New Zealand to Revise Employment Laws After Uber Contractor Case

New Zealand is set to amend its employment laws in response to a recent legal battle involving Uber Technologies, aiming to provide businesses with clearer guidelines on contractor versus employee classifications.

Employment Relations Minister Brooke van Velden announced that the current legal process for disputing employment status is both costly for businesses and contributes to general uncertainty. “These legislative changes are essential for providing both businesses and workers with clearer terms from the beginning of any contracting arrangement,” van Velden said.

The proposed changes come after Uber lost an appeal last month against a ruling by the Employment Court. The court had determined that four Uber drivers should be classified as employees under the Employment Relations Act rather than independent contractors.

The new legislation will introduce a “gateway test” for businesses to use when addressing claims of employee status. The test includes four criteria that must be met for a worker to be classified as a contractor:

• A written agreement designating the worker as an independent contractor
• No restrictions on the worker’s ability to work for other businesses
• No requirement for the worker to be available at specific times or for a set number of hours
• No penalty if the worker declines additional tasks

Van Velden emphasized that these changes are designed to give businesses more certainty, allowing them to adopt innovative contracting models and offer better terms without risking contractor status.

Unions have voiced strong opposition to the proposed changes. Richard Wagstaff, president of the NZ Council of Trade Unions, criticized the move, asserting it would enable companies to deny workers essential benefits such as leave and holiday pay. “Uber has faced legal losses, and now the Government is stepping in with legislation to ensure that companies like Uber won’t face similar outcomes,” Wagstaff said.

The New Zealand government plans to present the revised legislation to parliament next year.