Are courier drivers employees or contractors?

The court decision will undoubtedly have knock-on effects for other industries

BY HRD 31 Aug 2018

Proceedings have begun in the Employment Court to determine the employment status of courier drivers as either employees or contractors.

At the moment, courier drivers and some truck drivers are considered contractors and as such sign independent contractor agreements.

They typically own their transport, pay for their own equipment and don’t receive any form of leave from those who engage with their services.

However, some businesses who engage these contractors enforce exclusivity of work and vehicle branding, such as NZ Post. Consequently, First Union will argue the drivers are then employees, as opposed to contractors.

In the past, First Union tried to get this kind of restriction of exclusivity of service banned through private members Bills, but they’ve never made it through Parliament. However, this time they’re lodging directly with the Employment Court.

According to Employers Assistance Ltd, the result of this would “undoubtedly have knock-on effects for other industries and limitations for use of independent contractor agreements, not to mention any remedial actions for these workers against their ‘employers’”.

Transport, Logistics and Manufacturing Division Secretary Jared Abbott said that independent contractors, amongst other things, are supposed to be where a person provides a service to multiple companies.

“But what we are seeing are companies asking courier drivers to be contractors only for them, and to take on responsibility that actually belongs with the company such as insuring the company vehicle and wrapping it with branding, and then paying them net less than the minimum wage for their trouble,” said Abbott.

“We need to stop, and roll back the attempts by some employers to load all employment risks onto their workers.”

Abbott added that despite the Union lobbying parliament and making submissions on private members’ bills that could regularise workers (such as courier drivers) as employees, it’s unfortunate that none of the bills made it through parliament.

“It’s very frustrating that when we highlight an issue with the law that is allowing the abuse of the wellbeing of workers, that it’s completely ignored.”