The Paris Court of Appeal has recognised “employee” status for an Uber driver. While the French Supreme Court recognised a little over a year ago, the status of employee regarding a self-employed worker linked to the Uber platform, this recent case has further weakened the economic model of the American company.
On 12 May of this year, the Paris Court of Appeal ruled that one of the drivers was covered by an employment contract whose obligations had not been respected by the employer, which justified the termination of the contract.
In support of its decision, the court noted in particular, that the driver, by joining the service provision contract, “integrated a service organised by Uber, which unilaterally determined the conditions of execution of the service“. In addition, the company reserved the right to modify “at any time the calculation of the user rate” with the driver having suffered in this case, an “average decrease of 20% in rates“. Another element that was retained was that Uber had “the power to control the performance of the service and to punish any breaches observed” with regard to its driver. The company used this power against the driver by temporarily disconnecting him, following his refusal to accept passengers. Based on the combination of these elements, the Court of Appeal concluded that an employment contract existed and that the employer was to blame for the breach of the contract, as he had not respected certain obligations attached to the status of employee.
As a result, the driver was awarded €58,000 in various allowances and reimbursement of expenses.
Key Action Points for Human Resources and In-house Counsel
This case reinforces the point that businesses must take care to avoid placing their service providers, consultants and freelancers, in a subordinate position, which would allow for the re-characterisation of the relationship into an employment contract.