Courier driver was an employee despite agreement being styled otherwise | Employment Law Update May

In a case that may have substantial repercussions in both the courier business and, conceivably, other environments in which conditions have the characteristics of employment despite being called “contracts for services”, the Employment Court was resolute in its opinion that a driver for Parcel Express was an employee.

In a judgment surveying previous case law on the question, particularly in the light of the current ethos that “employment relationships should not be viewed through a conventional contractual lens”, Chief Judge Inglis considered the requirement of s 6 of the Employment Relations Act 2000 to determine “the real nature of the relationship” between the hirer and the worker.

A witness for the courier company struggled to demonstrate what the “freedom and flexibility” that the driver, L, allegedly possessed actually brought him. And even those alleged benefits of the autonomy enjoyed by L — an acquisition of business acumen and liberty to take time off — were not real, in the view of the Judge. Balanced against those were some very substantial restrictions on how L conducted his work. He:

  • was assigned a run, the boundaries of which were set by the company and in which he had no say (even as to changes in the run)

  • performed the job full-time from Monday to Friday and had to be back at the depot at three specified times during the day

  • worked where and when he was directed by the company and was required to work in Parcel Express’s best interests at all times

  • had to wear a uniform specified by the company and observe its procedures and the commands of its managers

  • had to attend in-house briefings

  • had to maintain a telephone link at his home, and provide another vehicle if his own vehicle — required to carry the Parcel Express colours and insignia and to be otherwise free of all other information, even L’s name — was not in good order and condition

  • had to take out insurance with a company approved by Parcel Express, and for an amount and for such risks as it decided

  • could not take more than 20 working days’ holiday in a year without the prior approval of the company and had to organise a relief driver, who had to be approved by the company, during any period of leave, and

  • was subject to a restraint of trade (for six months post-termination and within a 100 km radius of Auckland’s CBD) and to confidentiality requirements.

Few of these elements could be said to be mutually beneficial, the Chief Judge considered.

She was not swayed by protestations about industry practice. As she said [54]:

“While I accept that industry practice may be relevant to assessing whether a worker is an employee in some cases, I consider that it is a factor best approached with caution. That is because i