s 394 - Application for unfair dismissal remedy

Application for an unfair dismissal remedy - not an employee - no reasonable prospects of success - extension of time - no exceptional circumstances - application dismissed.

• [1] Mr Shen Bing Zhuge (the Applicant) applied to the Fair Work Commission for an unfair dismissal remedy under s 394 of the Fair Work 2009 (the Act), alleging that 'Uber Australia Pty Ltd' with the ABN 49 160 299 865 had terminated his employment.

• [2] Mr Zhuge worked as an Uber driver and says that Uber is his employer. He started this work in about 1 February 2023.

• [3] Mr Zhuge says that his account was suspended in November 2023, which prevented him from doing his work as an Uber driver. In December 2023, his account was permanently deactivated. Mr Zhuge asserted that this deactivation was a dismissal.

• [4] Mr Zhuge provided two different dates for the deactivation. In his application form, he said this was 15 December 2023. In his submissions, he said this was 10 December 2023. Mr Zhuge lodged an application with the Commission on 12 January 2024.

• [5] If the deactivation was a dismissal, then s 394(2) requires that an application is filed within 21 days of the date that the dismissal took effect. If this was 10 December 2023, the statutory period ended at midnight on Sunday, 31 December 2023. If this was 15 December 2023, the statutory period ended at midnight on Friday, 5 January 2024. Taking either date, the application was filed after the end of the statutory periods, being either 12 or 7 days late respectively.

• [6] Before deciding whether the dismissal was unfair, the Commission must be satisfied that an application was made within time or allow a further period of time under s 394 (3).

• [7] Rasier Pacific Pty Ltd responded to the application, asserting that it was the proper Respondent but that Mr Zhuge was not an employee and therefore could not be a person who has been dismissed within the meaning of s 385(a). Rasier Pacific asked that the application be dismissed under s 587 of the Act on the grounds that it had no reasonable prospects of success.

• [8] This decision relates to Rasier Pacific's application that Mr Zhuge's unfair dismissal application be dismissed under s 587. I conclude that Mr Zhuge was not an employee and dismiss the application. My detailed reasons follow.

• [9] Uber is a brand name of the Respondent, which describes itself as operating within the technology industry. It operates a business model that can be described as facilitating passenger transport services, using a software application. The use of the software application is governed by a Services Agreement.

• [10] There are three parties to the Services Agreement:
  1. Uber B.V.;
  2. Rasier Pacific Pty Ltd; and
  3. the Driver.

• [11] Uber BV is a private, limited liability company established in the Netherlands. It holds the intellectual property over the software application - the Uber Drive app - which facilitates requests for passenger transport from Riders and fulfilment of those requests by Drivers.

• [12] Rasier Pacific Pty Ltd is an Australian company that provides the requests (what it terms 'lead generation services') to enable the Driver to receive those requests and provide the transport services.

• [13] The Driver provides passenger transport services to Riders.

• [14] In his application, Mr Zhuge named Uber Australia Pty Ltd as the Respondent. However, the Respondent says that the proper Respondent is Rasier Pacific Pty Ltd as the entity named in the Services Agreement and is the remitter of all payments to Mr Zhuge. The Respondent says that Uber Australia Pty Ltd is a separate entity, which does promotions and marketing but does not appear in contractual documents and has no role to play in the contracting arrangements.[1]

• [15] Mr Zhuge did not agree that Rasier Pacific Pty Ltd is the proper Respondent and did not agree to change the name of the Respondent in his application. It is understandable why he did not think Rasier Pacific Pty Ltd was the Respondent. On all his tax summaries, the word 'Uber' appears in large font on the top left; on his tax invoices, the word 'Uber' appears in large font on the top right. While Mr Zhuge submitted that as Rasier Pacific Pty Ltd did not appear anywhere on information he received, he provided tax invoices where Rasier Pacific Pty Ltd ABN 27 622 365 833 appears at the bottom of the tax invoice. Also, Mr Zhuge confirmed that he viewed and signed the Services Agreement, which is the contractual document that governs the relationship.

• [16] I conclude that the proper Respondent is Rasier Pacific Pty Ltd and amend the name of the Respondent in Mr Zhuge's application under s 586(a) of the Act, which gives the Commission the power to correct or amend applications and other documents.

• [18] The Respondent sought permission to be represented by Ms Tan, an employee of law firm Seyfarth Shaw who was seconded to Uber Australia Pty Ltd, which is an associated entity of the Respondent.[2]

• [19] I am of the view that Ms Tan did not need to seek permission to represent, as s 596(4)(a) (relevantly) provides that a person is taken not to be represented by a lawyer if the lawyer is an employee or officer of the person. I am of the view that person in this context means the specific employing legal entity and the group of companies that entity may be a part of, and that when seconded, Ms Tan was relevantly an employee of Uber Australia Pty Ltd.

• [20] 'Person' is not defined in s 596 of the Act, however, the Acts Interpretation Act 1901 (Cth) at s 2C provides that in any act, "expressions used to denote persons generally ... include a body politic or corporate as well as an individual." The underlying principle of s 596 of the Act, as noted in the Explanatory Memorandum to the Act[3] is that persons dealing with the FWC would generally represent themselves. Further, s 577 of the Act states that the Commission must perform its functions and exercise its powers in a manner that is:
  • Fair and just;
  • Quick, informal and avoids unnecessary technicalities;
  • Open and transparent; and
  • Promotes harmonious and cooperative workplace relations.

• [21] The Commission's Practice Note on Lawyers and Paid Agents provides as an example falling under s 596(4)(a) where a company is represented by a lawyer employed by the company. In the context of avoiding unnecessary technicalities, I extend this meaning to include the group of companies of which a company may be a part and on which it would usually rely for internally employed lawyers. For practical purposes, the Respondent can be viewed as using internal legal counsel rather than external legal representation and as such does not require permission under s 596(4).

• [22] For the sake of completeness and if I am wrong about the above, I nevertheless grant permission for the Respondent to be represented under s 596(2)(a) in that representation would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter. A key issue in this matter is the Commission's jurisdiction, and there is significant and recent case law relevant to the question of whether a person is an employee.

• [23] Section 587 of the Act empowers the Commission to dismiss applications:

(1) Without limiting when the FWC may dismiss an application, the FWC may dismiss an application if:

(a) the application is not made in accordance with this Act; or

(b) the application is frivolous or vexatious; or

(c) the application has no reasonable prospects of success.

Note: For another power of the FWC to dismiss an application for a remedy for unfair dismissal made under Division 5 of Part 3 - 2, see section 399A.

(2) Despite paragraphs (1)(b) and (c), the FWC must not dismiss an application under section 365 or 773, or an application under section 527F that does not consist solely of an application for a stop sexual harassment order, on the ground that the application:

• [24] The Respondent has applied to FWC to dismiss the application on the grounds that it has no reasonable prospects of success.

• [25] Section 382 of the Act provides for when a person is protected from unfair dismissal:

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

• [26] Section 380 of the Act provides that, for the purposes of Part 3-2 of the Act relating to unfair dismissal, an employee means a national system employee, and employer means a national system employer.

• [27] The question of whether a person is an employee is the subject of two recent decisions of the High Court:
• • CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1;[4] and

• ZG Operations v Jamsek [2022] HCA 2.

• [28] As a result of the High Court decisions in Personnel and Jamsek, certain elements of the Commission's past approach to the question of whether someone is an employee[5] are no longer to be applied.[6]

• [29] The Commission has previously dealt with the specific question of whether an Uber driver is an employee in the following matters:
  • Kaseris v Rasier Pacific V.O.F [2017] FWC 6610
  • Pallage v Rasier Pacific Pty Ltd [2018] FWC 2579
  • Suliman v Rasier Pacific Pty Ltd [2019] FWC 4807
  • Nawaz v Rasier Pacific Pty Ltd T/A Uber BV [2022] FWC 1189
  • Jama v Rasier Pacific Pty Ltd [2022] FWC 2946

• [30] A Full Bench of the Commission has also considered a similar question about whether a food delivery driver using the Uber Eats app was an employee in Gupta v Portier Pacific Py Ltd; Uber Australia Pty Ltd t/a Uber Eats [2020] FWCFB 1698.

• [31] All the decisions above, except for Nawaz and Jama, predated the High Court decisions in Personnel and Jamsek. Nevertheless, all the above matters reached the conclusion that the driver or food deliverer was not an employee after applying the multi-factorial approach.

• [32] In his decision in Nawaz,[7] Commissioner Hampton (as he then was) summarised the principles to be applied, following the High Court's decision in Personnel and Jamsek:

1. Characterisation of the relationship is to be determined by reference only to the parties' legal rights and obligations;

1. Where a comprehensive written contract is in place, this will be the primary source of the parties' legal rights and obligations, unless the contract is a sham, has been varied after it was made or post agreement conduct or context demonstrates that a term was legally ineffective.

1. Relative bargaining power of the parties is not relevant.

1. The multifactorial approach remains appropriate but is to be applied by reference to the parties legal rights and obligations and not to post contract conduct.

1. All the relevant factors require consideration, but two factors in particular assist in assessing the ultimate question of whether the person was an employee, being
   1. The degree of control exercisable by the purported employer; and
   2. Whether a person was contracted to work in the business or enterprise of the purported employer or whether they were conducting their own business (although the second part of the question is subsidiary)

1. The labels applied by the parties are irrelevant as proper characterisation is a matter for the courts or the Commission.

1. The following factors are not decisive as they may be consistent with or indicative of casual employment:
   1. Non-exclusive work
   2. Terminability at short notice
   3. Absence of guarantee of work

1. In relation to factors that were previously relevant, these are subsidiary to the consideration of the written agreement but
   1. The manner in which the relationship is worked in practice may be relevant for certain limited purposes, such as to find contractual terms where they cannot otherwise be ascertained or to determine the nature of any variation to agreed terms.
   2. It is permissible to have regard to objective events, circumstances and things external to the contract.

1. Conduct and expectations of the parties after entering into the contract are not generally relevant.

• [33] As a response to the High Court decisions in Personnel and Jamsek, the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 has amended the Act to now provide statutory guidance in determining the ordinary meanings of employee and employer at new s15AA of the Act, which requires the Commission to determine the question:

by ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person.

• [34] The amended provision does not commence operation until 26 August 2024 (or a different date by proclamation). It therefore does not apply to this matter, and the approach outlined by the High Court, which was comprehensively and relevantly to this matter summarised in Nawaz, must be followed.

• [35] Each of the above decisions relating to drivers considered a Services Agreement entered into by the applicant with the Respondent. The Services Agreement was dated 1 December 2017 and was the same across all the decisions.

• [36] Nawaz comprehensively reviewed the terms of the Services Agreement. Of significance to this matter, Hampton C said:

There is no doubt that the Services Agreement represents a comprehensive written contract regulating the arrangement between the parties.

• [37] Commissioner Hampton then went on to consider two of the major factors, being control and whether the person was part of the purported employer's business. In respect to control, the Commissioner noted that there were competing aspects but the more significant elements pointed away from a relationship of employment.[8] These elements were that:

• Uber exercised no right of control at all over when or how long Mr Nawaz performed services under the Services Agreement;
• It was entirely within Mr Nawaz's control as to when he logged onto the App and for how long he remained logged on;
• Once logged on, there was no obligation to accept any ride requests; and
• Even when logged on and performing work, Mr Nawaz could accept work through other rideshare and delivery apps.

• [38] In Kaseris, Deputy President Gostencnik determined the question using the multifactorial approach as comprehensively listed in French Accent at [48][9] and stated that:

For there to exist an employment relationship, certain fundamental elements must be present. A contract of employment is, at its essence, a work-wages bargain, so that the "irreducible minimum of mutual obligation" necessary to create such a contract is an obligation on the one side to perform the work or services that may reasonably be demanded under the contract, and on the other side to pay for such work or services.

• [39] The Deputy President found that the relevant indicators of an employment relationship did not exist. In regards to control, the Deputy President found the absence of evidence of the kinds of control commonly associated with employment, principal amongst them, the obligation to attend work and to perform work when in attendance more significant than the control that the Respondent did exercise in relation to the determination of fares, service standards, and its requirements that the driver maintain their vehicle and drive safely.

• [40] In Suliman,[10] Commissioner Bissett elaborated on the work-wages bargain as including the requirement to attend work and to provide services when attending work.

• [41] In Gupta, the Full Bench[11] stated that the 'usual and essential hallmarks of an employment relationship' are:
  • A requirement to perform work at particular times or in particular circumstances;
  • Exclusivity when work is being performed; and
  • Presentation to the public as serving in the business.

• [42] This was the conclusion of the majority, being Ross J and Hatcher VP (as he then was). Deputy President Colman delivered a separate decision but agreed with the majority about the 'three critical factors' at [76].

• [43] The Respondent submitted that the Services Agreement comprehensively contained the legal rights and obligations of each of the parties. The Respondent gave evidence that the Services Agreement was unchanged and was identical or substantially similar to the agreements considered in each of the above Commission decisions relating to drivers.

• [44] As detailed above, there were three parties to the Services Agreement - Uber B.V., the Respondent and the Applicant. Uber BV holds the intellectual property over the Uber Drive app. The Respondent provides the requests (what it terms 'lead generation services') to enable the Applicant to receive those requests and provide the transport services. The Respondent is also responsible for collecting payments and remitting them to the Applicant, subject to a service fee. The Applicant provides the transport services. The Applicant is also responsible for providing the vehicle but is subject to requirements in the Service Agreement about maintenance of the vehicle, background checks for driving records, driving with due skill, care and diligence, and professional service standards, among other matters.

• [45] The Respondent submitted that there was no reason to depart from the previous decisions of the Commission, particularly that of Nawaz, where the agreement was identical to the one Mr Zhuge agreed to. In that decision, the factors that pointed away from employment, as established by considering the parties' rights and obligations under the comprehensive terms of the Services Agreement, were more significant than those pointing towards employment. Commissioner Hampton made particular note of the nature and degree of control exercisable under the terms of the Services Agreement.

• [46] In summary, the Respondent submitted that, under the terms of the Services Agreement:

• It had no right of control over the performance of work by Mr Zhuge;
• Mr Zhuge owed no exclusivity to the Respondent;
• Mr Zhuge was not an emanation of the Respondent's business as the agreement specifically provided that Mr Zhuge was not to display Rasier Pacific's, Uber's or any other affiliates names, logos or colours, nor to wear a uniform;
• Mr Zhuge was required to provide all equipment (vehicle, licenses, mobile device, data plan);
• Mr Zhuge was responsible for calculation and remission of tax;
• Mr Zhuge was responsible for insurance on his vehicle and that neither Rasier Pacific nor Uber were required to maintain any workers compensation insurance on his behalf;
• That the Agreement expressly stated it was not an employment agreement in clause 28.11;
• That there was no payment of wages but instead payment of trips from Riders; and
• That there was no superannuation, leave or worker's compensation.

• [47] Mr Zhuge gave evidence that he decided to start driving for Uber one year ago. To do this, he applied online, filled out forms and sent requested documents.[12] Mr Zhuge said that he had no choice but to agree to the terms of the Services Agreement if he wanted to access the app, and that he had done so.[13] The Respondent provided evidence from its electronic records that confirmed when Mr Zhuge electronically accepted the Services Agreement.[14]

• [48] The Services Agreement is in English. The Respondent could not assist me about whether any documents were translated into other languages. Mr Zhuge speaks Mandarin and some English, and had the assistance of an interpreter for the Commission's processes. Mr Zhuge said that he had assistance from his son for most of the communication with Uber, which was predominantly via the text messages. In relation to the Services Agreement, Mr Zhuge stated that he was aware that it was a long and complex legal document and he thought he would get assistance to understand it but did not. He confirmed that he has seen it, as it 'surfaced' on the app, and he had to agree to it to go to the next step and start work. In relation to this, Mr Zhuge said[15]

"Because if you want the job, you want to make money, you have to do that. That's why they give to you."

• [49] Mr Zhuge confirmed that he never spoke with anyone from Uber about the application process; it all occurred on the app.

• [50] Mr Zhuge agreed that he could access the app whenever he wanted, and that no one told him when to log on. He gave as an example of Uber having control over his access to the app that the app would tell him to log off if he drove for more than 12 hours, or to take a break if he had been on the app for more than 6 hours. However, he also gave evidence that he could ignore the app it if he felt fine and keep driving if he wanted to and that no one actually required him to stop and take a rest or confirm that he had taken a rest.[16] Under cross-examination, Mr Zhuge confirmed that that he could use the app at a time of his choosing but that sometimes the app did not allow him to log off when it was too busy and he would not log off as he did not want to upset 'Uber'.[17]

• [51] Mr Zhuge did not challenge the Respondent's characterisation of any of the other elements of the agreement, nor did he challenge the effectiveness of the Services Agreement. Mr Zhuge did make submissions relating to the unfairness of the agreement and his lack of bargaining power with respect to its terms.

• [52] Mr Zhuge appeared to agree that he was not an employee of Uber but argued that they had an employee-like relationship because he worked with Uber, who took a commission and then paid him.[18] Nevertheless, Mr Zhuge submitted that he was an employee because he was paid weekly and worked 50 hours per week. Mr Zhuge also argued that Uber could and did terminate him and this was a key element of the employment relationship.

• [53] The Respondent's argument that the Services Agreement specifically stating that it is not an employment relationship should not be given any weight, as the characterisation of the relationship is a matter for the courts or Commission, and not the parties.[19]

• [54] Considering the rights and obligations set out in the Services Agreement in the context of all the indicia, and particularly the 3 key or critical elements of employment as detailed in Gupta, I find that Mr Zhuge was not an employee of the Respondent. The Services Agreement did not require Mr Zhuge to access the app at particular times or perform any work at all, even if he did access the app. While the app did tell him to log off or take breaks, the Respondent did not require that he do so. That Mr Zhuge accessed the app regularly, worked conscientiously and long hours was irrelevant to the Respondent. Indeed, the Respondent was entirely indifferent about who Mr Zhuge was and responded to this case without any regard to the individual circumstances of Mr Zhuge.

• [55] The unfairness of the Services Agreement and that Mr Zhuge did not have bargaining power to negotiate its terms is not relevant to the consideration of whether or not he was an employee.

• [56] Many drivers have applied to the Commission for a remedy after they have been prevented from accessing the Uber app. Mr Zhuge was particularly aggrieved by the fact that he had no opportunity to respond to the allegation that formed the reason for termination of his access to the app. He denied the allegation and said that he was never provided with any information or details it, nor provided with an opportunity to respond to it. The Respondent did not respond to this part of Mr Zhuge's application, and I make no relevant findings. However, it is understandable that a person, against whom serious allegations have been made and which may lead to the loss of their livelihood, wishes to be afforded a degree of procedural fairness.

• [57] As I have found that Mr Zhuge was not an employee, it follows that his matter would not have reasonable prospects of success. Section 587 is a discretionary power. Even if I were to exercise my discretion and not dismiss this matter, Mr Zhuge must then establish exceptional circumstances for his late application and revisit the issue of whether he is a person who has been dismissed - that is, an employee within the ordinary meaning.

• [58] The unfair dismissal laws under the Act are not the avenue through which Mr Zhuge can ventilate his concerns about his treatment. The legislature has now provided some avenue for recourse in the 'unfair deactivation' and 'unfair contract termination' amendments to the Act contained in the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024. However, these are of no assistance to Mr Zhuge as those provisions do not commence until 26 August 2024 (or a different date by proclamation).

• [59] As I have found that Mr Zhuge was not an employee, and therefore not a person protected from unfair dismissal under s 382, I conclude that his application would have no reasonable prospect of success and I exercise my discretion to dismiss the application.

[1] Transcript of Proceedings, PN216-219.

[3] Explanatory Memorandum, Fair Work Bill 2008 (Cth), at [2291].

[4] CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1.

[5] Summarised in Jian Zheng Cai t/a French Accent v Rozario [2011] FWAFB 8307.

[6] Nawaz v Rasier Pacific Pty Ltd T/A Uber BV [2022] FWC 1189, at [51].

[8] Transcript of proceedings, PN190-197.

[9] Kaseris v Rasier Pacific V.O.F [2017] FWC 6610, at [48].

[10] Suliman v Rasier Pacific Pty Ltd [2019] FWC 4807, at [37]-[38].

[11] Gupta v Portier Pacific Py Ltd; Uber Australia Pty Ltd t/a Uber Eats [2020] FWCFB 1698, at [70].

[19] See Nawaz at [51] citing Personnel per Kiefel CJ, Keane and Edelman JJ at [58], [63]-[66], [79], Gageler and Gleeson JJ at [127], Gordon J at [184].

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