On a Wednesday in early November, Australia's High Court settled a long dispute between Uber and the state of New South Wales, ruling six to one that the people who drive for the company are its employees and that the money paid to them counts as wages. The decision leaves Uber with an $81 million payroll tax bill for 2015 to 2020, with later years still to be reckoned. It is a reminder that old laws, written for an earlier kind of work, can reach new arrangements without needing to be rewritten, and that the question of who truly controls a working relationship often outlasts the labels compa
Uber Loses High Court Bid, Must Pay $81m in Payroll Tax for Drivers' Wages in New South Wales
The old rules reached the new business model without being rewritten
Mark
Start with the basic point. What did the court actually decide?
Mimi
That Uber's drivers in New South Wales are employees for payroll tax purposes, and that what Uber pays them is wages. Six justices to one. The result is $81m owed for 2015 to 2020.
Mark
Why did the court land there?
Mimi
Control over money. Rider payments go through Uber first, so it can take its fee, change the fare, or cancel it before drivers see anything.
Luke
Worth being precise, though. This is a payroll tax ruling under NSW law. The reporting doesn't say drivers are employees for every purpose, like leave or minimum pay.
Mimi
Fair. The finding is about the tax provisions, though the majority's language is broad.
Mark
The chief justice talked about old laws reaching new business models.
Mimi
Yes. Gageler said the contractor provisions, added late last century to catch disguised arrangements, still apply to the gig economy. No new legislation was needed.
Mark
And the total could grow?
Mimi
The reporting says later years will likely push it well over $100m.
Luke
Note the word likely. Only $81m is the decided figure. The larger number is an expectation, not an assessment we've seen.
Mark
Does it affect other companies?
Mimi
Legal expert Celeste Black said last year it would probably influence gig firms across Australia. That is a prediction, and which companies are affected is still open.
O Pulso
- The High Court has closed Uber's last legal route, ruling six to one that its drivers are employees and their pay counts as wages.
- An $81 million payroll tax bill covering 2015 to 2020 now stands, with later years likely to push the total past $100 million.
- Uber's argument that it merely connects riders and drivers collided with its own control over fares, which it can set, cut, or cancel.
- NSW officials welcomed the ruling as a matter of fairness, while gig-economy firms across Australia watch for similar assessments.
- The next move is the tax bill for the years after 2020, and whether other states follow New South Wales.
On a Wednesday in early November, Australia's High Court settled a long dispute between Uber and the state of New South Wales, ruling six to one that the people who drive for the company are its employees and that the money paid to them counts as wages. The decision leaves Uber with an $81 million payroll tax bill for 2015 to 2020, with later years still to be reckoned. It is a reminder that old laws, written for an earlier kind of work, can reach new arrangements without needing to be rewritten, and that the question of who truly controls a working relationship often outlasts the labels companies give it.
On Wednesday, Australia's High Court ruled against Uber in a payroll tax dispute, finding that the company owes New South Wales $81 million. The vote was six to one. The decision ends Uber's claim that it does not employ its drivers and that the money it pays them is not wages under state law.
The $81 million covers the tax years 2015 to 2020, and it is unlikely to be the final figure. Uber had earlier won a round against the state revenue commissioner's assessment, but this ruling closes its remaining options. Later years are expected to add substantially to the total.
Six justices found that the drivers were employees. The majority pointed to the structure of the business itself: rider payments flow through Uber, which gives it real control over fares before drivers receive anything. It can take its service fee, alter a fare, or cancel it altogether.
Chief Justice Stephen Gageler set the case within a longer history. Several states had changed their payroll tax laws decades ago to reach contractual arrangements that disguised true working relationships, and those provisions, he wrote, still apply to today's gig economy.
The NSW government welcomed the result. Finance minister Courtney Houssos said payroll tax supports essential services and that businesses should pay their fair share. "Uber should pay their fair share too," she said.
What remains open is the bill for the years after 2020, and whether other states and gig-economy companies will face similar claims.
On Wednesday, Australia's High Court ruled against Uber in a payroll tax dispute, finding that the company owes New South Wales $81m. The decision was six to one. It ended Uber's argument that it does not employ the people who drive for it and that the money it pays them is not wages under state law.
The $81m covers the tax years 2015 to 2020. That is not the end of the bill. The ruling is likely to leave Uber with a significant liability for the years since, which would push the total well over $100m. Uber had won an earlier round, successfully appealing against the assessment made by the NSW chief commissioner of state revenue. Wednesday's decision closes the company's remaining legal avenues.
Six of the seven justices held that Uber's drivers were employees and that what they were paid counted as wages. The majority pointed to how the company has built its business. Payments from riders are funnelled through Uber, they wrote, and that gives it substantive control over fares before they reach drivers. It can deduct its service fee, change the fare, or cancel it entirely.
Chief Justice Stephen Gageler placed the case in a longer history. Several states adjusted their payroll tax laws late in the last century to capture more revenue from contractual arrangements designed to disguise the real nature of a working relationship. Those contractor provisions, he wrote, have continued "always speaking in the present" to the participants in a gig economy that emerged in this century. In other words, the old rules reached the new business model without needing to be rewritten.
The implications may travel beyond one company and one state. Last year the legal expert Celeste Black wrote that the case would probably influence the payroll tax obligations of companies with gig workers across Australia.
The NSW government welcomed the outcome. Finance minister Courtney Houssos said payroll tax is a key part of the state's tax base, even though only about one in 20 companies meets the threshold to pay it. She said it helps fund essential services that families and households rely on. "Local businesses pay their fair share," she said. "Uber should pay their fair share too."
What to watch now is the bill for the years after 2020, and whether other states and other gig-economy companies face similar assessments in light of the ruling.
Citações Notáveis
Local businesses pay their fair share. Uber should pay their fair share too.— Courtney Houssos, NSW finance minister
The contractor provisions have continued 'always speaking in the present' to participants in the gig economy.— Chief Justice Stephen Gageler
Quer a matéria completa?
Leia o original em The Guardian ↗
Politics & Governance