Amsterdam – Uber drivers are employees, not contractors, and are therefore entitled to greater workers’ rights under local labor laws, a Dutch court ruled on Monday, in a blow to the US company’s European business model.
The Amsterdam District Court sided with the Federation of Dutch Trade Unions (FNV), which argued that Uber’s roughly 4,000 drivers in the capital are employees of a taxi company and should be given benefits commensurate with the taxi sector.
Uber said it would appeal the decision and “has no plans to hire drivers in the Netherlands.”
“We are disappointed with this decision because we know most drivers want to remain independent,” said Maurits Schönfeld, Uber’s general manager for Northern Europe. “Drivers don’t want to give up their freedom to choose what, when and where to work.”
The court found that drivers transporting passengers through the Uber app are covered by the Collective Labor Agreement for taxi transport.
“The legal relationship between Uber and these drivers fulfills all the characteristics of an employment contract,” the ruling said.
The FNV applauded the decision.
“Due to the judge’s decision, Uber drivers are now automatically employed by Uber,” said FNV deputy chairman Zakaria Boufangacha. “As a result, they will receive higher wages and more rights in the event of, for example, dismissal or illness.”
The court said that Uber drivers are entitled to back pay in certain cases.
The judges also ordered Uber to pay a fine of 50,000 euros ($58,940) for failing to enforce the terms of the labor agreement for taxi drivers.
In March, Uber said it would reform workers’ rights, including a minimum wage for all of its more than 70,000 British drivers, after losing the Supreme Court case in February.
Uber recorded $600 million in first-quarter charges for UK benefits, highlighting the financial toll of sweeping changes to its contractor model.
Unlike other European countries and the United States, UK employment law provides a unique “worker” status – a legal definition that establishes drivers between no-profit independent contractors and full-time employees with broad benefits.
Uber has advocated for a similar situation in other countries, but said those initiatives would require changes to employment laws.
Uber released a white paper in February calling on EU regulators to recognize the value of independent contracts in job creation as they consider new rules to protect gig economy workers.
“We believe a new approach is possible—one where safety and access to benefits don’t come at the expense of flexibility and job creation,” Uber CEO Dara Khosrowshahi said in a blog post at the time.
The company is pushing a similar model in the United States and Canada, where it faces dozens of lawsuits over the status of its drivers.
Uber faced a legal setback in May when the US Supreme Court rejected its bid to avoid a lawsuit over whether drivers are employees and not independent contractors.
But the company and other gig economy companies scored a decisive victory in California last year when a majority of the state’s voters passed a company-sponsored ballot that, along with some benefits, cemented workers’ status as contractors.
Gig companies in some US states are also trying to strike deals with labor unions.
($1 = 0.8483 Euro)
by Anthony Deutsch and Toby Sterling
This News Originally From – The Epoch Times