Loading "The weight of evidence from our investigation establishes that the relationship between Uber Australia and the drivers is not an employment relationship," Ms Parker said. "For such a relationship to exist, the courts have determined that there must be, at a minimum, an obligation for an employee to perform work when it is demanded by the employer. "Uber Australia drivers have control over whether, when, and for how long they perform work, on any given day or on any given week." The decision means that the Fair Work Ombudsman will not take further action to require Uber Australia to comply with Australian workplace laws under the Fair Work Act. The findings were specific to Uber Australia and did not have wider implications for the gig economy more generally.

Loading The Ombudsman said companies in the gig economy used a range of business models and it would continue to assess allegations of non-compliance on a case-by-case basis. The employment watchdog undertook to investigate the company's contractual relationship with its large workforce of "driver-partners" in 2017, after a request by a group of drivers who argued they had been "misclassified" as self-employed. Employment law expert Professor Andrew Stewart from the University of Adelaide said the decision was "very disappointing", given the significant uncertainty that exists over the legality of Uber's arrangements. "The central issue is not just whether there must be a pre-existing obligation to work, but whether that obligation can arise in a practical sense from the way Uber structures its operations," he said.

Loading "That is a matter that could and arguably should have been tested in court, not behind closed doors. "As it is, Uber remains vulnerable to claims from drivers and/or unions. But it will rightly feel that the regulator has endorsed its business model." Joellen Riley, professor of labour law at the University of Sydney, said the decision was "uncontroversial". She said a British court has held that Uber drivers were employees under the common law.

Loading "It held that Uber drivers were 'workers' within the extended application of certain regulations, based on EU directives," she said. "The common law tests for employment still rely very heavily on the notion of control and the obligation to work at the behest of the employer. "I think this determination lends support to what I understand ride-share drivers in Australia are asking for – a more limited range of rights – to such things as an inexpensive avenue for review of decisions to terminate their contracts, and income support when they are off the road for reasons of illness or accident." Professor Riley said drivers to whom she has spoken do not see themselves as "employees" and do not wish to submit to the level of discipline over their working arrangements that would be typical in an employment relationship.

A spokeswoman for Uber said the company welcomed the Ombudsman's findings. "We believe that being your own boss does not need to come at the expense of security and support in work," she said. "Uber believes that everyone should have access to a set of affordable and reliable social protections, whatever category of employment they are in. "We want to work with governments and the community to ensure Australians can access independent and flexible earning opportunities, without limiting their access to the support and security they deserve." The Transport Workers’ Union called on the federal government to introduce legislation to ensure workers in the gig economy are given rights and protections against exploitation.

TWU national secretary Michael Kaine said the Fair Work Ombudsman’s decison was "devastating for workers in the gig economy". "Last year we had a landmark victory when a Foodora rider won an unfair dismissal case and we know the same control factors are in play for workers in Uber and right across the gig economy." The Rideshare Drivers Co-operative said Uber was controlling the jobs with drivers, saying, "Uber continually sends drivers messages on how we must behave and carry out our jobs." Meanwhile, the TWU NSW branch has encouraged its members to support Jodi McKay in the NSW Labor leadership contest against Chris Minns. Branch secretary Richard Olsen said she would best represent the union's concerns over road safety, gig economy workers and other transport workers.