Are Uber Drivers Self-Employed Contractors or Employees?

The vexed question whether or not Uber drivers are self-employed contractors draws scrutiny around the world.

According to an analysis conducted by the Belgian social security services, Uber drivers are “in principle” self-employed contractors and are not employed by Uber. This conclusion is based on the fact that they drive their own car and decide at their own discretion when they want to work.

Bart Tommelein, Belgian Secretary of State for Combating Social Fraud, declared in this respect that “Uber drivers are just like 84 percent of regular self-employed taxi drivers”.

However, the finding of the social security services is not a ruling and is therefore not binding on the Belgian courts. Also, the use of the phrase “in principle” implies that the assessment should be made on a case by case basis.

In order to determine whether a worker should be considered as an employee or a self-employed contractor, the normal rules on the nature of working relationships set out in the Program Law of 27 December 2006 apply (Programmawet van 27 december 2006/Loi-Programme du 27 décembre 2006). The parties to an agreement are free to organise the way in which they plan to collaborate, namely as two independent parties (self-employed) or through an employment contract.

When the parties opt for one regime or the other, the qualification which the parties attributed to their agreement prevails, provided that:

(i)    the parties respect all provisions of public order and of mandatory legislation; and
(ii)    the actual performance of the contract corresponds to the qualification chosen by the parties.

In order to assess whether the choice of the parties is in line with the law and corresponds to reality, the law established the following four general criteria:

(i)    the parties’ will (what has been agreed upon);
(ii)    the freedom (or absence of freedom) for the individual to organise his/her working time;
(iii)    the freedom (or absence of freedom) for the individual to organise his/her work;
(iv)    the possibility (or impossibility) to exercise hierarchic control on the individual concerned.

None of these criteria takes precedence over the other criteria.

The existence of a continued and personal hierarchical relation between the worker and his or her contracting partner distinguishes an employment contract from a contract with a self-employed worker (e.g. service agreement, consultancy agreement, management agreement). The Supreme Court defined this hierarchical relationship as “the legal authority of the employer who has the right to give orders to employees concerning the organisation and the performance of the work that has been agreed upon”.

A new assessment of the chosen status will only occur if a substantial number of factual circumstances indicate that the four above criteria contradict the ‘contractual’ status of the worker.

In some sectors (construction, surveillance, cleaning, transportation, horticulture and agriculture) there is a rebuttable statutory presumption that a working relationship must be considered as an employment relationship if a majority of sector-specific criteria are met. Therefore, in these sectors, an additional assessment should be made.

If the contractual relationship is reassessed, the “employer” may incur the following types of liability:

From a social security perspective

The employer is solely responsible for the following payments, without any possibility to recover them from the worker:

-    arrears of employer social security contributions on the amounts paid  (± 35 %);
-    arrears of employee social security contributions on the amounts paid (13.07 %);
-    late payment interests of 7 % per year;
-    lump sum penalty of 10 %.

The regular statute of limitations for a claim from the social security authorities amounts to 3 years, but is 7 years in case of fraud.

Criminal penalties and/or administrative fines may also apply.

From a labour law perspective

The worker can claim arrears of salary components (mandatory indexation etc.), vacation pay, thirteenth month etc. to which he/she would be entitled as an employee. In addition, there is also scope for late payment interests and, in case of unilateral termination of the agreement by the supposed employer, the payment of a severance indemnity.

The regular statute of limitations for employment claims for the payment of salary components is 5 years, but a longer period may apply in the case of a continuous infringement.