Issue 72, Commercial eSpeaking, Summer 2026

Read the full issue here

Uber drivers are employees – for now

The Supreme Court’s decision is final, but proposed legislation may offer an alternative

 Uber has an unusual but highly successful business model. It has proved difficult to classify its drivers under employment law, both in New Zealand and in other countries where it operates.

Employees vs independent contractors

The issue is whether Uber’s drivers are employees or independent contractors. The legal status of Uber drivers has significant consequences. 

Employees have a range of statutory entitlements, including annual leave, sick leave, bereavement leave, employer contributions to KiwiSaver, minimum wage levels, and the right to join a union and engage in collective bargaining with their employer. 

Independent contractors have none of these rights. However, they are entitled to offset their expenses against their income for tax purposes. Employees cannot do this.

The New Zealand court system has been grappling with this issue for the last five years. In 2021, the Etū union filed proceedings in the Employment Court seeking a declaration that four Uber drivers were employees. The Employment Court ruled in the union’s favour, declaring that the drivers were employees. Uber appealed to the Court of Appeal. The Court of Appeal declined the appeal. Uber sought, and was granted, permission to appeal to the Supreme Court. The Supreme Court released its decision on 17 November 2025.[1]

Supreme Court decision

The Supreme Court upheld the Employment Court’s decision that Uber drivers are employees. The court applied the well-established test for determining whether workers are employees set down in the Bryson case.[2] Bryson considered the issue of whether crew members on ‘The Lord of the Rings’ film project were employees or independent contractors. The test derived from this case involves considering the intention of the parties (how they describe their arrangement), the degree of control the company has over the worker, the extent to which the worker is integrated into the company’s business and whether the worker can realistically be said to have their own business.

Uber’s contractual documentation avoids the terms employee and independent contractor altogether. Uber claimed that it merely provided a service to drivers and riders by matching them through its app. The Supreme Court found that this documentation did not reflect the true position and that, in reality, Uber was using its drivers to provide transport services to its customers.

The court found that Uber exerts a high degree of control over its drivers, which suggests they are employees. Uber monitors the location of its drivers while they are using the app. Uber operates a reward system for drivers that strongly encourages them to accept nearly all the trips offered to them. Once a driver accepts a trip, Uber specifies the route they must take and the price for the trip.

The court accepted that drivers are not integrated into Uber’s business in the traditional sense. They do not wear uniforms or have Uber branding on their vehicles. The court found, however, that the drivers are integrated into Uber’s business in the sense that they are the ‘face’ of Uber’s business. The drivers are the only individuals that customers have contact with when buying services from Uber.

The court also held that drivers do not, in reality, operate their own businesses. They have no opportunity to generate goodwill through a loyal customer base. They are not provided with customers’ contact details. They are prohibited from providing services to customers outside the Uber framework. In addition, customers are unable to select a specific driver. The app allocates a driver to them.

The Supreme Court is New Zealand’s highest court; therefore the court’s decision is the final say of the New Zealand courts on this issue. However, there is currently draft legislation before Parliament that, if enacted, will change the law relating to this issue.

The proposed ‘gateway test’

The Employment Relations Amendment Bill includes a proposed ‘gateway test.’ 

The Bill lists five criteria for the gateway test. If a worker’s contract meets all five criteria, then they will be deemed to be an independent contractor, and they will be unable to take legal action to be treated as an employee. 

However, if the contract does not meet all five prerequisites, then their status may be decided by the courts using the tests applied in the Uber case.

The five elements of the proposed gateway test are currently:

  1. The contract defines the worker as an ‘independent contractor’
  2. The worker may work for other parties (except while working for the other party to the contract)
  3. The worker is not required to work set hours, or may subcontract their work to others
  4. The contract does not end if the worker refuses additional work, and
  5. The worker had the opportunity to take independent legal advice before signing the contract.

The Bill passed the select committee stage at the end of last year and has returned to Parliament for its second reading. 

It is unknown when the Bill will become law, as this will depend on how the government chooses to prioritise the legislation currently before Parliament. However, when the Bill is passed, it will enable companies to be certain that their workers are independent contractors, provided their agreements with their workers meet the requirements of the gateway test.

In the meantime, however, the test for whether someone is an employee or a contractor is well established. If you need some help with sorting out your current work situation, please don’t hesitate to contact us.

New Zealand’s criminal cartel regime

Lessons from the MaxBuild and Mardom prosecutions

While New Zealand’s criminal cartel regime has been in effect since 2021, it has only recently moved beyond theory into action. 

The Commerce Commission has now completed the country’s first criminal cartel prosecution with two sentences imposed in the High Court in Auckland on construction companies MaxBuild Limited (MaxBuild) and Mardom Limited (formally Chelsea Contracting Limited) (Mardom), with both companies pleading guilty to bid-rigging offences.

This enforcement marks a watershed moment for competition law in New Zealand, and sends a clear message to all businesses engaged in tendering, procurement and competitor interaction.

Criminal conduct

The prosecutions arose from alleged bid-rigging in relation to NZ Transport Agency’s Northern Corridor Improvement Project and Auckland Transport’s Middlemore Bridge Refurbishment Project; two publicly funded infrastructure projects.

The commission’s investigation revealed that MaxBuild’s director, Munesh Kumar, colluded with Mardom’s director, Dominic Sutherland, by agreeing that Mardom would submit artificially high tenders (‘cover pricing’) to allow MaxBuild to win the contracts with lower bids. This practice undermines competitive tendering, harms procuring agencies and potentially loads costs onto taxpayers.

The scheme was accidentally uncovered when a spreadsheet containing details of the illicit arrangement was inadvertently included in tender documents sent to the project’s overseers. This triggered a formal commission investigation and, ultimately, criminal charges.

Sentencing

In December 2024, the High Court sentenced MaxBuild’s director to six months’ community detention and 200 hours’ community service, and ordered a $500,000 fine on MaxBuild for its role in facilitating the cartel conduct. Justice Wilkinson-Smith described the behaviour as ‘serious and deliberate,’ and an attack on business confidence and taxpayer trust.

More recently, in October 2025, the High Court imposed a $30,000 fine on Mardom following its guilty plea to cartel conduct. 

Justice Sally Fitzgerald indicated that a starting fine of $595,000 would have been appropriate for Mardom, but the fine was lowered to $30,000 due to Mardom’s poor financial position and lack of active trading. Despite not directly benefiting financially from the scheme, the company had ‘taken active steps in the collusive behaviour.’

In both prosecutions, mitigating factors such as early guilty pleas, cooperation, personal circumstances and the inability to pay influenced the level of penalties imposed.

Why this matters for New Zealand businesses

Under New Zealand law, intentional cartel behaviour – including price-fixing, market allocation, restricted output arrangements and bid-rigging – can attract:

  • Up to seven years’ imprisonment (for individuals), and/or fines of up to $500,000, and
  • Substantial corporate fines (up to the greater of $10 million, three times commercial gain or 10% of turnover for each year in which a breach occurred).

The cases of MaxBuild and Mardom demonstrate that:

  • The commission will deploy criminal powers when warranted – not just civil penalties
  • Bid-rigging and cover pricing are key priorities, particularly in public-sector procurement
  • Individuals face personal exposure, with directors who engage in or facilitate cartel conduct risking criminal convictions and custodial sentences, and
  • Early guilty pleas and cooperation can reduce sentences, but they do not prevent convictions.

Lessons for business

  • Train your staff on ‘informal’ competitor contact. Conversations about pricing, bid strategy, territories or customers with competitors can be high-risk
  • Establish compliance programmes for your tender applications and keep them updated. Any coordinated arrangements with competitors about bidding practices can easily amount to cartel conduct. Include cartel law training, procurement protocols and escalation points for suspected breaches, and
  • Be proactive if you suspect there has been a breach. The commission’s Cartel Leniency and Immunity Policy (here) can be a way to mitigate exposure if cartel conduct is disclosed early.

Cartel conduct will be pursued aggressively

The commission’s prosecutions of MaxBuild and Mardom represent a tipping point in New Zealand’s competition law enforcement. It underlines that cartel conduct, particularly in tender processes involving public funds, will be pursued aggressively, with potential criminal consequences. 

For businesses operating in competitive markets, strong competition law governance is essential to protect legal, financial and reputational risk.

If you are unsure about any aspect of competitive commercial tenders, please contact us at the earliest opportunity.

 [1] Rasier Operations BV & Ors v Etū Inc & Anor [2025] NZSC 162.

[2] Bryson v Three Foot Six Ltd [2005] NZSC 34.



DISCLAIMER: All the information published in Commercial eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice.No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in Commercial eSpeaking may be reproduced with prior approval from the editor and credit given to the source. ©NZ LAW Limited, 2026. Editor: Adrienne Olsen, Adroite Communications. E: [email protected]. M: 029 286 3650.