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Are we there yet? Much Ado About Employment Status in New Zealand

Abigail Osiki (University of Canterbury)

December 3, 2025

Introduction

In New Zealand, as in other jurisdictions, it is recognised that work performed for others as employees is covered by labour law, and work performed as an independent contractor is covered by commercial law. In recent decades, there has been recognition that work relationships are not simply binary but lie along a continuum, including situations where individuals work for others and do not have their own independent business. For these types of workers, there have been extensive disputes about their status. This is the case for apprentices, interns, volunteers, screen production workers and many more. As a result, courts, through the development of common law tests for employment, have stepped in to provide assistance. But the application of these tests is not without its challenges, particularly in light of new forms of work and types of workers— working through digital labour platforms, owning their tools of trade, having freedom of working hours and whether to perform work. It is in this context that on 17th November 2025, the New Zealand Supreme Court delivered its long-awaited decision in Raiser Operations BV v. E TŪ Inc [2025] NZSC 162 (the Uber case), holding that Uber drivers are employees of Uber companies. At the same time, amendments to the Employment Relations Act are ongoing and will affect how workers in the grey area are identified as employees or independent contractors.

This blog examines these judicial and legislative developments and highlights their potential consequences for workers in New Zealand.

Changing the world of work and New Zealand employment law

Under New Zealand employment law, an employee's status is the gateway to protection under relevant employment statutes and the common law. To be considered an employee under section 6 of the Employment Relations Act (ERA), a person must be employed “to do any work for hire or reward under a contract of service”. This definition includes a homeworker and a person intending to work. In recognition that it may sometimes be challenging to distinguish whether a worker is an employee, section 6 (2&3) of the ERA provides that the Authority or the Court must determine the reality of the relationship between the parties by taking into account all relevant matters, including any matters indicating the parties' intention. However, any statement made by parties describing the nature of the relationship is not to be treated as a determining matter.

Despite the above, changes in the world of work, including the proliferation of non-standard forms of employment, are blurring the boundaries of employment. Consider, for example, the case of “dependent contractors” who are legally considered independent contractors but are economically vulnerable like employees. Consequently, like in many other jurisdictions, New Zealand courts have developed tests through extensive case law to determine employment status.1Over the years, these tests have been criticised for their inability to prevent misclassification, leading to the exclusion of many workers who need protection, including platform workers.2

In September 2024, the Minister of Workplace Relations and Safety proposed amending the definition of employee to exclude “specified contractors” who meet specific requirements, which we believe should be called presumptions of self-employment. To be a specified contractor, the worker must have entered a contract to perform work for another person and—

· Have a written contract stating the person is an independent contractor;

· Have no restriction to work for another person except while performing work for the contracting party;

· The worker is not required to be available to work at specified times, days or for a minimum period, OR the worker can subcontract the work, subject to the vetting of the contracting party;

· The working arrangement does not terminate because of refusal to accept additional work;

· The worker had a reasonable opportunity to obtain independent advice before entering the contract.

If a worker meets all the criteria, they are automatically classified as independent contractors and excluded from the protective scope of employment statutes. Although intended to provide clarity for contracting parties, the need to ensure workers’ protection was lost in the dark labyrinth of negotiations (dialogue between the Minister of Workplace Relations and digital platform companies) in the following ways:

A) There is a lack of consideration for the inherent power imbalance prevalent in many working arrangements, where an employing entity may unilaterally impose contractual terms on a worker (the use of standard form contracts on a ‘take it or leave it’ basis).

B) The structuring as a test for self-employment rather than a rebuttable statutory presumption of employment that creates an additional barrier to protection for vulnerable workers and raises the potential risk of organisations drafting contracts to fall within the scope of these criteria.

C) There are no codified parameters to ensure only genuine specified contractors are excluded from the scope of the ERA. This means the effectiveness of this amendment will be left to the interpretative discretion of the Employment Authority and the Court.

D) Finally, because the proposal focuses on the distinction between employees and independent contractors, the unequal regulatory treatment of many non-standard workers based on their contractual status persists.

The above amendment is currently before the Parliament with a report from the select committee due on the 24^th December 2025.

Decision of the Supreme Court: Raiser Operations BV v. E TŪ Inc. and another

The Supreme Court confirmed the decisions of the Employment Court and the Court of Appeal in Raiser Operations BV v. E TŪ Inc [2025] NZSC 162 that the Uber drivers, represented by the trade unions E Tū Incorporated and First Union Incorporated, are employees for the purposes of the Employment Relations Act whenever they were logged onto the Uber driver app.

The majority judgment noted that, as established in Bryson, the common law tests of control, integration, and fundamental law should be used to determine employment status (at [116]). Recognising that the employment tests have different lenses, a combination of these tests—while seemingly emphasising the criteria under the fundamental test (economic reality between the parties) for employment, was applied (at [121]). The requirements used to establish the employee status of the drivers are: the freedom to work for others; the right to subcontract performance; basis of payment for work done; provision of tools and equipment; opportunity for profit and risks of loss; goodwill(customer loyalty); work premises, uniform and insignia; control over performance and disciplinary process (at [122-143]). On the other hand, the supporting judgment considered: the intention of the parties at the time of entry into the contract; control; integration; and the fundamental test to determine the drivers were employees of Uber (at [179-188]).

The supporting judgment agreed with the Court of Appeal that the Employment Court should not have reframed the test in Bryson to include the workers' vulnerability based on inequality of bargaining power as one of the relevant factors to be considered in determining whether the drivers are employees. This is in contrast to the majority’s observation (at [89]) that it was not the intention of the Employment Court to include this as one of the factors to determine employee status. According to the supporting judgment, “vulnerability may be relevant to ascertaining actual common intention and in determining how much weight it should be given, but reference to s 3 is not needed for that as inequality of bargaining power is already part of the caselaw in that regard.” (at [172]). Furthermore, both the majority and supporting judgment agree that the Court of Appeal erred in discounting actual common intention as one of the relevant factors under section 6 to determine the real nature of the relationship in employment misclassification cases.

Although the checklist applied by the majority and supporting judgments vary slightly, this can be argued to be the court’s attempt to adapt the strength of the common law tests to the new ways of working. In doing so, the court broadened the application of these tests by placing greater emphasis on the operational and economic nature of the dependence of these drivers — including their access to the market, building customer loyalty, and control over pricing —in making its decision. The Supreme Court's identification of the vulnerabilities associated with ridesharing is a realignment of labour law goals to address changes in the New Zealand labour market.

Are we there yet? Implications of these Judi-Legislative Developments on Workers

The Supreme Court’s decision highlights once again the challenges faced by a growing number of workers whose working relationships cannot be easily characterised as falling within the binary divide of labour law, yet whose working conditions are precarious and vulnerable to exploitation. Consequently, by holding that the drivers are employees, the Supreme Court has paved the way for these workers to access minimum statutory employment benefits, including the minimum wage, leave, social security benefits, and the right to bring a personal grievance claim for unfair dismissal. The immediate implications of the Supreme Court's decision are uncertain, as it was drafted narrowly to apply only to drivers in this case. Nonetheless, other non-standard workers may gain recognition of employee status by relying on it, as platforms (for example, food-delivery apps) that determine how work is organised are more likely to be identified as employers. This decision will not impact platform workers who set their own service rates and have multiple clients. Specifically, for other Uber drivers, this decision provides leverage to organise and bargain collectively with Uber on their rights.

However, the Supreme Court’s decision was made within the current parameters of the law, and its implications may be affected by the proposed self-employment test. This means that, when passed into law, workers challenging their employment status must first satisfy this preliminary presumption of self-employment before the tests reiterated in the Supreme Court’s decision can even be applied. In essence, we have moved in circles, albeit a larger one, back to where we started.

Is my argument that tests should not be used to address the challenge of misclassification? No, I believe that legal tests can be used to achieve the goals of labour law. However, this depends on how the test is structured and interpreted. For example, a statutory presumption of employment that places the burden of proof on the employing entity to rebut this status could strike the right balance for parties in work relations. A purposive interpretation of the proposed criteria by New Zealand courts may, in the long run, facilitate the protection of vulnerable workers. Ultimately, as argued by the Tripartite Working Group on Better Protections for Contractors in its response to the above test, specific regulatory interventions, such as the EU Directive on Platform Work are needed for sectors characterised by high levels of misclassification.