# Uber drivers are employees, not contractors, says Dutch court
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-09-13
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Uber Drivers Ruled Employees in Netherlands, Impact on
Meta Description: A Dutch court decision grants Uber drivers greater workers' rights and benefits, going against the company's business model. Uber plans to appeal the
URL: https://financedigest.com/uber-drivers-are-employees-not-contractors-says-dutch-courthtml

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By Anthony Deutsch and Toby Sterling

AMSTERDAM (Reuters) -Uber drivers are employees, not contractors, and so entitled to greater workers’ rights under local labour laws, a Dutch court ruled on Monday, handing a setback to the U.S. company’s European [business model](https://www.financedigest.com/learning-from-the-disrupters-how-finance-brands-can-build-transformative-business-models.html "Learning from the disrupters – how finance brands can build transformative business models").

It was another court victory for unions fighting for better pay and benefits for those employed in the [gig economy](https://www.financedigest.com/meet-tilak-joshi-the-fintech-ceo-building-modern-solutions-for-the-gig-economy.html "Meet Tilak Joshi: the fintech CEO building modern solutions for the gig economy") and followed a similar decision this year about Uber in Britain.

The Amsterdam District Court sided with the Federation of Dutch Trade Unions (FNV), which had argued that Uber’s roughly 4,000 drivers in the capital are [employees of a taxi company](https://www.financedigest.com/why-more-companies-are-asking-new-employees-to-commence-employment-before-christmas.html "Why more companies are asking new employees to commence employment BEFORE Christmas.") and should be granted benefits in line with the taxi sector.

Uber said it would appeal against the decision and “has no plans to employ drivers in the Netherlands”.

We are disappointed with this decision because we know that the overwhelming [majority of drivers](https://www.financedigest.com/lyocell-fibers-market-overview-highlighting-major-drivers-trends-growth-and-demand-report-2019-2027.html "Lyocell Fibers Market Overview Highlighting Major Drivers, Trends, Growth and Demand Report 2019- 2027") wish to remain independent,” said Maurits Schönfeld, Uber’s general manager for northern Europe. “Drivers don’t want to give up their freedom to choose if, when and where to work.”

The court found [drivers who transport passengers via the Uber](https://www.financedigest.com/french-uber-drivers-to-earn-more-than-8-per-ride-after-union-deal.html "French Uber drivers to earn more than  per ride after union deal") app are covered by the collective labour agreement for taxi transportation.

“The legal relationship between Uber and these drivers meets all the characteristics of an employment contract,” the ruling said.

The FNV hailed the ruling.

“Due to the judge’s ruling, the Uber drivers are now automatically employed by Uber,” said Zakaria Boufangacha, FNV’s deputy chairman. “As a result, they will receive more wages and more rights in the event of dismissal or illness, for example.”

Uber [drivers are in some cases](https://www.financedigest.com/amazon-loses-bid-to-throw-out-case-by-uk-drivers-seeking-worker-rights.html "Amazon loses bid to throw out case by UK drivers seeking worker rights") entitled to back pay, the court said.

The judges also [ordered Uber to pay a fine of 50,000 euros](https://www.financedigest.com/rheinmetall-wins-quarter-billion-euro-order-for-e-vehicle-parts.html "Rheinmetall wins quarter-billion euro order for e-vehicle parts") ($58,940) for failing to implement the terms of the labour agreement for taxi drivers.

In March, Uber said it would improve workers’ rights, including the [minimum wage](https://www.financedigest.com/greece-to-increase-minimum-wage-again-before-election.html "Greece to increase minimum wage again, before election"), for all of its more than 70,000 British drivers after it lost a Supreme Court case in February.

Uber recorded $600 million in first-quarter charges to account for the UK benefits, highlighting the [financial toll of wider changes](https://www.financedigest.com/financial-risks-of-climate-change-overplayed-senior-hsbc-banker-says.html "Financial risks of climate change overplayed, senior HSBC banker says") to its contractor model.

Unlike in other European countries and the United States, UK employment law offers a unique “worker” status – a legal definition that situates drivers between [independent contractors with no benefits and full-fledged employees](https://www.financedigest.com/3-impactful-ways-that-leaders-can-contribute-to-the-independent-development-of-their-employees.html "3 Impactful Ways that Leaders Can Contribute to the Independent Development of Their Employees") with extensive benefits.

Uber has advocated for a similar in-between status in other countries, but said those initiatives would require changes to [employment laws](https://www.financedigest.com/a-first-look-at-new-york-citys-new-law-prohibiting-employers-from-inquiring-about-the-salary-history-of-applicants.html "A First Look at New York City’s New Law Prohibiting Employers From Inquiring About the Salary History of Applicants").

Uber in February released a white paper https://www.uber.com/global/en/about/reports/a-better-deal that called on EU regulators to recognise the value of independent [contracts in job creation as they consider](https://www.financedigest.com/4-questions-to-consider-before-embarking-on-a-contract-packaging-expansion.html "4 questions to consider before embarking on a contract packaging expansion") new rules to protect gig economy workers.

We believe a new approach is possible – one where having access to protections and benefits doesn’t come at the cost of flexibility and of job creation,” Uber CEO Dara Khosrowshahi said in a blog [post at the time](https://www.financedigest.com/whats-the-best-time-to-post-on-instagram.html "What’s the best time to post on Instagram").

The company is [pushing for similar models in the United States and Canada](https://www.financedigest.com/q-acoustics-push-global-expansion-with-canada-launch.html "Q Acoustics Push Global Expansion with Canada Launch"), where it faces dozens of lawsuits over the status of its drivers.

Uber in May faced a legal setback when the U.S. Supreme [Court rejected its bid](https://www.financedigest.com/glencore-courts-120-teck-investors-for-bid-backing-as-spinoff-vote-looms-source.html "Glencore courts 120 Teck investors for bid backing as spinoff vote looms -source") to avoid a lawsuit over whether drivers are employees and not independent contractors.

But the company and other gig economy [companies scored a decisive win in California last](https://www.financedigest.com/the-last-mile-of-statutory-reporting-is-absolutely-crucial-heres-how-one-global-company-does-it-with-onesource.html "The last mile of statutory reporting is absolutely crucial. Here’s how one global company does it with ONESOURCE") year, when a majority of the state’s voters passed a company-sponsored ballot measure that cemented workers’ status as contractors, albeit with some benefits.

Gig companies in some U.S. states are also trying to [strike deals with labour unions](https://www.financedigest.com/ita-airways-averts-strike-after-wage-increase-accord-with-unions.html "ITA Airways averts strike after wage increase accord with unions").

($1 = 0.8483 euros)

(Reporting by Anthony Deutsch and Toby SterlingAdditional reporting by Tina Bellon in Austin, TexasEditing by Edmund Blair and Mark Potter)


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