In Switzerland, Uber is an employer like any other and cannot escape its employer-employee obligations
In terms of labour law, there is an employer-employee relationship between Uber and its drivers, resulting in the online platform not being able to escape its employer obligations, including social security contributions, according to a legal opinion.
The expertise of social law professor at the University of Basel Kurt Pärli is the first review of law enshrined in the digital economy in Switzerland. It was presented today, Monday 29 August 2016, in Berne by the 200 thousand member strong union Unia.
According to this document, the transportation service request Uber acts through its subsidiaries in Switzerland as an employer and should assume the obligations by paying both the employee contributions as an employer to the Swiss social insurance .
Uber refuses to recognize its drivers as employees and instead devised a system of fictitious independence, noted the president of Unia.Vania Alleva told reporters, even the Swiss National Accident Insurance Fund (SUVA) has rated this company as an employer back in May this year, when considering its subjection to social insurance.
The Suva ruled that a driver from the ride-sharing service Uber is an employee, rather than self-employed, going against Uber’s business model, threatening the future of service in Switzerland.
“It’s a hard blow for Uber’s business model,” work law expert Thomas Geiser told Swiss public television SRF’s Rundschau programme on 20 May 2016. “This means that every other case involving an Uber driver will be treated the same,” said the St Gallen University professor. “It means that the [Uber business model] cannot work. Uber has to, like every other employer, meet its obligations and pay social insurance.”
The Rundschau programme reported 30 similar cases. Suva argued in its decision that taxi drivers who are connected to a headquarters count “in principle not as self-employed”, and are therefore employees. It said that drivers carry no economic risk and are, from a work organisation point of view, dependent on the headquarters.
This goes against Uber’s main argument that it is a technology company that connects passengers and vehicles via its app. Suva’s decision is binding for Switzerland’s social security system, like the state pension plan and disability insurance.
Suva’s most recent decision seems to contradict a number of decisions rendered by cantonal social security agencies since Uber’s Swiss market entry in 2012, which have so far accepted Uber’s position that offers only market platform brokering among independent self-employed taxi drivers and their clients.
The Suva decision could constitute a blow to Uber’s business model because henceforth it be required to pay social security contributions of 12.25% for the risks of old age, death, invalidity and unemployment, plus additional levies for further social security coverage against professional and non-professional accidents and family allowances, among others. In the past, Uber has successfully argued that it does not fall under local taxi legislation.
Uber has stated that it does not employ drivers, and that drivers are responsible for paying social insurance and taxes. In an interview on Rundschau, the general manager from Uber Switzerland, Rasoul Jalali, reiterated that Uber is a tech company and not a taxi firm.
Suva and local social security agencies apply a variety of tests in order to determine what constitutes a classic employer-employee relationship for social security purposes. The most important tests are the so-called ‘subordination’ and ‘integration’ tests (ie, an employer’s right to give binding instructions to its employees and the extent to which employees are integrated into the employer’s work organisation).
Speaking today, Ms. Alleva spoke of “shocking” conditions in Uber, favoured by a “pseudo-independence”, with some drivers who have a 100% working day and driving at night. This leads to “massive” violations of the law, particularly on rest periods, maximum hours of work, the recording of working time and measures to protect health.
“Best digital worlds”
Prof. Pärli has talked about a “prelude to the best of digital worlds.” According to its conclusions, the group Uber – Uber International Sàrl and Rasier Operations Sàrl in the Netherlands, Switzerland Sàrl Uber Zurich – indeed concludes a contract with its users.
The employer-employee relationship of subordination is including in step by step instructions that makes this company to any driver who executes a warrant of transportation. In addition, there is a de facto duty to accept the fares, because whoever refuses will no longer be offered work after a while.
According to the Professor, these workers perform dependent employed work and the employer must pay the social security contributions, AVS, AI, APG, accident, unemployment, occupational pensions and family allowances.
Kurt Pärli also questioned the validity of jurisdiction in any dispute between Rasier and a driver, an arbitral tribunal based in Amsterdam and in English. According to him, it is possible to denounce the arbitration clause in a Swiss court. Foreign courts have already ruled on this.
Strictly enforce laws.
Natalie Imboden, Unia, “the cantonal road traffic, responsible for the implementation of the Ordinance on working hours and rest periods for professional drivers must act quickly”. The union strongly rejects interventions to repeal or amend the ordinance recently submitted to the National Council elected by PLR.
According to Unia, this expertise is an example for the business model of online platforms. Employers cannot evade their responsibilities by organizing labor relations through the Internet or specific applications.
“The passivity of the federal and cantonal authorities is unacceptable”, further noted Roman Künzler, of Unia. “Only the city of Lausanne seriously seeks to prohibit price business model of Uber.”
Greater Zurich Council also on Monday rejected an individual initiative of a taxi driver Dübendorf (ZH). It demanded changes to several laws. These changes were all directed against Uber. The initiation demanded that all drivers have a permission of the municipal police. It also called for the introduction of a minimum price.
In a counter argument paper, Uber said that the legal opinion is “based on a series of inaccurate assumptions and lacks convincing arguments on the issue of self-employment.”
“We have very valid legal arguments about the status of our partners as independent and it is up to the judges to decide on this matter, not a single Professor or UNIA.”