Drivers Are Not Uber Employees, Rules Brazil’s Highest Labor Court

RIO DE JANEIRO, BRAZIL – The Superior Labor Court (TST) has ruled, for the first time, that Uber drivers have no employment relationship with the company because they are flexible in their schedules and are paid up to 80 percent of the amount paid by users, typifying a partnership relationship. The decision was unanimous.

A number of regional labor courts had tried cases involving a potential employment relationship between partners and companies such as Uber, iFood, and Loggi. However, this is the first time that the TST has ruled on the matter; it is the highest court Brazil’s labor court system.

The case judged by the TST concerns a driver who worked for Uber between July 2015 and June 2016. He wanted this period to be registered into his worker’s record book and wanted to be granted the labor rights secured by his employment relationship.

In the lower court, the judge rejected the existence of an employment relationship. The decision was reversed on appeal by the TRT (Regional Labor Court) of São Paulo, which found that all the elements to qualify an employment relationship – i.e. regularity, salary, presence, and subordination – were present.

According to the TST, which overturned the TRT decision, there is no subordination factor in the link between the driver and Uber, because he would be able to work whenever he wanted, in the regions he wanted, including the possibility of staying off-line.

“The worker’s ample flexibility in determining his routine, working hours, the places where he wants to work and the number of clients he intends to serve per day is incompatible with the acknowledgment of the employment relationship, which is based on subordination,” wrote  TST’s Judge Breno Medeiros in the ruling opinion.

The court points out that the link between drivers and Uber is closer to a partnership than to a job, as they were paid a fixed proportion of 75 to 80 percent of the amount paid by users. Currently, the percentage varies according to the time spent and distance traveled.

This proportion is too high to represent an employment relationship, Medeiros writes: “the distribution of the service amount in a high percentage to one of the parties evidences a salary advantage that is inconsistent with an employment relationship”.

According to TST Judge Douglas Alencar, in a concurring opinion, it is impossible to classify the shared economic relations as employment bonds defined by the CLT (Consolidation of Labor Laws), a law passed in 1943 by Getúlio Vargas. However, he believes that the partners are entitled to some kind of social protection: “there must be an urgent legislative update”.

In a statement, Uber claims that the TST followed the same line of 75 rulings by Regional Courts and over 240 sentences by several labor courts in Brazil. The rulings reject the existence of an employment relationship or say that disputes between drivers and the company should not be resolved by the Labor Courts.

Uber has more than 600,000 partner drivers currently registered in more than 100 municipalities. The platform counts over 22 million users in Brazil.