The United States ride hailing company Uber got a boost from the Brazilian Superior Court ruling in which the court ruled that the drivers who are associated with the company and provide their services are in fact only independent people are not employees of the company. This ruling can help the company to use it as a precedent for multiple other cases on the same issue in the country.
“App drivers don’t have a hierarchic relationship with Uber because their services are provided casually, without pre-established working hours or fixed salary, and therefore the characteristics of the labor tie among the parts don’t exist,” the court said in a unanimous decision by the 10 justices that form the second section of the court. This ruling overturned an earlier ruling by a local court.
The San Francisco-based Uber has had to face multiple cases in other countries as well over the claims by drivers that they are not independent contractors of the company but are employees of the company and hence entitled to benefits, which Uber has been dismissing. In the US states of California, the status of its drivers being independent contractors is under threat because the state legislators are contemplating bringing in a bill which could change the status of Uber drivers as employees. That would make them legally entitled to minimum wage protections and state-mandated benefits.
This issue is so important for Uber that it was also listed as one of the risks factors faced by the company in the prospectus that the company issues while issuing its initial public offering (IPO) earlier this year.
Settlement of disputes between Uber and its independent drivers have to be settled by the civil court and not Labor Justice, ruled the Brazil court, which is also known as the STJ.
There is a complete legal structure in Brazil that completely caters to labor claims exclusively which is called Labor Justice. There is a complete labor code and buildings and courts are tailored to specifically address claims that are related to labor relationships.
The creation of this system in Brazil has made it a country with the highest number of labor related complaints and has also prompted sale of their local retail operations by some foreign banks. This is the first time that a legal dispute between Uber and one of its drivers reached a top court in Brazil. According to experts, this ruling by the top court would also help the company to tackle the numerous similar cases that are going on in lower courts in the country.
“The current technological tools available allowed the development of a new form of economic interaction, creating the so-called shared economy, in which services provided by private car owners are intermediate by technology companies,” according to the ruling published on the STJ’s website.
“The decision reinforces more than 250 lower courts decisions in Brazil saying there’s no labor tie between Uber and its drivers,” Uber said in an emailed statement to the media.
(Source:www.bloomberg.com)
“App drivers don’t have a hierarchic relationship with Uber because their services are provided casually, without pre-established working hours or fixed salary, and therefore the characteristics of the labor tie among the parts don’t exist,” the court said in a unanimous decision by the 10 justices that form the second section of the court. This ruling overturned an earlier ruling by a local court.
The San Francisco-based Uber has had to face multiple cases in other countries as well over the claims by drivers that they are not independent contractors of the company but are employees of the company and hence entitled to benefits, which Uber has been dismissing. In the US states of California, the status of its drivers being independent contractors is under threat because the state legislators are contemplating bringing in a bill which could change the status of Uber drivers as employees. That would make them legally entitled to minimum wage protections and state-mandated benefits.
This issue is so important for Uber that it was also listed as one of the risks factors faced by the company in the prospectus that the company issues while issuing its initial public offering (IPO) earlier this year.
Settlement of disputes between Uber and its independent drivers have to be settled by the civil court and not Labor Justice, ruled the Brazil court, which is also known as the STJ.
There is a complete legal structure in Brazil that completely caters to labor claims exclusively which is called Labor Justice. There is a complete labor code and buildings and courts are tailored to specifically address claims that are related to labor relationships.
The creation of this system in Brazil has made it a country with the highest number of labor related complaints and has also prompted sale of their local retail operations by some foreign banks. This is the first time that a legal dispute between Uber and one of its drivers reached a top court in Brazil. According to experts, this ruling by the top court would also help the company to tackle the numerous similar cases that are going on in lower courts in the country.
“The current technological tools available allowed the development of a new form of economic interaction, creating the so-called shared economy, in which services provided by private car owners are intermediate by technology companies,” according to the ruling published on the STJ’s website.
“The decision reinforces more than 250 lower courts decisions in Brazil saying there’s no labor tie between Uber and its drivers,” Uber said in an emailed statement to the media.
(Source:www.bloomberg.com)
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