In an historic judgment for Uruguay, Uber was awarded its first favorable labor decision, in which the Labor Court of First Instance for the Capital term 15 found there was no employment relationship between the driver and the platform. This is the first case of its kind that, given the amount claimed, could come to be reviewed by the Supreme Court of Justice.

The decision, handed down on Thursday, May 23, is particularly important for the company, as it took place in the context of Uruguayan Parliamentary debate on a bill of law to regularize independent work via digital services platforms, like Uber’s.

In the specific case, the claimant alleged to have worked as driver and to have maintained a disguised employment relationship with the application. He claimed nearly one million dollars for purported nonpayment of vacation, vacation pay, statutory bonus, overtime, seniority, tips and activity-related expenses.

The Court of First Instance rejected the claim in full. The chief arguments for the decision were:

  • Freedom to work: the driver was able to choose to connect to the platform or not as he wished, setting his workdays and working hours, which is not compatible with a dependent employment relationship, insofar as there was no obligation to work. The Judge underscored that, in the specific case, without prior notice, the driver remained unconnected to the application for serval months due to travel abroad and, upon his return, he continued using the platform without any negative consequence for his conduct.
  • The platform establishes recommendations for users and for drivers: the application establishes certain guidelines for its use, applicable both to drivers and to user passengers. In the case of the claimant driver, the Judge noted that those guidelines did not impact on his freedom to decide when and how he worked.
  • Absence of supervision: the driver was not monitored and was not subject to supervision by Uber, insofar as it is the platform users who give good or bad reviews, through the application’s rating system.
  • Nonexistence of exclusivity: the driver was not subject to exclusivity and had the possibility of providing transportation services via multiple platforms, including Uber’s competitors.
  • The driver covered the expenses associated with his transportation service: the driver’s assuming the risks of his activity is an indicator of autonomous work. The driver covered all expenses inherent to the service he provided (e.g.: vehicle, cell phone, registration, maintenance, among others), and Uber did not assume any of these costs. The Judge found that the driver contributed the tools he used and that Uber did not give him any inputs whatsoever. Thus, he rejected the driver’s argument that the platform itself is a work tool.
  • The driver had never made any claim previously for nonpayment of labor credits: Uber never paid labor credits or typical employee benefits, and the driver, throughout his entire relationship with the platform, never claimed for nonpayment of these items.
  • Incompatibility between choosing when and for how long he would work and being a dependent employee: the Judge strongly criticized the claim and raised several questions. Among them: “What employee can freely choose the number of hours he is going to work on a certain day and whether he will work or not?” Or, “What employee can freely choose that as of a certain date, because he wants to earn more money, he is going to work overtime, is going to work more than eight hours a day?” And the Judge answers: no one. He holds that it is the company who in all cases decides if it is necessary to work overtime or not. It is not feasible for an employee’s earnings to depend on the employee’s willingness to work.