Courier contractor ruling could open way for action against other employers

An employment lawyer says a court finding that an Auckland courier was an employee not a contractor could open the way for similar cases.

Mika Leota was working for Parcel Express, and had signed a contract to say he was a contractor.

He had taken legal action after he worked 10-hour days and received less than the minimum wage.

Parcel Express argued he was an independent contractor, and therefore his own boss.

But an Employment Court judge yesterday determined the actual conditions he worked under made him an employee.

Wellington lawyer Barbara Buckett said other employers who have mislabelled employees as contractors could have a costly problem on their hands.

She said the ruling showed such contracts were a sham to avoid employment responsibilities.

The court had applied a "reality test", she said, looking at the actual nature and reality of the arrangement.

"So the words on the bit of paper that you sign are not the be all and end all of the question."

She believes treating employees as contractors in the courier business is widespread.

"[Employment court judge Christina Inglis] made some interesting comments around the fact that there has been for quite a long time some form of charade going on."

Though the judge made clear the determination applied only to Leota and did not find all courier drivers were employees, Buckett says similarities will be drawn.

"You'd be very hard put to find an arrangement that wasn't the same, or very similar, to Mr Leota's."

Other industries may be vulnerable to challenge, such as Uber, or the public sector use of consultants and contractors.

NZ Post said it was reviewing the judgement to see what effect it would have on its business.

It said whether someone was a contractor or an employee depended on the particular circumstances and arrangement between each courier and company.

Parcel Express declined RNZ's request for comment.