Amounts paid or payable for or in relation to the work
Having concluded that the threshold test under section 32 was satisfied and subject to the application of exemptions, the remaining matter in question was whether an amount was paid by Uber which could be taken to be a “wage” under section 35. Under section 35, the amounts paid or payable under the “relevant contract” are taken to be payroll tax wages where it is “for or in relation to the performance of work”.
Hammerschlag CJ noted that Uber’s argument, that the term “for” requires that the payment is in the character of remuneration, has force. In this regard, he concluded that the payments made by Uber do not have that character.
With respect to the term “in relation to”, he observed that, whilst it is of “wider ambit” than “for” and does not have to have the character of remuneration, “some form of reciprocity or ascertainable calibration between the money paid and the work done is required”. In this regard, the Court observed that the overall intention of the Contractor Provisions, is “to capture several means of disguising the employer-employee relationship by contractual arrangements which had been increasingly resorted to by persons seeking to defeat the objects of the Act”. Hammerschlag CJ noted that this was not the case for Uber and drivers.
Further, Hammerschlag CJ referred to the High Court decision in CFMEU v Personnel Contracting Pty Ltd (2022) 275 CLR 165, which in His Honour’s view, compelled that the characterisation of the payments must proceed by reference to the written contracts which “reflect and govern the legal relationship between the contracting parties and by reference to the rights and obligations to which the contracts give rise”. In this regard, from the written contracts in place, the Court observed that: “It is not Uber who pays the driver. The rider does that. Uber is a mere “payment collection agent””.
As noted, the terms of the contract can be referenced as being relevant to this conclusion, as they specify payment by a rider to Uber “shall be considered the same as payment made directly by the rider to the third party provider”, and that “Uber will facilitate the rider’s payment of the applicable charges on behalf of the third-party provider as the provider’s limited payment collection agent”.
Having made these findings and returning to the question of whether payments by Uber to drivers were “for” or “in relation to” work performed under the contract, Hammerschlag CJ acknowledged that there is some form of relationship between the payments and the work performed under the contract. However, in the context of his earlier commentary regarding the purpose of the Contractor Provisions, and having focussed his analysis on the written terms of the contract, his Honour concluded: “I do not consider that that relationship [between the payment and the work] is one which can fairly be described as being “in relation to” the work, in the context in which that phrase appears in s 35(1) and with the objects of Division 7 squarely in mind. There is no element of reciprocity or calibration between the driver and Uber or the rider and Uber with respect to the money paid by the rider. Those elements exist only between the driver and the rider”.
On this basis, it was determined that payments made by Uber to drivers ought not be viewed as ‘wages’ under section 35, meaning while a relevant contract existed, there were no ‘wages’, and no payroll tax liability arose.
