A case claiming that NZ Post’s courier drivers are employees who have been misclassified as contractors has been filed in the Employment Court. The Postal Workers Union of Aotearoa will be seeking a declaration from the Court that those couriers who have joined the Union are employees.

Couriers at NZ Post sign an “Owner Driver Agreement” which states that they are independent contractors. As contractors they are required by NZ Post to purchase their own van, pay for it to be branded “NZ Post”, pay for a scanner and some of the NZ Post uniform, and pay for their own ACC levies, and accountancy and legal fees. They are provided with no paid annual leave, no paid public holidays, no paid sick leave or bereavement leave, and they can’t earn any overtime pay.

NZ Post does not allow any negotiations on its contracts with the owner drivers. The contracts expire every three years. NZ Post does not guarantee that the contracts will be extended beyond any three year term.

The Postal Workers Union claims that the couriers are fully integrated into the business of NZ Post, their work is directed by NZ Post, and the work they do is primarily for the benefit of NZ Post and its brand.

The Employment Court has confirmed that every worker in New Zealand has the statutory right to seek a declaration as to whether they are an employee. The Union expects the Court to be focusing on the nature of the relationship – a relationship that the Union says is not as a contractor, but as an employee of NZ Post.

If the Employment Court agrees with the Union then the Court has the jurisdiction to declare that the couriers are, and have been, employees despite the Owner Driver Agreement stating they are contractors. Such a finding by the Court could provide significant financial benefits for the couriers who are Union members, including backdated compensation for past years spent as contract couriers.

NZ Post has been operating two separate delivery networks in metropolitan areas – an employee network for mail delivery and a “contractor” network for parcel delivery.

The company has said that operating two separate networks is costly and inefficient, and it has recently announced upcoming mass layoffs of the majority of its employee workforce in the mail service while retaining its “contractor” workforce.

It has become increasingly clear to the Postal Workers Union that NZ Post’s plan to improve its operating profit, faced with declining mail volumes and increasing parcel volumes, is to get a larger and larger proportion of its delivery work to be done by “contractors”.

The PWUA believes that the main reason that contractors are more profitable for NZ Post is because the “contractors” are paid much less per hour on average than employees, with some earning well below the legal minimum wage, and they are not provided with any paid leave.

“Contractors” also have to take on additional responsibilities which would otherwise be the responsibility of management.

If the Court declares that couriers are, in fact, employees then the Postal Workers Union believes that NZ Post’s plan to improve its profitability by using misclassified workers (“contractors” instead of employees) will need to be reviewed, and this could include reviewing the plan to lay off the majority of its mail service employees.

In the meantime the Postal Workers Union will be challenging any attempts by NZ Post, a State Owned Enterprise, to expand its use of “contractors” into mail delivery.

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