Facts
The Compensation Fund of the Canton of Zurich issued a ruling on 16 August 2019 determining that the UberPop drivers performed dependent employment activities for Rasier Operations B.V. (with registered office in Amsterdam). Uber Switzerland GmbH (with registered office in Zurich) was qualified as the accounting permanent establishment of Rasier Operations B.V. in Switzerland. The Fund required both companies to pay social security contributions (including ancillary costs) for the year 2014 amounting to CHF 4,283,763.75, as well as default interest of CHF 991,215.35.
Rasier Operations B.V. and Uber Switzerland GmbH filed an objection against this ruling. With its objection decision of 3 March 2020, the Compensation Fund reduced the contribution claim to CHF 4,257,228.55 (including ancillary costs) and the default interest to CHF 985,075.40. It confirmed, however, that the UberPop drivers performed dependent employment activities for Rasier Operations B.V. and that Uber Switzerland GmbH was to be qualified as a permanent establishment of Rasier Operations B.V. in Switzerland.
Both Rasier Operations B.V. and Uber Switzerland GmbH filed an appeal against the objection decision with the Social Security Court of the Canton of Zurich. The cantonal court partially upheld Uber Switzerland GmbH’s appeal and found that it was not liable to pay contributions. The Compensation Fund appealed the cantonal court’s judgment to the Federal Supreme Court (9C_692/2020), which was partially upheld (FSCA 147 V 174).
The appeal of Rasier Operations B.V. was partially upheld by a judgment of the cantonal Social Security Court of 20 December 2021 (case no. AB.2020.00045). The court set aside the objection decision of 3 March 2020 and referred the matter back to the Compensation Fund for a reassessment of the contributions for the year 2014, following determination of the wage sums and individual examination of the relationships between Rasier Operations B.V. and the drivers. The court also found that the drivers’ activities in 2014 were to be qualified as dependent employment.
Both the Compensation Fund (9C_71/2022) and Rasier Operations B.V. (9C_75/2022) filed public-law appeals against this judgment with the Federal Supreme Court. The Compensation Fund sought the annulment of the judgment and confirmation of the objection decision of 3 March 2020, in particular the determination that the UberPop drivers performed dependent employment activities for Rasier Operations B.V., that the latter was to be qualified as the employer, and that Uber Switzerland GmbH was to be qualified as a permanent establishment. Rasier Operations B.V. sought the annulment of the judgment and a determination that the drivers did not perform dependent employment activities and that no contribution liability existed.
Considerations
1. Admissibility of the appeals and joinder of proceedings
The Federal Supreme Court joined the two appeals (9C_71/2022 and 9C_75/2022) as they concern the same facts and parties and raise closely related legal issues. Both appeals are directed against the same lower-instance decision, which is to be qualified as an interlocutory decision. Rasier Operations B.V.’s appeal is admissible as it meets the requirements of Art. 93 para. 1 lit. b FSCA: if the appeal were upheld, the Federal Supreme Court could issue a final decision concluding the proceedings, thereby saving significant time and costs that would otherwise be incurred in extensive evidentiary proceedings. The Compensation Fund’s appeal is also admissible as it may raise the points in which it was unsuccessful before the lower court.
2. Contribution status of the UberPop drivers
The Federal Supreme Court examined whether the lower court was correct in qualifying the UberPop drivers as dependent employees. The decisive factor is whether the drivers were economically and organisationally dependent on Rasier Operations B.V. and did not bear any significant entrepreneurial risk. Although the contractual arrangements between Rasier Operations B.V. and the drivers (service and usage agreements) did not explicitly provide for any right to issue instructions, various individual provisions granted Rasier Operations B.V. extensive control and steering options over the drivers. These included, in particular, the prescription of routes, passenger ratings of drivers, constant technical monitoring via the app, price binding, and Rasier Operations B.V.’s dominant position in collection and complaints handling. These elements established a pronounced subordination relationship typical of dependent employment. The drivers did not bear any significant entrepreneurial risk, as they were not required to make substantial investments and their income depended on Rasier Operations B.V. The factors suggesting self-employment (e.g. no non-compete clause or presence requirement) carried less weight in comparison.
3. Employer status of Rasier Operations B.V.
Under Art. 12 para. 1 OASIA, an employer is any person who pays wages to persons subject to mandatory insurance. Rasier Operations B.V. had extensive powers to issue instructions to the drivers and paid their remuneration, albeit via Uber B.V. as its agent. It thus met the requirements for employer status. The fact that Uber B.V. technically processed the salary payments did not alter the fact that Rasier Operations B.V. was the actual employer, as it determined the working conditions and integrated the drivers into its operational organisation.
4. Permanent establishment of Rasier Operations B.V. in Switzerland
Under Art. 12 para. 2 OASIA, employers with a permanent establishment in Switzerland are liable to pay contributions. A permanent establishment requires a fixed installation or…