New Zealand Uber drivers are taking the global ride-share company to court, in the hopes of being legally determined as employees instead of contractors.

It is the latest in a string of cases taken against the company and other ride-share apps, and the second such case in New Zealand.

Two unions, First Union and E Tu, will take the class action to the Employment Court on behalf of more than 20 drivers. They hope to override a legal precedent set in the court last year, which ruled a driver was not an employee.

An Uber driver’s rate is set by Uber, but First Union’s Anita Rosentreter said the judge in last year’s decision concluded that the driver had control over their wages because they could, in theory, be paid less, or could improve the profitability of their business through adopting cheaper business costs – such as a phone plan.

“I find it unfathomable that someone thinks that is a compelling argument,” said Rosentreter.

The Employment Relations Act 2000 requires that the intention of the parties, and how an employment relationship acts in practice, must be considered. Merely stating in a contract that a person is a contractor does not mean it will automatically pass the legal test.

Rosentreter said Uber ultimately has control over how its business is carried out and how much drivers are paid for each ride. She said the drivers are out there representing Uber’s brand, not their own, meaning they should be deemed as employees, despite signing on as independent contractors.

“The court has to look at the reality of the way drivers are working and the relationship they have with the company and decide if that looks more like an employment relationship than the relationship of a contractor or a client,” Rosentreter said.

The legal challenge is part of a two-pronged attempt to seek better conditions and security for Uber and food-delivery drivers.

The unions delivered a report titled Gig Work in Aotearoa to the minister for workplace relations and safety, Michael Wood, at Parliament on Wednesday, outlining legal grey areas for gig-workers in employment law, their lack of employment security, and worrying trends in their rates of pay.

As self-employed contractors, the drivers are being deprived of their minimum employment entitlements, including the minimum wage, holiday pay, sick leave and legal recourse for unjustified dismissals, the report said.

Fifty-three percent of the respondents said they earned less than the minimum hourly wage after expenses.

“We have an opportunity in Aotearoa to get ahead of the worst excesses of the gig economy and learn from ample overseas evidence that employment laws need to be fit for purpose, not prone to exploitation by companies like Uber,” Rosentreter said.

A spokesperson for Uber New Zealand said in a statement that Uber is “focused on continuing to look at how we can improve the quality of on-demand work, while retaining the two key things that make it unique compared to traditional forms of work – low barriers to earning income, and the flexibility to work when you want, where you want, for as long as you want, and you can stop at any time.”

It said last year’s Employment Court ruling was consistent with multiple rulings in Australia and overseas.