The Fair Work Ombudsmen (FWO) has found Uber drivers are not employees.

The FWO has ruled that Uber drivers are independent contractors, not employees, meaning they are not entitled to receive the minimum wage, annual leave, sick leave or any benefits that employees receive.

The tribunal was investigating claims that Uber misrepresents its drivers as people who run their own business in order to avoid paying employee benefits.

“The weight of evidence from our investigation establishes that the relationship between Uber Australia and the drivers is not an employment relationship,” said Fair Work Ombudsman Sandra Parker.

“For such a relationship to exist, the courts have determined that there must be, at a minimum, an obligation for an employee to perform work when it is demanded by the employer.

“Our investigation found that Uber Australia drivers are not subject to any formal or operational obligation to perform work.”

The FWO says its decision was based on a wide range of evidence, including contracts with drivers, log-on and log-off records, payment records and interviews with drivers themselves.

“Uber Australia drivers have control over whether, when, and for how long they perform work, on any given day or on any given week,” Ms Parker said.

“Uber Australia does not require drivers to perform work at particular times and this was a key factor in our assessment that the commercial arrangement between the company and the drivers does not amount to an employment relationship.

“As a consequence, the Fair Work Ombudsman will not take compliance action in relation to this matter.”

Some drivers say the decision is wrong because they cannot set their own rates, whereas independent contractors can.

The Transport Workers' Union (TWU) also rejected the decision, calling instead for legal reform.

“Today's decision … is devastating for workers in the gig economy,” TWU national secretary Michael Kaine told reporters.

“Last year we had a landmark victory when a Foodora rider won an unfair dismissal case and we know the same control factors are in play for workers in Uber and right across the gig economy.

“If this is what our laws are guiding regulators to do then these laws are hopelessly broken and the Government must act urgently to put in place rights that protect all workers.”