AMSTERDAM—Uber drivers are employees, not contractors, and so entitled to greater workers’ rights under local labor laws, a Dutch court ruled on Monday, handing a setback to the U.S. company’s European business model. The Amsterdam District Court sided with the Federation of Dutch Trade Unions (FNV), which had argued that Uber’s roughly 4,000 drivers in the capital are employees of a taxi company and should be granted benefits in line with the taxi sector. Uber said it would appeal against the decision and “has no plans to employ drivers in the Netherlands.” “We are disappointed with this decision because we know that the overwhelming majority of drivers wish to remain independent,” said Maurits Schönfeld, Uber’s general manager for northern Europe. “Drivers don’t want to give up their freedom to choose if, when and where to work.” The court found drivers who transport passengers via the Uber app are covered by …