Upwork wouldnt have visibility into any other customers he may or may not have had, so it doesn’t seem like their call to make.

In Aus we have something sort of similar for contractors called personal services income. The rules are somewhat complex but it roughly boils down to the 80/20 rule - if you derive more than 80% of your income from a single customer, you have to treat that income as if you were an employee. Note that the burden here is on the contractor and enforcement is via the tax authority - as opposed to this case where the employer seems to be on the hook