The gig economy is the most commonly used term to describe the labour market in which people engage in work via online platforms/providers such as Uber or Deliveroo. Named after casually working ‘gigs’ due to the freelance nature of the work, the gig economy is rapidly expanding.
A report by Ernst and Young in 2016 claims that by the year 2020, one in five Americans will be providing one of these ‘on-demand’ services. The current global marketplace sees 15 per cent of workers accessing these platforms and the consensus is for this to expand.
What entitlements do workers in the gig economy receive?
People working with these platforms receive a payment for each job completed and, as such, are currently – arguably – classified as independent contractors in Australia. Australian courts have not yet ruled decisively one way or the other as to whether such arrangements are that of an employment relationship or a contracting arrangement.
In other words, gig workers are currently slipping through cracks of the Australian employment law framework.
Consequently, their entitlements, including remuneration, are entirely at the mercy of the provider they are using to access work. This leads to situations unheard of for many Australian workers where contracts allowing for remuneration can be unilaterally varied.
A gig worker performing two separate yet substantially similar jobs could potentially receive significantly different pay for each and have no say in the matter given the lack of regulation.
This independent contractor status means the Fair Work Act 2009 (the Act) and the National Employment Standards (NES) do not apply to these workers. Consequently, these workers are not protected by statutory minimum entitlements to pay, leave and other similar such entitlements.
Additionally, there is no access to general protections claims or unfair dismissal remedies. It is also quite common for gig workers to miss out on superannuation, workers compensation and occupational health and safety protections.
Workers will also miss out on the minimum entitlement prescribed by industrial awards. These provide for seemingly innocuous things, such as allowances, penalty rates for weekend, public holiday and shift work and annual leave loading, for example.
A vehicle allowance, for instance, contained in an industrial award could mean the difference between an Uber driver making a profit for the week and barely meeting their costs.
This poses the question: do these gig workers not care about those entitlements? Or do they accept that going without them is part and parcel of their position?
NSW workplace health and safety legislation was changed in 2012. The definition of ‘employer’ was changed to ‘PCBU’ – a person conducting business or undertaking. The definition of ‘employee’ was also changed to ‘worker’. These definition changes had the effect of encompassing far more employment classifications than was the case previously. Contractors, subcontractors, outworkers, apprentices, trainees, work experience students and volunteers were all captured under the new definitions.
This change was referenced in an Australian Senate report entitled ‘Corporate avoidance of the Fair Work Act 2009’ that outlined tax implications, minimum wage and safety regulations as concerns in relation to the gig economy.
How the government goes about combating these challenges is unclear. A recently published research paper by University of Adelaide professor of law Andrew Stewart and director of the Australia Institute’s Centre for Future Work, Jim Stanford, highlights several options for countering the issues raised by the boom of the gig economy.
Options for Change
1.Should we rely on existing laws?
Relying on existing laws essentially results in the status quo being maintained. This means regulation and understanding of the gig economy will be incrementally improved using test cases. It also means that until those test cases provide precedents, the provision of minimum entitlements is up to the providers. Airtasker is currently the only gig platform that has agreed to minimum working conditions, which includes a guarantee of paying above comparative award rates.
2.Redefine the definition of ‘employment’?
As opposed to incremental changes, ‘redefining employment’ is a quicker and bolder approach to finding a solution to the gig worker-entitlement conundrum. However, depending on how the issue is approached, this could result in disrupting the discernment between true independent contractors and employees as currently defined. Any definition changes would need to be carefully considered so that issues with sham contracting are not further exacerbated.
3.Consider a new employment classification such as ‘independent worker’ or ‘dependent contractor’?
Creating new employment classifications specifically for these gig workers could potentially enable them to access entitlements. The argument for this approach is that gig workers operate in a distinctly different way to both employees and independent contractors. However, consider that this approach may cause a similar issue to sham contracting – presenting another opportunity for employment misclassification.
4.Look at implementing rights for ‘workers’ as opposed to ‘employees’?
This is perhaps the most extreme option of the five options as it would grant entitlements to anyone that ‘performs work’. This could potentially be too costly an approach but could be an option for the most essential rights, such as WHS regulations.
5.Look at redefining ‘employer’?
As opposed to the most extreme option, this would be the most difficult to implement as well as the most unlikely. With this proposal, gig workers would have different employers for different legal purposes. The provider and the end consumer would essentially both share ‘employer’ status and the requirements that come along with being an employer. In the United States, this is known as ‘joint employment’ but is a concept Australia has been reluctant to adopt.
Like to know more? Contact CCI’s Employee Relations Advice Centre on (08) 9365 7660 or email firstname.lastname@example.org.