Gig economy needs to see creative reforms from the federal government
As part of the Albanese government’s workplace relations reforms, the Department of Employment and Workplace Relations recently published a white paper exploring how “employee-like” forms of work, such as ride-sharing or food-delivery, might be regulated to better protect workers.
These “gig” workers are often engaged as contractors rather than employees, meaning they are not entitled to conditions such as minimum hourly wages. Labor is proposing minimum standards for workers in “employee-like” forms of work, including the gig economy.
Dr Alex Veen
As researchers who have been studying the gig economy and workers’ experiences within it since 2017, we have been advocating for sectoral-based regulatory reforms to better protect workers. But the approach suggested in the white paper may create several issues.
First, the proposal, if implemented, would create a third category of “employee-like” workers. Sandwiched between existing independent contractor and employee classifications, this new category would add complexity to Australia’s industrial landscape.
Creating a third category can also generate unintended consequences, such as the risk that some employers will opportunistically turn their employees into “employee-like” workers to save on labour costs, while others will be forced in this direction because of competitive pressures, resulting in a regulatory-enabled race to downgrade conditions.
Second, ride-sharing and delivery platforms have proven themselves adept at drafting contracts that avoid the employment category. It follows that they may well use their contracting agility and the reality that most contracts are offered on a “take it or leave it” basis, to avoid workers being classified as “employee-like” – making the reform redundant.
Creating a third category can also generate unintended consequences, such as the risk that some employers will opportunistically turn their employees into “employee-like” workers to save on labour costs.
Rather than replicating Australia’s exiting workplace system for “employee-like” forms of work, with the aforementioned risks associated, the reforms present an opportunity to try something new.
Gig work is a different form of employment. For example, workers can be logged into a number of platforms at once, complicating relationships beyond a single employer and an employee.
nstead of squeezing gig work into the way employment has traditionally been regulated, this is an opportunity to create regulation that helps protect workers in this form of work, which is often chosen because of their limited labour market power.
In our submission to the department, we provide two wildly different and potentially incompatible options which, we believe, are equally worth considering.
Gig workers are often engaged as contractors instead of employees, which means they aren't entitled to minimum hourly wages. Pictures: Adobe
First, rather than making the Fair Work Commission the main vehicle through which minimum standards will be set, why not try a model of industry self-regulation and provide appropriate safeguards for the parties to engage in this?
In practice, rather than an arbitrating role, the commission could be tasked with bringing together platforms, unions, and other parties – facilitating social dialogue, coupled with the Fair Work Ombudsman’s being tasked with investigating and reporting on industry practices. This may provide sufficient carrots and sticks, encouraging the parties to make socially acceptable and economically viable rules.
Such a reform could capitalise on the momentum from recent memoranda of understanding between the Transport Workers’ Union and major food-delivery and ride-share platforms. Over time, this might be extended into other sectors such as aged and disability care.
Alternately, we note that a primary cause of working conditions in the gig economy is “take it or leave it” contracts. In practice, workers have little or no real bargaining power, creating the capacity for unfair contractual terms.
"Ride-sharing and delivery platforms have proven themselves adept at drafting contracts that avoid the employment category."
As such, we propose that workers or their representatives could have a right to challenge the terms and conditions of their contract with a low-cost jurisdiction such as the Fair Work Commission, which would be able to decide if contractual terms were unfair.
This, in turn, would help to dissuade platforms from offering “unfair terms”, somewhat levelling the playing field for workers. Under this approach, the government could consider requiring platforms to adhere to standards such as including dispute resolution clauses.
If the intent of the reform is to protect vulnerable workers, there are different ways forward. Rather than replicating existing approaches with all the risks outlined, let’s seize the opportunity to find creative – and gig-specific – solutions.
This piece was originally published in The Sydney Morning Herald.
Dr Alex Veen is a senior lecturer and DECRA Fellow at the University of Sydney Business School in the Discipline of Work and Organisational Studies. Dr Caleb Goods is a senior lecturer in the department of management and organisation at the University of Western Australia. Dr Tom Barratt is a senior lecturer in the department of management and organisation at the University of Western Australia.