Denham Sadler
May 16, 2019

Gig debate needs a wider view

Gig economy

Gig debate needs a wider view

Battlelines: The arguments about the gig economy are well understood

The debate about regulation in the gig economy needed to move away from a focus on how workers are classified and towards a broader approach that ensures individuals were treated fairly, the Victorian inquiry into the on-demand economy has heard.

The Victorian government launched the inquiry late last year, with a focus on whether gig economy workers were being paid enough, working in safe conditions and if further regulation and legislation was needed in the sector.

Almost 100 submissions to the inquiry have now been made public. A major focus of any discussion on regulating the gig economy is on how those working for large tech companies such as Uber and Deliveroo are classified.

Unions and industry groups have argued that they should be classified as employees and receive the benefits and security that is associated with this definition, while the gig economy companies say the workers enjoy the freedom and flexibility that comes with being classified as a contractor.

But in its submission to the inquiry, the UTS Centre for Business and Social Innovation said this focus risks “simplifying” the debate over the regulation.

“Effective government action to protect gig economy workers cannot solely rely on changing the legal definition of employee. Such a change, on its own, will potentially result in establishing another artificial boundary to be circumvented by motivated on-demand platforms,” it said.

The Transport Workers’ Union of Australia also said that more needs to come out of the inquiry and any subsequent legislative action than just a reclassification of gig economy workers.

“The debate needs to shift away from simply whether particular workers should be classified as an employee to determining what rights all workers should benefit from,” the TWU said in its submission.

“Critically, every link in the supply chain must be held accountable for safe and fair outcomes for workers, particularly those at the top of the chain,” it said.

Unsurprisingly, a major focus of the gig economy companies’ separate submissions was on arguing against reclassifying its workers as employees.

Deliveroo instead called for legislative changes that would allow it to provide some select benefits, such as paid sick leave and income protection without that meaning they become employees under law.

“The basis of its engagement with self-employed riders is inconsistent with employment, whether full-time, part-time or casual. None of these employment relationships provide the flexibility inherent to the way in which self-employed riders work with Deliveroo,” it said.

“However, in working with self-employed riders, Deliveroo wishes to be able to provide additional benefits to them without the risk of those benefits changing the relationship from one of self-employed riders, to riders employed by Deliveroo which would undermine the reason why they want to work with Deliveroo.”

Uber also backed this proposal in its own submission to the Victorian inquiry.

“This would empower platform businesses to provide and do more, without challenging the independent status of individuals accessing the platforms,” Uber’s submission said.

“It follows that platforms would then compete for the custom of individuals to use them, such as providing more support, training and benefits as well as excellent customer support,” it said.

Deliveroo argued that if the definition of a worker is changed, there will be less food delivery riders and drivers.

“Demand for work with Deliveroo would likely fall as it would no longer be highly flexible in nature and therefore not as popular. As a result, Deliveroo would work with fewer riders on the road who, unlike now, would operate in fixed shifts,” it said.

“This would be bad for riders, who could not work as they wish; would be bad for customers, who would be denied choice and speed as a result of fewer riders being on the road; and bad for restaurants, who would see lower revenue growth from deliveries through the Deliveroo platform.”

The company suggested that a Commonwealth Future Work Act could allow gig economy companies to provide some benefits to workers without classifying them as employees.

But the Transport Workers’ Union (TWU) dismissed this idea as being “off the mark”.

“This is just inventing a new way to legitimise their business model and to keep underpaying its workers. They are trying to silence on-demand workers,” the TWU said.

“Workers don’t need a new definition of worker and they certainly don’t need a third way that the company will just find a route around. Workers just need rights.”

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