Time to regulate the gig economy?

James Riley
Editorial Director

The federal opposition has backed a campaign calling for new legislation to address worker exploitation in the gig economy, while the government warns against “unnecessary regulation”.

The Transport Workers Union (TWU) launched a new campaign pushing for the federal government to intervene to ensure delivery riders working in the gig economy for the likes of UberEats and Deliveroo receive the minimum wage, superannuation and a minimum number of hours per shift.

The union also released a survey of 160 food delivery riders in Sydney and Melbourne that found over three quarters were paid below the minimum wage. The survey also found that almost half of the riders had been injured on the job or knew someone that had been, and more than 70 percent of the riders think they should receive entitlements like sick leave.

Brendan O’Connor: Industrial relation regulations need to address the gig economy

Gig economy workers like food delivery riders are commonly classified as contractors by global tech giants like Uber and Deliveroo, meaning they are not covered by Australia’s Fair Work rules. Most riders are paid a flat rate per delivery, with hourly pay mostly being phased out.

The campaign is pushing for specific regulation for on-demand work to ensure they receive the minimum wage and various entitlements such as sick leave and superannuation.

Federal Labor has backed the campaign, with shadow workplace employment and workplace relations minister Brendan O’Connor saying that new regulations are needed to address the gig economy specifically.

“Labor is aware that our industrial relations system needs to not only be adaptable to the changes we see in today’s labour market, but also to the changes that are coming. There are undoubtedly some remarkable benefits to the emergence of the gig economy and there is a place for new forms of work organisation,” Mr O’Connor told InnovationAus.com.

“However, if your business model can only succeed on the basis of undermining workers’ rights, avoiding workers’ entitlements and avoiding paying tax, that is not a model that Labor will support. As the nature of work changes, it’s vital governments and unions work with the tech and startup sector to ensure employees’ rights are respected and their conditions enhanced.”

Speaking at the TWU rally in Melbourne, Mr O’Connor laid down the gauntlet to the government.

“Federal Labor commits to regulating the industrial relations system to ensure justice for these workers. We need a set of laws that reflect the fair go that this country believes in, that will ensure working people in this country go to safe workplaces, that they get a fair day’s pay for a fair day’s work and that they share in the country of this nation,” he said.

“There needs to be a set of laws that actually ensures that we provide justice to those workers. We have a government in Canberra absolutely indifferent to the concerns of working people who are being exploited. I say to Malcolm Turnbull, lift your game and attend to this matter. If we win the next election we will if you don’t.”

But new Minister for Small and Family Business and the Workplace Craig Laundy pointed to the benefits and opportunities associated with the burgeoning gig economy.

“It is vital for Australia, as a globally competitive nation, to have new ways of enabling economic growth and job creation. The gig economy is just one of the new ways that producers and consumers are finding each other. Although still in its infancy, the gig economy’s potential growth presents both opportunities and challenges,” Mr Laundy told InnovationAus.com.

“Online platforms like Airtasker, Deliveroo and UberEats are a quick and efficient way to match workers and job-posters in real-time. Many people are attracted to the flexibility and independence this type of work offers.”

Mr Laundy said there are already existing laws in place to protect gig economy workers.

“There are protections against sham contracting in the Fair Work Act to stop employers from disguising an employee relationship as an independent contractor relationship. While it is important to protect people from exploitation, it is also important that we do not stifle new, and sometimes widely different, business models with unnecessary regulation,” he said.

But Mr O’Connor said that using new technologies isn’t an excuse for exploiting workers.

“We do not accept the proposition that if you sell your labour over a digital platform then you can be exploited. There’s nothing new about exploitation. Just because we use new technology in this country shouldn’t allow employers to exploit workers. We need to do something about that and we call upon the federal government and the Prime Minister to start redressing the widespread exploitation of workers in this country,” he said.

TWU national secretary Tony Sheldon said the survey of food delivery riders is a “damning indictment of the abuse of workers in Australia today”.

“Wealthy companies are engaging in wage theft, ripping workers off, leaving them without compensation when they get injured and not paying their superannuation. These riders are crying out for guaranteed hours, fair rates of pay, rain gear, workcover, sick pay and insurance for their bikes. The federal government may think this way of engaging workers is ‘exciting’ but the survey today shows the levels of exploitation which exists in the on-demand economy,” Mr Sheldon said.

A petition calling on the Fair Work Commission to intervene has already received more than 5000 signatures.

In statements, both Deliveroo and Uber pointed to the flexibility that their platforms offer to food delivery riders.

“Riders can choose where and when they ride with us, and are also free to ride with other delivery companies. Ninety one percent of our riders tell us they choose this kind of work because of its flexibility. The average earnings for riders across the country is above the national minimum wage, and we take great care to inform our riders about how they can maximise their earnings with our platform,” a Deliveroo spokesperson said.

Similarly, an Uber spokesperson said: “Digital technologies are opening up reliable, diverse and unprecedented opportunities for income generation – often for those who need it most. Delivery partner earnings vary depending on when and where partners choose to deliver.”

The federal government has previously been supportive of the gig economy, and late last year provided $1.4 million to a platform aiming to push 80 unemployed young Australians into on-demand work with the likes of Uber and Airtasker.

The funding will provide for a two-year trial of Y4Y Youth Force, a digital platform connecting unemployment recent students with short-term employment opportunities in the gig economy.

There have been growing calls around the world for gig economy workers to be classified as employees and receive the entitlements that come with this. UK Prime Minister Theresa May last year launched the Taylor Review into Employment Practices in the Modern Economy in an effort to stop the exploitation of on-demand workers.

The review recommended that these contractors be reclassified as workers.

In Australia, the Fair Work Ombudsman is already investigating Uber over whether its driver contracts are in breach of federal workplace laws, and if drivers should be reclassified as employees.

A recent UTS Future of Work report also raised a series of concerns over the gig economy, finding that it could create social divide and worsen issues surrounding taxation and labour laws.

Do you know more? Contact James Riley via Email.

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