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January 24, 2020
What the Gig Economy Means for Employment Law

Developments in technology have played a significant role in forging new dynamics between employers and employees in Australia and around the world, with the attractiveness of gig economy jobs luring workers away from traditional employment relationships.

Operating in the gaps between contract, temporary and freelance work, this new category of worker poses a conceptual challenge for the law. Whilst national statistics can only estimate the number of Australian free agents using app-based platforms such as Uber and Deliveroo to source and carry out casual contract work at around 2.5 million, the figure supports modern preferences for flexibility and autonomy over security.

Critics warn however that the casual contract model adopted by emergent tech companies to class workers as independent contractors flouts the minimum workplace awards and entitlements that cover employees under National Employment Standards.

Australian Cases

The concern comes after the Fair Work Commission finalised its two-year investigation into whether Uber Australia engaged in ‘sham contracting’ to misrepresent its drivers to avoid paying employee awards and benefits.

Fair Work Ombudsman, Sandra Parker, reached the decision that “Uber Australia drivers [we]re not subject to any formal or operational obligation to perform work” based on the weight of evidence disproving an employment relationship.

This decision is in line with earlier approaches taken by the regulator. In Kaseris v Rasier Pacific V.O.F and Pallage v Rasier Pacific Pty Ltd, two former Uber Australia drivers brought actions before the Fair Work Commission alleging unfair dismissal.

Both applications were ultimately unsuccessful as it was decided the claimants in each case did not satisfy the definition of employee under relevant sections of the Fair Work Act 2009 (Cth).

Such findings highlight that Fair Work protections extend only to employees, and that this is a narrow definition. Workers who venture outside of conventional employment arrangements may fall outside its scope and as a result cannot be guaranteed commensurate awards or entitlements.

If you are unsure about your status as an employee or are seeking advice regarding an employment contract, please contact Steven Blyth, Partner at Lewis Blyth and Hooper on sblyth@lbandh.com.au to make an appointment.

Calls for Regulatory Change

The rapid uptake of gig work has driven calls for substantial changes to the Australian industrial relations system. In its September 2018 report, the Senate Select Committee on the Future of Work and Workers “reject[ed] assertions that workers who perform tasks in the gig economy are independent contractors” and recommended “the Australian Government review the definition of ‘casual’ work in light of the large numbers of Australians who are currently in non-standard employment”.

In its June 2018 report, the Ministerial Advisory Panel recommended the meaning of ‘worker’ be amended “to include (if needed) workers under the gig economy”.

On 26 November 2019, the public consultation period for amendments to the model Work Health and Safety Bill for adoption in Western Australia ended. The submissions received have since been provided to the Minister for Mines and Petroleum; Industrial Relations to facilitate a decision.

Ensure your Business is Compliant

If the definition of ‘worker’ is expanded upon and the relevant regulatory change takes place, it will have dramatic implications for employers who operate within the gig economy and engage free agents or casual contractors.

With the increased focus on workplace relations issues and legislative change on the horizon, it is important business owners take the necessary steps to ensure compliance. For assistance, please contact Steven Blyth, Partner at Lewis Blyth and Hooper on sblyth@lbandh.com.au to schedule an appointment.