What Rights Do Workers in the ‘Gig’ Economy Have?

August 2, 2018

in

Work Safety

by

Stacey Leeke

Matt crawls out of bed, pours a coffee and slumps down in front of his laptop. It's Monday morning and there's no chance he'll be dealing with a crappy city commute or a stuffy corporate uniform. There's no way he'll be late either - in fact he's at work and ready to go in under 3 minutes and 46 seconds. Matt’s living the dream. But is working in the on-demand economy as good as it sounds? And what are the legal rights for workers in this industry? 

The rise of the 'on-demand' or 'gig economy' within Australia and globally has been prolific. Its emergence has been attributed to an increasing number of millennials dissatisfied with the 9 to 5 routine, seeking flexible work arrangements together with the development of digital online work platforms. 

A plethora of companies have flooded the market exploiting the low cost  benefits of hiring freelancers to conduct businesses that would normally be structured as franchises or have an extensive employee payroll. Probably best known is the Uber ride hailing service which has spearheading the gig movement in most jurisdictions and received the most publicity. Even south east Queensland is home to a growing number of gig hirers including Uber, Foodora, Deliveroo and Airtasker. 

But how are these companies dodging fair work laws? And what are gig workers sacrificing by dodging the traditional employee path?

How do the rights of gig workers compare with those of traditional employees?

While its possible that a gig worker may meet the criteria to be categorised as an “employee” for the purposes of Australian fair work laws in some cases, most are not being afforded basic employee rights and entitlements including: award wage, redundancy, sick and other leave entitlements. In addition, they usually have to pay for their own physical assets, consumables, petrol, vehicle maintenance and insurances and have no recourse if they are unfairly or arbitrarily dismissed. 

Many gig work contracts contain unfair contract terms which confer unilateral rights on the hirer to change commission rates or prices at will, exclude a worker from accessing the platform without reason or notice or otherwise vary contract terms without negotiation.

Are gig workers rightly classified as independent contractors?

In a traditional sense independent contractors are expected to supply their own tools and pay for their own overheads and as a trade off they have the flexibility to perform the work as they see fit and the capacity to accumulate goodwill that can be on-sold for financial gain. Gig workers on the other hand, despite bearing most if not all of the risk and investment costs, see no such benefits placing them in a novel pseudo-employee category which receives neither the benefits of a traditional employee nor the commercial benefits and autonomy of an independent contractor. 

An example is Deliveroo, a takeaway meal delivery service that reportedly requires its bike riders to be rostered on for shifts, wear uniforms and attend training, yet the riders are not even guaranteed minimum wage and can be dismissed at will. 

Political economist Robert Reich aptly observes of the gig economy generally, “There is no economic security, there is no predictability, and there is no power among workers to get a fair share of the profit.” 

While sham contracting laws prevent labour hirers from calling workers ‘contractors’ when they should rightly be treated as employees, many gig economy companies aren’t even doing that. So how are they getting away with it? 

For the time being they are calling a spade a shovel. Uber for example has attempted to class its drivers as ‘software users’ rather than ‘employees’, to dodge millions of dollars in employee benefits.

What legal protections do gig workers have?

Since they cannot avail themselves of regulatory bodies to enforce basic employment standards, the only legal protections in place for the gigging community are their contract with the hirer and statutory prohibitions on unfair contract terms provided for in the Australian Consumer Law. Examples of the types of terms that will be rendered unfair and therefore void at law, include where one party is allowed to vary price or payment terms or unilaterally terminate a contract prematurely. 

Unlike employees however, who can seek free assistance to enforce their employment rights, gig workers must initiate and fund civil law suits themselves.

Who is responsible for worker safety and training?

Within the traditional model, employers are legally obliged to train employees to perform their job safely and to deal workplace health and safety issues. Conversely, gig workers like independent contractors are responsible for any injury or illness they sustain while performing their work and must generally take care of workplace health and safety issues, including any necessary insurances themselves.

Is WorkCover available to gig economy workers?

Workers compensation insurance must be provided to workers classified as “employees” as well as some independent contractors (in the traditional sense). However gig workers again fall outside of this group. 

Many who are employed to carry out tasks with a moderate to high risk of physical injury such as driving or making bicycle deliveries, cannot access WorkCover through their hirer and must purchase their own insurances. Therefore, if a gig worker has a road accident while making a bike delivery, he may be able to rely on CTP insurance of the other driver, however if he collides with a pedestrian or another cyclist no insurance will be available. 

While Matt’s situation seems dreamy for the time being, there are some larger issues bearing down the Australian industrial relations system if gig economy companies are allowed to continue dodging minimum employment standards. Making up the bulk of the driving and cleaning gig workers are young students and migrants who hold a vulnerable bargaining position. Experts believe its only a matter of time before litigation or statutory intervention challenges the methods used by gig employers. 

Time will tell whether the ‘GE’ will find a way to survive or whether it will ultimately be strangled with red tape or sued to death.

Stacey Leeke
Rebecca Earl

Solicitor and legal writer. Contributor to the Smith's Lawyers blog and self-help articles

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