What the gig economy reforms means for employers and employees

Last week, the federal government announced it is set to overhaul the gig industry where employees will receive new, fairer benefits.

Making the announcement, Minister for Employment and Workplace Relations Tony Burke was blunt to the point of brutality, comparing the spread of the model into new sectors as "like a cancer."

Gig workers played a crucial role during the more serious parts of the pandemic delivering food, groceries and other necessities to people while they avoided getting Covid.

For many people, gig working provides an additional stream of income along with the flexibility to choose when they want to work.

But it also comes with compromises. Currently, in Australia for instance, as independent contractors, gig workers do not get any form of leave and may not be covered by workers' compensation, depending on the company. 

The pressure on many people in the sector is leading to tragic results. In 2020, six gig workers died while “rushing” to complete their orders. 

Since then there have been major pushes for reform for gig workers there have been some minor reprieves with Uber agreeing to a minimum wage and Sherpa insuring all of its gig economy drivers.

Burke spoke to the Trade Workers Union (TWU) last week announcing it would bring "secure jobs, fair pay and fairer system" to Australia’s gig economy.

He said, “Gig work must not become the equivalent of a get out of jail-free card in a Monopoly game where businesses are able to avoid the minimum standards that Australians hold dear. Twenty-first century technology must not mean 19th-century working conditions.”

Possibilities 

Globally, rights for gig workers differ depending on the country. In the United States, there are no sweeping rights for individual workers but President Joe Biden has advocated for better gig economy regulations.

In the UK, a landmark case in 2021 between a group of drivers and Uber changed the definition of gig workers where the Supreme Court decided that the way Uber hires drivers actually makes them an employer of these workers.

In Australia, these new reforms of the gig economy could bring in more employees to the sector, according to Aaron McEwan, VP research & advisory at Gartner.

“One of the things that employees want is variation, they want variety in their work so with a fully flourishing gig economy, it is possible that you could be helping to build houses one day, driving an Uber the next, childcare or aged care the next day.

“That could create very meaningful work, which is in stark contrast to having five to six, maybe seven days of the same work. That is an opportunity that will become more attractive if we end up with more stability and predictability and protection of workers,” he explained.

With the new reforms coming in those organisations who have exploited workers are most likely shaking their heads at the upcoming changes, according to McEwan.

“If your business model is reliant on getting access to very cheap labour without the complexities of full-time employment arrangements. I'm sure that they are nervous and not particularly happy about it,” he explained.

While culture is a big part of why people stay in an organisation, it is also one of the reasons they leave, McEwan noted.

“If my employer is telling me how to dress, how to behave, how to speak, to keep my opinions to myself, that doesn't allow me to show up as my full authentic self, the gig economy becomes attractive,” he added.

Industry reaction

Digital Nation Australia reached out to Uber, DoorDash, Menulog and Deliveroo about Tony Burke’s speech and their thoughts on industrial reform.

All except Menulog replied, supporting the move and highlighting their individual agreements with the TWU.

An Uber spokesperson said, “Our recent agreement with the TWU reflects a shared desire for industry-wide reform that ensures earnings protections and minimum standards for all gig workers while preserving the flexibility and autonomy that they tell us is important to them.  

“We will continue to work with the TWU, Government, industry, and workers to advocate for meaningful reform at a federal level that ensures a level playing field for gig workers across Australia.”

A spokesperson from DoorDash said, “Prior to the election, we worked constructively with the Transport Workers’ Union on a joint set of principles for reform which recognise the value people get from this new form of work while proposing a framework that would allow workers to maintain their independence while accessing new protections and benefits.

“A further agreement was reached yesterday between the TWU, and a broader set of businesses across the gig economy and the transport sector."

Deliveroo said, “We agree that a form of minimum standards needs to be applied to ensure riders are supported and that is why we have consistently raised the bar of what we offer to our riders through market-leading initiatives such as earnings while ill and one-off parental payments.

“It is our strong view that reform must occur at a national level and cannot compromise the way riders prefer to work - that is, to have the ability to choose when, where and how long they work. We welcome the opportunity to participate in a reform program for the gig economy, and look forward to constructive conversations with the Government and all stakeholders."

Perfect timing

These new reforms were never going to happen under the previous government, which both Burke and McEwan noted.

McEwan said, “Until we saw a change of government, it was unlikely that we'd see these types of reforms in any case.”

He said the changes aren’t “too little, too late”, in fact, they have come at the perfect time.

“The gig economy is at an interesting point, as we may also be witnessing the end of the tech unicorn. Will there be another Uber? I'm not sure, given the reluctance, as capital is tight. A lot of investors have been burned by investing in these big tech companies that do rely on these technically ‘exploitative business models’,” he explained.

“There's no indication that any of them will hit profitability. Maybe this is the right moment because we're probably questioning those business models in terms of their sustainability anyway which gives us a good opportunity to question those employment practices that are attached to those business models as well.”

So, what now?

Burke speaking to attendees at the TWU said the federal government would be “taking action through structures to support our lowest-paid workers”.

Burke explained, “There will be new responsibility given to the Fair Work Commission. The consultation process is about how we do that, because I know that Australians want the technology without the exploitation. There are plenty of places in the world where people have jobs where you can only make ends meet with tips and Australia should never be that the country.”

He said they will be moving to get bargaining moving through the Jobs and Skills Summit that will be on in Canberra next week.

“But then we have to close those loopholes that allow wages and conditions to go backwards. We acknowledge there are legitimate reasons where there’ll always be casual work. There’ll always be labour hire in some form; there’ll always be some fixed-term contracts,” he said.

“There’s a place for technology and for the platforms. I use the platforms in different ways – most of us in the room probably do. But what we won’t tolerate are the rorts and abuses of these forms of employment. We’ll close the loopholes which allow wages and conditions to be undercut.”