Employment Law Expert, Partner
Originally a pop culture term from the music industry, in recent times, the term ‘gig worker’ has been used extensively used to describe the new era of non-permanent staff.
In fact, in 2015, the Financial Times announced ‘gig worker’ as the economic term of the year.
Put simply, a gig worker describes a range of different types of non-employee workers. And we’ve seen different terms used over time …. Previously, the terms ‘consultants’ & ‘freelancers’ were more commonly used, especially in the media.
Often how a particular worker is described, is dictated by the legal relationships between individual & organisation: that is, how the law classify these relationships.
- Macroeconomic factors: talent demand still greater than supply, as the labour market sits in a post-GFC funk
- Globalisation of trade: employers engage specific pockets of skills, rather than long-term talent, thanks to the influence of global trade, which has created an environment for easy access to most skills
- Automation, AI and robotics: these growing market influences create fertile environment for gig worker demand
- Confluence with the rise of digital platforms: otherwise known as platform economics. 10-15 years ago there was a push towards outsourcing via a triangulated model of buyer, sourcing provider & worker.
In this dynamic, outsourcing was typically done outside Australia via a service provider, i.e. contracted BPO in India or Indonesia. Today, the buyer – or employer – can source the worker directly via digital platforms, making the union of gig workers with employers far more common
- As a result today, there’s an increased proportion of gig and part-time workers making up the labour force: stats on the latter from recent census is one in three workers, are part-time. Ten years ago, that figure was one in ten
- The employment rate has remained relatively static in recent years, but underemployment is high: this is the proportion of the workforce that state they would like to work more than they currently do
- Triangulated worker model: leaves the ‘working’ party vulnerable (e.g. ride share services). This is the typical model for online marketplaces. The Fair Work Ombudsman is more interested in direct engagement platform models (e.g. food delivery workers)
- Protections aren’t in place for the worker (mostly. The exemption for example, being the deal struck between AirTasker & NSW unions, where AirTasker provides life & other insurance to AirTaskers, as well as calculating minimum wage. A similar agreement is pending with Deliveroo). Current protections don’t extend to the provision of minimum terms, conditions, and monies paid to the worker
- The Office of State Revenue is also interested in how workers sourced via online platforms, are treated. And until there’s regulatory movement, uncertainty remains for these workers: so in the absence of regulatory change there’s commercial risk for the many businesses that utilise gig workers (Senate select committee due to report in June)
- Important to remember that, by simply using an online marketplace to source talent, organisations aren't automatically exempt from legislative, statutory and other compliance obligations. These platforms do not guarantee a means of removing risk
- Based on the margins these platforms are charging, with changes to legislation, then engaging these workers won’t be feasible or sustainable, so there is a risk in relying on these platforms
- Current employment laws won't address the triangulation model. Parliament needs to legislate to provide workers on these platforms with rights
- In Australia there’s an increasingly greater onus on organisations to keep worker records (of all workers) and to audit down the supply chain
- The four big departments involved: Immigration, FWO, ATO & State Revenue Offices: there’s pressure for increased powers for the sharing of information across all three departments. And if they get this right, and invest in better information infrastructure to have better data analytics, it’s going to increase their audit capacity, and they’re going to require records. This is why ‘employers’ in Australia need to step up
- It’s important that the market is allowed to innovate: but at what cost for funding social security, fundamental rights of workers, and minimum wage?
- Remember: Gig work companies & IT platforms are built for the benefit of a few – to the point of IPO. An interesting trend developing is that of platform co-operatives, where employees take share ownership in the platform (especially small start-ups). From a social standpoint, it’s a positive emerging trend
- If organisations try to avoid the cost of worker engagement (e.g. security & efficacy checks, onboarding) the obvious and easy thing to do is to use an online marketplace, given they’ve done it for you
- However, there is a need for transparency in the supply chain, where sovereignty is an issue: for example, data protection. You can’t just give someone access to your IT system without complying with onerous data protection stipulations. So who bears the risk? There’s a lot of the commentary coming out of the submissions to the senate committee: where the risk is being shifted to the workers themselves
- As a buyer of that platform, the organisation will likely have a supply chain in place – this is where the FWO comes in. If you’re using an online talent marketplace that says it’s not a labour hire company, but it actually is, then the organisation will land in hot water: it’s a supply chain miss. This is where accessorial liability provisions in the Fair Work Act come in: where the rubber hits the road. No matter how far down the supply chain you are, you must have knowledge of your obligations…