8.1
The most significant disruption to industrial relations (IR) in Australia and around the world in the last decade has been the emergence of the gig economy and on-demand platform work.
8.2
As discussed in the committee's first interim report, jobs associated with online platforms like Uber and Deliveroo can be some of the lowest-paid jobs in the Australian economy, and many of them lack basic employment protections and standards. These companies operate largely outside of Australia's IR system and have so far resisted attempts to have their workers brought under its protection.
8.3
This chapter looks at the Uberisation of work in Australia and the emergence of the Amazon effect, specifically discussing responses to the committee's first interim report along with new evidence submitted during the inquiry.
8.4
It revisits the recommendations from the committee’s first and third interim reports as they relate to these issues, and either restates or revises those recommendations.
Uberisation
8.5
The committee's first report weighed up evidence from a diverse range of submitters and witnesses, including employee and employer groups, industry, academics, and others. It was important to the committee to understand both the benefits provided by these new forms of work, and the potential risks they pose to individual workers, care recipients, and job security more broadly.
8.6
The report made a number of recommendations aimed at improving the conditions of workers engaged in on-demand platform work and seeking to reverse the trend towards the Uberisation of work in Australia.
8.7
After the publication of its first interim report, the committee wrote to all relevant submitters and witnesses, inviting them to provide feedback on the conclusions and recommendations in that report. This feedback is considered in this chapter and the next chapter, Chapter 9, which discusses increasing security in publicly-funded jobs.
8.8
In addition, while national data and statistics on the size and nature of the platform workforce in Australia are not currently available, this chapter includes information on steps that are being taken to address these gaps, and provides some new data and evidence on the growth of the on-demand platform sector.
The Amazon effect
8.9
In its third interim report, on labour hire and contracting, the committee identified a growing Amazon effect, where 'new wave' or new technology companies exert influence on the traditional transport and distribution sector through downward economic pressure. According to the Transport Workers Union (TWU), these companies are bypassing traditional employment models in favour of on-demand models, and as such are able to reduce costs and undercut their competitors:
Gig companies are outside the system, and this has led to them dragging down standards and leading otherwise good transport operators into reflex panic reactions, pushing down standards in an effort to compete with those that don't even have to obey the rules. This is what we call the Amazon effect.
8.10
The committee made a number of recommendations designed to defend these traditional industries from the corrosive and undermining effect of being forced to compete with companies operating outside of Australia's IR regulation.
The committee's recommendations: regulating on-demand platform work
8.11
Recommendations made in the committee’s first interim report were designed to provide greater protections for workers in the on-demand platform sector and included:
Recommendation 6, which would see the Commonwealth lead the reform of state-based workers' compensation schemes so that they would 'extend to platform workers, regardless of their visa or work status'.
Recommendation 7, which would expand the definitions of 'employment' and 'employees' in the Fair Work Act 2009 (Cth) (Fair Work Act) to 'capture new and evolving forms of work', and extending the coverage of the Fair Work Act to workers who fall outside the definition of employment, 'including low-leveraged and highly dependent workers'.
Recommendation 8, which recommended the Government 'investigates options for a Federal regulator to be empowered to request data [on pay rates, hours and conditions] from platforms that employ and contract workers'.
Recommendation 9, designed to expand the powers of the Fair Work Commission to allow it to 'resolve disputes and make orders for minimum standards and conditions in relation to all forms of work', as well as to:
adjudicate work status disputes;
set 'binding minimum standards and conditions in relation to non‑standard forms of work, regardless of employment status'; and
resolve disputes 'in a low-cost and effective manner'.
Recommendation 10, empowering the Fair Work Commission to provide pathways to permanency via arbitrations for casual conversion.
Recommendation 11, aiming to provide:
… greater protections for independent contractors who are sole traders by establishing an accessible low-cost national tribunal to advise on, oversee, and make rulings relating to employment relationships involving low‑leveraged independent contractors, such as those in the rideshare and other platform sectors.
Responses to these recommendations
8.12
While most participants in the inquiry agreed there is an urgent need for reform to provide greater protections for on-demand platform workers, a small number of participants cautioned that changing Australia's current workplace laws could stymie growth in the platform sector, reducing opportunities offered by emerging employers.
8.13
Responses to the recommendations are discussed below.
Australia's IR framework 'should not be disturbed'
8.14
The Australian Industry Group (Ai Group) highlighted the benefits that platform work provides for some workers—including the flexibility to work around study, family commitments and other paid employment—and for some businesses. Ai Group submitted:
Australia's workplace laws must recognise and accommodate the need for Australian businesses to engage employees and contractors in different ways. The vast majority of employment and contracting relationships rely on Australia's current workplace relations framework, including the flexibility afforded by the common law tests in determining whether a worker is an employee or an independent contractor.
8.15
Arguing that Australia's existing IR framework 'should not be disturbed', Ai Group said implementing laws that are too 'prescriptive' would simply 'stifle innovation to the detriment of businesses, workers and the whole community'.
8.16
In a supplementary submission responding to the committee's first interim report, Ai Group stated its opposition to recommendations 6, 7, 9, 10 and 11 on a number of grounds; these grounds are detailed below.
8.17
Ai Group did not support Recommendation 6 because it believed other forms of accident insurance 'are better aligned with the circumstances of contract workers than workers' compensation schemes'.
8.18
Ai Group was opposed to Recommendation 7 because it did not support 'capturing independent contractors and the self-employed under expanded statutory definitions of "employment" and an "employee"', saying this would likely have negative implications on existing contractors and small business owners, such as 'plumbers, electricians, truck drivers, graphic designers and countless other independent contractors who have no desire to be employees'.
8.19
Instead, Ai Group argued for retaining the common law approach to differentiating an independent contractor from an employee. Ai Group also argued that the Independent Contractors Act 2006 (Cth) (IC Act) offers 'protection against unfair contracts' for independent contractors that are covered by the Act, saying: 'If a relevant court determines that a contract is harsh or unfair, the Court may set aside the whole or part of the contract or vary the contract'.
8.20
However, Ai Group did not respond the committee's concerns that the IC Act imposes no penalties on companies for including unfair terms, that parties have to pay their own court costs (likely to be out of reach for most platform workers), and that the provisions in the IC Act do not appear to be well‑utilised—and perhaps have never been used by any platform worker.
8.21
In addition to the IC Act, Ai Group highlighted the existing sham contracting provisions in the Fair Work Act, saying these provisions:
… provide a range of protections and remedies for contractors. These may be pursued under the FW [Fair Work] Act's General Protections provisions, including by application to the FWC or the Federal Circuit Court. The FW Act's reverse onus of proof and penalty regime for these contraventions serves as a major deterrent to unlawful behaviour.
8.22
Other provisions contained within the Fair Work Act may also provide protection for employees who find themselves the victims of sham contracting arrangements, including:
Underpayment orders and penalties for breaches of the National Employment Standards and modern awards;
The unfair dismissal laws;
A prohibition on taking adverse action against an independent contractor because the contractor has a workplace right, has or has not exercised a workplace right, or proposes to exercise a workplace right (s.340);
A prohibition on coercion in relation to workplace rights (s.343); and
A prohibition on misrepresentations in relation to workplace rights (s.345).
8.23
Ai Group noted that amendments to the Fair Work Act made in 2017 designed to protect vulnerable workers added 'additional protection' and increased 'obligations on employers'. These amendments introduced 'a new "serious contravention" penalty' of up to $666 000 per breach for a company, which is ten times higher than the previous maximum penalty.
8.24
The committee notes, however, that many of these provisions only protect employees, and most on-demand platform workers are not classed as employees, despite many being 'highly dependent' on the platforms that engage them.
Some platforms continued to push for a 'third way'
8.25
Companies whose business primarily revolves around engaging workers as independent contractors (or 'partners') to transport people or goods, or deliver products for third parties, continued to oppose moves that would see their workers classified as employees.
8.26
Uber argued its drivers and delivery partners value 'flexibility' above all else, and 'the flexibility offered through working with Uber today is incompatible with traditional employment':
We believe a better approach is to evolve Australia's workplace relations framework to preserve this valued flexibility while removing the disincentives and regulatory barriers that prevent independent contractors receiving benefits.
8.27
Similarly, Deliveroo submitted that it wants to maintain the status quo in which its riders are independent contractors, while being able to provide more 'employee-like' benefits:
We would like to go further in offering benefits to riders, but are constrained by the law. Our 'ask' is for future governments to create new legislation, which makes clear that the provision of protections and security to riders does not impact on their self-employed status.
8.28
Deliveroo argued that bringing food delivery drivers and riders under the employment umbrella would:
'remove the flexibility riders currently have';
'create a new balance of power in the relationship between the platform and the rider';
prevent riders from multi-apping, which is how many maximise their earnings;
lead to there being 'fewer riders in total'; and
cause 'knock-on impacts for Australia's hospitality sector'.
8.29
While the platforms argue that their motivation for wanting to continue the independent contractor model is because that is what their workers want, the committee has previously been provided with evidence indicating that using employed delivery workers in compliance with relevant laws would cost up to 'twice as much'.
8.30
In an apparent effort to avoid a possible Federal Court ruling that one of its workers was an employee, the committee heard that Uber paid a $400 000 settlement to Uber Eats driver, Amita Gupta—significantly more than Ms Gupta would have been entitled to had she won her case.
8.31
There have been three other cases in which the Fair Work Commission determined a platform worker not to be an employee; none of them has been appealed, and each concerned rideshare rather than food delivery:
Suliman v Rasier Pacific Pty Ltd [2019] FWC 4807;
Pallage v Rasier Pacific Pty Ltd [2018] FWC 2579; and
Kaseris v Raiser Pacific V.O.F [2017] FWC 6610.
Others platforms are moving forward with employment models
8.32
Not all on-demand platforms are opposed to employing their workers. Hireup already employs its workers and argues this is the most appropriate model in the disability sector. This is further discussed in the next chapter.
8.33
While Menulog's delivery partners in Australia have been contractors up until this point, the company is moving towards an employment model with a trial under way in Sydney CBD. In June 2021, the company announced the first group of 'employed couriers' began delivering for Menulog, kicking off the company's employment trial.
8.34
The Attorney-General's Department noted that Menulog commenced an application on 24 June 2021 in the Fair Work Commission with the intention of creating 'a new industry modern award, the "On Demand Delivery Services" Award'.
8.35
As part of the application, Menulog contested the idea that delivery riders are already covered by the Fast Food Industry Award, the Road Transport and Distribution Award, or the 'catch-all Miscellaneous Award'. Before it can agree to create any new award, the Fair Work Commission must determine if any existing award can be amended instead.
8.36
The media release from Menulog explained that the new employed couriers would form a new division of Menulog, alongside the 'self-service and independent contractor delivery offerings'. The new division would enable Menulog 'to expand on its trial, working towards the employment of food couriers right across Australia if the application for a new modern award is successful':
Ultimately, we want to employ couriers, however the current regulatory framework presents a number of challenges, with specific regards to existing modern awards, the lack of flexibility they present and subsequent cost. As such, we intend to investigate avenues for employment by making an application for a new Modern Award with the Fair Work Commission and consulting with key stakeholders. We believe learnings from the trial of employed couriers will provide invaluable insight to help inform this proposal.
8.37
On 28 January 2022, the full bench of the Fair Work Commission handed down a decision that the:
… Road Transport Award currently covers employers and their courier employees in the 'on demand delivery services industry' as defined in Menulog's proposed award, and that the Fast Food Award does not cover such courier employees. It also necessarily follows from this conclusion that the Miscellaneous Award does not cover them by reason of clause 4.1 of that award.
8.38
The Commission noted that Menulog and 'some other parties to the proceedings' are wanting to undertake 'consultation and/or conciliation' prior to any further steps in the process occurring, and a directions hearing would be listed soon 'to facilitate this'.
Workers' compensation or voluntary industry codes?
8.39
A number of inquiry participants agreed that the Commonwealth should lead the reform of state-based workers' compensation laws, in order to ensure that the 'presumed' or 'deemed' worker provisions existing in state schemes apply to on-demand workers.
8.40
Professor Joellen Riley and Dr Michael Rawlings submitted that including provisions 'expressly' stating that platform workers are covered by workers' compensation schemes would 'foreclose attempts by platform operators to use contract terms that attempt to exclude workers from workers' compensation coverage'.
8.41
Maurice Blackburn Lawyers 'fully supported' Recommendation 6, noting the Joint Select Committee on Road Safety is currently 'looking at similar issues': 'We encourage both Committees to seek to ensure that the findings and recommendations from both Committees are aligned and consistent'.
8.42
However, platform companies including Uber and Deliveroo were focussed on their own safety and insurance models. Uber submitted that it 'share[s] the Committee's commitment to safety' and is working with state and territory governments and relevant stakeholders 'to improve safety standards'.
8.43
Uber announced that Uber Eats signed up to the National Food Delivery Platform Safety Principles (Safety Principles) in July 2021, along with Deliveroo, DoorDash and Menulog. The Safety Principles:
… are intended to give effect to how safety duties can be met by food delivery platforms in respect of food delivery platform workers and other persons.
The signatories are committed to continuous improvement and implementing initiatives that reduce the risks associated with online food delivery platform work and to provide protection when incidents occur.
8.44
Uber said the Safety Principles incorporate 'an accountability mechanism', consisting of an annual review and 'platform compliance', facilitated by industry peak body, Ai Group.
8.45
According to Uber, the Safety Principles commit signatories to provide 'free, automatic insurance protections that cover delivery workers for accidental injuries that arise while delivering on food delivery platforms'. Rather than applying state workers' compensation schemes to platform workers, Uber argued state and territory governments should require platforms to 'provide insurance protection for workers and agree on a minimum insurance standard for platform work'.
8.46
Deliveroo argued that state-based workers' compensation schemes are not the best form of insurance for its riders, because:
riders can delegate their work to others;
riders engage in multi-apping;
many workers' compensation schemes 'are not designed to provide insurance to an individual (contractor/sole trader) whose Deliveroo's earnings are only a portion of their overall income'; and
Deliveroo's bespoke policy 'is broadly equivalent, and in some instances better than, the state-based workers' compensation schemes'.
8.47
Deliveroo submitted that, on top of its existing free insurance offering, which includes income protection and personal injury insurance:
… insurance cover for riders working with Deliveroo will [now] include earnings protection for those who can't work due to illness and payments for new parents. We also offer free public liability insurance, so riders are protected in case something goes wrong in the course of making a delivery.
8.48
Deliveroo proposed that insurance policies that are managed and funded by the platforms provide 'a simple process for riders to follow', reduce red tape, and make claiming 'accessible for riders'.
8.49
Dr Tom Barratt and Dr Caleb Goods were asked to comment on the industry's Safety Principles, which they saw as 'a step in the right direction', but not sufficient to protect food delivery workers, for three reasons:
(a)
the voluntary nature of the code and lack of independent oversight and accountability;
(b)
the fact that not all companies in the sector are participants, including one where a contractor died in 2020; and
(c)
the commitments in the Principles 'do not always square with the experience of work', for instance the ''piece rate' remuneration schedule' remains, meaning riders/drivers 'retain economic incentives to expose themselves to workplace risks'.
8.50
Evidence from rideshare drivers indicated safety issues relating to the pandemic were not necessarily being addressed in practice, and that the use of an app to manage issues and disputes may be putting drivers and riders at risk.
8.51
Uber drivers, Ms Lorna Berry and Uber Driver X, both reported having passengers refuse to wear masks in their vehicles despite public health orders, or simply 'forget' to bring one. Both drivers said they carry masks in the car with them so they can offer one to any passenger who doesn't have their own, and both reported that Uber seemed to have no policy to protect drivers from exposure to COVID from unvaccinated passengers.
8.52
The Attorney-General's Department submitted that the Australian Government 'is taking a leadership role in advancing the issue of rider safety in the gig economy'. In its response to the first interim report, the Department stated that, on 20 May 2021, the Attorney-General and the Minister for Industrial Relations co-hosted a national meeting of WHS Ministers, at which Ministers:
… agreed to refer work on compliance and enforcement initiatives for food delivery platforms and riders to the Heads of Workplace Safety Authorities for consideration, and to refer work on promoting and strengthening education to Safe Work Australia.
8.53
In addition, the Department said the Commonwealth continues to contribute to the development of WHS guidance for business and workers in the gig economy through Safe Work Australia.
Expanding definitions in the Fair Work Act may not work
8.54
The committee was clear in its first interim report that it may revisit its recommendations in later reports.
8.55
Recommendation 7—which looked at expanding the definitions of 'employment' and 'employees' in the Fair Work Act, and extending the coverage of the Act to workers who fall outside the definition of employment—elicited some constructive criticism from submitters.
8.56
Professor Riley and Dr Rawlings were concerned that expanding these definitions may not represent 'the most effective mechanism' for extending rights and protections to gig workers, and that platform companies would simply find another way around them. As an alternative, Professor Riley and Dr Rawlings suggested that 'a general "deeming" power for the Fair Work Commission' would be 'preferable', where the Commission could 'deem' workers to be employees for certain purposes.
8.57
A number of inquiry participants identified possible unintended consequences of such a change. For instance, the Australian Institute of Employment Rights (AIER) said changing the definition may not work as intended, especially owning to the 'current wording of other provisions of the Act':
Many of the provisions in the National Employment Standards are framed on the assumption of certain work patterns which are not easily accommodated to the nature of all forms of gig work. Also, experience has shown that hirers are adept at drafting labour engagement contracts in ways that deliberately evade classification according to statutory definitions. So the inclusion of a new statutory definition of 'employee' may not resolve all problems, and may create new ones.
8.58
Uber was opposed to this recommendation and others that it saw as being aimed at 'attempting to pull independent contractors' closer to the definition of traditional employment.
8.59
Conversely, Maurice Blackburn Lawyers supported this recommendation. Though, it too cautioned about the need to avoid unintended consequences:
We encourage the Committee to be very specific in what it wants to see captured in these expanded definitions, in order to minimise the risk of creating loopholes which employers/platforms might seek to exploit.
8.60
The Australian Small Business and Family Enterprise Ombudsman expressed general support for recommendations that 'would clarify the employment status' of on-demand platform workers, saying: 'This is critical in reducing potential points of industrial conflict'.
Extend minimum standards and protections to all workers
8.61
While they did not support Recommendation 7, Professor Riley and Dr Rawlings proposed instead what they called a 'beyond employment' approach:
… a more effective method of ensuring that vulnerable gig workers are legally protected is to … institute a legislative regime that applies regardless of whether the workers are employees or contractors. That is, work standards might be explicitly applied to digital labour platforms who engage gig workers even if they are engaged as contractors. This approach has been tried and tested in the road transport industry for a number of decades under Chapter 6 of the NSW Industrial Relations Act. It was also the approach taken under the (now abolished) federal road safety remuneration system.
8.62
Similarly, the AIER proposed the committee amend its recommendation to say that the Fair Work Act should be amended to:
… expand its scope beyond regulating employment to regulating all forms of work (regardless of contractual form) and the Fair Work Commission should be empowered to make orders for minimum standards and conditions in relation to all forms of work and assign appropriate rights and protections to non-employees to ensure a universal safety net.
8.63
Maurice Blackburn Lawyers expressed their support for Recommendations 9, 10 and 11, saying the 'adoption of these recommendations would greatly enhance the experience of workers in the gig and on-demand workforce'.
Expand the Fair Work Commission's remit
8.64
The 'beyond employment' approach described above would see the Fair Work Commission's remit extended to allow it to set 'minimum wages and conditions for contract workers', 'arbitrate contract termination disputes', and 'make class orders'.
8.65
The AIER noted that Recommendation 11 calls for a national tribunal to be established to 'advise on, oversee, and make rulings related to "low-leveraged" independent contractors'—such as those gig workers doing rideshare and food delivery—and suggested this recommendation be clearer. The AIER proposed the committee clarify:
that this role should played by the Fair Work Commission, 'or a body within it with devolved functions'; and that
the tribunal should be 'tasked with setting generally binding minimum standards of remuneration and other conditions' for contractors, ensuring contractors are protected by minimum standards that are 'functionally equivalent' to those enjoyed by employees under the Fair Work Act.
8.66
A strong argument in favour of this approach is that much of the evidence the committee received from rideshare drivers and food delivery workers during the inquiry related to deactivation, or 'being kicked off the app'. Box 8.1 below provides a selection of evidence from these workers.
Box 8.1: Evidence from platform workers—deactivation
'[Uber] have a history of deactivating people, with no right of reply. Many drivers can be cut off immediately. If a rider in your Uber makes a complaint about you, the first thing Uber does is deactivate your account without a right of reply.
When they do this, they also take away your ability to phone them. You have to talk to them through generic emails, and it's very hard.
I have been deactivated three times with no evidence against me that warranted deactivation.
The other thing about it is that Uber operates as if they're your employer, but you are a subcontractor. It's a strange situation.'—Uber Driver X
'Earlier this year I drove to a job, and on arrival to that job there were four passengers … we're only allowed to take three passengers due to social distancing. The riders also did not have masks. I explained to them that I was unable to take all four of them … and that they would have to wear masks. They started to abuse me. … So I cancelled the trip and drove away. … About 24 hours after that I received a notification through the app that I had been deactivated. Somebody had reported that I'd been violent. This of course was a false claim and I was horrified.
My only method to contact Uber was through the app .... My phone privileges were withdrawn. … I contacted them several times through the app, only to have robotic Zendesk responses from them. In spite of the fact that I've done thousands of trips with a really high rating and I've done the highest level of premium Uber that you can do, there was no way of contacting them or knowing what was going to happen for something that I actually hadn't done. Then, about four to five days later, I was reactivated.'—Ms Lorna Berry, Uber driver
'When complaint is made against you [it’s] simple one-click and your either terminated on the spot or temporary deactivated and stood down.
When a complaint is made. Your past and future complaint or account strikes could lead to permanent deactivation and termination of account status there no policy in place or regulation to appeal complaints via 3rd party. …
[Companies] Use technology to make unfair deactivation hard to appeal or complain about.'—Mr Adam Nelson, Uber driver
8.67
Platform workers with long tenures working for Uber in particular felt aggrieved that, despite many months or years of service on the app, and high ratings and reviews, one bad review (often by a vexatious passenger) could lead to deactivation. It could take days to get reinstated, with no compensation for the income lost, and no apology; just a 'very robotic' reactivation message.
8.68
Uber Driver X explained that when he started driving for Uber in Sydney, 'they had offices' and 'people you could talk to'; that Uber had 'a public face and phone number' and 'you had a right of reply if anything went wrong'. Now, he said, the call centre has been moved offshore and anyone who has been deactivated cannot access it. Ms Berry agreed saying 'you need to be able to talk to a human'.
8.69
The research team submitted that there is a need to examine the 'growing role' of 'dehumanised management practices in the form of algorithmic management', which remains an 'under-investigated' area. Algorithmic management of work leads to concerns about 'equity, fairness and voice at work', impacts on collective bargaining, and workplace discrimination, and raises questions about 'what constitutes decent (or indecent) work'.
The need for low-cost dispute resolution
8.70
The Australian Small Business and Family Enterprise Ombudsman commented on the need for an 'accessible low-cost national tribunal' which could provide protection for independent contractors in 'employment relationships', saying:
While the consideration of employment relationships is important, independent contractors engaging in work through digital platforms face other disputes for which they may require external dispute resolution services.
8.71
The Ombudsman suggested that a Federal Small Business Claims List should be formed, as part of the Federal Circuit Court of Australia, to provide:
… affordable, determinative, dispute resolution services to small businesses (including independent contractors) who engage in work through a digital platform. … the List 'should include the ability for a small business to apply for a no adverse costs order'. This would afford 'low‑leveraged independent contractors' the opportunity to pursue legal resolution of their disputes with digital platforms without the fear of debilitating debt associated with costs orders that might be sought by powerfully resourced digital platforms.
International developments
8.72
While this report is not the place for a comprehensive summary of the international landscape in relation to regulating platform work, a few key developments are worth mentioning.
8.73
In his submission to the inquiry, commissioned by the International Transport Workers Federation (the ITF submission), Dr Jason Moyer-Lee observed that, despite the company's fervent attempts to resist all regulation, there are currently places in the world where:
… Uber is paying pension contributions for their drivers, where rideshare companies are paying the equivalent of a minimum wage of US$16.39 per hour—one of the highest minimum wages in the US—and sick pay, and where courier companies are negotiating collective agreements with trade unions and providing employee rights to food delivery couriers.
8.74
The ITF contended that Australia could learn from international experiences and apply these learnings to our choice of regulatory options, noting first and foremost that international law grants workers' rights to all workers, irrespective of employment status. For instance, Article 2 of the International Covenant on Civil and Political Rights grants every worker the right to 'form and join trade unions for the protection of his interests'.
… whether or not 'gig economy' workers fall into a domestic legal category which provides them with workers' rights in an individual country, if the country is not providing them with certain trade union rights, protection from discrimination, and other rights (subject to country ratifications), the country is in violation of international law.
Proposition 22 is challenged
8.76
One recent international development relates to Proposition 22 (Prop 22)—the 'ballot initiative' in California financed by major gig platforms that successfully 'overrode' Californian law 'AB-5'.
8.77
On 20 August 2021, in a case backed by the Service Employees International Union (SEIU), the California Superior Court in Alameda County 'ruled that Prop 22 was in violation of the Californian Constitution and invalid'. According to the ITF, the court found that a requirement in Prop 22 that any changes to would 'be subjected to a seven eighths majority vote in the California Assembly' was in violation of the constitutional power of the Californian Assembly to determine who is considered an employee for the purposes of workers' compensation.
8.78
While the ruling will be appealed, parties involved in the case said it provides hope and challenges the idea that corporations can simply 'spend their way out of following the law'.
The European Union moves closer to regulating
8.79
In its first interim report, the committee reported on the February 2021 European Commission consultation to address 'working conditions for digital platform workers in the gig economy'.
8.80
In December 2021, the European Commission published draft legislation resulting from the consultation process, saying the legislation would shift 'the burden of proof on employment status … to companies, rather than the individuals that work for them'. According to The Guardian, under the proposed legislation, workers would 'gain rights over algorithms', guaranteeing human intervention in key decisions, and preventing situations where a worker could be 'fired as a result of machines' decisions'.
8.81
European Trade Union officials were quoted saying the laws could 'signal the end of the free for all' for Uber, Deliveroo and other platform companies, who 'have made huge profits' while 'dodging their most basic obligations as employers at the expense of workers' in the name of flexibility.
Lessons for Australia
8.82
The ITF submitted that overseas experience has provided a number of principles for effective regulation of the platform work. These are summarised below:
(1)
The technology involved should not be the focus of regulation: whether a driver or courier is given work via an app or over the telephone, or via any other means, all workers deserve the protection of workers' rights.
(2)
Collective organising is 'an effective means of articulating the needs of the workers' and 'should be a starting point for anyone looking to change their conditions'.
(3)
Data—including data from platform companies—is critical to 'effective regulatory intervention', and also to combatting attempts by platform companies to undermine arguments in favour of regulation.
(4)
In relation to certain parts of the platform sector, regulating the industry by 'capping' the number of workers companies can take on 'is essential'. International examples demonstrate that companies like Uber 'saturate the market with as many low-paid workers as possible … lowering customer wait times as well as workers' wages'. The example of New York City shows that imposing a cap on the number of rideshare drivers can be done successfully and lead to better earnings without negatively impacting customers.
(5)
It should be about rights: whether or not platform workers are categorised as employees or independent contractors (and this may vary for different industries), the aim of regulation should be 'to provide these workers with a broadly comparable package of rights as others in an employment relationship have', including: whistle-blower protections; minimum pay, accounting for wait time and expenses; 'access to social protections'; health and safety protections; the right to claim against unfair dismissal; trade union rights; and protection from discrimination.
(6)
Effective and active enforcement is necessary, as platform companies have been known to ignore or flout laws. As such, it can be more effective to write workers' rights into a licensing regime, thus making it a cost of doing business in the first place.
Committee view
8.83
The committee was clear in its first interim report that we may revisit and refine our recommendations in relation to on-demand platform work, and we have done so here.
8.84
We wish to thank all of the submitters and witnesses who responded to the first interim report for your considered feedback and suggestions.
8.85
We also note the statement in the Attorney‑General's Department's response to the committee's first interim report that the Government 'will consider the Committee's final report, including any recommendations, once it is released'.
8.86
The recommendations below set out the committee's response to the need to protect on-demand platform workers from exploitation and to reverse the trend towards Uberisation of work in Australia. If implemented, many of these recommendations would also address the worrying 'Amazon effect', which is putting downward pressure on the transport and distribution sector.
8.87
There will always be a place for genuine independent contractors in Australia's workforce, but governments cannot allow companies to use technological and legal gymnastics to disguise what are essentially employment relationships as something they are not.
8.88
The committee believes that food delivery in particular is better suited to an employment model, and the relative certainty of protection that could be offered by the coverage of state-based workers' compensation schemes. Voluntary, self-assessed, industry-based codes of conduct are no substitute for proper regulation.
8.89
Rather than incrementally offering benefits and insurances to their workers in an attempt to avoid formal regulation, companies like Uber and Deliveroo should see the writing on the wall and join Menulog in seeking to provide a minimum wage and entitlements to their workers.
8.90
The committee also notes approvingly of the recent decision of the Fair Work Commission that Menulog workers should be classified under the Road Transport and Distribution Award. This decision ensures that food delivery workers are paid a rate commensurate with the rest of the courier industry.
The committee's preferred approach
8.91
While the committee originally made a recommendation around changing the definitions of 'employment' and 'employee' and in the Fair Work Act 2009, feedback on this recommendation has convinced the committee that there are better ways to achieve its aims without risking unintended consequences.
8.92
Expanding the remit of the Fair Work Commission 'beyond employment', to include roles in relation to contracted workers, would better achieve the committee's aims. The Fair Work Commission should be able to: set minimum wages and minimum standards and conditions for contracted workers that are commensurate with those enjoyed by employees; arbitrate contract termination disputes; and make orders relating to classes or groups of workers, such as to be able to order that a group of workers be classed as employees, not contractors.
8.93
The committee notes additional evidence received over the course of the inquiry about deactivation, and concerns raised about mechanised or algorithmic management of work, and shares these concerns.
8.94
Decent and meaningful work requires a connection with your employer and your workplace, a clear understanding of your rights and responsibilities and those of your employer, the right to raise concerns with your employer, and the right to be heard and respected.
8.95
The committee believes the issue of mechanised management through platforms is related to the issue of dispute resolution, and we believe this is an area that warrants further consideration.
Revised recommendations: regulation
8.96
In relation to the committee's first interim report, the committee supports and reiterates Recommendation 6, on workers' compensation; and Recommendation 10 on casual conversion, which has not been discussed in this chapter.
8.97
The committee provides the following revised recommendation to replace Recommendation 7 from the first interim report:
8.98
The committee recommends that the Australian Government amends the Fair Work Act 2009, expanding the scope of the Act to encompass all forms of work, and empowering the Fair Work Commission to:
determine fair rates and conditions for all categories of workers, including contractors;
arbitrate on contracts with independent contractors that are unfair or harsh; and
make orders and determinations for groups or classes of workers.
8.99
The committee recognises that there may be some overlap between Recommendation 6 (above) and the original Recommendation 11 from the first interim report. As such, the committee provides the following refined recommendation to replace Recommendations 9 and 11 from the first interim report:
8.100
The committee recommends that the Australian Government supports independent contractors who are sole traders by establishing and promoting accessible low-cost pathways for dispute resolution.
8.101
Recommendations 12, 13 and 14 on the National Disability Insurance Scheme (NDIS) are covered in the next chapter, on supporting publicly-funded jobs, as is Recommendation 15, on government procurement.
The committee's recommendations: Improving data collection and reporting
8.102
In its first interim report, the committee made four recommendations designed to improve data collection and the availability of statistics. Inquiry participants largely echoed views that have been expressed by academics that currently‑available labour statistics do not adequately facilitate the identification of gig workers as a specific subset of workers and the additional collection and reporting of data in this area would be invaluable.
8.103
In their response to the committee's first interim report, Dr Caleb Goods, Dr Tom Barratt, Dr Brett Smith, Mr Rick Sullivan and Dr Alex Veen (the research team) observed that the current 'paucity of data' on gig workers makes it hard for policymakers to 'understand the scope, nature and scale of the gig economy'; thus making it difficult to 'enact policy settings which meet the needs of various stakeholders'.
8.104
In Recommendations 1 and 2, the committee recommended that the Australian Bureau of Statistics (ABS):
expands its Labour Force Survey to capture quarterly estimates in relation to the number of workers engaged in the on-demand platform sector; and
enhances its Work-Related Injuries Survey to capture specific information on the number, and types, of injuries and fatalities for workers engaged in the on-demand platform sector.
8.105
In Recommendation 3, the committee also recommended that Safe Work Australia enhances its national data collection process to capture specific information on the number, and types, of injuries and fatalities for workers engaged in the on-demand platform sector.
8.106
Recommendation 8 of the committee's first interim report suggested that the Government investigate options for a Federal regulator that would be empowered to request data on pay rates, working hours, and conditions from platform businesses that employ and contract workers.
Responses to Recommendations 1, 2 and 3
8.107
Dr Goods, Dr Barratt, Dr Smith, Mr Sullivan & Dr Veen 'strongly supported' adding additional questions to the ABS Labour Force survey, to gather more data on gig workers, and even offered to use their experience and professional expertise to 'assist in the design of such survey questions'.
8.108
Platform companies also supported the need for more data. Uber submitted:
As the on-demand platform sector continues to evolve, it is sensible to ensure the Government has a comprehensive understanding of the sector based on accurate and timely data.
8.109
The Attorney-General's Department submitted that the Department is working with the ABS 'to enhance collection' of IR data on the on-demand economy, casual workers and award-reliant workers. The Government has provided '$2.8 million over four years' to the ABS 'to support this work' and is 'undertaking preliminary scoping work with the ABS on workers engaged in the gig economy'. The Department added that the new data will 'support the development of evidence-based policy responses'.
8.110
The ABS confirmed that the Government provided additional funding in the 2020–21 Mid-Year Economic and Fiscal Outlook which will allow it to collect new information from individuals—by adding new questions to the annual Characteristics of Employment supplement to the Labour Force Survey—and from businesses, through the two-yearly Survey of Employee Earnings and Hours.
8.111
The ABS argued that was 'the best approach' for mapping the 'nature and extent of this work', because it 'will provide information across all key on‑demand platforms' and provide data that 'can be directly reconciled and compared with other information on working arrangements'.
Responses to Recommendation 8
8.112
Ai Group opposed this recommendation, while supporting the committee's other data-related recommendations. Ai Group submitted:
A well-resourced and effective Federal regulator—i.e. the Fair Work Ombudsman (FWO)—already exists, with broad statutory powers to obtain information from businesses about wages and working arrangements for employees and contractors, including powers to enter premises, interview persons, inspect records and take compliance and enforcement action. … WHS regulators are empowered to undertake investigations and take enforcement action in relation to health and safety matters. … Establishing an additional regulator is unnecessary and inappropriate. This would only duplicate existing functions, create confusion and lead to potential inconsistency in the application of relevant laws.
8.113
However, the research team supported this recommendation, as did Professor Riley and Dr Rawlings, who argued that data from platform operators would support and make 'more meaningful' the data that would be collected if Recommendations 1 to 3 were implemented. They also observed that the current lack of 'extensive and reliable data' on platform workers 'is an obstacle to effective policy development'.
8.114
Online disability services platform, Hireup also supported this recommendation, saying the platform sector in disability services is currently a 'modern-day "Wild West", where the usual rules of employment law don't apply':
This recommendation would provide the information necessary to understand the depth of this currently under-regulated space, and the impact this could be having on workers. It would allow the Government to have appropriate oversight over platform operations in order to ensure fairness for workers and platform users, while providing foundational information for governments to apply appropriate employment and tax law (PAYG and payroll tax) settings to platform work and revenue.
8.115
Maurice Blackburn Lawyers also supported this recommendation, and suggested an additional item of data be collected: 'Incidents of workplace harassment (including sexual harassment) and bullying'.
New data submitted by Uber and Deliveroo
8.116
As part of its response to the committee's first interim report, Uber submitted new research on platform workers and the impacts on the pandemic on the sector. The report, Platforms Work, commissioned by Uber and prepared by Accenture, incorporated a survey of nearly 5 000 workers from six countries, analysis of Uber's 'administrative data covering 7 million drivers and delivery people', and a review of literature from academic and other sources.
8.117
The Platforms Work report found that—contrary to Uber's evidence earlier in the inquiry that most platform workers engage in this work to earn supplementary income—almost 80 per cent of respondents 'said platform work was an important or essential source of income during the pandemic'. In addition:
Across countries, between 57–73% of new platform workers had lost work or experienced a decline in hours prior to signing up and between 51-79% of new platform workers surveyed reported being ineligible for government support or not being able to access support.
8.118
The report stated that in 2020, Uber 'facilitated the transfer of over US$22 billion in earnings to rideshare drivers and delivery workers' globally. The report also indicated that pandemic-related growth in food delivery sector is likely to be permanent, saying:
It is noteworthy that while restaurant spending has returned to normal levels, spending on food delivery continues to be three times higher than pre-COVID levels in Australia.
8.119
The 'majority' of workers surveyed for the Platforms Work report use only one app, but 'more than a third use multiple platforms' (multi-apping). Workers surveyed had the following additional responsibilities:
49 per cent were undertaking other part-time or full-time work
19 per cent were undertaking study;
7 per cent were providing 'caregiving support'.
8.120
One interesting set of statistics submitted by Uber in the Accenture report was that pertaining to women's use of the app during the pandemic. The graphics below (Figure 8.1) suggest that women turned to working for Uber because they were unable to find other work (left), and that a number may have been caring for children or others while working (right).
8.121
The committee notes that there is more than one way to interpret this data. While some may say this data shows the success of flexible working arrangements for women, the committee believes this data paints a different picture.
8.122
This data indicates that during the pandemic, more women than men lost work, and more women took on caring for children and elderly relatives while lockdowns and other measures were in place. Compounding this, jobs in many lower-skilled sectors, such as hospitality and retail were harder to get at various points due to pandemic measures, so women were driven to seek employment where they could find it.
8.123
Deliveroo also provided statistics in its supplementary submission. According to Deliveroo, the company has:
around 10 000 riders engaged;
75 per cent of riders in Australia are students;
over a third (35 per cent) are completing post graduate degrees;
many riders 'have caring responsibilities for children';
the 'average tenure' for a Deliveroo rider 'is only 44 weeks'; and
around 1900 riders apply to work via the Deliveroo platform each week.
8.124
The reports from Accenture often lead to more questions than answers. Without seeing the actual surveys and the raw data, it is impossible to get a complete understanding of how Uber drivers and delivery partners genuinely feel about their work.
8.125
One Uber driver submitted that the companies distribute 'random' surveys 'preloaded with questions and answers that favour a particular expected "desired" outcome', or that sometimes the surveys 'don't work or break', preventing him from completing them.
8.126
Access to the platforms' administrative data would allow governments and regulators to make more informed decisions in relation to the sector. The success of this approach in New York, where access to rideshare company data was key to regulating the sector, is evidence of the need for this type of approach.
Data and statistics
8.127
The committee is encouraged to see the investment made by Government into the collection of new data around platform sector workers but cautions that collecting meaningful data may require new approaches.
8.128
The limited data currently available suggests that a large proportion of workers who engage in platform work in Australia are temporary residents and/or international students; many are young; English may be a second language; and some may not be legally entitled to work in Australia (or may be working more hours than their visa allows.
8.129
Simply adding questions about platform work to existing ABS Labour Force surveys may not sufficiently capture this vulnerable cohort of workers. Some additional measures may be needed to ensure meaningful data is collected.
8.130
The committee reiterates its support for Recommendations 1, 2, 3 and 8 made in its first interim report, noting the progress already made in this area. The committee agrees with Maurice Blackburn Lawyers that adding 'Incidents of workplace harassment (including sexual harassment) and bullying' to Recommendation 8 from the interim report would be beneficial.
8.131
In order to ensure data collection on platform workers provides a realistic impression of the sector, and is able to reach vulnerable cohorts of workers, the committee has added one additional recommendation.
8.132
The committee recommends that the Australian Bureau of Statistics consults with relevant migrant and international student community groups, community leaders, unions, employer associations and experts to ensure that its methods for data collection in relation to the on-demand platform workforce include effective and appropriate approaches to collecting data from key worker cohorts.
The committee's recommendations: protecting jobs in transport and distribution
8.133
The committee's third interim report included Recommendations 16 and 17, aimed at supporting jobs in the transport sector threatened by outsourcing and labour hire.
8.134
It also included Recommendation 18, which called for the creation of an independent body, such as a National Transport Tribunal, to set and enforce minimum standards of pay, safety and conditions for all transport workers (including contractors), and across supply chains, to adjudicate disputes, and to facilitate collective bargaining.
Committee view
8.135
The committee echoes its support for Recommendations 16 and 17 from its third interim report, relating to outsourcing and labour hire.
8.136
In relation to Recommendation 18, the need for a National Transport Tribunal to challenge the corrosive effects of Amazon's 'last mile' delivery is clear from Amazon's response to the committee's questions about its rates of pay.
8.137
Amazon continues to insist that its Amazon Flex Delivery Partner rates 'align with the relevant industry standards', when the 'type of work performed' and the type of 'vehicles used' are taken into account. However, the pay rate of approximately $27 an hour—being lower than any industry award—could easily end up being lower than minimum wage when vehicle operating and maintenance costs are taken into account (depending on the amount of work a partner does for Amazon Flex).
8.138
Delivery partners engaged by Amazon should either be employees, with proper training, WHS protections, and fair rates of pay, or be properly regulated and remunerated contractors, with contracts negotiated with the support of a union, or under the supervision of a National Tribunal.
8.139
The committee urges the Government to implement Recommendation 18 from the committee's third interim report as a matter of priority.