5.1
Australia's existing system of laws and regulations were not designed to accommodate the kinds of employment relationships that have emerged as part of the gig economy.
5.2
Industrial relations (IR) laws govern the relationship between employers and employees. However, rather than 'employees', on-demand platform workers are generally classified as 'independent contractors', leaving these workers without the protections provided to most Australian workers.
5.3
Independent contractors and those who run their own businesses have access to a number of potential remedies under legislation, including remedies for 'unfair contract' provisions, and protections against 'unconscionable conduct'. However, evidence to this inquiry has indicated that these provisions are unsuitable, inappropriate, and largely inaccessible to most on‑demand platform workers.
5.4
This chapter explores the adequacy and applicability of existing Australian regulation applying to workers in the on-demand platform sector, looking specifically at:
existing IR regulation and platform work;
existing contractor and small business regulation and platform work; and
work health and safety (WHS) law and workers' compensation, as they apply to platform workers.
5.5
A discussion of regulatory models in other jurisdictions is included at Appendix 3 of this report.
5.6
This chapter also includes the committee's view and recommendations in relation to WHS and workers' compensation, while broader recommendations for regulatory reform are included in Chapter 6.
Existing IR regulation and platform work
5.7
Australia's current regulatory framework embeds a dichotomy between 'employees' and 'independent contractors' in workplace laws. However, many labour market arrangements that are common in the gig economy do not fit neatly into either category.
5.8
In Australia, employees enjoy minimum protections under the Fair Work Act 2009 (Cth) (Fair Work Act), which:
… provides 'a safety net' which includes ten National Employment Standards. These cover hours of work, forms of leave, notice of termination and redundancy, minimum wages, rights of representation, and other entitlements, and cannot be 'undercut by any other arrangement'.
5.9
In contrast, workers who do not have the status of 'employees' are 'not entitled to the majority of protections provided by the Fair Work Act', or the protections provided by industry awards, including: award wages, penalties, overtime, dispute resolution procedures, consultation procedures and minimum engagement periods.
5.10
Workers who are not employees may also be unentitled (or less entitled) to a number of other 'protections and obligations', including: workers' compensation, superannuation and anti-discrimination protections, as the laws applying these obligations to employers often define them as obligations owed to employees.
5.11
This section looks at evidence around whether on-demand platform workers should be classified as employees, and considers how existing employment legislation currently applies (or does not apply) to these workers.
Classifying on-demand platform workers
5.12
The inquiry into the Victorian On-Demand Workforce (Victorian inquiry) observed in its June 2020 report that problems arise in instances where 'the real nature' of the employment relationship is unclear, or there is a 'misalignment between the way the relationship has been described and the way in which the parties are working':
Parties may badge the relationship as a non-employment relationship, but its real status depends on how the work is done and how the parties interact. This can change over time. A contract can begin as a clear, non‑employment relationship but evolve into an employment relationship.
5.13
Courts and tribunals apply a multifactor legal test which involves considering a set of indicia, developed over time, to test the status of work arrangements. The approach 'weighs up all the features of the relationship', including:
the right or legal authority to exercise control over the worker (not its actual exercise) and the extent or ability to delegate work to others;
whether the worker is integrated into the organisation hiring their service;
the substance of the relationship, not just the terms of the contract;
who provides and maintains tools and equipment;
if there is an opportunity to earn a profit or risk incurring a loss;
if payment is for completion of tasks, or wages in exchange for time worked; and
if the person is working in an employer's business or carrying on their own business.
5.14
The Victorian inquiry noted that 'commentators, experts, unions, and businesses' are divided on the '"true status" of platform workers', with many considering it 'unsettled':
The arrangements often feature some of the 'employment' indicia with the platform or, potentially, an end user. But elements that suggest otherwise are generally also present.
Relevant cases
5.15
A number of cases have come before the Fair Work Commission (FWC), Fair Work Ombudsman (FWO), and the Federal Court of Australia disputing the categorisation of various workers as independent contractors.
5.16
An early case related to a worker for food delivery platform Foodora. Foodora operated for a short time in Australia before ceasing operations in 2018 in the wake of Australian Tax Office (ATO) and FWC findings that its workers were not independent contractors, but employees.
5.17
In contrast to the Foodora case, in 2019 the FWO found that 'the relationship between Uber Australia and the drivers is not an employment relationship'. Fair Work Ombudsman, Ms Sandra Parker PSM, said that FWO inspectors had examined 'a wide range of evidence', and found no 'obligation for an employee to perform work when it is demanded by the employer'—a condition the Ombudsman considered must exist for a court to identify an employment relationship. However, the Ombudsman was careful to point out that the findings in relation to Uber did not necessarily extend to other companies or arrangements:
Our investigation found that Uber Australia drivers are not subject to any formal or operational obligation to perform work … [However] Companies in the gig economy use a range of business models and the Fair Work Ombudsman will continue to assess allegations of non-compliance on a case-by-case basis. Anyone with concerns about their employment arrangements should contact the FWO.
The Amita Gupta Uber Eats case
5.18
Similarly, in April 2020 the FWC found that Uber Eats driver, Amita Gupta was not an employee, 'even though she was not conducting a business in her own right', and as such, she was not protected from unfair dismissal as an Uber Eats delivery partner.
5.19
In the Gupta decision, the Commissioner wrote: 'There are some competing indicia however in my view the more significant factors tend to weigh in favour of this particular relationship not being that of employment'.
5.20
Ms Gupta was granted permission to appeal the decision and the appeal was dismissed. In dismissing the appeal, Deputy President Coleman stated that he upheld the Commission's finding that Ms Gupta was not an employee, but disagreed with its characterisation of her as an independent contractor to Portier Pacific (the payment collection agent that invoices restaurants and transfers payments to delivery drivers; a subsidiary of Uber), saying Ms Gupta was 'simply working for herself'.
5.21
The Victorian inquiry noted that the Gupta decision has 'been criticised by some commentators', and said the case illustrates potential issues with Australia's current dichotomous regulatory system:
The common law work status test in the 'real' world is not maintaining a clear distinction between an independent, autonomous worker operating their 'own' business and an employee working as part of another's enterprise. Some platforms' arrangements are blurring the distinctions.
Uber's settlement with Amita Gupta
5.22
In December 2020, Uber reached a confidential out-of-court settlement with Ms Gupta after she took her case to the Federal Court of Australia (Federal Court) with the support of the TWU. During hearings in the Federal Court, judges questioned Uber's argument that drivers are not employees, and said:
We actually operate in the real world here… This is not a debating club. We've not just got a theoretic construct to ask ourselves about… I'm puzzled as to why your client doesn't offer the court an analysis of the true factual element of the characterisation of the relationship.
5.23
The Court identified a 'quadrilateral relationship' between four parties: Uber Eats, the restaurant, the delivery driver and the customer, and questioned Uber's claim that there would 'truly be no consequences for failing to deliver an order'.
5.24
Before the Court could hand down its judgement, Uber settled the case with Ms Gupta for an undisclosed amount. Asked why it chose to settle its case with Ms Gupta, Uber said:
We welcomed the resolution of this case, which involved Ms Gupta discontinuing her claim and allowing the two decisions of the Fair Work Commission (which found Ms Gupta to be an independent contractor) to stand.
5.25
As a party to the settlement between Ms Gupta and Uber, the TWU was asked to give evidence about the settlement at a committee hearing on 10 June 2021. Noting advice on parliamentary privilege and the protection of witnesses, National Secretary, Mr Michael Kaine provided the following summary:
This was a case where Amita Gupta was sacked by being but a few minutes late for a delivery. It was a harsh, unfair dismissal, and the TWU, on the Guptas' behalf, took up an appeal for them, after they had failed at first instance in taking the case to the Fair Work Commission. The Fair Work Commission made a ruling. We appealed that ruling to the full bench of the Federal Court of Australia. Some time in December last year the full Federal Court packed up after a day's long hearing in relation to the Guptas' case. In that case, the various members of the court spent a significant period of time systematically unpicking the fiction of Uber Eats' arrangements. … It was very clear, and it's very clear to anyone from the reading of that transcript, that the full bench was completely unimpressed with Uber's approach. …
But the most telling feature of this settlement was the extent of the settlement. Amita Gupta, even if she had won an unfair dismissal case, would have been entitled to a maximum of around about $15,000 for six months work. The settlement that was made was $400,000. This I have provided in an answer to a direct question from the Senate committee. It is subject to a settlement document, but I think it is very clear that Uber Eats wanted to ensure that there was no risk that its exploitative system would be overturned by the full Federal Court. They were willing to pay an incredible amount of money, a life-changing amount of money for the Guptas, to ensure that that moment in time did not occur.
The case of Mr Diego Franco versus Deliveroo
5.26
A more recent decision has opened up the debate again. In Diego Franco v Deliveroo Australia Pty Ltd (2021), the FWC considered 'whether Mr Franco was an employee of Deliveroo and therefore protected from unfair dismissal'.
5.27
According to the Transport Workers Union (TWU), who supported Mr Franco in his case against Deliveroo:
While working as Deliveroo, Diego was recognised as one of the best performing and long-serving delivery workers and flown over to Melbourne to engage in a select committee of Deliveroo delivery workers.
In May 2020, Diego received an email notifying him that he would be terminated within 7 days for allegedly delivering orders too slowly. Diego was provided no prior warning and despite his pleas, Deliveroo refused to review Diego’s case or give him another chance. Diego was left 7 days to find a new job, in the middle of the Coronavirus pandemic, with a young daughter to provide for.
5.28
In considering the case the FWC considered 'issues of both fact and law', applying the same multifactorial approach as applied in the Gupta case, which considered the relevant indicia, but coming to a different conclusion. The judgement stated:
Following detailed examination of all of the evidence regarding the relevant factors and application of the relevant common law principles, the Commission has determined that the applicant, Mr Franco, was an employee of the respondent, Deliveroo … Subsequent consideration as to whether the dismissal of the applicant was harsh, unjust or unreasonable, has established that there was no valid reason for the dismissal of Mr Franco relating to his capacity or conduct. The substantive reason for the dismissal of Mr Franco was not sound, defensible, or well-founded.
5.29
A key consideration was around the indicia of 'control'. While Deliveroo claimed riders could log on whenever they want to, and choose when and if to undertake deliveries, the FWC said 'a more detailed examination beyond the mere appearance of the apparent freedoms that were provided to Mr Franco, reveals a very different picture':
Consequently, although it appeared that Mr Franco had the freedom to choose when and where to work, the practical reality was that the SSB system directed him to undertake work at particular times, and to regularly make himself available for work, and to not cancel booked engagements. Although Deliveroo did not require a rider to work for any particular length of time, or to even accept a delivery order once they had logged into a booked session, the economic reality of the situation would ordinarily compel a rider to undertake delivery work. After all, the objective of the entire process is to get paid.
5.30
The FWC noted that Deliveroo stopped using that particular system in January 2020. However, it noted that Deliveroo retains 'the capacity … to exercise a significant level of control', and could reintroduce that system, or a similar system at any time.
5.31
The FWC also observed that the terms of Mr Franco's contract/s 'clearly established that Mr Franco had no capacity to negotiate any of the terms of the supply/supplier agreements':
The practical reality of the circumstances was that Deliveroo presented the contractual arrangements to Mr Franco and other riders, as a fait accompli. Mr Franco could not even negotiate an additional one-off payment when he was being requested to undertake a particularly undesirable delivery order.
5.32
Further, the FWC was critical of the suggestion that Mr Franco was free to delegate work to others if he chose to, saying:
… there were clear financial constraints upon any subcontracting that involved an employment relationship between Mr Franco and any delegate because the remuneration that Mr Franco received from Deliveroo would be unlikely to cover payment of the national minimum wage to any delegate.
Work status: evidence from inquiry participants
5.33
The FWO commented that the 'individual nature' of its assessments means that its findings only apply 'to the individual workers that are the focus of the investigation', rather than having a broader application across similar workers in the sector.
5.34
The General Manager of Uber Eats Australia, Mr Matthew Denman, said that cases brought before the FWC and FWO in relation to both Uber and Uber Eats had consistently found that the relationship was that of 'an independent contractor'. Mr Denman added that, despite food delivery businesses appearing to be much the same, there are differences in the way businesses conduct their work, and the levels of control they exercise over their 'delivery partners'.
5.35
Mr Denman said Uber's delivery partners consistently tell the company that they would prefer to be independent contractors than to be 'employed with fixed shifts'. However, the TWU submitted results of two surveys conducted in 2020 by the union, in conjunction with the Delivery Riders Alliance and Rideshare Drivers Network: one on food delivery and one on rideshare.
5.36
In the food delivery sector: around 72 per cent of workers surveyed said that they believe they 'should be an employee and not an independent contractor'; almost 87 per cent of workers agreed that they 'should have access to rights like superannuation, sick leave, penalty rates and a minimum wage'; and 90 per cent of workers said: 'Delivery workers should be able to form a union to collectively represent their interests'.
5.37
In the rideshare sector: just under half of drivers surveyed (47.62 per cent) said that they 'should be an employee and not an independent contractor', but much larger percentages wanted better conditions and higher rates for the work they did. This suggests that there may be a greater justification for the independent contractor model in the rideshare sector than, for instance, in the food delivery sector, if driver concerns can be addressed.
5.38
The TWU argued that 'Australia's outdated industrial relations system … is in urgent need of reform', as the current 'binary distinction' denies contractors any rights or protections:
As a result, workers in highly dependent employment-like relationships who are classified as contractors are being denied access to any work rights and entitlements leading to concerning trends among workers in a highly competitive, low margin, almost no barrier to entry transport sector.
5.39
The TWU said that, while they are classified as independent contractors, most platform transport workers are engaged in 'highly dependent arrangements, with new forms of algorithmic control and management being imposed in new ways to undermine job security, conceal control and intensify already unsustainable work pressures in the industry'.
5.40
Similarly, delivery workers argued that they are not, in fact treated as independent, but are strictly controlled by platforms. One of these workers, Mr Assad Manzoor said:
They are apps where you have to apply for shifts, and you hope that your shift gets applied. You work as an employee. Take the definition of 'employee'—they get everything out of you as an employee. They are actually tracing you while you are doing jobs. If I take a wrong right turn, I will get a call from them saying, 'You're going in the opposite direction of where you're supposed to go' while I'm doing that. So they treat you as complete employees. But, when it comes to it, they are very specific that you are not employees; you are contractors.
5.41
The Rideshare Drivers Association of Australia (RSDAA) submitted the following reasons why it believes drivers are not truly independent contractors:
(a)
All Goodwill from trips is associated to Rideshare Platform Operators
(b)
Platform operators apply quality control to drivers to protect the Operators goodwill
(c)
Terms are set solely by Platform Operators
(d)
Drivers have no control over price
(e)
Drivers have no knowledge of destination, prior to acceptance of trip
(f)
Platform Drivers cannot delegate tasks or sub contract
(g)
Platform operators have full control over tasks
(h)
At no point has a contract between consumer and driver been established
(i)
Drivers have no power over payment from consumer
(j)
Drivers must use signage of Platform Operator to be recognised
(k)
Platform operators charge drivers a cancellation fee which may be paid by drivers
(l)
Platform operators have made private payments to drivers for compensation
(m)
Platform operators pay cleaning fees to drivers for disarray left by passengers
(n)
Drivers are not allowed to provide driver contact details to passengers
(o)
Drivers are not permitted to contact rider to organise future transport
(p)
Drivers are not permitted to build their own. 'Small Business Operations'.
5.42
The RSDAA contended that platform operators are 'transportation companies offering transport services':
Drivers, at least as Independent Contractors, merely fulfil the needs of the transport platform operators by responding to requests made to drivers by the platform itself, NOT by the consumer. This is certainly the overwhelming view also held by consumers …
5.43
Documents submitted by Uber to the inquiry indicated that while Uber Eats delivery partners are not allowed to charge a customer more than the set rate on the Uber Eats app to deliver food, restaurants can charge whatever they like, increasing the prices of their food to compensate for the commission that Uber Eats takes. Mr Denman said: 'The restaurants have complete control over their pricing'. This difference in the two relationships demonstrates the relative lack of leverage that delivery drivers have in relation to their contracts.
Sham contracting
5.44
In some instances employers attempt to represent employment relationships as independent contractor relationships in order to avoid providing minimum wages and conditions; this is called 'sham contracting'.
5.45
It is theoretically open to gig workers to appeal to the FWO or FWC to allege sham contracting, but the Victorian inquiry found this pathway is not accessible, affordable or well‑understood by gig workers, and has not proven to be an effective approach in litigation.
Existing contractor and small business regulation and platform work
5.46
The common law concept of 'employment' distinguishes it from commercial arrangements. In the traditional concept of employment, 'the employer typically assumed the risks and liabilities associated with work done under the contract and, in return, commanded control over their workers'. On the other hand, independent contractors provide services, operate 'autonomously', and carry 'the risk and the reward of applying their skills':
Independent contractors are self-directed in their work and exercise a high degree of control over how it is done, generally being paid for producing a particular outcome.
5.47
Independent contractors are not eligible for protections under the Fair Work Act that apply to employees, such as minimum wages, rights of representation, minimum terms of engagement, or protection against unfair dismissal. Certain obligations, such as the obligation to provide and maintain a safe working environment, do generally extend to independent contractors.
Contractor and small business regulation
5.48
There are a number of regulatory options for small businesses or independent contractors to pursue to 'seek support and remedies in relation to their arrangements'. However, the Victorian inquiry found that 'while these options are theoretically available to platform workers, they are not regularly accessed by them'. Evidence received during the course of this inquiry so far supports the findings of the Victorian inquiry.
5.49
Regulatory options available to contractors include:
small business support and remedies, including 'unfair contract' processes, and assistance with seeking 'relief from unconscionable and unfair practices' (in the Australian Consumer Law); and
some provisions in the Independent Contractors Act 2006 (Cth).
The Victorian inquiry overwhelmingly found that these remedies were unsuited to platform workers, were not designed for them, were not targeted to them, and/or were prohibitively expensive or difficult to pursue.
5.50
The Victorian Government observed that the report found unfair contracts remedies under Australian Consumer Laws 'are deficient because there is no penalty for including unfair terms in contracts'; and that 'it is uncommon for a contract to be amended to remove any unlawful terms', leading to businesses continuing to use 'unlawful terms' in their future contracts.
Dispute resolution mechanisms
5.51
Platform providers who use independent contractor models were asked about their dispute resolution models. Director of Ola Australia, Ms Ann Tan said that Ola's drivers have used mechanisms such as Fair Trading to lodge disputes regarding income and pay.
5.52
Deliveroo said it uses a manual review system:
If we have to make the tough decision, it all goes under a manual review. For every single decision where we've decided to end an agreement, we make sure that it's done by a person who is specifically trained in that process and looking at all of the scenarios and situations. It's based on an average of activity as well. It's never on a one-off basis in a one-off situation in a particular delivery scenario. … Riders are also never blocked from the app without 'any sort of human interaction'.
5.53
Workers reported being very concerned about the lack of security that their status as independent contractors provided them, with a number reporting that they had been removed from, or blocked from accessing, apps for reasons they believed were unfair, and that they had little to no recourse. Mr Manzoor said he had been blocked from two apps and that his complaints to the apps did not result in a satisfactory result:
They have blocked my access and eventually they just fired me from the apps based on some performance, like one late delivery or some other issue. They blocked my access so that I can't influence anyone else. I have no recourse. I can't go to Fair Work. I can't challenge that. I don't have money to challenge that in any way. They just kicked me out.
5.54
The TWU's survey indicated that around 86 per cent of food delivery workers reported being 'dependent on food delivery work as a main source of income'; and 61.27 per cent of workers said they had 'been unfairly treated by a company without being able to defend [themselves]'.
5.55
The rideshare survey indicated:
around 18.5 per cent of workers reported being 'suspended without pay';
just over 9 per cent had 'been terminated as a result of a false allegation'; and
83 per cent said they wanted better dispute resolution mechanisms.
5.56
Dispute mechanisms for Amazon Flex delivery drivers in New South Wales (NSW) and Victoria are subject to some regulatory control, because Amazon complies with the owner-driver regulations in these states. Amazon explained that it has 'off‑boarded' 19 drivers who have appealed the decision and been reinstated. Drivers who are 'off-boarded'—generally 'as a result of reliability issues'—have '24 or 48 hours' to lodge an appeal, and Amazon will assess the appeal and reinstate the driver if they have a good reason for failing to delivering their blocks. Mr Michael Cooley, Director of Public Policy Australia and New Zealand, said:
… if they are repeatedly accepting blocks and then not turning up to deliver the blocks, then we suspend their account, we notify them of that and we give them an opportunity to appeal. Where they have a good reason—perhaps personal circumstances, which has occurred in a couple of instances—and they bring that to our attention then we're sensible and approach these things with a great attitude, and we'll reinstate them where appropriate.
Independent Contractors Act
5.57
The Commonwealth Independent Contractors Act 2006 (the IC Act) was designed to ensure that 'genuine independent contracting relationships' would be 'governed by commercial rather than industrial law'. The IC Act recognises independent contracting as 'a legitimate form of work arrangement' that is commercial, rather than industrial; protects 'the freedom of independent contractors to enter into services contracts'; and prevents 'interference with the terms of genuine independent contracting arrangements'. The IC Act prevents state and territory governments from legislating for independent contractors to have 'employment like entitlements', 'subject to certain exceptions', and creates unfair contract provisions for independent contractors.
5.58
The Victorian inquiry found that, while platform workers could potentially use the IC Act to apply for a review of a contract on the grounds that it is unfair or harsh, there are no penalties for unfair terms, parties must pay their own costs (unless a claim is vexatious), and:
The Inquiry is not aware of any platform worker seeking to bring a claim using this remedy. The avenue does not appear to have been highly utilised or well supported. With only 16 matters being filed in court under the [IC] Act since 2014, comes the suggestion that this little used jurisdiction has produced few positive outcomes.
5.59
The TWU submitted that the IC Act is 'entirely ineffective and inaccessible':
Claims brought under the [IC Act] would require a worker to fund their own legal case which could take years with limited prospects of success given the severe limitation on protections offered by the [IC Act].
Issues under competition law
5.60
The fact that most platform workers are classed as independent contractors means they are also captured by competition laws. This, in effect, means that it is illegal for them to engage in collective bargaining, or jointly negotiating terms, conditions and prices.
5.61
In its response to the Victorian inquiry, the Victorian Government noted that the Australian Competition and Consumer Commission (ACCC) is currently seeking to introduce reforms to change this:
… by implementing a class exemption, so that certain businesses (with less than $10 million aggregated annual turnover in the financial year prior to the business joining the collective bargaining group or it being formed), could lawfully bargain collectively to jointly negotiate terms, conditions and prices (without offending competition laws).
5.62
Mr Denman said that competition laws also make it difficult for platform providers in the industry to work together to establish better conditions for workers. However, committee members noted that it would be possible to seek an exemption from the ACCC to anti-collusion laws, for this purpose.
Regulations applying to platform NDIS workers
5.63
In 2020, the National Disability Insurance Scheme (NDIS) had 390 000 participants. Total scheme payments increased from $2.18 billion in the first year (2016–17) to $16.11 billion in 2019–20. Funding for the NDIS is provided by both the Commonwealth and state governments, as well as through an increase to the Medicare Levy.
5.64
The Australian Government estimates the disability care workforce will grow to 190 000 workers by 2024 (Figure 5.1), meaning:
[T]he NDIS is expected to be one of the largest job creation opportunities in Australian history, with up to an additional 90,000 full time equivalent employees (FTE) needed over the next five years . This will include a mix of highly skilled positions and a large number of roles that do not require formal qualifications.
5.65
Secretary of the Australian Services Union, Ms Natalie Lang described the NDIS as 'nation building at its finest', and suggested it provides opportunities for the government invest in building secure jobs and a skilled workforce for the future. However, the ASU suggested this opportunity is not being maximised due to the unregulated nature of the workforce, including the proliferation of on-demand platform providers, like Mable.
5.66
Ms Lang said the NDIS has created a 'false market', where government funding is being provided to participants at rates that factor in award wages, training, and minimum protections for workers. However, platforms like Mable are facilitating arrangements where workers engaged as sole traders accept lower rates to deliver the services. Ms Lang said:
In terms of the pricing, the pricing is actually determined by the NDIA. So, again, it's a false market. It's really not up to what any person wishes to pay for a service in a completely unfettered way. The NDIA determines unit prices for the supports that a participant would access in their plan. They do so using a formula that actually accounts for all of the workplace entitlements. … The missing piece of the puzzle is the regulation that then requires that money to be spent accordingly. So, whilst the NDIS participant which has a plan that says the items of support that they are able to access and the amount of funding that sits in their package … it doesn't require the employer to pay the worker according to the award.
5.67
The NDIS changed the way disability funding was provided so that it no longer goes to the service provider (or 'the employer'), who then provides services, but now 'rests with the NDIS participant so that they can exercise choice and control'. Ms Lang said that this 'is a good thing and [the ASU] strongly support[s] it'. However, this model has led to 'a rise' in platform service providers employing different models based on the use of independent contractors, or casual employment models, that do not always facilitate consistent client/worker relationships. Also, Ms Lang noted that it is estimated that less than 10 per cent of NDIS workers have permanent full-time jobs.
5.68
Witnesses highlighted the complexity and specialisation of disability care work, the fact that the work is relationship-based, rather than transactional, and the potential vulnerability of participants. Ms Lang said this is why the government established the NDIS Quality and Safeguards Commission, which oversees 'a competency framework' for the provision of services: 'Every worker in the NDIS and our NDIS registered organisations are required to comply with the capability framework'.
5.69
Unlike most on-demand platforms, Hireup engages workers as employees. Chief Executive Officer and co-Founder, Mr Jordan O'Reilly, argued that disability and care work provided under the NDIS 'has all the hallmarks of traditional employment':
What we're seeing is that these are services that are engaged by our clients. A person with disability is choosing a support worker and often engaging directly multiple times a week, if not more, for many months at a time. The services are directed by the client. It's paid by the hour.
5.70
Along with these hallmarks, services supplied under the NDIS must meet quality standards, and various safeguards, qualifications, and credentials need to be in place. Ms Jessica Timmins, Senior Director of Service at Hireup, explained that meeting these regulatory obligations requires a 'back-office staff of 230 people'. It is unreasonable, Ms Timmins argued, to expect individual NDIS participants to understand the regulatory regime, and to appreciate the reasons why certain costs may need to be applied.
5.71
Given an option to pay less, as participants are when engage services in an unregulated market, such as Mable, Ms Timmins said it is understandable that individual participants may choose this option. Participants may not understand that the workers are missing out on 'entitlements, protections and award wages'.
5.72
Mr O'Reilly said that, while Hireup supports the employee model for support workers engaged through platforms, it also sees that there would be merit in simplifying the award, which is complex, and may currently act as a disincentive to platforms using an employment model.
Existing work health and safety regulation and workers' compensation
5.73
Evidence in relation to safety in the gig economy has been among the most concerning evidence received during the course of the inquiry so far. This section looks at the current legislative framework around Work Health and Safety (WHS) and workers' compensation, and considers:
issues with current framework; and
the impact of worker status.
5.74
The section looks at evidence on:
injuries and fatalities of platform workers;
how platforms, their contracting arrangements and algorithms provide incentives to workers to behave in ways that are unsafe; and
issues around establishing who is liability and responsibility for OH&S.
5.75
It finishes by discussing proposals for reform and presenting the committee's views and recommendations.
Health and safety laws and platform workers
5.76
Safe Work Australia is a statutory agency established under the Safe Work Australia Act 2008 (Cth) and was responsible for developing the model Work Health and Safety (WHS) laws in 2011 'to harmonise the regulation of WHS in each Australian jurisdiction'. To become legally-binding the laws were separately implemented in all jurisdictions, except Victoria. The model WHS laws consist of:
the model WHS Regulations; and
5.77
The Model WHS laws are intentionally 'broad in scope and application'. They cover 'a person conducting a business or undertaking (PCBU), workers and workplaces'. The terms used are 'deliberately broad', so that the laws will apply to 'all types of modern working arrangements, including those that extend beyond the traditional employer-employee relationship'. Safe Work Australia submitted that the laws aim to 'provide all workers in Australia with the same standard of health and safety protection regardless of the work they do, where they work, or their remuneration and entitlements'.
5.78
The TWU said the definition of PCBU 'includes most business operations, including businesses such as Amazon Flex, Uber and Deliveroo', and that the definition of 'worker' under the laws is 'any person who carries out work in any capacity for a PCBU'. This includes 'contractors and subcontractors, such as rideshare or food delivery workers':
These broad definitions nominally ensure that transport companies, including 'gig' companies, are not able to avoid their work health and safety obligations at any level of the supply chain by lawfully exposing their workers to dangerous workplace hazards on the basis of their employment status (or lack thereof).
5.79
Safe Work Australia submitted that organisations that provide a platform for gig economy work 'may be regarded as a PCBU', and 'the platform will owe a duty to the gig participant, as a worker'. Also, the platform will 'owe duties to an entity that consumes services from the platform (the client) as an other person'.
Safety issues in the gig economy
Injuries and fatalities
5.80
Safe Work Australia expanded its data collection to include food delivery workers in 2019 and noted three work-related deaths that year and five in 2020. However Safe Work Australia and others noted that its statistics are limited as gig workers are not classed as employees and so it is difficult to get a clear and current view of what is happening in the sector in relation to health and safety.
5.81
The TWU submitted that in a number of cases, 'the deaths of the [platform] workers were not even reported to the relevant regulatory authorities by the companies that had engaged them at the time of their deaths'.
5.82
Uber submitted that all platforms 'have a responsibility to [their] riders, consumers and the community to keep people safe'. In NSW, Uber is 'required' to notify SafeWork NSW about 'certain safety incidents'. Between January and October 2020, it provided notification of 74 incidents relating to the Uber Eats platform, and between May 2020 and May 2021, it provided notification of 12 incidents relating to the Uber ridesharing platform.
5.83
Uber further reported that the NSW Centre for Road Safety identified 55 food delivery rider casualties in 2019 and 2020. These all related to bicycle and motorcycle raiders and accounted for 1.19 per cent 'of all motorcycle and pedal cycle rider casualties in that period'.
5.84
Menulog tracks safety incidents that are reported by couriers, customers or restaurants. Data around incidents is tracked as:
5.85
For the period January 2020 to May 2021, Menulog reported:
The four serious injuries were reported to Safework NSW.
5.86
Deliveroo relies on self-reporting of accidents by riders, which it 'proactively encourages riders to do'. In the year 1 May 2020 to 30 April 2021, Deliveroo 'logged the following incidents (nationally)':
category 1 – loss of life or permanent disability = 0 claims;
category 2 – requires medical attention, e.g. broken bones or hospitalisation = 25% of all claims; and
category 3 – minor injury, petty theft or abuse = 75% of all claims.
5.87
The TWU raised significant concerns about the introduction of Amazon Flex in Australia, saying: that studies in the United States indicate it is 'one of the most dangerous last-mile delivery options in the transport sector':
In 2019, an investigation of Amazon Flex in the US found 60 instances where drivers had been involved in serious accidents involving 10 deaths, with poor safety management and unsustainable work intensification being key factors reported in many instances.
5.88
Mr Scott McDine, from the International Transport Workers Federation, told the committee that Amazon in the United States has 'a much higher rate of injuries' than similar companies:
There were 27,000 injuries in total at Amazon warehouses last year. Amazon drivers are also injured more often and more seriously than drivers at UPS, another competitor. When we are talking about injuries, not just serious injuries, Amazon drivers sustain 13.3 injuries for every 100 workers. Compare this to UPS, with nine injuries per 100 workers. Then you couple that with the complete lack of engagement, and we are seeing that here in Australia.
5.89
Safe Work Australia talked about the difficulty capturing reliable data on injuries and fatalities among gig workers. One source suggested was the Australian Bureau of Statistics (ABS) Work-Related Injuries Survey, conducted every four years:
This provides information on all workers, regardless of their employment arrangements. SWA is working to increase use of this data and capture insights on priority workers. This includes gig and other workers who are not working under employee arrangements. The next ABS survey period is 2021-22.
5.90
Safe Work Australia was asked if it believed 'work performed in the gig economy is inherently more dangerous or more likely to lead to an adverse health and safety outcome versus work that's undertaken in a traditional employment context'. Ms Meredith Bryant said that Safe Work Australia will be 'looking keenly' at the data that is captured in the next ABS Work-Related Injury Survey 'to see what we can glean about those smaller population groups and those not covered by workers compensation data'.
5.91
Ms Bryant said Safe Work Australia has not observed a marked difference in the level of injuries and fatalities among employees with paid leave compared to employees without paid leave. However, noting most gig workers are not 'employees':
… gig is one for which it is much more difficult to get a sufficient level of granularity without having too high a standard error. We're trying to look at that to see what broader insights we might be able to gain, but it is difficult based on the small population that is an area like gig.
Incentives to be unsafe
5.92
Participants raised concerns raised that some of the rates paid, contracting arrangements and algorithms applied by platforms may create perverse incentives that encourage unsafe behaviours.
As gig companies continue to compromise working conditions to maintain their competitive position in an unregulated market, by reducing pay and avoiding minimum legal obligations, workers are being pressured to work longer hours and engage in dangerous road practices.
5.94
Workers said that platforms sometimes encourage them to act in ways that are unsafe. Mr Esteban Salazar connected the low wages provided through the work to safety issues:
… we didn't have a minimum wage, and we still don't have it—and the lack of safety on the roads, especially when we are being forced to take the times that the app tells us to, to always be on time. For example, sometimes the apps would lie to us in saying that it is a 15-kilometre distance. If we record these distances with different apps, we realise that it is actually a longer distance. But we need to take the same time that the apps are telling us, otherwise we would probably face unfair sackings from the apps.
5.95
Delivery worker, Mr Ashley Moreland said that, because the algorithm is 'based on your proximity to the restaurant':
[Speed is] at the forefront of your mind, basically—to do it as quickly as possible. That often comes at the expense of traffic signals, I might add. I'm an educated person who is aware of the risks of that, but the ever-declining rates of pay mean that you feel pressed—ignoring the threats side of it … Sydney roads are so dangerous that you're often forced to ride on footpaths just from a safety perspective—as you can see with the two riders who were killed on Cleveland Road last year.
5.96
Menulog expressed a preference to move to an employment model for its couriers, and is launching a trial in Sydney in 2021 (discussed in Chapter 6), provided evidence that explains why platform workers in food delivery and courier services sectors might engage in risky behaviour. Menulog submitted that its riders 'can safely complete (on average approximately) two deliveries per hour and … earn $11-12 per delivery'. This suggests that in order to earn any more than the minimum casual hourly wage, riders have an incentive to 'unsafely' complete more than two deliveries per hour, something they often achieve by 'multiapping'.
5.97
The TWU said food delivery and rideshare workers generally report being provided with 'little-to-no safety training or personal protective equipment', and that its investigations into Amazon Flex have revealed a number of practices that may lead to injury or loss of life:
Earning between $10-15 per hour on average after costs,
Regularly overloading vehicles (commonly personal cars) to a point where driving vision is dangerously obstructed,
Delivering packages which require two or more people to carry and transport,
Feeling pressured to engage in dangerous road practices in order to complete an unrealistic number of deliveries in short windows,
Failing to provide sufficient training to workers with all training limited to a short 2-minute training video covering safety, manual handling and use of the app prior to commencement of work.
5.98
Amazon told the committee that the company has stated 'a commitment to become Earth's best employer and the safest place to work', and that, in 2020 Amazon made 'over 150 significant process changes and invested millions of dollars to keep workers safe at [its] sites across Australia'.
5.99
However the TWU said that Amazon Flex drivers are 'engaged with no training, no support and limited on-boarding'. Mr Kaine said drivers simply 'download an app and watch a two-minute 'safety video''.
5.100
Mr Kaine said the TWU had photographic evidence that some Amazon Flex drivers were using 'very old, small, clearly domestic cars', which were 'filled, pushing and squashing, to the brim with no visibility left': 'There's no suggestion that this is being done in a professional and a safe way'.
COVID safety
5.101
Unions and workers provided evidence that platforms failed to provide 'sufficient PPE, training or instruction' to workers during the pandemic. The TWU's rideshare drivers' surveys found:
65.38% delivery workers & 53.81% rideshare drivers were not provided any COVID safety training;
49.04% delivery workers & 48.57% rideshare drivers were not provided sufficient & free protective equipment (masks, sanitisers, gloves);
78.37% delivery workers and 74.76% rideshare drivers were not provided any paid leave or financial assistance when needing to isolate after being affected by the COVID;
59.62% of delivery workers said that the company they worked for promoted full contact-free delivery; and
1/5 delivery workers and rideshare drivers said the company they worked for took no measures to respond to COVID.
Issues with the current framework
5.102
The TWU submitted that the model WHS laws 'provide a powerful example of how future regulatory reform can be shaped to extend rights and protections to workers in dependent work arrangements'. However, the way in which the laws are currently being applied is insufficient, 'given limited enforcement to date and a tendency to ignore safety issues which arise from economic and contracting pressures in the road transport industry'.
5.103
Evidence suggested that current model WHS laws and safe work regulators focus on training, equipment, and safety practices, and largely ignore the 'rates of pay, remuneration structure and other contracting practices' which appear to be leading to 'poor safety outcomes' in sectors of the gig economy.
5.104
Further, there is evidence that platform companies may not believe the laws apply to them:
In 2019, six Deliveroo food delivery workers in Sydney issued a request to commence negotiations for workgroups, nominating the TWU as their authorised representative. During negotiations for workgroups, which took an unprecedented one and a half years to resolve, Deliveroo took exception with the application of these laws in its business model, in attempts to first deny and then water down its obligations to worker safety. The following excerpt is provided from a high ranking Deliveroo manager during the early stages of these negotiations: "The nature of the provisions of this legislation does not readily apply to the flexible nature of our relationship with independent contractors engaged to provide delivery services, and their delegates, working across multiple platforms, in varying locations and at variable, unpredictable times of their choosing."
5.105
Safe Work Australia submitted that, while a PCBU 'cannot punish a worker for raising WHS issues', workers in these sectors 'may be hesitant to raise WHS issues due to concerns around job security or culturally and linguistically diverse backgrounds'.
Difficulty establishing liability and responsibility
5.106
The obligation to provide and maintain a safe working environment does generally extend to independent contractors. However, in the case of on‑demand platform work, it can be difficult to determine what constitutes the 'workplace' or 'working environment', and whether a worker is engaged by the platform or by the end user. In these circumstances, whether or not this obligation applies is very unclear.
5.107
This concern was most apparent in relation to Mable, which operates as an 'online marketplace', connecting NDIS participants with workers who can provide services under the NDIS. Chief Executive Officer of Mable, Mr Peter Scutt, acknowledged that most people on the platform are sole traders, engaged as independent contractors. These workers are covered by insurance through Mable:
… since the inception of Mable, when we were on board with the first 50 workers back in 2014, we arranged a number of insurance policies on behalf of those workers: professional indemnity, public liability and personal accident cover. We've had that in place since inception. It's not something that we started looking at a couple of years ago when this became a topic for discussion.
5.108
However, Mable's terms of use state that contracts are between 'Customers' (NDIS participants) and 'Support Workers', and that 'Mable is not a party to that contract'. The terms of use stipulate that support workers must make themselves 'aware of' and 'comply with all laws and regulations relating to the provision of the Care Services'. This includes workplace laws and applicable occupational health and safety laws, policies, procedures.
5.109
Mable also requires Customers (that is, individual people with disabilities) to have 'inspected their premises' and to guarantee that 'those premises are a safe work environment for the Support Worker to provide the Care Services'; and that Customers 'have made themselves aware of and will comply with all laws and regulations relating to the engagement of Support Workers, including any applicable workplace laws and any applicable occupational health and safety policies or procedures'.
5.110
Safe Work Australia submitted that it is 'possible' for a client to be considered a PCBU under the laws, and for a gig worker to be 'a worker of the platform and the client at the same time':
As PCBUs, the platform and the client would be concurrent duty holders. A gig participant [platform worker] may also, at the same time as being a worker for the platform or client, be a PCBU and officer in their own right, if using the platform as a mechanism to carry out work in their own business. Whether a gig participant is a PCBU in their own right is determined by looking at their working arrangements and the type of services being delivered. This will need to be assessed on a case by case basis.
5.111
Safe Work Australia told the committee that there could 'certainly' be other PCBUs 'involved in a gig arrangement that will owe the same duty of care to their gig participant as a worker', because the model WHS laws 'contemplate that you can share duties'. However, there has been no case testing the application of the law in this kind of situation, at this time.
5.112
Under the model WHS laws, an individual worker working for a business or undertaking is not a PCBU:
Section 5 (4) of the WHS Act makes it clear that an individual is not a PCBU if they are involved in the business or undertaking only as a worker or officer of the business or undertaking.
5.113
While the WHS Act does not define PCBU, Safe Work Australia provides guidance as to who and what may be considered a PCBU, for example, the following would all be PCBUs:
The principal contractor on a construction site, sub-contractors engaged by the principal contractor, sub-contractors engaged by the sub-contractors (including self-employed contractors), along with the client engaging the principal contractor.
5.114
The guidance also notes that, in some circumstances, an owner-builder may be a PCBU:
Where work requires approval from the relevant building regulator an owner-builder may be a PCBU and owe duties to any workers or other persons at the workplace. In some circumstances where a landlord is carrying out work on an investment property that creates a risk to health and safety to other persons at the property they could also be a PCBU.
5.115
The WHS Act specifies certain exemptions, including volunteer associations and residential strata title bodies that manage common areas (unless they engage employees).
5.116
The WHS Act is drafted with the intent that 'individual householders who engage persons to carry out ad hoc home maintenance and repairs or other domestic work, e.g. casual babysitters; tradespeople to undertake repairs', are not to be considered PCBUs. Safe Work Australia notes that most tradespeople engaged by a householder will 'either be a worker for a business or undertaking, or a business or undertaking in their own right if the tradesperson is self-employed'. In this case the PCBU is the business the worker is employed by, or the contractor themselves.
5.117
However, Safe Work Australia states that individual householders may have the duties of a PCBU 'if they engage a worker, for example, employing a nanny to care for children in the householder's home':
While the householder is not employing the worker as part of a business, employing the worker to carry out certain duties at the home is regarded as an 'undertaking'. Consequently, the householder has a duty of care as a PCBU and the person employed by the householder has the worker's duty of care under the WHS Act.
5.118
According to the current guidance, it appears conceivable that a individual person with a disability, engaging a worker through a platform using their NDIS funding could be considered a PCBU.
5.119
Mable's terms of use purport to exempt Mable from any liability or responsibility for the quality of care provided through its platform. Terms d) and e) state that Mable:
(q)
makes no representation or warranty regarding the quality of any Care Services or any other services provided by any Member, or the accuracy or reliability of any information provided by any Member on its Site and/or Services; and
(r)
is not responsible for the interactions between Users including under any Support Worker Contract.
5.120
Regarding the question of whether a platform can legitimately claim to be exempt from any obligations under WHS laws, Safe Work Australia said:
A platform, an organisation that provides the gig economy work—again, this is a generalisation, Senator—would generally, as a PCBU, owe a duty to gig participants who are workers of the platform and to its clients as other persons.
5.121
Safe Work Australia further submitted that in general, 'a gig platform such as Mable is likely to be a PCBU as they will be a person conducting a business', and that: 'Duty holders, including PCBUs cannot transfer their WHS duties to another person (s 14)'.
5.122
Mr Scutt was asked whether Mable takes any responsibility for the quality of training and qualifications of the support workers registered on its site. In response, Mr Scutt said:
Mable takes the safeguarding of the community that engages via its website very seriously. We have a layered approach, with worker screening, with people being able to choose who supports them and to continue where it's working or discontinue, ratings and reviews, access to our learning hub. There are 120 courses on our learning hub from subject matter experts that are freely available to people on the platform. We have qualification checks, depending on the services. If you're offering personal care, we do check qualifications ... There are a lot of safeguards built into the platform. But the responsibilities of Mable reflect that we're a marketplace. We're not a service provider, and the responsibilities and terms of use reflect that nature.
5.123
However, the terms of use also require members who are Support Workers to 'report any incidents of abuse or neglect of a child, an elder or a person with a disability to the relevant state authority and to Mable’s customer care team', which demonstrates that Mable does take some care and responsibility in relation to relationships between customers and workers.
5.124
The Australian Services Union (ASU) submitted that regulatory confusion puts workers in a precarious position, as they find themselves in an 'unsupported situation if something goes wrong'.
5.125
The ASU submitted that several workers engaged through platforms have told the union they have 'been in situations' in which they have been asked:
… to complete work that is unsafe and/or not covered by NDIS funding, including performing tasks for other family members. One worker told the ASU that they had to stop working with participants in the past because of the requests of unsafe work, and the lack of support or information they were able to access from the platform provider through which they had been employed.
The impact of worker status
5.126
Mr Kaine argued that the 'out of date' binary divide between employees and contractors is leading to worker deaths:
Our binary divide between an employee, on the one hand, that gets everything and someone who falls just on the independent contractor side of the employee-independent contractor divide is out of date.
5.127
Mr Kaine referred to the deaths of five delivery riders in the space of 11 weeks (in 2019–2020), saying, '[n]one of them got the workers compensation payment that other Australians get, and their families are destitute'. These cases demonstrate, Mr Kaine argued, that the current model of regulation provides insufficient protection for platform workers in the food delivery and rideshare sectors.
5.128
As mentioned in Chapter 3, some platforms in Australia provide accident cover and other insurances but these are provided on a voluntary basis by the companies and can be removed. For instance, Uber and Uber Eats provide a 'minimum insurance policy', which includes a death benefit of $500 000. Deliveroo provides accident and injury insurance. Ola Australia used to provide accident insurance for its drivers, but ceased this benefit in June 2020, after making 'a financial decision' due to the impacts of COVID-19 on the business.
5.129
Mr Dominic Timothy Taylor, General Manager of Uber Australia, told the committee that Uber has 'led the industry' in terms of safety, having introduced an income protection policy for injury. However, Uber believes without regulation requiring all platforms to provide coverage, there is no reliable safety net for drivers.
5.130
In contrast to Uber's evidence that its workers are covered for injuries, delivery worker, Mr Salazar said that when he was injured delivering for Uber Eats, he had to pay his own medical expenses:
As a consequence of this rushing, I had an accident on 20 September last year. It was raining. I fell on the tracks of light rail and that caused me a lot of pain in my back. I had to go to the doctor. When I went to the doctor, I realised that we were not covered as any other worker in this country. I was not covered at all. Uber Eats didn't assume my medical expenses. I had to use my healthcare insurance for some of the costs. I also had to pay from my own pocket. Even knowing all those things, they never even asked me how I was feeling or about the accident. That made me realise that these companies don't really care about their workers; they just care about making workers do what they ask them to do. It's very frustrating.
5.131
Chief Executive Officer of Deliveroo Australia, Mr Ed McManus explained that Deliveroo originally included rider earnings 'in the rateable remuneration calculation for state based workers compensation schemes', theoretically making riders eligible for WorkCover 'in various states'. However, Mr McManus reported that Deliveroo riders who were injured and attempted to make claims under WorkCover were frequently rejected—generally on the basis that they were independent contractors and not employees. As a result, Deliveroo chose to move to a third‑party insurance policy.
5.132
Ms Tan acknowledged that, since Ola stopped providing insurance for its drivers in June 2020, a driver who might be injured whilst working for Ola would have no income support or coverage for medical expenses provided by Ola.
5.133
At the hearing, Ms Tan, who is also head of legal at Ola, said she did not know if Ola required its drivers to hold their own insurance. However, in responses to written questions, Ola made it clear that it only 'recommends' its drivers take out their own insurance, as communicated on Ola's website in the 'Driver Guidelines' section.
5.134
Menulog currently requires its couriers delivering by car, scooter or motorbike to hold compulsory third party (CTP) motor vehicle insurance.
5.135
Menulog expressed the view that moving an employment model would allow it to have 'direct control over safety' and lead to fewer accidents and casualities.
5.136
The TWU cautioned that an impending 'fourth wave of the gig economy now threatens the freight and trucking industry in Australia'. According to the TWU, Uber and Amazon are 'rapidly' expanding their offering to provide 'Uber Freight' and 'Amazon Freight Partners' in the United States, replacing jobs in the freight and trucking industries with unregulated, insecure, 'gig economy' jobs, if the government does not regulate.
5.137
The TWU told the committee that Amazon had failed to provide 'Blue Card training … critical occupational health and safety training' to Amazon Flex drivers in NSW, which is required under the NSW regulation, until the TWU raised the issue. Mr Kaine said this was indicative of a pattern of behaviour in which platform companies, like Amazon, 'will comply with laws only when they're caught red-handed'.
5.138
With the road transport sector employing 648 700 people in 2018, the numbers of workers in these sectors are much higher than seen in rideshare and food delivery, and the 'implications for worker and public safety are more concerning'. The TWU submitted:
In 2019, heavy vehicle fatalities accounted for 56% of all fatalities as a result of a vehicle collision. Road transport workers more generally remain the most likely to be killed at work, with a fatality rate 9.4 times higher than the average across all industries. In the past 10 years, 1,896 transport workers and members of the general public have been killed as a result of collisions with heavy vehicles alone.
Workers' Compensation
5.139
A number of submitters expressed concerns about the lack of adequate protections and financial coverage for on-demand platform workers in the case of workplace injury or illness.
5.140
The TWU said workers in the gig economy have 'almost no protections and entitlements' under the Workplace Injury Rehabilitation and Compensation Act 2013, because:
[State-based] Workers Compensation Scheme[s] [do] not define a worker in the intentionally broad way that the Model WHS Laws do. Because of this, transport workers in the gig economy do not clearly fit within the definitions of worker or deemed worker and instead are considered contractors for the purposes of workers compensation.
5.141
In its joint submission, the Commonwealth Government explained that, in Australia, the states, territories and Commonwealth 'have jurisdiction over their own workers' compensation schemes, and coverage rules differ between jurisdictions'. The submission confirmed that workers' compensation schemes 'generally cover employees', with employers either self-insuring or paying premiums to an insurer to cover their employees:
Some schemes deem particular workers to be employees for workers' compensation purposes and, in limited circumstances, independent contractors may be deemed to be employees under statutory schemes. The differences between workers' compensation schemes present significant challenges for national policy efforts.
5.142
As they are not generally employees, platform workers may have access to insurance from two sources:
policies they individually take out, or
policies provided by the platforms they work for.
According the TWU, the cost of both of these types of policies are often 'worn by the worker', either directly or indirectly, and generally 'there is no obligation for this type of insurance to actually be taken out'. Further, most of these policies provide 'less coverage than would otherwise be available through the Workers Compensation Scheme' (see Figure 5.2).
5.143
The TWU observed that, the benefits provided to platform workers are particularly inferior 'in regards to the payment for medical, hospital and rehabilitation services and the weekly payment for time off work':
In the tragic case of a workplace death, a gig workers life is worth less than half that of any other worker who would have access to workers compensation … They are fundamentally unable to provide a suitable pathway for injured workers to recover at work.
5.144
The Australian Institute of Employment Rights explained that the way in which employment is defined in relevant state legislation generally excludes platform workers and 'characterization of a contract … can be arbitrary and manipulable', allowing platforms successfully 'seek to avoid participation in statutory workers' compensation schemes'.
5.145
The Institute said addressing the regulatory gap that leaves platform workers without workers' compensation 'is an urgent problem':
Reports of workers killed or injured in the course of this kind of delivery work are alarmingly frequent. In September 2020 two young men, Dede Fredy and Xiaojun Chen, were killed doing this kind of work (Nick Bonyhady and Tom Rabe ‘Rider deaths reveal risky safety practices’ Sydney Morning Herald, 3‑4 October 2020, 24). In November three more cyclists were killed while making deliveries.
State and territory legislation
5.146
The submission from the Transport Education, Audit and Compliance Health Organisation Limited (TEACHO), provided further detail about the functioning of state-based legislative regimes. TEACHO explained that in NSW, workers' compensation legislation includes 'deemed worker provisions', which deem taxi drivers and similar workers to be employees for workers' compensation purposes. However, 'this provision, as it presently stands, would not cover on demand drivers who own their own vehicles'.
5.147
Two decisions in relation to on-demand food delivery workers in NSW 'have found that the workers could not bring claims against Uber'.
5.148
In Victoria, an individual owner driver is a 'deemed worker' if they drive their own vehicle 'mainly for the purposes of providing transport services to the principal'. However, this does not apply if the owner‑driver 'is carrying on an independent trade or business'. In order to be a deemed worker in Victoria for workers' compensation, owner drivers must meet the following conditions:
… the owner-driver must be unincorporated.
They must not engage relief drivers to perform 20 per cent or more of the contracted work.
They must not earn less than 80 percent of their income from the hirer.
They must not provide services for fewer than 180 days a year (six months), or for fewer than three days per week.
5.149
TEACHO stated that Tasmanian legislation also includes provisions similar to NSW and Victoria in relation to taxi drivers and other drivers:
These are similar to the bailment provisions in the NSW and Victorian legislation and depend upon the driver not owning the vehicle themselves. Section 4E also makes provision for prescription of relationships to be worker/employer relationships, so there is apparently scope within the Act for the making of regulations to include on demand workers, should the legislature be minded to do so.
5.150
The Australian Capital Territory's legislation requires work performed by contractors to be 'regular and systematic' to meet the requirements to qualify for workers' compensation, which would exclude many platform workers. In Queensland, an individual 'who falls within the requirements to deduct PAYG withholding tax is a worker … and a worker who does not fall with those requirements is not a worker'. The Northern Territory takes a similar approach. The relevant Act in South Australia provides for 'self-employed workers', and leaves the decision on who fits this description up to the 'Return to Work Corporation'.
5.151
In Western Australia, the relevant Act defines a worker as:
… any person engaged by another person to work for the purpose of the other person's trade or business under a contract with him for service, the remuneration by whatever means of the person so working being in substance for his personal manual labour or services.
5.152
TEACHO suggested that existing provisions in state and territory legislation indicate that 'legislatures have been willing to define or deem certain workers to be covered by workers' compensation insurance', and have also been willing to identify entities responsible to take out cover. This is the case 'whenever the worker is performing the service personally, as an unincorporated individual with no trade or business identity of their own'.
5.153
In line with existing provisions, TEACHO argued it would not be 'a radical proposal' for state legislatures to 'enact further deeming provisions' to cover on-demand platform workers:
From a broad policy point of view, it would be consistent for workers' compensation coverage to be extended to on demand road transport workers who provide labour without operating their own independent businesses. … A workers' compensation system that requires payment of premiums by the business controller who determines the systems of work is far better suited to providing an incentive to improve safety standards, than a system that merely compensates victims after accidents have occurred. And a system that provides for rehabilitation of workers, income maintenance during time off, and facilitates a return to work after recovery, deals more comprehensively with workers' need for economic security.
Proposals for reform
Reforms in work health and safety
5.154
The submission from the Attorney-General’s Department, Department of Education, Skills and Employment and Department of Industry, Science, Energy and Resources (joint Federal Government submission) said an independent review of the model WHS laws in 2018 found that the model WHS laws 'are largely operating as intended and noted that they do contemplate non-traditional working relationships'. The review found that regulators 'generally' consider the current laws to be 'broad enough to deal with emerging business models'. However, the review did recommend that Safe Work Australia develop criteria 'to continuously assess new and emerging business models, industries and hazards in the context of considering the need for any legislative change, new model WHS Regulations or Codes'.
5.155
The joint Federal Government submission acknowledged that 'more needs to be done to protect and promote the health and safety of workers engaged in the on‑demand economy', particularly in light of the 'tragic fatalities of food delivery riders working for several platforms in New South Wales and Victoria'.
5.156
The submission noted that the Commonwealth's WHS jurisdiction 'encompasses Australia Government departments and agencies and certain non-government self-insured licensees'. As such, the Attorney-General's Department stated that 'on‑demand platforms and participants therefore generally fall outside the scope of the Commonwealth’s jurisdiction, and instead are within the purview of the states and territories'.
5.157
Regardless of this, the Commonwealth has added 'rider safety' to the agenda of a future intergovernmental WHS meeting, as a 'priority item':
The Commonwealth will continue to monitor the operation of the WHS framework in relation to workers engaged in the ondemand economy, noting that this is primarily a matter for the states and territories. It is noted that SWA is currently developing specific guidance on the application of WHS laws to the ondemand economy and is continuing to monitor and investigate issues regarding WHS coverage of workers.
5.158
Safe Work Australia reported that a 2018 review of the model WHS laws recommended Safe Work Australia develop a model Code of Practice to 'provide practical guidance on how PCBUs can meet their obligations associated with the principles that apply to duties'. This included how the principles should apply to 'the gig economy and other modern working arrangements. The 2018 recommendations are currently 'being considered by Commonwealth, state and territory ministers responsible for WHS'.
5.159
Additionally, Safe Work Australia reported that it is currently developing 'guidance material to assist gig participants and platforms in the food delivery industry understand their WHS obligations'. The material will take into account the NSW Joint Taskforce: Food Delivery Rider Safety report, issued in April 2021, which Safe Work Australia submitted will 'provide a sound basis for SWA’s national guidance'.
5.160
The NSW Joint Taskforce: Food Delivery Rider Safety report was focussed on enforcing compliance with safe riding practices and road rules, such as:
Helmets and their compliance
Using a device when riding
Breaking road rules when riding
Roadworthiness of vehicle and the use of non-compliant e-bikes.
5.161
The report does not address the safety implications of contracting arrangements, rates of pay, platform algorithms, or the issue of multi‑apping.
5.162
Asked if Safe Work Australia is taking into account factors including remuneration that might 'incentivise breaches of road rules or other unsafe practices', Branch Manager, Ms Sarah Costelloe replied:
We are developing some guidance on gig-rider safety, and that was something that our Safe Work Australia members agreed to prioritise. As part of that, we are looking at the hazards that might potentially result in delivery riders engaging in unsafe work practices and the possible control measures to reduce those risks. This could include consideration of payment processes and the impact on work practices. I guess the critical part is whether those processes decrease safety, but the primary duty rests with the person conducting or undertaking the business to identify hazards and eliminate or minimise those risks.
5.163
Safe Work Australia also submitted that 'public submissions to the 2018 Review of the model WHS laws' indicated that work health and safety regulators 'are considering emerging issues arising from the introduction of the NDIS'.
5.164
The TWU proposed that safety in the platform sector would be most effectively addressed through broader industrial relations reforms to ensure all workers, regardless of their employment classification, 'have access to an effective regulatory system which can ensure that workers in dependent work arrangements are afforded minimum work rights and entitlements'.
5.165
The ASU recommended that WHS Regulators be 'funded appropriately to allow access to workers and enforcement of workplace health and safety legislation for all workers within the NDIS, regardless of the nature of their employment'.
5.166
The Queensland Government recommended that the Australian Government undertake 'a coordinated national study to build an evidence base for WHS risks specific to gig economy workers [which should] include future forecasting of likely emerging gig economy work'.
Reforming workers' compensation
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Maurice Blackburn Lawyers noted that the impacts of 'failing to provide certainty of coverage' for accident, illness and injury for is often 'devastating to gig economy workers and their families'. Frequently impacting 'vulnerable workers', Maurice Blackburn Lawyers argued that it also leads to 'increased costs to the public purse':
For example, injuries that should have been covered by workers compensation will instead be covered by Medicare, and workers who missed out on superannuation will instead be forced to rely on the pension in retirement.
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While noting that workers' compensation schemes are state-based, the Australian Institute of Employment Rights, recommended that the federal government 'seek to influence the adoption of measures to ensure that all vulnerable workers are covered by workers’ compensation schemes, by promoting a harmonised approach, in the same way as the model Work Health and Safety legislation was developed'.
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The TWU recommended that workers' compensation schemes be reformed to require businesses to provide workers compensation 'to all workers regardless of their method of engagement', and suggested:
Enforcing obligations for companies under existing WHS Laws by providing trade unions a greater role in enforcement and clarifying obligations for gig economy companies.
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Maurice Blackburn Lawyers recommended that governments amend state legislation 'to extend workers' compensation coverage to platform workers and require intermediary businesses to pay premiums'. Benefits of this approach would be:
Fair and equal access to same level of compensation and access to common law damages for work-related injuries as workers.
Improved timeliness of medical intervention for work-related injuries.
Improved durable return to work outcomes.
Improved work health and safety outcomes.
Early medical intervention and enhanced benefits structures also improve secondary psychological impacts on the worker and their family.
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The committee notes the analysis provided by TEACHO on deemed worker provisions in state and territory legislation, including in NSW, Victoria and Tasmania. These provisions provide a precedent, and offer potential models for the design of similar provisions directed at ensuring on-demand platform workers can be deemed employees for the purposes of workers' compensation.
Committee view
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Safety issues are among the most concerning aspects of on-demand platform work. While the data is patchy, there is enough to indicate that food delivery riders in particular are being injured, and in some instances, killed, at an alarming rate.
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Platforms owe a duty of care to these workers under current WHS legislation, even if some platforms may, at times, attempt to minimise their obligations by claiming that these obligations have uncertain application.
Application of WHS laws to on-demand platforms
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The committee applauds work undertaken by Safe Work NSW through its Joint Taskforce to engage with platforms and issue improvement notices and warnings to those that are failing to comply with WHS legislation.
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However, the committee is concerned that the approach taken by Safe Work NSW was overly focussed on 'the symptoms' of unsafe work in the food delivery sector, and seems to have ignored the causes.
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Evidence provided to the committee by Menulog shows that its couriers cannot safely earn more than $22 to $24 an hour under the current system, compared to the award rates of $25.81 per hour on weekdays (plus super) and $36.14 on weekends (plus super). The only way for couriers to earn a reasonable hourly rate is, arguably, by unsafely completing more deliveries in the timeframe, often through juggling multiple apps.
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The NSW Join Taskforce report makes no mention of these kinds of contracting arrangements, rates of pay, platform algorithms, or the issue of multiapping. Evidence to this committee from riders in the industry, transport unions, and academics, indicates that, until these issues are addressed, the incentive to behave in an unsafe manner will remain.
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While valid, issuing guidance in multiple languages, increasing fines, and greater policing of riders are, arguably, nothing more than Band-Aid solutions.
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These platform companies have been in operation in Australia since at least 2014. It is concerning that Safe Work Australia is only working on guidance for employers in the gig economy now, in 2021. The committee also respectfully suggests that that the NSW Taskforce report may not provide a sufficiently 'sound basis for SWA’s national guidance', and that Safe Work Australia should seek to prepare national guidance that more fully addresses unsafe practices and conditions in the sector.
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It is clear that Safe Work Australia has significant work to do in terms of:
better understanding the platform economy and its workforce arrangements;
providing meaningful national guidance on the application of the model WHS laws to platform workers in their various manifestations; and
ensuring that the model WHS laws meet their aim of providing 'all workers in Australia with the same standard of health and safety protection regardless of the work they do, where they work, or their remuneration and entitlements'.
The issue of PCBUs in the home care sector
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The committee is deeply concerned about the potential legal grey area exposed in evidence to this inquiry from Mable, Safe Work Australia, the Australian Services Union and others. While no case has tested the premise, witnesses confirmed that current legislative arrangements indicate that individual NDIS participants could be personally responsible for the occupational safety of workers provided through platforms like Mable.
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Individuals receiving care under the NDIS are not conducting a business or undertaking; platforms like Mable are. Mable takes a significant percentage of the money paid to these workers and, thus, profits from their labour. If there are legal loopholes allowing platform companies to avoid their responsibilities on worker safety—or even more disturbingly, to put those responsibilities onto individual disability care recipients—those loopholes must be closed as a matter of urgency.
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The NDIS Quality and Safeguards Commission confirmed during its 4 June 2021 Budget Estimates appearance that even unregistered providers, such as Mable, are subject to the NDIS Code of Conduct. Safe Work Australia should work with the NDIS Quality and Safeguards Commission to ensure that the burden of regulatory compliance, and legal liability, is not offloaded by platforms such as Mable, nor by the National Disability Insurance Agency or NDIS Quality and Safeguards Commission, to NDIS participants and care workers.
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Governments must move to rectify this issue by clarifying the relative and appropriate roles and responsibilities of platforms, and that of care recipients, before a tragic incident brings the issue to the fore.
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The committee also notes that addressing the issue of safety for platform workers is connected to addressing the broader rights, standards and protections applying to these workers.
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Chapter 6 of this report considers Australia's industrial relations system more broadly, and considers options for reform.
Workers' compensation for platform workers
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In relation to workers' compensation, the committee agrees that independent contractor status should not be an impediment to accessing state-based workers' compensation schemes.
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State governments must modernise their legislation to extend workers' compensation coverage to platform workers and require intermediary businesses to pay premiums. The Commonwealth can support this process through the National Cabinet and other intergovernmental forums.
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The committee recommends that, as a matter of priority, Safe Work Australia develops meaningful, high-level guidelines on the application of the model Work Health and Safety Laws to the on-demand platform (or 'gig') sector. The guidance should be aimed at addressing practices that incentivise unsafe behaviour, as well as enforcing compliance with safety rules and obligations. The guidance should not seek to unreasonably circumvent the obligations of on-demand companies through novel interpretations of workers as being a 'person conducting a business or undertaking' (PCBU), particularly when such workers in the on-demand sector are engaged in highly dependent or low-leverage work arrangements.
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The committee recommends that the Australian Government urgently clarifies, by way of regulation, which persons or entities owe a duty of care as a person conducting a business or undertaking (PCBU) under the Model Work Health and Safety laws in relation to individual support workers engaged through on‑demand platforms like Mable. The law should dictate that:
a platform that engages individual workers to provide support work under the NDIS or similar schemes, and makes money from the arrangement, is a PCBU and owes a duty of care to that worker, regardless of that worker's work status (employee or contractor), or their visa status; and that
individual care recipients, such as NDIS participants, are not a PCBU in relation to that worker.
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The committee recommends that the Australian Government works with state and territory governments to lead the reform of state-based workers' compensation schemes so that they extend to platform workers, regardless of their visa or work status, and require platform companies to pay workers' compensation premiums for these workers.