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How should Australia regulate the gig economy?
Legislating for the protection and security of workers in the gig economy is becoming a concern for governments. Lawyers Weekly spoke with Kingston Reid partner Katie Sweatman to understand the challenges facing the regulation of gig work.
Jess Feyder
In 2022, millions of people are part of the gig economy — either as a customer, contractor, employee or investor, and for many, the gig economy is a primary source of income.
While gig workers are granted flexibility and opportunity — as is the case for many migrant workers — there has been increasing concern about the lack of protections, benefits and workers’ rights available to gig workers.
Gig workers are not protected from unfair dismissal, they are not paid superannuation, they have no security or stability of income, and no access to workers’ compensation, insurance, or personal or paid leave of any sort.
In March 2022, the Fair Work Commission made a landmark ruling that found a former Deliveroo driver to be an employee rather than independent contractor. Such decisions could see many platform companies restructuring their business model.
Such decisions could even provoke their rapid exit from Australia, as happened with Foodora in 2018 when faced with a requirement to comply with minimum employment entitlements.
Some countries have already made the move towards classifying gig workers as employees, but Ms Sweatman argues that this could potentially drive platform companies away and harm those it intends to help.
Several key issues arise in the implementation of minimum standards in the gig economy, stated Ms Sweatman.
Often, a worker is not committed to any one employer, she noted, “gig workers engage with multiple platforms, performing the same or different types of work, at essentially the same time”.
“This phenomenon of ‘multi-apping’ makes it difficult to pinpoint when a worker is on ‘duty’ with what platform.
“Traditional concepts of paid sick leave accordingly cannot have sensible application,” she said.
Creating legislation is not simple since current legislation “does not work for a new economy that did not exist a decade ago”, she said.
“Taking the view that it’s the same work just with a smartphone in hand shows an incredible misunderstanding of how gig economy platforms work and how users — consumers and workers — engage with it,” she said.
“Gig platforms are innovators — they have innovative ideas for how services can be delivered and have innovative ideas for how work can be rewarded.
“They are constrained only by the current environment in which the offering of any benefit that looks, feels or smells like an employment entitlement might see their entire system be upended.
“The regulation of the gig economy accordingly needs to be built from the ground up, not by trying to force — not even a square — but a star polyhedron into a round hole.”
She noted that governments must engage with gig economy operators to understand the types of benefits and protections that are plausible for them.
“There also needs to be care taken not to take a paternalistic approach to providing protections to gig workers,” she noted.
Adverse effects could see platform companies leaving, or have the effect of constraining flexibility and other benefits, which attract workers to engage in the gig economy in the first place, stated Ms Sweatman.
“There is absolutely the potential for regulation to impact the amount of gig work available in Australia,” she noted.
“Gig operators will no doubt give careful consideration to the local regulatory environment when assessing whether to enter the Australian market.
“Blunt regulation of gig work that is not commercially viable accordingly limits access to those work opportunities,” she said.
“That is not to say that gig workers should not have access to reasonable earnings, but any safety net remuneration frameworks need to be relevant to the industry — one that did not exist in any form in Australia when the modern awards were made in 2009.”
