The Rise of the Gig Economy

As the rise of the ‘gig economy’ continues, the employment rules and regulations of this industry are yet to be settled. With a growing number of people relying on freelance or contract work, it is important that the rules and regulations surrounding these positions are made clear. 

A gig worker is a person who works temporary jobs typically in the service sector as an independent contractor or freelancer. In essence, a gig worker is someone with flexible work arrangements in regard to the methods and time they work. 

Australia’s current understanding of the gig worker is that they are largely independent contractors and are self-employed. Because of this, national safeguards like minimum entitlements don’t usually apply to gig workers. Instead, protections under national awards and the National Employment Standards only apply to employees. As companies like Uber, Ola and Deliveroo continue to expand, the number of Australians working without important protections increase. A significant portion of these individuals are migrants, who may be unaware of what their legal rights are, and how to go about protecting them. 

The current approach in Australia today lends itself to the exploitation of gig workers. Particularly, because of the power dynamic that exists between employers and workers. Without the guarantee of national safeguards, workers questioning their status with employers may face dismissal without any avenue of protection from the Fair Work Commission. 

Our laws have not caught up with the present day reality of the gig economy. Without any codified law in this area much of Australia’s workforce are left in the dark. While regulation arguably should be legislated upon, until then gig workers will remain at the mercy of their employers. 

Australia’s position is currently being formed largely through the common law. Per Joshua Klooger v Foodora Australia Pty Ltd a Foodora worker was declared to be an employee and thus entitled to employee protections. This important decision showed that workers in this industry, under similar company structures, could gain government protections. However, this doesn’t necessarily mean all workers in similar industries will be afforded the same rights. 

In Uber BV & Ors v Aslam & Ors the court stated that Uber drivers were not employees and therefore were not entitled to employee benefits. Instead Uber drivers were held to be independent contractors that created collateral contracts with their passengers. This loophole has allowed Uber drivers to earn as little as half the national minimum wage. While there is a greater earning potential for peak hours, Uber provides no guarantee of a minimal amount of income. Drivers must also factor in expenses such as car maintenance, running costs, Uber’s fees, as well as trying to comply with taxation obligations and pay their own superannuation. 

Cases like these have shown that no single factor determines whether a worker is a contractor or an employee. Instead a detailed determination of the question must be had in order to make a definitive decision. To do this, many different indicators are considered by the Fair Work Commission and the courts. These indicators include whether you need to wear a uniform, who pays superannuations or tax, and if you have the ability to exercise control over your employment, or do in fact exercise control. 

Overall, the regulations surrounding gig workers in Australia are largely decided on a case by case basis. When trying to work out if you are a contractor or employee, it is always best to seek legal advice to advise you of your status and what rights come with it. Hopefully, as the gig economy continues more equitable regulations will be implemented, with better safeguards for all workers. 

This article was co-Authored by Paul Cott from Law on Lydiard and Legally Yours Intern Anastasia Misarvidis-Tyshing

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This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to a practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in, or to any constituent part of Legally Yours Pty Ltd accepts or assumes responsibility, or has any liability, to any person in respect of this article.

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