The Senate Committee that is looking into Australia’s gig economy published its fourth interim report on February 11, suggesting that more changes are needed to protect contractors from exploitation in on-demand platforms such as Uber.
“There will always be a place for genuine independent contractors in Australia’s workforce, but governments cannot allow companies to use technological and legal gymnastics to disguise what are essentially employment relationships as something they are not,” the Select Committee said in its report.
One of the Committee´s proposals is to extend the regulatory powers of the Fair Work Commission (FWC), the Australian industrial relations tribunal, “beyond employment” to include roles in relation to contracted workers. This would allow the FWC to hold on-demand platforms accountable for certain practices. Other changes would allow the FWC to “set minimum wages and minimum standards and conditions for contracted workers that are commensurate with those enjoyed by employees; arbitrate contract termination disputes; and make orders relating to classes or groups of workers, such as to be able to order that a group of workers be classed as employees, not contractors.”
The final report will likely be issued at the end of March 2022, when the senate will recommend the federal government to implement these changes.
The Senate Committee also sent a message to companies like Uber and Deliveroo for their attempts to avoid formal regulation by offering benefits and insurance to contractors instead of moving to a full employee model.
“Companies like Uber and Deliveroo should see the writing on the wall and join Menulog in seeking to provide a minimum wage and entitlements to their workers.”
Europe Is Moving in the Same Direction
The European Union announced a legislative package with proposals to improve the working conditions of people using digital labor platforms on December 9, 2021. While many platform workers are truly self-employed as defined by the new proposed rules, there are an estimated 5.5 million people working in the EU through digital labor platforms who they believe may be incorrectly classified as self-employed.
The proposal could also require that digital platform companies give up some control over workers to make them truly self-employed. As employees, workers would be entitled to paid annual leave, collective bargaining and other benefits. The EU estimates the reclassification of employees could cost the industry as much as $5.1 billion.
In addition to the reclassification of contractors as employees, the proposed legislation also introduces new regulations for algorithmic management, which may have a compound negative effect on some of these companies. The proposed directive would require digital platforms to ensure human monitoring of automated systems and to establish appropriate channels for discussing and requesting review of such decisions.
The legislative proposal on digital labor platforms will now be submitted for discussion to the EU Parliament, where amendments may be introduced, and approval isn’t expected before the end of the year.
US Is Taking Small Steps, Too
The National Labor Relations Board, a U.S. federal independent agency which oversees union activity and workers’ rights, is assessing whether the agency should reconsider its standard for determining the independent contractor status of workers.
If the agency changes or reinstates a previous standard, that wouldn’t mean that gig workers would automatically be classified as employees — but it could make it easier for them to prove it.
With this consultation, the NLRB wants to see if there is appetite among companies and employees for a new change in the working relationships. While this is just the first step in reviewing a standard, not a change in the law to reclassify workers, it shows that the current status of gig workers may not fit well in the legal framework, as Uber has consistently proved around the country and elsewhere.