The report, commissioned by the Victorian Labor government and released on Wednesday, rebuffed union demands to broadly reclassify Uber drivers and other gig workers as employees entitled to minimum pay and conditions and instead opted to simplify the “work status” test that had created uncertainty for the industry.
Giving weight to whether a worker was “an entrepreneur”, the proposal would deem platform workers who are autonomous and operate their own business as independent contractors while those working in and for another’s business would be employees.
A low-cost body would be set up to fast-track determinations, and platforms would be required to pro-actively seek decisions relating to their business model.
The recommendations by former Fair Work Ombudsman Natalie James offer a unique pathway to regulate the gig economy that may influence the federal government, which is considering sham-contracting reforms to deter abuse in the new world of work.
Backing changes that were “revisionist not revolutionary”, Ms James said “the post-COVID-19 labour market will demand agility and flexibility, as well as effective protections”.
“Recovery and future prosperity require a modern, fit-for-future system which balances these imperatives,” she said.
“These recommendations would go part of the way to revising the ‘old’ parts of our system while not upending its fundamental constructs.”
Onus on platforms
The report’s proposed work status test would give weight to the “economic reality” of the situation, place the onus on platforms to prove a worker is not an employee and ensure that the relative bargaining positions of each party were also a factor.
However, the report also recommended allowing platforms to provide superannuation, training and consultation rights without risking reclassifying a worker as an employee, saying the current laws create “a perverse outcome” that deter businesses from improving workers’ positions.
Being your own boss does not need to come at the expense of security and support in work.
— Uber spokeswoman
Meanwhile, platforms, governments and unions would be encouraged to work together to adopt a principle-based industry code of conduct that would address issues such as fair conditions and pay and dispute resolution.
Other recommendations include establishing a new industry award for the gig economy that “balances the need for minimum standards with new agile work practices” and removing barriers to collective bargaining for platform workers.
An Uber spokeswoman said the report was “an important contribution to a national conversation” and stressed “being your own boss does not need to come at the expense of security and support in work”.
“Our vision is for a future of work that promotes the quality and security of independent work, while preserving the flexibility independent workers value.”
Moving the goal posts
The Transport Workers Union urged the federal government to take action and threw its weight behind the recommendation to set up a fast-track route to determine if workers are employees.
“We welcome the call for an independent body to investigate denial of rights to gig workers and where necessary arbitrate,” TWU national secretary Michael Kaine said.
“We don’t want to see a situation where employers continually move the goal posts on work status to ensure that workers are shut out of rights.”
The report urged the Commonwealth to take the lead on the reforms but suggested parallel reforms at a state-level if not.
Victorian Minister for Industrial Relations Tim Pallas said the government would consult before responding to the recommendations.
Federal Industrial Relations Minister Christian Porter said he had not yet read the report but that the gig economy presented significant opportunity for flexibility and innovation while also “present[ing] challenges which the government is committed to addressing”.
“In the last budget the Morrison government provided $9.2 million in additional funding to the Fair Work Ombudsman to establish a dedicated sham contracting unit to crack down on this practice and the Government is also committed to increasing penalties for serious cases of sham contracting.”