Legislative Council: Wednesday, November 30, 2022



Gig Economy

The Hon. I. PNEVMATIKOS (11:52): I move:

1. That a select committee of the Legislative Council be established to inquire into and report on the gig economy with particular reference to:

(a) the prevalence of gig economy work within South Australia;

(b) the various forms of gig economy work;

(c) the current legislative and regulatory regime and the extent of compliance within that regime;

(d) the impacts of the gig economy on workers inside and outside of the gig economy and the impact of gig economy work on families, communities and businesses;

(e) the individual, business, community and statewide economic impacts of the gig economy;

(f) the impact of the prevalence and practices of the gig economy in relation to government procurement and expenditure;

(g) the intersection of slavery and slavery-like practices;

(h) current supports available to workers and employers;

(i) other jurisdictions' legislative, regulatory and policy solutions to address issues within the gig economy;

(j) the implications of the gig economy in respect of compliance with treaties and obligations;

(k) legislative, regulatory and policy and legislative implications in South Australia; and

(l) any other related matter.

2. That this council permits the select committee to authorise the disclosure or publication, as it sees fit, of any evidence or documents presented to the committee prior to such evidence being presented to the council.

Today, I rise to speak about the need to address one of the fastest growing sectors in South Australia's workforce, and that is the gig economy. The gig economy is also known as the platform economy or the app economy. In the gig economy, services are provided to consumers for a fee via an online platform. The workers who provide the service include drivers for rideshare companies like Uber, couriers for food delivery companies like Menulog and Uber Eats, and tradies who provide their skills through apps like Airtasker.

Recently, the gig economy has been expanding into new areas such as disability and care work. The jobs are flexible, temporary and on demand. For workers, the gig economy is said to reward entrepreneurship and provide benefits such as flexibility, autonomy and choice. It is sold as giving a worker the opportunity to fit their job around their life rather than fitting their life around their job.

Many are drawn to the work as a form of supplementary income, or by the lure of being your own boss. The flexibility of the gig economy is often promoted as modernising and positive to both workers and businesses. In reality, the gig economy works by undercutting the traditional model of employment upon which many of our rules for worker protection are based.

By restructuring these labour relations, platforms have opened a window to bypass the existing regulatory framework, and profit enormously in the process. Someone working a job for a company that operates in the gig economy is not necessarily an employee of that company; rather, they are classified as an independent contractor. A lot depends on that classification. It will impact a worker's superannuation and their ability to access workers compensation and sick leave. In essence, it represents an attempt to contract out of existing wage and legal frameworks.

Judicial case law on contracts of employment has, over time, defined an employee as a question of whether one engages in a contract of service or a contract for service. This definition of a worker is based on consideration of various indicia to determine whether an employment relationship fits categorisation as a worker relationship or that of an independent contractor.

If an employee is a worker, they may be afforded a number of protections as well as rights. By the same token, employers have certain obligations and responsibilities for their workforce. Normally, an independent contractor will enjoy the benefits that make up for the loss of these things. The Fair Work Ombudsman provides some indicators to determine whether someone can be classified as an independent contractor. They state that, amongst others, an independent contractor will:

hold a high level of control over their working hours, work location and methods of work;

negotiate their own fees;

bear full responsibility and risk for workplace injuries, profits or losses on tasks and poor quality work;

use their own tools and equipment;

pay their own tax to the ATO;

have no leave entitlements; and

can delegate their work to another.

Gig workers may meet some of the above indicators, but it is clear they experience few of the benefits outlined. An independent contractor is understood to have some autonomy and control and equality in negotiation, which is not reflected in the reality of gig work. We can look to Uber as an example, as each Uber driver will take a commission, usually ranging between 20 and 30 per cent, along with booking fees. Uber has the authority to modify these commissions and fees at any point, for any reason.

There is little transparency surrounding the function of the algorithms that operate these platforms, with the company maintaining control and ownership of all data. This results in a massive power imbalance between worker and Uber, demonstrated through the practice of blind ride acceptance where drivers are not shown the destination or fare information but must accept or reject the job without knowing the profit potential.

Workers on Uber and other platforms are also subject to rating mechanisms, which have no managerial oversight from the company and yet will be used to determine whether or not a driver gets work or even has their contract suspended or terminated. Uber drivers may control when they choose to get in the car and where they work, but that would appear to be about all they control. This classification as independent contractor allows companies to artificially separate themselves from their workers by placing themselves as facilitators of a contract.

Uber states that they are a 'technology services provider that does not provide a transportation service'. By using this definition, Uber maintains the illusion of the driver's total independence and does not provide accessible or effective avenues for gig workers to seek support or remediation if they encounter harassment or mistreatment in the performance of their work. The difference between whether an employee is a worker or a contractor is the difference between working in a regulated or unregulated industrial environment.

A survey from the Transport Workers' Union in 2018 found that more than one in three delivery drivers had been injured in the job, with 80 per cent receiving no support from that platform. Out of 1,153 rideshare drivers surveyed, there were 969 reports of harassment and/or assault.

In addition to the risk of exposure, the payment that workers receive is not truly reflective of the work they perform. Payment is provided upon the completion of the task for which a worker is contracted, rather than the hours worked. Time spent getting to a job or waiting for customers is not covered by payment. A national survey commissioned by the Victorian government in 2019 found that, when asked, many could not say how much they earned per hour.

Gig workers will often have to work across many different platforms, as very rarely can a single platform provide a livable wage. The Senate committee into job insecurity reported last year that, as there is no contractual obligation for permanence or working hours, gig workers may be underemployed or terminated without warning, leaving them with no safety net.

This is exactly what happened to Diego Franco, a courier for Deliveroo in New South Wales in 2020. After having worked for the platform for close to three years, he was emailed by Deliveroo and notified that his contract would be terminated in a week's time, as he had been too slow delivering orders and had been notified previously about his poor performance. Mr Franco argued that he had received no such notification nor guidance as to what a 'proper delivery time' constituted. His contract was subsequently terminated, leaving him without his primary source of income in the middle of the first COVID lockdown, with no way to support his family.

The termination was automated and did not offer any opportunity to respond or human contact point for Mr Franco to engage with. The notice of termination did not show cause, nor did it show the information or specific complaints relied upon by Deliveroo. Mr Franco made an unfair dismissal case to the Fair Work Commission, represented by the TWU. Not only was this case successful but the commission found that Mr Franco had engaged in delivery work as an employee of Deliveroo, not as an independent contractor. Deliveroo chose to appeal the decision.

In the face of a test case over the employment status of one of its couriers, the food company Foodora left Australia in 2018. Deliveroo has now done the same. On 15 November, the Deliveroo app stopped working when their British parent company made the decision to withdraw from the Australian market. The abrupt closure has left up to 15,000 couriers in the lurch. When faced with a future that might require them to provide humane conditions to the people that make their profits possible, these companies would rather run.

The reality is that the profitability of these companies often depends upon the exploitation of contracted workers. Vulnerable groups are over-represented in precarious job situations. Feeling as if they can go nowhere else, they will accept the conditions that no-one else will accept. This makes the function of the gig economy all the more insidious. The national survey found that platform workers were more likely to be younger, be students, identify as living with a disability and speak a language other than English at home. A permanent resident is 1.7 times more likely to participate in the gig economy when compared with those who hold Australian citizenship.

This is a system that is not only an affront to workers' rights but one that undermines principles of competitive neutrality. For businesses to grow, competition must be fair. This cannot be the case where a business is permitted to cut costs at their workers' expense in order to achieve greater profit. It is fundamentally a non-competitive model.

It is clear that the gig economy is here to stay. Already, it is difficult for many people to imagine their lives without it. With a growing cost-of-living crisis, we are likely to see more people turn to the gig economy as they find themselves out of work or needing to supplement their income to afford skyrocketing prices.

To let the issues of this unregulated labour market go unaddressed would be to abandon an increasing number of the workforce to the possibility of mistreatment and exploitation. A semantic and technical difference in classification should not be allowed to deprive people of their rights. I hope that through the establishment of this committee we can begin to understand the dimensions of the South Australian gig economy and the needs of its workers better, and begin the journey towards ensuring that the most vulnerable workers in our society receive the protection they rightly deserve.

Debate adjourned on motion of Hon. L.A. Curran.