What is on-demand platform work?
1.1
The terms 'gig economy', 'gig work', 'on-demand work' and 'platform work' are often difficult to define, and their meanings can sometimes be contested.
1.2
Generally, 'on-demand' work is defined as work in the labour market that is procured 'on‑demand'. On-demand workers are those employed 'as needed by a business', rather than on an ongoing basis. In Australia this can encompass casual employees, labour hire employees, fixed-term and independent contractors.
1.3
Australian employment scholars have suggested on-demand work is increasing, while industrial relations legislation is failing to adequately address the challenges it poses:
On-demand work is a large and significant problem in Australia. Yet adequate regulatory responses have been either missing or misdirected. Protections inherited from the past, such as minimum shifts engagements, the right to request conversion from casual to permanent, and requirements for a regular roster for permanent part-time employees, have failed to prevent the spread of on-demand work. However, there is little sign of any comprehensive debate, which could generate new ideas and new initiatives to limit on-demand work and combat its negative impacts.
1.4
The term 'gig work' emerged during the Global Financial Crisis (GFC) in 2009. At this time many ongoing, full-time jobs were lost, and some workers turned to short term jobs, or 'gigs', as independent contractors, to make a living. Along with gig work, emerged the 'gig economy'.
1.5
Gig work is closely associated with online platforms—a lot of gig work is also 'platform work'. 'Platform work' is 'work accessed through or organised by digital platforms which match workers and clients via internet platforms or ''apps'''.
1.6
The Australian Institute of Employment Rights described those doing 'gig work' as 'workers hired through digital platforms to undertake tasks, on a piece-work basis', and submitted that:
Data on the extent of 'gig economy' employment in Australia is patchy. The [Australian Bureau of Statistics] does not publish data on the extent of employment via internet platforms, which is a relatively recent form of employment.
1.7
Gig work can resemble labour hire, because the platform acts as 'an intermediary organising work'. However, previous inquiries have determined that platform work is 'distinct' from labour hire (otherwise called 'on-hire') in a number of ways. For instance, where traditional labour hire firms generally (but not exclusively) employ workers, platforms 'largely deploy workers through non‑employment arrangements'.
1.8
In Australia, on-demand platform work is 'occurring in a variety of ways across a diverse range of sectors, with differences in the nature of the work, spectrum of experiences, pay and arrangements'.
1.9
This interim report is focused on on-demand platform work, typified by companies such as Uber, Uber Eats, Menulog, Deliveroo, Hireup and Mable. The terms 'gig work', 'gig economy', 'on-demand work' and 'platform work' are used throughout the report.
1.10
In summary, while there is no simple definition of on-demand platform work, in general:
'on-demand work' can be a broad term including labour hire, casual work, fixed-term contracts and independent contracting; it can also be used as a more specific term within the gig sector;
'gig work' can be seen as a subset of on-demand work;
'platform work' is on-demand work that is facilitated by web-based platforms or apps;
platform work is available across a range of sectors, using different operating models;
most gig or platform workers in Australia are classified as 'independent contractors', rather than 'employees' and are not covered by the Fair Work Act 2009 (Cth); and
most gig workers do not have leave entitlements, minimum rates of pay, or other protections of labour regulation.
The need for an interim report
1.11
The Senate Select Committee on Job Security (the committee) was appointed by resolution of the Senate on 10 December 2020. The committee was established to inquire into and report on the impact of insecure or precarious employment on the economy, wages, social cohesion and workplace rights and conditions, with particular reference to:
(a)
the extent and nature of insecure or precarious employment in Australia;
(b)
the risks of insecure or precarious work exposed or exacerbated by the COVID-19 crisis;
(c)
workplace and consumer trends and the associated impact on employment arrangements in sectors of the economy including the 'gig' and 'on‑demand' economy;
(d)
the aspirations of Australians including income and housing security, and dignity in retirement;
(e)
the effectiveness, application and enforcement of existing laws, regulations, the industrial relations system and other relevant policies;
(f)
accident compensation schemes, payroll, federal and state and territory taxes;
(g)
the interaction of government agencies and procurement policies with insecure work and the 'on-demand' economy; and
1.12
The committee is due to present its final report by 30 November 2021.
1.13
The issues of insecure work are complex and multifaceted. While workers engaged in on‑demand platform work may not be the largest cohort of Australian workers, they are one of the most disadvantaged, and the committee believes it is timely to examine the sector. As such, this first interim report focuses on gig work and gig workers.
1.14
The on-demand platform sector is growing, expanding out of rideshare and food delivery into care work, parcel delivery and, potentially, freight and trucking. As this workforce grows, governments need to take a more active role in providing a regulatory framework that is fair for both industry and workers.
1.15
This report presents the committee's findings to date. However, it is not exhaustive. The committee will continue travelling, hearing from workers and organisations around Australia, and considering a range of viewpoints. While this report makes preliminary recommendations, the committee does not rule out revisiting these matters in later reports.
Issues
1.16
On-demand platform work can provide economic benefits, including: efficiently 'matching buyers and sellers, creating new markets and providing better or improved services'. It can also benefit workers by providing: 'skills, experience and opportunity that may lead to more traditional work opportunities, reducing unemployment'.
1.17
However, there are also concerns about the 'work status' of on-demand platform workers. In Australia, most platforms do not engage workers as employees, but as 'self-employed workers' or 'independent contractors'. However, unlike many independent contractors, platform workers are often heavily-dependent on the employer, and may have little control over their work, or how much they earn.
1.18
Most platform workers do not have leave entitlements or enjoy the protections of labour regulation, and may earn less than minimum wage:
With a few notable exceptions, independent contractors are not subject to workplace regulation. Their pay and work hours are determined by arrangement with another party, subject to commercial arrangements. They are effectively 'small businesses' and their remedies are those that apply to any business, such as the law around 'unfair contracts' and associated dispute resolution services.
1.19
These issues have come to the fore over recent years for a number of reasons, including a reported increase in the number of workplace injuries and deaths of platform workers. The Australian Financial Review's Natasha Gillezeau reported:
A survey conducted by the Transport Workers Union found that more than one in three delivery drivers has been injured on the job, with 80 per cent receiving no subsequent support from the company they were driving for. Five delivery drivers have been killed in Australia since the end of September 2020.
1.20
In 2017, the Senate Education and Employment References Committee made the following observations about the gig economy, capturing a polarised debate. The committee observed that according to proponents, on-demand platform work is about:
… flexibility and freedom: it is all about choice. There are no employers and employees: there are customers, platforms and entrepreneurs. The customer needs a task to be completed—their food delivered, garden landscaped, legal document reviewed or house cleaned. The entrepreneur has skills and wants to use them how and when s/he chooses, for remuneration s/he sets. For a small fee, the online platform brings them together. There is no need for minimum or maximum hours, no obligatory peak-hour commute, no rigidity and no workplace hierarchy.
1.21
Whereas according to detractors:
There is also no security of income, no insurance for the worker in case of accident, no superannuation, no personal, annual or paid leave of any description. An entrepreneur with specialised, in-demand skills may agree to sell their expertise for a handsome fee. An entrepreneur with less specialised skills can secure a short-term job, a 'gig', by selling their labour for less than their competitors. And there is no limit to how low fees can go; no minimum amount a person can be paid to do a job, as long as they agree, because—as far as the platform and customer are concerned—the entrepreneur is not an employee. The worse or more desperate a person's financial circumstances, the less they might agree to work for.
1.22
Evidence around the benefits and pitfalls of on-demand platform work are discussed in Chapter 4 of this report.
1.23
Workforce models common in the gig economy have become more widespread in Australia over the last decade, moving from the
'Airtasker field', through rideshare, food delivery, and into disability care, parcel delivery, and other services. As more sectors have been impacted by these workforce models, the impetus to look at regulation has become more urgent.
1.24
A number of jurisdictions around the world have taken steps to change or increase regulation in relation to on-demand platform work. These initiatives are detailed in Appendix 3.
Moves towards reform at the state and territory level
1.25
All Australian jurisdictions have been impacted by the gig economy, with Uber and other platforms having now extended their reach into regional areas and across all states and territories. However, some state governments have taken active steps to address perceived inadequacies in the standards of pay, safety and conditions applying to on-demand platform workers, and are exploring various policy and legislative solutions. This section looks at moves by those states.
Victoria
1.26
The Victorian Government commissioned an inquiry into gig work in 2018. The Report of the Inquiry into the Victorian On-Demand Workforce (Victorian inquiry) was published in June 2020, and stated that:
The emergence of digital platforms that source, sort, organise or deploy workers presents a shift in the efficiency and accessibility of on-demand work over the last decade. In particular, the speed and ease with which workers can be engaged or sourced, terms can be agreed and work then executed via platforms, has created new opportunities at an individual and economic level.
1.27
The Victorian inquiry was chaired by the former Fair Work Ombudsman, Ms Natalie James. It found that some platform arrangements 'are blurring the distinctions' between what is an 'independent, autonomous worker operating their 'own' business and an employee working as part of another's enterprise'. Also, that existing regulations applying to independent contractors and small businesses 'do not provide accessible, quick or always effective remedies for non‑employee on‑demand workers':
There is a compelling case for strengthening the remedies available to assist on-demand workers who have little negotiating or bargaining power vis a vis a business platform. Further support is needed to assist independent contractors to seek to review services contracts.
1.28
The Victorian inquiry recommended a combination of measures, including a number that went towards redefining some platform workers, and some that would better protect those who remained as independent contractors. Key recommendations from the inquiry were:
That the Commonwealth government lead reforms, in collaboration with state governments and other key stakeholders.
That the Fair Work Act 2009 be amended to codify work status 'on the face of relevant legislation', rather than relying on common law understandings, including by adopting an 'entrepreneurial worker' category; and governments align 'work status' across work laws and other statutes.
That governments encourage platform businesses with significant non‑employee, on-demand workforces to seek a work status determination; if they will not do so voluntarily, governments consider requiring platforms to initiate a determination process.
That regulators proactively intervene to resolve cases of 'borderline' work status, especially where it is occurring at a systemic level and impacts on low-leveraged workers.
That a fit-for-purpose body provides a mechanism for accessible, fast resolution of work status disputes.
That the Fair Work Commission work with relevant stakeholders to apply modern awards to applicable platform workers.
That governments create a well-resourced Streamlined Support Agency that focusses on platform workers and provides a single source of advice and support to workers. That the Streamlined Support Agency be responsible for and sufficiently resourced to provide effective support to self-employed platform workers.
That Commonwealth competition laws remove barriers to collective bargaining for non-employee platform workers and ensure workers may access appropriate representation.
That governments clarify, enhance and streamline existing unfair contracts remedies so that they are accessible to low-leveraged workers.
That provisions to counter sham contracting are strengthened, and require a court to consider each party's relative bargaining position and how much genuine choice a worker has over their presumed work status.
More government funded research and surveys to build the evidence base.
Victorian Government response
1.29
On 13 May 2021, the Victorian Government released its response, stating that it supported 'in full or in principle' all 20 recommendations and 'committed to work progressively towards implementing them'.
1.30
The Victorian Government stated that its priorities are to:
Clarify and codify work status: to reduce doubt about work status and the application of entitlements, protections and obligations for workers and business, and align legislative definitions across the statute books
Streamline advice and support: for workers whose status is borderline
Provide fast-track resolution: of work status so workers and business do not operate under prolonged doubt about entitlements and obligations
Provide for fair conduct for platform workers who are not employees through establishing Fair Conduct and Accountability Standards that are principles-based and developed through a consultative process with relevant stakeholders
Improve remedies for non-employee workers: to address deficiencies and anomalies in the existing approach
Enhance enforcement: to ensure compliance, including where sham contracting has occurred.
1.31
The Victorian Government noted that a national approach was preferable. However, reforms at the Federal level 'may take time to develop or not eventuate at all'. As such, the Victorian Government stated its intention to 'explore opportunities to cooperatively engage with other States and the Territories to develop consistent standards'.
1.32
The Victorian government also acknowledge the importance of considering the needs of business and industry, saying it will:
… be guided by the principle of ensuring we accommodate and support genuine needs of platform businesses and not stifle innovation or entrepreneurial activity while maintaining a fair and relevant safety net of conditions and obligations for workers and businesses alike.
1.33
In August 2020, the Victorian Minister for Industrial Relations wrote to the Commonwealth Minister for Industrial Relations and all State and Territory Ministers to request that they consider Victoria's report, and its recommendation for a national response. In October 2020, the then Commonwealth Minister for Industrial Relations, the Hon Christian Porter MP responded 'indicating that the Australian Government is continuing to monitor developments in the on-demand economy, and that he was considering the implications of the recommendations in the Report'.
1.34
However, the Victorian Government noted its disappointment that the Commonwealth has since enacted the Fair Work (Supporting Australia's Jobs and Economic Recovery) Act 2021, and this Act makes no 'reforms to national work laws identified by the Inquiry, which could better support on-demand workers and businesses'. As such, the Victorian Government stated that it will 'continue to advocate for strengthened and improved legislative provisions'.
New South Wales
1.35
On 24 March 2020, the New South Wales Parliament established the Select Committee on the Impact of Technological and Other Changes on the Future of Work and Workers in New South Wales. The committee was tasked with looking into, among other matters, 'whether current laws and workplace protections are fit for purpose in the 21st century'. The Select Committee's terms of reference include:
the application of workplace laws and instruments to people working in the 'on-demand' or 'gig-economy', including but not limited to:
the legal or work status of persons working for, or with, businesses using online platforms,
the application of Commonwealth and New South Wales workplace laws and instruments to those persons, including, superannuation and health and safety laws,
whether contracting or other arrangements are being used to avoid the application of workplace laws and other statutory obligations,
the effectiveness of the enforcement of those laws and regulations,
regulatory systems in other Australian jurisdictions and in other countries, including how other jurisdictions regulate the on-demand workforce and are adapting to the automation of work.
1.36
Six hearings have been held and, as at the date of tabling this interim report, the inquiry is continuing.
Queensland
1.37
The Queensland Government undertook an investigation into the possibility of extending workers' compensation coverage to certain gig economy workers in 2019. Submissions were invited responding to the Consultation Regulatory Impact Statement, Workers' compensation entitlements for workers in the gig economy and the taxi and limousine industry in Queensland.
1.38
Twenty four written submissions were received and nine confidential and 15 public submissions, available on the Queensland Government's website. The website for the consultation states:
A Decision RIS will be publicly released outlining the Government's recommended options when all submissions and stakeholder perspectives have been carefully considered.
1.39
Further, the Queensland Government submitted to the committee's inquiry, urging the Commonwealth to make reforms to the national industrial relations framework to support on-demand workers into the future:
The Queensland Government recommends that the Australian Government consider reform of the Fair Work Act 2009 (Cwlth) (FW Act) to more adequately accommodate emerging forms of non-traditional employment, including broadening the definition of worker and providing broader access to the benefits of collective bargaining, minimum standards of pay and conditions, and access to the Fair Work Commission, in line with recommendation 17 of the Queensland Wage Theft Inquiry Report.
1.40
The Queensland Government said it is committed to the process of reforming its workers' compensation legislation, as:
Improving provisions for work related injuries for vulnerable gig workers is consistent with the Queensland Government's recommendation to the Federal Government to improve industrial relations protections for these workers in the federal industrial relations jurisdiction to provide a fair and equitable workplace relations system for vulnerable workers.
Western Australia
1.41
The Western Australian Government has not referred its industrial relations powers to the Commonwealth. However, a Ministerial Review that considered whether the WA Government could amend industrial relations legislation to provide better protections for gig workers concluded that only the Commonwealth could achieve this change, as it controls the Fair Work Act 2009 and the Independent Contractors Act 2006.
1.42
The WA Government noted that comprehensive up-to-date data on the gig economy and platform work is not currently available, and reported that it intends to move in the areas that are within its jurisdiction, by:
'examining how to manage workplace health and safety issues with respect to the food delivery industry as engaged in by gig economy workers'; and
'modernising the workers' compensation legislation in Western Australia'.
Conduct of the inquiry to date
1.43
Details of the inquiry were placed on the committee's website.
Submissions
1.44
The committee invited submissions from individuals and organisations by 31 March 2021. The committee provided extensions to lodge submissions until 10 June 2021.
1.45
The committee has received 122 submissions (to 21 June 2021). The submissions received by the committee can be found on the committee's website and a list of submissions is at Appendix 1.
Hearings
1.46
The committee has so far conducted seven public hearings—in Sydney, Wollongong, Melbourne and Canberra—and intends to conduct several more across Australia, visiting Queensland and Western Australia in coming months. A list of witnesses who gave evidence at the hearings is at Appendix 2.
Structure of the interim report
1.47
This first chapter provides definitions for on-demand platform work, introduces the issues, reports on moves for reform by some Australian states, and outlines the administrative details of the committee's work. The remainder of the report is structured as follows:
Chapter 2 provides an introduction to the on-demand platform sector and its workers, looking at prevalence and data issues;
Chapter 3 introduces the key sectors and major platform companies, and outlines their business models, looking at contested evidence around worker earnings;
Chapter 4 looks at the pros and cons of the gig economy, examining the impacts of on-demand platform work on individuals, families, communities, society, and the economy;
Chapter 5 looks at how current industrial relations, contractor, and small business regulation applies to on-demand platform workers, including the application of work health and safety laws and workers' compensation; and
Chapter 6 considers proposals for reforming Australia's industrial relations framework to provide minimum standards and protections—along with secure and safe jobs—for platform workers today and into the future.
Acknowledgements
1.48
The committee would like to acknowledge all submitters and witnesses who gave evidence at public hearing; especially workers who shared their personal stories with the committee.