Menu Close

Collectivising the gig economy: In the pandemic, it’s a matter of life and death

Anthony Forsyth

October 29, 2020

Anthony Forsyth, RMIT University and Labour Law Down Under Blog.

This post was recently published in a collection of articles: ‘Focus on Impacts of COVID-19 and Work and the Challenge for Union Rights’ – in Volume 27, Issue 3 of International Union Rights. Thanks to IUR’s editor, Daniel Blackburn, for bringing the collection together. It has a lead article from Sharan Burrow, General Secretary of the International Trade Union Confederation. All articles are accessible at: http://ictur.org/IUR.htmlhttp://ictur.org/IUR.html

A landmark Australian inquiry calls out the gig economy’s rotten core

In July 2020, the Report of the Inquiry into the Victorian On-Demand Workforce was released.[1] This was the first full-scale government inquiry into platform work in Australia, possibly even globally. Inquiry Chair, Natalie James, tackled head-on the problem at the core of the gig economy: work status, and therefore access to protective employment regulation, is generally controlled by the platforms.

The Inquiry found that platforms exercise significant levels of discretion and control over how gig work is organised, with no independent oversight. This presents challenges to Australia’s system of labour regulation, and uncertainty about which laws apply to gig workers.

Arguably one of the most striking features of the Report is its public calling-out of what we know platforms like Uber, Uber Eats, Deliveroo and Foodora have been doing around the world for years:

While there are a small number of notable exceptions, the arrangements established by the platforms with the workers are usually consciously framed to avoid an employment relationship arising between the worker and the platform.

The Report also exploded the myth, propagated by the platforms, that gig workers are (universally) flexibility-seeking entrepreneurs who do not wish to be stifled by conventional employment arrangements:

While certain platforms may characterise their workers as ‘entrepreneurs’, some platform workers do not fit the typical epitome of self-determined, self-employed small businesses or ‘non-employee’ workers. Further, some platforms are highly controlling in how they organise elements of the work including, in some cases, setting prices for end users.

A significant consequence of these arrangements, the Inquiry found, is that many gig workers are paid less than the Australian minimum wage (once the various costs and payment structures applicable to non-employee platform workers are calculated).

Further, many platforms design contracts and control systems which are imposed on workers on a ‘take it or leave it’ basis, including work allocation through algorithms. This level of control, the Inquiry concluded, does not sit comfortably with the platforms’ entrepreneurship narrative.

Noting that a person’s work status is ‘pivotal’, the Report went on to observe that the determination of that status ‘is rarely the subject of formal or regulatory scrutiny at the outset’ of a platform work relationship. The question of the worker’s true legal status is only tested if they challenge the presumption that they are not an employee and fall outside applicable employment law rules. However the putative contractor status of gig workers has been successfully contested in only one Australian case to date.[2]

The Inquiry found, further, that:

Platforms are unapologetic that they have chosen to operate outside the employment regulatory framework. … Platforms claim to be inhibited from extending more beneficial arrangements to workers by the risk that the relationship might then be characterised as employment, making their model untenable. The arrangements they have put in place are designed to mitigate this ‘reclassification risk’.

The Inquiry made a series of recommendations for reform of Victorian and federal law to provide more choice, fairness and certainty for gig workers – in other words, to counter the platforms’ deliberate structuring of contractual and work arrangements in their favour.

One critical recommendation was to ‘codify work status’ through a new statutory definition in the Fair Work Act, rather than relying on the present imprecise common law tests. This would involve placing the concept of entrepreneurship at the core of the employee/independent contractor distinction.[3] It would ensure that only genuinely self-employed, autonomous business people operate under commercial arrangements – and workers who operate as part of another’s business or enterprise are covered by protective labour regulation.

Union representation and collective bargaining for gig workers

The Victorian Inquiry noted that there are significant legal barriers to platform workers seeking to improve their pay and conditions by organising collectively. Their assigned contractor status excludes them from access to collective bargaining under the Fair Work Act, which is only available to employees. At the same time, as self-employed small business operators (unless they prove to the contrary in the courts), they are precluded from bargaining as a group by Australia’s competition law regime.

The Inquiry’s recommendation to allow collective negotiations by (so-called) independent businesses in the gig economy would only go so far. Any such negotiation process would be regarded by the platforms as voluntary, and most likely ignored. Further changes to competition legislation would be needed to enable gig workers to take collective action – equivalent to protected industrial action under the Fair Work Act – in pursuit of an agreement.

Despite these limitations, and the refusal of most platforms to engage in collective discussions, several Australian unions have been at the forefront of organising and representing gig workers in recent years.

Unions NSW has fought to obtain improvements for workers engaged through the Airtasker platform. Airtasker facilitates the matching of home-based tasks created by ‘job posters’ with people to do the work, through an online bidding process. Unions NSW has highlighted concerns that this business model is actually based on the ‘bidding down’ of workers’ pay rates, with the result that they are often paid below the minimum pay rates set down in awards (legally enforceable, industry-level instruments setting pay and conditions). Further, without proper safety checks in place, Airtasker workers go into private homes to do electrical or plumbing work, or asbestos removal, in some instances without the required trade qualifications.

In 2017, Unions NSW negotiated an agreement with Airtasker which was described as ‘a world first for the gig economy’. Under the agreement, the company agreed to post recommended pay rates (based on legal minima) on its site; and to enter into further negotiations on safety guidelines and a personal injury insurance policy for workers obtaining jobs through the platform. Although this was not an industrial agreement made under legislation, and therefore was unenforceable, it provided a foothold or entry point for unions to build more effective forms of organising in the hostile terrain of the gig economy.

The Transport Workers Union has supported legal challenges to misclassification by Foodora, Deliveroo and Uber Eats delivery workers. The TWU has also worked with Victorian Trades Hall Council’s Young Workers Centre to compile survey data highlighting the exploitative pay arrangements, intrusive surveillance and safety risks encountered by food delivery riders. Their joint work informed the On-Demand Food Delivery Rider’s Charter of Rights, published in late 2019 as part of the ‘Rights for Riders’ campaign and seeking the following:

  1. a fair minimum wage and pay for waiting times
  2. transparency in how companies assign orders, and disclosure of the order distance and delivery fee before a rider accepts an order
  3. penalty rates for weekends, nights and public holidays
  4. bad weather allowance
  5. workers’ compensation insurance and other safety measures
  6. collective voice and recognition of Delivery Riders Alliance unions.

This lobbying by the TWU and Young Workers Centre, along with similar campaigns by other unions, was influential in bringing about the Victorian Government’s decision to establish the On-Demand Work Inquiry – and at the time of writing, these same representatives are providing data on gig workers’ views and experiences to the state government as it implements the Inquiry’s proposals.

A matter of life and death: gig workers, unions and COVID-19

Soon after the pandemic hit Australia’s shores, it was clear that workers in the gig economy would be extremely vulnerable. Rideshare drivers and food delivery riders were directly exposed to coronavirus infection through daily contact with the public, and very minimal safety protections. Their designation as contractors meant they had no entitlement to sick leave or other forms of leave. This had the effect that many would simply work through, even if they developed symptoms, rather than being tested and self-isolating. It was this kind of dilemma which led Victorian Premier, Daniel Andrews, to describe the mounting COVID-19 infections in the state’s ‘second wave’ as a phenomenon attributable in large part to insecure work.

In the early weeks of the crisis, the TWU pressed Uber and other platforms to provide workers with sick leave and suspend their customer ratings so drivers would not be penalised for wearing face-masks or taking other precautions. Then, Uber and Deliveroo allocated their drivers and riders up to 14 days’ payment if they contracted the virus or were directed to quarantine. Several food delivery platforms introduced contactless delivery to customers and provided some personal protective equipment. The rideshare company Ola went further, installing transparent hygiene screens in vehicles and frequent driver temperature checks. However, this was only available to drivers who elected to join the ‘Ola Pro Program’ as part of a new service offered to customers wanting ‘super sanitised’ transportation.

In late July, the TWU and US food delivery platform DoorDash announced they had entered into an agreement which included their shared belief ‘that open, honest, and constructive dialogue and engagement on issues of concern to workers will help improve the safety of food delivery workers during the COVID emergency’. Under the agreement, DoorDash committed to measures including free provision of PPE to drivers, and payment of two weeks’ earnings to delivery workers who ‘(a) have tested positive for COVID-19, (b) have been individually instructed to self-quarantine by a medical professional or public health official, (c) are at higher risk for severe illness due to COVID-19, or (d) have a housemate who fulfills [sic.] at least one of the above criteria.’ These payments are based on a driver’s average weekly earnings over the previous three months.

The agreement also included this rare concession from a platform company: ‘DoorDash recognizes that collective representation from workers through regular dialogue and engagement with the TWU is valuable to identify, discuss, and resolve issues of general and specific concern and enhance food delivery work in the emerging gig economy.’ Time will tell whether the TWU is able to convert DoorDash’s apparent willingness to engage in collective dialogue into more substantial progress on countering the contracting model which subverts the rights of so many gig workers.

The COVID-19 pandemic has brought home the brutal effects of the gig economy’s legal fantasy – that all workers are independent contractors until they prove otherwise. As a result, these workers have been locked out of income protection schemes with no access to sick leave entitlements, at the same time as working amidst heightened risk of infection. All of this hammers home the vital importance of an effective collective voice for gig workers. Australian unions have been taking on this formidable challenge. Although significant obstacles remain, they are starting to build worker power in the world of platform capitalism.

[1] See: https://engage.vic.gov.au/inquiry-on-demand-workforce

[2] Klooger v Foodora Australia Pty Ltd [2018] FWC 6836; cf. the following decisions: Kaseris v Rasier Pacific V.O.F. [2017] FWC 6610, Pallage v Rasier Pacific Pty Ltd [2018] FWC 2579, Suliman v Rasier Pacific Pty Ltd [2019] FWC 4807, Gupta v Portier Pacific Pty Ltd; Uber Australia Pty Ltd T/A Uber Eats [2020] FWCFB 1698.

[3] Based on the approach taken in decisions including On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366 and Fair Work Ombudsman v Quest South Perth Holdings Ltd [2015] FCAFC 37.

***

Many thanks to Prof Anthony Forsyth for permission to repost his blog entry from COVID-19 & Work on the Labour Law Down Under website: https://labourlawdownunder.com.au/
(originally posted on 26th of October, 2020)

Share on facebook
Share on twitter
Share on linkedin
Back