Tough gig for workers being ‘gamed’ to drive down costs, union boss warns

The employment conditions that gig workers are hired and paid under is facing radical change as the Labor government steps in to overhaul workers’ rights.

The push for reform sets out to protect gig workers from being incorrectly classified as independent contractors rather than employees, which results in a lack of workplace entitlements and no job security, lower incomes and no superannuation.

Of particular concern are big businesses exploiting loopholes in existing legislation to openly misclassify workers as independent contractors, resulting in a lack of workplace entitlements and job security.

Boom in sham contracts

Sham contracting arrangements have also boomed through the pandemic, aided by the rapid growth in gig and platform work.

Super is another major concern, with Australia’s gig workers collectively $400 million worse off in super contributions a year, a report from Industry Super Australia (ISA) revealed in April.

Gig work is paying the bills for 81 per cent of gig workers in the rideshare, food delivery or parcel delivery sectors, a recent report from McKell Institute found.

But more than 40 per cent have to work more than 40 hours a week and don’t earn overtime rates.

Delivery drivers, disability carers, IT professionals, education workers and other services are part of the 275,000 workers it estimates are in the gig economy.

ACTU president Michele O’Neil is in Canberra this week with union delegates to discuss the reforms.

She accused Australian businesses of “gaming the system” to drive down the cost of labour and avoid paying superannuation by using existing labour loopholes.

“Despite casual workers being entitled to a higher loading, most gig workers earn on average less than permanent workers do, and that’s because we’ve had arrangements in place where workers are called casuals. And yet when you look at the reality of their job, they have permanent ongoing work,” O’Neill said.

The gig economy can never deliver the security older workers took for granted. Photo: Getty

“Employers are gaming the system, and in many cases it’s big businesses creating their own labour hire companies so they can pay workers less than if they employed them directly,” O’Neill said.

She highlighted the fact that 45 per cent of transport workers in the gig economy are paid less than the minimum wage as a case in point.

“Whatever you’re called as a worker, it’s important to have access to basic employee rights.”

‘Incorrectly categorised’

“Some jobs are genuinely casual, and irregular, unpredictable work, but what we see in Australia at times is gig workers being told they’re a contractor, not an employee.

“Then, when you look at the reality of what’s happening to them. They’ve been incorrectly categorised to avoid having to pay sick leave and long service leave,” O’Neill said.

The details of the reforms designed to regulate the gig economy are still being ironed out by the government, but some fear they could leave gig workers worse off.

But removing flexibilities and choice for gig workers could restrict wages, rostering and the ability for gig workers to easily move between platforms as it suits them.

The cost of goods could also rise, warns Business Council chief executive Jennifer Westacott.

“These changes would also have serious impacts on small business – we need to remember these are the jobs that allow us to order takeaway from our favourite family-owned restaurant, or shop online from a local corner store,” she said.

“At a time when we want business to be innovating with the flexibility to grow, these measures will impact jobs and livelihoods and create a more complex workplace relations system that stifles the ability to keep pace with what customers want.”

A recent ACTU survey found that new sole trader Australian Business Numbers (ABNs) have outpaced employment growth since 2019, and boomed amid the pandemic.

Its survey also found that workers on sham or dependent contracting arrangements earn $242.80 less per week than genuine independent contractors which, over the course of a year, represents a gap of $12,644.

Its analysis shows that the average gig worker could have up to $29,000 more in their retirement nest egg if super was paid to the on-demand workforce.

However, DoorDash asserts that flexibility is the deciding factor to sign up to its platform for nine out of 10 workers.

Choosing their own hours to work around family commitments allows them to be more present at home, those surveyed revealed.

A 26-year-old Queenslander working for DoorDash says working based on his mental health has been a drawcard for him.

“A regular job does not have the flexibility to simply stop when things get way too much,” he said.

The government is still consulting over the detail of the reforms, which are likely to be introduced before the end of the year.

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