One of the key arguments raised by employers against the introduction of the federal government’s proposed gig economy regulations has been branded a ‘scare campaign’.

As part of the second tranche of workplace reforms set to be introduced later this year, the government is looking to empower the Fair Work Commission to set terms for ‘employee-like’ forms of work in the gig economy.

So-called gig work is normally associated with those employed in the burgeoning rideshare and delivery sectors, but Australian Industry Group chief Innes Willox has attempted to drag workers in more traditional industries into the argument.

Speaking to the National Press Club about the government’s proposal to regulate ‘employee-like’ forms of work (including gig work on platforms like Uber and Airtasker) Mr Willox last week claimed that “hundreds of thousands of fiercely independent electricians, plumbers and carpenters” would be affected by the changes.

He claimed that these workers, who run their own businesses, “would no doubt be horrified at the prospect of being redefined as ‘employees’ or subject to new regulations that might discourage other businesses from hiring them”.

Despite Mr Willox’s claims, industry groups representing contractors have indicated that changes to gig work are not an area of concern for consultation with the government.

“It’s our understanding that it [the gig worker and employee-like work reforms] will have no impact on our industry at all,” said Michael Wright, national secretary of the Electrical Trades Union, which represents electrical workers, many of whom are registered as independent contractors.

Earl Setches, national secretary of the plumbers union, went a step further, describing Mr Willox’s comments as a “scare campaign”, adding “I don’t think registered plumbers are concerned about it all”.

What are the proposed reforms?

The reforms proposed by the federal government are intended to regulate “standards for workers in ‘employee-like’ forms of work, including the gig economy”.

For most people, these are characterised by employers like Uber, DoorDash and the other so-called ‘gig’ platforms.

The Victorian government was one of the first in the country to respond to the unique issues facing workers in the gig economy and established an inquiry in 2018 to look at whether people doing gig work were being paid enough and whether they had adequate safety and workplace protections.

In June 2020 the inquiry released the Report of the Inquiry into the Victorian On-Demand Workforce which examined whether the employment terms and conditions which apply to “on demand” or “gig workers” are fair.

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

The report recommended that the Commonwealth, having responsibility for Australia’s system of workplace laws, should lead the reform to “improve choice, fairness and certainty for platform workers”.

The Commonwealth government is now proposing to expand the powers of the Fair Work Commission to set minimum terms and conditions of engagement for platforms engaging gig workers, to close what Employment and Workplace Minister Tony Burke calls a “loophole” that allows platforms to pay workers “less than the minimum wage”.

The powers that the government is considering giving to the Fair Work Commission include the power to set minimum rates of pay, working conditions and payment timeframes for gig workers.

Why are they needed?

At present, so-called gig workers typically fall outside the rules that apply to other workers because they are usually not regarded as employees.

This means that their effective rates of pay, in some cases, fall well below the minimum standard, and many report poor and unsafe working conditions.

As independent contractors on insecure contracts, these workers have very few rights and do not have access to the usual employment benefits that apply to other Australian workers, such as leave or protection from unfair removal from the platform.

But unlike other business owners and self-employed persons, they are exposed to very little financial upside, essentially powerless in the working relationship.

They often have contracts giving the employer the right to decide when or if to give out work, and in some cases the right to terminate the relationship without any reason.

Who will the reforms affect?

There are two key areas that the government has identified for change.

The first is to make it easier for gig and other workers to be recognised as employees by returning the test to what it was before two High Court decisions in 2022 altered it.

The second is to enable the Fair Work Commission to set the minimum conditions of gig workers and others in ‘employee-like’ arrangements without having to decide whether or not they are employees.

Although the government has made it clear that these changes may affect some workers outside of the gig economy, the reforms are squarely aimed at addressing the regulation gap for those workers currently falling between the cracks and who are among some of the most vulnerable and exploited in the country.

What could it look like?

Governments around the world are struggling to catch up to the evolving gig economy, but some legislators in the US have recently passed laws to regulate the minimum standards for rideshare drivers.

For those drivers in the state of Washington, the law now provides minimum rates of pay, protection against unjustified removal from the platform, and medical and family leave benefits.

It is expected that these are the sorts of terms that the Fair Work Commission will be able to set if the government proposal gets through.

Given the reform is targeted at responding to workplace problems that have emerged as a result of the surge in gig work, claims they will have some wide-reaching negative consequences for “fiercely independent electricians, plumbers and carpenters” seem to lack foundation.

Scott Riches is a former union official with the Electrical Trades Union Victorian branch, and a practising employment lawyer. He is also a volunteer in the employment clinic at the Fitzroy Legal Service