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Is it time to join the 'GIG economy'?

Is it time to join the 'GIG economy'?

25 Feb 2017

With companies such as Uber and Airtasker rapidly becoming household names, many businesse are looking to emulate their successful business model.

You may not be familiar with the term “gig economy”, but you’re sure to have heard of some of the organisations championing this emerging business model. 
Businesses like Uber, Airtasker, Deliveroo and Foodora have generated a significant buzz around not only what they do, but how they do it.
Put simply, the gig economy refers to an environment where businesses engage workers through digital means (usually via tablets or smart phones) to perform on-demand work for short-term engagements.
With lower costs than other business models, it’s a tempting proposition for many businesses, but Joe Murphy, Director, Workplace Relations of Australian Business Lawyers & Advisors (ABLA), cautions against jumping in too fast.
“If you are a business looking to restructure your employment arrangements, and you ask us, we will take you back to the tests the courts and tribunals continue to apply,” he says.
To address some of the issues raised, ABLA will be hosting a “Gig Economy – new ways of engaging workers in 2017 and beyond” webinar on 21 February 2017. Topics will include trends in the way workers are currently engaged, tips on how to achieve an appropriate “workforce mix”, key pitfalls around engaging contractors, and the future of IR regulation for modern workforces.

Key points:
  • Businesses engage workers through digital methods such as via tablets or smart phone to perform on-demand work for short-term engagements.
  • By employing contractors, the outgoings in terms of fees are usually less than paying wages and other employment entitlements to employees. Other benefits include reduced legal risk and other costs (often those “contractors” must have their own insurance).
  • These red-tape busting businesses have attracted both opposition from established businesses they are competing with, particularly in the tourism and hospitality sectors, and a significant degree of scrutiny from regulators, both here and overseas.
  • How these companies engage their workforce, and whether worker are being paid fairly and according to law, has attracted the attention of regulators.  A recent ruling from the Employment Tribunal in the UK found that drivers employed by Uber were employees rather than contractors, resulting in the company having to back pay employee entitlements.
  • If you find yourself before the Australian courts or Fair Work Ombudsman, it is likely they will look at a range of factors including whether workers are deemed to be running their own business, using to their own equipment, are able to contract with others, dictate their own hours and the degree of control they exercise over the work they perform. 
As always, if there is any issue within your business that might give rise to a claim, early intervention is the best protection. Feel free to contact us on 1300 565 846 if this raises any questions.

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The content of this article is general in nature, and is intended to provide commentary only. It does not constitute advice, and should not be relied upon as legal advice. Targeted formal legal advice should be obtained prior to any action being taken in relation to a matter arising in response to the content of this article.

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