The debate about whether Gig Economy business models are fair and appropriate rages on around the world.
In the UK in late 2017 the London Central Employment Tribunal found 2 drivers were ‘workers’ for the purposes of minimum wage and other entitlements.
In a number of decisions between 2014 and now, various US Courts and Tribunals have decided both for and against the idea that Uber drivers are actually employees and not contractors.
Here in Australia we had a decision late in 2017 from the Fair Work Commission found that Uber drivers were independent contractors and not employees due to the degree of freedom they exercised in deciding when to start, when to finish, whether they would accept work at any given time and were otherwise considered to be conducting their own business. The Deputy President in that case did question whether the legal process (the multi-factorial test) was ‘outmoded’ for the purposes of assessing modern day business models in the Gig Economy.
Interestingly a year later, the Fair Work Commission decided that another Gig Economy business, Foodora, was in fact engaging employees instead of independent contractors. The circumstances of that case were found differently because the Commission considered that the company had ‘considerable capacity’ to control the manner in which they individuals worked, including start and finish times, number of shifts per week and a requirement to work on particular days of the week.
Last month, Uber drivers (estimated in the vicinity of 3 billion vehicles globally) staged a global protest (which included Australia, UK, Canada, Brazil, Italy, Brussels, Belgium, France, Poland) over pay and conditions.
Just last week the Fair Work Ombudsman announced she had come to the same view as the Fair Work Commission about Uber, and in coming to that same view she stated, that “there must be, at a minimum, an obligation for an employee to perform work when it is demanded by the employer” and considered that it was also compelling that “Uber Australia drivers have control over whether, when, and for how long they perform work, on any given day or on any given week.”.
Those who work in the Gig Economy appear to be split about whether it is more important to have the freedom of an independent contractor or the security of a minimum safety net that employee’s benefit from.
In October 2018, the Victorian Government commenced an inquiry into the Gig Economy, focusing on whether people in the gig economy are being paid enough, whether the work is safe, or whether there are adequate protections for workers. Former Fair Work Ombudsman, Natalie James, has been appointed as Chair of the inquiry.
Whatever angle you take in the debate, the concerns about the lack of a safety net for drivers will not go away. In the circumstances where not only are drivers globally are expressing their dissatisfaction, but governments and judicial officers have expressed reservation about whether current laws adequately provide a basis for assessing whether individuals should benefit from the minimum protections afforded to employees, there are a range of questions to be determined:
- Whether it is still suitable for Courts and Tribunals to be applying a ‘multi-factorial’ test to determine whether an individual is an employee or not;
- Whether a form of minimum safety net is required for individuals working ‘on-demand’ or otherwise as part of the Gig Economy.
For the time being, the challenge still exists for ordinary businesses out there who regularly engage contractors and who are at risk of discovering that those individuals are in fact employees, attracting a range of entitlements not budgeted for and potentially litigation not contemplated commercially or financially.
Ensure you have your arrangements in order and you are correctly engaging your contractors. The Uber example is quite a unique one in the broader scope of the business world and Courts and Tribunals will not hesitate if you falter in your engagements.
Hear Joe Murphy
's radio interview with Ross Greenwood on Money News below: