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Making the ‘gig economy’ work for everybody

Submission to the Inquiry into the Victorian on-demand workforce

The emergence of the on-demand or ‘gig economy’ presents a number of opportunities and challenges for workers, consumers, businesses and the Victorian economy and society more broadly.

While this type of on-call, piece-based work is not new, existing policy, regulatory and enforcement frameworks at both a state and federal level have not kept pace with its growth, leaving many workers vulnerable to exploitation and insecure employment, and consumers at risk of poor services.

VCOSS has a specific interest in the nature and effects of insecure employment on vulnerable people and their families. Gaining secure and meaningful work contributes to individual and community well-being. Stable paid employment provides people with an income and contributes to their sense of identity and wellbeing.

The nature of employment has changed over the past few decades, with many Victorians now employed insecurely and increasing polarization of employment into high skilled, high paying jobs, and low-skilled, low paying roles. The promotion of independent contracting through the gig economy is an example of insecure work that has flourished in recent times, alongside rising casualisation, sham contracting and labour hire.

Insecure work affects people in different ways. Some forms of insecure work, such as casual or seasonal work, may suit people at different times in their lives, while others may pursue insecure forms of work as a pathway to more permanent employment. Many vulnerable people, however, have no alternative to insecure work. People who face multiple disadvantages are more likely to experience insecure work, underemployment and be at higher risk of unemployment. This includes vulnerable young people, Aboriginal people, people with disability, single parents, older people, women, people with low levels of education, people from culturally and linguistically diverse communities, migrants, people living in rural, regional, outer suburban areas, or low socioeconomic communities, and those with a history of contact with the justice system.

People in insecure employment generally experience less protection from termination, limited entitlements and often receive lower pay. Working as independent contractors or casual employees, many gig workers are not covered by the 10 minimum entitlements under the National Employment Standards, which include annual leave, maximum weekly hours, sick leave, parental leave and notice of termination and redundancy pay.

The rise of the gig economy can also affect government revenue, including by inadequate and inconsistent collection of payroll tax from on-demand businesses, as well as injured workers falling back on the public health care system for medical treatment, or social security for income support. Concerns have also been raised with workers not paying the right amount of tax. A recent Black Economy Taskforce report recommends online platforms report data to the Australian Tax Office and other agencies.

Whilst much attention has focused on online platforms such as Uber, Deliveroo, Airtasker and Airbnb, the emergence of platforms in the health, social and community services sector is a newer phenomenon.

Driven in part by government funding models, it has the potential to dramatically alter the relationships and delivery of quality care, particularly in aged and disability services. This requires a more active response from governments to mitigate the risks and avoid creating an underclass of low-paid care workers, with no minimum employment entitlements. Given that the health and community sector is the fastest growing industry, future risks are particularly high.

The Fair Work Act is the most prominent lever to strengthen employment protections for all workers. However, there are state policy levers to effect change, including legislation governing health and safety, workers compensation insurance, and training and qualifications.

 

Recommendations

  • Ensure publicly-funded aged and disability care services are personalised, safe and high quality.
  • Gradually introduce minimum qualifications for registered disability support workers and aged care workers.
  • Work with the Federal Government to ensure Australia’s industrial relations system provides a framework of minimum rights and protections for all workers.
  • Ensure all gig workers can access Victoria’s workers compensation scheme funded by the collection of premiums from online platform businesses.
  • Ensure that all on-demand businesses comply with workplace health and safety laws, and that they are liable for any violations.
  • Require all online platform businesses to list relevant union, commission, ombudsman and complaints authorities to report specific issues (e.g. abuse, sexual harassment) or query work conditions (e.g. underpayment of wages).
  • Resource community service organisations to assist and represent vulnerable workers in the gig economy navigate complaints systems.

 

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