Government to create pay floor for gig workers, saying small increases to food delivery costs a ‘small price’ for safety

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Small increases to the cost of pizza or other food deliveries will be worth the cost if they keep gig workers safe, the workplace relations minister says, as he unveils plans for minimum pay rates for workers using apps such as Uber and DoorDash.

Life has been made more convenient by apps that have disrupted transport, food delivery, trade hire and many other services, but Workplace Relations Minister Tony Burke says the emergence of the gig economy has wiped out the rights of many workers.

Mr Burke said there were no minimum standards for gig workers because the current system had no good way to define their labour, and the government would introduce legislation next week to change that.

“The reason they have no minimum standards is this: At the moment, you turn up to the Fair Work Commission, and the Fair Work Commission asks the initial question, ‘Are you an employee?'”

“If you are an employee, you have a whole series of rights. If you’re not an employee, all of those rights — all of them — fall off a cliff.

“What we want to do is turn that cliff into a ramp.”

Mr Burke said if minimum rates mean “there’s a tiny bit extra you pay when your pizza arrives to your door and they’re more likely to be safe on the roads getting there, then I reckon it’s a pretty small price to pay”.

“Underpaying people is cheaper, yeah it is. Slavery is probably cheaper too,” he said.

The government asserts that a lack of standards around gig workers has contributed to unsafe work conditions, and estimates at least 13 gig workers have died on Australian roads in recent years.

Gig worker pay ‘floor’ to be set by Fair Work Commission

Under the legislation, the Fair Work Commission would use a new test to determine if someone fits a new class of worker.

That test would ask whether the person is earning income through a digital platform, and whether they are “employee-like”, determined by whether a person has low bargaining power, low levels of control over their work and lower wages than if they were engaged as an employee.

Mr Burke said that test would cover people earning an income through apps such as Uber, Hungry Panda and DoorDash, but it would not capture people finding work through platforms like Facebook, Whatsapp or Airtasker, which he said acted more like forums for people to find work rather than a service provider.

If someone did fit that new class of worker, they would be entitled to a minimum pay rate, as well as certain standards around how they were paid including timings of payments.

“We’ll no longer have a situation where there is no floor, we’ll no longer have a situation where some of the more reputable apps are being undercut by other apps that emerge on the market that are putting people into unreasonably poor remuneration and unreasonably safe working conditions,” Mr Burke said.

He said in terms of workplace standards, if a minimum standard typically applied to an employee would interrupt the way a person engaged with digital platforms, it would not be applied, but where minimum standards could be applied, gig workers would be covered for the first time.

In submissions to the government’s consultation on gig worker reforms, Uber said it supported a minimum-earnings rate and compulsory accident insurance coverage, but warned it could become costly if not implemented carefully.

“If reforms are inadequate and fail to reflect the modern realities of gig work, there could be significant impact to jobs, to consumer availability and to businesses who use digital platforms to reach new customers and grow their businesses,” the company said.

‘Why make things more expensive?’

Business groups have heavily criticised the proposed changes, arguing they will push up the cost of goods for consumers, and put gig workers out of work.

They argue the new laws — which will also include changes to rules around casuals, labour hire workers and wage theft — will add complexity to industrial relations and make it harders for businesses to employ the workers they need.

Jennifer Westacott from the Business Council of Australia said the timing of the gig worker changes is poor, and the minister is understating the impact on ordinary consumers.

“Why would any government, at this time, when people are struggling with the cost of living crisis, make things more expensive?” she said.

“The minister admitted today that costs will go up. How much will things go up? Why would we make things more complex?”

Andrew McKellar from the Chamber of Commerce said there are concerns the new laws will apply more widely than to companies like Uber.

“Rather than focusing what they’re planning to do in areas where there is a demonstrated argument, like rideshare and food delivery, they’re seeking to apply it across the board,” he said.

“It will pick up a range of areas where people are offering their services in specialised areas — whether it be the care sector, or other services being provided.

“That’s our fundamental concern — this is adding complexity, it’s going to mean it’s much harder to employ people across a range of different categories, and that’s not fair.”

The new laws are expected to be introduced to federal parliament on Monday.

By political reporter Jake Evans (Original ABC Article)