Read The Times Australia

Daily Bulletin

Why gig workers may be worse off after the Fair Work Ombudsman's action against Foodora

  • Written by: Tom Barratt, Lecturer, School of Business and Law, Edith Cowan University

The way “gig workers” are paid and protected might be about to change, as a result of legal proceedings brought by the Fair Work Ombudsman. The Ombudsman alleges that food-delivery platform Foodora underpaid three workers by A$1620.74, plus superannuation, in a four-week period.

The Ombudsman argues that while Foodora engaged these workers as independent contractors, they were in reality employees. If the action succeeds, it could be positive for the underpaid workers, but it could also drive down working conditions.

The food-delivery platforms have stated they would be willing to give their workers more benefits, such as training. But not at the cost of workers being classified as employees. If the Ombudsman’s case succeeds, it could cause gig platforms to offer fewer protections in order to ensure workers are classified as contractors.

This could not only disrupt the food-delivery sector, but have a broader impact on the gig economy, restaurants, customers and workers.

The difference between an employer and a contractor is significant. They fall under different laws, receive different protections and have different obligations.

If a contractor performs poor work they are legally liable for that. But an employer is responsible for the poor work of an employee.

In many cases this distinction is clear-cut. However, in the gig economy these workers operate in a grey area, one the Fair Work Ombudsman seeks to test.

Whether workers can be classified as employees or contractors depends on a variety of factors, including the nature of the work. If workers are deemed employees then they receive a greater number of protections, including minimum wage rates.

In the Australian platform-based economy (including ride sharing and food delivery), the Fair Work Commission has determined workers are independent contractors in two recent cases.

In one case, Commissioner Nick Wilson stated that “[the driver] did not bring anything especially entrepreneurial to the arrangement” but also that “it is evident that the weight of those indicators leads to the finding that [the driver] was not engaged as an employee, but instead as an independent contractor”.

Read more: 'The way they manipulate people is really saddening': study shows the trade-offs in gig work

The Fair Work Ombudsman’s decision to intervene in the food-delivery sector might be a response to poor working conditions for gig workers. But the decision to go after Foodora specifically could dissuade rather than encourage other platforms to improve working conditions.

As shown in the table below, the three major food-delivery platforms have varying approaches to engaging workers. For instance, Foodora, in the period under investigation, would engage workers for set periods of time, rather than per delivery. Deliveroo and Foodora also provided uniforms for workers, while UberEATS did not.

Why gig workers may be worse off after the Fair Work Ombudsman's action against Foodora Authors’ original work based on Fair Work Ombudsman, The Australian Financial Review, The Guardian Australia, original research.

The fact that the case was brought against Foodora suggests that the company has the most direct relationship with workers, and thus its workers are most likely to be classified as employees.

Our research shows, however, that these work practices are evolving all the time.

In submissions to the ongoing Senate Select Committee on the Future of Work and Workers, both Deliveroo and UberEATS claimed they would like to provide additional benefits to workers but doing so in the existing regulatory environment might compromise their business models.

For instance, Deliveroo argued that it “… wishes to be able to provide additional benefits to [workers] without the risk of those benefits changing the relationship from one of self-employed riders to riders employed by Deliveroo”.

UberEATS similarly argued that “current employment classifications create significant disincentives: they can mean that offering training to these [workers] can compromise the self-employed status of the individual. We believe that companies should be incentivised, not penalised, for helping independent workers”.

This is why the Fair Work Ombudsman’s decision to target Foodora may be counterproductive. It sends the signal that the better you treat your workers, the more likely they are to be classified as employees, the more expensive your labour costs will be and the more inflexible your operation will become.

Read more: Being exploited and breaching your visa: the limited choices of the food delivery worker

The Foodora case is interesting as it applies existing employment rules to “gigified” work. Currently, some gig workers earn significantly less than the minimum wage. They also miss out on other protections of employment.

However, unlike high-profile franchising cases such as the underpayment of 7/11 workers, their current classification as contractors means this practice is within the law.

If the Fair Work Ombudsman is successful and these workers are reclassified as employees, it might provide a disincentive for other platforms to protect workers. The law itself might need to change.

With this in mind, we all need to pay attention to the recommendations of the Senate Select Committee on the Future of Work, due on June 21.

Authors: Tom Barratt, Lecturer, School of Business and Law, Edith Cowan University

Read more http://theconversation.com/why-gig-workers-may-be-worse-off-after-the-fair-work-ombudsmans-action-against-foodora-98242

Business News

The Rise of Digital Marketplaces in the Australian Trade Sector

For decades, the Australian trade and construction sector operated almost entirely on word-of-mouth recommendations and local community networks. Small business owners typically relied on local newspa...

Daily Bulletin - avatar Daily Bulletin

How Immigration Lawyers Can Help

Introduction Visa decisions can shape employment, family life, study plans, travel, and future residence. A small omission can lead to delay, added expense, or refusal. Immigration lawyers assess l...

Daily Bulletin - avatar Daily Bulletin

How Industrial Drying Equipment Supports Efficient Processing

Many industrial processes require moisture to be removed from compressed air, products or process materials before they move to the next stage. Excess moisture can affect equipment performance, produc...

Daily Bulletin - avatar Daily Bulletin

Practical Ways a Whiteboard Can Improve Workplace Communication

Effective communication helps teams stay organised, share ideas and keep track of important information. While digital tools are now common in many workplaces, a whiteboard continues to provide a simp...

Daily Bulletin - avatar Daily Bulletin

Designing Eco-Friendly Custom Water Bottles for Your Next Event

The Evolution of Sustainable Event Merchandise Event planning has undergone a massive transformation over the last decade. Gone are the days when organizers could hand out cheap, single use plastic...

Daily Bulletin - avatar Daily Bulletin

Why Choosing a Professional Florist Melbourne Makes Flower Delivery Impactful

Flowers have a great power to speak when humans cannot express their feelings with right words. Flowers are the best gifts when you are celebrating a birthday or welcoming a newborn child into your fa...

Daily Bulletin - avatar Daily Bulletin

The Business Case for Choosing Australian Fabricators Over Imported Alternatives

For a long time, you might have defaulted to overseas suppliers when sourcing fabricated metal components for a project. The unit price was lower on paper, and the maths seemed straightforward. That...

Daily Bulletin - avatar Daily Bulletin

Australian organisations are relying on business continuity plans built for a far more predictable world

Tariff escalations, supply chain fragility, geopolitical events, and the ongoing threat of cyber disruption have reshaped the risk environment facing Australian organisations. The problem is that ma...

Daily Bulletin - avatar Daily Bulletin

How to Rent a Car for Uber in Melbourne: What Every New Driver Needs to Know

Starting out as an Uber driver in Melbourne is not as complicated as it sounds but getting the vehicle right is where most new drivers get stuck. Uber has strict requirements around vehicle age, condi...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

How Wide Should Running Shoes Be? Signs Your Shoes Are Too Narrow

Running shoes should be wide enough for the forefoot and toes to sit naturally under load, but not...

Trail Running Shoes vs Hiking Shoes: Which Is Better for Australian Trails?

Australia does not offer one neat definition of a “trail.” A weekend walk might mean a hard-packed...

Architectural Window Shading: Solutions for Triangle Blinds, Raked Glazing, and High Ceilings

Mastering Light and Privacy with Specialized Window Coverings Modern architectural de...

From Suburban Streets to Modern Events: Why Australians Still Love the Ice Cream Truck

Did you know Australia consistently ranks among the world's highest ice cream-consuming countries? ...

Will These Bloody Kids Ever Move Out? The Resurrection of the Duplex Says No

Whilst Baby Boomers and Gen Xer’s typically finished school, got a job and moved out of home relativ...

Critical Structural Checks to Prioritise Before Renovating an Older Property

The Australian home renovation market is experiencing unprecedented growth. The total value of thi...

Why Regular Gutter Cleaning Northern Beaches Is Important

Living in the Northern Beaches offers beautiful coastal scenery, fresh air, and leafy surroundings...

Double Glazed Sliding Doors vs Standard Sliding Doors: Key Differences

Sliding doors are a popular choice in modern homes due to their space-saving design and ability to...

How to Plan a Bathroom Renovation Timeline (Without Surprises)

A bathroom renovation rarely feels “small” once work begins. Even modest updates involve multiple ...