In the gig economy, who should be protecting workers?

gig economy
Bianca Healey


written on May 10, 2017

The smart money says that some day soon we will all be contractors in the gig economy. What does that mean for the relationship between workers and their employers?

By 2020, the number of Americans working independently is expected to reach 54 million, according to research by consultancy MBO Partners.

It’s a trend that’s rippling through the western world as disruption profoundly changes the stability of traditional business models and technology threatens to replace entire workforces.

With the rise of the “gig economy”, a new debate is underway about how companies treat the people who “work” for them. For one, there’s a slate of evidence that gig workers are underpaid, overworked, subject to exploitation and even abuse. Plus, the law is still catching up when it comes to rulings that question whether workers should be defined as “employees” or “independent contractors” in disputes – and there’s the question of how will we regulate the contracts between employee and employer?

When workers are no longer interacting with a single organisation, but have “assembled” careers with several employers, how do we renegotiate rights and protections for workers? And whose responsibility is it anyway?

What are the opportunities for HR in the contractor economy? Read about the latest job trends here.

A world first

As an example of how these relationships may be negotiated in the future, this month sees a landmark decision featuring Unions NSW and Australian online job-posting platform Airtasker. Both organisations came to an agreement to create a new set of structures to protect the Airtasker workers.

“It’s the first time that we know of, there’s been an agreement between a union and a gig economy platform,” says Thomas Costa, assistant secretary, Unions NSW – and it comes on the back of a broader investigation by the union about how to regulate the burgeoning online-driven gig industry.

As a result of the agreement, workers using the Airtasker platform will be offered an affordable and flexible insurance product similar to workers’ compensation. In addition, an independent disputes resolution process has been introduced, to be overseen by the Fair Work Commission.

“Previously on Airtasker’s platform, workers had no access to coverage by a workers compensation insurance product,” he says. “If you’re working in a traditional environment and you get injured, worker comp covers you for the time off that you need to recover, but also covers all of your medical expenses.”

Parts of the agreement, such as a process to promote pay rates that are above the minimum rates (which kicked off last year) have already proven successful. Now, Unions NSW is hoping to roll out this model with other online companies, as well as look more broadly at how the internet enables the exploitation of workers such as “how social media is being used to advertise jobs below award rates, for example,” says Costa.

Who’s failing workers and what can be done?

In Costa’s opinion, a lot of the problems have arisen because politicians aren’t engaging with the issue in order to regulate it. “When it comes to the employment space we have not updated the Fair Work Act in almost 10 years – and in this space, never.” The problem, he says, is that Parliament is not creating new definitions for employment – and the online space is racing ahead.

The question then moves to where HR fits into this new structure.

Unsurprisingly, Costa maintains unions are the natural fit for the fight ahead, as they aren’t required to answer to a board.

“In the past, unions used to fill this space predominantly. We’re very well placed to negotiate on behalf of workers and for the best interests of workers.”

Companies which neglect to provide human resources services are exposing themselves to union action. For example, in the UK workers at food delivery service company Deliveroo have demanded union recognition by the company, including employment rights, in one of the first examples of a collective bargaining agreement in the gig economy.

Read our discussion about whether we need unions and HR.

How to balance innovation and worker protection in the new economy

Unions NSW secretary Mark Morey has stated that the new agreement with Airtasker marks a huge step towards improving the pay and workplace protections for people working in the gig economy. “This is the first plank of a new floor we are building under the gig economy,” he says.

Costa agrees.

“As traditional work becomes more and more fragmented, we’re going to see the debate where workers say ‘this is how we want to engage in work’ or ‘do we need different laws to regulate this space so it’s fairer?’” And the benefits have to work for everyone; it can’t simply be a zero sum game.

“Companies like Airtasker create new jobs which are a very important part of our economy and we don’t want to stop companies like that from emerging – or from stopping those innovators.

We just want to make sure that they engage with workers fairly.”

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4 thoughts on “In the gig economy, who should be protecting workers?

  1. Who precisely is selling the gig workers the ‘affordable and flexible insurance product similar to workers’ compensation’. Airtasker or the union?

    1. Hi John,
      Thank you for your comment.
      As far as I understand it from my conversation with Mr Costa, this insurance product will be made available to Airtasker workers on the online Airtasker platform. It’s an important first step, as online platforms have thus far been reticent to work with unions. However as Professor ​John Buchanan from the University of Sydney business school has said; “this isn’t a full-blown industrial agreement with rock-solid enforceable rights. What it does provide is a point of reference for defining relations for a realm of economic practice which has been labour-standards free.

  2. This seems a natural evolution. Workers, quite sensibly, will collaborate to ensure reasonable working conditions – this is how unions came about all those years ago. So good news for unions, good news for workers and, I’d suggest, good news for the gig economy companies who see value in treating contractors properly to provide customers with the services they want . Good news for HR too if the negotiations draw on HR’s strategic and operational skills. Bad news for HR if that contribution isn’t seen as relevant. Perhaps we are looking at a partnership rather than a gig economy in the longer term.

  3. I raised the issue of minimum entitlements for contractors in a discussion within Linked In AHRI group and the “debate” raged with some very passionate opinions. As one contributor to that discussion pointed out there is legislation covering Independent Contractors and the FWA is clear about Sham Contracts. Personally I believe that the trending Gig Economy needs a set of protocols that is a bit more disruptive. I know many Aust small business proprietors who engage offshore VA’s and refuse to pay Aust VA’s due to hourly rates. Ultimately I don’t think the Gig Economy will flourish in Aust because of the combination of offshore price and availability and Aust legislative expectations. So bring on something that will serve to protect those Australians who choose to work “Gigs” and protect those who choose to engage them without exploiting them.

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