A recent senate committee has given us a hint about what legislative change around the gig economy could look like.

A senate committee has released a report pushing for change to Australia’s employment laws, including tighter regulation of labour-hire companies, and better protections and entitlements for ‘non-standard’ workers.

After Foodora announced its plans to exit Australia, HRM reported on how the future of the local gig economy might unfold. The senate committee gives a clue as to what legislative changes might look like.

The committee says that Australia’s industrial laws have failed to keep pace with a rise of automation and the gig economy.  The report concluded that better planning and significant reform is needed to address growing inequality in the workforce.

According to the inquiry, ‘non-standard work’ is a key problem for the Australian workforce, and it is on the rise.

‘Non-standard work’ includes casual, temporary and on-call employment, as well as those that are employed on a labour hire basis, members of the gig economy and the dependent self-employed. The committee found that this type of work is typically associated with low wages and a lack of access to entitlements such as paid holidays, sick leave and superannuation.

In the committee’s view, inequality is rising and workers have suffered a loss to their bargaining power, partly due to the prevalence of ‘non-standard work’, and also because of legislative change and stagnant wage growth.

The report said that change is needed to assist non-standard workers, and also to prepare our workforce for massive disruptions caused by technological innovation. The Committee noted that many members of the Australian workforce were suffering ‘automation anxiety’ and an action plan is needed to bring Australia in line with the approach taken by other developed countries.  

Recommendations

To address these concerns, the committee recommended that Australia:

1. reform how we define employment, including by reviewing the definition of ‘casual employment’, and broadening the definition of ‘employment’ generally to capture members of the gig economy;
   
2. expand worker entitlements, which would be facilitated by changed definitions of employment, but also by improving the superannuation rights of non-standard workers, abolishing the $450 minimum threshold for superannuation contributions, improving access to flexible working, and the implementation of portable leave schemes which allow individuals to accrue leave entitlements across their working lifetime and transfer them to new positions;
3. reform to the labour-hire industry, including by introducing a licensing scheme, imposing a ‘fit and proper’ test for owners/directors of labour hire companies, a transparent fee structure, significant penalties for employers using unlicensed labour-hire firms, and a requirement that labour-hire workers have access to and be paid at least the same wages and conditions as the directly engaged employees working alongside them;
4. strengthen bargaining power and consultation requirements for workers and unions, including through tougher legislative requirements for employers to consult with workers and trade unions for introducing major technological change, and tougher penalties for sham contracting; and
   
5. introducing a new government body and a coordinated plan to address changes to our workforce.

The committee was predominantly comprised of Labor senators, and its recommendations were generally opposed by a dissenting report released by the Liberal National Senators. The Coalition described the committee’s report as ‘missed opportunity’ and claimed they ‘simply turned the inquiry into a union directed Labor election campaign exercise.’

Fay Calderone is a partner at Hall and Willcox.