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Hadfield, Laura --- "The hidden cost of the gig economy: Rights for injured gig workers" [2022] PrecedentAULA 65; (2022) 173 Precedent 30

THE HIDDEN COST OF THE GIG ECONOMY

RIGHTS FOR INJURED GIG WORKERS

By Laura Hadfield

In 2020, in the space of two months, five food delivery drivers died on Australian roads.^[1] Gig workers like these are at high risk of suffering injury or worse while performing their work duties, but as independent contractors they enjoy none of the rights of employees doing similar work. This article looks at what is being done by federal and state governments, and by intermediary companies and insurers, to protect gig workers.

WHAT IS THE GIG ECONOMY?

There is no legislated definition of ‘gig economy’ in Australia, but it generally describes an arrangement where an intermediary, or platform, uses mobile apps or websites to connect individuals who are providing goods and/or services with consumers.^[2] These platforms maintain a level of control over aspects of the work such as price and service standards, and are also responsible for selecting and managing the workforce. Payment is made by the consumer to the service provider via the platform. Popular platforms include ride sharing services (for example, Uber), food delivery services (for example, Deliveroo), and personal services (for example, Airtasker).

The gig economy has been growing for years but it boomed during the COVID-19 pandemic, when on-demand delivery services became essential to businesses such as cafés and restaurants that were restricted to the sale of takeaway food during lockdowns.

The gig economy can offer workers flexibility that few other industries can. Gig workers have the opportunity to work when and how often they want, and can balance work with other commitments, such as study or family responsibilities. Some use the gig economy as their main income source, whereas others use it to supplement their income. Many gig workers in Australia are migrants or come from other vulnerable cohorts who cannot easily find employment in other industries.

While this flexibility may appear to be positive, gig work often requires individuals to work long hours for little pay. Additionally, the way in which gig work is structured allows platforms to shift costs and risks to gig workers, which enables exploitation.

ACCESS TO WORKERS COMPENSATION

Gig workers are generally not considered employees of the platforms they work for. This leaves them to be classified as independent contractors and, as such, they are not entitled to the minimum wage, leave entitlements, superannuation benefits, or other employee rights, including access to workers compensation schemes.

Access to these schemes would provide injured gig workers with better access to treatment and return to work assistance. This would result in better outcomes for the workers, reduce pressure on the public health system and benefit the economy as a whole.

At present, workers compensation schemes across Australia consider a range of factors to determine if an injured person is considered a ‘worker’ for the purpose of accessing workers compensation insurance, including:

• control over whether to take on work;

• ability to choose working hours;

• provision of tools and equipment;

• arrangements for payment of income;

• responsibility for the cost of fixing any faults or repairing damage; and

• whether work can be delegated or is required to be performed personally by the worker.^[3]

As the gig economy has evolved, platforms not only continue to control key aspects, such as price, standards, and the conduct of gig workers, but new digital technologies have also enabled platforms to assert control through the use of algorithms, including the ability to select and manage the workforce based upon performance ratings.

Despite this level of control by platforms, gig workers are generally still considered independent contractors rather than employees, and no state scheme currently provides workers compensation coverage that specifically includes gig workers.

THE CASE LAW

While no Australian decisions have been handed down that relate specifically to gig workers and workers compensation entitlements, the Fair Work Commission (FWC) has considered the question of whether gig workers should be categorised as ‘employees’ on a number of occasions, with differing results.

Kaseris v Rasier Pacific V.O.F^[4]

This 2017 case dealt with an application for unfair dismissal by an Uber driver after his agreement was terminated for failure to meet Uber’s ratings standards. The FWC found that the applicant was not an employee for the purpose of unfair dismissal protection under the Fair Work Act 2009 (Cth).

The FWC found that the fundamental elements of an employment relationship did not exist in the service agreement between Uber and the applicant, as he was free to perform as much or as little work as he liked, when, where and for whom he saw fit, and he was not performing any contractual obligation to Uber. Further, the FWC found that rather than being paid by Uber, the applicant was charged a service fee based upon a percentage of fees paid by the consumer, and this was inconsistent with an employer-employee relationship.^[5]

Klooger v Foodora Australia Pty Ltd^[6]

By contrast, in this 2018 case the FWC found that, despite the applicant having entered into an ‘Independent Contractor Agreement’ with Foodora, he was in fact an employee for the purpose of his unfair dismissal application.

The FWC found that Foodora’s capacity to control the manner in which the applicant performed work, through metrics used to assess his performance, meant that, as a matter of practical reality, the applicant was not free to pick and choose when and where to work or how to complete deliveries.^[7] Foodora was found to have presented the applicant to the world at large as an ‘emanation’ of its business from the wording of its website and the expectation that the applicant would wear Foodora-branded attire and use the company’s equipment.^[8]

The FWC noted that the gig economy had considerable potential to limit legal rights of gig workers and stated that, as a matter of public interest, these arrangements should be subject to stringent scrutiny and any characterisation of the relationship that would avoid such violation should be preferred.^[9] However, the ruling was based upon the particular operations of Foodora and sets no precedent with respect to other platforms. Foodora has since ceased operations in Australia.

Gupta v Portier Pacific Pty Ltd^[10]

In 2019, the FWC rejected an unfair dismissal application by an Uber Eats driver whose access to the Uber Eats app was cut off for failure to meet delivery time standards. The decision was upheld by the Full Bench of the FWC on appeal.^[11]

The Full Bench rejected Uber Eats’ argument that the appellant was conducting her own business on the basis that this was inconsistent with Uber Eats’ control over the appellant’s pay, ban on delegation of work, control over payments from consumers, and enforced delivery standards through a rating system. Despite this, the Full Bench also ruled that the appellant did not meet the criteria of ‘employee’, stating that the arrangement lacked the ‘essential hallmarks of an employment relationship’. In particular, drivers could log on and off the app at will, work for multiple delivery outlets, and had control over whether or not they accepted deliveries.^[12]

This matter was further appealed to the Federal Court in what would have been the Court’s first ruling on this issue. However, the matter was settled for a substantial sum before the Court had the opportunity to rule on the case.^[13]

Franco v Deliveroo Australia Pty Ltd^[14]

Most recently, in 2021, there was a first instance decision by the FWC in which the applicant was found to be an employee for the purpose of his unfair dismissal application. The FWC analysed the workplace controls that a platform could exercise over gig workers and looked at the ‘overall picture’ of the work relationship, ruling that the level of control exercised by Deliveroo over the applicant, along with the general capacity of Deliveroo to exercise control, meant that the economic autonomy of gig workers was significantly constrained, supporting the existence of employment rather than independent contracting.^[15]

This case was successfully appealed to the Full Bench of the FWC,^[16] whose decision saw the pendulum swing again against rights for gig workers. The intervening case of CFMMEU v Personnel Contracting Pty Ltd^[17] meant the Full Bench had to focus on the wording of the relevant service agreement, which provided Deliveroo with little control over gig workers. It was noted in the decision that, had the Full Bench been permitted to focus instead on the practical reality of the control actually exercised by Deliveroo, this would have tipped the balance in favour of employment.^[18]

So far, the debate as to whether gig workers should universally be classed as employees has been inconclusive and turns on the individual facts and service agreement in each case. It is clear that the existing legislative framework creates uncertainty around the gig economy and reform will be necessary if we wish to provide gig workers with the same protections that other classes of workers enjoy.

Wei v Hungry Panda Au Pty Ltd & Ors^[19]

This was a claim made by the family of Xiaojun Chen, who died after being hit by a bus while delivering food for Hungry Panda. Workers compensation benefits were initially denied to the family by icare, resulting in a claim to the NSW Personal Injury Commission (NSWPIC). The claim was resolved by consent after icare’s insurance agent, Employers Mutual Limited (EML), ultimately admitted that Mr Chen was employed by Hungry Panda when he died, meaning that his family is now entitled to benefits.^[20]

This is the first reported case where a gig worker has been considered a ‘worker’ for the purpose of access to workers compensation benefits; however, in the absence of a ruling, it is unknown whether other insurers will follow in the footsteps of EML when assessing similar claims.

We may soon have further guidance on this issue as proceedings have recently been launched in the NSWPIC by the families of Uber Eats drivers Bijoy Paul and Dede Fredy, who lost their lives while completing deliveries in 2020. Both families’ claims for workers compensation benefits have previously been rejected by icare.^[21]

LEGISLATIVE REFORMS

Legislative reform would remove the uncertainty currently faced by both gig workers and platforms when entering into agreements.

With the responsibility for industrial relations resting firmly with the Commonwealth, state governments have limited ability to legislate to protect the rights of the gig workers. However, one area where the states could act would be extending the entitlements to workers compensation by broadening the definition of ‘worker’ in their respective legislation. While such reforms have been canvassed in many jurisdictions,^[22] no jurisdiction has made changes so far.

Fundamentally, reform to gig worker rights requires national attention. One option for the Commonwealth is to amend the legal definition of ‘employee’ in the Fair Work Act to include gig workers; however, a simple definition change could ultimately be circumvented by platforms as they devise ever more creative arrangements with the individuals who provide their services.

Another option is for the Commonwealth to create a new legal category of ‘worker’ that includes gig workers. This could be similar to the approach taken in relation to Australia’s work health and safety laws, which have a broad definition of ‘worker’ and ‘workplace’ that includes not only direct employees but also contractors and sub-contractors.^[23]

As part of Labor’s ‘Secure Australian Jobs Plan’, the Albanese Government is proposing to provide a ‘better deal for gig workers’ by extending the powers of the FWC to include ‘employee-like’ forms of work, allowing it to better protect gig workers from exploitation and dangerous working conditions.^[24] This proposal would allow the FWC to make orders for minimum standards relating to gig work and ensure that this vulnerable cohort has access to entitlements and protections currently denied to them.

This approach would likely entitle gig workers to minimum pay rates and employment conditions but would not necessarily include gig workers in state workers compensation schemes. Further reform of the states’ workers compensation legislation will likely also be required.

WHAT ARE THE PLATFORMS DOING?

There is no doubt there is community support for change in the gig economy to provide more protections for gig workers, and in recent years the platforms themselves have started to respond.

Menulog

In 2021, the food ordering and delivery platform, Menulog, declared its intention to break with the gig platform business model and engage some of its couriers as employees rather than independent contractors.^[25] However, Australia’s award system was cited as a potential barrier,^[26] with existing awards lacking flexibility in relation to minimum engagement periods (which is so central to the gig economy). As such, Menulog is pushing for the creation of a new On Demand Delivery Industry Award.^[27]

While Menulog’s employment model would remove any uncertainty over access to workers compensation, if the platform is ultimately successful in creating a new award that erodes fundamental principles such as minimum hours and payments, gig workers could find that employment doesn’t leave them much better off than they were before.

Doordash and Uber

Agreements have recently been reached between the Transport Workers’ Union and Doordash,^[28] as well as Uber,^[29] to create frameworks for gig workers. The key objectives of both agreements are to provide transparency to gig workers regarding earnings; to provide proper access to dispute resolution; to allow workers to organise and be represented by a union; and to enforce industry standards.

It is noteworthy that these agreements fall short of categorising gig workers as employees or another category of ‘worker’ that would provide protection under the workers compensation schemes.

With the exception of Menulog, it appears that platforms are trying to get out in front of any legislative reform by making concessions with respect to pay and conditions while attempting to ensure that gig workers remain ‘independent contractors’ and do not gain entitlement to full employee rights. Crucially, if gig workers remain independent contractors, there is no entitlement to workers compensation benefits and no requirement for platforms to pay the associated premiums.

WHAT COULD BE THE UNINTENDED OUTCOMES OF REFORM?

While seeking to include gig workers in workers compensation schemes has numerous and obvious benefits to the workers, there may also be unintended outcomes.

If the approach taken is to create a new category of worker for gig workers, this could create a two-tier system of worker protections. Companies may seek to alter their employment arrangements to misclassify employees as gig workers in order to limit employment protections for existing workers. This risk could be minimised by careful consideration in the drafting of definitions around ‘gig workers’, ‘platforms’ and ‘intermediaries’, and/or by affording gig workers most or all of the current rights available to employees.

By including gig workers in workers compensation schemes, platforms would be required to pay premiums which could substantially increase the operational costs of the platforms. The additional cost would likely be passed to the consumer, which may make the services provided by the platforms less attractive. Many restaurants now provide delivery services and in-app ordering, and many taxi companies have developed technologies to rival the likes of Uber in ease of use and consumer safety. With increased fees passed on from platforms to consumers, there will be less incentive for consumers to participate in the gig economy. This could result in less work being available for gig workers.

An employee-like relationship between the gig worker and platform could also result in more control being exerted on the worker by the platform and less of the flexibility that is so attractive to many of those working in the gig economy.

It may also be argued that the inclusion of gig workers in workers compensation schemes would negatively impact the viability of the schemes themselves. However, while the gig economy has boomed in recent years; there are estimated to be around 250,000 gig workers in Australia,^[30] and they therefore still make up a small proportion of the total Australian workforce. It is hoped that the collection of correctly calculated premiums from the platforms will offset the increased cost of claims.

CONCLUSION

In a society with an ever-increasing appetite for on-demand services, and in a world of evolving technological advances, it is important to ensure that the changes in the way services are provided do not fundamentally erode long and hard fought for workers’ rights.

New technology can be used to increase freedom and flexibility for gig workers but should not deprive them of the rights and benefits enjoyed by other workers. The questions about the gig economy are part of a wider social conversation about technological change and the impact on our society.

Whatever happens next, the future of the gig economy is looking very different in a world emerging from the pandemic.

Laura Hadfield is an Associate in Maurice Blackburn’s Brisbane office. She is dual qualified in the UK and Australia and has been practising in plaintiff personal injuries law since 2007. EMAIL lhadfield@mauriceblackburn.com.au.

^[1] N Zhou, ‘Australia’s delivery deaths: The riders who never made it and the families left behind’, The Guardian (21 November 2020) <https://www.theguardian.com/business/2020/nov/21/australias-delivery-deaths-the-riders-who-never-made-it-and-the-families-left-behind>.

^[2] Australian Government, Fair Work Ombudsman, Gig economy <https://www.fairwork.gov.au/find-help-for/independent-contractors/gig-economy>.

^[3] Australian Institute of Health & Safety, ‘Do gig economy workers have access to workers’ compensation?’ (31 October 2021) <https://www.aihs.org.au/news-and-publications/news/do-gig-economy-workers-have-access-workers%E2%80%99-compensation>. For definitions of ‘worker’ in the different jurisdictions, see: Safe Work Australia, Key Workers’ Compensation Information, Australia (2014) <https://www.safeworkaustralia.gov.au/system/files/documents/1702/key-workers-compensation-information-2014.pdf>; Workers’ Compensation and Rehabilitation Act 2003 (Qld), s11; Workplace Injury Management and Workers’ Compensation Act 1998 (NSW), sch 1; Worksafe Victoria, Claims Manual <https://www1.worksafe.vic.gov.au/vwa/claimsmanual/Claims_Manual/2-claims-management/2-1-workers-and-injuries/2-1-1-define-a-worker.htm>; Return to Work Act 2014 (SA), s4; Workers’ Compensation and Injury Management Act 1981 (WA), s5; Return to Work Act 1986 (NT), s3B; Workers’ Rehabilitation and Compensation Act 1988 (TAS), s3; Workers’ Compensation Act 1951 (ACT), chs 3.

^[4] [2017] FWC 6610.

^[5] Ibid, [51].

^[6] [2018] FWC 6836.

^[7] Ibid, [73]–[74].

^[8] Ibid, [89].

^[9] Ibid, [106].

^[10] [2019] FWC 5008.

^[11] Gupta v Portier Pacific Pty Ltd [2020] FWCFB 1698.

^[12] Ibid, [69]–[70].

^[13] C Prosser, ‘Uber settles out of court with drive who alleged unfair dismissal for late delivery’, ABC (30 December 2020) <https://www.abc.net.au/news/2020-12-30/uber-settles-with-delivery-driver-who-claimed-unfair-dismissal/13021798>.

^[14] [2021] FWC 2818.

^[15] Ibid, [139].

^[16] [2022] FWCFB 156.

^[17] [2022] HCA 1.

^[18] Deliveroo Australia Pty Ltd v Diego Franco [2022] FWCFB 156, [53]–[54].

^[19] [2022] NSWPIC 264.

^[20] Ibid, [1].

^[21] C McLeod, ‘UberEats riders’ families fight for compensation after road deaths’, news.com.au (11 August 2022) <https://www.news.com.au/finance/work/at-work/uber-eats-riders-families-fighting-for-compensation-after-road-deaths/news-story/c77b4db75ddf4a2edb735926cacea07b>.

^[22] Legislative Council, Impact of technological change on the future of work and workers in NSW (Discussion paper, October 2020) <https://www.parliament.nsw.gov.au/lcdocs/other/13673/Discussion%20Paper.pdf>; Office of Industrial Relations, Consultation Regulatory Impact Statement: Workers’ compensation entitlements for workers in the gig economy and the taxi and limousine industry in Qld (2019) <https://www.worksafe.qld.gov.au/__data/assets/pdf_file/0026/19277/ris-gig-taxi-limo-industries.pdf>; Engage Victoria, Inquiry into the Victorian On-Demand Workforce (closed 18 February 2022) <https://engage.vic.gov.au/inquiry-on-demand-workforce>.

^[23] Work Health and Safety Act 2011 (Cth), s7.

^[24] Labor, Labor’s Secure Australian Jobs Plan <https://www.alp.org.au/policies/secure-australian-jobs-plan>.

^[25] Menulog, ‘Menulog announces shift towards employment model for food couriers in Australia’ (12 April 2021) <https://www.menulog.com.au/explore/media-centre/articles/employment-model-for-food-couriers>.

^[26] N Zhou, ‘Menulog pushes ahead with plans for drivers to become employees under new award’. The Guardian (17 May 2021) <https://www.theguardian.com/australia-news/2021/may/17/menulog-pushes-ahead-with-plans-for-drivers-to-become-employees-under-new-award>.

^[27] Application to the FWC dated 24 June 2021: <https://www.fwc.gov.au/hearings-decisions/major-cases/proposed-demand-delivery-services-award-menulog>.

^[28] Doordash, ‘Doordash and Transport Workers Union sign charter of principles to ensure safety and fairness for gig workers in Australia’ (10 May 2022) <https://doordash.news/australia/doordash-and-transport-workers-union-sign-charter-of-principles-to-ensure-safety-and-fairness-for-gig-workers-in-australia/>.

^[29] Uber, ‘Uber and TWU strike deal, focused on flexibility and minimum standards’ (28 June 2022) <https://www.uber.com/en-AU/blog/uber-twu-deal/>.

^[30] Actuaries Institute, The Rise of the Gig Economy and its Impact on the Australian Workforce (Green Paper, December 2020) <https://actuaries.asn.au/Library/Miscellaneous/2020/GPGIGECONOMYWEB.pdf>.