What are Australia’s new gig economy rules, and how do they apply?
Major changes to Australia’s workplace landscape kicked in Monday, covering workers in the gig economy and the digital platforms that secure their labour.
Major changes to Australia’s workplace landscape kicked in Monday, covering workers in the gig economy and the digital platforms that secure their labour.
Here’s what workers engaged in the gig economy need to know.
What is changing?
Gig economy platforms, like rideshare operators and food delivery startups, have challenged traditional notions of employment and contract work.
Unlike employees, who complete work on an ongoing basis for set entitlements, and independent contractors, who work on discrete projects and miss out on sick leave and superannuation contributions, gig economy workers sit somewhere in the middle.
At least, that is the view now enforced by the Fair Work Commission.
It has been empowered to enact minimum standards orders for a new category of “employee-like” worker.
From August 26, 2024, the FWC is empowered to make legally-binding minimum standards orders, or non-binding guidelines, covering certain regulated workers and businesses.
Those standards orders and guidelines can cover a wide swathe of factors, including but not limited to:
- Payment terms,
- Penalty rates,
- Payment for time between gigs,
- Minumum periods of engagement on a gig platform,
- Eligible deductions,
- Insurance,
- Consultation with workers, and
- Rights for workers’ delegates.
In addition, regulated workers will gain the power to challenge “unfair” deactivation and termination by a gig economy platform.
And the FWC now has the power to hear applications for collective agreements, proposed either by a digital platform or a union representing gig workers.
When do those powers kick in?
Although August 26 is the nominal starting point, some of the FWC’s decisions will take time to kick in.
Before a minimum standards order kicks in, the FWC must first:
- Receive an application,
- Publish a notice of intent and draft order,
- Genuinely engage with parties covered by proposed minimum standards order, and
- Consider submissions in reply.
Workers hoping to challenge an “unfair” dismissal or termination from a gig economy platform must work on one platform for at least 6 months from August 26, 2024.
This means the earliest application won’t arrive until February 26, 2025.
Interested parties can assess the FWC site for further insight.
What about independent contractors?
With the creation of the employee-like regime comes changes for independent contractors, intended to delineate them from other types of workers while granting new protections.
The first key change: there is a new holistic test to determine who is a contractor and who is an employee, similar to the ‘whole of relationship’ test now being used to determine who is and who is not a casual employee.
The measure is intended to protect low-paid contractors from being exploited by their clients.
It will generally cover constitutionally-covered businesses: your Pty Ltds, foreign corporations, Commonwealth authorities, and bodies registered in a territory or Commonwealth jurisdiction, for instance.
Crucially, the Fair Work Ombudsman said this definition won’t apply to state-referred workers and workplaces: this includes many sole traders and partnerships.
You can read more about the breakdown on the Fair Work Ombudsman site.
To recognise the fact many independent contractors like their working arrangements, high-paid contractors can opt out of the ‘whole of relationship’ test.
As of July 1, 2024, that income threshold is $175,000.
And, to further shield independent contractors, they now have new powers to challenge unfair contract terms.
The FWC is now empowered to determine if a term in a services contract is unfair, and make orders to set aside, amend or change all or part of the contract.
Contractors must have entered into the contract on or after August 26 to take advantage of the new powers.
Contractors above the high-income threshold listed above can’t apply to amend an unfair contract term.
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