Showdown over gig economy as Labor introduces tough new wage laws

Millions of consumers will be asked to accept tough new rules to protect food delivery drivers and other “gig economy” workers despite industry claims the changes will push up prices.

The national workplace regulator will gain full power to lift wages and set conditions for the workers in sectors ranging from food to healthcare and disability services.

Employment Minister Tony Burke will introduce the new draft legislation into parliament next week. Credit: James Brickwood

The new approach breaks with years of practice by creating a new class of “employee-like” workers who will gain the protection of the Fair Work Commission on minimum standards.

But it also widens a fight with employers over the next tranche of workplace reform when the Business Council of Australia and other peak groups are saying the changes will increase costs.

Uber has warned against sweeping changes to workplace laws by claiming “prices would likely rise” under new rules, setting up a dispute over the draft bill when it is put to parliament next week.

Employment Minister Tony Burke will argue in a speech to the National Press Club on Thursday that workers “shouldn’t have to rely on tips” when existing laws treat rideshare and food delivery workers as contractors with few rights.

Fair Work would gain the power to set base pay, penalty rates and superannuation conditions under the laws, as well as deciding insurance for hundreds of thousands of workers.

The government estimates that at least 13 gig workers have died in accidents in the past few years, triggering claims that low pay forces drivers and riders to take risks, while their uncertain employment status leaves them uninsured.

Fair Work would also hear disputes if a worker was “deactivated” by an employer – removed from the online platform – in a way he or she believed was unfair.

Uber said in June that Australians paid $3.8 billion to its drivers and delivery people last year, with about 150,000 workers sharing that revenue, and it accepted some arguments for change.

The company backed a “universal safety net of entitlements” including minimum pay, personal accident insurance covered by the digital platforms and appeal rights for workers who lost their jobs.

Burke is going further by planning tough enforcement by the federal regulator rather than assuming the digital platforms will sign up to a voluntary scheme.

Uber has warned of higher prices for about 8 million Australians who use the digital platforms, although the detail of the reform will not be known until the draft law is put to parliament next week.

“If reforms are inadequate and fail to reflect the modern realities of gig work, there could be significant impact to jobs, to consumer availability and to businesses,” Uber said in June.

The new legislation plans to set minimum wage and condition standards for “employee-like” workers in the gig economy. Credit: AP, Alamy

Burke will outline the changes in his speech, identifying the “care economy” as a key target and making it clear the laws go beyond food delivery.

The government is concerned about workers in aged care, the National Disability Insurance Scheme and other services where low-paid contract shifts could undercut full-time employees.

“At the moment if you’re classed as an employee, you have a whole lot of rights such as sick leave, annual leave and minimum rates of pay,” Burke said.

“If not, all those rights fall off a cliff. What we want to do is turn the cliff into a ramp. A whole lot of gig workers like the flexibility from using this technology and that won’t change under our laws.

“But just because someone is working in the gig economy shouldn’t mean that they end up being paid less than they would if they’d been an employee. Australia is a country where you shouldn’t have to rely on tips just to get by.”

A key concern among employers is that it will be difficult to define an “employee-like” worker and this will extend the changes to sectors beyond the gig economy and impose higher costs across industries.

Burke is promising the draft law will not give Fair Work the power to set overtime rates, rostering arrangements and terms that would change how a worker is engaged.

Another pledge is that the changes will “in no way” affect independent contractors who have a high-degree of control and autonomy over their work, such as skilled tradespeople.

Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter here.