With the rise of the ‘gig economy’, the impacts of the Global Pandemic on employment rates and Australia’s industrial relations system has fallen short in the protection of those who are independently contracted by gig economy operators. These operators include common names such as Uber, Menulog, Deliveroo and the like. Menulog has stepped up and is trialling a pilot programme for its contractors to be engaged as employees. However, there are some advantages and disadvantages that accompany this potential impending permanent change.
Menulog is the first of its kind to trial something of this nature. However, it will be interesting to see how it pans out. There are some significant advantages for contractors converting to employees of Menulog. Of course, there are some disadvantages too.
So, what is the gig economy you ask? It is the rising epidemic that is consuming many workers in today’s society. Rather than people engaging in more permanent, full-time or part-time work, people are gravitating towards more flexible, casual and precarious jobs. This gig economy is predominantly made up of casual employees or contractors for companies such as Uber, Menulog and other new-age businesses that allow their contractors to basically work for themselves on their own terms, with the company acting as an intermediary between the contractor and the customer.
This is a stark contrast if we are to rewind to the 1960s where people would stay at the same workplace for many years, with most people only ever working for one or two employers. Society is gravitating towards the gig economy style as it provides many opportunities to be flexible and has that ‘work-life balance’ and it means that they do not have someone to boss them around, they can be their own boss.
There has however been some public discussion surrounding the protection of contractors working for these big companies. They aren’t afforded a minimum wage, they don’t have access to entitlements such as leave, and they usually have to have their own insurances in place. This has seen a large push for these giant companies to hire their drivers (and riders) as permanent employees as opposed to contractors.
Advantages and Disadvantages
There are several things to take into account when looking at whether it is more favourable to be an employee or contractor of a large company in the booming gig economy, especially in light of COVID-19. The unemployment rate is high and the unemployed are turning their minds to the possibilities associated with the gig economy. However, most large companies have fallen short in protecting their contractors as they are not obligated by law to provide this to them.
The advantages and disadvantages of being an employee of a business as opposed to a contractor are as follows:
|Covered by the Business’ Worker’s Compensation Insurance||Less flexibility in terms of working hours and availability|
|Superannuation benefits payable||Potentially restricts the ability to work for a mixture of apps as they may have previously done|
|Guaranteed minimum wage||Not necessarily going to make a large difference|
Although this programme is a major move by Menulog to break away from the precarious and insecure gig platform, we cannot get overly excited. It is only a trial and there are still many questions that remain unanswered. The most pressing being whether becoming an employee will seriously or significantly alter any of their current working conditions. In fact, there are arguments that it would not make much of an impact at all and could defer consumers from using the app as costs are expected to rise to subsidise the extra costs associated with engaging employees.
We will keep you in the loop as to how to programme goes and what this means for the future of the ‘gig economy’.
ABOUT KARENA NICHOLLS:
Karena is a Partner at Coutts and is the Head of our Injury Compensation (with extensive knowledge in personal injury) and Employment Law teams. She is passionate and dedicated to helping her clients understand their rights and obligations and advising them on the best course of action to achieve their desired outcomes. It is her practical and client-orientated approach that has attributed to her authentic reputation positioning her as a highly regarded compensation and employment lawyer.
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This blog is merely general and non-specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever to this blog, including all or any reliance on this blog or use or application of this blog by you.