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The recent deaths in of two food delivery riders, working for separate gig platforms has, again, brought into tragic focus one problem, of many, that a vulnerable worker faces when classified as an independent contractor, rather than as an employee.

An Uber Eats rider, an Indonesian national, and a Hungry Panda rider, a Chinese national, were both killed in separate road accidents late last month in Sydney, while undertaking ‘gigs’ for the respective platforms.

Both men had a wife and dependent children back in their respective home countries to which they were sending money.

Under the New South Wales workers’ compensation scheme, the dependants of a worker who dies in, or from, the performance of their work duties are entitled to a lump sum payment of $834,200, and weekly payments of $149.30 for each dependent child until the age of 16.

However Uber Eats and Hungry Panda both classify their riders as independent contractors, not employees. Consequently, neither man’s family is eligible for any form of payment worker’s compensation payout.

As The Guardian reports:

Under the insurance policy provided by Uber Eats, the dependants of a deliverer who dies while working are eligible for a maximum of a $400,000 lump sum, and potentially $5,000 for each spouse or dependant. 

………this was well below the NSW standard compensation, and it was not even clear from the Uber Eats contract whether (the rider’s) family would be eligible for the company’s insurance. 

This situation would not happen with an RCSA member or any law-abiding member of the recruitment industry.

Appropriate worker’s compensation coverage is required for recruitment agencies to operate in any labour-hire arrangement. The recruitment agency is legally the employer and as such is legally responsible for the occupational health, safety, and environment of each worker it supplies to an end-user client.

Across the Pacific, the issue of gig workers’ rights and entitlements is one that Californians will be voting on next month. Proposition 22 is a ballot initiative that would roll back minimum wage and other labour protections for app-based and other gig workers. Late last year, California passed Assembly Bill 5, which requires many gig companies to reclassify their workers as employees instead of independent contractors.

Under AB5, workers are entitled to the state or local hourly minimum wage and other protections that come with employee status, such as paid sick leave and unemployment insurance.

AB5 sets a precedent for how to protect workers’ rights as the nature of work changes. But a handful of gig companies, such as Uber and Lyft, have launched a $70 million-dollar campaign urging Californians to vote for Prop 22, which would gut many of the law’s protections.

Earlier this month US investigative news site ProPublica published a damning feature-length story about the employment practises of Arise Virtual Solutions, a gig economy platform that promotes work-from-home for customer service workers.

Like Uber drivers or TaskRabbit gofers, they are independent contractors. To get gigs, they first absorb substantial expense, paying for their own equipment and training, and then have fees deducted from every paycheck for the “use” of Arise’s “platform.” 

Arise has faced, and lost, legal challenges alleging that its arrangements with agents violate federal labor law and cheat workers of what they are rightfully owed. One judge called the arrangement an “elaborate construct” created by Arise to get around labor law.

Nevertheless Arise has been able to avoid altering its model in any significant way, aided in part by a 5-4 ruling from the Supreme Court, written by Trump appointee Neil Gorsuch. 

Arise charges both sides: the corporate clients, who often pay millions, and the network of workers, composed overwhelmingly of women and people of color.

Rigid workplace formulas often govern everything from length of calls to frequency of refunds. Deviate from these standards and an agent can lose her job. (ProPublica 2 October 2020) 

The lie of these workers being independent contractors has been exposed through various lawsuits former Arise agents have filed.

In one such filing, a former Arise contractor asserted that as an agent working exclusively on the account of communications giant AT&T her contract listed 25 performance measures that she had to meet. Failure to meet any one of these 25 requirements “shall be deemed a breach,” the contract said, allowing Arise to terminate her job.

How this type of arrangement is anything other than an employer-employee relationship seems beyond obvious.

Damningly, Arise does not engage agents who live in those US states that have tighter rules protecting employees, currently; California, Connecticut, Maryland, Massachusetts, New York, Oregon, and Wisconsin.

The issue of gig economy platforms and the classification of workers has been one of the core issues addressed by the Report of the Inquiry into the Victorian On-demand Workforce, (‘the Report’) chaired by former Fair Work Ombudsman; Natalie James. The report was publicly released in July this year.

The ‘work status’ of platform workers and the consequences that flow for the workers, businesses and the labour market, is the issue that sits at the heart of this Inquiry. 

Many ‘independent contractors’ are genuinely autonomous, self-employed workers who choose this way of working. But an increased number of work arrangements are ‘borderline’. 

The Inquiry’s National Survey found that vulnerable cohorts – young and migrant workers – are securing work via platforms. Some platform workers are low skilled and have little or no leverage when it comes to the platform or the labour market more generally. 

It is the platforms, not the workers, that determine the work arrangements. 

Platforms generally retain a high degree of discretion and control, with no independent oversight of their arrangements or conduct. 

(The Chairperson’s foreword, pages 1 & 2) 

The Report makes 20 recommendations. The deadline for providing written submissions with respect to some, or all, of the recommendations, was Tuesday last week.

The Victorian Government has stated it will now consider all feedback received before responding to the Inquiry’s Report at an unstated future date.

A shot across the bow was fired earlier this week when a rider commenced legal action against Deliveroo Australia in a Fair Work Commission unfair dismissal case.

The rider, Diego Franco, was sacked by Deliveroo in April, after three years working as a delivery rider. The Transport Workers Union alleges that Franco was sacked because of slow deliveries, but was not given any specific examples of where or when this problem arose, or any warning to improve his performance.

Of the twenty recommendations made in the Report the most urgent demand is clearly for Recommendation 10:

The Inquiry recommends that a fit-for-purpose body provides a mechanism for accessible, fast resolution of work status that:

(a) produces authoritative and binding determinations for all parties

(b) is available to all workers and businesses

Until the status of a worker is able to be determined easily and quickly everything else remains secondary, especially while the economy continues to deal with the economic and health shock of COVID-19.

At the heart of this efficient resolution of worker status is the playing field for organisations that remains unfair.

Those companies that do the right thing by their workers, and the community more broadly, through rigorous compliance with workplace regulations, are at a disadvantage compared to their competitors who deliberately structure their worker relationships to avoid existing employer-employee obligations.

As the Report states:

Our current system is underpinned by a great unresolved question about the status of some workers. 

This uncertainty undermines workers’ choice, fair competition, and the integrity of the regulatory system. It also undermines the capacity of businesses to operate in clear compliance with the law and arguably permits unfair competition. (The Chairperson’s foreword, pages 1 & 2)

RCSA members, and most of the recruitment industry, operate in compliance with workplace law, and when they are found not to be so, the evidence shows that they quickly fix any issues.

Gig platforms, providing largely the same service, are doing everything they can, all over the world, to avoid being regulated in the same way. When, mostly, they should be.

This is an issue that needs to be resolved; now.

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2 Comments

  1. Daniel Carter on 22/10/2020 at 11:54 am

    The issue about worker status (sham contracting) is always framed around workers rights but there are far more issues present. Allowing one participant in an industry to have a lower cost workforce, either by consent or inaction, is uncompetitive.

    Take UBER EATS for example – they have such a low cost model due to having no employees but plenty of workers that it stops an Australian firm opening that will pay their workers at least the minimum wage and workplace entitlements.

    I no longer work in recruitment (15 years in – thanks for asking) but in my current industry I am competing with firms that import overseas workers here on sham visas and pay them way under the minimum wage. It is not only bad for the exploited Asian and Indian workers but it also means that I can’t create jobs for Australians because these firms are able to deliver at a price below our costs.
    It is not a level playing field and Australian firms and workers suffer.

  2. James Purtell on 22/10/2020 at 7:44 pm

    Firstly, Ross, thanks for writing about this matter and bringing more attention to it.

    Agencies get a lot of flack generally but the fact is, law-abiding members of the RCSA and APSCO or direct employers would not have left workers in this situation. Whereas, the Ubers and temporary staff ‘marketplaces’ of the market are borderline law-abiding but operating with appalling ethics. It’s up to all of us (consumers) to be aware that our purchasing decisions have consequences and encourage behaviours that leave the families of these drivers and others destitute. They also penalise employers who go to the expense of treating people lawfully and ethically.

    In this country we’ve decided over many years that, as a society, both users of the platform and the gig-workers themselves aren’t responsible for what they’re signing up for. So, in Australia anyway, the Law needs to help protect them like it does with their work with agencies and direct employers.

    The biggest farce/joke/contradiction of all is that, for the most part, the Union and the side of politics you’d expect to support workers like this have absolved themselves and does nothing or little to lobby against this type of work. It’s a disgrace.

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