Industrial relations need reform. Australia has inherited a system that served us well in the past, but which has not been adapted to the internet and what has become the gig economy. Today, many people work in the gig economy, where they are paid for small jobs done on demand, often for very low rates of pay. Examples of businesses using this model include Uber, UberEats, Upwork, and many more. 

The dramatic increase in these types of jobs creates challenges for businesses and regulators. If you are a business in today’s world wanting a task completed, there are basically three options:

1. Full or part-time employees— This is the traditional system designed for long term employment. This system offers the highest level of security for long term employees but is inflexible for employers. 

2. Casual employees— This offers increased flexibility for employers, with reasonable compensation for employees.   

3. Contractors (including gig economy workers)— If workers are employed as a contractor, they are treated as running their own business. Consequently, there are very few controls placed on the hours worked, the amount paid, or the conditions under which they work. 

These classifications have worked well in the past, but currently create problems for business workers and business owners. For example, full-time, part-time, and casual workers have a number of restrictions placed on their employment. These conditions usually work to protect the employee from exploitation, but sometimes can be counterproductive. For example, a common restriction is a 3-hour minimum work period. This works well in retail to protect employees from unreasonably short shifts but can be an obstacle in some other kinds of work. 

I used to run a tutoring business that sent tutors to the student's home, usually for one hour sessions. If I were to employ someone rather than hire a contractor, I would need to pay minimum wage for the full three hours. This is obviously impractical and consequently, even if I wanted to choose a different system, I’m forced to take these workers on as contractors. 

Contracting worked well for my tutors, as it allowed them to be independent, flexible, and choose their own hours, and the hourly rate accounted for travelling and the fact that they were responsible for all their own business expenses. But in some situations, this system can become exploitative. When workers are treated as running an independent business, there are no protections on minimum wage, no protections on working conditions, and no job security. 

The lack of minimum wage can lead to an unrestricted race to the bottom. Employers in a non-unionised industry have significantly higher bargaining power than employees, resulting in a strong downward pressure on pay. I have spoken to tutors within the last few years who have been paid as little as $20 for an hour session of tutoring, which also includes unpaid travel, prep, and admin. 

For many people, the gig economy is the reality of work. These people are your drivers, cleaners, and tutors, and we need to ensure that they get a fair go. The current system denies these workers reasonable wages and conditions. We in the Common Good believe this is not acceptable. Workers must have fair work, fair pay, and businesses wanting to provide reasonable conditions need to be able to compete on a level playing field. 

This is a complicated problem to fix. One suggestion that may help is creating a new category of employment such as an “Independent Worker”. If done right, this would allow workers to engage in newer forms of labour that are genuinely profitable, but provide them with a minimum standard of pay and appropriate protection. 

Our economy has irreversibly changed and we must adapt to it. The exploitation must end.