New Protections for Gig Economy Workers: What Employers Need to Know
Updated: Sep 26
As of August 26, 2024, new laws are coming into effect to protect the interests of certain workers in the gig economy, particularly those in the road transport industry. If your business engages independent contractors in these sectors, here’s what you need to know.
Who Will Be Impacted?
These new regulations primarily affect independent contractors classified as:
‘Employee-like workers’: Contractors performing digital platform work in the gig economy.
Road transport industry contractors: Individuals working within the road transport sector.
These contractors are now considered ‘regulated workers,’ and businesses engaging them will be classified as ‘regulated businesses.’ Additionally, the new laws will impact any independent contractors involved in a ‘road transport contractual chain’ and other individuals within that chain.
Eligibility Requirements
To be classified as a regulated worker, contractors must meet certain criteria:
They must be a party to a services contract, either individually or as part of a corporate entity, trust, or partnership.
They should perform the majority of the work under this contract.
They must not perform any work under the contract as an employee.
These changes apply only where there is a ‘constitutional connection,’ such as when work is performed under a contract with a constitutional corporation.
Introduction of ‘Employee-Like Workers’
Starting August 26, 2024, or earlier if determined by the government, the Fair Work Commission will gain new powers to cover certain independent contractors in the gig economy, identified as ‘employee-like workers.’ To meet this classification, a contractor must satisfy at least two of the following criteria:
They have low bargaining power in contract negotiations.
They are paid at or below the rate of an employee performing similar work.
They have limited authority over how their work is performed.
Any other characteristics prescribed by future regulations.
Changes for Road Transport Industry Contractors
For those in the road transport industry, new rules will also take effect on August 26, 2024. Contractors in this sector, termed ‘regulated road transport contractors,’ will be subject to specific regulations, particularly concerning the structure of contractual chains.
A road transport contractual chain involves multiple contracts or arrangements between businesses and workers performing the same task, like delivering freight. The new laws extend the Commission’s powers to everyone involved in these chains, including contractors and ‘employee-like workers.’
Setting Minimum Standards
The Fair Work Commission will have the authority to set minimum standards for ‘employee-like workers’ and road transport contractors through:
Minimum standards orders: Legally binding and enforceable with penalties for non-compliance.
Minimum standards guidelines: Non-binding but still influential.
These standards may cover aspects such as payment, deductions, and insurance, while additional guidelines might address matters like payment terms, fuel levies, and contract terminations.
Collective Bargaining Rights
The new laws also expand collective bargaining rights for ‘employee-like workers’ and regulated road transport contractors. These workers can now enter into collective agreements with digital platform operators or road transport businesses, setting terms and conditions much like enterprise agreements.
Unfair Deactivation or Termination
From August 26, 2024, the Fair Work Commission will handle disputes regarding the unfair deactivation of ‘employee-like workers’ from digital platforms or the termination of road transport contractors’ contracts. However, contractors earning above a certain income threshold won’t be eligible to apply.
Rights of Workplace Delegates
Regulated workers will gain the right to be represented by workplace delegates, who can advocate for their industrial interests. Regulated businesses will be prohibited from taking adverse actions against these delegates.
Advisory Groups and Resources
To support the implementation of these changes, new advisory groups will be established, including:
Regulated Worker User Group: To connect with and inform regulated workers and businesses.
Expert Panel and Road Transport Advisory Group: To advise on and manage matters related to the road transport industry.
What Employers Should Do Next
Review your contracts: Ensure they comply with the new definitions and standards.
Prepare for collective bargaining: Understand how these changes might affect your negotiations with contractors.
Stay informed: Keep up to date with the Fair Work Commission’s guidelines and minimum standards orders.
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