What is the “gig economy” and where is it headed?

While it may sound like an economy based on live music at your favourite local over the weekend, the “gig economy” is where individuals provide services to consumers for a fee via digital platforms or marketplace. It has also been described as the platform or app economy, the sharing economy or the on-demand workforce.

 Most of us will have used such a service and found that it provides us with great choice and excellent flexibility in our daily life. Some examples include:

 ·         Ride sharing – Uber is the classic example

·         Delivery services – think DoorDash

·         Professional services – this can include graphic design or web development

 From an employment perspective, individuals working in the gig economy will often be classified as independent contractors. That is, they have a commercial relationship with the company that hosts the digital platform or the ultimate consumer that receives their services. However, this classification is not always correct. As a result, if the platform engages an individual as an independent contractor when they are actually employees they could be liable for penalties under the Fair Work Act, and also have to backpay the person all relevant entitlements. For more information, click here

 There is no question that gig work has transformed not only the workplace but the way that we do things and receive services. It has challenged the idea of traditional employment and provided many people with a freedom that they previously only dreamt about. However, it is also seen to have reduced entitlements and, in some cases, drastically reduced the rights and protections of workers.

 This has caused the new federal government to begin work on laws to boost work security for the millions of Australian workers that are engaged in the gig economy. It has announced consultation on these new laws and it appears that minimum wages, job security and better conditions could be coming for those Australian workers. See here

 So if you operate a platform or are a gig worker, you should pay attention in this space as it is about to be impacted by real change.

 Whether you are an employer or a worker, if you have any issues in relation to the status of “independent contractor” within the gig economy, please feel free to call James Burke or Adam Stencel on (08) 8941 6355 or email james@bowden-mccormack.com.au or adam@bowden-mccormack.com.au.