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Companies like Uber and Airtasker have transformed the so-called ‘gig economy’ by hiring thousands of workers as independent contractors, rather than employees. Today, journalist Kieran Pender on the landmark high court decision, and the future of work in Australia.

The High Court case that could change your job

Read Transcript

Companies like Uber and Airtasker have transformed the so-called ‘gig economy’ by hiring thousands of workers as independent contractors, rather than employees.

But this practice has a downside - workers aren’t guaranteed basic rights like a minimum wage, superannuation or leave.

It’s a model that is spreading across the Australian economy, removing more and more workers from traditional safety-nets.

Recently, two workers pushed back against this model of employment and took their case all the way to the High Court. The court’s decision could fundamentally change the nature of employee-employer relationships for everyone in Australia.

Today, journalist Kieran Pender on the landmark high court decision, and the future of work in Australia. 

 

Guest: Lawyer and contributor to The Saturday Paper Kieran Pender.

 
Read Transcript

[Theme Music Starts]

RUBY:

From Schwartz Media I’m Ruby Jones this is 7am

 

Companies like Uber and Airtasker have transformed the so-called ‘gig economy’  by hiring hundreds of thousands of workers as independent contractors, rather than employees.

 

Recently, two workers pushed back against this model of employment and took their case all the way to the High Court. The court’s decision could fundamentally change the nature of employee-employer relationships for everyone in Australia.

 

Today, journalist Kieran Pender on the landmark high court decision, and the future of work in Australia. 

 

It’s Wednesday, February 16.

 

[Theme Music Ends]

 

RUBY:
Kieran, this story, it's really about workers rights, the types of things that workers should be entitled to. So I wonder if you could start by just telling me what those rights are?

 

KIERAN:
Of course, we're talking about things that I think a lot of us take for granted things like minimum wage, things like sick leave, annual leave, superannuation, overtime and historically at least Australia's been really ahead of the curve compared to the rest of the world. Australia has been renowned for its strong employee rights. 

 

I remember when I moved to London a few years ago and I looked at my employment contract in London, I was really surprised at the difference between the rights I took for granted in Australia and the employment law situation in the UK. 

 

But there's a whole part of our labour force who aren't covered by those employment protections, and those people are called independent contractors, people who are self-employed or run their own business. 

 

Now, in the last decade, there's been a huge increase in the number of companies engaging workers as independent contractors, the so-called uber ization of the workplace.  

 

RUBY:
OK, and Kieran I think it's worth talking about what we mean exactly when we say the uber-ization of work, because I think what we're talking about is the gig economy. So how is that different to the traditional employee employer relationship of the past? 

 

Archival tape -- News:
“Low cost taxi company Uber will allow virtually anyone to be drivers for the company as long as they pass.” 

 

KIERAN:
Yeah, so I guess in recent years we've had the rise of the gig economy. We've had people working for Uber, UberEats for Deliveroo. 

 

Archival tape -- News:
“Since 2016, Uber has expanded eight fold. The food delivery business is now a $2.6 billion industry, and Uber supports around fifty nine thousand.” 

 

KIERAN:
Those tech companies, those Silicon Valley companies have pioneered this model, where people doing work that might otherwise have been employed work, employees are now doing it on their own account. 

 

Archival tape -- News:
“The multinational has sent a new contract to its riders, making it crystal clear they are independent contractors. That means they don't have access to the same benefits as employees.”

 

KIERAN:
They're independent contractors, even if perhaps the distinction between the work they're doing and an ordinary employee of previous times might not be so pronounced. 

 

Archival tape -- News:
“But the unions have long argued that these gig economy workers are being paid too little for too insecure work.” 

 

KIERAN:
And we’re seeing it erode long held workplace rights. We’re seeing companies across the entire economy undermine employment obligations by shifting people from employment to independent contractor arrangements. 

 

And of course, that's an issue, you know, in the place where it started in those Silicon Valley companies, you know, right around the world. But more and more, we're seeing it go even further beyond Uber's Deliveroo's to all parts of the economy.

 

RUBY:

Mmm ok. It’s pretty clear why companies would want to do this - because they would save money by not paying those entitlements. But it’s not a great deal for the workers - so can you tell me about the pushback that we’re seeing from them?

 

KIERAN:
Yes, as you say, employers are doing this because it's cheaper. But that has really significant downsides for employees. And so we're seeing this big push in recent years from unions and from employees to resist the erosion of traditional employment rights. And one case recently has gone all the way up to the High Court. 

 

So this is a case that revolves around two truck drivers, a guy called Martin Jamsek and Robert Be, they worked as truck drivers, as employees for a company starting in 1977. But in the mid 80s, after they'd been there for about 10 years, the company that was employing them said it no longer wanted to use them as employees, and it would only keep them on if they changed their contractual relationship to one of contractor.

 

And they were required to buy their trucks off the company and to enter into contracts to carry goods just as they were doing before. 

 

RUBY:
Mm-Hmm. So those are things that would typically align with being an employee. 

 

KIERAN:
Well, that's the thing. Nothing else really changed. So they'd been employees that had all these rights under employment law, and suddenly they didn't have. And aside from the legal form in which they were invoicing the company and the fact that they own the trucks. Everything else stayed the same. 

 

They worked more or less regular hours. They worked just for this one trucking company. They had, you know, the company logo on their trucks that they were given uniforms bearing the logo. So they went, I guess, from being employees with all the entitlements that come with that to being contractors without those entitlements, even though they still looked like employees, they sounded like employees. Suddenly, they found themselves as contractors, whether they liked it or not. 

 

And then in 2017, their contracts were terminated. And after decades of working for this company, initially as employees and then as contractors, they found themselves no longer in a relationship with the company. And so they went to court and they sought entitlements that were owed to them, they said, because they had been employees all along. 

 

RUBY:
And what was the outcome? 

 

KIERAN:
Well, recently the High Court ruled in favour of the company. They said that under Australian employment law, as they saw it, it was actually legal for the company to treat them as contractors because as a matter of law, that's what they were. 

 

RUBY:
Right and so what are the ramifications of a decision like that? Kieran, for four other workers in Australia, do you think that this is a sign that workers should be worried that something like this could happen to them and and it could be perfectly legal? 

 

KIERAN:
Yeah, this case is really concerning this case and a parallel case that was heard together with this case basically say that workplaces can engage staff as contractors, even if they might otherwise look like employees as long as they draft the contract clearly. 

 

And that could mean that more and more Australian workers are pushed out of Australian employment law, pushed away from those rights, those are minimum standards, minimum wages, superannuation, overtime - all those things that so many of us who are employees take for granted as a core part of our job. And people might find themselves suddenly as contractors without all of those protections under law.

 

And that those workers could be in all sorts of sectors, not just the kind of work done by ubers, airtaskers, but really any of us could find ourselves contractors.

 

Unless there's legislative intervention. 

 

RUBY:
We’ll be back in a moment.

 

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RUBY:
Kieran we've been talking about a recent High Court decision that could have some long standing repercussions for workers rights in Australia, across a range of industries. You mentioned that one way of protecting workers rights in the face of this would be legislative intervention. So can you tell me what you mean by that, how that might look? 

 

KIERAN:
So we already have this employee friendly labour law in the Fair Work Act, and one way to address this significant loophole effectively that the High Court has opened up for companies who want to avoid employment entitlements is to change the Fair Work Act to provide better protections. 

 

And that could build on recent initiatives we have seen proposed in other countries in the UK, for example… 

 

Archival tape -- News:
“The Supreme Court has ruled that a group of Uber drivers must be treated as workers rather than self-employed, a decision which means they could be entitled to a minimum wage and holiday pay.” 


KIERAN:
…but also in New South Wales and Victoria there's been more and more discussions of law changes to protect Uber drivers, Airtasker workers to provide them with protections in the workplace. 

 

Archival tape -- News:
“NSW government is set to pass the toughest laws in the country on the gig economy in a crack down on unsafe practices.”

 

KIERAN:
Now, federally, this wasn't really a big political issue until now. This High Court ruling could mean that industrial relations is a really hot topic at the election. 

 

RUBY:
Hmm Ok, I mean, that would be interesting if we had an election that was fought in some way on industrial relations and I suppose specifically these kind of loopholes around gig workers and contract workers, does that seem likely to you? 

 

KIERAN:
Yeah, it's it's a real possibility. You know, for the Coalition, this decision is business as usual. This is a deeply black letter, conservative judgment from an increasingly conservative black letter High Court. Like for big business, this is good news. 

 

But for workers and for labour, this is not good news. And so Labour came out after this decision expressing their concern.

 

Archival tape -- News:
“Uber eats workers - all these types of people - will get a new minimum wage under Labor, including other terms and conditions.” 

 

KIERAN:
And raised the prospect of legal changes to address this. Unions are certainly are worried. 

 

Archival tape -- Michael Kaine:
“We're calling on Scott Morrison to act urgently to put legislation in place to make sure that there's an appropriate balance between the needs of the new economy and the need to treat workers workers with respect.” 

 

KIERAN:
So for the first time in over a decade, we could have an election where IR issues are really central. 

 

RUBY:
Mm-Hmm. And Kieran, what happens if there is no legislative change on this? What would the future for Australian workplaces and Australian workers look like in that case? 

 

KIERAN:
I guess what it looks like is a parallel workforce - workforces where there are people who are employees who have all these great rights and entitlements, and then people who might work in the same workplace work at the next desk, you know, dressed in the same uniform, but be on a totally different workplace relationship where they don't have compensation for workplace injuries that have benefits that don't have sick leave and have overtime. And I guess Uber, the gig economy has really foreshadowed that future. And I guess that was the early warning signal that those people in vulnerable situations often perhaps we didn't pay sufficient attention to their workplace rights. 

 

And now it may well be that this is an issue that affects far more Australians. Anyone who's employed could in the future find themselves as a contractor. 

 

And I guess what concerns me about these decisions from the High Court and other developments in this space is that we risk entrenching a dual society where there are some of us who are fortunate enough to have these rights and protections and some of us who don't. 

 

And if you do have them, do you care about those who don't? Now I hope the answer is yes, because we're only as as a society where only as safe and as as lucky as our most vulnerable. But if we don't fight for our rights, if we don't take action to address decisions like this that provide employers with effectively a blank cheque to move people onto contractor relationships and strip away their rights. Then we face a troubling future. 

 

RUBY:
Kieran, thank you so much for talking to me today. 

 

KIERAN:
Thanks. 

 

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RUBY:
Also in the news today…

 

Thousands of nurses and midwives walked off the job in NSW yesterday to call for better pay and nurse-to-patient ratios. The striking nurses said the Covid-19 pandemic had pushed an already stretched health system to its limit. 

 

It is the first statewide industrial action by nurses in almost a decade, and comes after the union defied orders from the NSW Industrial Relations Commission to call off the strike.

 

And anti-racist street signs will remain on display in a number of suburbs in Sydney’s inner east after a push to remove them narrowly failed. 

 

Woollahra Council narrowly voted 8-7 to keep the “racism not welcome” signs where they are currently situated, after some councilors pushed to have them removed.

 

I’m Ruby Jones, this is 7am, see ya tomorrow.