The changing industrial landscape for gig economy workers

Australia was a workers’ paradise at the time of Federation and it’s time for some serious industrial relations reform.

The return of Parliament to Canberra last week has brought industrial relations, particularly the conditions and rights of gig economy workers, to the forefront of the political agenda in Australia. The discussions centre around the need for significant changes to existing legislation in order to provide gig economy workers with enhanced job security, improved wages, and safer working environments. These proposed amendments also encompass critical provisions for ensuring equal pay for equal work and the criminalisation of wage theft. Additionally, there is a focus on establishing minimum standards for penalty rates, superannuation, and insurance, as well as regulating the process of deactivation, whereby employees can be removed from gig platforms without justification.

These proposed changes appear to be a reasonable response to the challenges faced by gig economy workers, and it’s difficult to understand why there would be any resistance to these changes. Many of these workers are engaged within platforms operated by massive multinational corporations such as Uber, which have reaped substantial profits while providing low pay and substandard working conditions to their employees. In this context, it becomes imperative to reassess the role of work, emphasising fair compensation for the tasks performed rather than enabling big business players to exploit the labour market.

Nevertheless, the reaction to these proposed reforms has not been universally positive. Employer groups, notably the Australian Chamber of Commerce and Industry, have launched an expensive advertising campaign against the idea of equal pay for equal work, arguing – without any logic – that these reforms could harm businesses, as if commerce should be placed at a far greater level than human life.

Liberal Party leader Peter Dutton has criticised the legislation, suggesting that it primarily serves the interests of organised labour and “the unions” (memo to Dutton: the Labor Party was created in 1891 to advocate for the agenda of union) but this is to be expected: his role is to disagree with everything the Labor government proposes, in some forlorn hope that this will somehow improve his electoral appeal.

The concept of “fair pay for fair work” and efforts to improve working conditions for a demographic that has endured subpar conditions for far too long, should be an issue that could garner bipartisan support, if we lived in a normal world and the politics of Australia was populated with sane and reasonable people. However, we don’t live in a normal world: contemporary politics often reflects a deeply divided landscape where finding common ground is increasingly elusive except, of course, when it concerns salary increases for politicians: there will always be bipartisan support for this matter.

A workers’ paradise lost

It is somewhat astonishing to reflect upon the evolution of Australia’s industrial relations landscape. In the early twentieth century, Australia was renowned as a “worker’s paradise”, boasting a robust system of wage regulation and workers’ rights. This system effectively ensured the equitable distribution of wealth, thanks to fair labour practices and a thriving goods and services sector. Wages were commensurate with the tasks performed, and this arrangement was widely accepted by governments, business, workers and the community.

In the earlier parts of Australian Federation, the Court of Arbitration played a pivotal role in this system by allowing unions to make ambitious claims, even if they were never expected to be fully granted. This practice spared the court from the administrative burden of handling numerous minor claims. Interestingly, over time, some of these ambitious claims began to be met as a result of natural economic processes such as inflation and changes in the cost of living.

However, this paradigm began to shift with successive governments, kicked-started by the Hawke government’s Accord process in the 1980s, and more notably during the Howard era after 1996. Since then, the discourse on wages and workers’ rights has taken a precarious turn, with wages stagnating for many workers and highly skilled professions being chronically underpaid while other managerial sectors receive overcompensation. This complex web of issues has created a challenging environment for workers reliant on a fixed wage.

As the Labor government takes action to address the evolving industrial relations landscape, it is important to acknowledge that progress may need to accelerate to meet the urgent needs of gig economy and labour-hire workers. The political process takes time to turn, but decisive and positive steps must be taken to rectify the current imbalance in worker rights and compensation.

These debates surrounding industrial relations changes for gig economy workers in Australia reflect the broader challenges of reconciling the interests of workers, businesses, and political agendas. While the path forward may be fraught with contention, addressing the issues faced by gig economy workers is a step toward creating a more equitable and just labour market in Australia. The complexities of this endeavour underscore the need for careful deliberation and swift, decisive action to ensure that all Australians can enjoy fair compensation, job security, and safe working conditions in the rapidly evolving world of work.

The imperative for change: Addressing worker exploitation

The proposed workplace law changes are seemingly uncomplicated and are needed to recalibrate the discrepancies and disadvantages for workers that have crept into the gig economy sector. Yet, there is strong opposition the Liberal and National parties, as well as from influential business interests. While it is acknowledged that there must be a balance between business and worker interests, many argue that this balance has tilted too far in favour of business for far too long.

One critical aspect of this debate is the nature of the businesses involved. Gig economy platforms like Uber, Menulog, Hungry Panda, and Airtasker have built their business models on the exploitation of workers and the erosion of workers’ rights and conditions, and follows on from the expansion of large corporations in recent decades, whose success has been built on the back of this exploitation. While the technological disruption and innovation evident through these platforms has been a historical feature human progress and social change, these models are leveraging technology to the detriment of workers, and in a way that has never occurred before.

The call for change is straightforward: to rectify these imbalances in the industrial relations landscape. The proposed changes aim to ensure that workers are fairly compensated, have job security, and work in safe conditions, addressing key concerns about underpayment and precarious employment.

The Minister for Industrial Relations, Tony Burke, ridiculed questions from business groups about costs associated with these reforms by suggesting that “underpaying people is cheaper. Slavery is probably cheaper too… there is some modest pass through here, we are talking about some of the lowest paid people in Australia. And if that means there’s a tiny bit extra that you pay when your pizza arrives to your door, and they’re more likely to be safe on the roads getting there, it’s a pretty small price to pay.”

Business groups have argued that higher labour costs may result in higher prices for consumers, but the human cost of their gig economy practices is undeniable. Workers, often among the lowest paid in Australia, bear the brunt of these cost-saving measures. Burke’s commentary emphasises that the true cost of these practices extends beyond the immediate financial transaction, as the safety and wellbeing of workers are also at stake.

The financial impact of these reforms will result in an estimated $500 million per year allocated to labour-hire workers and approximately $400 million for gig economy workers. From a worker’s perspective, these additional funds represent a vital improvement in their livelihoods, helping them to meet their basic needs and maintain a decent standard of living.

The opposition to these changes from business leaders and the Liberal Party, underscores the deep divisions in the ongoing discourse on industrial relations. But what is their alternative? Slavery? Even then, it’s doubtful conservatives would be satisfied with a serf-styled arrangement or, if wages were reduced to $2 per day that African workers receive, a view supported by Gina Rinehart in 2012: she’d argue that even $2 per day will send businesses broke, and the need to reduce them even further.

The historical perspective provided by Karl Marx and Adam Smith reminds us that wages are not merely expenses for businesses but also investments in the workforce. A well-compensated and secure workforce can be more productive and contribute positively to a nation’s economic growth. The failure of business leaders and the Liberal Party to recognise this fundamental economic principle underscores the current challenges facing the industrial relations landscape in Australia.

Competing interests and ideologies

The debates and discussions surrounding gig economy workers and industrial relations changes in Australia reveal a complex landscape marked by competing interests and ideologies. On one side, business and employer groups, as well as the Liberal and National parties, often stand in opposition to labour-related reforms proposed by a Labor government and supported by the unions.

Their perspective, rooted in the basic accountants’ idea of labour as a commodity to be exploited for minimal cost, is overly simplistic and underscores their resistance to any measures that seek to enhance worker rights and well-being. This uncompromising stance, which seemingly disregards even the most basic principles of fairness and dignity, raises important questions about the ethical dimensions of modern employment practices.

However, it is essential to recognise that the government plays a crucial role in shaping and regulating the labour market to ensure that it functions in the best interests of all citizens. Even Friedrich Hayek, the doyen for conservative economists and supporters, acknowledged the necessity of government intervention when free markets produce unfavourable economic outcomes, particularly for the working poor. This perspective emphasises the responsibility of government to address market failures and protect the most vulnerable members of society.

There are many deeply problematic practices of gig economy companies and this situation offers an insight into the future of work, if these practices are left to proliferate. While there are some individuals who find fulfillment in such work arrangements, the prevalent issues of low wages, precarious employment, and dangerous working conditions cannot be ignored.

The call for regulation in this context is not an attempt to stifle innovation or hamper business growth. Rather, it is an acknowledgment that certain practices have reached a point where they are detrimental to the wellbeing of workers and the broader community. Regulation, when well-balanced and carefully implemented, can help address these issues without stifling economic progress.

In the end, the evolving landscape of industrial relations in Australia underscores the importance of finding a middle ground, where the rights and interests of workers are safeguarded while allowing businesses to thrive. Achieving this balance is a complex task, as it involves reconciling competing perspectives and ideologies. However, it is a challenge that must be embraced, as the wellbeing of workers, the fairness of our society, and the sustainability of our economy all depend on finding equitable solutions in the face of evolving labour practices and the gig economy.

There needs to be a more nuanced and balanced approach to industrial relations to ensure that Australia can continue to prosper as an advanced and civilised economy, but it’s an approach that an uncivilised business community and Liberal Party is not prepared to consider, preferring a world that resides in the law of the jungle.