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The Next Gig Thing

The NDIA may be absent in the Gig economy conversation but a Senate Select Committee is investigating the complexities of this new way of ‘doing business’.

By Sara Gingold

Updated 15 Apr 202431 May 2021

In the last 30 days, chances are that you have had some form of contact with the “gig economy.” It’s become part of everyday life, using online platforms to enter into formal arrangements with independent contractors for the purpose of getting a job done. This afternoon, I used the platform Uber to connect with the independent contractor Rahul to get me where I needed to be. Rahul is not employed by Uber, but in many ways, he is dependent on the platform to get work. This job was a one-off gig, and I will probably never see Rahul again. 

Since the formation of the NDIS, the disability sector has developed its own form of platform-based contract work. An increasing number of NDIS participants are using websites that connect them to available support workers in their area. Most of the time, these support workers are independent contractors not employed by the platform (HireUp is the only provider we are aware of that uses an employment model). 

The gig economy is supposed to operate on, well, “gigs,” one-off, short-term, time-limited jobs in which both sides have a level of autonomy. In such a context, a contract arrangement makes sense. However, technology has morphed and stretched definitions in ways that are challenging industrial relations all over the world. In the disability sector, for example, support work is rarely a one-off job. Usually, participants and support workers form a relationship and work together over a period of months or years. So, can a contract model really work? 

There is currently a Senate Select Committee on Job Security that plans to take a long, hard look at contract-based work in Australia. From what we have seen so far, we can safely assume that the disability sector will be a key focus. At the first hearing, two major NDIS providers were called to give evidence, joining global megacompanies like Uber, Deliveroo, and Menulog. 

 What has the committee heard so far? And what does it mean for the future of our sector? 

 

THE CASE AGAINST THE CONTRACT MODEL FOR SUPPORT WORK

For the purpose of this article, it is important to distinguish between sole traders who operate their own businesses and workers who are in employment-like relationships with online platforms. It is also possible for platforms to employ their workforce, like HireUp. But a central question that the sector has to grapple with is whether contractors working on platforms are employees in all but name. The line between contractor and employee has been blurred, but there are real legal differences between employees and contractors. Some of these differences are that employment work is ongoing and has regular hours and employees have little control over the work performed and cannot subcontract (you can read the full list of differences here).

Critics of the platform-based contracting model identify three main issues with the system:

Risks to Participants 

There is a concept in employment law called “sham contracting,” which occurs when a business or individual hires somebody as a contractor although they are really operating as an employee. When it comes to online platforms operating in the disability sector, there is a problematic lack of clarity about whether support workers should be entitled to employment – and in the case of online platforms, whether it is the platform or the participant who should be considered the employer.

There is a risk that in future legal proceedings, the participant using these platforms could be determined to be the worker’s employer. If this happens, participants could find themselves responsible for large sums of back pay, including contributions to superannuation and making up for any payments below award rate, as is common practice on some platforms. Many participants who use these platforms are completely unaware of any risk along these lines. 

The other risk to participants is that online sites that use contractors do not always take responsibility for the quality or safety of supports for either participants or workers. Most platforms are also not registered with the Quality and Safeguards Commission (QSC). 

Workers’ Rights

Usually, when we hear a conversation about the gig economy, the focus is on workers’ rights. The Select Committee has heard that some of these platforms pay below award rate. Even beyond that, there are certain advantages for a worker of being an employee. They are entitled to award rate, rights around unfair dismissal, injury compensation, supervision, superannuation, tax payments, and sometimes regular leave. 

Even Playing Field for Providers

According to some submissions to the Select Committee, having some workers classified as contractors when they are in fact employees creates an uneven playing field for providers. Companies that employ their workforce incur significantly higher costs and therefore need to charge a higher rate. In this way, the market incentivises providers to use a contractor model, despite the risks to participants and concerns about workers’ rights. 

 

THE CASE IN FAVOUR OF THE CONTRACT MODEL FOR SUPPORT WORK

The case in favour of the contract model for support work is largely financial. From paying award rate to superannuation, employees are costly. However, a contracting model allows platforms to enjoy significant savings on overheads and obligations to their workforce, which they can pass on to participants. For participants who are trying to get the most out of a stretched plan, this can be hugely beneficial. 

Online platforms argue that there are benefits for workers as well, particular because they get to set the hours and terms of their engagement (though this is often also the case with other disability providers as well). It has also been argued that the power imbalance inherent in other parts of the gig economy is less present in the disability sector. In the rideshare market, for example, the large number of drivers looking for work gives the platforms and customers a considerable amount of power in the exchange. However, in the disability sector, the workforce shortage puts more power in the hands of the worker. We’re not sure if workers themselves would agree with this assessment. The evidence put forward in support of this is that the average hourly rate on a platform where workers get to set their own rate is just over $12 higher than the minimum allowed. The argument is that if workers had less power in the exchange, the average payment would be closer to the minimum. However, the minimum rate that presumably some workers are being paid is below award rate. Nevertheless, some workers do end up being paid a higher hourly rate than they would receive in employment. 

 

WHERE IS THE NDIA AND QSC IN THIS CONVERSATION? 

Notably absent from this conversation are the NDIA and QSC. When asked about related issues in past Senate Estimates hearings, both agencies have fundamentally shifted responsibility to the Fair Work Commission and the Fair Work Ombudsman. Naturally, from a workers’ rights perspective, Fair Work has an important role to play. But when the conversation goes beyond an employment law dispute to putting participants and the NDIS market at risk, it is difficult to see how the NDIA and QSC can avoid getting involved. It will be particularly interesting to see if the final Select Committee report calls out their conspicuous absence. 

 

THE OTHER SIDE OF JOB SECURITY 

The Select Committee appears to be focused mainly on insecure, contract-based work. But within our sector, another form of insecure employment is also the norm – casualisation. As you probably know, there are a huge number of benefits to permanent employment, from the security of regular work to leave entitlements. The pandemic and last year’s outbreak in aged care demonstrated the risks we all incur when essential services are provided by a workforce without paid sick leave. As we look to attract a larger workforce, we also cannot avoid asking ourselves whether a casualised work is hindering or helping this effort. 

The Senate Select Committee will deliver its final report before the end of the year. This is a Labor-led Inquiry, and there is a strong possibility that it will not lead to any legislative changes. Nevertheless, there are ever increasing signs that the tide is turning on contract work. A court recently ruled that a Deliveroo worker was incorrectly defined as a contractor and unfairly dismissed. The Victorian government has also indicated they will take action to clarify the employment status of contract worker. But regardless of what happens, there is a lot of work to be done to ensure that both workers and participants are making informed choices. This is part of a global conversation that is not going away anytime soon. These are issues that the entire disability sector has to start grappling with before parliament and the courts force our hand. 

Authors

Sara Gingold

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