Precedent (Australian Lawyers Alliance)
THE GIG ECONOMY
A LOSING BATTLE FOR WORKERS
By Daniel Stojanoski
Gig economy workers often receive good media attention when they fight it out in legal proceedings, trying to prove that they are employees rather than independent contractors in order to get protections like workers’ compensation and other basic employment benefits such as annual leave. In my opinion, the gig economy is a rort which is designed to exploit workers and attack workers’ rights. This has been a difficult opinion to justify as the big corporates, such as Uber, often win legal battles and the worker is denied basic employment rights.
Whether gig economy workers are ‘workers’, ‘employees’ or ‘independent contractors’ is a complex legal issue that is yet to be determined in Australia. A decision on this issue is important because it will give some finality on whether, for example, the gig economy remains insecure work and whether a gig economy worker can access the same benefits and entitlements as a permanent employee.
It is my view that gig economy workers are ‘employees’ and judicial consideration needs to catch up with the realities of the modern labour economy. Decision-makers are currently taking a ‘case-by-case’ approach, leaving it up to the Government to legislate.
Whatever the case may be, we can all agree that the gig economy has grown exponentially in recent years and is here to stay. Governments and judicial systems in Australia, and around the world, have been grappling with defining the employment regulations in the gig economy.
THE EMERGENCE OF THE GIG ECONOMY
The gig economy can be explained as involving a ‘one-off task’ that a person or business offers to people who work ‘independently’ and are willing to do that ‘one-off task’.
There has been increased reliance on independent contractors in what has been termed the ‘gig economy’. In late 2018, a survey of 14,000 people commissioned by the Victorian Labor Government found that 7.1 per cent of respondents were using a digital platform to find and perform work while 13.1 per cent had undertaken digital platform work. In 2019, according to the Australian Bureau of Statistics, 8.1 per cent of the approximately 13 million workers in Australia were working as independent contractors.
This rise in gig economy workers is inarguably attributable to our heavy reliance on technology and the convenience of accessing services through apps and other digital avenues.
But what if there are so many of these ‘one-off tasks’ that keep coming from the same business to justify a person working consistent, full-time hours? Is that person now an employee or are they still self-employed as an independent contractor?
A District Court in the US in 2018 correctly opined as to where this was all headed, commenting that the gig economy presents ‘a novel form of business that did not exist at all ten years ago, available through the use of “apps” installed on smart phones. With time, these businesses may give rise to new conceptions of employment status.’
Some years on and Australia has yet to come to this realisation, which is apparent from the way in which the legal system considers matters affecting gig economy workers.
EMPLOYEE OR SELF-EMPLOYED?
In some instances, the gig economy worker is an employee and in others, the gig economy worker is self-employed. As discussed below, in the UK the gig economy worker is a ‘worker’.
At home in Australia, the Fair Work Commission (FW Commission) has given us some guidance on how we treat a gig economy worker in an industrial setting. However, the decisions turn on the facts and the outcomes are often opposing. Presently, decisions are made on a case-by-case basis. A few key decisions by the FW Commission are discussed below.
Klooger v Foodora Australia
One of the first landmark Australian decisions was Joshua Klooger v Foodora Australia Pty Ltd (Klooger), in which gig economy worker Mr Klooger, a bicycle courier for Foodora, was deemed to be an employee at law. This meant that Mr Klooger was not an independent contractor and was able to run an unfair dismissal claim following the termination of his employment.
Fair Work Commissioner Ian Cambridge undertook a careful analysis of the proper characterisation of the relationship between Mr Klooger and Foodora and determined that the relationship was one of employee and employer ‘in this instance’ – despite Foodora’s attempts to frame Mr Klooger’s role as that of an independent contractor.
The multifactorial test was key in determining the employment relationship. As summed up by Commissioner Cambridge, the multifactorial approach involves:
‘consideration of various factors including a number of identified indicia, with no single factor being decisive, and an overriding requirement for examination of the totality of the relationship between the parties so as to ultimately provide a sound basis upon which to determine whether the relationship was one of employment or independent contractor.’
Simply put, the multifactorial test offers a non-exhaustive list of indicia that do not all have to be made out but should be considered in determining whether a worker is an employee or an independent contractor.
In considering some of the indicia of the multifactorial test that led to the determination that Mr Klooger was an employee, Commissioner Cambridge observed that:
• Mr Klooger presented himself to be a Foodora employee by wearing Foodora-branded attire and using Foodora-branded tools or equipment;
• Mr Klooger was subject to fixed work start and finish times and there was a fixed place of work; and
• Foodora exercised a considerable amount of control over Mr Klooger’s work, representative of the type of control that an employer typically has over an employee. For example, Mr Klooger had to work on a certain number of Fridays and weekends, and had to perform a certain number of deliveries during any particular engagement.
After determining that Mr Klooger was an employee, Commissioner Cambridge concluded that there was no valid reason for his dismissal and ordered Foodora to pay $15,559 in compensation to Mr Klooger.
Suliman v Raiser Pacific
In Suliman v Raiser Pacific (Suliman), it was determined that a gig economy worker who was a driver was not an employee of Uber.
As was the case in Klooger, Fair Work Commissioner Michelle Bissett considered the multifactorial test to assist in determining whether Mr Suliman was an employee or a contractor.
Commissioner Bissett focused particularly on the compulsion to work to lead her to a determination that Mr Suliman was an independent contractor. Mr Suliman did not have to accept jobs through the Uber app and, as such, he was not ‘a servant’ – as would be the case if, for example, he was a casual employee who presented for work and was then compelled to work.
The Suliman decision is perhaps in line with the Fair Work Ombudsman’s determination in 2019 that Uber drivers were not employees after the completion of a compliance investigation. The Ombudsman observed that a factor in reaching this determination was that Uber drivers are not subject to any formal compulsion to work.
It must be noted that the Ombudsman’s compliance investigation focused solely on Uber and did not investigate the practices of other gig economy operators.
Gupta v Portier Pacific and Uber Australia
Gupta v Portier Pacific and Uber Australia (Gupta) is a decision of the Full Bench of the FW Commission, delivered in April 2020 after Klooger and Suliman.
At first instance, Ms Gupta’s unfair dismissal claim was rejected because it was determined that she was not an employee of Portier Pacific Pty Ltd and Uber Australia Pty Ltd (which are two entities that use the Uber Eats app for the delivery of food from restaurants) and therefore she could not run an unfair dismissal claim.On appeal, the Full Bench of the FW Commission applied the multifactorial test again and considered that there were a number of factors weighing in favour of Ms Gupta being an employee, including:
• Ms Gupta’s work did not involve the exercise of any particular trade or skill, and required no special qualifications;
• the rate of the delivery fee was not set by Ms Gupta;
• Ms Gupta had no means of independently expanding her customer base or generating additional work; and (but not limited to)
• Ms Gupta was not permitted to delegate work.
However, the Full Bench ultimately decided that Ms Gupta’s relationship with Uber was a contractual arrangement and that she was not an employee because the relationship did not bear a number of the usual essential hallmarks of an employment relationship, namely:
• a requirement to perform work at particular times or in particular circumstances;
• exclusivity when work is being performed; and
• presentation to the public as serving in the business.
Being a Full Bench matter, Gupta presented an opportunity to bring some finality to the undecided issue of whether a gig economy worker is an employee or an independent contractor. However, the Full Bench did not provide that clarity. The Full Bench, in my view, had the opportunity to dispense with the subjective, complex and lengthy multifactorial test used in gig economy worker claims of this type and could have offered a simplified test for gig economy workers that is limited to the above three indicia.
Perhaps Parliament will have to resolve this issue.
Until there is legislative reform or a judicial body provides concrete law that is particular to gig economy workers, we will continue to see applications made by gig economy workers who hope to have at least a shot at the multifactorial test being applied to their particular circumstances and the possibility of a favourable outcome.
COMMON LAW COURT RULINGS
Gupta remains the most authoritative decision in Australia with respect to the status of gig economy workers.
Australian courts have not dealt with the legal employment status of gig economy workers, although they have dealt with many circumstances in which they have been required to determine whether a worker is an independent contractor or an employee.
Perhaps the most recent authoritative decision in that regard is the Full Federal Court decision in Jamsek v ZG Operations Australia Pty Ltd (Jamsek), where it was determined that two truck drivers, who had worked for the same company for 40 years, were employees and were thus entitled to certain employment benefits such as superannuation.
The same multifactorial test that was applied by the FW Commission in the above cases was applied in this case.
Jamsek is currently on appeal to the High Court.
RECENT DEVELOPMENTS IN THE UK
While Australian gig economy workers continue to lose their fight for employee industrial entitlements, UK gig economy workers have recently had a major breakthrough.
A recent decision by the UK Supreme Court in Uber BV & Ors v Aslam & Ors considered the employment status of drivers using the Uber app and whether those workers qualified for the national minimum wage, paid annual leave and other workers’ rights.
Uber contended that the ‘drivers do not have these rights because they work for themselves as independent contractors, performing services under contracts made with passengers through Uber as their booking agent’.
Uber made submissions that it was simply a technology provider and the booking agent for drivers who it approved to use the app and, in that way, the drivers were independent contractors contracted to the customer to provide a service and were not Uber workers.
The Court rejected Uber’s argument and found that the drivers worked for, and under contracts with, Uber after observing that:
• where a ride was booked through the Uber app, Uber set the fare and dictated how much drivers were paid for their work;
• the terms on which drivers performed their services were imposed by Uber and drivers had no say in them;
• once a driver had logged onto the Uber app, the driver’s choice about whether or not to accept requests for rides was constrained by Uber through its monitoring of the driver’s rate of acceptance and cancellation of trip requests;
• Uber exercised significant control over the way in which drivers delivered their services, including through the ratings system; and
• Uber restricted communications between passenger and driver and took active steps to prevent drivers from establishing any relationship with a passenger beyond an individual ride.
However, it is important to note that the UK decision did not conclude that Uber drivers are employees of Uber. Rather, the Court found that they were ‘workers’, which is a classification under the UK’s Employment Rights Act 1996 that sits between an ‘employee’ and an ‘independent contractor’.
The definition of ‘worker’ in the UK does not go as far as to give the worker access to unfair dismissal laws, but it does give them the safeguard of the UK’s minimum wage under the National Minimum Wage Act 1998.
On 17 March, Uber Chief Executive Dara Khosrowshahi announced in the media that from that day forward, ‘Uber drivers in the UK will be treated as workers.’ But perhaps he didn’t have much of a choice.
TREATMENT IN THE US
It would be remiss of me not to mention what has happened in the US, seeing as I cited an opinion of a US District Court in my earlier section on the emergence of the gig economy.
In Razak v Uber, a US Pennsylvanian District Court commented on the need to start thinking about a new type of employment status for gig economy workers. However in this case, the Court still determined that the gig economy worker was not an employee but an independent contractor because the degree of control ‘weigh[ed] heavily in favor of “independent contractor” status’.
More recently, in December 2020, the Appellate Division of the New York Supreme Court held that Uber exercised sufficient control over its drivers to qualify as their employer. The test in that case was again about control.
As we have seen, gig economy workers in Australia are in most cases not determined to be employees and are therefore unable to access workers’ compensation.
This is very troubling because recent research commissioned by Slater and Gordon Lawyers revealed that almost 50 per cent of Australia’s rideshare and food delivery workers were unaware that they could not access workers’ compensation once they returned to work after an injury.
This lack of insurance cover means that it is unlikely that a gig economy worker will be able to receive lost wages payments during their period of injury and recovery.
The knock-on effect on the economy is significant because these workers may have a mortgage, have utilities to pay for, have many mouths to feed; but during their period of injury, they get nothing.
WHAT NEXT?: THE REFORMS
Senate Select Committee on Job Security
The Senate has appointed a Committee on Job Security ‘to inquire into and report on the impact of insecure or precarious employment on the economy, wages, social cohesion and workplace rights and conditions’.
This inquiry will also look at the application of the current industrial relations system and accident compensation schemes to workers in this sector of the economy.
It has been reported that the Committee has already received 77 submissions from a range of interested parties, such as unions and university academics, and that the large gig economy players such as Menulog, Uber, Uber Eats, Ola and Deliveroo have also made submissions, but that only Menulog has come out and said it needs ‘to do more’ for its couriers. Other media outlets have reported that Menulog plans to move to an ‘employment model’ and wants to have all of its couriers employed by the company within a few years, beginning with a trial among its Sydney couriers. This is all very promising for gig economy workers, and as a trade unionist I encourage the consumer to congratulate Menulog on this sensible step forward. We can only hope that others follow suit.
The Senate Select Committee will deliver its report on 30 November 2021.
Other than this inquiry, not much else is happening with regard to reforms that directly address the problems presented by the gig economy. The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (Omnibus Bill) may have had the potential to affect the gig economy, but things did not go so well for that Bill.
The Omnibus Bill
The Omnibus Bill passed Parliament on 22 March 2021 and made only one change to the Fair Work Act 2009 (Cth) – the insertion of a new definition of ‘casual employee’. Section 15A states that a ‘casual employee’ is a person who accepts an offer of employment in circumstances where the employer made ‘no firm advance commitment to continuing and indefinite work according to an agreed pattern of work’.
Alas, this change will be unlikely to impact gig economy workers. There are no bills currently before Parliament that deal with the status of gig economy workers. Perhaps we will see something after the Senate Select Committee on Job Security delivers its report.
The federal Labor Party has pledged as part of its ‘Secure Australian Jobs Plan’ policy to improve job security for gig economy workers by extending the powers of the FW Commission to include ‘employee-like’ forms of work, potentially meaning that the FW Commission will be empowered to make orders for minimum standards for gig economy workers. The Labor Party envisages that this will better protect gig economy workers from exploitation and dangerous working conditions.
The gig economy is a losing battle for workers. There is no dedicated or real avenue through which a gig economy worker can quickly and simply determine whether they are a contractor or an employee, or whether they can access basic employment entitlements. As the system currently requires a case-by-case analysis of each gig economy worker, a gig economy worker is left with either the risky option of battling it out in legal proceedings or simply doing nothing and continuing on as a ‘contractor’.
It is unlikely that this issue will be resolved any time soon. Some legislative reform may come about after the Senate Select Committee on Job Security has handed down its report. Or gig economy corporates may choose to follow the example of big companies such as Menulog, which has promised to change its employment model to better serve its couriers. However, the best hope for transforming the gig economy is if gig economy workers join their trade union and advocate for change as a united group.
Daniel Stojanoski is a senior associate who heads up the industrial and employment law practice at Slater and Gordon Lawyers, WA. PHONE 0413 958 822 EMAIL email@example.com LINKEDIN linkedin.com/in/danielstoj TWITTER @danielstoj.
 P McDonald, P Williams, A Stewart, R Mayes and D Oliver, Digital Platform Work in Australia: Prevalence, Nature and Impact (Report, 2020) 5.
 ABS, Inquiry into the Victorian On-Demand Workforce (Report, June 2020) 17.
 Razak v. Uber Technologies Inc (U.S. District Court, E.D. Pa.) 24 (Razak).
  FWC 6836 (Klooger).
 Ibid, .
 Ibid, . See also, Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; Hollis v Vabu Pty Ltd t/a Crisis Couriers  HCA 44 – frequently relied on and accepted authorities in relation to the multifactorial indicia. See also, Abdalla v Viewdaze Pty Ltd (2003) 122IR 215; Jiang Shen Cai t/a French Accent v Michael Anthony Do Rozario  FWAFB 8307 – relevant decisions in this regard of the FW Commission.
 Klooger, above note 4, .
 Ibid, .
 Ibid, .
  FWC 4807.
 Ibid, .
 Ibid, –.
 Not to be confused with the FW Commission, which is a statutory employment tribunal – the Fair Work Ombudsman is the workplace watchdog.
 Fair Work Ombudsman, ‘Uber Australia investigation finalised’ (Media release, 7 June 2019) <https://www.fairwork.gov.au/about-us/news-and-media-releases/2019-media-releases/june-2019/20190607-uber-media-release>.
 Amita Gupta v Portier Pacific Pty Ltd; Uber Australia Pty Ltd t/a Uber Eats  FWCFB 1698 (Gupta FWCFB).
 Amita Gupta v Portier Pacific Pty Ltd; Uber Australia Pty Ltd t/a Uber Eats  FWC 5008.
 Gupta FWCFB, above note 16, .
 Ibid, .
  FCAFC 119.
  UKSC 5 (Aslam).
 Ibid, .
 Ibid, .
 Ibid, .
 Ibid, .
 Ibid, –.
 Ibid, .
 Ibid,  with reference to Bates van Winkelhof v Clyde & Co LLP  UKSC 32,  and .
 Aslam, above note 21, .
 D Khosrowshahi, ‘Uber chief executive Dara Khosrowshahi says “we’re turning the page on driver rights”’, Evening Standard, 17 March 2021, <https://www.standard.co.uk/comment/comment/uber-chief-executive-dara-khosrowhahi-drivers-rights-turning-page-b924529.html>.
 Razak, above note 3.
 Ibid, 31.
 Matter of Lowry, No. 530395, 2020 WL 7390888 (App. Div. 3d Dept. Dec. 17, 2020).
 L Evlin, ‘New research finds nearly half of Australia’s migrant gig economy workers don’t know they’re not insured’, SBS News, 13 March 2021, <https://www.sbs.com.au/news/new-research-finds-nearly-half-of-australia-s-migrant-gig-economy-workers-don-t-know-they-re-not-insured>. It must be mentioned that some delivery companies offer some level of cover despite there being no requirement to do so.
 Parliament of Australia, Senate Committees, Select Committee on Job Security, Terms of Reference, <https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Job_Security/JobSecurity/Terms_of_Reference>.
 J McIlroy and M Panegyres, ‘Menulog starts trial but gig economy workers’ security remains precarious’, Green Left, 15 April 2021, <https://www.greenleft.org.au/content/menulog-starts-trial-gig-economy-workers-security-remains-precarious>.
 L Henriques-Gomes, ‘Menulog announces pivot towards “employment model” for all couriers within coming years’, The Guardian, 12 April 2021, <https://www.theguardian.com/business/2021/apr/12/menulog-announces-pivot-towards-employment-model-for-all-couriers-within-coming-years>.
 Fair Work Act 2009 (Cth), s15A(1)(a).
 Labor, Labor’s Secure Australian Jobs Plan, <https://alp.org.au/policies/job_security_plan>.