The Federal Government is proposing a significant change to the Fair Work Commission’s (FWC) powers to allow them to set minimum standards for ‘employee-like’ forms of work, including gig economy work.

In April this year, the Federal Government released a consultation paper titled ‘’Employee-like’ forms of work and stronger protections for independent contractors’ (paper). This paper outlines the proposed changes to the FWC’s powers to set minimum standards for ‘employee-like’ forms of work, including gig economy work. Public feedback was invited on the proposed changes.

The paper sets out three key commitments from the Federal Government which it made in last year’s federal election as follows:

1. ‘Employee-like’ forms of work – giving the FWC new powers to set minimum standards for workers in ‘employee-like’ forms of work, including the gig economy.
2. Improving avenues to dispute unfair contractual terms – amending relevant legislation to give workers the right to challenge unfair contractual terms.
3. Making the road transport industry safe and sustainable – consider allowing the FWC to set fair minimum standard to ensure that the road transport industry is ‘safe, sustainable and viable’.

Scope of workers

The question remains as to the true scope of workers that the above proposed changes would apply to, however the paper explains that there is no settled definition of ‘gig economy’ that can be readily relied upon. However, the paper does say that this could include:

• Vertical on-demand models where the platform exercises control over how the work is performance; and
• Horizontal models where the platform provides a marketplace of sorts for workers and consumers to connect on specific tasks on an ad hoc basis.

However, the paper does make clear that the ‘sharing economy, which is the sharing of accommodations, cars or tools and so forth is not intended to fall within the scope of the measure to increase the FWC’s powers and jurisdiction.

Minimum standards

With respect to some of the minimum standards that the FWC would be able to set as proposed in the paper, this could extend to conditions and obligations such as:

• minimum rates of pay
• concepts of ‘work’ time
• payment timeframes between the completion of work and payment
• workplace conditions, such as portable leave, rest breaks and so forth
• treatment of business costs, including vehicles and maintenance, insurances, licences and so forth
• record keeping requirements
• training and skill development
• dispute resolution mechanisms

The proposed changes would create further protections for workers who are not employees but who engage in what is considered as ‘employee-like’ work, in which there are little protections or minimum standards in their work. The ultimate goal of the Federal Government appears to be to create a marked improvement in financial and job security for ‘employee-like’ workers, including gig workers.

Road transport industry

A key industry which appears to be front of mind for the Federal Government as part of the proposed measures outlined in the paper is the road transport industry.

As noted in the paper, the road transport industry has over 260,000 people – over 40,000 of whom are independent contractors. Of these independent contractors, the majority are operating as owner-drivers.

This focus appears to come off the back of the COVID-19 pandemic in which road transport workers became an integral service, particularly during lockdown periods in which this became primary service for deliveries including groceries, food items and other online shopping items.

When are these changes going to happen?

These changes are still to be tabled to Federal Parliament and the usual process for passing legislation will need to be adopted to pass these changes.

At this stage, it is unclear when these changes will take effect or the specific timeline on when the legislation process would commence, particularly considering that the Federal Parliament sought input from the public on the proposals.

If you would like to seek advice on employees and independent contractors, please contact our Employment Law team.