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The ‘Wow’ and Risks of the Gig Economy

There’s a lot being said about the ‘gig’ economy.

I’m really starting to get irritated by the word, and more irritated by this constant noise about gig, gig, gig. So much so, I’m coining a new phrase – ‘WoW’, because really it is a new ‘way of working’ – a preference that is available based on technology advancements and more flexible employment attitudes. It’s got a wow factor because it enables people to make flexible choice for their life.

So, we’ve gone out in the world and posed the question to people who are participating in the new WoW, to gain their feedback about the why and the how. We’ve then mapped that against compliance to give you a view of how compliance needs to be managed differently for these individuals.

Firstly, let’s compare how we worked only ten years ago.

Diane Mulcahy, author of The Gig Economy: The Complete Guide to Getting Better Work, Taking More Time Off, and Financing the Life you Want, says traditionally, winners and losers in the U.S. economy have been easy to identify (Who Wins in the Gig Economy, and Who Loses, Harvard Business Review, October 2016)

Mulcahy suggests that if you held a full-time job you were a winner because this form of work offered access to so many benefits.  A full-time role was seen to provide a steady income needed to support the highly leveraged, high-fixed-cost house; the cars; the latest consumer goods, as well as employer-provided benefits, such as health insurance and a pension, as well as protections against workplace injuries, discrimination, and harassment.

The way we work today is far from the mindset that we need a full-time job to economically survive and be happy.  In recent years, we’ve seen a surge in alternative work arrangements such as freelance assignments, moonlighters, project and contract work.

Clearly, with digital platforms enabling an on-demand workforce, there are benefits of the gig economy to both employers and workers.

The wins for an employer of course is that they have access to a vast range of expertise and skills on demand.

Flexibility, autonomy and meaning are the big gains for workers in the new WoW economy.

So, let’s turn the spotlight on the ‘duty of care’.  When you engage someone to do work for you, (whether paid or not, whether engaged directly or not), or if you influence or direct a person to carry out work on behalf of your business or undertaking, a duty of care is owed to that worker.

The primary duty of care requires the duty holder to ensure the health and safety, so far as is reasonably practicable, by managing the risks to health and safety through a hierarchy of control approach.  Under the primary duty of care, a business or undertaking must ensure, so far as is reasonably practicable:

The new working economy and technology advancements enables us to engage workers through so many different mediums.  With the tap and a swipe on a mobile we can gain access to and order up a range of specialised services.  For example, you may use a site like Fiverr, a freelance services marketplace to engage the services of a content writer for a small one-off project, or you may need help relocating office and post a job on Airtasker, seeking someone to assist you for a day.  Alternatively, you may be a looking for a full-time nanny and post a job on Find A Babysitter.

When you consider work health and safety law and its application in these various types of worker engagement, it can be mind-blowing.   At what point does the work health and safety law, specifically primary duty of care become relevant?

Safe Work Australia’s Interpretive Guideline-Model Work Health and Safety Act, The Meaning of  ‘Person Conducting a Business or Undertaking provides some clarity on this point.

Firstly, work health and safety regulators consider that the intent of the legislation is that the following kinds of persons should not to be taken to be PCBUs:

  • Individuals who carry out domestic work in and around their own home (e.g. domestic chores etc).
  • Individuals such as home-based foster carers who care for foster children.
  • Individual householders who organise one-off events such as dinner parties, garage sales, lemonade stalls etc.
  • Individual householders who engage persons to carry out ad hoc home maintenance and repairs or other domestic work, e.g. casual babysitters; tradespeople to undertake repairs. It is important to note that a tradesperson will either be a worker for a business or undertaking, or a business or undertaking in their own right if the tradesperson is self-employed.

However, if the individual householder engages a worker, for example, employing a nanny to care for children in the householder’s home, they may have duties of a PCBU.  While the householder is not employing the worker as part of a business, employing the worker to carry out certain duties at the home is regarded as an ‘undertaking’. Consequently, the householder has a duty of care as a PCBU and the person employed by the householder has the worker’s duty of care under the WHS Act.

A householder may also be a PCBU if ‘work’ is carried out by or for them that is not purely domestic, but is part of a business or undertaking conducted by them (e.g. a business is operated from home). The householder may then be a PCBU involving the management or control of the workplace, and have duties as such. If the person is undertaking ‘work’ for the householder, as part of the conduct of a business or undertaking by the householder, then the householder will have the primary duty in relation to that person.

In line with new ‘WoW’ is the changing landscape for duty of care. If you are a player in the new WoW, you need to be across your obligations and duties.

For a more comprehensive look behind these duties, download our free ebook on independent contracting which clearly and in a practical manner sets down some of these considerations.

Author: Tania Evans, Founder, WorkPro.

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