tag:theconversation.com,2011:/us/topics/independent-contractor-51206/articlesIndependent Contractor – The Conversation2018-11-27T19:05:41Ztag:theconversation.com,2011:article/1073692018-11-27T19:05:41Z2018-11-27T19:05:41ZRedefining workers in the platform economy: lessons from the Foodora bunfight<figure><img src="https://images.theconversation.com/files/247146/original/file-20181126-149332-q2wo73.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Foodora was struggling in Australia even before regulators took an interest in its cost-minimisation measures.</span> <span class="attribution"><span class="source">ArliftAtoz2205 / Shutterstock.com</span></span></figcaption></figure><p>Had Foodora’s Australian operations not already gone into <a>voluntary administration</a>, the November 16 decision of the Fair Work Commission might well have finished the food-delivery company off.</p>
<p>The commission <a>upheld</a> former courier Josh Klooger’s unfair dismissal complaint against Foodora. In doing so, it found Foodora had incorrectly classified him as an independent contractor, rather than an employee.</p>
<p>By treating workers as independent contractors, “gig economy” companies such as Foodora have avoided the cost of paying employee entitlements such as annual leave, sick leave and superannuation. The commission’s ruling made Foodora liable for paying such entitlements.</p>
<p>So does the ruling put other gig-economy companies on notice that they too will have to pay for employee entitlements? The short answer is no. It’s complicated because the decision reflects a range of reasons specific to Foodora’s operations. </p>
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<img alt="" src="https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Foodora-branded uniforms and equipment indicated a level of control akin to that of an employer over an employee.</span>
<span class="attribution"><span class="source">Andrea Delbo/Shutterstock.com</span></span>
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<p>But the Foodora case still might have some significant ramifications for the future of the gig economy – based on a not-yet-public ruling by the Australian Tax Office.</p>
<h2>Context matters</h2>
<p>The Fair Work Commission’s decision about Klooger’s relationship with Foodora can be contrasted to its decision that Uber drivers are <a>contractors not employees</a>. </p>
<p>Labour law experts <a>have pointed to</a> the exceptional circumstances of the Foodora case. These include the control the company exercised over Klooger. Foodora determined, for example, when he had to start and finish his shifts. It also required all couriers to wear a uniform and use Foodora-branded equipment.</p>
<p>Because these factors were specific to Foodora, there is no certainty the commission would rule that other gig-economy workers classified as independent contractors should be treated as employees. </p>
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<p>As we <a>have previously suggested</a>, this may even result in other platforms creating greater <a>arm’s-length relationships</a> with workers – both contractually and by reducing work-related support.</p>
<h2>Taxation and the gig economy</h2>
<p>Although the direct implications of the Fair Work decision for other platform companies are limited, Foodora’s demise is significant. </p>
<p>Its voluntary administration process has revealed the outcome of an Australian Taxation Office determination that could be relevant to other gig companies.</p>
<p>We know this because of Foodora’s administrator’s report to creditors. The report notes ongoing warnings from the tax office to Foodora. Chief among the tax office’s concerns was that Foodora should have been collecting PAYG income tax and making superannuation contributions. It was on this basis that the administrator agreed Foodora had probably <a>wrongly classified</a> its riders as independent contractors. </p>
<p>It is the tax office’s determination that could have the most far-reaching consequences for other platforms operating in Australia. </p>
<p>The determination and reasons for it are not yet in the public domain – due to “<a>obligations of confidentiality</a>”. We can only speculate about the underlying rationale. However, based on existing <a>case law</a> and <a>tax compliance priorities</a>, we suggest two critical aspects potentially expose other platforms’ operational models to the tax office’s compliance regime. </p>
<p>The first relates to the platform setting rates of pay and creating invoices on behalf of workers, which the platform then pays. Prior <a>tax office actions</a> suggest recipient-created tax invoices lead to questions about the true nature of the contracting relationship. Foodora had such a mechanism. Deliveroo and Uber Eats have something similar.</p>
<p>The second is the demand that workers provide an Australian Business Number (ABN) and what this means for <a>the contracting relationship</a>. The tax office is quite clear the ABN does not change the fundamental employment relationship.</p>
<p>This means the ATO is likely to scrutinise the particular arrangements a platform uses to classify workers as contractors.</p>
<h2>Platforms and profitability</h2>
<p>That Foodora went <a href="https://www.smh.com.au/business/workplace/foodora-australia-goes-into-administration-while-facing-legal-action-20180817-p4zy5b.html">into administration</a> before the ATO and Fair Work rulings could bite tells its own story about the platform economy. </p>
<p>Despite the mushrooming of different platforms across a range of sectors – from ride sharing to food delivery, hospitality and care work – serious questions remain about the viability and sustainability of platform companies. Uber, for example, <a>lost US$4.5 billion globally in 2017</a>. </p>
<p>In an environment where platforms ruthlessly compete for market share, profitability remains a key challenge. </p>
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<p>Author Nick Srnicek in his book <a>Platform Economy</a> warns that the ‘network effects’ associated with platform capitalism may lead to monopolies. This is the result of users flocking to the most used platforms while others fail. </p>
<p>Foodora may just be one of the first victims of increased market concentration in the food-delivery industry. Its demise reflects the evolving nature of the platform economy in Australia. </p>
<p>Given the continued popularity of the platform economy with consumers it is unlikely the above developments will spell the end of work organised and facilitated by online apps. However, this space remains fluid. There will be rulings on other platforms. There is talk of potential legal and regulatory <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Future_of_Work_and_Workers/FutureofWork/Report">reforms</a> to better protect workers in the gig economy. The issues of employment status and rights will not be settled any time soon. </p>
<p>In the meantime platforms are incentivised to do whatever they can to <a href="https://theconversation.com/why-gig-workers-may-be-worse-off-after-the-fair-work-ombudsmans-action-against-foodora-98242">avoid the costs of employment relationships</a> as that increases their chances of benefiting from, rather than falling victim to, the drift towards monopolisation.</p><img src="https://counter.theconversation.com/content/107369/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It is the Australian Tax Office, not the Fair Work Commission, making the big waves with the Foodora case and the future of the gig economy.Alex Veen, Lecturer (Academic Fellow) in Work and Organisational Studies, University of SydneyCaleb Goods, Lecturer - Management and Organisations, UWA Business School, The University of Western AustraliaTom Barratt, Lecturer, School of Business and Law, Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1003292018-07-25T20:09:51Z2018-07-25T20:09:51ZChildcare shake-up neglects family day care workers, but we can learn from garment workers’ experience<figure><img src="https://images.theconversation.com/files/229194/original/file-20180725-194124-1bjlv4t.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Family day care workers provide this essential service from their homes, but being classed as independent contractors means they lack many employment protections.</span> <span class="attribution"><a class="source" href="http://www.afimsc.af.mil/News/Article-Display/Article/1212996/lukes-cdc-wins-best-in-air-force/">AFIMSC</a></span></figcaption></figure><p>The federal government has <a href="https://www.smh.com.au/national/a-childcare-revolution-is-set-to-change-the-way-we-live-20180628-p4zofh.html">rolled out</a> new <a href="https://www.education.gov.au/ChildCarePackage">Child Care Subsidy</a> arrangements based on parents’ earnings. Recent policy changes emphasise the need for quality childcare. To this end, policy has promoted minimum educational qualifications for childcare workers and increased reliance on market principles. </p>
<p>Often forgotten in the middle of all these changes are the childcare workers themselves, known as “educators”. In particular, <a href="https://www.education.gov.au/child-care-provider-handbook/types-eligible-child-care-services">family day care</a> educators have been conspicuously absent in discussions. </p>
<p>Historically, these workers have been at the bottom of the <a href="https://www.education.gov.au/child-care-provider-handbook/types-eligible-child-care-services">early childhood education and care work hierarchy</a>. They have been the least visible, most isolated, and lowest paid. </p>
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<p>With even federal education minister Simon Birmingham <a href="https://www.afr.com/news/economy/employment/government-targets-pricegouging-by-childcare-providers-20180629-h121t9">encouraging families to shop around</a> for cheap childcare, many of these workers end up having to cut their rates to attract families.</p>
<p>Family day care workers have much in common with home-based workers in the garment industry. Migrant women are overrepresented in both types of work. The employment is uncertain and their work conditions are often poor.</p>
<p>However, <a href="http://journals.sagepub.com/eprint/UBe9b7td8bF9RpcayMBM/full">our research</a> shows that garment workers have benefited from better regulation and representation, and this would help family day care workers too. </p>
<h2>Who provides family day care, and how are they regulated?</h2>
<p>Family day care is different from other forms of early childhood education and care. The workers are home-based and are not employees. Under federal law, they are considered independent contractors. According to the peak body <a href="https://www.familydaycare.com.au/fdc">Family Day Care Australia</a>, there are more than 22,000 of these workers.</p>
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<p>Most of these workers are women. The work allows them to contribute financially to their household, while still being able to care for their own family. They operate as small businesses, independently contracted to a family day care coordination unit. </p>
<p>However, the usual association of self-employment with independence and entrepreneurship does not hold in this case. The business cannot be expanded, sold, or operated independently of the scheme. </p>
<p>These educators work long hours and are unable to control or limit them. With the marketisation drive, many have had to cut rates to be competitive. </p>
<p>Any changes in their operation are highly regulated. Workers spend a lot of time completing paperwork for compliance. </p>
<p>Family day care also attracts a lot of migrant women. A 2013 <a href="http://www.scseec.edu.au/site/DefaultSite/filesystem/documents/Reports%20and%20publications/Publications/ACECQA%20Research%20Report%20on%20the%20NQF%20and%20Regulatory%20Burden%20-%20Combined.pdf">ACECQA report</a> indicated that nearly two in five (38%) of these workers speak a language other than English at home. </p>
<p>Most of the women migrants arrive on a <a href="https://www.homeaffairs.gov.au/visas/supporting/Pages/403/dependent-family-members.aspx">dependant visa</a>. It’s difficult for them to find other jobs due to <a href="https://theconversation.com/refugees-need-support-to-continue-their-careers-heres-how-it-can-be-done-76151">lack of recognition of qualifications and experience</a> from their home countries, lack of local experience, and <a href="https://theconversation.com/skin-deep-should-australia-consider-name-blind-resumes-55503">discrimination in the labour market</a>. They also lack social support in their new country. </p>
<p>Entry into the childcare sector is relatively easy. Childcare is widely considered to come “naturally” to women. Therefore, many women are pushed into this work, and family day care in particular, so that they can also look after their own children. In fact, <a href="https://www.pc.gov.au/inquiries/completed/education-workforce-early-childhood/report/early-childhood-report.pdf">government policy</a> frames family day care as an important career pathway for migrant women. </p>
<p>However, in reality, these women experience isolation due to long hours, inflexible schedules, and the compliance workload. </p>
<p>In most cases, all these activities are undertaken at low pay. In 2014, the government announced <a href="https://www.smh.com.au/politics/federal/parents-warned-budget-cuts-will-put-family-day-care-in-danger-20140518-38hz4.html">cuts to the Community Support Program</a>. Under this program, well-established day care centres supported family day care operators. These <a href="http://fdcsupport.org.au/wp-content/uploads/changes_to_the_community_support_programme_for_family_day_care_service_operators_in_hands_template.pdf">cuts, along with strict eligibility conditions</a>, have <a href="https://www.heraldsun.com.au/leader/east/federal-government-cuts-250000-subsidy-to-monash-family-day-care/news-story/4392fa2beb3ad947d93d5dacd69f9679">increased the uncertainty</a> for family day care workers. </p>
<p>Many now have to find a new scheme with which to associate for referrals. In some cases these are not local, with the result that educators are left to find new clients on their own. </p>
<p>For migrant educators, this can be difficult. They do not have the network. They also often <a href="https://www.humanrights.gov.au/our-work/race-discrimination/publications/fact-sheet-racism-it-stops-me-community-service">face racial discrimination</a>. </p>
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<h2>How does this compare to garment workers?</h2>
<p>Despite the many common features of family day care educators and home-based workers in the garment industry, <a href="http://journals.sagepub.com/eprint/UBe9b7td8bF9RpcayMBM/full">our research</a> has shown the regulation of their work is very different. </p>
<p>Because of advocacy by the unions (TCFUA and FairWear) for garment homeworkers, they are deemed to be employees under federal law. This gives them legislative protections under the Fair Work Act 2009, including the right to a minimum wage, long service leave, and superannuation. They are also protected from unfair dismissal. </p>
<p>On the other hand, the concerns of all early childcare workers are assumed to represent family day care workers’ concerns. Unlike garment homeworkers, family day care workers have failed to secure recognition as employees. This has limited their capacity to organise collectively and develop bargaining strategies through a union advocate. </p>
<p>In the case of garment homeworkers, advocacy focused on the workers. However, advocacy around childcare has focused mainly on the needs of working parents and access to affordable childcare, rather than on the pay and conditions of the workers. Family day care homeworkers have been left at the mercy of market forces.</p>
<p>Childcare policy in Australia has focused on human capital – present and future. It has sought to help new mothers to return to work and provide the next generation with a strong foundation. </p>
<p>It is time to recognise the essential role of family day care workers in providing this foundation. Their voice and the advocates working to improve their protection need to be heard.</p>
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<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Family day care workers have much in common with home-based workers in the garment industry. But the latter are classed as employees, resulting in better representation and protected work conditions.Vidhula Venugopal, Postdoctoral Fellow in Entrepreneurship & Innovation, RMIT UniversityAnnie Delaney, Senior lecturer, RMIT UniversityYee-Fui Ng, Senior Lecturer, Faculty of Law, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/934282018-03-16T06:46:21Z2018-03-16T06:46:21ZGig platforms’ claims over worker chat groups: fraught territory indeed<p>Food delivery platform Foodora, it seems, is <a href="http://www.afr.com/news/policy/industrial-relations/foodora-fires-courier-for-refusing-to-quit-workers-chat-group-20180314-h0xg33">trying to claim intellectual property rights</a> over an encrypted chat group that Foodora riders were using to swap tips and shifts, and talk about pay and conditions. </p>
<p>This raises important questions about what digital privacy rights we have, especially over what might once have been “water cooler” conversations. Many Australians wouldn’t agree that employers have rights even to look at private social media posts. </p>
<p>And when it comes to intellectual property rights, employers’ rights are usually limited to material created in the course of employment. And rights over the material of independent contractors are even more limited. </p>
<p>In <a href="https://ses.library.usyd.edu.au/handle/2123/17587">recent research</a>, based on an online survey, my colleagues and I found that only 37% of Australians agreed that it was acceptable for current employers to look at your public social media posts. Only 20% agreed it was acceptable when the social media posts were private.</p>
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<p>Our research asked about employers looking at posts by employees. But Foodora considers its drivers <a href="https://www.foodora.com.au/contents/terms-and-conditions.htm">independent contractors</a>, not employees. This is due to the flexibility and autonomy that it asserts the drivers have (and is <a href="https://www.smh.com.au/business/careers/fired-for-taking-a-holiday-bicycle-couriers-claim-unfair-dismissal-20180313-p4z45p.html">in dispute</a>), but it also makes it extraordinary that Foodora would lay claim to a private chat group among riders. </p>
<p><a href="http://www.afr.com/news/policy/industrial-relations/foodora-fires-courier-for-refusing-to-quit-workers-chat-group-20180314-h0xg33">According to The Australian Financial Review</a>, Foodora claims that by maintaining and refusing to transfer ownership of encrypted chat groups on Telegram, a rider was potentially breaching confidentiality and Foodora’s intellectual property rights. </p>
<p>It is difficult to imagine what kind of intellectual property rights Foodora might be talking about. Could an employer or platform claim copyright in a chat group? We’d first have to accept that conversations in a chat group are protected by copyright, just because they’ve been written down.</p>
<p>But even if they are, employers usually only <a href="http://www5.austlii.edu.au/au/legis/cth/consol_act/ca1968133/s35.html">own</a> what employees create <em>in the course of their employment</em>. </p>
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<p>If I’m an employee graphic designer, hired to create new logos and designs for my company, no one should be surprised that they belong to the company. </p>
<p>But if I’m a retail sales assistant and writing the world’s next great novel at night, it would be very surprising if my supermarket employer could turn around and claim the copyright royalties. </p>
<p>A general rule of thumb is: what work was the person hired to do? It’s not obvious to me that conversations delivery riders might have, even if it is ostensibly about their work, is work they were hired to do. </p>
<p>And remember, again, gig workers like Foodora drivers are, according to the platforms themselves, independent contractors. In copyright law, <a href="https://www.artslaw.com.au/info-sheets/info-sheet/employment-issues-for-nsw-employees/">work created by independent contractors belongs to them</a>. We would, though, have to look at the way the Foodora contracts are written. The ownership rules in copyright are all subject to contract. </p>
<p>It’s conceivable that a platform’s terms could be so broadly written that it tries to claim copyright in anything at all that is related to the platform - but that would be an extraordinarily broad way to write a contract. I suspect courts might be quite unwilling to read a term like that broadly.</p>
<p>Foodora might be claiming that the information shared by the drivers is confidential information. Here things are a little more legally interesting: to get to the bottom of a claim like that would mean looking at the law of contract, the terms of the contract, the law of equity etc. </p>
<p>But again, it’s not clear that a platform could claim that the standard terms and conditions it offers to contractors are confidential information (they are quite widely discussed in the media), or that riders discussing those terms among themselves is a breach of confidence. And for a court to treat terms like that as confidential would be very disempowering for workers - and not great for the market for employment, either.</p>
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<p>More fundamentally, we also need to ask, if a gig economy platform claims that private, encrypted conversations happening among workers somehow belongs to it, what degree of control is that platform asserting over the workers?</p>
<p>This isn’t consistent with the assertion that those workers are free, autonomous, independent contractors with none of the rights (or responsibilities?) of an employee.</p>
<p>In our study we found that those who had only completed high school – the least powerful employees – were consistently the group least likely to agree it was acceptable for any employer to look at public or private social media posts.</p>
<p>We also found that a majority of Australians supported some government regulation for online gig work platforms. So perhaps platforms should think about the consistency of the claims they make. Foodora’s feels a little like having your pizza and eating it too.</p><img src="https://counter.theconversation.com/content/93428/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kimberlee Weatherall is employed by the University of Sydney. Research quoted in this piece has been funded by the University of Sydney's Research Excellence Initiative.</span></em></p>Could an employer or platform claim copyright in a chat group? We’d first have to accept that conversations in a chat group are protected by copyright.Kimberlee Weatherall, Professor and Associate Dean (Research) The University of Sydney Law School, University of SydneyLicensed as Creative Commons – attribution, no derivatives.