Yes or no to regulation – The ‘gig economy’ debate

| March 22, 2018

The Australian Council for Trade Unions is calling for greater protection for workers in an increasingly deregulated and casualised labour market, while the Centre for Independent Studies warns that more red tape will inconvenience consumers and cost jobs.

The case for

Thirty years of trickle-down economics has failed to provide secure jobs or fair pay rises.

Too many people in Australia have no job security. They can no longer predict or plan their lives. Having a job you can count on is a foundation of the Australian way of life.

The rules must be changed so jobs with basic security and rights can be restored.

1. Casual employment should be limited and properly defined: Workers in Australia can get trapped in casual employment. The average tenure is over three years.

We have to change the rules so big business can no longer deny people basic rights by refusing them permanent positions. Our laws need to properly define casual employment. Working people should have the choice to convert to permanent if they are in long-term regular work.

Casual employees who have worked on a regular basis for six months, deserve the right to choose to convert to permanent work.

2. Equal rights for all workers, including those in the gig-economy: Classing workers as individual contractors has seen people paid below minimum wage, denied access to workers’ compensation, denied sick leave, superannuation, access to unfair dismissal, and denied the benefits of collective bargaining. Everyone deserves these rights.

We need to change the rules so everyone has basic rights, including the right to collectively bargain.

3. Complete overhaul of labour hire: Labour hire companies simply rent out workers for lower pay and less job security. It’s got to stop.

We need to completely overhaul labour hire companies by creating a national labour hire licensing system to ensure they are not cutting wages and conditions.

Workers need protection from unfair dismissal by the host employer, and the ability to bargain with the company so they can win fair pay rises and gain secure work.

4. End the uncapped temporary working visa system: The government is shipping in exploitation and taking job opportunities for locals through its temporary visa system, and it needs to end.

The system should favour permanent migration and local employment. Temporary visas should only be used for genuine shortages, with strong protections against abuse.

5. Skills for the future: Privatising vocational education and training has been a disaster.

We must rebuild the funding for schools, TAFE and universities.

6. More secure jobs from free trade: The government is negotiating trade agreements that sell out Australian jobs.

We must only enter into agreements which defend and improve wages and job security. They should not be able to bypass our laws regarding the movement of people, just for the benefit of corporations.
Secure jobs from government’s buying power:

The government is currently using its spending power on what’s cheap, not quality. Rewrite the Commonwealth Procurement Rules to ensure that the government hires directly and locally, and prefers local businesses which pay fairly and provide secure jobs.

7. Time to care: The majority of working people have a responsibility to care for children, sick relatives, or an elderly parent.

We need to change the rules so people have the right to a part time or reduced hours. And the right to return, when their caring responsibilities have reduced or ended.

Sally McManus is the Secretary of the Australian Council of Trade Unions.

The case against

The ACTU campaign will axe jobs and hurt consumers

The ACTU campaign for the government to introduce burdensome restrictions on flexible work is a disingenuous move to clamp down on the choices of independent workers and consumers and is not grounded in any sensible economics.

The ACTU regime is targeting modern economy businesses, but is based on how businesses in the old economy operated. Weighing down businesses with unnecessary rules and regulations will ultimately lead to job losses and hurt many people.

These restrictions would ultimately harm both casual and independent workers, as well as the millions of Australian consumers, who benefit from the provision of flexible work, particularly in the sharing or ‘gig’ economy.

Ultimately, businesses and workers are beholden to the needs and desires of consumers. Modern consumers want goods and services which are on demand and streamlined for their needs. In this world, businesses and workers need to be more flexible than in the past.

The ACTU secretary, Sally McManus pretends that this campaign is all about fairness for workers; but the ACTU wants to take away the right of independent workers to freely choose their own conditions, hours of work and the quality of their work.

Casual employment conditions and the use of independent contractors provide the economy with the necessary flexibility to help deal with the advent of new technology and services.

The majority of recent employment growth has actually been in full-time work, with the number of Australians in full-time employment growing by over 290,000 in the last year. Given the strong state of the Australian workforce, the ACTU’s campaign is irresponsible.

The losers of labour regulation would include workers who want to work flexibly because of family or other commitments; consumers who want food or goods delivered and the elderly who need part-time home care.

Importantly, the ACTU should acknowledge that restricting flexible working conditions will incentivise businesses to automate jobs at a faster rate than otherwise. How is this in workers’ interest?

Matthew O’Donnell is a Senior Research Fellow and Eugenie Joseph is a Policy Analyst in the economics program at the Centre for Independent Studies.