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Workplace Express: Corporate evasion of employment obligations "endemic", says submission

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The rapid rise of the "gig" economy has "normalised" sham contracting and exploitation of young workers, according to a submission to a Senate inquiry into corporate avoidance of the Fair Work Act.

The Young Workers Centre submission to a Senate education and employment committee inquiry into "corporate avoidance" of the legislation says the "gig" economy is "sham contracting rebadged" and that young people are performing temporary work without safety insurance, minimum pay rates or the conditions provided in the NES and industry awards.

The "gig economy", characterised by piecemeal, short-term engagements, where workers perform temporary "gigs" of work, has become more prevalent due to the rise of digital platforms such as UberFoodoraDeliveroo and Airtasker, which receive a commission from each payment.

Deliveroo not delivering for workers

Deliveroo, for example, engages its workers as independent contractors and signs them up to a "standard" contract, which does not provide workers with minimum conditions or other entitlements set for the industry by the Road Transport and Distribution Award, the submission says.

However, "real life case studies" put forward by the Centre, based on accounts from people who have presented at its Victorian Trades Hall office, reveal there is no '"standard" as contracts are subject to constant change.

The Centre says Deliveroo riders in Melbourne currently performing identical tasks and jobs are engaged under up to five different contracts, each specifying different pay rates and conditions, depending on when the worker started with the company.

According to the terms of one Deliveroo contract dated November 2015, workers are paid $18 an hour, plus a $2.50 delivery fee.

Meanwhile, under the contractual terms of another Deliveroo contract from April last year, the worker receives no hourly rate, but a $9 delivery fee.

Centre calls for government to step in

The Victorian-based Centre, established in 2016 to "break the cycle of exploitation" at work for young workers, recommends that the Federal Government expand the Act's definition of 'employer' and 'employee' so that the 'employee' definition captures employment arrangements that rely on contracting, which it says are currently being "disguised" as independent contracting.

The Centre is also calling on the government to amend the Act to make sham contracting a strict liability offence.

It further wants the federal government work with state health and safety regulators to review OHS and workers compensation legislation to ensure that companies operating in the gig economy are responsible for their workers' safety.

Centre wants to bury "zombie" agreements

The Centre says that the FWC should audit all Work Choices agreements to find out how many "zombie" deals still exist.

More than 4,000 Work Choices agreements were registered, but it is unclear how many still operate.

The Centre says the Government should legislate to require employers to renegotiate and replace zombie" agreements with deals that comply with the Act and the BOOT.

It says the current agreement termination process is not simple or risk-free and young workers are discouraged from seeking to terminate zombie agreements on their own because of a fear of reprisals.

Plug loopholes, says Centre

The Centre says that large multinational corporations are reaping huge profits by shifting their business costs, risks and responsibilities to workers.

It also says that by classifying workers as independent contractors, corporations are avoiding paying taxes and levies.

The Centre claims businesses are showing a "flagrant disregard" for the legislation and are exploiting loopholes to avoid their obligations for workers safety, pay and rights.

It is urging the inquiry to make recommendations to close the loopholes available to businesses exploiting young workers and impose harsher penalties to provide a disincentive for any further avoidance.