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A New Gig for the Fair Work Commission?

20 June 2017


A New Gig for the Fair Work Commission?

David Weiler, Associate

It was recently reported that the gig-economy giant, Airtasker, had agreed to explore the option of a dispute resolution process overseen by the Fair Work Commission (“FWC”). This is an important step in coming to terms with how employment regulation should respond to an industry that allows users to access on-demand the services of individuals whose employment status and the basic conditions under which they work is uncertain.

The details of the proposal are not yet clear, but according to news sources, President Ross and Senior Deputy President Sams of the FWC along with Unions NSW and Airtasker have entered into a heads of agreement with respect to issues being faced in these types of work arrangements.

According to Unions NSW, the agreement commits Airtasker to:

  • ensure that its recommended rates of pay are above award rates;
  • offer workers using the platform an insurance product similar to workers’ compensation to protect against workplace injuries and illnesses;
  • work with Unions NSW and the FWC to introduce a dispute resolution process; and
  • implement “best practice” WHS/OHS standards to protect workers and consumers using the platform.

In response to the announcement by Unions NSW, Airtasker has clarified that it already has an existing dispute resolution process operated by a third party provider, and that the potential involvement of the FWC in such a process is only at a “discussion stage”. Airtasker did however take steps to amend its online pay guide for various tasks to reflect, at a minimum, award rates for such work. This willingness to work with employee associations and address concerns about the pay and conditions of workers is a significant deviation from the practices of other operators in the gig-economy.

Background

Founded in 2012, Airtasker is an Australian based online company that offers a platform for a user (a “Job Poster”) to have various jobs performed by an individual (“Worker”), including specialised tasks performed by tradespeople.

It is free to post on the platform, where the Job Poster describes the task and indicates a budget for the work. Workers then post comments with regards to that task and can “bid” on the work, often indicating their experience and offering such features as “satisfaction guaranteed or free”. Following negotiations between the Job Poster and the Worker, the Job Poster can accept an offer from the Worker and the agreed amount is paid into a trust account held by Airtasker. Upon completion of the task, the Worker can request payment, which prompts the Job Poster to agree to Airtasker “releasing” the funds. If the Job Poster does not accept that the task has been completed in accordance with the agreed terms, it may raise a dispute, which prevents Airtasker from releasing the funds to the Worker. As discussed above, disputes relating to the disbursement of these funds are currently handled by a third party, and both Job Posters and Workers have profiles with ratings and reviews that may affect future work prospects.

The service fee for using the platform is included in the “bid” made by the Worker and is 15% of the value of the task. The Airtasker website boasts that it has created $116 million worth of jobs and that nearly one million Australians use its platform.

Employment relationship

In a Senate inquiry held in April 2017, Airtasker’s CEO, Tim Fung, testified that the people bidding for work (i.e. the Workers) are defined under the site’s terms and conditions as independent contractors and that he “certainly doesn’t think that there’s any form of employment relationship being created.”

The terms and conditions expressly state that if a Job Poster accepts an offer from a Worker, a “Task Contract” is formed between the Worker and the Job Poster (i.e. Airtasker is not a party to this arrangement). The terms also only permit “natural persons” to use the platform, so corporations are excluded from posting jobs or bidding on work, however persons may “represent a business entity.” Not surprisingly, the platform and its terms and conditions have been structured to create a strong argument that no employment relationship is created between Airtasker and the Worker.

Minimum wages

In 2014, Unions NSW published an issues paper that challenged the status of work arrangements in the gig-economy, and specifically questioned the obligations of Airtasker in relation to, among other things, minimum rates of pay. The paper included a comparison between Airtasker’s recommended pay rates for popular tasks like data entry, sales and cleaning and the relevant minimum award rates for such work. In some instances, where the cost of the 15% service fee charged by Airtasker was accounted for, this difference was almost $10/hour.

Importantly, the service fee is built into the value of the bid made by the Worker and accepted by the Job Poster at the time the Task Contract is entered into. As such, the cost of using the platform (which is arguably an equally shared benefit for both the Worker and the Job Poster) is borne entirely by the Worker and remains largely hidden from the Job Poster in relation to determining the value of the task.

Another concern for Workers is the fact that fees are set per task and not per hour. If a task takes longer than anticipated, the Worker can negotiate for an additional payment to complete the task, but this must be agreed between the parties. If the task is not performed in the agreed time, the Job Poster may refuse to pay the Worker at all, which would likely lead to the dispute being brought to the third party (the cost of which the parties must bear).

Dispute resolution

The potential move towards a dispute resolution process overseen by the FWC is certainly welcomed by Unions NSW, but its scope is far from certain. The lack of clarity of the terms of many of these agreements has the potential to disproportionately disadvantage the Workers. One such example is a case study that has been published on Airtasker’s website, which sets out that even after an offer is accepted and a Worker travels to the Job Poster’s location and is willing and able to perform the work, if the Job Poster cancels the Task Contract prior to the Worker commencing the work, unless there is an express term that has been agreed in relation to these circumstances, the Worker will not be entitled to any payment. An important point here is that these relationships are largely governed by comments left on postings and private messages between the parties, which in many (if not most) cases lack the basic terms and conditions around when and how a Job Poster can terminate a Task Contract.

Some important considerations regarding the establishment of an FWC dispute resolution process include:

  • what powers the FWC would be able to exercise (determinative or advisory only); and
  • the type of disputes within its jurisdiction.

The terms and conditions that a party accepts by using the Airtasker platform set out that the current third party provider has the power to arbitrate (that is, to issue a binding determination on the parties). The FWC process could involve similar powers to arbitrate disputes. It is likely that if this method was implemented, the FWC would also require the parties to conciliate prior to arbitration.

The type of disputes that may come within the FWC’s jurisdiction is also uncertain at this point but conceivably, it could include the enforcement of pay rates at the award minimum. It could also be empowered to ensure that certain conditions are met in respect of task contracts (e.g. around cancellation periods).

Insurance

A further issue relating to these arrangements is the provision of insurance for Workers. An aspect of the recent announcement is that Airtasker is working with a third party provider to develop personal insurance policies for Workers, which would address the concerns raised by Unions NSW around workers currently being excluded from workers’ compensation insurance.

Conclusion

The proposed partnership with the FWC and this collaborative engagement between Unions NSW and Airtasker is certainly a change of pace for observers of the gig-economy. It reflects an interest in finding ways to provide a platform of minimum conditions and a fair dispute resolution process. But it is important to note that neither of these aspects would necessarily make it an employment relationship. The fact that Airtasker is Australian and has grown in a market that has longstanding, strong workers’ rights protections may explain why its approach stands out amongst similar platforms. However, it is still early days for the company and the industry as a whole, and the only certainty is that we need ways to deal with the work undertaken pursuant to such arrangements as technologies develop and the demand for such services increases.

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