According to Tony Burke, the cost of having food delivered to your home and using ride-sharing services may need to go up as a “modest pass-through” to consumers to pay for minimal conditions in the gig economy.
The industrial relations minister, Burke, stated on Thursday at the National Press Club that “underpaying” workers results in lower costs for customers but that paying a “tiny bit extra” is a minor amount to pay for circumstances that promote rider safety. Burke was speaking on behalf of the government.
Employer organizations jumped on the statements to argue that the proposed legislation to close loopholes in the labor market, which includes measures for the gig economy, will add complexity and raise prices. They are requesting that the Senate dismiss it in its entirety as unacceptable.
However, Australian Council for Trade Unions has disregarded what it deems to be the most recent “scare campaign” meant to increase profits at the expense of fundamental working conditions to assist workers in affording the rising cost of living.
After question time on Monday, a bill that would grant the Fair Work Commission the authority to set minimum standards for hundreds of thousands of “employee-like workers” on digital platforms is scheduled to be introduced. This legislation is scheduled to take effect on July 1, 2024. Additionally, it will make theft of wages a criminal offense, offer equal pay for people employed through labor hire, and protect the rights of casual employees.
The modifications that are being made to the gig economy will make it possible for parties to apply to the commission for orders for basic standards. These orders may concern pay, penalty rates, superannuation, payment terms, record-keeping, insurance, or deactivation, among other things.
When reporters in Canberra asked Burke about the impact on customers, he responded as follows: “When you say ‘oh, could there be a pass-through to someone getting the pizza delivered to their home?'” However, it is more cost effective to pay individuals less.”
“Yeah, you’re right. “I’m sure that slavery is less expensive as well,” he joked.
“There is a little bit of a pass-through here. We’re talking about some of the folks in Australia who make the very least money. And if it means that there is a teeny-tiny amount of an increase in the price that you pay when your pizza is delivered to your house, and they are more likely to be safe on the highways getting there, then I think that it’s a very small thing to pay.
Burke stated that in the absence of minimum wage, employees in the gig economy have an incentive to “run red lights, go up on to the pavement, [or] down the road… constructing an additional lane between the parked cars and the traffic, knowing that at any point, if a car door opens, they will be lying beneath the traffic rather than riding between the lanes.
Burke stated that he was unable to provide an accurate estimate of the impact on prices for customers because the Fair Work Commission would be responsible for determining the minimum wage, which may be paid per minute or per five-minute block.
Burke stated that “years ago,” delivery drivers for businesses such as Pizza Hut were considered workers who were entitled to a baseline set of rights.
“And in the past ten years, that has disappeared. Simply said, we want to provide the commission with information on what the acceptable minimum requirements ought to be so that they can figure it out.
Burke stated that the “price problem” for customers was likely to be modest, and he argued that if it were different, you “wouldn’t find” cooperation from platforms such as Uber, which had already provided their support in concept. Burke was referring to the fact that Uber had already given its support in principle.
“Don’t forget that the number of injuries we found with firms like Hungry Panda was disproportionate for the size of the business. There are some smaller apps out there that have been grossly violating [conditions], which has been a significant cause for concern regarding safety.
Burke elaborated on this point during his appearance at the Press Club, when he stated that the race to the lowest would continue even if platforms had the ability to opt-out by granting contractors the freedom to determine their own prices.
Instead of determining which platforms the reform will apply to, the commission will determine whether or not workers have poor bargaining power, low authority over their work, or low pay, and if so, whether or not they fall under the reform’s purview.
Andrew McKellar, chief executive of Australian Chamber of Commerce & Industry, has accused the minister of “confusion” about the question of which platforms the reform will apply to.
He stated, “The minister has made it abundantly clear that there will be an increase in costs.” “The cost of your takeaway pizza on Friday nights will become more expensive, the cost in terms of getting a ride home.”
Sally McManus, secretary of Australian Council for Trade Unions (ACTU), stated that employers were battling for loopholes that had “simply been used to drive down wages.” Because of this, they are opposed to the reforms because they want to maintain the status quo with regard to the pay.
Michaelia Cash, who serves as the shadow minister for employment, stated that the “devil would be in the detail” of the bill. However, she criticized Burke for proposing “extraordinarily” to grant himself the right to unilaterally rule in regulations “whether or not a digital platform is employee-like”.