The "sharing economy" is still in its infancy
but steadily establishing itself as a force to be reckoned with.
It's generally defined as a socio-economic ecosystem where
human and physical resources are shared. Put simply, it's about
sharing stuff like cars (Uber) and accommodation (Airbnb) when the
owner decides the resource is available, for a fee.
While the business model is evolving, the law is typically
lagging behind. The challenge for the "sharing economy"
is working out how it can comply with the law while retaining the
flexibility (and cost efficiency) it requires.
Deciding how to engage the workforce is one area of significant
challenge given the workplace relations legislation heavily
regulates the forms of engagement available. Broadly speaking,
these can be divided into two categories; employees or contractors.
There are pros and cons with each and neither seems to provide a
"Employment" is typically determined having regard to
a number of factors, including the level and degree of control the
"employer" has over the individual" and whether the
individual is integrated into the organisation. Email addresses,
business cards and other branding is consistent with employment.
However, this model is typically unattractive to the "sharing
economy" given the hours of work are unpredictable or
determined by the individual and payment is commission based rather
than hours worked. Other onerous obligations associated with
employment are also a deterrent such the cost of paid leave
entitlements and vicarious liability.
Casual employment might seem a viable option if the work is
typically ad hoc. However, casuals are entitled to a higher minimum
pay rate, and longer term casuals present a risk of being deemed
permanent and consequently entitled to the same benefits as
On the other hand, the contractor model may be appropriate if
the arrangement meets criteria including the worker running their
own business, providing their own tools of trade, being able to
delegate their work, submitting tax invoices and if they are
incorporated. However, if the substance of the relationship is more
akin to employment, the principal faces exposure to non-compliance
with the relevant protective legislation afforded to employees,
including the "sham contracting" provisions in the Fair
Work Act 2009(Cth) which carry heavy penalties for a breach and
reinstatement of entitlements.
It appears there is a case for regulatory reform, as the current
options for engaging workers don't provide a neat fit. However,
that's not likely to happen in the short term given the most
recent Productivity Commission draft workplace relations report
didn't tackle the issue head on.
We'll keep an eye on any developments. In the meantime, the
"sharing economy" will need to watch this (shared)
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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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