THE LAW & THE ON-DEMAND ECONOMY

DAY OF RECKONING

Nick Duggal Partner

Liz Aitken Associate

“the economic activity created by digital marketplaces that fulfil consumer demand via immediate access to and convenient provisioning of goods and services”

United Kingdom

United States Australia

Airtasker “has used a cloak of innovation and progress to re-introduce archaic and outdated labour practices”

Unions NSW

“In essence, people formerly known as “employees” have lost that identity to schemes drafted by lawyers and accountants involving labour hire agencies, dependent and independent

contracting, franchising, supply chains and digitalised labour.” Maurice Blackburn

• Mass engagement

• Unskilled labour

• Decline in major industry engagement

• Augmentation of labour market

• Lack of regulation

FEATURES OF THE ‘ON-DEMAND’ ECONOMY

YOU TELL US…

IMPLICATIONS

• Higher transaction cost and overheads Æ passed to consumer

• Less flexibility for workers / businesses

• Lower earning capacity for workers / businesses

• Poor leverage of excess capacity for workers / businesses

• Less stimulus for consumption

• Poorer consumer experience

IMPLICATIONS

• Unfair dismissal and other common employment claims

• Employment entitlements – minimum wages, annual leave etc

• Tax exposure – PAYG, GST etc

independent contractor vs

employee

FWO v Quest South Perth Holdings Pty Ltd [2015] HCA 45

"a person (the employer) that employs, or proposes to employ,

an individual must not represent to the individual that the contract of employment under which the individual is, or would be, employed by the employer is a contract for services under which the individual performs, or would perform, work as an

independent contractor.“

Section 357 Fair Work Act 2009 (Cth)

FWO v Quest South Perth Holdings Pty Ltd [2015] HCA 45

• Attempt to “convert”

employees to contractors

• Defence Æ labour hire arrangement

• High Court’s position: section 357 extends to triangular arrangements

Roy Morgan Research Centre Pty Ltd v CMR For State Taxation

FACTS:

Roy Morgan engaged “interviewers” as contractors who: • could accept interviewing “assignments” for usually two

weekends a month • would be provided with questionnaires, and be required

to read those questionnaires precisely as formulated • be paid if completed eight interviews • be required to have a car and a telephone A series of decisions in other states with almost identical facts determined that the interviewers were employees.

Roy Morgan Research Centre Pty Ltd v CMR For State Taxation

RULING: • On the question of control: “If there was scope for

control, it was only in respect of incidental matters.” • On the contractors running their own business: “there is

little scope for the interviewers to create a business enterprise of their own, for example, by the accumulation of goodwill, and that the interviewers are in fact operating in RMRC’s business operation. I accept there is weight in that argument, but in my view, that circumstance is outweighed by factors pointing the other way.”

• On the persuasive precedents: “I have been very much assisted by those decisions, and I accord them respect. But however desirable it might be to have uniform decisions between the States…..I must reach my own decision.”

CROSS-ROADS

• Contested area • Imminent Australian ruling

NO MORE THAN A TECHNOLOGY SERVICE?

• Strategic workforce planning • Characterisation • Fundamental precautions: ‘off-set’ clause, limitations on

liability, ‘no reliance’ and ‘express terms’ • Effective advocacy

Liz Nick

Liz Aitken @elizabethaitken @liz8ken

0429 000 409 (03) 9602 9708 Elizabeth_Aitken@tresscox.com.au

Nick Duggal @nicholasduggal

0421 348 596 (03) 9602 9744 Nicholas_Duggal@tresscox.com.au

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