Deliveroo workers are technically classed as independent contractors, not employees. (Getty Images: Daniel Leal-Olivas)
About a year ago in the United Kingdom, courier drivers for the billion-dollar food delivery service Deliveroo began protesting changes to payment rates.
And it soon became a dispute over definition and status, as much as pay.
Exactly what it means to be an “employee” has been the subject of heated debate before a British arbitration committee.
And the result could have implications for both the global gig economy and the future of worker representation.
Deliveroo, like other gig economy firms, classifies its workers as independent contractors, rather than employees.
The distinction is not just semantic. It’s worth hundreds of millions of dollars, because as independent contractors, gig workers have no right to traditional entitlements such as holiday pay and sick leave.
Similarly, Uber in the UK is currently appealing an earlier tribunal finding that its workers are not self-employed, as the company has long maintained.
Despite the lack of a definitive ruling in both cases, changes are already underway.
Uber recently announced that it will provide a sick pay and injury cover scheme for British drivers.
And the British Conservative Government has stepped into the Deliveroo drivers debate, warning the company that it’s required under law to pay its couriers the national living wage.
An issue of organisation
What’s also at issue in this UK case is whether gig economy workers have a right to collective action.
Only a few weeks ago public and political pressure forced Deliveroo to remove a clause in their supplier agreement, forbidding couriers from challenging their self-employed status before an employment tribunal.
“I believe that any time people feel exploited or mistreated, they are going to find ways to push back at that and to demand change,” Dr Jim Stanford, the director of the Centre for Future Work, says.
“That will be as true of young people working in a digital gig world as it was of workers in a smoke-filled factory in the Industrial Revolution.”
But for all the successes Deliveroo’s UK couriers have had so far, their long campaign highlights the difficulties gig economy workers in general have in organising and engaging in collective action.
The much vaunted flexibility offered to workers also gives companies like Uber, Lyft and Deliveroo enormous flexibility in discontinuing a person’s employment if they engage in protest or strike activity.
Dr Stanford believes that level of insecurity, coupled with poor pay, means workers are being exploited.
“Whether they are Uber drivers or Deliveroo riders or freelancers doing digital work, you are finding that they are looking for ways to connect with their fellow workers and put forth a united front to their employers to demand better treatment,” he says.
One way of doing that has been through social media.
Deliveroo drivers in Britain have used a crowd-funding site to help raise money for their strike fund, while sites like YouTube have become a forum for current and former gig workers to air their grievances and call out what they see as injustice.
California-based former engineer Harry Campbell runs a hugely popular blog for gig workers in the United States called The RideShare Guy. The site provides information about developments in the ride share industry, both positive and critical.
However, such initiatives lack the industrial muscle associated with a traditional trade union. Deliveroo workers in the UK eventually sought assistance from an established union – the Independent Workers Union of Great Britain. But that sort of assistance is not guaranteed in the future.
Solidarity (not quite) forever!
The established union movement has problems of its own. It’s struggling, despite conditions that should suit a growth in members: rising inequality, stagnant or falling wages and a dramatic decline in full-time employment. Ninety per cent of all jobs created in Australia in the 12 months to June 2016 were part-time.
Nowhere is the decline of unions more obvious than in Australia, which is now one of the least unionised countries in the developed world. Union membership is just 15 per cent — 10 points under the average for OECD countries. And among the young — those most affected by the rise of the gig economy — only 6 per cent of workers are union members.
“What we’ve seen has been 30 or 40 years in which almost every piece of legislation affecting the labour force has been calculated to reduce the influence of unions, to make unions’ life more difficult,” John Quiggin, an ARC Laureate Fellow in economics at the University of Queensland, says.
And while the union movement has historic links to the Labor Party they too, have conspired in the movement’s decline, Professor Quiggin says.
“It’s fair to say that the typical dynamic has been that each conservative government in Australia has introduced a new and tougher anti-union legislation. None of that has been repealed under Labor governments,” he says.
“And the other reform measures Labor governments have introduced, trade agreements and liberalisation generally, have been calculated to undermine unions, promote contestability and competition and so forth.”
And that’s as true of all Anglosphere countries, as it is of Australia, he says.
Dr Stanford, however, describes the Federal Government’s attitude to unions as “distinctly hostile”.
He says the system has been designed to further diminish union power by promoting the “free rider” effect.
Dr Stanford says many young people don’t understand the role that unions have played in Australia. (ABC News: Shahni Wellington)
“There is complete protection given to individuals in workplaces who can take all the benefits of unionisation in terms of being protected by an enterprise bargaining agreement and other things that the union does, but are under no requirement whatsoever to join the union or pay anything towards the services they get from the union,” he says.
Until that situation is redressed in line with other Western nations, Dr Stanford believes unions in Australia will continue to be hobbled.
He also believes the low rate of union membership among millennials reflects an issue of generational awareness.
“Most young people entering the labour market today don’t have any idea of what unions do, the historical role that unions have played in Australia in lifting standards,” he says.
“And therefore many of them don’t understand why they should be part of that union.”
Understanding the new globalisation
Another problematic factor for unions is the changing nature of the modern workplace and its internationalisation.
Professor Richard Baldwin, a specialist in globalisation trends from the Graduate Institute in Geneva, argues the basic focus of union representation is seriously flawed and no longer fit for purpose.
“That was appropriate when the challenges were arriving at the level of sectors and skill groups,” he says.
“But with this outsourcing and off-shoring, which is enabled by knowledge moving across borders, it meant globalisation was affecting the economy with a much finer degree of resolution.
“So a particular stage of production in a particular sector could be either helped or hurt by the globalisation. And even in that same factory there could be skilled workers who are helped by it, other skilled workers who are hurt by it, some unskilled workers who are helped and hurt.”
Professor Baldwin says off-shoring means globalisation has affected the economy with a finer degree of resolution. (Getty Images: Mick Ryan)
And he believes protecting worker rights and conditions in the future may well bypass unions altogether, with governments becoming more directly involved and following the Danish model of “flexicurity” — which shifts the focus from defending types of employment, to safeguarding employment opportunities for individual workers.
“In other words, you are not guaranteed a job, but they will help you find a job, no matter what happens,” Professor Baldwin says.
“That’s what I mean by protecting people — assuring them that they will do okay as the economy changes.
“Protecting jobs just doesn’t work because we do not know what jobs are going to stay and what are the nature of those jobs, where they’ll be located.”
A spirit of cooperation
Another idea for ensuring fair and equitable employee entitlements and conditions in a possible post-union world involves deliberately structuring employee-employer relations along less confrontational lines.
The industrial relations systems that operate in the Anglosphere are built on argumentation and contest — unions and employers battle against each other through some form of enterprise bargaining process.
By contrast, many countries in Europe allow for worker’s councils within companies, while in Germany they have a system known as co-determination.
Deakin University’s Jean du Plessis, an expert in the German system, says co-determination ensures workers are given a stake in the long-term future of the company.
“Shareholders and employees jointly appoint people to what is called a supervisory board, and that supervisory board is responsible for appointing the management board,” Professor du Plessis explains.
He says while the supervisory board has no direct say over how the management board operates, its role in appointing the management board reduces the chance of employers becoming rabidly anti-worker.
“In that way it’s a co-determination between the shareholders and the employees with the interest of the employees almost constantly taken care of, rather than just once every three years through enterprise agreement negotiations in a very combative form through the unions,” Professor du Plessis says.
He says the co-determination arrangement also tempers the demands of workers and their representatives.
Introducing such a system into a country like Australia, where industrial relations has a long history of confrontation would not be easy.
Professor du Plessis argues such a system acknowledges it’s not just the nature of worker representation that needs to change.
“This is one of the only ways, in a gradual way, in which we can move away from the shareholder primacy model to a more stakeholder based model,” he says.
“That’s what the company lawyers and corporate government specialists … are struggling with. How do we get the interests of other interest groups like employees, creditors, customers, also recognised in the formal company law model that we have? Because the model is broken at the moment.”