California has passed legislation to significantly restrict the ability of businesses to use independent contractors. This is part of a seemingly global push against the rise of casual jobs that don’t pay benefits, including the so-called ‘gig economy’.
It is no surprise that the biggest driving force behind legislation like this is the union movement. It is exactly the same here in Australia, where the unions and affected industries have campaigned on the evils of long-term casual work and strongly opposed the introduction of ride-sharing apps like Uber.
In particular, union leaders condemned the Fair Work Ombudsman’s decision in June that Uber Australia drivers were not employees – with the national secretary of the Transport Workers Union saying “these laws are hopelessly broken and the government must act urgently to put in place rights that protect all workers”.
It’s important to understand that the push to impose strict IR regulations on these ‘gig work’ businesses is as much about protecting old-tech incumbents from competition as it is about protecting workers from unscrupulous bosses.
Nor is it clear that all casual or gig workers are unhappy with their lot. For example, a survey of workers on the staffing platform Sidekicker in 2012 found that three out of four workers thought job flexibility and work-life balance was more important than job security.
Arguably of equal importance are the longer-term implications for workers and the economy. Australian businesses are competing on cost with overseas firms with far more flexible labour markets.
Many businesses are not in a position to offer permanent positions – even if they wanted to – either because their work is inherently unsuited to it, or because they don’t have the financial security or stability to take on full-time staff.
Generous working conditions might satisfy union concerns in the short term, but at the cost of business viability. Far from ensuring that all workers get greater protection, strengthening the industrial relations system may result in some workers losing their jobs – and others not getting jobs at all.
Moreover, what’s wrong with businesses and staff being allowed to negotiate terms? That some businesses treat casuals poorly is no reason to upend the whole system.
An Australian Industry Group survey from 2016 found thousands of casual workers would lose their jobs if changes were made to give casual workers the absolute right to convert to permanent employment.
Such restrictions also drive businesses towards technology that can replace their workforce. After all, a robot will be happy to work casual shifts.
Simon Cowan is Research Director at the Centre for Independent Studies.
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