Stephen Roebuck (Peninsula) on the changing employment market for regulated workers
Australia has a large and complex labour market. Employees are engaged under various contracts, modern awards, or types of employment such as permanent, part-time or casual. In addition to this, there are independent contractors who work for themselves by providing services to another person or business.
Regulated workers are a subset of these independent contractors who form a vital element of the gig economy. There are two types of regulated workers, employee-like workers and road transport contractors. Employee-like workers provide services via a digital labour platform, such as a ridesharing, food delivery or other service app. Flexibility of hours and minimal barriers to entry has increased the number of people entering the gig economy. In fact, there are over 250,000 gig workers in Australia.
With this increase, there are new laws that have come into effect that aim to protect these workers' rights and freedoms. In August 2024, there were updates to the minimum standards for regulated workers. These updates form part of the federal government’s Closing Loopholes No 2 Act reforms to the Fair Work Act 2009.
Unfair deactivation and termination of regulated workers
Since 26 February 2025, the Fair Work Commission (FWC) accepts applications from eligible employee-like workers for unfair deactivation from a digital labour platform. Eligible Regulated Road Transport Contractors (RRTC) may also lodge a claim if they believe they have been unfairly terminated by a road transport business.
Similar to an unfair dismissal or unfair termination claim, the FWC will determine if deactivation or termination was unfair.
To be eligible, the employee-like worker or RRTC is required to have performed work for the digital labour platform operator or for the road transport business for at least 6 months from 26 August 2024.
The FWC will consider whether there was a valid reason for deactivation or termination. There are two distinct legislative instruments which apply, one for employee-like workers and another for RRTC. As such, the FWC will also consider whether the respective Fair Work (Digital Labour Platform Deactivation Code) Instrument 2024 or Fair Work (Road Transport Industry Termination Code) Instrument 2024 has been followed (the Codes).
The Codes establishes minimum requirements in respect of issuing deactivation or termination warnings, following requisite processes and other mandatory requirements that need to be considered by the platform operator or road transport business before deactivating or terminating the worker.
Regulated workers will have 21 days from deactivation or termination to make an application to the FWC. They will only be eligible if they earn less than the Contractor High Income threshold of $175,000 for the current financial year.
What is a digital labour platform?
A digital labour platform is an online app, website or system (platform). It is used to book or arrange the services where the operator of the platform engages contractors directly (or acts as an intermediary between users or customers and contractors) through the platform. Payments for the work performed by contractors are processed by the operator, an associated entity of the operator, or a contractor engaged by the operator.
Minimum standards for employee-like workers
Previously, digital platform workers had few rights and needed protections to be put in place to create safe and positive working conditions.
In August 2024, the Fair Work Commission was empowered to make legally binding minimum standards covering certain regulated workers and businesses. The FWC can set standards for regulated workers by making minimum-standard orders (MSOs) and minimum-standard guidelines (MSGs). MSOs and MSGs deal with the same workplace matters, such as payment, deductions. Insurance and cost recovery.
The key difference is MSOs are legally binding and if they are not followed, individuals or businesses can face penalties. MSGs are not legally binding. An MSG cannot be made to cover the same employees covered by an MSO.
Actions for businesses
Before termination or deactivation of eligible workers, careful consideration should be undertaken as to whether the action could be considered unfair, including the reason for termination or deactivation and following processes under the relevant Code.
Impact on the gig economy in Australia
Project based or temp jobs are not new in Australia. The gig economy exploded with the launch of digital platforms and websites. Delivery and rideshare services are just some of the companies that use gig workers.
Vulnerable regulated workers with low bargaining power required protection from unfair contracts, underpayments, and exploitation. Traditional systems of regulation would not suit regulated workers noting they are independent contractors, and the industry is in its infancy and unexplored. The need to create modern and agile regulations which consider flexible and different ways of working led to the reforms to the Fair Work Act 2009.
For business owners and employers, the changing employment relations landscape is the new reality. Navigating the complexities of new regulations is always challenging. Understanding the specific requirements is crucial for ensuring compliance and mitigating potential risks. It is highly recommended to seek guidance from experienced employment relations advisors like Peninsula who can provide tailored advice and ensure you are compliant with the latest legislative requirements.
