The price of home-delivered food and ride sharing may have to go up as a “modest pass-through” to consumers to pay for minimum conditions in the gig economy, Tony Burke has said.
Burke, the workplace relations minister, argued at the National Press Club on Thursday that “underpaying” workers is cheaper for consumers but a “tiny bit extra” is a small price to pay for conditions that improve rider safety.
Employer groups seized on the remarks, arguing Labor’s closing loopholes bill, including the gig economy reforms, will increase complexity and raise prices. They are calling on the Senate to reject it in its entirety.
But the Australian Council of Trade Unions has dismissed what it says is the latest “scare campaign” designed to bolster profits at the expense of basic conditions to help workers afford the rising cost of living.
The bill, to be introduced after question time on Monday, will give the Fair Work Commission the power to set minimum standards for hundreds of thousands of “employee-like workers” on digital platforms from 1 July 2024. It will also provide equal pay for labour hire workers, criminalise wage theft and improve the rights of casual employees.
The gig economy changes will allow parties to apply to the commission for orders for minimum standards, including on pay, penalty rates, superannuation, payment terms, record-keeping, insurance and deactivation.
Asked about the impact on consumers, Burke told reporters in Canberra: “When you say ‘oh, could there be a pass-through to someone getting the pizza delivered to their home?’ Well, underpaying people is cheaper.”
“Yeah, it is. Slavery is probably cheaper too,” he quipped.
“There is some modest pass-through here. We’re talking about some of the lowest paid people in Australia. And if that means there’s a tiny bit extra you pay when your pizza arrives to your door and they’re more likely to be safe on the roads getting there, then I reckon it’s a pretty small price to pay.”
Burke argued that without minimum pay gig workers are incentivised to “run red lights, go up on to the footpath, [or] down the road … creating an extra lane between the parked cars and the traffic, knowing at any moment if a car door opens, instead of riding between the lanes, they’ll be lying beneath the traffic.”
Burke said he couldn’t quantify the price impact for consumers, because it would be up to the Fair Work Commission to decide minimum pay, which could be paid per minute or per five-minute block.
Burke said that “years ago” delivery drivers for franchises like Pizza Hut were employees who had minimum rights.
“And in the last decade, that’s gone. We simply want to bring back what those appropriate minimum standards should be, for the commission to work it out.”
Burke argued the “price problem” for consumers was likely to be minimal, arguing if it were otherwise you “wouldn’t find” cooperation from platforms such as Uber, which had already given in-principle support.
“Don’t forget that, disproportionate for the size of the business, the number of injuries we saw with businesses like Hungry Panda. There’s some small apps out there that have been radically undercutting [conditions], that have been a real safety concern.”
At the Press Club, Burke clarified that if platforms were able to opt-out by allowing contractors to set their own price, the race to the bottom would continue.
Instead of defining which platforms the reform will apply to, the commission will decide if workers have low bargaining power, low authority over their work or low enough pay to come within scope.
The Australian Chamber of Commerce and Industry chief executive, Andrew McKellar accused the minister of “confusion” about which platforms the reform will apply to.
“The minister made it very clear that costs will be going up,” he said. “The cost of your takeaway pizza on a Friday night will become more expensive, the cost in terms of getting a ride home.”
The ACTU president, Michele O’Neil, accused employers of “crying wolf” and a “scare campaign”.
ACTU secretary, Sally McManus, said businesses were fighting for loopholes that had “been used simply to drive down wages”. “That’s why they’re opposing the changes, because they want to keep wages where they are.”
The shadow employment minister, Michaelia Cash, said the “devil would be in the detail” of the bill, but criticised Burke for proposing “extraordinarily” to give himself the power in regulations “to unilaterally determine … whether or not a digital platform is employee-like”.
