“Closing the loop bill” or more accurately “Fair Work Legislation Amendment (Closing Loopholes) Bill ” received royal assent on 24th February 2024. It was part 2 of a 2 part bill, the first part receiving assent earlier.
Back in August 2023, the Labor Government announced amendment to the Fair Work legislation laws. The message then was to protect workers of the evolving gig economy.
It was then long overdue. Past assumptions on employment and the general approach of one size fits all does not work in the gig economy. It was time for change.
First impression from the August announcement
I was elated when I first read about it.
I wrote about the Hybrid gig laws for Australia it in an earlier post here.
Impression to me in August at least was to define the operating boundaries of this relatively new paradigm. The gig economy was new and the old world conventional employee – employer relationship model did not fit.
Not only did we need to protect workers in this new sector but to give this new sector clear guardrails.
The guardrails would also help to protect the early evolved values of the gig economy. Most importantly the concept and practice of worker independence.
The ability of the individual to make a choice of how he wants to be engaged. Not everyone wants to be considered a worker with the usual fixed conditions of employment. To be considered independent and to feel independent.
On other element and I believe this is where fair play for both sides will prevail. The respected Fair Work Commission would be given powers to rule on work practices in the gig economy. This approach was the sweetener as it provided an independent arbitration framework far away from power lobbies and unions.
The new laws are far reaching
The new amendments passed in February 2024 however appears to be different. As far as I can tell it appears to cover the loopholes and shortcomings of existing laws in all aspects of employment. The focus is not just the gig economy.
It is clearly complex. It does not take much to work out that the cost of labour across the economy will rise, to be compliant. Both for the conventional and gig economy workforce.
One interesting element and ties the hands of Fair Work Commission when it comes to arbitration is any outcome cannot be worse off for workers when the matter is first referred.
So correcting an error of the employer that wrongly benefitted the workers is out. At least one state government and employers organisations have expressed concerns about this.
Guardrails to steer the gig economy
It does provide much needed cover for workers from exploitation but does it also protect the good things of the gig economy?
Building on the many positives of the gig economy is rather too early to determine with the new set of provisions. Much of that work for now has been passed to the Fair Work Commission.
I do remember like some others that it became obvious years before General Motors withdrew from Australia’s car industry that the sector was on its last leg. The wage cost was too high and even with the generous state grants, it would not survive. And it did not.
We seem to struggle with employment and business opportunities for society as a whole. I wonder if at times, we shoot ourselves in the foot.
California’s Proposition 22 it is not
I wrote about the referendum that the State of California held where the decision to shape the gig economy especially in the transport related sector was pushed to the public to vote on.
It did show the loss of faith placed on the legislature. And it went to the voters, the people to make the call. People of California made it clear they needed the gig economy and valued it.
Here is the post on this interesting and unexpected development.
California is where the the gig first economy first took shape and Californians are aware of its value.
The big players in the gig economy were right behind the referendum and they help drive it. They sensed what people wanted it but knew that they had to provide better terms for workers. Time was up, they had to step up.
A series of compromise in relation to workers protection were offered by these big players. because they too realised they cannot carry on in the manner they did.
I anticipated the Australian Govt would take a leave out of Proposition 22 and shape the proposed amendments.
In the details
With the devil typically in the details, the complexities needed to be interpreted and understood. And this bill may have advanced the gig economy besides introducing worker protection measures after all.
Bill Digest is a parliamentary aid for new bills. It helps those who are keen to understand new legislation.
Here is the Bill Digest for the Closing the Loop Bill.
The bill’s key issues
According to the bill digest, there are 6 key issues.
- Definition of casual employment
- Test to determine employment status
- Minimum standards for gig economy workers
- Same job, same pay
- Criminalising wage theft
- Criminalising industrial manslaughter
The first 3 do cover gig workers as well the conventional workforce. The 3rd in particular is on gig workers. The remaining targets employers across the board
The next few years
It will take at least 2 years for the amendments to force change as many aspects require referrals to the Fair Work Commission to consider and rule on. It is a great start and what they rule on will form the guardrails that is needed for the gig economy to evolve.
So it still work in progress but the framework is now in place courtesy of the Closing the Loop Bill.
It will interesting in time to see if Australia got it right compared to other countries who are also facing the same set of dynamics.
Will Uber Australia differ markedly from Uber California or Uber UK? Quite a long road to see the end I suppose.