What’s behind Australia's paradigm shift in regulating precarious work?

Legislative changes are reshaping Australia's labour market by ensuring fair wages, regulating gig work and increasing employer accountability

When Uber launched its ride-sharing service in Australia in 2012, the company promoted the freedom and flexibility of gig work. Drivers were classified as independent contractors rather than employees, allowing them to "be their own boss" and work on their own schedule. This business model, powered by digital technology and algorithms, promised a win-win: consumers gained convenient, affordable services while workers accessed flexible earning opportunities. The reality, however, often meant unpredictable income, no minimum wage guarantees, absence of leave entitlements, and shifting platform rules that could dramatically affect earnings overnight.

This pattern extends beyond the gig economy. In the mining industry, labour-hire arrangements have proliferated since the 1990s. Following a methane explosion at Queensland's Grosvenor coal mine in 2020 that seriously injured five workers – all labour hire – a Board of Inquiry confirmed the safety risks associated with these precarious arrangements. Similarly, in road transport, owner-drivers working at the bottom of multi-tiered contracts face intense commercial pressures from large retailers and shippers, driving down rates, and leading to excessive hours and hazardous practices.

The agricultural sector tells a similar story. What was once primarily domestic seasonal work has transformed, with farms now heavily dependent on backpackers on working holiday visas (s417) and workers from Pacific Island nations under schemes like the Pacific Australia Labour Mobility program. A 2016 inquiry by the Joint Standing Committee on Migration found widespread exploitation: underpayment through piece-work arrangements, poor working conditions, minimal OHS safeguards, and substandard accommodation. These vulnerabilities were particularly acute among workers whose visa status depended on employer sponsorship.

A recent paper co-authored by Emeritus Professor Michael Quinlan from the School of Management and Governance at UNSW Business School together with Associate Professor Michael Rawling from the Faculty of Law at the University of Technology Sydney, reveals striking parallels between today's digital platform workers and 19th century "sweated labour." Just as food delivery riders now work long hours for minimal pay with no job security, garment outworkers in the 1890s laboured under subcontracting arrangements "squeezed by middle-men," producing clothes in cramped home workshops with irregular pay and no workplace protections.

Published in The Economic and Labour Relations Review, Regulating precarious work: A paradigm shift explained that recent legislative reforms introduced by the Australian Labor government represent a fundamental rethinking of how work is regulated. These changes mark a significant departure from past approaches, seeking to address the challenges posed by contemporary precarious work arrangements including digital platform work, labour hire, and contracting.

The return of precarious work

The Albanese government's industrial relations reforms did not emerge in a vacuum. They represent a response to the resurgence of precarious work arrangements that began in the late 1970s and accelerated in recent decades.

This form of work insecurity is not new. Looking back to the 19th and early 20th centuries, precarious work was common across most industries. Workers were engaged casually or irregularly – wharf labourers picked daily by overseers, construction workers hired through gang masters, or women and children working from home under exploitative subcontracting arrangements.

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The shift away from standard employment that began in the 1970s is best understood as a return to arrangements that were once the norm, according to the paper. It noted that the post-war period (1945-1975) marked an unusual time of widespread job security in wealthy countries, underpinned by strong unions, centralised wage-setting, and economic policies prioritising full employment. Neoliberal policies dismantled these protections through deregulation, privatisation, outsourcing, and the growth of global supply chains.

Documenting the problems

Government inquiries conducted over the past three decades consistently found that precarious work arrangements undermine labour standards and pose significant occupational health and safety risks. The studies showed casual workers, labour-hire workers, and contractors experienced higher injury rates, poorer mental health, and limited access to regulatory protections.

The problem extends beyond gig workers. Labour hire arrangements, where workers are technically employed by an agency but work under the direction of a host employer, create confusion about responsibility for workplace safety. Foreign workers on temporary visas face particular vulnerability due to their dependence on employer sponsorship.

Research commissioned for the NSW Mine Safety Review, for example, found contractors were more likely to engage in hazardous practices and less likely to report safety incidents. Similarly, studies of road transport found commercial pressures on owner-drivers led to unsafe practices including excessive hours, speeding, and drug use to combat fatigue.

The implementation of the Albanese government's reforms is underway, as unions lodge claims for new orders that are negotiated and heard, said Prof. Quinlan. He also noted that, typically, major reforms take a number of years to become embedded – and Prof. Quinlan and A/Prof. Rawling stressed in their research that this is the case with the new legislation.

A new approach to regulation

The Albanese government's industrial relations reforms seek to address these issues through an interconnected package of measures. The legislation aims to regulate work rather than just employment relationships. 

Key elements include:

• Empowering the Fair Work Commission to set minimum standards for "employee-like" digital platform workers, such as ride-share drivers and food delivery riders
• Allowing the Commission to make minimum standards orders for road transport contractors, ensuring fair remuneration and conditions
• Expanding multi-employer bargaining, enabling workers in sectors with low bargaining power to negotiate collectively across multiple employers
• Introducing "same job, same pay" provisions requiring labour hire workers to receive the same wages as direct employees performing the same work
• Restricting fixed-term contracts to improve job security
• Imposing criminal penalties for deliberate wage theft
• Creating rights for employees to disconnect from work communications outside working hours

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The Transport Workers Union successfully campaigned for these changes, especially those relating to road transport and gig workers. Their efforts gained support from industry stakeholders who recognised the race to the bottom on costs was undermining safety and sustainability.

"Having an industrial tribunal set remuneration levels for gig workers can assist in removing incentives to seek an advantage by cutting remuneration," note Prof. Quinlan and A/Prof. Rawling. "It will provide the basis for a more sustainable industry including by lowering workforce turnover."

A/Prof. Rawling said it is no coincidence that the package of IR reforms integrates measures that both rebuild collectivism (including through tribunal regulation) on the one hand, and specific measures to directly address precarious work on the other. “An increase in collectivism and tribunal powers will enhance specific precarious work innovations as the potentially resulting increase in worker bargaining power generally (in the absence of a major economic downturn) will also prevent further fragmentation of work in the Australian labour market,” said A/Prof. Rawling, who added that due to the reforms, there is a much greater capacity in the IR system as a whole to address precarious work and sustain more secure forms of work.

“This major shift in policy warrants global attention as the reforms begin to address previous gaps in IR protections, which are similar to the shortcomings in protections in parallel countries. However, the Australian reforms will take time to implement. Many rely on Fair Work Commission processes, which can take time to formulate the new pay rates, etc. including those for gig/platform workers.”

Looking forward: Implications for business

These changes represent a fundamental shift in Australian labour regulation with significant implications for businesses:

1. Digital platforms must adapt their business models. Platform companies like Uber, Deliveroo, and DoorDash will need to engage with unions and the Fair Work Commission to establish minimum standards for their workers. This may increase operating costs but could lead to more sustainable industry practices.
2. Labour hire arrangements face greater scrutiny. Businesses using labour hire must prepare for "same job, same pay" requirements. Some companies have already begun insourcing work previously done by labour hire workers to maintain control over costs and standards.
3. Multi-employer bargaining changes industry dynamics. Sectors like aged care, childcare, and hospitality may see greater union activity and coordination across employers. Businesses should prepare for a more collective approach to employment conditions in these industries.
4. Greater protection for vulnerable workers. The risk of criminal penalties for wage theft increases the importance of compliance. Businesses should ensure their employment practices, including arrangements with contractors and labour hire firms, meet legal requirements.
5. Transport and supply chain innovations. The regulation of road transport contracting chains may drive innovation in how goods are moved. Companies at the top of supply chains will need to ensure their commercial practices do not create downstream pressures leading to unsafe outcomes.

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Key takeaways for industry

The Albanese government's reforms represent a paradigm shift in regulating work. While some business groups have expressed concerns about increased costs and reduced flexibility, others recognise the need for a more sustainable approach.

Prof. Quinlan and A/Prof. Rawling argue these reforms do not represent a return to the past but rather a modern framework adapted to contemporary work arrangements. By addressing precarious work, the legislation aims to improve standards across industries and create a more level playing field.

For business leaders, the changes require careful consideration of employment practices, contracting arrangements, and supply chain management. Companies that embrace the reforms proactively may gain advantages through improved workforce stability, safety outcomes, and stakeholder relationships.

The experience of past economic reforms suggests businesses that adapt quickly to new regulatory environments often find competitive advantages. As Australia moves to better regulate precarious work, forward-thinking companies will look for ways to build business models that provide both flexibility and security.