Unpacking minimum standards for employee-like workers

Sweeping changes to workplace laws, introduced under the Closing Loopholes reforms, came into effect on 26 August 2024, marking a pivotal moment for not just Australia’s industrial relations landscape but also the gig economy and road transport workers.

The gig economy and road transport sectors are entering a new era of accountability and fairness. Here, our experts unpack the new minimum standards for employee-like workers and explain why understanding how these updates redefine rights and obligations is essential for both businesses and workers.

So, what’s changed?

These changes establish new minimum standards and protections for employee-like workers, addressing the unique challenges faced by contractors operating through digital labour platforms such as Uber, DoorDash, and Deliveroo. For the first time, these regulated workers are receiving protections that bridge the gap between traditional employment and contractor arrangements. Covered by the new laws, the contractor must:

• be party to a services contract with a constitutional corporation (i.e. a Pty Ltd business);
• perform all (or a significant majority) of the work under the services contract; and
• not perform any work under the services contract as an employee.

These guidelines help clarify the contractor’s status and define the scope of protections to which they are entitled.

Employee-like workers

A contractor is now considered an employee-like worker if they satisfy at least two of the following:

• Low bargaining power in negotiations concerning their contract;
• Payment at or below the pay rate of an employee performing similar work;
• Low authority over the performance of work; or
• Any other characteristic prescribed by the regulations.

Road transport industry contractors

A contractor is now considered a road transport contractor if they’re in the road transport contractual chain. A road transport contractual chain is a series of contracts or arrangements that involve certain workers and businesses within the road transport industry (such as a person or company that requires delivery of freight by road and the driver who makes the delivery).

Minimum standards

The Fair Work Commission (FWC) can set minimum standards for employee-like workers and regulated road transport contractors. The FWC can do this by making either:

• minimum standard orders (which are legally binding); or
• minimum standards guidelines (which are non-binding).

Minimum standards orders and guidelines can include terms about the following:

• Payment;
• Deductions;
• Record-keeping;
• Cost recovery;
• Representation;
• Delegates’ rights;
• Insurance; and
• Consultation.

A minimum standards order can’t include terms relating to:

• Overtime;
• Rostering;
• matters that are primarily of a commercial nature;
• WHS matters that are addressed by State or Territory law; or
• Any term that would deem a worker an employee.

If a minimum standards order is made and parties don’t adhere to it, penalties will apply for the breach(s).

Your HR and compliance partner in a changing landscape

Keeping pace with these changes is a growing burden for time-poor businesses. That’s where we come in. As experts in HR and workplace compliance, we can help you stay ahead of evolving legislation, ensuring:

• Compliance with the Fair Work Act,
• Contracts and work practices are correctly classified, and
• Avoidance of unnecessary penalties or reputational risk.

If you’re unsure whether these changes apply to your business or you’re just looking for complete peace of mind, get in touch with our friendly team today. We’re here to reduce the admin burden so you can focus on running your business with confidence.

About our author

Kurt Calma is a Workplace Relations Consultant at Citation HR. He regularly provides advice on workplace matters via the 24/7 HR advice line to help clients find solutions.