Ideasroom

Covid-19: We must protect ‘gig economy’ workers

As new restrictions affecting people’s ability to work are put in place, there's a growing segment of workers we must ensure aren't left out in the cold, writes Victoria University of Wellington's Stephen Blumenfeld 

The Covid-19 outbreak and nationwide lockdown should not create an opening for employers to treat the labour market like the UFC in the early 1990s, when it used the tagline: “There are no rules.”

Although there is no New Zealand case law pertaining to lockdowns, there appears to be consensus within the legal community that an employer must continue to act towards its employees in a manner consistent with how ‘a fair and reasonable employer’ might act. This suggests they need to consult and provide those employees with relevant information and an opportunity to offer feedback on any redundancy proposal. Good faith also requires that employees facing redundancy be given a reasonable period of notice, long understood to be a minimum of four weeks, or payment in lieu.

But, even in the best of times, because they are likely to be designated as contractors, gig economy workers generally fall outside the ambit of New Zealand’s employment law. Often referred to as ‘dependent contractors’, a category of worker not presently defined under New Zealand law, those who hold those jobs are contractors in name only. That is, they often depend on a single ‘payer’ and they exercise limited control over their working arrangements for a given job or ‘gig’.  

Consequently, workers such as taxi drivers, delivery persons, freelance journalists, performance artists, photographers, landscapers, tech repair professionals and sex workers are often not entitled to most benefits and protections under the law as those identified as employees are. It follows that these workers also lack statutory protections against dismissal, effectively making them ‘at-will’ employees. Moreover, out of fear of retaliation such as ‘blacklisting’, gig workers are likely to be reluctant to exercise the very limited legal rights they do have.  

As part of its response to the recent health crisis, the Government has launched a wage subsidy scheme aimed at softening the blow of the Covid-19 outbreak to both businesses and workers as they adjust to the initial impact of the four-week national lockdown. The goal of this initiative is to sustain the relationship between businesses and their staff and ensure an income for affected workers, especially those unable to work due to the crisis created by spread of the virus or the lockdown. Yet, notwithstanding those objectives, although ostensibly covered by the scheme, it is likely to prove difficult, if not impossible, for most gig workers to meet its compliance requirements.

To qualify for a wage subsidy, an enterprise must either be registered with the New Zealand Companies Office or a sole trader with a personal IRD number, any mandatory licences or permits to work in the industry, and qualifications or registrations for the relevant trade or profession. To receive a payment under the scheme, self-employed individuals must be able to show at least a 30 percent decline in their actual or predicted revenue, that the decline is related to Covid-19, and that they have taken ‘active steps’ to mitigate the impact of it on their business. Therefore, despite that they may be eligible to apply for the wage subsidy, few gig workers will have put in place the business and operating practices necessary to facilitate this process.  

Towards the end of last year, the Government mooted a proposal to provide greater legislative protections to dependent contractors. The threefold aim of that initiative was to ensure all workers are covered by the basic statutory minimum rights and entitlements to which those labelled ‘employees’ now have access; to reduce the imbalance of bargaining power between firms and vulnerable contractors; and to ensure inclusive economic growth. With it now focused on curtailing the spread of Covid-19 and mitigating its impacts on the economy, however, any legislation that might come from this proposal and the discussion it generated before the crisis has been put on Parliament’s backburner.  

The crisis created by the coronavirus pandemic has drawn back the curtain to reveal the true face of the Great and Powerful Oz, a labour market comprised of a growing number of workers denied access to the basic employment law rights and protections afforded to most. It underscores the precariousness and conspicuous risks faced by gig economy workers and other dependent contractors, who are nonetheless as vulnerable to economic shocks as legally defined employees.

As new restrictions affecting people’s ability to work are put in place in response to the rise in cases of Covid-19, action is urgently needed to ensure those who comprise this growing segment of the labour market are not left out in the cold, with no support on the horizon from either those for whom they ply their services or the Government.

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