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Business Ethics Assignment: Minimum Wages Of Gig Workers In Australia

Question

Task:
Background
Since Justice Higgins introduced the ‘basic wage’ in the Commonwealth Conciliation and Arbitration Court in the landmark wages decision in Ex parte HV McKay (1907) CAR 1 (known as ‘the Harvester case’), the setting of minimum wages have evolved beyond statutory instruments called awards to include enterprise bargaining agreements, contracts and legislative provisions. While the minimum wage for low-paid workers in Australia continues to be one of the three highest in the Organisation for Economic Co-operation and Development (‘OECD’), wage stagnation was a major issue prior to the outbreak of COVID-19 in 2020.

The wages crisis now extends beyond wage stagnation. Job and income security are now key issues for all workers. The prospect of redundancy, termination of employment, loss of hours for full-time, part-time and casual workers and the general social and economic uncertainty related to living in a pandemic has put further pressure on wages and current forms of wage fixation and regulation. In addition to income and job security caused by the coronavirus, the existing wage issues for ‘gig’ workers and the underpayment of minimum wages (or wage theft) continue. Questions persist in relation the ongoing effectiveness awards and enterprise bargaining to set effective wages that allow workers to support themselves and families to a standard that is acceptable in Australia.

Instructions For Business Ethics Assignment
Students must choose an issue in wage regulation in Australia for their practical assessment and obtain approval from the unit coordinator. The practical assessment requires students to analyse the key regulatory issues of their selected issue wage topic by using relevant employment legislation, cases and theories covered in this unit. Students must also assess this wage issue within principles of business ethics and corporate social responsibility examined in this unit.

In your report you must:

  1. Summarise the key forms of employment regulation related to your wage topic. Examples include relevant provisions of the Fair Work Act 2009 (Cth), awards, enterprise agreements or forms of employment (eg labour-hire arrangements).
  2. Map the key wage legal issues of your topic as applied to workers, employers and society.
  3. Analyse your wages topic in the context of the relevant legal regulations that govern an employer or industry’s business ethics and corporate social responsibility.
  4. Evaluate the effectiveness of relevant laws in regulating your wage topic.
  5. Propose legal, business organisation and business ethics reform to improve the regulation of your wages topic.

Answer

Executive summary
The present business ethics assignment provides an evaluation of the various consequences faced by the gig workers in Australia. The primary form of employee regulations related to the minimum wages of the gig workers is considered in this report. The key wage legal issues related to the legislation in Australia are mentioned in this report that can be applied to workers, employers, and the overall society. An analysis of the wages related to the corporate social responsibility of the industries and the effectiveness of the relevant laws are provided in this report. A proposal of the legal and business ethics and reforms are provided to improve the regulation of the wages related to the gig workers in Australia.

Introduction
The topic chosen for this report is the wages of gig workers, as it is one of the rising issues. The report provides a summary of the employment regulation related to the salaries of the gig worker. The assessment discusses the wage legal issues of the gig worker and analyses the chosen topic in context to the relevant legal regulations that operate the social responsibilities and ethics of the employer or industry. Furthermore, the report evaluates the effectiveness of the laws and proposal of legal ethics for the betterment of the wages of gig workers.

Employment regulation of gig worker
The gig workers so-called independent contractor, are not said to be not associated or fit within the traditional definition of the employee, and hence, they are not considered as an employee and are often called a nonstandard worker. These workers are not provided any types of entitlements or exemption, with minimum wages per hour, or per day, as their daily wages are noticed below the average salary to be paid to the employee, as per the government of Australia. Even, the Fair Work Act, 2009 and the National Employment Standard are said to be not applied in terms of gig workers, as already mentioned, they are not considered as an employee by the organization. Despite the minimum wages, lack of entitlements, rewards, and compensation, there are no particular acts of law, which can protect the job security of the gig workers. These workers are hired to perform a temporary project or a specific task within a certain period, and the wages given to them will generally be different than the average employee will get. They often miss the superannuation, compensation, and allowances that are given to the average engagement, such as weakly off, shift work, annual and casual leave, etc., without any insurance and job insecurity (CCIWA, 2021).

Legal issues in the wages of gig worker
In the last decade, there has been a drastic change in the gig economy, generally related to the digital platform, which connects the workers with their job. Since they are not considered within the category of a traditional employee, there have been many legal issues on the wages of the gig workers, which are as given below-

The minimum pays and conditions in the economy of the gig worker are some of the significant issues, which have directly affected the wages of the gig worker. Since, the gig workers are not considered as an employee, as mentioned earlier, they are often rewarded with the minimum wages and pays. Tough they do not match with the traditional definition of the employee; nonetheless, the commission could provide them the exemptions such as superannuation, collective trading, minimum wages, and adjournment rights. In this case, some unions believe that if the lawmakers try to widen the employee definition, then it will their work practice will be to the desertion of the new law, and hence, the exemptions to be enlarged based on the classification of workers (Choi, 2021). As per the survey conducted by the transport worker union in the year 2020, it was stated that the earning of the food delivery was $10.42 per hour, which is below the minimum wage in Australia, i.e., $19.84 per hour. Portable exemptions and insecure job security are other legal issues for gig workers, as there are rarely, any entitlements noticed for the gig workers, with the constant fear of job insecurity (Koelmeyer, 2021). The gig workers have no security of their job and income; neither are they rewarded with any entitlements, such as paid leave or casual leave. Also, the gig workers are expected to manage their equipment by themselves and pay their maintenance fees from their daily wages or payment they received for their work. Thus, it is tough for the gig workers to manage with the minimum wages given to them by the organization or a company, without any compensation and exemptions, on top of it, to manage their maintenance fees also on their own, which is a burden and a matter of concern, as their wages are below the average salaries as prescribed by the government of Australia (Paul Oyer, 2021).

Analysis of the wages of gig workers
The legislation related to the practice of business ethics and corporate social responsibility is integral to the wages of the gig workers. It is the social responsibility of the employers and the industries to provide the minimum wages to the gig workers in Australia. However, there have been some disruptions in the otherwise smooth payment of wages due to the onset of the covid 19 pandemic that has caused an economic turndown in Australia and the entire world. The Fair Work Act of 2009 did not govern the issues related to the minimum wages of gig workers. The gig workers were not protected by the minimum entitlements that are statutory (Choi, 2021). However, several implications regarding CSR and business ethics in companies were applied to provide the minimum wages of the gig workers rose during the pandemic.

The CSR of Australia is committed to the protection of human rights and operations. Business operations and companies need to comply with CSR and provide employees with the benefits that they deserve. Business organizations in Australia should comply with the legal responsibilities offered by CSR. The labour department will, however, allow Fair Work Commission to make minimum pay conditions for an employee like works. The gig workers in Australia are, however, playing an essential role in the provision of employment to many people who find it difficult to enter the labour market.

Effectiveness of the relevant laws that regulate the wages of gig workers
The gig workers of Australia have no social security related to income, insurance, personal and paid leave of any kind. They have no entitlements related to the worker's compensation, superannuation, and certain taxes. As the initiation of the pandemic caused specific changes in the industrial patterns in Australia, the laws and legislation do not always maintain a similar pace with the rates of change. The inclusion of the senate inquiry into the corporate avoidance of the Fair Work act of 2017 was done, and the committee recommended that the government of Australia should amend the Fair Work Act (Derwin, 2020). The provision of the inclusion of the act will carry obligations for the business organizations to pay entitlements to the gig workers relate to their salary and extra allowances.

The inclusion of the gig workers in the Fair Work Act is underway, and the effectiveness of the law in governing the minimum wages will assure the worker's easy access to the basic labour standards under the act. The Senate inquiry has been instrumental in the commencement of the effects of the inclusion of gig workers in the legislations of Australia. However, the inclusion process of the wages aspect of the gig workers is still underway due to the impact of the pandemic named covid 19 that has halted economic and other parts of the global industries. The recommendations by the Senate enquiry, NSW enquiry, and Victorian on-demand force have attracted the attention of the Australian government to include the aspects of wages related to the gig workers within enclosed legislation (Karp, 2021). The rising workforce of gig workers across Australia is highly attributed to the committees adopting this decision that will benefit the gig workers in the future.

Proposal of legal and business reforms to improve wages of gig workers
Two proposals can be made to improve the regulations related to the salaries of gig workers. They can be attributed in terms of legal and organizational implications.

Creating a new category of independent workers
The practice and nature of the jobs of gig workers are somewhat different from the traditional work culture that is usually seen in industries. The structural difference can be attributed to the need for an entirely different approach to work (Stewart & Stanford, 2017). The basic standards of fair and justified treatment and payment should be guaranteed by the regulatory bodies because this is considered as an independent and freelancing platform of workers.

Creating rights for the workers rather than employees
The employee aspect should be considered less critical than workers as this can provide the workers with added extra benefits which they cannot receive on carrying the status of employees. The workload that the gig workers have is comparatively more than any other employee working in any organization. Some protection and discrimination rights need to be followed by the employers of the organizations that provide the gig workers a secured environment to work freely without thoughts of being secluded and isolated (Derwin, 2020). The nature of the job must be made mainstream to achieve workplace equality.

Conclusion
The wages of the gig worker are notably below the average in comparison to the wages of an employee. Though the Fair Work Act, 2009, is not applied to these workers, there should be some legal acts and provisions to protect the rights of the gig worker, and initiatives, as proposed above, should be taken for the increment of the wages of the gig worker and their job security.

References
Stewart, A., & Stanford, J. (2017). Regulating work in the gig economy: What are the options? The Economic and Labour Relations Review, 28(3), 420–437. https://doi.org/10.1177/1035304617722461

CCIWA. (2021). No entitlements for gig workers. CCIWA. Retrieved May 28, 2021, from https://cciwa.com/business-pulse/no-entitlements-for-gig-workers/.

Choi, S. (2021). The Gig Economy And Australian Law: What’s Next? - Sprintlaw. Sprintlaw. Retrieved May 28, 2021, from https://sprintlaw.com.au/gig-economy-in-australia/.

Koelmeyer, A. (2021). Legal ramifications of the 'gig' economy. Hcamag.com. Retrieved May 28, 2021, from https://www.hcamag.com/au/specialisation/employment-law/legal-ramifications-of-the-gig-economy/147976.

Paul Oyer. (2021). Labor and Employment Issues in the Gig Economy: Q&A with Professor Paul Oyer. Analysisgroup.com. Retrieved May 28, 2021, from https://www.analysisgroup.com/labor-and-employment-issues-in-the-gig-economy/

Derwin, J. (2020, September 22). "Desperate for work": The gig economy is booming, but the jobs it's creating aren't the ones Australia needs. Business Insider Australia. https://www.businessinsider.com.au/gig-economy-australia-work-rideshare-jobs-2020-9

Karp, P. (2021, February 10). Gig economy workers: Labor’s plan to boost job security, pay, and entitlements. The Guardian. https://www.theguardian.com/australia-news/2021/feb/10/gig-economy-workers-labors-plan-to-boost-job-security-pay-and-entitlements

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