Anthony Drake, Partner, Wynn Williams
We asked our lawyers to give their opinion on the current pros and cons of the New Zealand gig economy, as well as the global gig economy. Here's what they said:
The internet is increasingly playing an important role in all aspects of our lives, including the important role of finding work. Likewise, the way we manage our work with the use of online platforms has dramatically grown in the last decade. It is clear that participation in the online economy as a source of income plays a significant part in the life of many workers.
What is the gig economy?
Gig is slang for a live musical performance. Originally coined in the 1920s by jazz musicians, the term, short for the word engagement, now refers to any aspect of performing or work.
In New Zealand, the gig economy is generally understood to be a labour market characterised by short-term contracts or freelance work as opposed to permanent jobs. It involves and allows people to have much greater control over their work life. For example, carrying out work from home, carrying out work for different customers somewhere outside of the home, or carrying out work involving driving someone to a location for a fee using an app or website such as Uber.
What are the problems with the gig economy?
What do delivery couriers, Uber drivers and freelancers have in common? They're all part of the gig economy. By its nature, the gig economy provides for flexibility in where, how, and when a worker generates an income, but it comes with a trade-off of worker protections.
The rapid growth of the gig economy has seen large multi-national corporations commence operations in New Zealand. There is a concern that, while those corporations provide workers with flexible working conditions, a segment of those workers are being (or have the potential to be) exploited.
There is a growing call to adjust the balance to provide gig economy workers with the same or similar protections that full-time employees enjoy. The challenge for any policy makers, game enough to take up the task of drafting new laws, is to find the correct balance between regulating gig economy workers and the need to maintain flexibility for those workers; often the primary attraction for gig economy workers in the first place.
An analogy can be drawn between gig economy work and zero-hour contracts which were, until recently, prevalent throughout New Zealand. The gig economy and zero-hour contracts both treat workers as contractors and neither offer a guarantee of pay which can leave workers unsure of how much they’ll earn. However, gig economy roles are normally paid per piece — such as a set rate to deliver a package or drive a fare to a location — while zero-hours contracts are paid hourly, but with no set minimum. The companies ruling the gig economy say they bring the flexibility to work whenever you like. Critics — which include many of those working for the companies — argue that not only do workers lack protection and fair pay, but the roles aren't as flexible as they seem, as workers are incentivised or pressured to work when the companies need them. The government has responded to zero-hours contracts, preventing employers from forcing zero-hour conditions on their employees, but the question remains whether the government will push through policy to provide stricter holiday and sick pay rights for people working within the gig economy?
The rapid growth in the gig economy suggests that this is a fixed aspect of New Zealand’s growing economy, but questions of job security, pay, and benefits are yet to be answered. Those questions have not and will not stop employers and employees embracing new and innovative ways of working; employers who do not adapt to the changing work environment will be left behind.