Regulated workers in Australia, such as gig economy rideshare and food delivery drivers, as well as some eligible road transport contractors, now have more protections from being unfairly deactivated or terminated from work.
Forming part of the changes made to the Fair Work Act 2009 by the Closing Loopholes 2.0 legislative reforms, from 26 February 2025, eligible employee-like workers can start making an application for unfair deactivation or termination from a digital labour platform or road transport business.
Who are regulated workers?
Flexible hours and the opportunity to earn additional income to offset the cost of living, has seen the number of people entering the gig economy escalate significantly in recent years. It’s now estimated there are over 250,000 gig workers in Australia.
There are two types of regulated workers:
- Employee-like workers who provide services via a digital labour platform.
- Regulated road transport contractors (RRTC) who work in the road transport industry.
To protect these workers' rights and freedoms new laws came into effect in August 2024. These included updates to the minimum standards for regulated workers.
What does this change mean for employers?
Similar to an unfair dismissal or unfair termination claim, the Fair Work Commission (FWC) will determine if deactivation or termination of a regulated worker was unfair.
To be eligible to lodge a claim, the RRTC or employee-like worker is required to have worked for the road transport business or digital labour platform operator for at least 6 months from 26 August 2024.
The FWC will consider whether there was a valid reason for termination or deactivation. The FWC will also consider whether the respective Fair Work (Digital Labour Platform Deactivation Code) Instrument 2024 or Fair Work (Road Transport Industry Termination Code) Instrument 2024 has been followed (the Codes).
The Codes establish minimum requirements regarding issuing deactivation or termination warnings, following requisite processes and other mandatory requirements by the platform operator or road transport business before deactivating or terminating the worker.
Regulated workers have 21 days from deactivation or termination to make an application to the FWC. They will only be eligible if they earn less than the Contractor High Income threshold of $175,000 for the current financial year.
What is a digital labour platform?
This could be an app or website people use to arrange a service such as food or grocery delivery or to make a car ridesharing booking. It’s how customers are connected to employee-like workers.
The owner or operator of the platform engages employee-like workers directly (or acts as an intermediary between them and customers) through the platform. Payment for the work completed is processed by the platform operator, an associated entity of the operator, or a contractor engaged by the operator.
Minimum standards for employee-like workers
The FWC can also set standards for regulated workers by making minimum-standard orders (MSOs) and minimum-standard guidelines (MSGs). These deal with the same workplace matters, such as payment, deductions, insurance and cost recovery.
The difference is MSOs are legally binding and if they’re not followed, individuals or businesses can face penalties. MSGs are not legally binding. An MSG cannot be made to cover the same employees covered by an MSO.
What do these changes mean for your business?
If you’re the operator of a digital labour platform or run a road transport business, you need carefully consider if your actions could be deemed as unfair before terminating or deactivating eligible workers. This includes the reason for termination or deactivation, even if you followed the processes outlined in the relevant Code.
Understanding new legislation and ensuring your business is compliant is always challenging. For tailored advice on how the changes to unfair deactivation and termination of regulated workers could impact your business, contact Peninsula.