The federal government is preparing a sweeping expansion of the industrial relations system, declaring Uber-style labour contracts a “cancer” on the Australian economy, and is launching talks with major players on how to extend traditional employee rights to gig workers.

In remarks which point to a potential clash between the Albanese government and platforms like Uber, Deliveroo, Menulog and DoorDash, Workplace Relations Minister Tony Burke will use a speech in Sydney on Friday to accuse the sector of driving down wages of up to 1 million workers.

Workplace Relations Minister Tony Burke has begun the process of regulating Australia’s gig economy.Credit:James Brickwood

“Gig work drives down wages and it has been spreading like a cancer through the economy,” Burke will tell union members ahead of next week’s jobs and skills summit in Canberra.

“[It is now] extending into the care economy – into aged care and the NDIS – and into industries like security.”

Unlike traditional employees, contractors for gig companies do not have rights to minimum wages, unfair dismissal protections, employer superannuation payments, workers’ compensation for injuries or paid leave. Working conditions in the sector have been under growing scrutiny following five delivery rider deaths in three months in 2020.

However, the services have flourished since Uber arrived in Australia a decade ago as minimal government intervention allowed consumers to enjoy cheap and quick food deliveries and more convenient taxi services, and gave gig workers the ability to choose when to work.

The sector’s impact on wages is hotly disputed. A union survey from 2020 suggested food delivery riders earned an average of $10 an hour after costs while Uber reported $27.50 an hour before costs this year.

“Gig work must not become the equivalent of a get-out-of-jail free card in Monopoly where business is able to avoid the minimum standards that Australians hold dear — 21st century technology must not mean 19th century working conditions,” Burke will say.

The use of food delivery services exploded during COVID-19 lockdowns.Credit:Rhett Wyman

The push to regulate the gig economy comes ahead of the government’s jobs summit next month, and after the Australian Council of Trade Unions this week called for the return of industry-wide pay bargaining. Opposition Leader Peter Dutton has said the ACTU proposal risks a “tightening of the industrial relations scheme that takes it back to the 1970s”.

Burke will deliver the speech at an event in Sydney’s west for the Transport Workers Union, which has been the sector’s primary antagonist through its years-long reform campaign.

University of Adelaide professor Andrew Stewart said it was impossible to say what effect gig work had on wages overall because it was so varied. A study of a 14,000-person survey co-authored by Stewart in 2019 showed many used it around other obligations to supplement their income, while a smaller number concentrated in areas like food delivery were totally reliant on it.

Reform talks between Burke’s department and the companies will begin on Friday, marking the first of several rounds of broad-ranging meetings to get input on how to let the Fair Work Commission set minimum standards for employee-like workers.

Uber, Deliveroo, DoorDash and Menulog will attend along with disability and aged care providers Mable and HireUp, which employs its staff.

But Burke will warn on Friday that the government’s commitment to reform the sector is not up for debate. “That decision has been made,” Burke will say in the speech.

Gig economy companies are broadly supportive of the federal government's efforts to regulate the sector but have demanded their workers' flexible hours, which let them clock on and off at will to fit their schedules and efficiently match supply and demand, be protected.

"Whether it is students, retirees, parents or small business people, work through apps like DoorDash appeals to many because it can fit around their lives and other commitments, however we need to find a way to ensure independent workers can rely on clear standards and protections in their work," said DoorDash Australia boss Rebecca Burrows.

Menulog has trialled employing a small number of riders directly and was forced to use the pay rules for road transport distribution staff, which it said was “ill-fitting” and designed before the gig economy existed.

"We cannot emphasise enough the importance of genuine, deep and ongoing consultation to ensure that the legislation truly meets the needs of the couriers it is seeking to protect and does not damage an industry which so many businesses and communities rely on," a spokeswoman said.

In June, Uber signed an agreement with the Transport Workers Union backing minimum earnings standards and regulation, making it the second firm after DoorDash to reach a pact with the union.

“Our recent agreement with the TWU reflects a shared desire for industry-wide reform that ensures earnings protections and minimum standards for all gig workers, while preserving the flexibility and autonomy that they tell us is important to them," an Uber spokeswoman said.

The spokeswoman said a recent assessment by the company found rideshare drivers earned on average $38 an hour and delivery workers an average $27.50 an hour — before costs — across all hours they spent on the platform.

Many of the best-known gig economy companies such as Deliveroo and Uber voluntarily provide insurance to cover their riders and drivers. Some also provide safety equipment.

NDIS and aged care platform Mable said it planned to let workers make automatic superannuation contributions by the end of the year.

Chief executive Peter Scutt said he supported the talks but said wages were already rising fast on the platform, up 7 per cent each year for the last two years for services such as personal care and social support to an average of $43 an hour during the week.

HireUp declined to comment while a spokeswoman for Deliveroo said it agreed some form of minimum standards was needed.“It is our strong view that reform must occur at a national level and cannot compromise the way riders prefer to work – that is, to have the ability to choose when, where and how long they work,” she said.

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