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One of Australia’s largest food delivery platforms, Menulog, has broken with the industry and declared it will be the first to give many of its couriers rights to a minimum wage and superannuation contributions by directly employing them.
In a move that is a major shift away from the independent contractor model popular in the gig economy, the company’s managing director, Morten Belling, told a Senate inquiry on Monday the business was looking to start a pilot employment program for its couriers around Sydney’s CBD.
Menulog managing director Morten Belling has announced the company will start making its couriers employees.Credit:Rhett Wyman
Industry giants such as Uber and Deliveroo have come under pressure from Labor and unions because the existing contractor model allows companies to pay less than industry minimum wages.
Mr Belling, in an opening statement to an inquiry that is examining job security in the gig economy, said the contractor model had been well suited to the local market but it was now apparent there had to be improvements to the working conditions of couriers.
He said the company was committed to the safety of its couriers but there was more it could do.
“We owe it to our couriers to help enhance their life standards and as such, we have begun looking at how we can improve the way we operate and, as part of this, how we can roll out an employee model in Australia,” he said.
“We know this process will take time; we are a big company with a large global network, across 23 countries, each with their own requirements.
“Due to the timing of the hearing today, we are sharing this update on these intended changes sooner than anticipated. However, we strongly believe it is the right approach for this market and we are committed to progressing with it.
“We believe this plan will help us better do the right thing by our couriers and meet our moral obligations as an Australian-born business and one of Australia’s largest food delivery platforms.”
Mr Belling said the company would look towards increasing insurance coverage for couriers and examine portable leave and superannuation.
It will start its pilot employment program in Sydney and look to a possible new award with the Fair Work Commission in consultation with unions.
Mr Belling cautioned it would take some time to move to a new employment system.
“Ultimately, we want to employ couriers. However the current regulatory framework presents a number of challenges, with specific regards to existing modern awards, the lack of flexibility they present and subsequent cost,” he said.
The decision will pile more pressure on tech giants such as Uber, Deliveroo and disability services provider Mable that use independent contractors and insist the status is essential to their business model because it allows workers to pick when they work.
Deliveroo shares slumped on its stock market debut in the UK at the start of this month, in part because several major British fund managers declined to invest on account of its labour practices.
Uber’s UK wing reclassified its drivers as “workers”, a status similar to casuals in Australia, after a series of bruising court battles.
And both companies have said they would accept some regulation such as sick days in Australia in a sign they see it as inevitable.
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