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Who Qualifies as a Regulated Worker?

Regulated workers fall into two distinct categories under the new legislation, each with specific protections tailored to their working arrangements. Understanding which category, you belong to is the first step in determining your rights under these new provisions.

Employee like workers are individuals who perform paid work through digital labor platforms such as food delivery or rideshare apps. These workers typically operate in what’s commonly known as the “gig economy,” where work is allocated through digital interfaces rather than traditional employment structures. Despite not being classified as employees in the traditional sense, these workers now have certain protections like those enjoyed by employees.

Regulated road transport contractors constitute the second category, encompassing individuals working in the road transport industry under service contracts. This broad definition covers various sectors including distribution, long distance operations, waste management, cash in transit, and passenger vehicle transportation. These contractors, while technically self employed, often face power imbalances like those experienced by employees.

To qualify for protection under these new provisions, regulated workers must meet specific criteria:

• For employee like workers: they must perform work through a digital labor platform
• For regulated road transport contractors: they must work under a services contract in the road transport industry
• For both categories: their annual earnings must fall below the contractor high income threshold
• Any deactivation or termination must have occurred on or after February 26, 2025

These qualifications ensure that protections are extended to those workers who most need them while maintaining distinctions between genuine independent contractors and those in more vulnerable working arrangements.

Understanding Unfair Deactivation for Digital Platform Workers

For employee like workers engaged through digital platforms, unfair deactivation represents a significant threat to their livelihood. Deactivation essentially means losing access to the platform that connects them with work opportunities, effectively terminating their ability to earn income through that channel.

Under the new provisions, deactivation encompasses several scenarios:

• Complete termination of access to the digital platform
• Suspension of access for an extended period
• Significant modification of access that substantially reduces earning capacity

The legislation recognises that digital platforms have historically exercised considerable unilateral control over when and why workers are deactivated, often with limited transparency or recourse for affected workers. The new unfair deactivation protections aim to address this power imbalance by establishing clear criteria for what constitutes fair grounds for deactivation.

To be eligible for unfair deactivation protection, an employee like worker must have been performing work through the digital platform on a regular basis for at least six months. This requirement ensures that protections extend to those with established working relationships rather than occasional or very short term engagements.

When assessing whether deactivation was unfair, the Fair Work Commission (FWC) will consider:

• Whether there was a valid reason for the deactivation related to the worker’s conduct or capacity
• Whether the worker was notified of the reason
• Whether the worker had an opportunity to respond
• Whether the platform followed processes specified in applicable deactivation codes

These considerations mirror aspects of unfair dismissal protections available to employees, reflecting the recognition that employee like workers face similar vulnerabilities despite their different classification.

Unfair Termination Protections for Road Transport Contractors

Regulated road transport contractors now have access to unfair termination protections that parallel those available to employees under unfair dismissal laws. These protections acknowledge the often unequal bargaining power between transport contractors and the businesses that engage them.

To qualify for these protections, a regulated road transport contractor must have been performing work in the road transport industry under a contract or series of contracts for at least six months. This requirement ensures that protections apply to contractors with established working relationships rather than very short term engagements.

The unfair termination provisions cover various scenarios:

• Outright termination of a services contract
• Non renewal of a fixed term contract in circumstances where renewal would normally be expected
• Constructive termination, where the contractor is effectively forced to end the relationship due to the conduct of the business

When assessing whether a termination was unfair, the FWC will consider factors similar to those used in unfair deactivation cases, including:

• Whether there was a valid reason for the termination related to the contractor’s conduct or capacity
• Whether the contractor was notified of the reason
• Whether the contractor had an opportunity to respond
• Whether the business followed processes specified in applicable termination codes

These considerations ensure that road transport contractors receive procedural fairness in termination decisions, addressing a significant gap in protections for this vulnerable group of workers.

The Application Process for Unfair Deactivation or Termination Claims

If you believe you’ve been unfairly deactivated or terminated as a regulated worker, understanding the application process is essential for seeking remedy. The process involves specific timeframes, documentation requirements, and procedural steps that must be followed carefully.

The most critical timeframe to be aware of is the 21 calendar-day deadline for lodging an application with the FWC. This period begins from the date the deactivation or termination took effect. The FWC can only extend this timeframe in exceptional circumstances, so prompt action is essential if you believe you have a claim.

To achieve the optimal outcome and results, please contact Workclaims Australia to alleviate the stress associated with lodging a claim. Alternatively, when preparing your application, you will need to:

• Complete the appropriate application form available from the FWC website.
• Pay the applicable application fee (or apply for a waiver if this would cause serious financial hardship)
• Provide details of your working arrangement, including evidence of your engagement as a regulated worker
• Explain why you believe the deactivation or termination was unfair
• Outline any attempts you’ve made to resolve the issue directly with the platform or business

Once your application is lodged, the FWC will assess whether you meet the eligibility criteria for bringing a claim. If your application proceeds, the FWC will notify the respondent (the digital platform or road transport business) and provide them with an opportunity to respond to your claims.

The FWC will typically attempt to resolve the dispute through conciliation before proceeding to a formal hearing. Conciliation involves a conference facilitated by an FWC member or conciliator, aimed at helping the parties reach a mutually acceptable resolution. If conciliation is unsuccessful, the matter may proceed to a formal hearing where the FWC will make a binding determination.

Potential Remedies for Successful Claims

If your unfair deactivation or termination claim is successful, the FWC has the power to order various remedies depending on your circumstances and the nature of the case. Understanding the potential outcomes can help you assess the merits of pursuing a claim.

For employee like workers who have been unfairly deactivated, the primary remedy available is reactivation. This means the digital platform must restore your access to the platform, allowing you to resume work. Unlike in employee unfair dismissal cases, the FWC cannot order compensation as an alternative to reactivation for employee like workers.

In addition to reactivation, the FWC can order:

• Restoration of lost pay for the period of deactivation
• Continuity of engagement, meaning the period of deactivation, doesn’t count as a break in your working relationship
• Other orders to ensure you don’t suffer disadvantages as a result of the deactivation

For regulated road transport contractors who have been unfairly terminated, the FWC has broader remedial powers. The primary remedy is typically an order that a new contract be formed, either on the same terms as the original contract or with variations ordered by the FWC.

Alternatively, the FWC may order:

• Compensation for lost earnings resulting from the termination
• Restoration of the contractor to their previous position
• Other orders to remedy the effects of the unfair termination

These remedies aim to restore the regulated worker to the position they would have been in had the unfair deactivation or termination not occurred, recognizing the significant impact that loss of work can have on individuals in these sectors.

Minimum Standards for Regulated Workers

Beyond the unfair deactivation and termination protections, the new legislation empowers the FWC to establish minimum standards for regulated workers, similar to how modern Awards set minimum standards for employees. These standards aim to ensure fair working conditions across digital platforms and the road transport industry.

The FWC can make minimum standards orders covering a wide range of matters, including:

• Payment terms and minimum rates
• Hours of work and rest breaks
• Dispute resolution procedures
• Insurance requirements
• Record keeping obligations
• Consultation rights regarding changes that affect workers

For regulated road transport contractors and employee like workers in the road transport industry, the FWC can make additional orders setting specific minimum standards that apply not just to the immediate contracting party but to all parties in a broader contractual chain.

The legislation prohibits certain content in minimum standards orders, including:

• Restrictions on the number of regulated workers a business can engage
• Requirements to engage particular individuals
• Provisions that would prevent a business from engaging both employees and regulated workers

The FWC may also issue minimum standards guidelines, which, while not carrying penalties for breach like orders do, provide important guidance on best practices for businesses engaging regulated workers.

Collective Agreements for Regulated Workers

The new legislation establishes a framework for collective bargaining between regulated workers and the businesses that engage them. This represents a significant shift, allowing workers who are not employees to negotiate collectively for better terms and conditions.

For employee like workers, the FWC can approve collective agreements between digital platform operators and organisations representing workers’ industrial interests. Similarly, for regulated road transport contractors, collective agreements can be negotiated between road transport businesses and representative organizations.

Unlike enterprise agreements for employees, collective agreements for regulated workers don’t require approval through a vote of the workers to be covered. Instead, the agreement is made when both negotiating parties (typically a representative organization and the relevant business) have signed it.

The FWC will assess collective agreements against several criteria before approving them:

• If a minimum standards order applies, the agreement must be more beneficial overall than the minimum standards
• The agreement must not include prohibited content
• The agreement must have been genuinely agreed to by the negotiating parties

Once approved, a collective agreement sets the floor for minimum entitlements for regulated workers engaged by that digital platform or road transport business. Businesses face penalties if they fail to comply with the terms of an approved collective agreement.

Unfair Contract Terms Protections

In addition to unfair deactivation/termination protections and minimum standards, the new legislation introduces specific unfair contract terms (UCT) protections for regulated workers. These provisions aim to address power imbalances in contracting relationships that can lead to unfair terms being imposed on workers.

The FWC now has jurisdiction to deal with disputes regarding UCT in services contracts for regulated workers who earn below the contractor high income threshold. This means that terms in contracts that:

• Cause a significant imbalance in the parties’ rights and obligations
• Are not reasonably necessary to protect the legitimate interests of the advantaged party
• Would cause detriment to the regulated worker if relied upon may be declared void by the FWC, with the remainder of the contract continuing to operate without the unfair term.

Common examples of potentially unfair terms include:

• Unilateral variation clauses that allow businesses to change contract terms without consultation
• Excessive restraint of trade provisions
• Unreasonable payment terms or penalties
• One sided termination clauses

These UCT protections complement the unfair deactivation/termination provisions by ensuring that the terms of engagement for regulated workers are fair from the outset, not just at the point of termination.

Preparing for New Regulation

With the new protections taking effect from February 26, 2025, both regulated workers and the businesses that engage them should be preparing for the changed regulatory landscape. Taking proactive steps now can help ensure compliance and minimise disruption when the provisions come into force.

For digital platforms and road transport businesses, key preparation steps include:

• Reviewing and potentially revising contracts with regulated workers to ensure they don’t contain unfair terms
• Developing internal procedures for deactivation or termination decisions that align with procedural fairness requirements
• Monitoring the development of minimum standards and preparing for their implementation
• Considering potential impacts on business models and pricing structures
• Developing strategies for potential collective bargaining scenarios

For regulated workers, important preparation steps include:

• Understanding your classification and whether you meet the criteria for protection
• Familiarising yourself with the application process for unfair deactivation/termination claims
• Monitoring the development of minimum standards relevant to your work
• Considering membership in organisations that may represent your interest in collective bargaining
• Keeping records of your working arrangements, earnings, and any issues that arise

By taking these preparatory steps, both businesses and workers can position themselves to navigate the new regulatory framework effectively when it comes into force.

Conclusion: Protection for Regulated Workers

The introduction of unfair deactivation and termination protections for regulated workers represents a significant evolution in Australian workplace law, acknowledging the changing nature of work in the digital age. By extending protections to workers who fall outside traditional employment relationships, the legislation aims to address vulnerabilities in the gig economy and road transport sectors.

For regulated workers, these changes provide important new rights and avenues for redress when unfairly deactivated or terminated. For businesses, they introduce new compliance obligations but also provide greater clarity around engagement models and dispute resolution processes.

As these provisions are implemented and tested through FWC proceedings, we can expect further refinement of how they apply in practice. What is clear is that the distinction between employees and independent contractors is no longer the sole determinant of workplace protections, with this “third category” of regulated workers now recognized in Australian law.

Whether you’re a digital platform worker, a road transport contractor, or a business engaging these workers, staying informed about these developments and seeking expert advice when needed will be essential as we enter this new era of worker protection.

If you’re uncertain about the new regulations on unfair deactivation or termination for regulated workers, contact Workclaims Australia for expert advice and assistance. Simplify your claim and ensure your rights are protected.