Insurance issues arising in the gig economy

What is the gig economy?

‘Gig’ is a slang term referring to a ‘job for a specified period of time’ and harks back to when musicians were engaged for a performance or a ‘gig’. The gig economy refers to the growing trend towards freelance or contract workers, as well as the share economy of resources such as property and equipment. In the US, almost 30 per cent of the workforce now participate in the gig economy. That is expected to grow to 50 per cent by 2027.

Some highly recognisable examples of the gig economy at work are:

  • Uber and Lyft – ride sharing
  • Airbnb – accommodation sharing
  • Airtasker – task sharing
  • Dozr – construction equipment sharing

The gig economy is clearly the way of the future. This poses both challenges and opportunities in the corporate and insurance worlds in terms of how best to classify, assign and transfer risk in these ‘non traditional’ employment and commercial relationships.

What are some of the risks emerging from the gig economy?

The risks that have already emerged with some prevalence from the gig economy include:

1. Who insures the workers?

It remains unclear who insures gig workers in various scenarios. For instance, if an Uber driver is involved in an accident, who insures that driver for compensation and damages arising from any personal injuries sustained? There have been different judicial approaches to this issue in various jurisdictions and situations. This gives rise to great uncertainty for both the drivers and the corporation.

In another example, who insures an Airtasker worker who suffers injury when attending a domestic home to perform a contracted task? Airtasker eschews responsibility. The homeowner’s public liability cover (an extension to home and contents insurance) excludes claims by workers. The homeowner may have direct liability to the Airtasker worker, unless another insurance solution can be found.

2. Who insures the work performed?

A similar issue arises for consideration about who insures for the negligence of gig workers. If you are engaging with a freelancer who does not hold appropriate insurance cover, you may not have recourse against an insurer (and its deep pockets) in the event the gig worker causes loss and damage.

3. Who insures the property?

A standard insurance policy wording may not cover property that is ‘hired out’ via a platform such as Airbnb or Dozr.

Again, the platforms Airbnb and Dozr see their purpose as ‘connecting supply with demand’ and exclude liability. This creates a few issues for the property owner namely:

  • Are they covered if the hirer causes damage to their property?
  • Are they covered if the hirer suffers property damage, personal injury, loss or other damage arising from the hire of the property?

How can insurance help?

In some instances, the new and emerging risks arising from the gig economy can be assigned through properly drafted contracts and agreements that clearly spell out where the liability (and the obligation to insure) falls.

However, some of the risks identified above will not be covered by standard or traditional insurance policies.

New products providing coverage directed at the gig economy are constantly being developed. This may otherwise be achieved by amending or endorsing existing policies. However, insurance arrangements should be carefully reviewed to ensure that you are covered for risks arising from the gig economy.

What should you do to protect yourself?

The gig economy offers much in the way of flexibility and free market engagement – but review your insurance to make sure you are covered in the event something goes wrong.

If you are a member of the gig economy, or you engage with members of the gig economy, talk to your broker about your insurance needs.

Queensland Smoke Alarm Laws and you

Whether you are a home owner, a renter, a landlord or a renovator/builder, the smoke alarm legislation introduced by Queensland Fire and Emergency Services from 1 January 2017 will affect you!

As a landlord….

  • Existing smoke alarms manufactured more than 10 years ago must be replaced with photoelectric smoke alarms which comply with Australian Standards (AS) 3786-2014. All smoke alarms should be interconnected within the property.
  • Smoke alarms should be installed on each storey including – in every bedroom; in hallways that connect bedrooms and the rest of the property and if there are no bedrooms on a storey, at least one smoke alarm should be installed in the most likely path of travel to exit the property.
  • Any person can legally install a battery powered alarm, but 240-volt hard-wired smoke alarms must be connected by a licensed electrician.
  • Within 30 days before the start of a tenancy in a domestic residence, you must test and clean each smoke alarm in the property.

As a tenant….

  • During the tenancy, you must test and clean each smoke alarm in the property, at least once every 12 months. To test a smoke alarm, press the ‘test’ button.

As a home owner….

  • Existing smoke alarms manufactured more than 10 years ago must be replaced with photoelectric smoke alarms which comply with Australian Standards (AS) 3786-2014.
  • Smoke alarms that do not operate when tested must be replaced immediately.
  • It is recommended that smoke alarms be either hardwired or powered by a non-removable 10-year battery, and ionisation smoke alarms be replaced with a photoelectric type as soon as possible.

As a renovator/builder….

  • All new or substantially renovated homes or units require hardwired, photoelectric interconnected smoke alarms. For existing dwellings, the smoke alarms can also be powered by a non-removable 10-year battery.
  • Smoke alarms must be installed on each storey, in each bedroom, in hallways that connect bedrooms and the rest of the dwelling, and if there are no bedrooms on a storey, at least one smoke alarm must be installed in the most likely path of travel to exit the dwelling.
  • It is essential to also have a well-practiced fire escape plan.

For further details, refer to Queensland Fire and Emergency Services’ website at www.qfes.qld.gov.au/community-safety/ smokealarms

Single Touch Payroll is here

The biggest change to payroll in history is here and compulsory for businesses with 19 or fewer employees.

What is it?

Single Touch payroll (STP) is an ATO compliance regulation which requires employers to send employee payroll information, including salary, wages, PAYG withholding and superannuation to the ATO at the same time as their standard pay run.

Why is it happening?

The government likes STP for a number of reasons.

  • It’s a much more efficient way to operate the taxation system.
  • It will make the black economy more difficult…at least in theory…because the ATO will know who is being paid, how much they’re being paid and when.

What are the benefits?

The ATO will be able to pre-fill the BAS for employers, eliminating errors and double handling.

Online access to Payment Summaries means that employers no longer have to provide Payment summaries at the end of the year, as the ATO will already have this information.

What’s the scale of this?

ABS data reveals that there are approximately 782,000 businesses with 19 or fewer employees in Australia…about 37 per cent of all Australian businesses.

What are the concerns?

Worries range from businesses not being aware of the changes to some employers not even having digital payroll software. A lot of small businesses are struggling to come to grips with why the change is needed.

What’s the ATO approach?

The ATO has said that they weren’t interested in cracking the whip to ensure short-term compliance and are instead taking a long-term view, but they certainly want to bring all businesses into the digital world.

What’s the solution?

A number of third party software providers have introduced low cost solutions for micro-businesses, while larger businesses should have already have updated software to deal with the changes.

That’s not a cyclone…this is a cyclone

That’s not a cyclone…this is a cyclone

Although the effects of Cyclones Debbie, Yasi, Marcia and Larry are generally well known, these are dwarfed by Cyclone Mahina.

Cyclone Mahina is the deadliest cyclone in recorded Australian history, striking Bathurst Bay in Cape York on the 4th March 1899, with its destructive winds and storm surge combining to kill over 400 people. Thankfully, storms like this occur extremely rarely, with research by scientists finding that “on average”’ super cyclones occur in the region only once every two or three centuries.

A pearling fleet was anchored in or near the bay before the storm, but within an hour the fleet had either been driven ashore, onto the reef, or sunk at their anchorages.

A storm surge, reportedly 13 metres high, swept across Princess Charlotte Bay and then 5 kilometres inland destroying anything left of the fleet and the settlement. Apart from the sailors, around 100 indigenous

Australians were killed, but as indigenous people were not counted as part of the population at the time, no accurate numbers are known. Tragically, they had tried to help the shipwrecked survivors, but the back surge caught them and swept them away.

Thousands of fish and some sharks and

dolphins were found several kilometres inland and on Flinders Island, dolphins were found on the 15.2 metre cliffs.

The cyclone continued southwest over Cape York Peninsula, emerging into the Gulf of Carpentaria before doubling back and dissipating on the 10th March. Measuring cyclones is a complicated task as the biggest or strongest are often not the most

destructive, but one good measure of

intensity is pressure.

The lower the pressure, the more air gets sucked into the cyclone and this ultimately results in more power. A study in 2014, found the lowest pressure of around 880 hectopascals for Mahina, based upon modelling of meteorological variables needed to induce the world record setting surge height…by comparison, Cyclone Yasi was 930 hectopascals.

Hopefully, we won’t see anything like Cyclone Mahina in 2017/18, but Queensland, and more particularly North Queensland, is facing another nervous cyclone season, with weather forecasters predicting a dozen cyclones could form off the Australian coast this summer. Of those, up to four could cross the Queensland coast, but even tropical cyclones which do not make the coast can still have a significant impact on coastal communities. Heavy rainfall causing major flooding, storm surges causing coastal inundation and destructive winds causing damage to property and infrastructure are a common occurrence.

 

BREAK OUT:

The State Emergency Service recommend having an Emergency Kit ready for storm season that contains essential items you may need during and after a severe storm.

An Emergency Kit contains essential items that you and other members of your household may need during and after a severe storm.

An employer’s right of dismissal for lies in a job application

Employers may sometimes come across job applicants who have embellished, exaggerated or stretched the truth about their qualifications, skills and experience in order to gain employment. While lying on a job application through a résumé, CV, cover letter or job interview may not be a criminal offence, it will be considered fraud if an individual presents false documents to back up claims of qualifications, education or job history. It is also illegal to impersonate a doctor, a police officer and various other occupations.

In these situations, an employer may take disciplinary action, and go so far as to dismiss the employee, even if the misrepresentation does not relate to the qualifications or skills required to perform the role. This is because of the inherent requirements of trust and honesty in the employment relationship. Furthermore, even a little stretching of the truth could amount to a breach of the employment contract.

In Jacques v The McCarroll Motor Group [2014] FWC 5793, the Applicant was a trainee motor mechanic who lied in a job interview and said that he had around six modules left to complete in the near future for his trade qualifications. However, the Applicant actually had 14 modules left to complete and had not made any progress since starting the job. The Fair Work Commission found that the dismissal was not ‘harsh, unjust or unreasonable’ because the Applicant’s misrepresentations had demolished the trust and confidence necessary to maintain the employment relationship. Furthermore, the Applicant could not satisfy the foundation element of the employment without his trade qualifications.

In 2015, Jeffrey Flanagan pleaded guilty to deception charges when it was uncovered that he had falsified his employment history and gave fictional references on his résumé. Myer, who had hired Mr Flanagan as an executive, had terminated his employment on the first day and referred this matter to police.

More recently, in Tham v Hertz Australia Pty Ltd T/A Hertz [2018] FWC 3967, an employer was able to dismiss an employee due to exaggerated employment dates on his CV, despite the fact that the misrepresentation did not directly relate to the employee’s role and there were procedural deficiencies in the disciplinary action taken by the employer.

The key takeaway for employers is that there is a right to dismiss an employee who intentionally lies in their job application or provides false details. However, employers should ensure that any immediate dismissal is due to sufficiently serious dishonesty and that all procedural matters are followed during the disciplinary and dismissal process.

The hidden dangers in your mobile phone contract

Nobody likes checking documents with a fine-tooth comb, but being careful with your mobile phone contract can save you some expensive mistakes.

We all know we should read the small print before signing anything, but who does? We just want it now!!!

As part of an April Fools Prank in 2010, game retailer Gamestation once inserted a new clause in its terms and conditions requiring customers to sign away their souls.

It demanded: “By placing an order via this website… you agree to grant us a non-transferable option to claim, for now and for ever more, your immortal soul, and any claim you may have on it, within five working days of receiving written notification from gamesation.co.uk or one of its duly authorised minions.”

All customers had to do, was just opt out by clicking on a link, only 12 percent were observant enough to do so.

Some Governments have considered regulation over the use of small print in contracts by stipulating a minimum font size and basic level of intelligibility.

However, this may well end up extending only to consumers and explicitly excluding business contracts.

So what are the most common hidden dangers that can lurk in a mobile phone contract?

Can you understand the contract?

The biggest danger by far is it being unintelligible to begin with. Contracts are often mired in such extreme legalese that it’s impossible for the layman to make head or tail of them. Sheer length can also grind you down, so that your eyes glaze over and nothing actually sinks in. A company with nothing to hide should minimise both these problems, using language that’s as clear and concise as possible.

Check the trial period of a plan – some may be shorter than you expect – the notice period, and whether the contract will automatically roll over when it ends. Check how much you’ll pay if you go over your allowances for calls, texts and data…a “bigger” deal may well work out much cheaper in the long run. And be wary of ‘fair usage’ clauses…your idea of what’s reasonable may be very different from that of your provider.

Can the provider change it without notice?

It also makes sense to be particularly careful when checking what the mobile phone contract allows the carrier to do. Some are written in such a way as to allow it to change just about anything…including monthly payments…with little or no advance notice. Sometimes, customers find that an add-on service…maybe even one that’s vital for their business…can be cancelled. Check for late payment fees and unexpected surcharges as well.

What rights do you have?

Look beyond the cost. See what level of service and support you can count on. It’s not uncommon, for example, to find clauses designed to get the seller out of replacing faulty items, or to give unreasonably short time limits for the return of goods.

Above all, read everything carefully – however long it takes – and ask for an explanation for anything you don’t understand. After all, your immortal soul could be at stake…

Are employee benefits the key to retaining good staff?

Some employers would say yes, but the experts agree that you can’t supplement a poor work culture with employee benefits.

You can use employee benefits to reinforce your company culture and show staff they matter, but you must have a good culture to start with, otherwise employee benefits won’t stop staff leaving.

If your culture is one where employees feel valued, supported, they have room to grow and are remunerated fairly…employee benefits can definitely give you an edge on employee retention.

If you align the benefits to increasing the health and the well-being of your employees, it’s a win/win for everyone.

Some popular employee benefits, which can contribute to good physical and mental health include:

  • Flu Shots
  • Day off on birthday
  • Free fortnightly massages at work
  • Weekly lunchtime yoga classes
  • Employee Assistance Program (EAP)
  • Bring your pet to work day
  • Fruit supplied in the kitchen
  • Supplemented gym memberships
  • Flexible working hours
  • Mental health days as required
  • Ability to work from home when needed

If your workplace has enough flexibility so employees don’t feel overwhelmed with life outside work, productivity is significantly increased.

The modern day successful workplace is a two way street. Happy employees always give 110% especially when they feel supported by the business they work for.

A Snapshot of the New Labour Hire Licensing Laws

The Labour Hire Licensing Act 2017 (Qld), which commenced on 16 April 2018, aims to protect workers from exploitation by providers of labour hire services and to promote the integrity of the labour hire industry through a licensing scheme.

The Act will apply to those who, as part of carrying on a business, hire out workers to another person or business, such as organisations that provide apprentices and temporary staff.

Some of the key features of the Act include:

  • Licensees being required to pass a fit and proper person test;
  • The entity providing the services to be financially viable;
  • Licensees to submit half yearly reports on their operational activities;
  • Strong penalties for breach of obligations;
  • The establishment of a labour hire licensing compliance unit, responsible for awareness, monitoring and enforcement functions.

A person may be seen as not fit and proper and therefore refused a licence if they have been convicted of a serious criminal offence, have been a bankrupt or disqualified from holding a directorship in a company or is under the control or influence of another person who is not fit and proper to provide the labour hire services.

The scheme will be regulated and managed by the Labour Hire Licensing Compliance Unit.

The expectation is that by 15 June 2018, anyone who provides labour hire services in Queensland must either have a licence or have submitted one. Licences are renewed annually and carry with it a licensing fee based on the amount of wages paid by the business.

If you are unsure whether your business will require a license or would like more information about the Act, please visit www.labourhire.qld.gov.au.

Crypto Currencies – The rise of the cashless society

A ‘Cashless Society’ describes an economic state whereby Financial Transactions are not conducted with money in the forms of physical banknotes or coins, but rather through the transfer of digital information (usually an electronic representation of money) between the ‘transacting parties’. Cashless societies have existed, based on barter and other methods of exchange.

Cashless transactions have also become possible using many different forms of ‘crypto currencies’ such as ‘Bitcoin’. A ‘Crypto Currency’ is described by Wikipedia as ‘a controversial digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions to control the creation of additional units and to verify the transfer or assets.’ Depending on whom you listen to and believe ‘Crypto Currencies’ may just be ‘the next big thing’ or a ‘total fraud’.

Using the example of ‘Bitcoin’ whilst there are many examples of individuals who’ve invested and made strong returns in relatively short periods of time there appear to be many strange terminologies used and old adage of ‘If it’s too good to be true…’ may just apply.

Like an investment, a sound knowledge of both the product and the market allow better opportunities to obtain strong returns on capital. Whilst there have been many articles and lots of discussions regarding these relatively new products they haven’t been around long enough to make a truly informed assessment. There has also been a great deal of negative press that have surrounded many of these new markets. ‘Ponzi Scheme’ along with other negative names have been used to describe these new markets.

Further, as these products are delivered on electronic platforms across many country borders, consideration should be given to the Legal and Taxation framework and jurisdictions that exist where the transaction will occur.

Not dissimilar to any new or emerging products and markets, the more research and advice from professionals will allow you, as an Investor, the best opportunity for success.

Once again, the Greek saying that translates to ‘Let the buyer beware’ should raise the appropriate alerts.

Travel Insurance and Credit Cards – what you need to know

Before your fly, check your travel insurance

It’s imperative for travellers to have a full understanding of their Travel Insurance Policies prior to heading off on their adventures.

Certain credit cards that have Travel Insurance Policies included as part of their offering sometimes have many limitations and exclusions that may cause heartache if not understood prior to departure.

There are many insurance products that are attached to credit cards that sometimes don’t provide adequate coverage. As travellers, we need to ensure that the coverage matches our expectations.

Some of the limitations of the credit card insurance policies don’t provide coverage for:

  • Terrorism related events
  • Certain international travel destinations

Certain policies are limited to provide coverage for medical expenses only and are often also priced accordingly.

Also, if you find yourself in a position where you need to make a travel claim here are some “tips” that may assist:

  • Get it down on paper – if you’re a victim of a flight or hotel cancellation or delay be sure to obtain written proof of such events from your airline and/or provider.
  • Keep receipts – Your insurer will require proof of payment/booking in order to settle your claim. Retaining boarding passes,

receipts or credit card statements further assist.

As always, contacting us, your broker, to advise of details of any potential claim with proof at your earliest opportunity will ensure prompt settlement of claims.

Further, by allowing us to view your existing coverage, prior to departure, will also allow for any “shortfalls or inadequacies” to be identified and the appropriate coverage obtained.