Adam is the sole proprietor of a franchise convenience store (SunUp) in Melbourne, Victoria - that operates 24/7 - as stipulated within the rules of the franchise agreement. 6 casual employees work on a roster-basis so that there will always be two workers at any one time - excluding Adam who works from his back office as the owner. All the casuals have very flexible irregular and unsystematic working hours. Adam is good at accommodating the personal circumstances of his workers when rostering their week-to-week schedule. No worker has any set work schedule or hours. Because the store is located in an undesirable part of the city (drunkenness, anti-social behaviour, etc.), he was only able to attract casual workers 21+ years old. The downside is that they are paid the legal minimum wage of $24.60/hour. The store's wages alone come to $431 000/year [$24.60 x 2 workers x 24 hours x 365 days]. Two distinct duties are required of employees, i.e., Customer Service (behind the counter) and Cleaning & Stocking. Business is slow during the late shift of between midnight and 6am.

SunUp is struggling to make a profit and in the past financial year, ended up with a $20 000 loss. Adam had to 'prop' up the business using his own personal savings. So, when 2 casual workers resigned, Adam took the opportunity to find ways to reduce his labour costs. Desperate to save his business, Adam decided to hire 3 more staff all on different employment arrangements. Existing staff will get fewer hours as a result.

1. Adam's best friend Jack is a sole proprietor of his less-than-successful lawn mowing business. Desperate for some additional income, Jack entered into a 12-month $28 000 contract with Adam's SunUp to provide 'general cleaning & stocking services' at the store. The contract stipulates that Jack can choose any five 6-hour shifts per week - by giving Adam advance notice. This works out to be about $18/hour. Jack provides his own cleaning tools & equipment and gets his wife to help out at times. According to Adam, Jack is an independent contractor. 2. Another new worker 25-year-old Jerry agreed to work for $17/hour undeclared cash-in-hand. It's not a good idea because of the undeclared wages, Adam would not be able to claim wage expenses for tax purpose. Also, technically Jerry is not employed by the business and won't be covered under workers' compensation insurance - should he be injured at work. But Adam went ahead with the plan since Jerry is willing to work 35 hours/week. 3. The third new worker 22-year-old Mary is equally desperate for work since she has no work experience, and the job market is very competitive. Adam made a verbal agreement with her to only officially record 50% of Mary's worked hours at the minimum wage, i.e., 'cook the books'. In effect Mary will be paid $12.30/hour

Q1Do some basic research on the 'gig economy'. Using Jack's contract with SunUp, explain why the 'hiring' of independent contractors (instead of employees) has its advantages, but is also controversial and even unethical.

Q2Do some basic research on the 'gig economy'. Using Jack's contract with SunUp, explain why the 'hiring' of independent contractors (instead of employees) has its advantages, but is also controversial and even unethical.