Use Australian laws to discuss legal issues in the article.

The Menulog food delivery business will apply to the FWC for a new modern award covering the on-demand industry, as part of a landmark decision to take the first step toward an employment model based on minimum wages and conditions.

The business revealed the change yesterday while giving evidence to a Senateinquiryinto job security.

Menulog managing director Morten Belling says the contractor model is historically well-suited to the Australian market, but the company believes it needs to make improvements for couriers that align with the philosophies and values of its new European parent group,Just Eat Takeaway.com.

"We are committed to the safety of our couriers, providing them with insurance cover and a fair income," Belling says in astatement.

He says the company complies with IR laws but that it can do "more" for its couriers.

"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."

Menulog says its shift to an employment model will include a proposal for a new modern award for the on-demand industry.

Belling says the company "ultimately" wants to employ couriers, but 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".

"As such, we intend to investigate avenues for employment by making an application for a new modern award with the Fair Work Commission and consulting with key stakeholders.

"In tandem, we will begin an employment pilot program with couriers in the Sydney CBD to help inform the longer-term plan.

"We have also committed to increasing support of our network of contracted couriers by increasing our current insurance cover and examining portable leave entitlements and superannuation."

Belling said the process will take time, with the global company operating in 23 countries, but it is committed to shifting to an employment model.

RCSA applauds Menulog initiative

Recruitment, Consulting and Staffing Associationchief executive Charles Cameron commends Menulog for trialling an employment model that will provide courier workers with rights to minimum wages, greater protections and superannuation contributions.

"Competition in the broader gig economy should not rely on the absence of minimum wages and entitlements for workers in roles whereincomes are regularly below minimum entitlements identified in law," he says. "RCSA hopes consumers will support Menulog's move with theirpurchasing choices as a way of encouraging other operators and platform matching services in the broader gig economy to do the same."

"Workers in roles where wages are at or below minimum entitlements should be engaged as employees with all the protections that follow.

"Otherwise, what is the point of creating a minimum baseline for workers' wages and entitlements?

Watershed moment, says TWU

TWU national secretary Michael Kaine welcomes the move and says Federal Government regulation is critical at this juncture to protect companies seeking to do the right thing for their workers.

"This is a watershed moment for the gig economy in Australia."

"For the first time, a food delivery company has realised the importance of awarding minimum pay and rights to riders and will move towards this model. "

He says the TWU will work with Menulog "on this important trial which will challenge the myth that flexibility and fairness are at odds".

"Minimum pay and rights for riders will break apart the dependent, exploitative relationship that forces riders to work quickly and dangerously over long hours just to put food on the table.

"Finally, socially conscious consumers will be able to select a food delivery company that aligns with their values and the protections they know these essential workers deserve."

Kaine is calling on the Federal Government to "level the playing field and regulate this industry to protect companies moving to provide essential rights and protections for workers".

"Menulog must be encouraged to continue along this trajectory rather than put at a competitive disadvantage."

ACTU secretary Sally McManussaid that "app based corporations" have denied workers basic rights for years constantly reorganising their business to avoid workplace laws and Australia lagged behind other countries in terms of delivery workers' rights.

"If Menulog moves to make this more than a trial we will be calling on all Australians to ditch other delivery apps and only use Menulog, and any other companies who join them.

"People will be able to benefit from the convenience without also buying exploitation."