We have been watching with close interest the exponential expansion of crypto-currencies. These instruments, such as Bitcoin, Ethereum and Litecoin, are methods of secure, electronic transfer of value between individuals using advanced digital encryption techniques – without any central regulation by government.
Recent research published by The Conversation suggests that crypto-currencies are showing no signs of being merely a speculative bubble. With their recent translation from purely online origins into tangible interfaces, for example, the establishment of Bitcoin ATMs in Australia, employers need to consider not only the future of work, but the future of the ways in which businesses will be able to, or might want to, reward contribution.
While crypto-currencies remain in their infancy, the likely speed of growth of direct, electronic-based, decentralised, financial interactions between individuals mean that they are likely to grow in relevance as consumers become more comfortable and familiar with their use – and possibly overcome their fear!
As more transactions occur in crypto-currencies, businesses may find that they collect some of their revenue in crypto-currency or that their contributors ask to receive reward in crypto-currency. In both these scenarios, the business will be under pressure to use a currency that may be rather different to what they have been used to.
But what does this mean for the way in which a business will interact with its contributors? There are two separate groups of contributors that need to be considered at the moment:
- where a business employs a worker in Australia, a business will generally need to pay the worker in “cash” for the work they have performed, as result of particular provision in the Fair Work Act. This provision was originally designed as a protective system for employees – it prevents an employer trying to implement a system where an employee is paid “in kind” a prohibition which originally from the old UK “Truck Acts”, preventing employers paying employees in goods (but that’s for a future blog to explore). Payments in kind present obvious challenges in relation to the value that is placed on the good or service that the employee would receive – requiring cash payment reduces the prospect that the employee might be short-changed.
- where a business engages a worker as an independent contractor, there is significantly less regulation in Australia. There are no express prohibitions on businesses giving contractors reward in something other than cash – arguably reward could be given in Bitcoin or other crypto-currency.
Obviously, as crypto-currencies become more widely accepted (though the total market capitalisation across crypto-currencies already well exceeds USD 100 billion), we may see the employment legislation develop to allow alternative payment methods – but this may well be a decades-long evolution rather than a Che Guevara style revolution.
Importantly, though, viewing the workforce through this lens reflects the trend we are seeing – as the basis on which the workforce is engaged shifts over time away from traditional employment and towards independent contractor gigs, it is likely that even without legislative reform, businesses will have increasing flexibility in the way they pay for the services that are provided.
Our ‘future of work’ series has been considering how businesses will need to grow and adapt to changes to the way in which work will be performed in the future. Many of these developments flow from significant advances in technology that we have seen over the last 20 years – for example, increased automation, increased use of robotics and increased computing power have made many traditional roles redundant, while Increased communications potential has meant that many workers can perform their roles flexibly. We understand these developments as the law firm known for our role in transformational legal industry and labour and employment issues, we believe it is our responsibility to harness our knowledge, experience and relationships to forge a path for the Future Employer.