Australia’s complicated workers’ compensation framework needs modernising and harmonising to respond to changing employment patterns, a report commissioned by IAG says.

“An increasing number of independent contractors are not adequately covered by workers’ compensation, nor the types of insurance usually attached to superannuation accounts,” it says.

The report recommends the Federal Government explore extending workers’ compensation to people in the gig economy and to other industries with a high ratio of contractual, short-term arrangements, and proposes that the issues should be pursued through the Council of Australian Governments.

“As a large employer and a provider of workers’ compensation insurance, IAG has a keen interest in the changing nature of work and its impact on Australians and our communities,” EGM Culture and Leadership Gillian Folkes said.

“We need to shift the conversation about the future of work from automation and robots taking our jobs to how we can ensure Australians have the right skills for the type of work in the future and continue to have the appropriate level of protections and entitlements.”

The report cites cases of labour hire companies incorrectly relying on insurance provided by the host employer to cover injuries, leading to costs getting pushed to other products such as liability that are not designed to cover a person in the same way.

The report, produced by public policy not-for-profit The McKell Institute, also says technological disruption will remain a challenge and calls for lifelong learning opportunities and a focus on people, not just jobs.

It says traditional arrangements still dominate the labour market, but these jobs are changing.

At least 1 million people are employed as independent contractors, including more than 100,000 full-time in gig economy jobs, and more than 20% of the workforce are employed on a casual basis.

“We hope research like this serves as a timely reminder of how much work has changed, how much it’s likely to keep changing, and how we need to better prepare as a society to ensure no one gets left behind,” McKell Institute Executive Director Sam Crosby said.