Bernie Ripoll (Oxley, Australian Labor Party, Shadow Parliamentary Secretary for Industry, Infrastructure and Industrial Relations) Share this | Hansard source

Before I go through the detail of the Independent Contractors Bill 2006 and cognate bill and what they propose to do, I make the very obvious point that this legislation is about the government roping in those workers left in the community who as yet have not been directly impacted on by the Work Choices legislation. This is a way for government to rope in those last few workers who are out there either as independent contractors or as employees who would be independent contractors. It also ties in a number of small businesses.

The bill is part of the government’s suite of reforms to reduce wages and conditions and to strip away unfair dismissal laws and the protections for workers provided by state based legislation. It is to make life harder. I cannot see any other purpose for the legislation. I have certainly heard nothing from government speakers on the bill that would say to me that there is some good intent in it about protecting workers—whether they are independent contractors or small business people. I have heard nothing about it protecting their wages, their hours of work, their conditions, their entitlements or their superannuation. I have heard nothing about it protecting or enhancing their quality of life at work or the balance between work and family. We do not see any of that in this bill or in any other part of the government’s Work Choices legislation.

Speaking about choices, when government members come into the House they cannot help but use the word ‘choice’. It is now a meaningless word, thrown up by government members, and means: if you are forced to do something, you are given a choice. My definition of what that word means is according to what the government do. They give you a choice between accepting something or nothing. That is not choice. It is not real choice; it is not choice of any kind.

What this so-called independent contractors legislation will do is leave people out on their own. They are going to be independent, all right. They are going to be completely on their own, with no protection. There will be no protections under law—no real protections for their wages and conditions, their ability to work, how they work or their hours of work. They will be on their own. That is the message that independent contractors are going to receive from the government when this legislation passes this House.

In an excellent media release, our shadow minister for industrial relations, Stephen Smith, said that these laws amount to nothing more than the Howard government’s latest attempt to slash wages and strip away the conditions of working Australians. That is exactly what it does. On the other hand, Labor genuinely supports people who want to start their own business. There is absolute support for workers who want to start their own business and who have the skills and capacity to go out on their own. They should be supported by government. It should not be made more difficult for them with the introduction of legislation such as this.

If the government are trying to create something beneficial for small business and contractors, they are not going to achieve it through this legislation; it will do precisely the opposite. In fact, the legislation will provide more power to the big end of town, the big market players, who have enormous economies of scale and power over their employees. They will start to push people out of the traditional, normal relationship of employee-employer into so-called independent contracting jobs.

You do not have to be Einstein, an industrial genius or someone who fully comprehends all the complexities contained within these laws to understand that, in a normal employer-employee relationship, the employer is bound to carry the burden of superannuation and a whole range of entitlements such as sickness benefits and other things that workers expect as an entitlement, as a right. They are part of the employment contract. For the productivity that workers provide, they are given in return not only a salary but also some assurances and some protection. They can have a life of their own. They can borrow money for a home loan—of course, these days that is more and more difficult. That is the central theme of the employer-employee relationship.

These proposed laws will fundamentally change that forever. They will push people out into so-called independent contract jobs but, really, all that will happen is that on a Friday afternoon you will finish working for the big company and on Monday morning you will restart with the same company, wearing the same uniform and doing the same job with much the same conditions, except that now you will be deemed to be an independent contractor. That will mean that perhaps you will be paid a little bit more per hour—perhaps not; there is no guarantee of that either because the minimum set by this government is $12.75 per hour. But as an independent contractor you have to carry the burden of your own superannuation payments and you have to carry the burden of dealing with the Australian Taxation Office. You, the employee, the so-called independent contractor, will have to carry the burden of providing for yourself. You will have to insure yourself so that if you fall sick you are covered in those instances where you may not be able to meet your mortgage payments, which otherwise you might have been able to do had you fallen sick and taken a day off under your normal entitlements.

That is what this legislation does: it pushes people out. It makes their lives less secure and it slashes their wages and conditions. There is no question about that. Nowhere in this bill does it argue against that and nowhere in this bill does it put in place any frameworks, legal or otherwise, that will protect people. I think that is the disgraceful part about this bill.

As I said earlier on, it is just part of the government’s full suite of extreme industrial relations legislation. Just because this legislation is about so-called independent contractors, people should not view it as being any different from the workplace relations bills, acts and laws that the government has put in place. The intent is identical. The intent is about removing rights, entitlements and any balance of power from an employee, a person working for wages, and rebalancing that power in favour of the employer.

I have no beef with employers and good bosses. I have many in my electorate whom I either am friends with or know, and they are excellent employers and excellent companies. They do the right thing not only by the economy and the region in which they operate but also by their employees because they understand the importance of a solid employer-employee relationship. They understand productivity gains and growth; they understand what makes this country great. They understand why we do enjoy today a good, strong economy, although that is turning very fast and is questionable under the leadership of this government. They understand that it is because there are workers out there, working hard. There are people out there being productive, efficient and globally competitive.

Does this bill propose to enhance that in any way? No, it doesn’t. Does this bill actually propose in any way to put forward legislation that would improve productivity? Productivity is the key to growth and growth is the key to employment. That is how we manage to maintain our living standards in this country and the quality of life that we so enjoy. But these are fragile qualities that can turn and change, and we are seeing that now. We are seeing 10 years of dereliction of responsibility by this government. We are seeing now, 10 years after inheriting a great economy, a growing economy, 10 years of dereliction starting to turn things. We are starting to see underlying inflation on the rise. That will cause some massive problems.

We are starting to see interest rates rise. You often hear the government talk about interest rates—they used to talk about interest rates but they are a bit more ashamed to talk about interest rates these days; they are a bit more quiet—of six per cent. Supposedly, six per cent is low. It is low as a number, but it is very high when compared with the rest of the world. Interest rates always need to be looked at in global terms because it is the cost of money. How much does it cost to borrow money? What is money worth? In global terms six per cent in Australia is very expensive. You do not have to look any further than the families around the kitchen tables in Australia right now who are doing their sums on the supposedly low interest rates and realising that they cannot afford them anymore. They realise they are struggling. Another quarter of a percent, that tiny little bit, may be the straw that breaks the camel’s back in terms of people being able to afford their mortgage interest payments.

No more evidence was needed than the Reserve Bank of Australia this week confirming what we have known for some time: it is more expensive to pay interest payments today as a proportion of your income than it was to pay 17 per cent back in 1989. Some people say, ‘Wow! I can’t believe that. I didn’t know that.’ The evidence is there: it is more expensive today. That is the real cost to families.

This legislation does nothing to serve anybody. Interestingly, if you look at the Productivity Commission report done on employment surveys, and which has specific data about independent contractors, you see that over recent years there have been between 750,000 and about 900,000 independent contractors in the data for how many people are in those types of employment arrangements. That number is starting to climb very high. It is now closer to 1.9 million employees deemed to be independent contractors, and it could possibly be well over the two million mark in 2006. These are figures for 2004.

Is that a good thing for Australia, is that a good thing for independent contractors, and is that a good thing for workers? I suspect that for many it is, because they are people who are in genuinely independent contract type arrangements where they basically run a small business. They are their own small business. They are an independent, sole operator type of small business. But I think the larger extent of this growth in the numbers is a case of people being pushed out of their traditional contract of employment and onto one-off, flat rate fees, onto the labour only types of contracts.

Is that good? I think it will be detrimental for a lot of people. We have only to look at a number of categories—for instance, owner-drivers, in particular, and taxidrivers. There is a whole range of people who struggle with that halfway house in their employment status: what they are deemed to be under law, particularly tax law and what they can claim, and what they actually are under federal law. This legislation will only further confuse independent contractors and workers. It will further blur the lines between people who deserve a fair go in terms of having proper wages, conditions and protection and people who will be marginalised—people who already struggle, people who are not wealthy, people who are at the lower end of the wage scale who, under these proposed laws, will come under this category of independent contractor and who are in reality nothing at all like a true independent contractor. There are plenty of incidents that demonstrate this.

Definition is really important here and a common-law test will be applied. Who is defined as an ‘independent contractor’? Certainly a person who has a degree of control over their own work would in my book be an independent contractor. In many cases, that will not be the case under this legislation and it will not be the case for many people who are deemed to be an independent contractor. Also, workers who are wearing the uniform of the company will finish work on Friday as an employee and start on Monday as an independent contractor, wearing the same uniform, driving the same truck and doing exactly the same work. They will be left to fend for themselves, thrown out in the cold and may be told: ‘You have this warm fuzzy feeling inside and you can call yourself an independent contractor. You are a small business person, but you will earn less money and have the burden of extra work. You have to work more hours because you are under a contract to deliver a particular type of product, under a certain set of conditions and for a set amount of money. You have to work harder. You just work a lot harder for the same money, if not less.’ Independent contractors will have to provide their own vehicle, tools and equipment—all of the things that you would not expect an employee to supply—where previously the company would have provided the tools and machinery, whatever was needed to carry out the work. So there is a range of issues concerning definition. I think that is going to be a huge problem and cause a great deal of confusion, worst of all meaning that a lot of people are going to be exploited. People will be exploited under these laws because they will not understand where they fit in the legal framework.

What is even more confusing is that the state governments provide, under their industrial relations laws, specific deeming of categories of workers so that they are protected. You would think we would protect people from unscrupulous employers, but we need to protect them from unscrupulous federal governments such as this government. There will be some problems where federal legislation overrides state based industrial laws. That is a great shame because state based laws provide protection for workers and an understanding of the difference between a real independent contractor and an employee and the benefits that that carries. I mentioned earlier but I will mention again the relationship with the Australian Taxation Office, because of rules for personal services income: what type of person are they under law and how can they deal with their tax affairs? If you are a small business person you really do come under a different category with a range of claimable deductions and ways you can organise your business. You could split income between partners in the business or with your spouse or family, depending on how you arrange your business.

An independent contractor, you would imagine, would be protected under this legislation and there would be some clarity about how they could organise their business; but the reality is that that is not the case in this legislation. Most people will find that they come under the pay-as-you-go tax arrangement. In tax law, PAYG people are employees. So with that warm fuzzy feeling, which I talked about earlier, the boss might tell you: ‘Now you’re an independent contractor. You have all these new-found freedoms and powers. You’re just going to get a heap less money and the tax office will still deem you to be an employee. You’ll have no other benefits, no rights. You’ll have to pay for your own super and make sure you never get sick. And when we do not like you anymore, because no unfair dismissal laws apply to independent contractors, the only recourse you will have will be to go to court at huge expense.’ That is something that these people could not afford to do. So there is a minefield of legal problems and entitlement problems for people who are going to be missing out completely.

Unfortunately, this will override state powers and provisions that protect workers such as milk vendors, cleaners, carpenters, joiners, bricklayers, painters, bread vendors, outworkers in the TCF industries—who are particularly exploited workers—who need all the protections that can be afforded them by the federal government, by state governments and by the courts. Those people will be the losers from this legislation. Timber cutters and suppliers, plumbers, drainers, plasterers, blind fitters, council swimming centre managers, supervisors, truck drivers, lorry drivers—a whole range of people who would traditionally work for an employer will be pushed out to do it on their own as an independent contractor.

If the employer or the contractee rather than the contractor—there is no longer an employer as such—decides that they no longer require your services, they will just terminate the contract. There are no unfair dismissal provisions and the fact that the contract may have been unfair in the first instance will have no bearing. To deal with that you would have to get help from legal experts. There will not be a heap of avenues to pursue. There certainly will not be any protection. While there is provision in this bill to deal with those issues and there will be fines for exploiting people, when you get down to the practical nature of how these things work, independent contractors are not going to have the access to that knowledge or the capacity to use it. It is not their role. It is not what they are about. A milk vendor is not going to be arguing the underlying unfairness of the contract for milk deliveries. Their job is to deliver milk, not to be a legal expert. They are not going to have the finances either to go to court, nor should they have to, nor should the burden be on them to prove their case. The few safeguards in this legislation are weighted heavily in favour of the contractee and will do very little to protect independent contractors. Unfair contracts will be another blow to ordinary people trying to remedy any cases where there is wrongdoing in place.

Currently outworkers are deemed to be employees, and this is very important in terms of the relationship between the federal legislation and the state industrial legislation. Outworkers are deemed to be employees regardless of whether or not they are an independent contractor, to afford them the protection they deserve. This will be undermined by this bill.

This bill does nothing to help workers or independent contractors. This government says to people, ‘You are on your own.’ There will be no support and no protection. You will get bare minimum pay. Your entitlements will go.’ Nobody is going to be fooled by this, certainly not independent contractors when they have a closer look at their finances at the end of the month or at the end of the year. This legislation is a disgrace. (Time expired)

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