Peter Slipper (Fisher, Liberal Party) Share this | Hansard source

I would like to say at the outset that every so often there is a debate in the parliament and both sides of politics take different positions. The Labor Party here appears to be going back to the old concepts of class warfare of the 1890s. The member for Hotham is no doubt speaking from the heart, but the reality is that the Labor Party is so completely out of touch with modern working arrangements in Australia that we have heard a troglodytic speech from the honourable member for Hotham.

The government made an election commitment in 2004 to introduce separate legislation governing independent contractors and on-hire arrangements. One only has to cast one’s mind back about 10 years to see that the Labor Party made a whole series of promises prior to getting elected and then broke those promises. We in government deliver on our election commitments. We place a high level of priority on keeping faith with the Australian people. Prior to the 2004 election the government said that, were we to be re-elected at that poll, legislation similar to the legislation currently before the House would be placed on the statute books by this government. The government’s proposal of the Independent Contractors Bill 2006 indicates that we want to clarify, make certain and protect the status of independent contractors in order to provide for certainty and choice for a significant number of Australians who are working in fields as diverse as housing construction, transport and information technology.

It is simply a fact that more than one million independent contractors are currently in the Australian workforce. This government and, indeed, this parliament would be entirely neglecting our collective responsibility if we did not bring in legislation to recognise that people today are no longer working under the old working arrangements. This government—and I am sorry to hear that the opposition does not—respects the rights of genuine independent contractors to manage their own affairs and enter into their own agreements with their clients if that is their preference, just as it respects the rights of employees to be accorded the relevant legal protections. Independent contractors are a crucial component of a modern economy and of a modern, flexible labour force. One would have thought that was an axiom, yet one has to be disturbed by a situation where the Labor Party is opposing this legislation. It is as though it is seeking to make sure that independent contractors are no longer able to run their own businesses, as they do, and ought to in effect become employees once again.

The government wants to protect through this legislation the freedom to contract, the freedom to operate as a genuine independent contractor and the freedom to engage work through on-hire arrangements. The government’s proposal for an independent contractors bill is intended to clarify and protect the status of independent contractors to provide for certainty and choice. The Labor Party, through weasel words, is seeking to have this legislation withdrawn. What it would really like is for it to be mandatory that independent contractors be employed as workers in the future. That is unacceptable.

Honourable members who have looked at the Notice Paper would be aware that there are two bills: the principal bill and a bill amending the Workplace Relations Act 1996. The principal bill recognises and protects the unique position of independent contractors in the Australian workplace by supporting their freedom to enter into arrangements outside the framework of workplace relations laws. This outcome will be achieved in a number of ways—that is, by excluding certain state and territory laws which seek to limit the ability of genuine independent contractors to enter into commercial arrangements or which seek to draw independent contractors into the net of workplace relations regulation, by providing a transitional scheme for workers deemed by state or territory laws to be employees and by providing a national services contract review mechanism for independent contractors.

Again, the Labor Party would want you to believe that this government has no respect for the rights of workers, but the bill retains under state legislation protections for contracted outworkers in the TCF industry. In addition, where contracted TCF outworkers are not covered by a law providing for some form of minimum remuneration, they will be covered by the wages guarantee in the Australian Fair Pay and Conditions Standard. The principal bill will only exclude state and territory laws with respect to workplace relations matters. Despite what some opposition luminaries have suggested, the bill will not interfere with non-workplace relations matters in state or territory laws. These matters include taxation, workers compensation, occupational health and safety and superannuation and go to any definition of an employee for those matters. (Quorum formed) As I was saying before I was interrupted by the honourable member for Ballarat, who was wasting time of the House by calling for a quorum, the amendment bill will complement the principal bill by prohibiting sham contracting arrangements, where employers seek to disguise the employer-employee relationship as an independent contracting relationship and thereby avoid the legal entitlements that are due to employees.

In his speech the member for Hotham seemed to be saying that the government was riding roughshod over the rights of workers. This government is seeking a balanced approach; it is seeking to implement an election promise. The amendment bill will: insert a new part into the Workplace Relations Act 1996 that prohibits sham employment arrangements and provides penalties where sham arrangements do occur; make consequential and transitional amendments relating to textile, clothing and footwear outworkers; and provide consequential amendments relating to unfair contracts in the Workplace Relations Act and the Building and Construction Industry Improvement Act 2005.

The incidence of independent contractor arrangements is becoming substantially more significant. I mentioned a figure of more than one million independent contractors. Actually, estimates of the number of independent contractors in Australia range up to 1.9 million. It could well be that up to 19 per cent of Australian workers are independent contractors.

The Labor Party gets concerned because people are voting with their feet and walking away from union membership. While unions might well have played a very important role 100 years ago, today unions have become insufficiently focused on positive outcomes for workers and have been playing politics and ideology, with the net result that, unless people are forced by circumstance to join a union, generally speaking they believe that their union membership fee would be better used if it remained in their pocket. That is why, particularly in the private sector, the proportion of union membership has dropped below 20 per cent. That is an ongoing situation. Given their connection with the Labor Party and given their significant control over the Labor Party both now and historically, the unions are quite desperate. Every so often you find the Labor Party comes into the parliament and essentially acts as the mouthpiece for the union movement. The speech by the honourable member for Hotham is an indication that that old ideology held by the trade union movement and the Labor Party is not dead but ongoing. That is the situation. The Labor Party is proving itself to be irrelevant and once again shows itself to be a party of the unions—controlled by the unions and operating for the unions. That is a matter of some concern.

There are a number of provisions in the bills. There is a definition of an independent contractor. In the principal bill this definition is not broadened beyond its common-law meaning, and courts will look at the whole of the relationship between the parties and consider a range of indicia, such as the control of the worker over the work, economic independence and the description of the relationship in a contract. The opposition would have us believe that sham arrangements, whereby people who for all intents and purposes are employees will be deemed to be independent contractors, will continue to occur. I am pleased to be able to assure the honourable member for Hotham and those opposite that the definition of independent contractor in the principal bill is not expanded beyond its common-law meaning. So any concerns that people might have through the scaremongering tactics of the opposition in relation to this matter are entirely lacking in validity.

The indicia that courts are required to consider under the common-law test include the degree of control the worker has over the work and the degree to which the worker is integrated into and treated as part of the principal’s enterprise. For example, if the employer wears the principal’s uniform and represents the principal’s enterprise to the public, this supports the worker being found to be an employee. Another matter to be looked at is whether the worker is making a significant capital contribution—such as using his or her own motor vehicle or carrying the maintenance and the running cost—to the enterprise. Also relevant is how the principal pays the worker. For example, payment by results supports a finding that a worker is an independent contractor, whereas payment on an hourly basis supports a finding that a worker is an employee.

Other factors to be considered are whether the worker has an obligation to work and the provision of leave, superannuation or other entitlements. These entitlements usually only apply in employment situations. The place of work is another factor. If the worker works at his or her own premises, this supports the worker being found to be an independent contractor. Other relevant considerations are whether the worker has the right to delegate work to others, whether income tax is deducted from the worker’s pay by the principal, whether the worker provides similar services to the general public, whether there is any scope for the worker to bargain for his or her remuneration, whether the worker is providing skilled labour or labour that requires special qualifications—if so, this supports a finding that the worker is an independent contractor—and whether the issue of deterrence of future harm arises, for example where the principal is in a position to reduce accidents by efficient organisation and supervision. This may support a finding that a worker is an employee.

I am pleased to reassure the honourable member for Hotham that the court will determine the appropriate weight to be attributed to the indicia depending on the circumstances of the case and then come to a considered conclusion about whether the worker is an employee or an independent contractor. The government’s policy position is that genuine independent contractors should be governed not by industrial law but by commercial law—because they are not employees, that is the appropriate way to go. As they are independent contractors they are running their own business and work under commercial and not employment contracts.

This legislation is not extreme. It is fair and reasonable and reflects the workplace situation of 2006. It recognises that up to 18 per cent of working people are in fact operating as independent contractors. A government which did not legislate to protect and entrench the position of up to 1.9 million Australians is a government which would be failing in its responsibility to the Australian people.

These bills are strongly worthy of support. They are bills which seek to implement a promise made by the Australian government to the Australian people at the last election. We are delivering on our mandate. We were elected to office by the Australian people to implement a range of promises. The promise being implemented by this legislation is one of them. We are entitled to have this policy implemented and we seek the support of the parliament so that we are able to keep faith with the Australian people in this manner. I commend the bills to the House.

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