Phillip Barresi (Deakin, Liberal Party) Share this | Hansard source

The member for Hunter, I do not know how many times you need it written, but there is a guarantee that TCF outworkers are protected. Further to this, this bill does not seek to override protections for owner-drivers in New South Wales and Victoria, the only two states with such legislation. I know that this is a fairly contentious aspect of the legislation and I also know that when I held the House of Representatives parliamentary inquiry into independent contractors we did receive major representation from owner-drivers in New South Wales. They all turned up and they all gave their case. So what we have here is a bill which does not seek to override these protections.

From my own philosophical point of view, if we were starting off with a clean slate I would much prefer that every owner-driver is roped into this legislation. But we are not starting with a clean slate. There is significant legislation at both the New South Wales and the Victorian government levels which does provide a certain amount of protection and restrictions on what the federal government can do. It is simply a recognition of the facts of the situation. But I know that everybody, certainly on this side of the House, would acknowledge that if we were starting with a clean slate we would prefer a situation where all owner-drivers were treated the same way right across this country. The government does believe that special protections need to be put into place for these two states. However, we will also establish a review of the state owner-driver protections. This will be done as a way of trying to rationalise and achieve nationwide consistency in these types of laws. There will be a public consultation process involving a discussion paper from the department in 2007. Like contract outworkers, owner-drivers have a particular vulnerability, which this legislation has recognised. Many owner-drivers we know work for only one principal and they often operate within very tight business margins.

The Independent Contractors Bill will provide a more balanced approach to the regulation of unfair contracts. The bill retains access to a fair and reasonable federal remedy for genuine cases where unfair or harsh conditions have been imposed on a contract. This will be achieved by overriding state unfair contracts legislation using the corporations power. Provisions in the bill replace the existing federal unfair contracts legislation. More accessible remedies may be sought in the Federal Magistrates Court. State unfair contracts regimes will be overridden by a federal remedy for genuine cases where contracts are harsh or unfair. What we will be seeking through these specific provisions is to create one single, national, unfair contracts system which will eliminate existing duplication and confusion with the overlapping state systems that are currently in place in New South Wales and Queensland. The existing federal unfair contracts provisions will be removed from the Workplace Relations Act and instead be covered by this bill.

This further illustrates the government’s firm view that contracting relationships should be dealt with outside the scope of workplace relations legislation. The Federal Magistrates Court will have the power to determine unfair contracts cases and will provide a cheaper, more accessible remedy for independent contractors with unfair contracts claims. The federal system will also allow incorporated independent contractors to access the jurisdiction. Currently, the federal jurisdiction is limited to independent contractors who are natural persons. Furthermore, the law will provide for a financial cap for the jurisdiction to be set by regulation.

In the limited time I have left I want to turn my mind to the protections against sham arrangements, which also received quite considerable coverage through our inquiries. I know there are varying views out there on what is and what is not a sham arrangement. The bill will protect genuine employees from sham arrangements. This is where an employee is disguised as an independent contractor so that an employer can avoid payment of legitimate employee entitlements. Penalties will apply to employers who deliberately try to avoid their responsibilities through the use of sham arrangements. The Office of Workplace Services will investigate such cases and enforce the provisions as required.

The bill will also address the issue of sham labour hire arrangements by allowing a voluntary code of practice to be made, with an ability for mandatory application if necessary. I know that there are some industry groups out there, particularly in the on-hire labour sector, that have excellent codes of practice, which they put in place for their own industry representatives. Some of these models need to be looked at very carefully with a view to introducing them on a wider level. I will pay credit this time to the Recruitment and Consulting Services Association for the work that they have done in this area. The legislation will also introduce penalties for unscrupulous employers who seek to use sham contracting arrangements to avoid their obligations to their employees.

There are well over one million independent contractors in the Australian workforce. The government respects the right of genuine independent contractors to manage their own affairs and enter their own agreements with their clients if that is their preference, just as it respects the right of employees to be accorded the relevant legal protections. Independent contractors are a crucial component of the modern economy and a modern, flexible labour force. This legislation seeks to protect and encourage their activities. It is legislation that should be supported by this House as a recognition of what a growing number of Australians have clearly shown is an occupational preference. (Time expired)

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