Brendan O'Connor (Gorton, Australian Labor Party) Share this | Hansard source

I rise to support many of the comments made by the member for Prospect and others on this side of the House in relation to the Independent Contractors Bill 2006. Before I make some comment upon the substantive provisions of the bill, I would like to note that again we find ourselves in a situation where the government speakers have already stopped speaking on this bill. I look at the list of members to contribute to this debate today. There are three government members and 23 opposition members.

It is quite extraordinary to see the government fail to articulate their support for a piece of legislation that has far-reaching consequences. We say that most of those consequences will be adverse for those the legislation affects. However, the government, I understand, have a contrary view. But they are not in this place to convince the Australian people, via this chamber, why we should support this bill. This is not the first time. Indeed, the failure of the government to attend to a debate in the parliament seems to be happening on a daily basis when we engage in very important matters affecting the nation. So it is a disappointment that I have to rise immediately after the member for Prospect rather than after hearing a government member attempt to convince me and others why there are merits to this bill—and I have to say that I find very few merits indeed.

I indicate to the House that the member for Prospect was quite correct when he said that there should be no schedule 4 to the bill, going to outworkers. There is no doubt in my mind that outworkers are not independent contractors. It is fair to say that there have been some protections afforded to outworkers but, seriously, if anyone understood the situation which most outworkers find themselves in, they would rather this government afford them proper protection than lump them into the independent contractors bill. Let there be no mistake: Labor does not oppose independent contractors per se. There are genuine independent contractors in this country—those people who freely choose to enter into arrangements with their clients or with a principal contractor and go about their business seeking to gain work through the contractual laws of this land.

The problem is that there are too many people deemed to be contractors who are in fact clearly under sham arrangements which are not a relationship between a principal and a contractor but a relationship between an employer and an employee. One would have to go behind the provisions of the bill to seek answers to why a person would want to call themself an independent contractor if they were entirely dependent upon the other party to an employment relationship. My answer to that, in the main, is that many so-called independent contractors do not have a choice. They do not have a choice as to whether they will be deemed an independent contractor or not. Unfortunately, there are growing examples of employers forcing employees to take ABNs—that is, they will be employees on Friday but will be provided with an ABN so that they can be contractors on Monday. We have employees who have no control over their work other than that they are working for one employer and in this country they are deemed to be independent contractors.

This bill, if enacted, will remove the right of unions in the main to defend those employees who have been forced into sham arrangements. This bill proscribes the right of most unions in this country to defend or challenge the assertion that somebody is in a contractual relationship. As the member for Prospect said, as a lawyer you can represent many of these so-called contractors. You can as an association. You can as almost any person or organisation, provided you are not a union. Provided you are not a registered employee organisation, you are in a position to represent the interests of persons who argue that they are not independent contractors, that they are in a sham arrangement. That clearly shows the enmity that this government have towards unions. Rather than say that there would be one type of agent who would represent a person in a legal matter or an industrial matter, they are proscribing the right of most unions to do so.

I acknowledge that there are two exemptions that provide for some level of representation for workers who find themselves in a contractual relationship. For owner-drivers in New South Wales and Victoria, under two particular state acts, unions are still able to represent the interests of their members. Having spoken with the TWU about that particular matter, I understand that they worked very hard to seek to distinguish themselves, claiming, quite rightfully, that they have been representing these workers—these owner-drivers who drive large rigs, who quite often have very large debts and who have to work very hard to pay them off—for more than 80 years and it would be ludicrous that a Commonwealth law could proscribe their right to represent them in the future, subsequent to the enactment of this bill. Clearly the government has decided to concede that particular point.

The question then is: why are they so different from so many others who might be deemed to be or are called contractors? Why is it the case that only owner-drivers are provided the right to be represented by a union when others who are in almost identical situations to those drivers are not afforded that same right? How can the government explain away the fact that they will discriminate against every other employee or contractor in their right to be represented by a union and not cogently argue why that will take place? I have to say that clearly one of the reasons for that is that the government were fearful of the successful campaign of the Transport Workers Union. They were fearful of this parliament having thousands of Transport Workers Union members attending a rally that would have occurred in the event that the government chose to exclude them also.

I do not think that this was necessarily undertaken graciously. I do not think it was an act of generosity on the part of the government. Clearly the government has chosen not to get into a fight with what is a very effective union in relation to this type of occupation. It has chosen instead to pick on the weakest, most vulnerable contractors in the land, who, once this legislation is enacted, will no longer have a right to be represented by a union in particular tribunals. We would argue that that is clearly and utterly discriminatory. We do not in any way support the motives of the government in relation to that exclusion.

This matter has been under consideration for some time. The matter was referred to the House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation in late 2004 or early 2005. A report of the committee was tabled in this place on 15 September last year. That report, amongst other things, dealt with the independent contracting arrangements. In the report there were a number of unanimous recommendations which the government failed to incorporate into the provisions of this bill.

The government has chosen to resist accepting the reasoning of opposition and government members of the committee that inquired into independent contractors. I was not for a moment surprised that it failed to take up any of the recommendations in the dissenting report, but I would have thought some of the recommendations that were unanimously made would have been acceptable to the executive government. That was not the case.

There is still a blur between what would make up an independent contractor and what would make up an employee. There was some effort by the committee to delineate the differences between those two creatures, those two legal personalities. Whilst we did not agree on all matters, there was some effort made by all 10 members to consider the matter properly and faithfully, to seek some solutions and to propose them to the executive government. They were met with a lack of generosity on the part of the government and a lack of concern that the matters we raised had some bearing on independent contractors—so much so that the minister put out his own paper during the course of our inquiry. He put out his own survey, with loaded questions, and then started to form his own views concurrently with our inquiry.

We had a situation where the minister had referred a particular matter to the committee and then, whilst that matter was being considered, started to undertake his own process behind closed doors. No witnesses were called. The minister was engaging in what I think was contemptible behaviour—failing to allow the committee to properly report, failing to allow for those matters to be considered by executive government and pre-empting all of that by starting to draw his own conclusions on this matter as we met and held public hearings throughout the country.

I should not be too surprised that that would be the case with this government. The government has shown little regard for parliamentary committees in this place. Therefore I was again not surprised about some of the unanimous recommendations of the Senate inquiry, which was held only last month—for only two days, but that is two days more than not having an inquiry. Even in respect of that Senate inquiry, the unanimous recommendation to remove part 4 from the bill was completely and utterly ignored by this government.

We now have a government that is contemptible with respect to the way in which it fails to debate bills in this chamber and that shows utter contempt for inquiries that it has itself referred to committees. And then it shows complete contempt not only of opposition members but also of government members who are seeking to find solutions to some of the complexities in relation to independent contractors and their relationship with the definition of employee.

If the government was interested in seeking some answers—if it was seeking to delineate these two definitions—it should have listened to the evidence provided by Professor Andrew Stewart. Professor Andrew Stewart is an eminent academic who not only is an expert in the field of employment and contract law but has more employer clients than union or employee clients. He makes that admission himself. In relation to the evidence he gave to the House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation’s own inquiry into the independent contractors and also in relation to the submission he made to the Senate inquiry in August this year, he said that it is clearly important that we first seek to define the term ‘employee’ and then from that determine what is an independent contractor—not allow the reasoning that we should first define independent contracting and conclude that therefore what is left is an employee.

The suggestion he made should have been properly considered by the government. There is a whole host of problems as a result of us not being able to clearly delineate the two legal creatures of independent contractor and employee. Those problems range from taxation issues about what particular level of taxation a person must pay to whether a person should be paying his own workers compensation and superannuation. These issues have taxation, workers compensation and insurance implications, and implications for the way the government defines superannuation and who is obligated to provide the employer contribution. So it is not just about the exploitation that can arise if people are forced into what are clearly dependent relationships which are being called otherwise. It is also about the good governance of this country and whether the tax office can clearly understand whether a person is an employee for tax purposes. Indeed, it is also critical for the government at this level and at the state level to understand who the employer is for other tax purposes.

These failings by the government to properly embrace the complexities and find solutions so we can distinguish the two creatures has shown that the government are not interested in finding solutions but only in seeking ways to hurt the most vulnerable people in our society. That is the only conclusion I can draw. They do not seek to fix the problem that has now been in existence for some time—the significant growth of independent contractors and the significant confusion between the terms ‘employee’ and ‘independent contractor’ and all the obligations and requirements that fall from those two definitions. If you cannot clearly delineate those two definitions, if you cannot separate one from the other, then how do you attend to all those other matters that governments must attend to, including taxation, superannuation and workers compensation?

The government have instead chosen to engineer a set of laws that will make it very difficult for unions to represent the most vulnerable in our society. They have made very few exceptions in relation to that matter, and the exceptions they have made were purely because they believe that that part of the workforce that may have genuine independent contractors are so well organised that the government would find themselves getting into some grief from the TWU—and I say good luck to the TWU. Clearly, they have placed enough pressure on the Commonwealth for them to accede to some of the demands they made of them.

Critically, because the government’s focus is primarily on removing the rights of unions to represent employees and on shifting employees—in many instances genuine employees—into independent contracting arrangements it has not looked at the taxation problems. We may have a shrinking revenue base as a result of people being able to reduce their taxation burden. While that may seem to be a benefit to those employees who can reduce the burden of taxation, those same people are now being forced to pay workers compensation, their own superannuation and other imposts that have been placed on them because the government seeks to shift employees onto independent contracting arrangements and therefore make it very difficult for them. The government has failed in seeking to solve the problems in this area. The chickens will come home to roost as this becomes an increasingly larger problem for the Australian Taxation Office and other agencies. (Time expired)

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