John Murphy (Lowe, Australian Labor Party, Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

I begin by congratulating the member for Blaxland on his very erudite contribution to the debate. I hope that all his electors living in Bankstown and elsewhere in his electorate of Blaxland were listening to his contribution tonight. I wish that the minister had been here to hear what he had to say. I too must respectfully disagree with this government’s ideological statements, and I object in the strongest terms to the Independent Contractors Bill 2006.

During this debate, as the member for Blaxland has pointed out so succinctly, it has become apparent that ideology, and ideology alone, is the driving force behind this bill. There has been a litany of ideological claims, including the sophistry that all independent contractors have chosen to work for themselves to gain the benefits of choice and flexibility—that somehow parties are always able to determine the most appropriate form of their working relationships, as if the workers always have a choice to determine the structure of those relationships.

Members on government benches have spent considerable time throwing around words like ‘choice’, ‘flexibility’ and ‘freedom’ as if these words were confetti. Like never before, this government has become bogged down in a mire of 19th century classical contract theory with notions of presumed free will, presumed assent and misguided justifications for regulatory nonintervention. It should come as no surprise that the government has to conjure up an impression that the moral force behind this purely ideological bill is autonomy: that all independent contractors should be held in the strictest terms to their contracts because they have chosen to be. The picture painted by the government is far removed from reality. In truth, many independent contractors bargain from a position of economic weakness and are offered contracts on a ‘take it or leave it’ basis. Many have not consciously or willingly chosen to become independent contractors.

Without ideology, the bill has nothing else to recommend it. The official object of the bill purports to enshrine the status of independent contracting as a wholly legitimate form of work and to protect the freedom of independent contractors to enter into contracts of their choice. The first of these aims appears entirely reasonable. There can be no doubt that there has been a quiet shift in the Australian labour market which has seen an increase in the number of employees who have become independent contractors. This has also seen a concomitant shift in many employment obligations—including, but not limited to, the provision of superannuation, leave entitlements and professional indemnity cover—becoming the responsibility of workers rather than employers.

I am aware that many individuals have made a genuine, conscious choice to have their rights and obligations determined by contractual provisions and have established their businesses accordingly. I do not begrudge this choice, nor do any of my colleagues. Many people with marketable skills have chosen to work for themselves, have successfully negotiated a reasonable basis upon which to sell their services and have reaped the benefits of setting their own hours. The Senate Employment, Workplace Relations and Education Legislation Committee was provided with an example of an occasion when independent contracting can work. Mr Kenneth Phillips, Executive Director of the Independent Contractors of Australia, disclosed to the committee that he received income from around 20 sources in 2005. Among other activities, Mr Phillips has been able to ply his trade writing articles for newspapers and acting as a consultant to companies on a wide range of issues.

I do not doubt that an efficient, modern and evolving economy can have a reasonable mix of working arrangements. There is a public interest in providing flexibility and diversity in the way people perform their jobs—so long as all Australians have the opportunity and means to clearly articulate their choice. Mr Phillips has reaped the benefits of his conscious choice, and we do not begrudge him that. For others, a conscious choice between remaining an employee and becoming an independent contractor does not present itself so neatly—which brings me to the second purpose of this bill: the purported protection of independent contractors.

The question is: just who will this bill protect? An independent contractor is often described as someone who is their own boss—a person who contracts to perform services for others while not having the status of an employee and the benefits that come with being an employee. Estimates vary as to the number of so-called independent contractors operating in Australian workplaces. Productivity Commission estimates from the Australian Bureau of Statistics Forms of Employment Survey data suggest that there were around 800,000 independent contractors in 2004. Nonetheless, many of these so-called independent contractors lead very strange lives for people who have been painted by the government as being masters of their own domain and their own bosses.

A recent study published in the Australian Journal of Labor Law, titled ‘Non-standard workers in Australia: counts and controversies’, has shown that as many as 400,000 of these so-called independent contractors actually do all of their work for the one employer. Therein lies the inherent conflict and misnomer in the use of the term ‘independent contractor’. Many are not independent of their employers but are dependent and easily open to exploitation. Despite the mirage being created by the government that these people are their own bosses, many are not. What a ludicrous proposition it is to suggest that someone is independent or a contractor when they receive income from the one source, are compelled to plaster that income source’s logo on their uniforms, and must commit to working only for that single income source. These people are de facto employees and are designated as contractors for the convenience and financial advantage of employers. Many are merely Clayton’s employees—employees which employers sign up as so-called independent contractors when they do not want the associated costs of hiring employees. The practice is abhorrent but it has been given implicit permission to continue by the Howard government. The reason is that this legislation, despite being willing to destroy the many protections available to these Clayton’s employees, does not even attempt to define the term ‘independent contractor’ beyond its meaning under common law. The seminal case of Stevens v Brodribb, while laying down superficially simple indicia of employment to determine whether a worker is a contractor or an employee, leaves many workers vulnerable to exclusion from basic employment protections.

Debate interrupted.

See this speech in context