Annette Ellis (Canberra, Australian Labor Party) Share this | Hansard source

I am pleased to have the opportunity this evening to speak on the Independent Contractors Bill 2006 and related bill. To me the government’s intention to legislate in this area has been quite clear, and the disturbing fact is that, despite evidence and suggestion that they should be careful, the government’s determination is seen very clearly in this bill. We on the Labor side strongly support people who genuinely enter into their own businesses and genuinely set up their own subcontracting or contracting businesses, as has been done from time immemorial. But for the government to try to create the impression that this legislation is going to make an acceptable difference for small business and contractors is, in my view, very misleading.

However, let us just look at a little bit of the history. On 9 December 2004, the Minister for Employment and Workplace Relations requested the Standing Committee on Employment, Workplace Relations and Workforce Participation to inquire into independent contracting and labour hire arrangements. That committee, of which I was a member, got under way and began its work. While that inquiry was under way, the minister then also, for some strange reason, had an inquiry of his own. He began an inquiry after requesting this particular parliamentary committee to look into these issues. He then basically set up a parallel inquiry of his own to look into the same issues. That frustrated some of us on the committee, and we wondered why on earth that was being done. However, it was. Then we also saw, with the production of the legislation, a Senate Employment, Workplace Relations and Education Committee inquiry take place properly, as it should, into the bill.

A great deal of evidence was received through all of these processes, and in particular I want to refer to the report of the House standing committee, the committee of which I was a member, called Making it work. I want to speak about one specific aspect that we came to understand in our work. In doing this I want to put it in this context: we have seen Work Choices, the industrial relations changes brought in by this government; we have seen the Welfare to Work changes come in, and we are only now just beginning to see their impact; and now we have in front of us what I believe is the third part of this triple whammy, and that is the independent contracting arrangements. They all sit together in a very neat package for the government, but from my point of view they all sit very uncomfortably, not only together but in our community, for all of the reasons that we on this side of the parliament, at least, understand.

I refer to that because I want to make particular points in relation to evidence that we took in that committee inquiry. In fact, the evidence came from my electorate. It appears on page 125 of the Making it work report. It is an example that I think the government and all of us need to be extremely aware of because with the changes that are going to occur under this Independent Contractors Bill I fear that this is not going to be an isolated case. In fact, I am sure it is not already. The example is where a Salvation Army officer came to my office. As I said, subsequently this became part of the inquiry. They were very concerned about a client of theirs, a young woman who had a mild intellectual disability. She was on the disability support pension and had been so for four years. She had worked part time as a cleaner since October of 2004. The client informed Centrelink each fortnight of her income, and they adjusted her disability support pension accordingly. I am quoting here from the paragraphs in the report:

The client is concerned about not paying tax, as the employer is not deducting the tax from her earnings. The cleaning agency informed the client that she was a sub-contractor as she had signed a contract stating the arrangement. The client did sign a contract; however she had no idea what it meant for her employment. She receives a weekly pay, and does not invoice the agency. She is offered work on a weekly basis; however, she does not have regular customers of her own—

obviously. The report continues:—

It was made clear to the Salvation Army that some cleaning agencies were moving to sub-contractors rather than employees in the hope of avoiding responsibilities in regard to workers’ compensation, superannuation, pro-rata long service leave and holiday pay. The client was to apply for an ABN; however, it was stated she did not understand the implications this would have on her rights as a worker or her possible taxation debts.

I was really alarmed when I heard this story, and I made sure that the evidence of the Salvation Army in this case became known to the inquiring committee. Particularly when we look at the Welfare to Work changes and the changes in Work Choices, it is not at all outrageous for any of us to imagine that there is going to be many a case, with this particular legislation as the third part of this triumvirate, where we will see people in similar situations to this young woman, who genuinely believed that she was an employee. She genuinely believed that she was doing the right thing, and she realised she was not only when the authorities started to be aware that there were some obligations that she was not meeting. Thank heavens she walked through the door of the Salvation Army and that that particular agency—or a similar agency in any other case—was able to argue her particular position.

But the point is that, yes, she did sign the agreement; she had no idea what the implications of it were. It was quite apparent that in the arrangement between her and who she thought her employer was, they did not make it quite clear either. It was to their financial advantage to do what they did, and the outcome is there for us to see in that report. So I have a range of concerns, but I think that outlines one of them very distinctly. As I said, we must see the Independent Contractors Bill as not only an isolated bill but also part of this whole move that government is making in relation to employment arrangements in this country.

I also refer to the Labor senators’ minority report, which was done as part of the Senate inquiry. The senators say:

The basic policy aim of the Independent Contractors Bill is to turn as many employees as possible into contractors. In the Government’s view, and more particularly in the view of employer organisations close to the Government, industrial relations are greatly simplified by arrangements which put employees onto either Australian Workplace Agreements, or turn them into contractors. Work Choices is intended to encourage the first of these trends, and the Independent Contractors Bill is intended to encourage the latter development.

Under this legislation, genuine employees are going to find themselves, in many cases, moved into what we call sham independent contracting arrangements, reducing or losing their entitlements, their conditions and their protections—protections, I might add, they now need more than ever they have before. These workers will find themselves having to carry the costs of superannuation, workers compensation and so on. Those workers most affected will include drivers, and I commend the Transport Workers Union for its submission to the Senate committee inquiry. The legislation will also dramatically affect cleaners, electricians and clothing outworkers.

In relation to clothing outworkers, the Senate report unanimously recommended that part 4 of the bill be omitted. This part 4 relates to clothing outworkers, and I refer to a briefing note in relation to part 4 of the bill that I have. This briefing note says:

Part 4 creates a new category of worker: contract outworker. This definition ignores the fact that outworkers have previously been afforded employee-like protections and status due to their particular vulnerabilities. It also has the potential to create confusion about the appropriate classification for outworkers, and gives unscrupulous employers the opportunity to reclassify their workers as contract outworkers to come within the terms of the bill and avoid other outworker entitlements.

Under part 4, the bill, under the guise of protecting outworkers, has the effect that contract outworkers are entitled to a default minimum rate of pay. Where a minimum rate of pay is not specified in state law, this particular bill provides that the federal minimum wage of $12.75 is the default minimum rate. However, in legislating a minimum rate of pay, the government has excluded the broader protections provided to outworkers under state laws or in federal awards. These protections include things like annual leave, public holidays, ordinary hours of work and overtime, superannuation, workers compensation and redundancy pay.

To me, it is extremely significant that senators across the political board recognised the effect of part 4 and recommended its omission.

These laws attack the protections and entitlements of those workers who happen to be in inferior bargaining positions. The cleaning profession is one, but we have named many. Should you be a worker or a small business seeking a remedy for any unfair or sham contract arrangement, you will have to resort to costly court processes. I make the observation that most people who would find themselves that way affected through this legislation probably cannot afford the process. It is unrealistic to most of them to imagine going down that path in the first place.

We on this side of the House are opposed to this bill. I personally see it as very bad legislation; I cannot see any public policy gain by it. Sadly and realistically, however, despite all of our protests and the protests of others, this bill will proceed. On that basis, I strongly support the amendment moved by the member for Perth, and I would like to conclude by reflecting. It is very easy for all of us in this place to get a bit carried away with self-importance sometimes, and it is all very easy in this place for any one of us to get a bit carried away by our base philosophical beliefs. But I firmly believe that it is the role of government in this country of ours to come up with legislation that is good for everybody and that considers the rights and the roles of everyone in our society.

These words are very easy for me to say here, but I believe in them very passionately. I do not agree in following a pure, blind, philosophical direction just because it is what you want to do. There might be a whole heap of other people who do not agree with you, but people fall into the trap of being so convinced that what they are doing is absolutely correct because it follows their philosophical basis that they do not see any other view. This legislation falls straight into that category, along with the Work Choices and the Welfare to Work legislation. When we see these three pieces of legislation reflecting on each other, I really worry for the genuine role that people can play in our workforce in a fair way.

There is a lot of debate about Australian values. One of the greatest values we have here is a fair go, and I cannot see that a fair go is reflected in this legislation. I think about that young woman with a mild intellectual disability who thought she was doing the right thing by working as a cleaner part time through the week, on a regular basis, for an employer while being supported by the disability support pension, only to be led into this whole deception. The real question is: how many more people in her vulnerable position are going to be affected, let alone owner-drivers and a whole list of other people? At the end of the day, yes, this legislation is going to go through. Will that stop me or others from objecting to it? No, because we also have a responsibility—that is, to stand up in this place and say why we think it is wrong and what we think should be done to fix it. And you never know, one day the government might just fix it.

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