Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Hansard source

I thank Senator Murray for his contribution. He might be pleased to know Labor is supporting his amendments. There are a number of issues I want to touch on. The first is—and this really goes to the heart of some of the problematic policy in this legislation—the difficulties with the common-law test in determining who is an independent contractor and who is an employee. Senator Murray has outlined some of those. Certainly anyone who is practised in the area of employment law or is an industrial relations practitioner on either side of the fence would know that there are a great many arrangements entered into by parties where the name and title of the relationship probably does not indicate the true nature of the relationship.

Certainly many of us would have experience in dealing with people where they have been termed and treated as independent contractors when, for all intents and purposes, they have been an employees. And often, as Senator Murray has pointed out—and this really is the critical issue—there are occasions when the principal clearly has a fairly strong vested financial interest in continuing to treat somebody as an independent contractor, notwithstanding that the person might, for all other intents and purposes, effectively be an employee. It is arguable that the difficulty with the common-law test—and this was alluded to in quite some detail in the second reading debate—is that it is possible, because of the multiplicity of factors, for justice not to be done, that the common-law test application may not yield what we as legislators and as policymakers would think is an appropriate outcome that is fair to the person who is working.

Labor does believe there is clearly a place for genuine independent contractors. There are a great many Australians who choose to work under those arrangements, but our concern is for those who do not have a choice, for those who are effectively employees but are being made into, essentially, sham independent contractors because the principal concerned has a financial interest in having that occur. I indicate to Senator Murray that Labor does support a statutory test. As we indicated in our second reading contributions, we do believe that we need a better statutory test. We are going to support Senator Murray’s amendment to this bill, and I think there are related amendments to the Workplace Relations Legislation Amendment (Independent Contractors) Bill.

One of the points that Senator Murray made, which is a good one, is the inconsistency with income tax legislation. The government is happy to have at least the inclusion of a statutory test in looking at personal services income but is not prepared to look at a statutory test, other than to pick up a common-law test, in the context of this legislation. Labor will be supporting this amendment. We think it is critical to any regime that you have a sensible and clear statutory test to determine who should be an independent contractor—someone who is genuinely in such an arrangement—but equally there should be a statutory test for those people who really, from a public policy perspective and from a legislative perspective, should be regarded as employees and have the benefit of entitlements pursuant to industrial relations legislation which would normally accrue to employees.