Gavin Marshall (Victoria, Australian Labor Party) Share this | Hansard source

There are many flaws with this legislation, but the fatal flaw is the very thing which Senator Murray’s amendments seek to address. The legislation does not seek to define the term of independent contractor beyond its meaning under common law. And Senator Murray is dead right: the problem with the Independent Contractors Bill is that it does not meet a single one of the stated objectives of the government.

At common law, employees are engaged under a contract of services, whereas contractors are engaged under a contract for services. In other words, an independent contractor is generally a person who is engaged on a labour-only contract, usually determined as a one-off flat rate. Generally, the independent contractor remains responsible for a number of aspects of the relationship that would usually be the responsibility of an employer—for example, superannuation payments and remitting income tax to the ATO. We say this is very problematic, and it means that an independent contractor is seen to be a person who contracts for services to be provided without having the legal status or protections of an employee even if they are dependent upon that contract. Of course, owner-drivers are a good example of that.

The common-law test that has been applied by Australian courts and tribunals for many years is quite difficult and complex. The criteria applied by the courts involve many factors, and I just want to go through them to demonstrate the test’s complexity and why we get substantially different outcomes from different judicial rulings. The criteria go to the question of the degree of control the worker has over the work; the degree to which the worker is treated as part of the principal’s enterprise—for example, whether the worker wears the principal’s uniform or, for owner-drivers, whether their truck is painted with the employer’s logo; whether the worker is using his or her tools and equipment; how the principal pays the worker; whether it is at the worker’s discretion to work; whether the principal has the right to dictate hours of work and whether or not the worker can refuse those hours; the provision of leave, superannuation and other entitlements by the principal for the worker; the place of work; whether the worker has the right to delegate work to others; whether the worker provides similar services to the general public; and whether the worker is providing skilled labour or labour that requires special qualifications. They are not all of the provisions, but they are the main criteria used under the common-law test.

While we were conducting the Senate inquiry into this legislation, Professor Andrew Stewart, who appeared before us—and Senator Murray has touched on this to a degree—said in relation to the common-law test:

The fact is that any competent employment lawyer can take almost any form of employment relationship and reconstruct it as something that the common law would treat as a relationship between principal and contractor … thereby avoiding the effect of a wide range of regulation which is typically applicable only to employees, such as industrial awards, registered agreements, leave and superannuation legislation and unfair dismissal laws—

if they apply to companies with more than 100 employees. What this bill really does is try to stop the attempts of state legislatures to overcome the difficulty of the common-law test by putting in their own legislation. While we agree that some of those efforts are not perfect, dismissing them, disregarding them and overruling them through this legislation just takes us back to something which is considerably worse. That is why we say the real motivation of this legislation is not to define what independent contractors, dependent contractors or genuine contractors should be; it is simply another government legislative attack on any form of regulated employment standing.

Through the Work Choices legislation we have seen the push to drive people—and only employees are covered by the legislation—onto AWAs, which simply fail to protect the standards, wages and conditions that they have enjoyed for many years. Of course the independent contractors legislation provides the second avenue of pushing people out of an employment relationship altogether into what this bill calls ‘independent contracting’. If you are an independent contractor, whether genuine or not, under this legislation the minimum standards of Work Choices—the lowest wages and conditions that are allowed for—do not apply. Under independent contracting, there is no protection of wages and conditions. There is no regulation for even the minimum wage. We say that this legislation in its entirety is flawed. We will certainly be voting against it. We understand the numbers and the reality these days that the legislation will get up, but if the government is serious about trying to address the problem of genuine independent contractors having rights and people being properly and easily determined as employees, it will seriously consider the amendment.