Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I rise to speak on the issue of independent contracting in Australia. More specifically, I would like to address the circumstances of tens of thousands of owner-drivers and their families. Owner-drivers are small business people. They invest a considerable amount of money in their businesses, in some cases hundreds of thousands of dollars in their vehicles, equipment and goodwill. Goodwill is probably best described as the money an owner-driver pays to buy their run of regular work. Many owner-drivers, while they are self-employed, do work exclusively for their primary contractor. In many circumstances they are contractually prevented from working for any other company and often have the logo of the company for which they work printed on their vehicles.

As I am sure most people are aware, the road transport industry is one of the most price-competitive industries in this nation. It is not unusual for major road transport companies to operate on profit margins of two to three per cent. Such tight margins put pressure on the entire industry, and the pressure for lower prices is driven all the way down the supply chain to owner-drivers. As such, owner-drivers are in a particularly unenviable situation. Many have mortgaged their homes to buy their businesses. Many others have borrowed from their families to get into the industry and to provide for their families. In those circumstances, where owner-drivers and their families are mortgaged to the hilt, effective cost-recovery systems are absolutely essential to the viability of the business. For an owner-driver, ‘viability of the business’ means servicing whatever loans they have taken out, paying high fuel prices, maintaining an expensive and essential vehicle and, only then, putting money aside to support a family. Such competing financial pressures clearly underline the undeniable need for safe cost-recovery mechanisms for owner-drivers.

In such a competitive industry, the removal of minimum standards would mean that owner-drivers could be forced to work longer hours or sacrifice the maintenance of their vehicles to keep their heads above water financially. With so much of an investment at stake, many owner-drivers without minimum cost-recovery mechanisms could be forced to make the drastic choice between losing their businesses and putting themselves at risk on the road, through longer hours behind the wheel or by not maintaining their vehicles to the optimum level.

The ability for owner-drivers to negotiate collective agreements in New South Wales and the protections available to owner-drivers in Victoria have provided financial security to thousands of owner-drivers and their families. In many circumstances, owner-drivers work for overseas and home-grown multinationals. One owner-driver has little bargaining power with a multibillion-dollar corporate giant. But the ability to band together to ensure safe rates of pay has served owner-drivers well.

Our roads claim the lives of too many Australians each year. Sixty-seven people have died in heavy vehicle accidents in New South Wales alone so far this year. Last year, according to the Australian Transport Safety Bureau, 194 people died in accidents involving heavy vehicles. With such losses already, any move to protect more Australians from dying on our roads is an honourable one. For some time, the New South Wales government, when under both coalition control and Labor control, has recognised the importance of legislating protections for owner-drivers. The protections in New South Wales have always enjoyed bipartisan support. In Victoria the transport employers association, the Victorian Transport Association, supported moves for the protection of owner-drivers by the state government.

I will now attempt to put all of this in a legislative context. The Independent Contractors Bill, part of the Howard government’s industrial relations changes, is likely to be before the Senate this week. As part of that bill, the government saw a modicum of sense. While the bill exposes millions of Australians to the inequities of sham contracting arrangements between employers and employees, it does recognise two groups of working Australians as having particular vulnerabilities: owner-drivers and textile, clothing and footwear outworkers. The following is from Minister Kevin Andrews’s media release of Wednesday 3 May 2006:

Notably, protections for owner-drivers in New South Wales and Victoria, the only two States with such legislation, will be maintained by the Bill.

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The Government recognises that owner-drivers, like outworkers, have historically been recognised as having particular vulnerabilities and requiring special protections.

In other words, the government announced that owner-drivers in Victoria and New South Wales would continue to have access to the protection of their state systems.

I refer to this media release because of concerning reports in the media that the government may consider removing the exemption for owner-drivers under the Independent Contractors Bill. A group called Independent Contractors of Australia has been running around the corridors of this place for the past few months in a last-minute attempt to persuade the government to back down on its decision to protect owner-drivers in New South Wales and Victoria. This organisation, under questioning before the Senate Employment, Workplace Relations and Education Legislation Committee, admitted that its membership is no more than 200 nationwide. By way of comparison, the Transport Workers Union represents over 10,000 owner-drivers. How outrageous is it for owner-drivers to have access to cost-recovery mechanisms which ensure that their businesses do not go under and which allow them to work in a safe manner, protecting everyone using our roads?

Even the existing protections under state laws require enforcement. The following statement was recently lodged in the New South Wales Industrial Relations Commission by a driver working for Australian National Couriers, formerly Fleet Flyers:

ANC also held about 30% of my earnings for each payment which they refund part of every quarter. I understand that this was for payroll tax.

I am not aware of any superannuation contributions being made by ANC on my behalf to any fund.

I was never requested by ANC to record my start time or to inform them that I was starting other than using the terminal as referred to above.

I have never received any safety net top up payment from ANC, although I was entitled to one for many periods I worked for them.

Each one of these sentences describes a breach of the relevant New South Wales contract determination, the industrial agreement under which couriers are paid in New South Wales. Interestingly, James Taylor is a director of both Australian National Couriers and Independent Contractors of Australia. Independent Contractors of Australia is asking the government to backflip on its reasoned and sensible decision to retain protections for owner-drivers under state law.

I could not have put the logic behind that decision more eloquently than the office of the Prime Minister or the minister for workplace relations. Having spent some time working with owner-drivers in the past, I understand the pressures they face and heartily encourage the government to hold their nerve. I encourage them to do the right thing by thousands of small business people, their families and road users across the country. On 2 June 2006, Tony McNulty, an owner-driver, received the following reply from the office of the Prime Minister when he inquired as to the government’s steadfastness in its commitment to protect owner-drivers:

The Government considers that owner drivers deserve special protections because of their particular vulnerability, a fact that has been historically recognised by both Liberal and Labor State Governments.

In part, this is because many independent contractor owner drivers work to only one principal and, as a result, are fully dependent on them for their work volume.

This is coupled with the fact that owner drivers often operate within very tight business margins, a problem caused primarily by the large loans they take out to pay for their vehicles.

Given that I am about to run out of time, I seek leave to incorporate the remainder of my speech in Hansard. I have also sought permission to table the three press releases to which I am referring.

Leave granted.

The speech read as follows—

Financing these loans requires a steady income source and, therefore, steady work.

Accordingly, the Bill will not override protections for owner drivers in New South Wales and Victoria (the only two States with such legislation).

The Government believes that special protections applying to owner drivers in NSW and Victoria should not be disturbed at this stage.”

In a similar vein, the Member for Hughes wrote to Mr Clarence Gibbs, another owner driver, on 18 August 2006 forwarding him a copy of a letter from Minister Andrews stating that:

“Owner drivers arrangements in New South Wales have been historically recognised by both Liberal and Labor State Governments.

In part, this is because many independent contractor owner drivers work to only one principal and, as a result, are fully dependent on them for their work volume.

This is coupled with the fact that owner drivers often operate within very tight business margins, a problem caused primarily by the large loans they take out to pay for their vehicles.

Financing these loans requires a steady income source and, therefore, steady work.

Accordingly, the legislation will not override protections for owner drivers in New South Wales and Victoria, the only two States with such legislation.”