Independent Contractors Legislation

Newcastle Herald 14 July 2006

By Kellie Tranter

It is now several months since the Government's IR overhaul commenced, premised on economic and regulatory reforms being needed to boost Australia's international competitiveness and maintain our living standards.  After repeated requests for the Government to produce a proper historical and statistical analysis to support its reforms, to give some logical explanation of why positions have been taken or how the changes will really work, and to explain how WorkChoices will achieve what the Government says it will--none of which have produced any response--we now discover that the economic case used to justify the Federal Government's controversial workplace regime is a four-page summary of 16 academic and Government papers.  Bravo!

Perhaps the Government's assertions, assumptions and speculation may prove to be correct by producing a successful outcome for some "resource sector" voters.  Time will tell.  But it is interesting that the 2006 OECD Employment Outlook report and a recent Harvard Political Review undermine what the Government says, and that a recent BIS Shrapnel's Economic Outlook bulletin points the finger squarely at the Government's failure to invest in skills training and public infrastructure as the main threat to future growth of the Australian economy.  But we can take comfort that our country's financial management is in careful hands: earlier this year our Government invested $25,000 in replacing the wrong shade of carpet in the Cabinet suite, $200,000 to upgrade the Prime Minister's dining room and $52,000 on sound-proofing the doors to the Prime Minister's office.  Hopefully the latter was a matter of national security and not a matter of flatulence or a preference for dealings behind closed doors.

Nonetheless voters could be forgiven for being sceptical about what the Government says about its Independent Contractors and labour hire reforms.  The noble objectives of the reforms are to protect the freedom of independent contractors to enter into service contracts, to acknowledge independent contracting as a primarily commercial (as opposed to industrial) form of work arrangement, and to prevent interference with the freely negotiated terms of genuine independent contracting arrangements.  Why?  What it really does is exclude State and territory unfair contract laws that would otherwise protect independent contractors or that might grant them rights similar to those that employees have (or, more correctly now, used to have).

But it is important to remember that these reforms do not exclude State and territory laws covering matters like anti-discrimination, workers compensation and occupational health and safety.  Nor do they exclude state or territory laws that apply to outworkers.  Fortunately for owner drivers in the road transport industry, the reforms maintain existing legislation in NSW and Victoria that allow them to bargain collectively with transport operators, and have minimum rates of pay.

It is commendable that the Workplace Relations Legislation Amendment (Independent Contractor) Bill 2006 prevents employers from entering into "sham" arrangements and prohibits a person from misrepresenting an employment relationship as an independent contracting arrangement and vice versa, but it will be interesting to see how effective this is when it is a defence if an employer believed that they were not misrepresenting the arrangement and could not reasonably have been expected to know otherwise.  Employers are also prohibited from dismissing or threatening to dismiss an employee where the sole or dominant purpose is to later engage them as an independent contractor to perform the same work as an employee, and from giving false statements to induce a current or former employee to enter an independent contract arrangement where they would perform the same work they performed as an employee.

The reality is that these new laws are just another step in the Government's anti-union pogrom and they will only be more fuel for the debate between the Government and employers, on the one hand, and what is left of the unions, on the other.  The Labor opposition will probably keep hanging onto the ACTU's coattails while all this happens, and we the citizens have to sit on the sidelines but cop the consequences.  Makes you understand why, in early 20th century America, H L Mencken wrote an article called "Government: the Voter's Dilemma".