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Wednesday, 29 November 2006
Page: 15

Senator WORTLEY (10:27 PM) —I rise to speak in opposition to the Independent Contractors Bill 2006 and the related bill, the Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006. These are bills that introduce even more complexity and confusion into Australia’s workplace laws. Labor will continue to stand up for workers and their families against this onslaught of anti-worker legislation constructed by the Howard government. This is legislation that is intent on destroying the Australian tradition of a fair go for all.

This is legislation that will ultimately have a negative impact on the day-to-day lives of thousands of Australian workers and result in slashing the wages and stripping away the conditions of working Australians. This legislation ignores the structural disadvantage with which a worker is encumbered when they have no choice but to be engaged as an independent contractor when in fact the relationship should be that of employer-employee. The proposed changes that will result from the passing of the Independent Contractors Bill 2006 created by this government, with perhaps just a little help from their friends, sends a very clear and distinct message to these workers. That message is: ‘You are on your own.’

The intention of this bill is to turn natural employees into unnatural contractors, placing considerable stress and hardship on tens of thousands of workers and their families. There are genuine independent contractors who willingly go into independent contracting, in many cases for entrepreneurial reasons. I repeat what many of my Labor colleagues have already said: we are not opposed to independent contractors. However, with the passing of this legislation, we are likely to see a significant increase in a different type of independent contractor, because this bill paves the way for genuine employees to be pushed out of a genuine employer-employee relationship and be set up effectively as independent contractors, without any say or choice and through no fault of their own.

What will this mean for workers whose status changes from employee to independent contractor? It will reduce or remove their conditions and entitlements, award wages, holiday pay and sick pay. It will place the burden on them for workers compensation arrangements, taxation arrangements and superannuation arrangements—arrangements which until now have been the responsibility of the employer.

The bills before us today cover five key areas: state laws with employee deeming provisions; state transport owner-driver laws; state unfair contracts jurisdiction; outworkers in the textile, clothing footwear industry; and the sham arrangements. Currently, at a state level, protection exists for contractors who are effectively in a dependent contract position. This legislation removes or reduces that protection for dependent contractors because it overrides provisions in state legislation—provisions which act as a protection for the benefit of consumers, contractors and small business.

In addressing state transport owner-driver laws, I acknowledge the valuable insight and contributions made by my Labor colleagues senators Sterle, Hutchins and Conroy, particularly regarding the plight of owner-drivers. Over recent months I have met with many owner-drivers and had discussions with them about the impact that this legislation will have on their working life, and the burden it will create for them and their families.

While this bill now provides for an exemption of existing New South Wales and Victorian owner-driver legislation, it has the effect of preventing other states from introducing legislation to protect dependent contractors. For owner-drivers and their families in New South Wales and Victoria, the exemption means that they are able to maintain a critical system of safe and sustainable rates, without which driver and public safety would be threatened. It also protects the owner-driver small business model, which provides security to these unique small business operations, along with industry stability. But the question is: how long will this remain the position?

Will the review proposed for 2007 lead to the welcome inclusion of the other states and territories benefiting from these exemptions or will this government buckle under the pressure from its friends in high places—and not only continue to rule out the other states and territories from claiming exemption from the provision of the bill but also remove New South Wales and Victorian legislation from being exempt? Through these bills, this government has provided even more uncertainty for thousands of workers and their families across Australia and a fear that there will not be a secure future for owner-drivers in the other states or for those workers forced into the position of being independent contractors—those workers who lose their employee-employer relationship and its associated benefits.

One does not have to look far to see who is in the shadows behind the introduction of such antiworker legislation. On Monday I received an email from Independent Contractors of Australia also known as ICA, an organisation with only a relatively small number of members who should consider a name change to better reflect their membership and what they are on about. It is probably fair to say that it is not those workers who will be pushed from an employee-employer relationship to a sham independent contractor arrangement. The email said: ‘ICA has informed the government that we oppose the bill in its current form. If two amendments are made, we will support the bill.’

The first amendment the ICA wants is that ‘any exclusion of more independent contractors from the act should be made by legislative change only’. One may well ask: why would Independent Contractors of Australia want such an amendment? In Western Australia and the Australia Capital Territory, industry support has been demonstrated throughout the consultation process for the development and introduction of owner-driver legislation that will seek to address the vulnerabilities recognised as being unique in this part of the transport industry. The bill as presently drafted will override the operation of those pending state laws as well as those in Queensland, where there are currently legislative provisions utilised by owner-drivers.

The minister in his announcement in May identified the vulnerabilities unique to owner-drivers as a reason to maintain this legislation for owner-drivers in New South Wales and Victoria. These vulnerabilities are not limited by borders and are the same vulnerabilities experienced by owner-drivers in all states, including in my own state of South Australia. With the passing of this legislation, owner-drivers could be forced to work longer hours or maybe even sacrifice the maintenance of their vehicles to make payments on their loans. They could be forced to choose between losing their business and putting themselves at risk on the road. In this scenario everyone is a loser. At the very least, these exemptions should be expanded to include all of the states and territories.

The bill as it currently stands confers a broad regulation-making power which makes express reference to the exemption provisions. If the relevant minister in this government or a future government gets some sense and decides to broaden the exemptions to include those in the other states and territories, it could be done simply through regulation. However, the ICA does not want this to be the case and is actively lobbying the government to make this process more difficult.

The second amendment being sought by the ICA reads: ‘Only a government authority should conduct a sham contract prosecution.’ Why would they want this? Owner-drivers are single-vehicle operations, the vast majority of which perform work exclusively for a single-transport operator, a principal contractor. Owner-drivers are often highly dependent upon those with whom they contract. The current legislation in New South Wales and Victoria allows for a degree of basic regulatory protection to ensure the owner-driver small business model operates in an economically viable and safe way.

The Transport Workers Union has represented owner-drivers in collective negotiations since the 1920s. The New South Wales experience is that owner-drivers simply do not bargain or seek representation other than through their union. The lesson from this is that preventing union representation of small business in the transport industry will ensure that big business gets its way in cutting costs through exploiting its superior bargaining power. As part of its representation, the TWU is also active in ensuring that the relationship accurately reflects that which has been entered into. Owner-drivers are not employee drivers and vice-versa. By excluding the union, the capacity to conduct and the inability to investigate a sham prosecution will effectively deny owner-drivers effective and established representation.

So, in reality, the idea behind the Independent Contractors of Australia is to prevent unions from representing their members. We will now have to wait and see how much influence the ICA has on the Howard government. This government’s continuous attack on the working conditions and rights of workers is an attack on the security of working families and the values of Australian society. It is an attack on the conditions and job security that we should be protecting for our children and for future generations. Labor supports those who genuinely set out to start their own business. The Howard government is out there trying to create an impression that these laws are somehow beneficial for small business and contractors, but the reality is that they are not.

These laws will result in genuine employees being forced out of the employee-employer relationship and into independent contracting arrangements, reducing their entitlements, conditions and protections and pushing additional burdens onto them. They will remove protections from thousands of independent contractors who are in a dependent contract position and, as a consequence, in an unequal bargaining position. They will override state unfair contract provisions, which provide protection to employees, contractors and small business. They will allow employees to be treated as independent contractors in a sham way through ineffective, weak anti-sham provisions. And, if you are a worker or a small business seeking a remedy for an unfair or sham contract arrangement, you will have to go through the costly court process—an option beyond the reach of most of the people this legislation will affect.

The bills before us today will ensure that thousands of Australians will have no choice when it comes to their status as workers. That is the reality of this legislation—another Howard government no-choice piece of legislation forced onto Australian workers with far-reaching, ongoing consequences for them and for their families.