Senator FIELDING (Leader of the Family First Party) (10:59 AM) —Family First is the true champion of workers and families. Family First is proud of the fact that we were the first party to point out that, under the government’s anti-family Work Choices bill, workers on agreements or contracts would no longer be guaranteed public holidays, meal breaks and overtime. Australian workers and their families want to feel safe and secure. Job security is a huge issue. We all know that many workers, particularly unskilled and migrant workers, are not in a strong bargaining position with their employers, and the government’s Work Choices legislation makes them even more vulnerable, which is why Family First voted against it.

Family First proudly stands up for workers and their families, and it is those workers and their families that Family First has as its top priority when considering this bill before us. But the Independent Contractors Bill 2006 is not about Work Choices; it is about giving people the option to work as independent contractors if they want. This bill is interesting because it appears that no-one wants it in its current form. It is a compromise between two sides of the debate.

Both the Independent Contractors of Australia and the Australian Chamber of Commerce and Industry do not want it unless it is amended. On the other side, the Transport Workers Union also wants amendments. In broad terms, the bill states that anyone who says they are an independent contractor is an independent contractor. The bill will override state and territory laws on independent contractors which deem many of them to be employees. The problem is these state laws are frustrating people who want to be independent contractors but are prevented from doing so. These workers want to set themselves up as small businesses subject to commercial law rather than operate as employees subject to industrial relations laws.

The bill before us therefore empowers those workers to become independent contractors—in effect, small businesses—if they choose. Family First believes this is a good thing. However, there is also the risk that employees could be made to become independent contractors against their wishes, and that is a concern to Family First. The main incentive for companies to employ independent contractors rather than employees is that employers do not have to pay the 25 per cent on-costs, such as nine per cent compulsory superannuation, along with workers compensation and payroll tax.

It has been suggested that minimum conditions could be introduced for independent contractors. But, once you start imposing minimum conditions, the person is in effect no longer an independent contractor and can no longer freely negotiate their contract with an employer. Family First supports workers becoming independent contractors if that is what they want. But Family First wants to ensure that employees are not forced to become independent contractors if they do not want to, so they are not exploited. Groups of most concern are outworkers in the textile, clothing and footwear industry as well as owner-drivers.

As always, the challenge is to get the balance right. The government has recognised that some workers would be vulnerable if they were not given extra protection, and Family First is pleased that outworkers and owner-drivers will be exempted from the legislation and protected by state laws which specify minimum pay and conditions. It is here that some industry groups disagree with the legislation. Owner-drivers often take on a very large debt to purchase their trucks, have very little room for error in making a profit and have little bargaining power with the big businesses they contract to.

The exemptions for owner-drivers are appropriate because owner-drivers do not operate on a level playing field. Their livelihoods would be threatened if they did not have in place rates for minimum cartage. Without minimum cartage, a driver can lose the value of a truck run, which affects the goodwill value of the truckie’s business. Without this exemption, big contracting firms would be in a position to force owner-drivers to accept cuts in their payments, which would run many small businesses into the ground.

We all know that workers do not have equal bargaining power with their boss. For example, owner-drivers tend to contract to one firm, and this is recognised by the governments in Victoria and New South Wales. Family First is pleased that this bill also provides for action to be taken against unfair contracts. Most independent contractors lack the resources of the contracting firm. For this reason the bill includes a reverse onus of proof, meaning that the employer must prove they are not taking advantage of an independent contractor. The court, in checking whether a contract is unfair, has to consider the relative bargaining strengths of the parties, whether there was undue pressure and, importantly, whether the contract offers less money and anything else the court thinks relevant.

Family First’s main concern is to ensure that this bill does not leave workers and their families worse off. But we also do not want to stand in the way of families starting small businesses. I also acknowledge that the government has announced a review, which will be done next year, to examine the issue of owner-drivers in Victoria and New South Wales and whether there can be nationally consistent laws in this area.

The associated Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006 includes a range of amendments to the Workplace Relations Act. It was difficult to work though the detail of these amendments in the time available as they only arrived late yesterday. These amendments are part of a political package which offers something to workers and something to employers. For example, employees will be able to cash out sick leave entitlements and will have the assurance of minimum redundancy payments. Employers will have easier record keeping compliance rules.

But Family First is concerned about the stand-down provisions in the bill and will be considering moving an amendment to take these sections out of the bill. On balance, there are enough benefits for workers and their families and for small businesses to support the bill overall.

  (Quorum formed)