It is always a pleasure to follow on from my colleague who is such a passionate advocate for workers’ rights. Indeed, he is right: touch one, touch all. On that note, I join my colleagues who have spoken before me to make my contribution to the debate on the Independent Contractors Bill 2006 and the bill associated with it, the Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006. Like my colleagues I oppose this legislation as it is nothing more than a further attack on the rights and security of Australian workers. I want to support the amendment moved by the member for Perth, which I am certain will help ameliorate some of the problems that this bill, when implemented, will create.
This legislation is a betrayal to those hundreds of thousands of legitimate independent contractors, many of whom are in my own electorate of Calwell. It is a betrayal generally of those vulnerable workers who are at risk of exploitation under these provisions. These bills follow on from the government’s misleadingly named Work Choices legislation. They provide yet another attack on the rights, conditions, entitlements and protections in the workplace and on the living standards in general of the many hardworking men and women whom I represent in this place.
Despite the government’s assertion that this legislation is intended to protect independent contractors, the legislation actually does no such thing. It does not benefit independent contractors; it does not assist them in negotiating with unscrupulous employers or operators as it does nothing to redress the uneven bargaining positions of businesses and potential contractors. Just like this government’s Work Choices legislation, these bills rely on the incorrect presumption that all workers can negotiate an arrangement which is to the benefit of both the employer and the employee.
In reality, this could not be further from the truth. Whilst some workers decide to work for themselves as independent contractors, many do not. Just like the Work Choices legislation, which leaves employees who are unwilling to accept pay cuts out of a job, this legislation leaves workers who are unwilling to accept an independent contractor relationship out of a job. For too many people, there is no choice.
Firstly, this legislation allows genuine employees to be pushed out of the genuine employer-employee relationship and to be established as so-called independent contractors with the consequence that the employee’s conditions and entitlements are reduced or removed and further burdens are placed on the employee, such as workers compensation, taxation and superannuation arrangements, all of which would normally be carried out by the employer. Secondly, in my state of Victoria, we have many sound protections for contractors, and this legislation removes or reduces these protections by overriding the state provisions.
Looking at some of the detail of the bill, I have great concern with part 2, which seeks to override state laws with deeming provisions. Under state laws, certain categories of independent contractors are deemed to be employees. These provisions have been introduced to protect workers from what are effectively disguised employment relationships. Without these provisions, there is no definition of an independent contractor beyond its meaning under common law, which is problematic as no statutory criteria are provided as guidance. In Victoria, owner-drivers in the transport industry are currently protected by the state provisions for employment conditions. Whilst this legislation provides an exemption for such dependent contractors, this exemption is to be reviewed in 2007. This leaves the prospect of the exemption ceasing either before or after the next federal election, if the government is re-elected, and it also prevents other states from introducing comparable protection legislation.
This exemption raises further concerns. You have to ask: why is it there? Is it there because independent contractors will be facing reduced pay and conditions under this legislation? The minister has admitted as much. The minister in his second reading speech said that these provisions will remain because of the ‘special circumstances of owner-drivers in having to operate within very tight business margins’. In other words, owner-drivers are at risk of going broke if they are not exempt from the provisions of this bill and they therefore need to be protected. But what about everyone else? By the minister’s reasoning it is okay for everyone else to go broke, but not owner-drivers. I am pleased that owner-drivers will be exempt, albeit only in the short term, but I am very concerned about all the independent contractors that the government has decided not to protect.
Part 3 of this bill is also a concern as it deprives state jurisdictions of the power to legislate to set aside unfair provisions in contracts, which currently exist in state legislation. These state provisions are much broader and more easily accessible. The state provisions also allow employer organisations and unions to apply for unfair contract review on behalf of a party. This legislation does not. Instead this bill seeks to create an exclusive unfair contract regime in the Commonwealth jurisdiction, and unfair contract matters will need to be tried in the Federal Magistrates Court, a more formal jurisdiction, which will add to the expense, length and complexity of reviews.
Part 4 of the bill is perhaps of most concern and indeed the most contentious aspect of this legislation, particularly in light of the Senate Employment, Workplace Relations and Education Legislation Committee’s recent inquiry into these bills. The minister unfortunately chose to commence debate in this place prior to the conclusion of that committee’s inquiry. Of particular interest are the provisions in the committee report regarding contract outworker protection in Victoria, particularly given that the report notes that the committee considered outworkers to be more vulnerable to changes resulting from this legislation. As the textile, clothing and footwear industry is comprised in large part of outworkers, it is important to take note of what those who represent workers in that industry submitted to the committee. In short, these representatives made it clear that the protections contained in this bill were inadequate.
The committee also noted that it received advice from the Minister for Industrial Relations in Victoria that Victorian legislation contained comprehensive and appropriate protection for these outworkers and as such part 4 should be omitted to avoid unnecessary and confusing duplication of the laws. Concerns have also been raised that these bills will lead to greater confusion in the textile, clothing and footwear industry as outworker entitlements will be enforced under state law, whereas proceedings for a review of unfair contracts must be instituted under federal jurisdiction.
The legislation as drafted does little to protect outworkers who are already in a vulnerable and often exploited position. Instead this legislation as drafted will significantly reduce outworker entitlements. After investigating these concerns, the Senate committee report included a unanimous recommendation that part 4 of the bill dealing with protection for outworkers in the textile, clothing and footwear industry be omitted. The government’s own senators concluded that part 4 ‘serves no useful purpose’. It is extremely disappointing that the government contemptuously introduced this legislation prior to the completion of that inquiry and paid no regard to the good work of even their own senators on that committee.
It is now, of course, understood that the minister will dump this section of the bill, and I have to say that I commend that decision. The question is: what was the government’s rationale for introducing this legislation when it did? How narrow was its consultation and research in developing this legislation, and how seriously can we take a government which proposes legislation which it has no confidence in and now recognises as wrong? To me this is further proof that this government is simply seeking to impose its anti-worker and anti-union ideology on the people of Australia with scant regard for the consequences that this legislation will have on their overall working conditions and, indeed, their lives.
Finally, I would like to discuss the so-called sham arrangement provisions in this legislation. The provisions are intended to apply where workers are categorised as independent contractors where in fact they are in an employment relationship. These provisions in themselves are a sham and will be completely ineffective in preventing this from occurring. As the legislation does not define the difference between independent contractors and employees, it remains fundamentally flawed and invites exploitation.
As the ACTU have recently reported, this is particularly an issue for young workers who are especially vulnerable to exploitation. This legislation does nothing to protect teenagers from being recruited to sell food and drinks at football games for a 10 per cent commission or working on building sites on low wages and with inadequate accident insurance. This legislation does nothing to prevent this exploitation nor does it do anything to prevent employers contracting out their workforce and failing to take responsibility for the entitlements of their employees.
Those employees who are most likely to be exploited by sham contracts are those who are least able to stand up for themselves and least likely to be able to put together a case at the Federal Court or the Federal Magistrates Court or afford to have someone else represent them. This government refuses to protect those workers who most need protection and has again let down our young Australians in its attack on their job security.
In my electorate of Calwell, we are fairly lucky to have a number of community based organisations who provide assistance to people in financial or personal crisis situations. These crises largely result from job losses and strained household budgets. When people are detrimentally affected by this government’s legislation, be it the fallout from Work Choices or the fallout from Welfare to Work, it is organisations such as the Brotherhood of St Laurence and UnitingCare who are there to try to keep people’s lives together through emergency relief, financial counselling and family support services.
Given that this legislation is further putting at risk job security and entitlements of workers, it is important to note what groups such as the Brotherhood of St Laurence and UnitingCare have to say about the legislation, as ultimately they will be the ones left to handle the fallout in the community. In a submission to the Senate committee inquiry, the Uniting Church in Victoria stated several principles which the legislation should conform with, including:
… laws pertaining to independent contracting should be measured against the potential impact on those most vulnerable (those people with the least ability to bargain for decent remuneration and conditions at risk of ‘sham arrangements’ or unjust contracts);
… … …
Commonwealth laws should not override State laws in such a way that allows for less protection to be provided to those most vulnerable.
The submission concluded by stating their concern:
... that the proposed changes to independent contracting arrangements will unfairly disadvantage those most vulnerable, leaving them open to exploitation unless necessary amendments are made ...
Similarly, the Brotherhood of St Laurence recommended in their submission to the inquiry that outworkers be excluded from the legislation in order to preserve the protections provided to them under state laws. They also recommended that part 4 be removed in its entirety and that the sham contracting provisions be amended as they fail to provide specific provisions to ensure outworkers cannot be called independent contractors in order to avoid penalties.
Many other submissions were made to the inquiry that had similar conclusions. I think that these submissions need to be taken into serious consideration. I want to quote comments that were made by the Transport Workers Union in relation to their submissions, because, as I said, I have many owner-drivers in my electorate and in my state of Victoria, and the TWU work extremely hard to protect the rights and privileges of their members. It is the view of the TWU that:
While the exemptions do not go far enough to protect owner-drivers nationally, for owner-drivers and their families in New South Wales and Victoria, they will maintain a critical system of safe and sustainable rates that, without driver and public safety, would be threatened. They will also maintain the protection of the owner-driver small business model, which provides security to these unique small business operations and industry stability.
As my many colleagues before me have said—and my colleague before me used similar words—the effective message that this legislation has for the workers it affects is, ‘You are on your own.’ In an unequal bargaining position with a superior contract partner, they will effectively be on their own, with no access to state based protections, no access to unfair contract provisions and no access to employee-deeming provisions. For these reasons I oppose this legislation. It is a further attack on the rights and security of workers both in my electorate and generally in Australia, and I support the amendments moved by the member for Perth.
