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HANSARD EXTRACT

Employment , Workplace Relations and Workforce Participation Committee Report

15 September & 12 October 2005

Mr HAYES (Werriwa) (12.20 p.m.)—I would like to support the recommendations of the dissenting members of the Standing Committee on Employment, Workplace Relations and Workforce Participation. While the majority of the recommendations of the committee were agreed upon unanimously, I trust that the government will take notice of the seven additional recommendations contained in the dissenting report presented by Labor members of the committee.

Independent contractors and labour hire arrangements are a growing feature of the Australian workplace, and the evidence suggests that there is going to be some growth for some time to come. It is not about to stop—at least according to the evidence presented to the committee. It provides opportunities for employers to shift workers from being employees to being contractors while in effect remaining, to all intents and purposes, an employee.

Probably the most disappointing thing about the report is that this failed to be taken up in any serious way. While it was acknowledged as an issue by the dissenting Labor members, the government members failed to pick up probably the single most important thing facing people who have been shifted from being employees to being contractors.

The government members have missed a fantastic opportunity to address the concerns of these workers, who are becoming a larger and larger part of the Australian work force. I am a little torn about why this might be the case. On the one hand, it might be that people simply do not understand the concerns of these workers. On the other hand, it is perhaps because government members are actually supportive of the inherent unfairness of the arrangements, given their stance on other industrial issues. But it is most likely to be simply that government members do not care.

The government simply does not care about many workers being forced into positions where they have to accept a contracting arrangement for the convenience of their employers. In most circumstances the employees who have quickly become so-called independent contractors are not facing anything different in terms of their work or their relationship with their employer, but they are certainly facing additional uncertainty—additional uncertainty borne out of not being on the books in the same way: as opposed to being on wages, they are there simply as independent contractors.

Of course, it does not stop there. The former employee, now a contractor, also faces considerable on-costs that once were borne by the employer. The contractor is expected to now make provision for their own superannuation, their own compensation premiums and any other insurance that may be required by the employer or by state or federal statute. While members opposite may say this is a fair thing, I have to say that from my perspective, and from that of the people in my electorate, it is completely unfair. The employer is getting all the benefits in the same way that they did before, but they are now able to avoid the additional on-costs associated with the direct hire of employees.

The situation, quite frankly, is probably best described as all care with very little responsibility. In my opinion, this is a key thing that government members missed during this inquiry. Government members had the opportunity to recommend to the minister that, after weighing up all the evidence that was presented to them, there was a case for change. There was the opportunity to adjust what I consider to be these unfair arrangements. There was an opportunity to correct the record in that respect. They had the opportunity to support Labor’s bid to have an unfair situation corrected by recommending changes to the definition of an employee, moving away from a common-law definition and imposing an adjustment to the Workplace Relations Act. Instead, the government members stood firm with the decision to continue the situation in which an employer can get away with removing entitlements, exposing workers to unnecessary and unfair levels of risk, simply by redefining their classification. With the stroke of a pen, everything is removed and nothing is replaced when it comes to many cases of so-called independent contractors.

As the member for Gorton noted in his earlier speech on the report, there are myriad sham arrangements that have been entered into and taken advantage of by making employees contractors. These sham arrangements create a situation of disguising employment and they are simply unfair to workers who are forced to accept them, forced to take all of the risk and most of the cost—sometimes for very little or no additional return, I might add. These situations are simply wrong and should be stopped. It is not nearly good enough that they be allowed to continue and that people be allowed to take advantage of them, or at least of the results. The government had the chance to change this, or at least put on the record that it is wrong, by supporting a relatively simple amendment to the definition of ‘employee’. This could have been easily achieved through an amendment to the definition of employee contained in the Workplace Relations Act, as outlined in recommendation 2 of the dissenting report.

The evidence to the committee was clear. When labour hire and independent contracting arrangements are entered into, the lines become extremely blurred. The lines are blurred not only for the purpose of assigning responsibility but also for the purposes of legal obligations that are created by these arrangements. The blurred lines and changed obligations mean that, at times, workers in these arrangements are far worse off than they ever were when they were direct hire employees. Their protections have been removed, their entitlements have been removed and they have additional on-costs foisted upon them. In most circumstances, when added up, this is all to their detriment.

I note that the evidence to the committee showed that there are also concerns about permanency of arrangements, unreasonableness of working hours and the general treatment of the so-called independent contractor being worse than would have been the case had they remained as direct employees. These are serious issues and they reflect a legitimate concern for those who are being taken advantage of under often unfair arrangements that they had no option other than to accept. I wonder if this is some sort of sign for the future of all other working Australians.

The matters that this report deals with have a direct impact on many of my constituents. I know many of those in Werriwa are certainly concerned about the matters that came before this committee. Recently I had the opportunity to hear from and speak with a number of people who are deeply concerned about the government’s approach to independent contractors. These people were not just fearful for their own livelihoods but concerned about the future of their families. During the last sitting fortnight of this parliament, a delegation of independent contractors in the transport industry travelled to Canberra to defend their rights. This group rallied at the front of Parliament House in an effort to bring their plight and their fight to the members of this place. I attended that rally to show my support. Sadly, I have to say, I did not see many members from the opposite side there and that is probably why they are not so willing to participate in this debate.

The transport workers also conducted a forum to which all members and senators were invited. The forum gave all of us here the opportunity to hear directly about their concerns. It also gave us the opportunity to hear from a number of experts, including academics in the field and wives and families of these contracted transport workers. While generally productive, the forum was interrupted by the member for O’Connor, who, it would seem, could not help himself when presented with an opportunity to put himself in front of a TV camera.

A division having been called in the House of Representatives—

Debate (on motion by Mrs Gash) adjourned.

12 October 2005 in continuation

Mr HAYES (Werriwa) (12.04 p.m.)—Before debate on the House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation report Making it work was adjourned I mentioned that these concerns are the very concerns that the Transport Workers Union made so clear during its campaign to heighten awareness of the plight of independent contractors that has prompted action on my part. In an effort to put a set of rules in place that will allow independent contractors a fair go at negotiating fair agreement with large organisations, the member for Hunter and I have co-sponsored a private member’s bill that will amend the Trade Practices Act to allow small businesses to access collective bargaining.

Just because independent contractors are treated like business operators does not mean they carry with them all the clout that would ordinarily be associated with a business operator. It is important that the Trade Practices Act reflects this. Already this year we have had amendments to the Trade Practices Act that do nothing but exacerbate the problem that people like the transport workers I met in Canberra are currently experiencing. Their right to have a union collectively bargain with large companies on their behalf has been removed under the guise of reform. This government says that these workers—and at the end of the day they are workers, not necessarily just business operators—have the right to negotiate, but bear in mind that many are often forced to negotiate with the large and sometimes internationally based organisations for whom they work. It is like asking a goldfish to negotiate with a shark and expecting that the goldfish will have a fair chance of not being eaten. It is a ridiculous expectation—one that everyone knows is well beyond reality—which contractors such as these transport workers and other independent contractors face on a daily basis.

The private member’s bill that I co-sponsored seeks to rebalance the process by allowing small business operators to collectively bargain. I know that members opposite may claim that the recent decision of the ACCC means that in truth it is still permissible, but these are exceptions rather than any general rule. The private member’s bill seeks to strengthen the bargaining position of small businesses by allowing them to get together to bargain as a collective without the cumbersome, time-consuming and inefficient authorisation processes that currently exist through the ACCC. This is the sort of thing that, quite frankly, small businesses want. This is the sort of thing that would help them out immediately, and it would certainly be a greater weight off their minds than whether or not they can unfairly sack somebody without repercussions.

I congratulate the Labor members of the committee for their dissenting report, but I also congratulate all members of the committee on the amount of common ground that was found. I look forward to the government taking these matters seriously by adopting a number of the recommendations that were agreed to.

 

 

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