Daryl Melham (Banks, Australian Labor Party) Share this | Hansard source

I rise today to oppose the Independent Contractors Bill 2006 and the Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006. I begin my remarks by quoting from the minister’s second reading speech, in which he said:

The coalition believes everyone’s life opportunities are diminished by restrictions on the freedom to work.

I do find the comment incongruous from a government whose sole purpose in this parliament has been the imposition of restrictions through its appalling Work Choices legislation. This legislation has already had such a deleterious impact on the lives of so many Australians. I first spoke on the so-called Work Choices bill on 9 November 2005. At that time I warned:

With this legislation the government has come down fairly and squarely on the side of the employers ... The government does not even pretend to be fair in this situation.

This trend began with the discriminatory attack on the building and construction industry; it continued with the attack on all workers covered by federal legislation and now continues with this piece of worthless legislation. The net effect of the independent contractors bills is to ensure that basic rights are ripped away from contractors. These rights include those which are so fundamental that they should defy definition: annual leave, workers compensation, long service leave, superannuation, sick leave and paid public holidays.

The term ‘independent contractor’ is somewhat misleading. Many of these contractors are not independent. The legislation does not seek to define the term ‘independent contractor’. Instead, it relies on the common-law definition. At common law employees are engaged under the contract of services, whereas contractors are engaged under a contract for services. In other words, an independent contractor is generally engaged on a labour only contract, usually determined as a one-off flat rate. Generally the independent contractor remains responsible for a number of aspects of the relationship that would usually be the responsibility of an employer. This is problematic. Most recently we have seen examples of how this relationship is demonstrably not independent—to the detriment of the contractors. Figures from the Productivity Commission based on the ABS forms of employment survey estimate that there are 787,600 independent contractors in Australia, 8.2 per cent of all employed persons.

Technicians installing for Foxtel, for example, pay for all their materials—a van, tools and petrol. There has not been an increase in their contract rates for over 10 years. Optus workers were made redundant earlier this year and re-applied for their jobs as independent contractors. There is no doubt that Optus management was sure that the company would not suffer financially as a result of this change—indeed, rather the opposite.

Owner-drivers delivering Tooheys beer faced a 42 per cent cut when Linfox took over this year. The vast majority of owner-drivers, for instance, are single vehicle operators who are highly dependent on the employers to whom they contract. Often owner-drivers only work for the one employer. They can only work for that operator and must take the price they are offered. There is little independence in terms of bargaining power, and the contractors are vulnerable, never more so than if this legislation passes both houses. Many trucking families live on overdrafts as they struggle to pay off the huge debt incurred in purchasing a vehicle. Surveys have found that around one-third of people could not find permanent work and three-quarters believe that these arrangements are simply used by their employer to avoid any obligations to their staff.

In my own electorate there are a number of owner-drivers. Their stories, provided to me through the TWU, are a clear illustration of why this legislation must be defeated. Adam works in the general transport industry and has invested $300,000 in his business. He believes that deregulation will mean a decrease in rates for many drivers. Adam also believes that he will have to increase an already high workload—in excess of 70 hours a week.

David, with 17 years of service and $100,000 invested, also believes that driver rates will be negatively affected and is concerned about his ongoing vehicle repayments, maintenance and fuel costs, which still need to be serviced. He says:

I think it’s a disgrace that a government that says its on the side of small business has just kicked so many, right in the guts.

Another owner-driver, Ian, sees the introduction of this bill as a direct attack on his ability to collectively bargain. He said:

My mates have stuck up for me in the past but I guess after this, I’m on my own.

Andrew is also concerned about the impact on collective bargaining. Andrew said:

Now I am going to have to pay solicitor fees to go to court when before my union was able to represent me for free. I thought I had the freedom to choose.

Another constituent, Ali, a courier with $150,000 invested in his business, is worried about the fact that the deregulation will see an increase in the number of unsustainable operators. Ali works in the very competitive courier industry, where ease of entry and little product differentiation means that there is always a high turnover and a high level of unsustainable operators—drivers working for very low rates to build a client base. He also sees it as an attack on his ability to resolve disputes in an easy and affordable way:

If I went up against a company outside the commission—I wouldn’t win, I couldn’t pay the big bucks, I’d spend two weeks income to win back a day.

I understand that the legislation now excludes owner-drivers from New South Wales and Victoria. This has been as a result of significant lobbying, not the least of which has been from the Transport Workers Union. The comments and stories I have quoted are from my own constituents in Banks in Sydney. I would be very surprised to find that these do not represent the views of owner-drivers across Australia.

In the 1960s the particular vulnerabilities of owner-drivers were recognised—by a Liberal government. A commission of inquiry established that there was an ‘overwhelming case’ for the regulation of owner-drivers. The inquiry recognised that, while owner-drivers were contractors, they operated in a dependent relationship with the employing companies.

The current New South Wales act—the Industrial Relations Act 1996—recognises enforceable minimum standards providing the certainty of at least cost recovery; the prevention of unfair destructive competition by preventing undercutting across a site or industry sector; the capacity for incentive systems to flourish above the minima on either an individual or an enterprise level; protection against arbitrary termination of the contract; no-cost and timely access to the Industrial Relations Commission for the resolution of disputes about various matters, including goodwill; and the capacity to recover goodwill where termination of the contract has resulted in that goodwill being unfairly extinguished. This system has had bipartisan support in New South Wales since its inception.

In Victoria, an inquiry was established in 2003 which established that significant disadvantage exists amongst owner-drivers, requiring legislative intervention. The Victorian government passed the Owner Drivers and Forestry Contractors Act 2005 to remedy this situation. Some of the critical elements of this act include: the provision of an information booklet to the owner-driver prior to the entering into of a contract; the provision of published rates and cost schedules to the owner-driver prior to the entering into of a contract—this identifies the typical fixed and variable overhead costs for that class of contractor and the base hourly and casual rate that would typically apply to that class of contractor; that contracts must be in writing and include the guaranteed minimum hours of work; the rates to be paid and the minimum period of notice applicable; the creation of the capacity for owner-drivers to appoint a negotiating agent; the establishment of codes of practice in relation to owner-drivers and hirers; the prevention of unfair business practices through the articulation of a series of tests in relation to unconscionable conduct; and the establishment of a low-cost, accessible dispute resolution procedure under the auspice of the Victorian Small Business Commissioner.

As I understand it, it is the government’s intention to preserve existing New South Wales and Victorian arrangements and protections—and, on behalf of those people in my electorate who are impacted, I am very pleased. Nonetheless, the exclusion begs the question: if it is unacceptable for the independent contractors of New South Wales and Victoria, why is it acceptable for the independent contractors of the other states and territories? It shows the typical short-sightedness of this government. I also note that the government will review this exemption in 2007, which opens up the prospect of whether the review will be before or after the next federal election. The likelihood is that the exemption will be rescinded—I am a pessimist. The Australian Labor Party oppose these bills. We note that it is a continuation of the government’s attack on the conditions of Australian workers, and we will continue to oppose such unfair legislation.

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