Steve Hutchins (NSW, Australian Labor Party) Share this | Hansard source

I want to speak this evening on the Independent Contractors Bill 2006 and the Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006. I had the opportunity to sit on the Senate Employment, Workplace Relations and Education Committee when it went through the various aspects of the bill. The committee dealt with a variety of witnesses who appeared before it and who presented their case as to what they wanted from this legislation.

It is a good sign for us in the Labor Party that, once again, ideology has gripped the government. It is always a sign that a party is starting to concentrate more on what it sees as its place in history than on the practicalities of the maintenance of government administration when it lets ideology take over. The fact that the government has presented legislation that, in essence, does not allow individuals to become members of or be represented by trade unions is again another sign of its ideology. As I said, I think that is a good sign for us in the Labor Party because, while the government is concentrating on its place in history, we will certainly be making sure that it does become part of history at the next election.

I had a long association of dealing with the issue of contracting and contractors in my previous occupation. As you would be aware, Acting Deputy President Crossin, for 18 years I was a full-time official of the Transport Workers Union of Australia’s New South Wales branch. I ended up being the secretary and also the national president of that organisation. I remember clearly when I first joined the organisation on St Patrick’s Day in 1980. My old boss then—his name was Edward Clarence McBeatty—said: ‘One thing you should remember about truck drivers is that they are politically conservative but industrially militant, and never mix up the two. They may take direct action on behalf of their wages, conditions or rates, but that does not necessarily mean that they will vote the way you would like them to at a general election.’ I always used that test in my old branch of the TWU in how to approach small business men who, of their own volition, joined trade unions—particularly lorry owner-drivers.

The association of the union with owner-drivers goes back a long way. When the union was formed in 1888, there were men who owned their own horse and cart at the meeting at Trades Hall in Sydney. From that period on, when trade unions and industrial awards were being formed, owner-drivers who had particularly worked around the waterfront, in the sugar houses and in carting concrete and excavated and building material often not only were subject to direction and control by one employer but wore uniforms that they were required to wear by that employer, their wagons were painted in the colours that the employer required along with the company’s logo and, in fact, the employer would often tell them the sort of equipment they wanted them to provide. These owner-drivers were subject to their employer’s direction and control. This became more and more prevalent for those men after World War II, when a lot of surplus army equipment was available and people started to get more involved in the road transport industry in what was called in that period the Department of Main Roads.

From that period on, the New South Wales branch of the union sought to represent the interests of the lorry owner-drivers through legal mechanisms. I recall meeting Sir Jack Sweeney, who was their QC at one stage. His junior was Neville Wran. On two occasions they made appeals on behalf of the union to the Privy Council in London to represent owner-drivers to make sure that they could be legally enrolled. There were mechanisms to ensure that that occurred in legislation through to the sixties. In fact, when Sir Robert Askin was a Liberal Premier of New South Wales, he started to enact more and more legislation to make sure owner-drivers were represented. That continued in New South Wales right through the variety of Liberal governments, from Sir Eric Willis to Tom Lewis, Nick Greiner and John Fahey.

That is the history that has always been there with that particular union, so I am a bit concerned—even though Senator Troeth has said this evening that there are aspects of this legislation that will not apply to owner-drivers in New South Wales—that, in the amendments that were presented five minutes before the bill saw the light of day, there was one clause that would remove the right of owner-drivers in New South Wales to make or vary contract determinations. I hope that the minister will clear that up in reply—whether it is just a drafting error or whether it will be dealt with in other aspects of the legislation. But if that is the case then that negates the arrangements that were entered into by the TWU and the government to exempt at this stage the provisions of this bill for lorry owner-drivers in New South Wales and in Victoria.

I do not share the confidence of Senator Troeth on the changes to the legislation in the areas of deeming, unfair contracts and the transferring of those powers in New South Wales and Queensland jurisdictions to the federal jurisdiction. I mentioned earlier that a lot of legislation that has been helpful to owner-drivers in New South Wales was carried whilst the coalition was in power in that state and was often carried unanimously by both houses of the parliament.

In 1994, particular legislation was introduced into the New South Wales parliament to provide a mechanism to protect goodwill payments for owner-drivers, particularly in the concrete industry. That bill was, as I recall, introduced as a private member’s bill by the Labor member for Auburn, Peter Nagle, and was supported by the then IR minister John Fahey and his successor Kerry Chikarovski. In essence, that bill allowed owner-drivers involved in contract disputes with their major employers—in this case, it was the concrete companies—to go before the New South Wales industrial commission and seek to argue a case as to whether there was an unfair or unconscionable contract. That saved a lot of men in particular and their families a lot of money and a lot of heartache in that period when those companies were restructuring. It allowed for the swift and not all that costly resolution of significant contract disputes between the concrete companies—those multinationals—on the one hand and lorry owner-drivers in painted colours on the other. It meant that the difficulties which had transpired, and which transpire in other states, no longer occurred.

In my last contribution here in parliament on this issue, I spoke about the situation only a few years ago concerning Boral. Boral in New South Wales wanted to change its method of contracting and remuneration for their lorry owner-drivers. By virtue of the fact that the owner-drivers had an opportunity to go before the New South Wales commission and to use the unfair contracts legislation that was available to them in that state, they were able to seek a reasonable outcome to the dispute between them and their company. Unfortunately, in Canberra, another group of owner-drivers employed by the same company never had that opportunity. In fact, a lot of those men lost a lot from it. I understand that some lost their homes. They lost a lot of money as a result of the dispute. I mentioned that one of the sacked owner-drivers has been a security guard here in this building. It is not beer and skittles, as we might have been led to believe by Senator Troeth.

There are significant difficulties in what is being proposed by the federal government in relation to taking these powers away from the states, where there is appropriate legislation, and putting it in the hands of the Federal Magistrates Court. That is going to make it more legalistic, more complex and more inaccessible to men and women who fall into contract disputes with major companies. That will lead to the denial of justice. I know that some coalition colleagues have an ideological bent about trade unions, and one can accept that. That is a thing that sometimes has started some of them up. But in the end this is going to lead to unfairness and to a denial of justice for men and women if they are put in this position.

In my old organisation we saw the example of what happened with Boral here in Canberra as opposed to Boral in New South Wales. The people in New South Wales were able to achieve a satisfactory result for both sides as a result of being able to go through the New South Wales jurisdiction. In Canberra, the men were broken because they did not have the money to compete with Boral. In the end, some lost their homes and they all lost their businesses because they did not have the opportunity to match Boral dollar for dollar in legal costs. If we transfer these decisions from a jurisdiction that allows for them to be dealt with inexpensively, that attempts to make it non-legalistic and that attempts to make sure that the outcome works to another jurisdiction—as is being proposed under this legislation—then it will become a case of, ‘If you can afford justice, you will get it.’ A former staffer of mine once said that he was told that the British system of justice, and I suppose that is what we have, is a Rolls Royce system of justice—the only thing is that you need to own a Rolls Royce to get full access to it. If that is what is being proposed here, then it is terribly wrong. I hope that some coalition colleagues go back and have a think about it because that would not be in the public interest. It will be a denial of justice.

The deeming aspects of this legislation change the situation as well. Under New South Wales and Queensland law, there are certain provisions to prevent sham contracts. They have been put in there over the years. We heard from the New South Wales representatives that these pieces of legislation have been in place for 45 years, so they were in place during two significant periods of coalition government. In New South Wales, the coalition under Askin, Lewis, Willis, Fahey and Greiner did not seem to think that it was worth while to change them. But we have now got that prospect presented to us. If we change strong deeming provisions that prevent sham contracts then we are going to deny justice to people who are probably not in a position to demand it. The people who are probably going to be most vulnerable in this situation are not going to be the people in the cities but the people in country New South Wales and country Australia. Once again, I hope that that will lead to a bit of a rethink from some of the National Party senators and some of the senators from the coalition who come from outside the metropolitan areas.

Two other things worth mentioning came out of the inquiry. The first was that, as a result of changes to the personal services income tax in July 2000, the income test for a contractor is much stronger. The ability to claim benefits and to deem yourself as a contractor has been significantly reduced. So, if this legislation goes through as it is proposed, we could find men and women put in positions where they are deemed contractors for the purposes of this act—and I will come to how that occurs—and yet with that not meaning anything to the Taxation Office. And Senator Marshall may be able to help me with that in his contribution. So in fact you can be deemed a contractor under this legislation yet not get access to the benefits of being a contractor because of the July 2000 ruling. You can still be taxed as an employee by the Australian Taxation Office because they will not accept whatever is said in the mechanism that is being proposed.

The other thing is that, if you are a person who wants to put someone on a contract, all you have to say is, ‘I genuinely thought he or she was a contractor.’ And that is it; that is the defence in the law. You do not have to do anything else. From my recollection of the hearings and from other stuff I have read, you do not have to do anything else other than to make that claim, and that is sufficient for this bill to be in operation.

There are two other things I want to mention in the brief time I have left. I think Senator Marshall may comment more widely on this because he asked these questions in relation to the operation of minimum wages. On 4 August Senator Marshall asked Mr Pratt from the Department of Employment and Workplace Relations:

Is it possible under this proposed legislation that an independent contractor can be paid less than the federal minimum wage?

Mr Pratt answered, ‘No.’ Senator Marshall went on to ask:

So what provisions of this legislation give any protection to people under the age of 18 entering into an independent contractor relationship? Is there any?

Mr Pratt said, ‘No.’

I have outlined my concerns about this legislation. I think that this is going to be a terrible piece of legislation that will be unfair and unjust on probably the most vulnerable members of the working community in this country. There is no protection for them from being forced into contracts—as much as the government may say there is—because all an employer has to say is, ‘I genuinely thought they were,’ and that is the defence.

There is no advantage for the contractors in taxation. There is no minimum wage for them. In fact, I alluded earlier to child labour—Senator Marshall was concerned about the vendors outside a VFL ground in Victoria—and there does not seem to be any particular protection for children.

So what is this all about? I go back to my original point, and that was that this is about ideology gone mad, which has consumed this government since it got control of the Senate. And, as I said earlier, it may mean that, as a result of the government worrying about their place in history, they probably will make their place in history because of silly moves like this.