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2 October 2007
Background
In July 2007, the ALP released to Independent Contractors of Australia answers to a series of questions on independent contractor issues. In our commentary, we referred to the answers as being historically significant, as they revealed a substantial shift in the ALP's attitude toward independent contractors. It was a shift we welcomed. The essence of the shift was the ALP's acceptance of the definition of independent contractors as being people who earn their income through the commercial contract as found under common law. This is a position that reflects the legal and behavioural reality in which independent contractors work. It is also common sense. The ALP's new attitude marked a shift away from its traditional position which viewed independent contractors as somehow illegitimate. (Click here for the July questions, ALP answers and ICA commentary.)
The ALP statements of July, however, were comments on matters of broad policy principle. ICA was concerned that these policy principles could be compromised when they were cashed out in policy detail and we put two further questions to the ALP. We have appreciated the constructive way in which the ALP has engaged with us and handled our questions.
The two questions relate to core ALP--union relationships and historical ALP values. In the past, the ability of other parties to interfere with or destroy the commercial contracts of independent contractors has been accepted as legitimate by the ALP. This has meant that others have used their power in these respects to deny independent contractors their rightful and legal access to work. It was a situation of gross discrimination against independent contractors. ICA has long campaigned against this.
The current government removed other parties' ability to discriminate against independent contractors. ICA strongly supported and continues to support this.
The two key issues
ICA requested feedback from the ALP on the following two specific threshold issues: The ALP has provided a one-page response attached at the end of this commentary.
Issue 1:
ICA asked: Would independent contractors continue to be protected from secondary boycotts under existing provisions 45 (d) and (e) of the Trade Practices Act?
ALP answer (summary) : "... secondary boycott laws will remain in their current form in the Trade Practices Act." (See full statement below)
ICA comment: The ALP has a provided clear and straightforward answer to this question. The ALP has committed itself to continuing this core protection for independent contractors. ICA welcomes and strongly supports this position. It supports the historical shift towards positive recognition and acceptance of independent contractors. It secures legislative teeth to protection of independent contractors from discrimination under secondary boycotts.
Issue 2:
ICA asked: Will clauses in industrial instruments (legislation, awards, agreements) that seek to control, restrict or impose conditions on independent contractors be outlawed by the ALP?
ALP answer: See below "Freedom of contractors"
ICA comment: (Draft, 1 October) The answer supplied on this issue lacks the total clarity of other answers supplied and is subject to interpretation to understand its meaning. It has the potential for taking on additional meanings. ICA therefore is not satisfied that the response enables us to fully understand the ALP's policy position regarding this key point.
(Breaking News, evening of 1 October) Late yesterday, 1 October, ICA received an e-mail letter from Julia
Gillard and Craig Emerson clarifying the ALP's position on industrial
instruments interferring in independent contractor arrangements. The letter
(click here) is a very strong indication of the ALP's intentions that people
should be able to operate as independent contractors if they so wish.
Dispute resolution
In addition, the ALP has made a further commitment on an issue on which we have long campaigned. That is the problem of the excessive cost of contract dispute resolution for independent contractors.
They ALP has stated that it will develop lower cost dispute resolution procedures for unfair contract disputes under the Independent Contractors Act. Further, it has committed itself to the promotion and the greater use of low-cost contract dispute resolution procedures that are available within State and Territory legislation. We expect that this means encouraging access to and use of the small claims processes available to independent contractors under the States' fair trading Acts.
This is also a welcome development. It is an issue that ICA believes is very important, and one upon which we have campaigned for a long time. If commercial contracts are to have integrity, then quick, cheap resolution to simple disputes is essential. Where legal resolution can be achieved quickly and cheaply, parties tend to have fewer disputes and confidence in commercial activity grows. This is an important development for independent contractors.
(Note: underline inserted by ICA to highlight key points)
Secondary boycotts
As announced in our Forward With Fairness Policy Implementation Plan, the secondary boycott laws will remain in their current form in the Trade Practices Act.
Role of contractors
Labor understands the growing importance of contractors to the Australian economy.
Labor's policy is that independent contractors are small businesses that should be regulated by commercial law and not industrial law.
Labor believes that the use of contractors should be supported and facilitated, and that contractors should be given fair opportunity to access work.
Freedom of contractors
Labor recognises that employers, particular small business employers, need an industrial relations regime that does not permit inappropriate interference from third parties.
Under Labor, employers and employees will be free to bargain the terms of workplace agreements about matters which suit them.
However, the terms of an agreement must be lawful and cannot breach discrimination laws, OHS laws or Labor's principles to guarantee freedom of association.
This means clauses which involve matters such as union preferences or union bargaining fees cannot be included in an agreement, nor can agreements prescribe that contractors be engaged or not engaged on the basis of their industrial arrangements.
Labor agrees that unions should not be permitted to interfere in commercial arrangements. Under Labor, there will be no closed shops and no return to a 'no ticket no start' culture.
Under Labor, unions will not be able to interfere in the negotiation of commercial contracts for independent contractors unless with specific and individual authorisation from each individual contractor.
Low-cost dispute resolution for contractors
Labor will develop low-cost dispute resolution procedures for contractors who are experiencing an unfair contract as defined in the Independent Contractors Act. At present, a contractor can only bring a claim in the Federal Magistrates Court. This can cost a contractor at least $5,000 for legal advice and representation for a one-day hearing.
Labor will also be working with state and territory governments to ensure that the dispute resolutions forums for which they are responsible are promoted and easier to access by contractors.
1 October 2007
Ken Phillips
Executive Director
Independent Contractors of Australia
PO Box 2191
Oakleigh VIC 3166
Dear Ken
We refer to an article in today's Australian Financial Review titled 'Labor Pledges to Bar Union Control of Contractors'.
In the article ICA Chairman Michael Kelson refers to a question put to Julia Gillard on 1 August 2007 about sections 799 and 800 of the Workplace Relations Act 1996 (Cth). Mr Kelson is reported as saying that Labor has failed to provide the ICA with a response to that question.
On 1 August in the question time of a lunch attended by almost 300 people, Julia Gillard was asked a question by Michael Watt from Freelance Global about Sections 799 and 800. Julia indicated she would take that question on notice and we can only presume this is the question to which Mr Kelson refers.
Whatever the origins of the question, we are happy to answer it as Labor has been happy to answer questions formally put by the ICA.
Sections 799 and 800 of the Workplace Relations Act are concerned with protecting the rights of independent contractors to do business with employers without interference from third parties. Specifically these sections deal with freedom of association issues.
In Labor's industrial relations legislation there will be strong freedom of association provisions.
Labor's policy is that independent contractors are small businesses which should be regulated by commercial law and not industrial law and that contractors should be supported and should be given fair opportunity to access work.
Labor believes unions should not be permitted to interfere in commercial arrangements involving contractors and the key tenets of freedom of association should be respected at all times.
Our Forward with Fairness policy expressly states Federal Labor's view that:
- all workers should be free to decide whether or not to join and be represented by a union, a choice which must be respected;
- it should be unlawful for anyone to try to stop a working person exercising this free choice by threats, pressure, discrimination or victimisation;
- working people must not be discriminated against because of the nature of the industrial instrument that covers their employment; and
- freedom of association is vital for the proper functioning of a fair industrial relations system.
Federal Labor has also publicly clarified our position in relation to right of entry, genuine non union bargaining, agreement content and bargaining fees.
As we have stated publicly, under Labor it will not be lawful for agreements to contain clauses which involve matters such as union preferences or union bargaining fees nor for agreements to prescribe that contractors be engaged or not engaged on the basis of their industrial arrangements or the union membership or non-membership of their employees.
Federal Labor understands the importance of independent contractors and small businesses to the Australian economy. We have a dedicated Shadow Ministry for this important group of working Australians. We look forward to an ongoing dialogue with the sector into the future.
Yours faithfully
Julia Gillard MP
Deputy Labor Leader
Shadow Minister for Employment &
Industrial Relations
Shadow Minister for Social Inclusion |
Craig Emerson MP
Shadow Minister for Service Economy,
Small Business & Independent Contractors |
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