Defining Self-employment

This has been an unusual Christmas/New Year ‘break’ for us. We’ve needed to keep working!

The reason is the looming outlawing of your/our legal right to be our own boss/es—that is, to be self-employed. This is a real live threat, the likes of which have never been seen before (since Federation at least).

We explained this in our ‘double-cross, Trojan Horse’, news alert before Christmas (14 December). Supposed ‘independent’, ‘small business-aligned’ Senator David Pocock was at the centre of this legislative small business attack—not a very nice Christmas present at all. Senator Pocock has enabled the passage in the Senate of a section in the government’s Loophole Bill which gives union ‘delegates’ intrusive control over small businesses. This flags a massive much larger assault in the pipeline for small business people. Yes, this means attacking you!

We’ve now written to Senator Pocock explaining our position and asking him to be ‘upfront’ about his intentions. We’re publishing this for anyone to read. Sorry, it’s a bit long.

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4 January 2023

Dear Senator Pocock

You are no doubt aware of our criticism of you, posted on our website on 14 December 2023. This criticism relates to your central and critical role in working with the Labor government to pass a highly controversial section of the Loophole Bill on 7 December 2023.

The objectionable content

That now-passed section gives designated union representatives extensive legal ‘rights’ to interfere in (and based on our experience, to effectively control) any Australian business. This includes even small businesses where the individual person running their own business employs only one person.

This legal right—gifted to one person to interfere in and effectively control the business management decisions of another person—comes with no responsibility or consequences for the person who has been allocated that controlling right.

This is an extremely dangerous law which destroys a key notion of legal responsibility in our society. People running their own small business or even people running large businesses have imposed upon them onerous, personal obligations and direct personal responsibilities for their actions or failures. The law which you have enabled gives effective controlling power to one person (a union delegate) to require actions of another person (the business person/individual) who then carries the responsibility for the consequences.

The immediate consequence of this is the defilement of a core principle of justice in our society—namely, that individuals are responsible for their actions.

We have to ask: where in any section of the Bill that has been passed are union delegates held liable and responsible for their actions?

On the practical level, law which grants power without responsibility attacks a core motivational trigger in our society—namely, the ability and willingness of individuals to get off their tail/s and start a business of their own and then run it.

People who have ever been in business for themselves work hard, put everything ‘on the line’ to pursue a vision, a belief to better themselves and their loved ones. To do this they must have clear control within the scope and framework of the laws with which they must comply. But where a law imposes not just legal parameters, but an overseer with the power to micro-dictate decisions, the pursuit of that vision has a noose placed around its neck. And that leads to corruption.

Why does corruption occur? Because when third parties have control or partial control of a business and those third parties bear no responsibility for their control, then the third party will expect, demand and induce ‘pay offs’ from the people running the business. To suggest that this does not occur would reflect naivety about the reality of human behaviour.

Senator, it may be that you have another explanation for your support for this law that you created on 7 December. Maybe you have another perspective. But we think it reasonable of us to make it clear to you why our criticism is so strong.

But there is also another element to our criticism. This second element concerns the process that you followed to effect the passing of the split Loophole Bill on 7 December 2023.

Breach of trust

You will be well aware of the following:

• After the introduction of the Loophole Bill in early September 2023 you were instrumental in having the Bill referred to a Senate Inquiry. We congratulated you for this.
• You were active in the Senate Inquiry process.
• Further, you conducted your own extensive consultations which were heavily focused on small business issues. We took active part in a number of those consultations. We congratulated you on this.
• On 6 November 2023 you moved to split the Bill to seek to pass ‘uncontroversial matters’. We congratulated you on this. The split Bill passed in the Senate with the support of the independents. The government rejected the split Bill in the House of Representatives.
• The Senate Inquiry is due to report in early February 2024.

The events outlined above generated an expectation that the Loophole Bill would be subject to further consideration once the Senate Inquiry had reported in February. In fact, it is our understanding that Senate convention is that consideration of Bills waits until after Inquiry reports have been released.

Without warning, on 7 December 2023 you sided with the government to pass the new ‘split’ Loophole Bill that included the union delegate ‘right of entry’ we refer to above.

If you had been successful in passing the split Bill that you attempted on 6 November, we would have been full of praise. But the inclusion of the ‘right of entry’ provisions destroys any capacity for praise to which you would have been entitled.

By supporting the section on ‘delegate rights’ on 7 December you have, from our perspective, severed any trust we feel we can have in you to follow the consultative processes that you yourself were instrumental in establishing.

What you have signalled, from our perspective, is that:

• The Senate Inquiry process was pointless.
• The Senate report will be pointless.
• The consultations you conducted with small business were pointless and meaningless.

Senator, you are perfectly entitled to make decisions as you see fit. You have that power and parliamentary capacity. We accept and acknowledge that in your consultations you have diligently asked questions and sought information. And in our experience you have mostly stayed mute about your views on the ‘contentious’ issues. That is also appropriate during consultations and is (again) your right. Where your view became clearly known was in your actions on 6 November when you sought to pass certain ‘uncontroversial’ elements of the Loophole Bill. However, the passing of the highly controversial ‘right of entry’ provisions was, in our view, a blind-siding of small business people.

You will be aware that you have been referred to in The Australian as a ‘Trojan horse’. Certainly the Labor Party has a long history and is adept at presenting ‘headlines’ on issues deflecting analysis from the true effect of a Bill. Your apparent silence on the union delegate ‘control’ of business issue has us puzzled. What are your reasons?

It is for this reason—the collapse of our trust in the consultative process with you—that we are now placed in a position where we must make a decision.

Your next steps

We must assume that you will likewise blind-side small business and the Australian community and pass the balance of the Loophole Bill—that is, the rest of the controversial sections of the Bill.

We believe that you are well aware of our strong objections to the balance of the Loophole Bill. In our briefing papers supplied to your office and in our submission to the Senate Inquiry we have made it clear that the following sections of the original version of the Loophole Bill are objectionable and should be rejected.

Specifically, this means rejecting:

• 15AA (Page 113) Determining the ordinary meaning of employee and employer
• 15H (Page 123) Meaning of services contract
• 15 L (Pages 126 to 128) Meaning of digital platform work
• 15 P (Pages 126 to 128) Meaning of employee-like worker
• Part 16 (Pages 128 to 139) Regulated workers – Road Transport
• Chap3A (Pages 131 to 190) Regulated worker
• 536JX (Page 153) FWC vs ACCC — Competition law

And we include rejection of

• 15A (Pages 5 to 21) Meaning of casual employee

And that any other sections of the Bill that relate to, or involve implementation of, the foregoing sections also be removed from the Bill, as they will become redundant once those sections are removed.

Senator, our calls for the rejection of these sections is based on the fact that to pass these sections involves a complete dissolution of fundamental underpinnings of how the Australian economy is regulated. That is, they remove the clear and necessary distinction between industrial relations law/regulation on the one hand and commercial/competition law/regulation on the other. These sections of the Bill are not some mere ‘tweaking’ of industrial relations law. They do not ‘protect’ small business people, but rather legislatively remove the right to be a small business person. These sections follow the axiom that to ‘protect the village it is necessary to destroy it!’

In our papers and submissions, we have made it quite clear how small business people, including self-employed independent contractors, need and can be afforded further protections. We believe actions on the items we have raised should be policy and law.

Senator, given that we have no idea where you stand or are likely to stand on the Loophole provisions (above) that we oppose, we believe it responsible of us to ask if you would be interested in providing us your views/positions. Our engagement process with you to date has been, for the most part, constructive and appreciated. But, as stated, that trust has recently been broken for the reasons we stated above.

Passage of the sections of the Bill we highlight above would, in our view, constitute a betrayal of Australian small business people and demonstrate an anti-small business stance.

Given that parliament is due to resume in early February 2024, we are looking to make decisions on what we need to do by mid-January 2024. The timelines are tight.

We send this correspondence to you as a public document that we will publish on our website.

With thanks for your considerations.

Ken Phillips
Executive Director
Self-Employed Australia

 

Breaking news: The Albanese government has finally bowed to common sense and split the Loophole (IR) Bill into two sections. Today (7 Dec 2023), independent Senators David Pocock and Jacqui Lambie secured a deal to pass some parts of the Loophole Bill.

Senator Pocock’s media release states that the agreed changes are as follows:

• Make it easier for First Responders to access workers’ compensation for Post Traumatic Stress Disorder from 1 January 2024 …
• Enhance protections for people experiencing family and domestic violence …
• Expand the functions of the Asbestos Safety and Eradication Agency to include silica …
• Ensure employees of large companies don’t miss out on redundancy entitlements as a business downsizes due to insolvency …
• Close labour hire loopholes consistent with amendments to the legislation that passed the House of Representatives …
• Criminalise intentional wage theft and the non-payment of superannuation, …
• Ensure industrial manslaughter becomes a criminal offence …
• Ensure health and safety representatives can access workplaces …

The issues in this (now) Part One of the Loophole Bill are essentially the ones which the Senate had agreed to in November but were rejected by the government who insisted that the entire Loophole Bill be passed. The Albanese government has now flipped. The only section not agreed to in November and now included is the labour hire bit!

Big business organisations have heavily criticised the passing of the labour hire provisions. We haven’t studied these clauses and therefore make no comment.

But putting labour hire issues to one side, congratulations must go to the independents in both the Senate and House who have argued to pass some of the Bill, as is now the case.

It’s also fair to recognise the constructive role of the Coalition. It could have taken the attitude of allowing the entire Loophole Bill to pass and letting the economy tank as a result. Some political strategists would argue that such an approach is good politics. In other words, letting the government make a real mess of the Bill would be a pathway to electoral success for the opposition. To its credit, the Coalition hasn’t done this and has put its assessment of policy above crude politics.

The rest of the Bill will now be debated/negotiated next year when Parliament resumes in February. This includes the key issues we have asked the independent Senators to reject.

These issues are in the remaining part of the Loophole Bill and include the following (with links to our position papers):

• Overturning common law—High Court rejection.
• Turning self-employed people into employees.
• Trashing casuals’ incomes.
• Attacking owner-drivers.

These parts of the Loophole Bill are small business destruction items that deny Australians the right to be their own boss.

Further, they are a direct attack upon the fundamentals of competition that underpin our economy. When you destroy small business, you destroy competition. We put our view on this in response to Senator Pocock’s Questions—Competition/Big Business.

The next phase will be the ‘battle’ early next year over the issues that concern us—namely, will small business people be allowed to exist? Will the right to be self-employed be respected? Will the common law and common sense of the High Court be respected? These are the things we seek to defend.

This is to provide you with an update on the state of play with the Albanese government’s Loophole (industrial relations) Bill.

Last week we provided you the link to my video evidence (on 10 November) before the Senate Committee looking at the Bill. It’s not quite riveting, Oscar-winning viewing, but the interchange between myself and ex-Transport Workers’ Union career official, now Senator, Glenn Sterle could have put us both in the running for an Oscar nomination perhaps? Um!

But back to reality! To summarise:

• The day before I gave evidence, independent Senators Jacqui Lambie and David Pocock moved motions in the Senate (on 9 November) to extract the OHS items from the massive Bill. These covered redundancy issues, anti-discrimination, asbestos safety and first responders coverage. (We support these and have said so.) The amendments were supported by the Libs/Nats and other independent Senators and passed.
• Last week (13 November) those amendments went to the House of Representatives with the government voting against them. That is, the Albanese government blocked the implementation of these vital OHS protections. The outcome is a stalemate at this stage. The government insists on passing the entire Bill as a block and has been accused of using the OHS issues to leverage the passing of the government’s aggressive industrial relations agenda. This includes the self-employed, small business destruction parts that we strongly oppose.
• Parliament isn’t sitting this week but returns the week after (from 27 November) for two weeks before Christmas. I’ll be back in Canberra ‘walking the halls’, talking with parliamentarians and their advisory staff.
• The Senate Committee has finished its hearings and will now prepare its report to be presented on 1 February 2024. Normally the government controls the numbers on committees and a majority report favouring the Bill could be expected, with a minority report making criticism. But that’s speculation on our part.
• Parliament resumes on 6 February with five sitting weeks from then until May. It’s impossible to tell what will happen, but if the stalemate continues (that is, the independent Senators wanting the amendments and the government refusing to pass them) the Bill could drag on well into next year. Again, that’s speculation.

However, there’s a lot of work for us to do. Following my Senate Committee appearance, we’ve received a request from the Committee secretariat asking for responses to follow-up questions from Senator Pocock. These are:

1. You warn that this Bill will damage competition and result in a concentration of power in the hands of big business. Can you explain your concern for the fate of small business and competition in Australia in relation to this Bill?
2. Does this Bill impose any risks on the viability and autonomy of relatively well-paid independent contractors?

The reply is due by 27 November. What’s great is that what we are saying is being taken seriously. But we need to demonstrate and seek to prove our case. And isn’t that exactly what a parliamentary democracy is supposed to be about?

We’ll keep you informed.