Self Employed Australia

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“Everyone needs an Advocate”

The Gig Economy

To gig or not to gig. Is that the question?

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pub-gigIf you’ve ever been to a pub gig, you’ll have taken part in what the Albanese government wants to (effectively) close down. The Albanese agenda is starkly clear after Workplace Relations Minister Tony Burke declared the ‘gig economy’ is a ‘cancer’.

Here’s a simple example of why we strongly oppose the Albanese/Burke agenda.

The gig economy is not something new. The Stones, Cold Chisel, AC/DC all did and/or do ‘gigs’. Gig is the contractual lifeblood of the entertainment industry locally and globally.

A gig is pretty simple. There’s a contract for a set price to do something. “Come to my pub. Play for three hours and I’ll pay you a thousand bucks”, says the pub manager. “Done”, says the singer. The singing done and the money paid. End of contract.

Somehow, for the Albanese government this is a ‘cancer’.

However, this familiar entertainment industry ‘gig’ model has taken new forms. Now gig work is available for ride-share, food delivery, aged and disability care, and odd jobs. The list goes on. And, yes, the entertainment industry has gig platforms. Gigsmash is but one.

What’s happened is that online technology has made gig work secure. Gig platforms enable anyone wanting to do a job to connect with someone needing a job done. The revolution is that job specifics and price are upfront and agreed by the parties. The gig platforms also make the payments and enable both the ‘doer’ and the ‘receiver’ of the service to rate each other.

It’s fantastic. The risk of not being paid is massively reduced. Think of how many times a pub manager has failed to pay the full amount agreed, screwing over the worker (singer)? It’s the security of payment and security and clarity of the gig work agreement that’s made this expansion of gig work so seemingly popular. And it’s all happened without government sticking its nose in!

But Minister Burke has promised to create laws that will require gig workers to have holiday pay as one eample.

So the pub manager will have to pay holiday pay on top of the $1,000 agreed. How is this to be calculated? Holiday pay is for full-time employees who’ve worked a full year. How is this to be calculated for 3 hours work and no more? Ouch! That has heads scratching! But let’s say it’s $10. It’s clear what will happen. The pub manager will only agree to $990 for the gig. $10 will have to be held back.

But when does the gig singer get the $10? Does the singer determine when it’s ‘holiday’ time or does the pub manager decide? Sounds like a recipe for scamming! So will Albanese/Burke then set up a massive new government-run department to manage gig workers’ holiday pay? Will the singer need to apply to the government for the $10?

But there’s more. Around 830,000 Australians do gig platform work in any year. But only 22,000 use gig for their full-time work. In other words, around 810,000 Australians (about 7 per cent of the workforce) only use gig work as part-time top-up work. How is gig holiday pay to be calculated for all these part-timers?

Whatever Albanese/Burke do, it’s destined to be a mess. The proposal/promise is illogical. It doesn’t fit the reality of how people work. It’s dumb. Its dangerous. It will do much harm.

We will keep arguing against this.

Apparently we’re a ‘cancer’ according to the Albanese government

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cancer-aged-care-gigWorkplace Relations Minister Tony Burke recently called gig work a ‘cancer’. Give us a break! What a ridiculous overstatement.

Let’s get real. Only 0.19 per cent of workers earn their full-time income through gig platforms. Yes, 0.19 per cent! That’s it. But, on the back of this cancerous depiction of gig work, the Albanese government intends to clamp down on it.

People who do gig work are, by definition, self-employed. Attacking gig means attacking self-employed people. Burke’s comment is insulting to self-employed people.

But if we’re going to apply such politically emotive language to policy analysis, where’s the real ‘cancer’?

Take the aged care sector. This is one sector Minister Burke identified as having a (cancer) problem.

The 2020–21 Royal Commission into Aged Care exposed abusive treatment of people in aged care. It was and is a massive scandal. The Royal Commission recommended that self-employed people and gig work be banned from aged care.

However, the Royal Commission offered no evidence as to why self-employment/gig should be outlawed. Was it because self-employed people abused elderly people? The Commission was silent. The fact is, however, that 96 per cent of people working in aged care are direct employees of aged care providers. Surely this overwhelming percentage would suggest that the problem lies in employment, not with self-employment/gig.

Facts speak louder than assumptions.

Care workers in aged care are on rock-bottom low wages. This leads to high worker turnover and lower quality care. Low pay rates occur because the award minimum pay rates, in practice, are the maximum being paid.

But the evidence is that the 4 per cent of workers in aged care who are self-employed are routinely paid more than employees. This evidence, which is accepted as valid, comes from Mable the largest gig platform operating in aged care. The higher rates occur because the self-employed workers are free to negotiate their remuneration directly with the people they care for. This doesn’t happen with employees.

The Commonwealth funds aged care. But there’s evidence to suggest much of that money disappears into a black hole. Look at these facts.

Funding for the top level in-home care is around $114 per hour. Aged care ‘providers’ are overwhelmingly not-for-profit charities and manage the money. They pay their ‘employed’ award workers roughly $32 an hour (casual). Add workers’ compensation premiums and so on and the cost is $35 an hour. The providers routinely charge another 32 per cent ($36 an hour) for their services of assessing and monitoring need, and organising workers.

There’s a gap, therefore, of $43 an hour of unexplained and unaccounted Commonwealth funding. What’s going on?

This month, media leaks from a yet-to-be-released Health Department report state that 9-in-10 in-home care providers don’t meet minimum government price transparency requirements. Some 275,000 older Australians receiving government-funded home care can lose up to 60 per cent of their allocated money in provider fees.

This ‘disappearing’ money is being spent on “excluded items” such as holidays, TVs, renovations and more. Maybe a good portion of this expenditure is justified? But is this where $43 an hour goes?

What is obvious is that the front-line employees doing the care are paid rubbish. Surely within existing funding budgets there is ample room to pay workers more. There’s a lot of fat in the system. Self-employed gig workers individually can and do negotiate higher remuneration. This doesn’t happen with employees.

What really emerges is that it’s the employed 96 per cent of workers in aged care who are being exploited by the ‘employment’ system.

The ‘cancer’ in aged care looks much more like the result of employment management systems than the outcome of gig platforms. In fact, gig-organised self-employment could well be the answer to a sick aged care system.

The Albanese government should take off its ‘cancer’ blinkers. Gig and self-employment offer real solutions, not problems.

Unions and labour lawyers in panic. High Court disaster!

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contract-kingA major High Court decision in February this year has sent unions and labour lawyers into a panic. The High Court declared that when deciding whether a worker is an employee or self-employed that the written contract is king!

We’ve waited until we received detailed legal analysis of the decision before making comment, which we can now do. We’ll send out several news alerts on this. It’s extremely important.

In simple layperson’s terms the High Court has said that:

  • If a written contract is clear and comprehensive, a court must primarily rely on the written contract in coming to a decision.

This seemingly knocks out what’s been used for the last 40 years or more. Courts have applied the ‘multifactorial’ test, which is a basket of behavioural indicators only one of which is the written contract. The High Court has said that the lower courts have misunderstood the situation and that the High Court has always had the view that the written contract is supreme.

This has sent unions and labour lawyers into a spin. The multifactorial test has been great for lawyers and unions because they could retrospectively examine a case going back years. It is a great source of income for lawyers and has allowed unions to intimidate businesses and self-employed people.

But the High Court has said that it has a duty to create certainty, stating that the multifactorial test:

“… is apt to generate considerable uncertainty, both for parties and for the courts.”

And

“It is the task of the courts to promote certainty with respect to a relationship of such fundamental importance.”

We see this as extremely important. There are 2.1 million self-employed people in Australia. We have a right to clarity and certainty. The High Court has done the right thing by society in its drive for clarity.

But there are others who want uncertainty. This is bad. And the pressure is already coming on the Albanese government to pass legislation to create uncertainty. We will campaign strongly against this.

But first we want to ensure that there is clarity about what the 99-page High Court judgement says.

We’ve prepared the following links for SEA members:

We’ll have more information and comments soon.

‘They’ plan to screw over 2.1 million Australians

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dark-menaceLet’s be clear. There’s a cabal of unions, labour academics and self-interested businesses that are gunning to destroy the right of Australians to be self-employed.

Their strategy is brilliant in its simplicity. They plan to push through new Federal legislation that will throw into chaos the law that defines who is self-employed and who is an employee. This will directly harm the capacity of Australia’s 2.1 million people who are self-employed—people who, by definition, are their own boss.

That’s right. The Australian Bureau of Statistics identifies 2.1 million of us comprising:

  • 1,391,900 self-employed (own boss) who don’t have employees and
  • 805,800 self-employed (own boss) who have employees.

The ‘cabal’ is mostly targeting the 1,391,900 self-employed who don’t have employees. Think hairdressers, owner-drivers, care workers, gardeners, personal trainers, and the massive numbers of IT, accounting (and more) consultants to identify just some. What the ‘cabal’ is calling for is legislation that will strip away your right to be your own boss. They want forced employment.  Such law will also have an impact on the other 805,800 self-employed.

The cabal wants legislation that invents ‘employee-like’ arrangements.

Understand what this would do. It would destroy the integrity of the commercial contract. It would give smart-arse lawyers the ability to carve out and deconstruct the very legal basis of commercial activity upon which our society is based and which defines who is self-employed. It’s a sneak guerrilla attack. But once in place it will have devastating effects.

Legislating to invent employee-like arrangements is to take social or psychological concepts and to fashion law on those concepts. It’s incredibly dangerous for our society. It’s something the High Court seemingly commented against in a ground-breaking judgment in February this year.

The High Court said (See par 44):

The employment relationship with which the common law is concerned must be a legal relationship. It is not a social or psychological concept like friendship.

That is, the employment contract, and its opposite, the self-employed contract are legal concepts. This comment by the High Court was within the context of the most important judgement on the definition of self-employment in 50+ years.

After more than 50 years of legal confusion the High Court said (See par 58):

It is the task of the courts to promote certainty with respect to a relationship [employee/self-employed] of such fundamental importance.…

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The parties’ legitimate freedom to agree upon the rights and duties which constitute their relationship should not be misunderstood.

The fact is that people have a right to determine their contractual (self-employment) relationship themselves. Employee-like legislation would strip away that right. It would create massive uncertainty in defiance of the certainty the High Court says should exist.

Unfortunately, Labor’s federal ‘Secure Jobs Plan is to create ‘employee-like forms of work’ legislation.

Campaign to defend self-employed people: It’s going to be a battle

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self-employed-battleWith the election of the Albanese government, there’s been a frenzy of academic, union and Labor government commentary about how big changes are coming for self-employed people. There’s the:

  • Demonisation of the ‘gig’ economy, as if every gig worker works in some sort of oppressive Dickensian environment.
  • Pushing of ‘employee-like’ independent contractor concepts and of bringing such people into employment regulation.
  • Calls to change the definition of self-employment/independent contracting.
  • Renewed attack against owner-drivers.

Let’s be clear. The Albanese government has stated its intent to implement new, aggressive policies around each of these issues. Workplace Relations Minister Tony Bourke explained on ABC Radio the ‘big shift’ that’s to happen.

Frankly, we (SEA) have been around too long (since 2000) and we are too experienced to fall for the spin that this is to ‘protect’ self-employed workers. These types of agendas have been promoted by the broad Labor movement (unions, ALP, Labor academics) since the 1990s. The agenda is to squeeze the life blood out of people who are, and want to be, their own boss. We know the game.

But this time is different from the last three decades-or-so. With The Greens and at least one independent Senator, Labor has the numbers to push its agenda through parliament.

Their agenda is, of course, damn nonsense and will be cancerous to the livelihoods of Australia’s 2.1 million self-employed people. You won’t know the cancer is there until you start feeling the pain.

However, don’t expect something different from the Dutton opposition. After the Morrison government’s 2019 win, the Coalition demonstrated a brain deadness on small business issues.

  • Yes, it introduced some good ‘pay small business on time’ requirements but didn’t go far enough.

But,

  • It continued to allow the ATO to bully, harass and oppress small business people without any checks and balances.
  • It failed to implement the beefing up of unfair contract laws that were ‘ready to go’. Did it do a deal with the big end of town to put this off?

Now for some balance. While we’re warning about, and will campaign against, Labor’s destructive agenda for the self-employed, there’s some good news.

The upshot is that we have a battle on our hands. The are some positives in the Albanese government’s small business agenda, but also some shockers. We’ll be producing considerable commentary and analysis to explain the good and the bad over the coming months.

Albanese plan to smash Australia’s 2 million self-employed

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election-2022-smashThere’s now clarity on what Albanese’s Labor intends to do to self-employed small business people if elected. Labor intends to attack us.

The ALP Secure Jobs Plan says:

“Labor will extend the powers of the Fair Work Commission to include ‘employee-like’ forms of work…” Labor intends to attack “…new forms of work such as gig work.”

Last Monday (2 May) this was further made clear at an Albanese street-walk rally in Brisbane. The Australian Financial Review reports from the rally that Labor will legislate to invent new law that says that self-employed people are a ‘little bit’ an employee, like being ‘a little bit pregnant’. It’s clear that the policy is directed at giving unions control over gig workers and any other self-employed person they choose to target. Hairdressers, for example!

The policy is a direct lift from the Californian law called AB5, introduced in early 2020. It was a job killer which hit the most vulnerable self-employed people. Think of single mums running their own transcription business from home! Closed down! There are thousands of examples.

The United Kingdom has an old 1986 ‘little bit pregnant/employee’ independent contractor law. This was used by the UK transport union in 2021 to attack gig ride-sharing. It’s thrown commercial contracts into chaos in the UK.

Albanese’s Labor says it wants to do ‘nice’ things such as giving ‘little-bit-employee’ self-employed people access to collective bargaining, superannuation and the minimum wage. But this is a beat-up.

Self-employed people (us) already have easy access to collective bargaining authorised under competition laws. Superannuation is clearly required when an individual, self-employed persons (not structured as a P/L company) works for a business. The Independent Contractors Act requires that independent contractors should not be paid less than employees.

The truth is that self-employed people are protected under commercial law regulations. Think of the unfair contract laws. Albanese’s Labor wants to drag us into the mess of union-controlled industrial relations law. Forget it!

And quite recently the Australian High Court reaffirmed that self-employed people operate under commercial law. The Court also stated that UK-type (little-bit-employee) laws are not part of Australian law.

Further, the International Labour Organisation, a United Nations body, declared in 2006 that national laws should not interfere in the commercial relationships of independent contractors.

The Albanese plan defies international labour rulings and secure (High Court-determined) contract law. It is a repeat of the disastrous Road Safety Remuneration Tribunal introduced by the 2012 Gillard Labor government. This ‘protection’ invention was about to destroy the businesses of 50,000 self-employed truckies before the Turnbull government abolished the Tribunal.

The obsession Labor has with the ‘evil’ gig economy is silly. Only 0.19 per cent of the Australian workforce earned their full-time income through gig work. But Labor is using a near-hysterical, anti-gig campaign as an excuse to attack self-employed people.

It’s clear that if Labor wins government, we (self-employed people) will have a big fight on our hands to retain our right to be self-employed. It’s about our right to decide how we want to earn our living and to control our working lives. Labor wants to attack that right.