Self Employed Australia

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“Everyone needs an Advocate”

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Should gig workers like Mick Jagger, Beyoncé and Harry Styles be worried?

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In late April, we alerted you to the new Australian Taxation Office (ATO) reporting rules for gig workers. We had some queries asking, “what are ‘gig’ workers?” That’s a pretty sensible question.

Last week I posted the answer on Substack. You can read ‘To Gig or Not to Gig’ (it’s free!)

Yes, icons of global popular culture such as Mick Jagger, Beyoncé and Harry Styles are all gig workers.

And (believe it or not) gig work is even older than Mick Jagger! Wow! I wonder if Mick’s eight children—particularly his youngest child, six-year-old Deveraux—would realise that Mick’s a gig worker? They probably wouldn’t care…

But the ATO does care about who is a gig worker. And the Albanese government, under Minister Burke, wants to kill off gig. But we assume that it wouldn’t give PM Albanese any ‘Satisfaction’ to attack Jagger, and anyway ‘You Can’t Always Get What You Want’.

But the ATO is really looking at this as a Satellite issue (apologies to Mr Styles).

What the ATO is focused on is the type of gig work that’s done through platforms. No, not the ‘stage’ platforms that Mick, Beyoncé and Harry work on, but the ‘tech’ platforms that Uber and other such companies use to organise work. The ATO calls it the sharing economy.

What the ATO wants to do is track your income if you work as a ride-share driver, rent out your flat/house/room for short-term accommodation and so on. The ‘platform’ companies will be required to report your income to the ATO starting on 1 July 2023 (i.e., soon!) The platform companies will require information from you, notably your:

  • ABN and business/trading name (where applicable);
  • first, middle and surname/family name (for individuals);
  • date of birth (for individuals);
  • residential or business address;
  • email address and telephone numbers; and
  • bank account details.

But we suspect they’d have all this information anyway. The ATO has provided a detailed explanation here.

And just to ensure the message gets through, to steal a line from Beyoncé, these new gig reporting rules also apply to Single Ladies! (But presumably won’t apply if you’re still in nappies.)

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.

‘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.

Deliveroo decision is NOT a win for unions. Just normal stuff!

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There’s a lot of excitement coming from the union movement over the recent ‘Deliveroo’ decision. ‘This is the end of gig’ they say.

They are excited because the Fair Work Commission (FWC) has declared that Deliveroo food deliverers are employees and not independent contractors.

However  there’s nothing at all unusual about the decision. In 2018, a similar company to Deliveroo, the German-based Foodora, left Australia after its delivery people were declared to be employees. Conversely, in April  2020, Uber Eats delivery people were found to be independent contractors not employees.

You might ask, ‘is there some inconsistency here?’ Well, no! In fact the FWC (and the courts) are being entirely consistent. What the law requires is the application of the standard common law tests to distinguish an employee from a self-employed person.

The process involves considering up to about 20 or more factors such as: Did the worker have to work certain times? Was the worker ‘required’ to work? How was the worker paid? The task at law is to look at all the  factors and give an overall assessment.

Even though Foodora, Deliveroo and Uber Eats appear to do the same thing—organise riders to collect food from restaurants and deliver the food to customers at home—in fact they each have different contracts and manage the process differently. That’s why the rulings differ.

I’ve examined both the Deliveroo and the Uber contracts. I’m not surprised by the Deliveroo decision. There are major operational differences between the companies. The fact is that the Deliveroo decision supports the legitimacy of the gig economy.

In 2006, Federal legislation secured across the country the ‘common law’ test for employee vs contractor determinations. The Independent Contractors Act followed on from a 2006 International Labour Organisation declaration which secured the right of people to be self-employed. Australia is a signatory to that international obligation.

Further, Australia has done more than any country to protect and defend self-employed people.

The Independent Contractors Act has unfair contract provisions. In addition, we have specific Federal unfair contract laws for small business people that are currently being ‘beefed up’. Then there are the current moves to create pay-on-time laws for small business people. The JobKeeper and JobSeeker benefits were made immediately available to self-employed people during 2020.

At the same time, there is no tolerance for sham contracting, with specific laws against that practice.

These Australian protections for self-employed independent contractors are world-leading.

But this regime that protects the right to be self-employed is hated by Australian unions and labour in general. They run scam media plays trying to boost the argument that self-employment is on the way out.

This ‘we hate independent workers’ movement is deeply embedded in Australian Labor.

The Victorian government is proceeding with an agenda to kill off self-employment. But Victorian Labor’s plan is confronted by the Independent Contractors Act which overrides state laws on the issue. This then explains the hype around the (very normal) Deliveroo decision.

Labor is eager to turn ‘gig’ into an election issue. But it’s up against the most advanced package of self-employment protections in the world. Labor’s agenda threatens those protections.

Regulation-lovers with a ‘solution’ desperately seeking a problem—Gig it!!!

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Monday, August 05, 2019

Since the Global Financial Crisis, unemployment has dropped to low levels in most of the developed world at least. That’s fantastic. It needs to continue.

One of the important factors in this positive trend seems to be the evolution of work arrangements that enable quick responses to fast-moving markets and consumers. Flexible work creates work! But this gets regulation-lovers worried. They reckon that if work isn’t controlled through government regulation, there’s got to be something wrong. Currently their focus is on the so-called ‘gig’ economy. Apparently, it’s a big ‘problem’ that needs a solution.

We’re intensely interested in the ‘gig’ issue because ultimately the regulation-lovers’ push is about squashing the right of people to be self-employed. And that’s a right that we love!

There are heaps of inquiries and reports. As examples, there are questions over Uber (ride sharing), Facebook, AirBNB and so on generating big media coverage. But here’s a core question. Just how many people are earning their income through ‘gig’ engagement’? How big is the issue?

We’ve pulled together data from reliable sources covering the United States, the United Kingdom and Australia. Here are the summary tables.

Get this. For all the big noise about the ‘gig’ economy the number of people using ‘gig’ engagement as their income source is tiny. The stats show that:

  • Only 1 to 1.8 per cent of workforces are involved in ‘gig’ work but, of those,
  • 0.63 per cent to 0.88 per cent are in fact ‘regulated’ employees.

And significantly

  • For 56 per cent, gig work is less than 15 per cent of their income. (UK)
  • 69 per cent earn less than £1,000 a year from gig work. (UK)

The results are similar in the USA and Australia.

That is, for the bulk of people using gig engagement, it’s pocket money or top-up ‘nice-to-have’ income, but not core income.

But it’s important also to distinguish between ‘gig’ and other self-employed work. The Centre for Research on Self-Employment (CRSE) in London has produced a great research report on this. The report looks at the freelancer side of self-employment and finds that:

  • 85 per cent of freelancers undertake project-based and ‘portfolio’ work.
  • Only 15 per cent are gig workers.

This is consistent with our summary table.

What’s more, CRSE identifies that the freelance sector generates some £140-145 billion of economic output for the UK economy. It’s major stuff. Here are some key extracts from the CRSE report.

An important finding by CRSE identifies skills as the key issue relating to income levels, not the nature of the contract:

…high skilled gig work generates higher quarterly income than equivalent employee work. It seems that skill rather than the nature of the employment contract is the most important determinant of a worker’s income…

Why are we concerned? Too often we’ve seen attempts by worker regulation-lovers to use ‘invented’ problems to try and kill off self-employment. It’s a campaign that’s been ongoing since around the 1990s. Its current rebirth is ‘gig’ focused.

Regulations are needed for real problems. But let’s not invent problems. We want a fact-based debate. Self-employment in its many forms—freelancing, gig, traditional shop-keeping, trades and so on—all make an important mix for job creation, economic activity and personal income creation. Let’s not kill off the good stuff!

Reflections on an incompetent ATO—ABNs & Gig stuff

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Friday, June 28, 2019

Earlier this week we discussed the history of Uber in its global legal battles to have its drivers accepted as independent contractors. The Uber battle is at the forefront of the gig ‘question’.

Today we focus on the Australian Taxation Office and its incompetence (from our experience) in assessing employee vs independent contractor status. The ATO should learn from a significant Uber legal decision in Australia. It probably won’t though

The issue is important because the ATO has the unrestrained power to destroy the business of self-employed individuals simply by denying individuals their Australian Business Number. It can do this by declaring an independent contractor to be an employee.

This is because under the ABN legislation a person is entitled to an ABN if they are ‘carrying on an enterprise,’ a business being a ‘Profession, trade, employment, vocation or calling.’ But a business does not include an occupation as an ‘employee’.

Under this definition, self-employed people should easily qualify for an ABN because the definitions are so broad, intentionally so we believe. However, the ATO can legitimately deny a person an ABN if the person is an employee at common law.

We have sighted ATO assessments of ‘employment’ when the ATO has denied or withdrawn people’s ABNs. The ATO did this to some 17 individuals in late 2017. The story of the case is here. The ATO was eventually pressured into returning the ABNs to these people.

We have sighted the ‘employment’ assessment done by the ATO in this case. On our assessment the ATO’s process was amateurish and incompetent at best and at worst was manipulated by the ATO to achieve its predetermined view that the independent contractors were/are employees. By these actions the ATO strips itself of its legitimacy.

One of the ATO’s current obsessions is the gig economy and an apparent determination to deny that gig platforms legitimately use self-employed independent contractors. If the ATO is to have legitimacy in this area, it must demonstrate that it follows proper common law processes in undertaking its assessments.

Fortunately, there are some authoritative recent Australian examples that the ATO should replicate if it is to have legitimacy in this area. We present and analyse the major Uber case here.

Will the ATO fix its incompetency? On past experience, probably not.

Hysterical reaction to Uber (gig) drivers not being employees. ATO wake-up call

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Tuesday, June 25, 2019

Earlier this month the Fair Work Ombudsman released a statement that, after a two-year investigation, it has concluded that drivers working through Uber are not employees.

The Transport Workers Union described the decision as ‘…devastating for workers in the gig economy’. One academic said the decision was ‘very disappointing’.

We disagree. The Fair Work Ombudsman’s decision is consistent with a highly detailed investigation and legal ruling on Uber drivers by the Fair Work Commission in December 2017.

We have a message for the labour movement and its apologists: Wake up! The world has changed. By their actions people demonstrate that they want to be independent and control their own working lives. The worker vs bosses war is irrelevant to most people. Read the tea leaves from the recent federal election. You’re flogging a horse that will kick you! Our message is equally directed to the Australian Taxation Office: We reckon that you’re breaching the law!

So, after getting our ‘rant in reply’ out of our system, let’s look at the facts.

There’s a big push from the Victorian Labor government, the unions, some academics and many in the federal bureaucracy (particularly the ATO) to clamp down on or stop the gig economy. They have similar motivations in our view. They don’t like, understand or accept that independent work can actually exist. They are obsessed with controlling all work.

But independent work is a legal, economic and behavioural fact discovered and found in clear, established processes of investigation. There is no mystery or confusion about this. Unless it’s confusion created by those who want to stop it. (Oooops. I think we are still ranting!!!)

The Uber decision matches those facts. Proper investigative process was followed by the Fair Work Commission and, it would appear, the Fair Work Ombudsman. On the basis of the facts, Uber (gig) drivers are engaged in independent work.

It’s important to base analysis on facts. We’ve put together an analysis of the facts and issues relating to the Uber/gig economy issue. It covers:

And we have a message for the ATO. In our experience the ATO demonstrates gross incompetence in its investigations and analysis of who is an ‘enterprise’ for the purposes of ABN allocation. The ATO needs to learn from the Fair Work Commission and the Fair Work Ombudsman and become competent in this area.

The gig economy is under attack—from people who seemingly don’t care about the harm they do

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Wednesday, October 17, 2018

I was in an Uber the other day and got talking to my driver. He was a Sikh. We had quite a conversation about his religion and the importance of it to his everyday life. I’ve never met a Sikh before! He was most interesting. I asked him why he drives Uber. His response was quick. He loves being his own boss. He can make his work fit around his family commitments.

My Sikh driver reminded me of why we at Self-Employed Australia have been doing what we do for almost 20 years. We’ve been defending the right of people to be self-employed. We’ve seen attacks from many directions. The attackers always seem to argue that somehow ‘we’ are being exploited. They can’t seem to contemplate that in self-employment there is economic liberty and freedom! My Sikh driver knows and lives that reality.

Now we are witnessing a renewed attack. This time the new ‘evil’ is the gig economy. We first discussed this in August this year. This ‘gig’ attack is just another of many attacks we have seen that ‘squeezes’ self-employed people through regulation.

On the basis of our experience and analysis, the outcomes sought in these current attacks are clear. The ‘anti-self-employed’ antagonists want to impose ‘sham employment’.

It looks like we have another long and hard counter-campaign on our hands!

Join us in the campaign. Your membership contributions help us maintain the fight. Join here.

It’s the gig economy, stupid!!

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Friday, January 19, 2018

Technology is crushing traditional jobs. The command-and-control factory is being replaced by robots. Banks are rapidly removing pen-pusher jobs by the tens of thousands!!! For those with an economic bent, the Milton Friedman-type assumptions about how an economy operates are dead!

What’s taking over is the ‘gig’ economy. But what is it?  It’s pretty simple really.

Traditional jobs (Friedman assumed) involved an employer having a legal ‘right to control’ an employee. The gig economy does away with this wage-slave-like setup. Instead, the contractual relationships are entirely commercial. The on-line business platforms that facilitate this are many. For example, Uber (ride sharing), Airbnb (accommodation), Amazon (manufacturing and retailing), Airtasker (home and other services) operate like stock markets.

The platforms connect people wanting something (for example, to buy shares) to people delivering something (for example, selling shares). The platforms facilitate and manage the commercial transactions including invoicing, payments and so on. Every transaction is commercial.

If you’re scared of this, well, move over and crawl into a hole!!! Some people claim it’s a crisis and we have to regulate this quickly as if its employment.

But other jurisdictions are being positive:

And, in a major development, the Australian Fair Work Commission has just declared an Uber driver to not be an employee. This makes sense.

The importance of properly approaching the gig economy cannot be underestimated. To fail to embrace it is to be a wrecker of opportunity and an oppressor of people.

This is one reason why we attacked the Australian Taxation Office hard late last year over its removal of Australian Business Numbers from 16 gig economy workers. Yes, we were damn angry with the stupidity of the ATO and succeeded in having the ABNs reinstated. Now that were a bit calmer, we’ve summarized the ‘transcribers’ case here.

And we’ve just added a new piece about how this transcribers case relates to the gig economy.

Remember, this ATO-style attack can happen to anyone. The ATO has gone rabid on this. You need protection. Check it out here.