Self Employed Australia

"Everyone needs an Advocate"

“Everyone needs an Advocate”

Unfair Contracts

Historic day for small business people – Real unfair contract protections

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unfair-contractToday is historic for small business people and the Australian economy.

Today (9 November 2023) is the start of the new ‘beefed up’ unfair contract laws. These new laws have real ‘teeth’:

  • Businesses that ignore or breach the laws can suffer fines of up to $50 million.
  • Loopholes have been closed to stop businesses getting around the laws by making minor changes to their contracts and so on. The courts have wide powers to close unforeseen ‘loopholes’.

Have no doubt that these laws are a game-changer for small business people. It’s much bigger than most people realise.

And big businesses are responding. If they don’t, they are in trouble. We’re aware of at least a dozen big-name companies who have just released ‘upgrades’ to their standard form contracts.

We’ve prepared a two-page summary of the laws. Read it. You need to be aware of your rights and these protections. We provide a link to the government regulators (ACCC and ASIC) who enforce the laws.

And we think that we are entitled to claim a big chunk of credit for these laws coming into being.

  • We started campaigning for the laws in 2009.
  • It was a long, lonely, persistent seven-year campaign.
  • We were strongly opposed by some of the most powerful Australian big business lobbyists.
  • Success came in 2016 with the first laws for small business people.
  • Now, ultimate success—the laws with ‘teeth’ start today.

Of course, no-one does anything on their own. There was political support from politicians on all sides of parliament. Our huge thanks to The Australian business journalist, Robert Gottliebsen. He’s a champion of small business. But we can say that, without our campaigning, these small business protections would not be in place today.

The full story is here, showing our campaign back to 2009.

This is what we at Self-Employed Australia do. We focus on the long-term and are damn persistent.

We are delighted with today’s historic event.

But now we are focusing on defending your right to be you own boss. It’s staggering that we have to do this. The Albanese government’s Loophole Bill is the greatest attack upon small business people that Australia has seen. Here’s our campaign page.

Tomorrow (10 November 2023) I’m giving evidence before the Senate Committee that is reviewing the Loophole Bill. We’re being quite specific about the sections of the Bill that must be defeated if small business people are to exist in Australia.

Our submission to the Senate Inquiry is here (number 160). It’s big! But the issues are massive.

More soon.

Independent Senators – Your small business future in their hands

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independent-senatorsHave no doubt that the future of your right to be your own boss, to be a small business person, is in the hands of the seven independent Senators in parliament.

On Monday and Tuesday this week I ‘walked the corridors’ of Parliament House, Canberra, meeting with Senator’s advisors and others on the government’s 284-page, highly complex Loophole (Industrial Relations) Bill. I’ll be returning to Canberra several times before Christmas.

We’ve provided you an overview of the Bill and a detailed analysis of how the Bill trashes contract law as defined by the High Court. We’ll be supplying more analysis progressively. But be very clear on the central thrust of this Albanese government Bill.

This is the greatest attack against Australian small business people ever seen. More details below.

What should be happening are proper protections for small business people. One of these is the unfair contract laws. Seriously stronger unfair contract law come into effect on 9 November and, across the board, companies are upgrading their contracts. But government departments are not subject to these laws. That is, government departments can have unfair contracts with small business people and get away with it.

On Monday morning (16 October), independents Senator David Pocock, Senator Jacqui Lambie and MP Allegra Spender co-sponsored a small business breakfast in Parliament. The large room was packed. I had a chance to push this issue.

I put it to the Senators that this must be fixed. A one-paragraph amendment to competition law would stop this double-standards shocker.

Here I am putting this proposition. Senator David Pocock is behind me on the left of the picture.

small-business

But back to the Bill. The consequence of this Bill is that:

  • 2 million self-employed people will be declared to be employees. This will kill incomes.
  • 970,000 people who use gig work for top-up income will have their incomes trashed.
  • 8 million casuals will be forced to be full/part time employees, losing 6 per cent of their income.

For just the casual workers, people on:

  • minimum pay will lose up to $3,062 a year;
  • average pay will lose up to $5,354 a year.

That is, the Albanese government is engaged in a massive attack against people’s incomes.

This is no exaggeration. These conclusions are based on hard analysis of the words in the legislation with clear documentation on what this means. But be alert. The Albanese government is conducting a scandalous misinformation and disinformation campaign to push this Bill through.

We have more detailed explanation papers that we’ll release shortly. You can judge for yourself. We’ve already supplied these to the independent Senators and MPs and they are listening.

In praise of self-employed people – Common sense needed

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Bruce-BillsonFederal parliament sits again for two weeks from Monday, 4 September. We’ll be back there ‘walking the halls’, knocking on the doors of parliamentarians, and ‘selling’ the good news about being self-employed—that is, of people like us who want the right to be our own boss.

The planned legislation to force self-employed people to be employees has not yet been released. We want the Senate to block this legislation. At this stage our advocacy is on concepts plus practical things to ‘protect’ self-employed people.

For example, we want government departments to be subject to the unfair contract laws. Yes, it’s staggering. The laws make it illegal for businesses to have unfair contracts, but it is perfectly legal for government departments to impose unfair contracts on people. Talk about hypocrisy! We are putting it to Senators that unfair contract laws should be extended to cover government departments.

In this aggressive political environment, with all the attacks on self-employed people, it’s super refreshing to read independent comments in praise of the self-employed. Bruce Billson is the Federal Small Business Commissioner. He’s published an opinion piece “Why it’s time to celebrate our hard-working self-employed”.

We’d really like to quote the entire article, but here’s a selection:

Self-employment already allows 1.6 million Australians to earn a reliable income while preserving autonomy and choice.

We need to understand and recognise the difference between self-employed Australians and vulnerable workers. Self-employed people are not vulnerable… there is a risk if we allow that misconception to grow – we will snuff out the flexibility that’s so valued and important to the success of self-employment.

We need to reaffirm the sound and long-standing legal distinction between ‘contracts of service’ and ‘contracts for services’… We already have rules to stamp out sham contractors…

…we must make sure we do not generate legal and compliance confusion by conflating commercial and competition matters with employment matters.

Let’s honour and value self-employed people and independent contractors for mapping out a livelihood that works for them…

Self-employed people make a valued contribution, complement the employer-employee workforce, add agility to the economy that increases productivity, delight customers and clients, and deserve to be celebrated – not strangled.

The Small Business Ombudsman is really just talking common sense. We hope that common sense will win the day over the foreshadowed small business ‘attack’ laws when they come into parliament.

And remember that if you have a small business issue (say a dispute), the Federal Small Business Ombudsman and the State Small Business Commissioners provide great, practical support services.

Here’s our four-page summary of why we oppose the proposed anti-self-employed laws, including the practical reforms we say are needed.

How government can harm people – The Robodebt scandal

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RobodebtWe’re currently studying the report of the Royal Commission into the Robodebt Scheme. The report describes a scandal of huge proportions, in which government inflicted enormous damage on individuals—even to the extent of a number of suicides occurring.

The scheme involved the Australian Taxation Office (ATO) supplying income assessment data to the Department of Human Services (DHS) on some 860,000 social welfare recipients. The ATO data reported PAYG income based on employer returns for specific periods during a year. The DHS then used the income data and assumed that the income from one period of time was income across longer periods of time (say a year). They called this ‘averaging’.

To quote directly from the Royal Commission Report:

“…the way averaging was used in the Scheme was essentially unfair, treating many people as though they had received income at a time when they had not … with the further fiction that they now owed something back to government…”

That is, the income assessments made by DHS based on ATO data were wrong. On the basis of these false incomes, people were sent bills to pay back social security payments they had received.

There is now, of course, a lot of political payback surrounding the issue, much we would observe likely justified. But there is a bigger issue at play.

There is a gross institutional failure in Australia when it comes to government operations being subject to transparency and checks and balance. Much of what are claimed to be ‘check and balances’ is government scamming the people. Take one example.

November this year marks the start of strengthened unfair contract laws for small business people. But government departments are not subject to these laws. That is, Australian governments are not prepared to apply to themselves the same rules which they apply to the community. Australia has a big problem in this respect, and it makes for bad government.

The Royal Commission report runs to over 1,000 pages. When we’ve finished our study, we’ll produce a detailed assessment.

On the issue of contracts, we’ve had a number of people ask us for assistance in devising their own contract or reviewing a contract they have been offered. SEA does not provide legal, accounting or other advice. But we have developed guidelines on contract assessment/construction that many people find helpful. SEA members can access that information here. These give good starting points that can be checked by a lawyer.

Labor to deny self-employed access to protections

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protections-deniedThe Albanese government’s determination to legislate an ‘employee-like’ definition will introduce radical law that will deny protections to Australia’s self-employed people.

The government says that it doesn’t want to create any ‘unintended consequences.’ Whether the consequences of its actions are intended or unintended is irrelevant. Denial of protections is what will occur.

Self-employed people currently enjoy protections from:

Further, Australia has built a system of cheap, quick dispute resolution through the network of state and federal small business commissioners and ombudsmen.

This entire protection system will be thrown into chaos and confusion with the creation of an ‘employee-like’ definition.

This is because self-employed people are regulated and protected through commercial law which is entirely different to how employees are dealt with under employment law.

The government’s agenda will defy decisions of the global protector of workers’ rights, the International Labour Organisation. In 2006 the ILO declared principles which stated that it was necessary to:

  • protect the freedom of independent contractors to enter into services contracts;
  • recognise independent contracting as a legitimate form of work arrangement that is primarily commercial; and
  • prevent interference with the terms of genuine independent services contracts.

These principles are embedded in the Australian Independent Contractors Act.

And more.

On certainty

In February 2022, The Australian High Court made the most important decision on the definition of self-employment in more than 50 years. In its decision the Court stated that:

“…It is the task of the courts to promote certainty with respect to a relationship of such fundamental importance.” (at par 58)

The government’s ‘employee-like’ agenda will create uncertainty, the very opposite of what the High Court says needs to be achieved.

Legal relationship is not social/psychological

The High Court also said:

“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.”

The government wants to turn a social or psychological concept (‘employee-like’) into a legal form through legislation. This defies and erodes the common-law distinction between employment and self-employment which the High Court says must remain distinct.

Bad consultation

The government’s recently announced ‘consultation’ on the issue does not raise or seek to discuss any of these vital issues. This is not ‘consultation’. It is a process of seeking to ram through an agenda that is bad for self-employed, small business people.

We’d appreciate any support you can afford in our campaign to defend the right to be self-employed. It’s important.

Defending the self-employed: 2023 Campaign to counter the creeping attack!

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defendingThere is no doubt that, in the second half of this year, major legislation is going to be pushed through Federal Parliament that will do harm to self-employed people.

We know this because of the government’s stated agenda. In a significant speech to the National Press Club on 1 February 2023, the Workplace Relations Minister, Tony Burke, laid out the government’s wide-ranging agenda. There are four items on that agenda list that we must oppose.

These are:

  • The creation of ‘employee-like’ legal definitions for self-employed people.
  • Limiting the self-employed’s capacity/rights to engage in the gig economy.
  • Imposing business-crushing ‘employment’ regulations on owner-driver truck drivers.
  • Giving the Fair Work Commission power over self-employed people.

Each of these agenda items is presented by the government as a form of ‘protection’ for the self-employed. But in fact these items reduce the right of Australians to be their own boss. There’s the harm.

We have long fought for protections for self-employed people. But these protections can and must come through commercial law and regulation.

The government’s approach on the items listed above is instead a process of denying the full right of people to be self-employed and instead forcing people into employee-like situations. This approach stems from an ideological view that only employment regulation provides workers with protection. This is a wrong, narrow and harmful perspective. Wherever this is done, great harm is inflicted on self-employed workers. Think of the AB5 laws in California which harm truckers and many others. We must try to prevent such harm being done in Australia.

We’re not saying that the Albanese government is all bad on the self-employed front. In fact, we were and are full of praise for its speedy passing of the ‘beefed up’ unfair contract (protection) laws in October last year. This is exactly the model of protection laws that self-employed (own boss) workers need—namely, protections under commercial law. But where the government heads in the wrong direction we need to oppose it.

Today we’re announcing the start of our campaign. This means:

  • Writing submissions (even if not invited to do so).
  • Communicating directly with government advisers and MPs.
  • Seeking support from the Coalition opposition and Senate/House independents.

One thing that we have learnt over many years is that if we don’t go to Canberra and walk the halls of parliament knocking on doors, presenting our views, and raising awareness, then we will not get anywhere.

We’re asking for your $ support. This campaigning costs money. It requires effort, persistence and money. We will put in the effort and the persistence. But our only revenue is from you—our members/supporters.

You can contribute/Join here as a:

  • Full member ($44 a month)
  • Standard member ($22 a month)
  • Campaign member (you choose $)

More information will follow as our campaign unfolds.

PS: You can also follow Ken Phillips through his Self-Employed Aren’t Stupid, Substack postings.

Why we do what we do. No-one should be above the law

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above-the-lawAs I was leaving the court at the close of our most recent Victorian Supreme Court hearing on 4 October over the 2020 Hotel Quarantine debacle, I was asked by a journalist, “why do you do what you do?”

The journalist was observing that, in taking on WorkSafe Victoria, we are taking on the might of the Victorian government. Further, there is no personal gain to be had for anyone at Self-Employed Australia in doing this. In fact, some would argue that in doing so, there may be all sorts of personal risks. And the court action consumes substantial resources with frequently very stressful work. The journalist was curious as to our motivation.

The answer is simple. In an (allegedly) democratic country constrained by the rule of law, no-one is or should be above the law. We are fighting, as best we can, to have that principle of democracy applied in practice. Democracy and the rule of law should not simply apply on election days, but be the living experience, every day, that guides our communities.

It’s like this. Governments make rules that apply to everyone. But far too frequently government excludes itself from those same rules. This happens when legislation specifically removes government from the reach of the law. It also happens when government institutions which regulate and enforce the law fail to, or (worse) refuse to, apply the laws in order to protect themselves or others.

Perhaps one of the greatest historical and enduring battles of human organisational effort is to decide the proper role of government. There are perhaps two broad aspects to the battle.

Some assume that government (by its nature) is always good, always pure and should reign supreme. Further that private enterprise is always evil because of the profit motive. (Yes, this simplistic view was passionately put quite recently in an online consultation I attended with a large government-funded think-tank!)

The counter-argument often put is that government is the source of oppression and must be constrained, reduced and curtailed.

The truth I think, is sandwiched between the two views. There is nothing holy or sacred about either government or private-sector operations. There is just the reality of human behaviour in which both the best and worst of human instincts play out against each other.

The resolution of this problem must be that we have laws that apply equally to everyone. The practices of transparency and accountability must be embedded in law and apply whether individuals work in government or the private sector.

Too frequently, however, government writes itself out of the rules that are written for everyone else, most notably the private sector.

Take this example. This Wednesday past (9 November) beefed-up laws giving protections from unfair contracts came into effect. That’s fabulous. But get this: The laws don’t apply to government departments. So a government department can, for example, engage an IT contractor but impose an unfair contract upon them. A bank cannot do the same thing. The hypocrisy is monumental. It debases the rule of law.

Another example. The ATO recently took submissions reviewing its policy for how it treats taxpayers. But these rules don’t have the force of law. Hypocrisy again. In our submission we challenged the ATO to seek to have parliament pass legislation to enshrine the fair treatment of taxpayers in law.

Our campaign to have the Victorian WorkSafe Authority prosecute individuals and government departments for OHS breaches over the 2020 hotel quarantine debacle, is a campaign for the rule of law. No-one should be above the law. (In case you’ve been following this matter, we’re still waiting for the court ruling.)

Ensuring that these simple principles of transparency and accountability apply equally to everyone is what motivates us. After all, self-employed people are always held accountable for what they do. Perhaps this is why we’re so passionate about equality of accountability.

We’ll have more news soon.

Government report: Don’t destroy self-employed gig workers. We agree

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report-gigDespite the Albanese government’s description of self-employed ‘gig’ work as a ‘cancer’, a recent government report (interim) says that such work and workers should not be ‘stymied’. We totally agree and have made a supporting submission.

The Productivity Commission is a high-powered federal government economic research think-tank. What it says is important.

In its (interim) report it studies and makes recommendations on the gig/platform economy. It says:

Regulation should evolve to meet the workplace relations challenge of innovative new business models, without stymying their potential contributions to productivity.

This is a heap of common sense. We hope the Albanese government takes note. Don’t throw the baby out with the bathwater!!

Our submission makes key points of fact.

There’s no confusion between an employee and a self-employed person:

  • An employee earns income through the employment contract.
  • A self-employed (independent contractor) person earns income through the commercial contract.

This legal fact is supported by research conducted by the International Labour Organisation and by international standards to which Australia is a signatory. Like the Productivity Commission, the ILO says:

National policy for protection of workers in an employment relationship should not interfere with true civil and commercial relationships…

We say that employment-structured firms are under competitive threat from gig/platforms and self-employed people. These firms are marshalling their well-entrenched political power to stop or limit the competition for power. This explains the ‘third way’ push which is on the Albanese government’s agenda.

The ‘third way’ push is highly dangerous. It has been rejected by the ILO and is causing great harm in the UK, for example. We explain this in our submission.

We also say that self-employed people are entitled to ‘protections’ but through commercial regulation not employment regulation. For example, protections are already available under laws covering unfair contracts, work safety, collective bargaining (under competition rules), minimum rates guarantees and dispute resolution.

But there is urgent need to reform the workers’ compensation schemes, for example, to allow individual self-employed people to register directly with the schemes without being forced into ‘employment’. Currently, self-employed people are banned from workers’ compensation, a glaring discrimination.

We explain these issues and more in our submission.

Unfair contracts ‘beef up’ – Big tick for Albanese

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albanese-tickIn our comment earlier this week we heavily criticised the Albanese government for its plans to attack Australia’s 2.1 million people under the con of ‘gig protection’. We will continue to mount that criticism.

But today a huge tick for Prime Minister Albanese and his government. The government is moving with great speed to ‘beef up’ the unfair contract laws. This will give real protections to self-employed, small business people from bullying, unethical big businesses. It’s a game-changer for the economy in ways which few people, we think, would understand.

A brief background:

To the credit of the Labor Party, it has supported the creation of these laws since the beginning. In fact, in 2016 the laws would have been useless if not for the hard Senate negotiations conducted by Labor. Now the ALP is moving quickly to beef up the laws. We explained this in August this year.

Our summary of the new laws is here.
The Explanatory Memorandum to the Bill is here (with our highlights).

The key thing with the new laws is that there are big fines for breaching them. $2.5m for an individual and $50m for a corporation.

But back to basics. What do the laws actually prohibit? The laws make it clear that a contract is ‘unfair’ if it gives one party, but not the other, the ability to:

a)  Avoid or limit the performance of the contract.
b)  Terminate the contract.
c)   Apply penalties against the other party for a breach/termination of the contract.
d)   Vary the terms of the contract.
e)   Renew or not renew the contract.
f)    Vary the contract price where the other party cannot terminate the contract.
g)   Unilaterally vary the characteristics of the goods or services under the contract.
h)   Unilaterally determine if the contract has been breached or to interpret its meaning.
i)    Limit one party’s vicarious liability for its agents.
j)    Permit one party to assign the contract without their consent.
k)   Limit one party’s right to sue the other party.
l)    Limit the evidence one party can use in legal proceedings.

That is, the law balances the contractual power between big and small businesses. This is real, serious protection for self-employed and small business people. Now with real teeth, big business will be forced to comply.

Great news! Albanese ‘beefing up’ unfair contract laws

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albanese-unfair-contractGet ready for a profound disruption to some core big business operations in Australia. And this is great for small business people, consumers and (believe it or not) big business as well.

The Albanese government has committed to introducing new unfair contract legislation in the current parliamentary sitting period. Labor promised this in 2019—a pledge we totally endorsed. We again strongly endorse this move by Labor.

We campaigned for seven years for the unfair contract laws for small business and achieved these in 2016. But the laws have proven to be too weak.

Australia’s unfair contract laws are arguably the world’s first (and in global terms possibly the only) laws that have addressed the issue of bad standard form contracts in a holistic way. The laws were introduced for consumers in 2010 and extended to small businesses in 2016. Insurance products were included in 2021.

Why the laws

Some lawyers say unfair contract laws are wrong because they override the principle that a contract once entered into is set in concrete, even if it disadvantages one party. This is a perverted view of contract. The Australian unfair contract laws effectively codify in statute the elements under common law that make a commercial contract a proper contract.

As examples, unfair contract laws hold that if a standard form contract enables one party but not the other to unilaterally change the price of a contract, or cancel a contract or change its terms, then the contract is ‘unfair’.

Why the need to ‘beef up’

The Australian Consumer and Competition Commission has been responsible for enforcing the unfair contract laws. Since 2016, the ACCC, with then chair Rod Sims at the helm, has consistently expressed frustration at big business ignoring the laws.

Until now, unfair contract terms could only be ‘voided’. There were no penalties for their use. Unfair contracts could only be sanctioned after they had done harm. This enabled ‘let’s screw people over’ big businesses to laugh off the laws.

To his credit, Rod Sims led the charge for a ‘beefing up’ of the laws. A ‘beefed up’ Bill was presented to Parliament earlier this year. It is this Bill that the Albanese government has as a template for making unfair contracts ‘illegal’.

If Albanese implements the template Bill, unfair contracts will be illegal with civil penalties of up to $100,000 for individuals and $10 million for corporations. A court will be able to make an order if it thinks there might be a loss. In other words, harm can be prevented before it occurs. Other provisions give real bite to enforcement.

Further, the current $300,000 threshold for the size of a contract subject to the laws is being removed. The size of a small business is being lifted from 20 to 100 employees.

On any assessment this is a major economic reform. It will protect consumers. But just as importantly, small businesses will discover a new level of equality of power with big businesses as both buyers and sellers of goods and services. Australia’s 1.3 million self-employed sole traders will have protections from bullying clients that they have never had before.

It’s a huge step forward.