Self Employed Australia

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“Everyone needs an Advocate”

Unfair Contracts

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.

Morrison’s dead flat small business pitch

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election-2022-pitchLast week Morrison made his pitch for the small business vote. It fell dead flat. That’s strange really.

It’s almost an Australian political truism that political parties cannot win government in Australia without a sizable chunk of the small business vote. So, for Morrison, who’s supposed to be ‘Scotty from marketing,’ his seeming blindness to this alleged truism is odd.

Morrison’s pitch was that by lowering overhead costs and energy bills he’d create a vast number of new small businesses. This pitch is not specific and applies generally to any business (or family) in the economy. There’s no ‘joining of the dots’ between the pitch and the lives of the self-employed, small and family businesses.

Again, it’s strange that Morrison has totally missed his small business target. The Coalition in fact has a substantial history of not only spouting the small business mantra, but of having substance to support the mantra as well. Take some examples.

John Howard created the Independent Contractors Act to protect the status of the self-employed. Tony Abbott committed to the introduction of a Federal Small and Family Business Ombudsman and put the wheels in motion for unfair contract laws for small business.  The Abbott-era commitments were finalised and delivered under the Turnbull coalition government.

Self-employed, small business people profile strongly on the measure of informed and swinging voters. They are extensive seekers of information. This again is why Morrison’s dead flat small business pitch seems so strange at this election.

At the 2019 election Morrison promised to introduce security of payment laws for small business. He’s done this. And it’s good. It’s strange that he’s not pitching it.

He also promised to ‘beef up’ unfair contract protections for small business people. The Bill was ready to go. But strangely this major pro-small business Bill was deserted immediately before the election was called. Did the ‘big end of town’ get to Morrison to pull the Bill?

Then there is the elephant in the room. The Australian Taxation Office has been crucifying small business. The ATO has destroyed small businesses in the research and development space—claiming dodgy use of grants—but the ATO subsequently admitted that it was wrong.

The ATO has been attacking small and family business trusts, forcing trust beneficiaries to pay tax when (even the ATO admits) the beneficiaries have not received any income. The ATO has also sought to change trust distribution rules retrospectively, thereby creating tax debts in the past where, under then-existing ATO rules, no tax debt existed.

In the 2021 Budget the Morrison government declared in Parliament that “We are backing small business in over the ATO. No longer will the ATO be able to garnishee and takeaway (alleged tax debt) while the dispute is in train”. But this promise turned out to be false. The implemented policy only enables small business people to ‘apply’ to have a disputed debt ‘paused’ until appeals have been heard.

Morrison’s pitch to create large numbers of small businesses falls dead flat if those new (and existing) small businesses find themselves under unfair attack from the ATO without the protections afforded by a rule of law regime.

To win and retain the small business vote the Coalition has historically made a policy of substance that it then delivers when in government.  This time Morrison is not selling what he’s done and not promising anything new for small business.

It’s almost as if Morrison has abandoned the small business vote. How odd!

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.

Closing the construction watchdog will harm self-employed tradies

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Unfair contract laws

In March we praised the Morrison government for moving to ‘beef up’ the unfair contract laws for small business people. Albanese’s Labor also supports this, which is great. Unfortunately, the Bill did not pass through Parliament before the election was called.

Integrity Commission – ATO

Labor has made a big noise about Morrison failing to establish a Federal Integrity (anti-corruption) Commission. Here’s our assessment of the issues and politics of this. Morrison has a model, but Labor wants one based on the NSW Commission. The NSW Commission is, however, accused of being a kangaroo court that the High Court found breached the law. The Morrison model would, for the first time, make the ATO accountable to an external body. That’s a policy we strongly support.

Industrial relations

Last week Morrison announced he would move on some industrial relations reform. Labor attacked and Morrison quickly reversed his stance. Here’s our assessment of the politics around this issue. Essentially, we say that the ‘big end of town’ wants changes to suit themselves. But we reckon that the ‘big end of towners’ are incompetent in managing their workplace relations.

Construction Industry Watchdog

If there’s one Labor commitment that stands out, it’s that an Albanese Labor government will close down the Australian Building and Construction Commission (ABCC).  We see this as highly negative for self-employed people in the construction sector. We strongly oppose this Labor policy.

Here’s our longer assessment, but in summary:

  • The ABCC has brought some discipline to the mafia-like behaviour of construction unions. Over the last two years the ABCC has had the courts impose fines totalling some $5.7 million for illegal (thuggish) behaviour.
  • What’s extremely important is that the ABCC operates a Security of Payments system in the construction sector. It’s a vital service. All construction firms within the ABCC’s jurisdiction are required to pay their subcontractors within payment terms. If they are late, they must report this to the ABCC. Subcontractors can lodge complaints with the ABCC over late payment.
    If contractors do not pay on time, they risk sanctions that ultimately include being banned from all Commonwealth-funded work. Over around the last 5 years the ABCC has recovered some $10.7 million in outstanding payments owed to subcontractors. Some major contractors have been disciplined.
    An external review of the ABCC reports a “reduction in the number of delayed payments” and “greater efforts being made to pay subcontractors on time.” This is critically important.

There’s no doubt that should Anthony Albanese’s Labor win the election, one of its highest priorities will be the elimination of the ABCC. The outcome would be renewed, unrestrained thuggery on construction sites. Further, small business tradie subcontractors would again carry the risk of not being paid. A bad outcome for all except for the thugs.

(Disclosure: Ken Phillips is a member of the ABCC Security of Payments Working Group along with representatives from the ACTU and Building Industry Associations.)

We’ll produce more election assessments on issues for self-employed people over the coming weeks.

Confronting bullies in our own (Australian) backyard – Unfair Contracts

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bullyIn a world full of bullies, the ‘little’ person must have the power to stand up against aggressors. If bullies rule, our democracies, the rule of law, justice and fairness are simply empty, meaningless terms thrown around like useless confetti.

In Australia we are lucky to have a government and a parliament that are finally moving hard to stop big business bullies in their dealings with consumers and small business people.

There is a Bill before Parliament at the moment, ready to be passed, that gives real teeth to unfair contract laws. What might seem like technical change to obscure law known only to a few people is, in fact, a huge step for fairness in how the Australian economy works. Everyone is affected, even if few understand how.

Simply put, when this Bill becomes law:

  • It will be illegal for big business to have unfair contract terms in their standard form contracts with consumers and small business people.
  • Fines will apply to anyone who tries to push an unfair contract on to consumers/small business. (Up to $500,000 for individuals and $10,000,000 for corporations.)

The implications of this are massive. Businesses that want to screw over consumers and/or small businesses with unfair contracts will be forced to dump those contracts. (Think phone, internet, car and other equipment leasing, land sales and on and on.) This is a huge economic reform that will make for a fairer and stronger Australian economy. More people will be able to do business and buy things with real protections against unfair contracts.

For us, this journey started in 2009. At Self-Employed Australia we believe we played a pivotal role in making this happen—along with many others that we need to thank. The sequence of events was as follows:

A full timeline and details of the events is here.

There are many people to thank, reflecting the very best of the Australian parliamentary process and the public service:

  • The Abbot government committed to the laws for small business.
  • The ALP, Greens and Senate independents ensured that the laws had reasonable meaning.
  • SEA played a pivotal advocacy role to this point (2016) against opposition and dirty play by ‘big end of town’ types.
  • Rod Sims and the ACCC were champions in highlighting the weaknesses in enforcement and pushing for ‘beefing up’.
  • The Morrison government has worked through to ensure that the ‘beefed up’ laws are now before parliament.
  • The ALP, Greens and independents all seem clearly supportive of the new laws.

For the ‘big end of town’ lawyers who say that these laws break contract integrity, we reply as follows: The Unfair Contract laws embed or codify the ‘structural’ principles of commercial contract in statute. They ensure that standard form contracts have a measure of power balance such that they engender contract trust—that is, the contracts have integrity.

We do, however, have one major concern. Australian governments, state and federal, routinely break the unfair contract laws. They reckon they are exempt. And most often they are. We need all Australian governments to amend laws to hold government agencies accountable to the same contract laws they expect of the rest of the community.

There’s more work to be done.

Xmas is here—Goodness. A quick update and Season’s Greetings!

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seasons's-greetingsSuddenly Xmas is upon us. What a year!  Season’s Greetings to all our members and followers! We wish you the very best for a ‘non-lockdown,’ ‘sudden rules change’ Xmas and holiday season.

Here’s a quick pre-Xmas update for you on our two main campaign activities.

Victorian Government OHS prosecution campaign

The fund-raising response has been outstanding. We’re looking solid in achieving our funding target for the legal campaign. We try and ring people to say thanks for contributions but the numbers have become a bit overwhelming. Please accept our thanks if we haven’t rung you.

The funding is so solid that we’ve started the process of spending serious money on lawyers. The full legal team had a long and highly productive Zoom conference early last week. Tasks have been allocated, research into the finer details of legal issues is occurring, and preparation of court papers has begun. We’ll keep you updated during January. I won’t go into the details at this stage.

We’ve had quite a few queries around the fact that WorkSafe is prosecuting the Victorian Health Department and what this means. I’ve prepared another short video explaining that the prosecution of Health doesn’t change the fact that individuals also need to be investigated with a view to prosecution.

Here’s the YouTube video:

NATL

Reform of the Australian Taxation Office

Our decade-long campaign to reform the ATO rules governing how it is required to treat small businesses continues. Yes, we’ve been on this case for 10 years. Yes, we are persistent.

Here’s the ABC coverage of what we’re seeking:

Helen

You’ll be pleased to hear that we are in discussions with the ATO on our Taxpayers Rights Agenda based on the USA model for regulating the IRS. The ATO is showing genuine interest and seems to want to understand. That’s good. We’ll continue the discussions.

Other major issues

  • The new Federal ‘pay on time’ laws are now in full implementation. This is hugely important for small business people and a great Xmas present. We’ll provide some updates in the New Year.
  • The beefing up of Unfair Contract laws is slower than we’d like. The new Federal Bill has across-the-board support but seems to be caught up in an overloaded Parliamentary backlog of Bills. We hope it proceeds before the next Federal election. We’ll certainly push for this.

So again. Season’s Greetings to everyone. Let’s all trust that planned holidays, long overdue family gatherings and some well-deserved relaxation occurs without Covid-reactive government interference.

Small business hugs Karl Marx? That’s a turnaround!

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karl-marxIn the nineteenth century, the father of communism, Karl Marx, ‘created’ class ideology where ‘evil’ capitalists always exploited the working class (who were little more than wage slaves). The worker–bosses war has been fought ever since. Workers have been allowed to strike and bargain collectively through unions to secure their rights against the exploitative bosses.

However self-employed, small business people upset this simple idea because we are both the worker and boss in one. How is it that we can ‘exploit’ ourselves? This has resulted in confused law. It’s confused unions who try hard to force self-employed people to be employees so we can be ‘exploited’ and join the union class. It’s pretty silly really.

But the Australian Consumer and Competition Commission (ACCC) has come to the rescue. The ACCC regulates the economy, checking that big businesses doesn’t use their dominant power to exploit consumers. But now the ACCC has taken another step to stop big businesses using their dominant power against self-employed, small business people. The ACCC is making it really easy for small businesses to bargain collectively with big businesses.

Small business collective bargaining has been available for a few years, but you needed significant legal knowledge to do it correctly. And you had to receive ACCC approval. Now it’s very simple. It:

Only requires a one-page form. No lodgement fee.

Authorisation is then automatic.

Your business turnover must be less than $10m a year.

The ACCC link is here.

What does this mean in practice? Here are some simple examples:

If you are (say) an IT contractor supplying services to (say) a government department that applies a standard pay rate across all similar services, a group of IT contractors could get together to negotiate a different rate.

If you are a retailer and want to bulk buy a product from a supplier, you could get together with other small retailers to negotiate a better price if you buy collectively.

If you are putting in a tender to supply (say) HR services to a large company, you could get together with other HR independent contractors to put in a collective tender.

This collective bargaining process offers opportunities to at least partially match the bargaining power of big business and government by self-employed, small business people. It creates real, additional opportunities for small business.

Combine this with the new pay-on-time laws and the planned ‘beefing up’ of the unfair contract laws and Australian small business people are really starting to receive a fair go in the Australian economy. These are big, important reforms.

The only problem is that unions and others who passionately believe in Karl Marx’s workers–bosses war might feel a bit annoyed. If class ideology is suppressed by new, fairer market regulation, how do unions and others still maintain the battle?

Unfair Contracts BIG Beef UP. Fantastic! Bank of Queensland slapped down

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dragon-slayerWith all the focus on Covid, it’s good to see that major reform efforts are still underway. Last week the Morrison Government released the Bill to ‘beef up’ the unfair contract laws. It’s a ripper. It’s a game changer.

In 2015 the Coalition government passed unfair contract laws for small business people. As Self-Employed Australia was the primary, often the only, advocate for the laws (we campaigned for seven years) the laws achieved about 70 per cent of what we wanted. This new law will make the laws really strong.

The new Unfair Contract Bill

The Exposure Draft Bill has been negotiated with and supported by the states. It applies both to consumers and small business people.

The Bill Expands the definition of small business to businesses of up to 100 employees. Currently it’s only 20 employees. The Bill applies no limit on the value of the contract. Currently it’s only contracts to $300K. Plus the Bill clarifies what is a ‘standard form’ contract to one where the contract has been used before.

The Bill also expands the scope of Court Orders. If a clause is declared unfair in one contract, it will be unfair in all contracts. Fines can be imposed for using unfair clauses. A person can be banned from ‘managing a corporation’ for using unfair clauses.

The Bill gives real teeth to the laws. Big businesses and their managers will be in major trouble if they try to use unfair contract clause under this proposed legislation. It truly will make for a greater power balance between big businesses and consumers/small businesses.

Bank of Queensland slapped down

Take this example: The Bank of Queensland (BOQ) has known about unfair contract laws for six years. They were dumb if they didn’t! Yet they ignored the laws. The Federal Court has now slapped down BOQ. They had clauses in small business contracts that (1) let them change contracts at their whim, (2) allowed BOQ to declare a default anytime, (3) allowed BOQ to charge customers for BOQ negligence and (4) forced the customer to disprove a debt if BOQ declared a debt. These are all bastard clauses that have now been removed by court order.

But under the new Bill, BOQ and their managers would be in real trouble for having these unfair clauses. Their executives, lawyers and managers could face been banned from being a manager in banking or any corporation. Are you listening big business managers? Now it’s serious.

The Bill is subject to further consultation. We’ll be putting in a submission of STRONG support. Here’s our summary of the Bill.