The 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:
- Underpayment through strong provisions in the Independent Contractors Act of 2006.
- Unfair contracts through both the Independent Contractors Act and the Unfair Contract laws enforced by the Australian Competition and Consumer Commission.
- Sham contracts enforced by the Fair Work Ombudsman.
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.
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.
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.