Self Employed Australia

"Everyone needs an Advocate"

“Everyone needs an Advocate”

The nature of work

Is the ‘gig’ up? Is a ‘secure’ job a fiction? We say it is!

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security-blanketThe Senate is currently holding an inquiry into ‘insecure’ work. The Terms of Reference state: “…to inquire into and report on the impact of insecure or precarious employment on the economy, wages, social cohesion and workplace rights and conditions….”

Well we, self-employed, independent contractors, gig workers, contractors and so on—that is, people who are their own boss—are seen by labour academics and unions as doing ‘insecure’ work. And they see that as a huge social problem that has to be fixed. The Victorian government wants to ‘fix’ us as a problem by outlawing us. Some fix!!

We say that ‘secure work’ is a “figment of imaginations searching for legal expression”. In other words, ALL work is insecure. What people need is not a ‘secure’ job but continuity and certainty of income. This is a more sensible way of approaching the issue. Trying to manufacture ‘secure’ jobs is just the old left-vs-right thing. It’s plain dumb and doesn’t get us anywhere.

We say that self-employed people need ‘protections’ through commercial regulation, such us the unfair contract laws and pay-on-time laws. These sorts of things provide real, practical solutions.

We were asked to appear before the Senate Committee which we did on Tuesday 27 July (this week).

Here’s our one-page summary of our stance on the issue.

And here’s the 37-minute video of our discussion with Senators on the issue.

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.

‘Homework’ takes on a totally new meaning … for adults!

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The global energy giant BP has told around 25,000 of its staff that work from home is now permanent. This is confirmation that ‘home-work’ is now globally locked in and not a temporary Covid ‘thing’.

BP is selling offices and moving to smaller premises as staff move to working two days and more from home. This is evidence of a working revolution. It’s a revolution that will throw the legal, academic, tax and political work-regulation establishment into utter confusion.

It makes the recent UK court decision to declare Uber drivers to be a ‘little bit’ employees combined with destructive self-employed tax laws, to be dangerous for the UK economy. It makes the Californian law making self-employment illegal look like a wall of sand trying to hold back an incoming tide. It makes the Victorian government’s agenda to outlaw self-employment look plain dumb.

The fact is that home-work will result in a productivity boom that will be difficult for statisticians to measure. How do you measure output per hours worked when someone is writing a report at home, stops, puts on the washing, returns to writing, stops, hangs out the washing, checks emails, heads off to collect the children from school and has several business phone calls in the car driving to pick up the children? How to you measure the huge time saving when the ‘commute’ to work is from your bedroom to the corner office in the spare bedroom?

But these are the productivity ‘realities’ that self-employed people have enjoyed and delivered for years. This is the self-employed work/life ‘balance’ truth which is now being realized by employees at BP and will predictably move through the corporate sector.

But here comes the push-back.

Property investors are worried about their CBD skyscraper investments.

Corporate power junkie managers wonder how they will ‘control’ staff.

Work safety officers wonder about what happens when people injure themselves at home when working.

Accountants can’t work out how to monitor people on hourly based pay rates.

‘Exploitation!’ scream unions and ‘worker rights’ academics!

It’s all nonsense of course. The incoming tide is largely located in the knowledge-based side of economic activity which is shifting from ‘hours’ to ‘results’ assessment of work. It’s been driven forward by technology for two decades and more, but Covid has given it a great kick along.

What’s happening is the disintegration of the specific legally defined ‘employment’ relationship.

The reality of self-employment based on self-control and payment on results butts up against the social and legal ‘employment’ assumptions. Employment as a generic term is looking more and more like self-employment as time-based pay is replaced by results-based remuneration.

The post Covid home-work revolution is pushing this trend harder. As more people work from home, even if not full-time, results-based remuneration becomes the logical outcome. Hours-based remuneration becomes awfully complicated.

We can probably be sure that this revolution in home-work, ‘employment’ (looking like self-employment) will be a major productivity booster.

Australian unions see flying ‘gig’ pigs landing from the UK

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You may have seen reports that the UK’s top court has decided that Uber drivers are not independent contractors. The UK decision seems to support the unions’ campaign against the gig economy. It gives the appearance of international support for Federal Labor’s anti-gig (anti-small business) policy announced earlier this month.

However, sorry to disappoint the small business-haters in the unions and Labor, but the UK’s decision has no relevance to Australia.

The facts in Australia are that Uber drivers have been declared to be independent contractors by:

And last year (2020) the FWC declared that Uber Eats delivery people are independent contractors. In this 2020 decision the Commission looked at the UK law above and stated that its irrelevant to Australia. Here’s why.

In Australia we use the well-known common law tests which identify whether there is a commercial contract or an employment contract. All independent contractors (self-employed people) earn their income through a commercial contract. This is locked in under Australia’s Independent Contractors Act 2006. It protects the right of people to be their own boss.

In 1998 the UK created statutes which say that even if you’re an independent contractor you can still have access to some employment ‘rights’. This is the ‘little bit pregnant’ idea. The UK statute says that someone working under a commercial contract can be a ‘little bit’ an employee. This is the statute that has been ruled upon by the UK Supreme Court last Friday in the Uber case.

The UK has made, and is making, a mess of its treatment of self-employed people. Self-employed UK people have been treated as economic trash during the Covid crisis, receiving little if any income support. For 20 years the UK tax office (HMRC) has been trying to stop the self-employed from having business tax rights. The Uber decision now throws massive uncertainty into commercial contract law.

Fortunately, in Australia since around 2006, we’ve developed policies to support and ‘protect’ self-employed people. This has included the same access as employees to the federal parental leave scheme (2010), JobKeeper and JobSeeker (2020) and the introduction of unfair contract laws (2016) and their planned ‘beefing up this year. Also, this year the full pay-on-time laws for small business should pass.

We ‘protect’ small business people by giving them access to a practical commercial ‘rule of law’ environment, backed by sensible access to social security support where needed. This creates a stronger economy with small business at its core. Let’s hope that the UK small business destruction disease doesn’t spread to Australia.

For a longer version of this article which includes a link to the UK Supreme Court ruling, click here.

Oz unions’ weird desire to impose ‘permanent’ wage slavery

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News just out is that private-sector union membership in Australia has plunged to 9 per cent of the workforce. Unions are rapidly becoming public-sector-only, with about 37 per cent of that workforce. Perhaps this is why unions are campaigning so hard to try and force ‘wage slavery’ onto all of us. They are fighting for survival.

The ACTU’s core campaign is against ‘insecure work’. It aims to impose ‘permanent’ employment on Australians. But it’s illogical. In particular their campaign has been mugged in the blink of Covid eye reality.

When planes can’t fly, ‘permanent’ airline jobs also ‘fly’. Empty hotels mean an emptying out of permanent hospitality jobs. When cruise ships no longer cruise, the impermanency of every ship job hits home. Economic reality determines everything. Like it or not!

The ACTU’s claim that ‘insecure workers’ are more likely to face unemployment is just plain wrong. No job type—permanent, casual, part-time or contract—escaped the Covid mugging.

The illogicality of the ACTU stance extends to statistics. Unions portray ‘insecure’ work as a growing ‘problem’. That is false. Recent analysis from University of Melbourne Professor Mark Wooden confirms the following.

Casual employment has remained at around 20 per cent of the workforce for 20 years. Labour hire and gig work is small, at less than 5 per cent of the workforce. Self-employment has sat at around 2.1 million people but declined slightly as a workforce percentage to around 17 per cent over the last 15 years or so.

What’s also illogical in the ACTU stance is the complaint about casual employees’ lack of access to ‘entitlements’ such as holiday pay. This is plain nonsense.

Casuals get paid 25 per cent plus more than permanents to make up for holidays and so on. Casuals receive holiday pay built into their hourly pay. Permanents get paid less upfront and get paid the money when they take holidays. In fact, casuals end up with more money than permanents because full-time ‘entitlements’ usually only add about 19 per cent to their pay. Casuals can receive up to 6 per cent more than permanents.

The Federal government’s proposed new workplace laws will allow casuals to access permanent part-time work after 12 months. They will allow part-timers to work extra hours. The ACTU continues to find problems even under these reforms.

Even the economic ‘war’ with China has taught Australia that there is no such thing as ‘permanent’. We now are fully aware that reliance on permanency of trade with China or any one big national market is massively risky. Trade security is found in having a wide range of trading partners. It’s the same with work for individuals. Having a range of work and income sources is safer than relying on one ‘permanent’ job. In reality, ‘permanency’ is insecurity.

Too often the ACTU agenda falls apart in the face of the facts. On this issue their ‘anti-insecurity’ agenda looks like a policy solution searching for a policy problem that doesn’t exist.

We need to focus on ‘solutions’ for a 24/7 economic reality in which Covid and China have both taught us that nothing is permanent. To pretend otherwise is to live with fantasies that will harm us.

Dan Andrews (Victoria) declares war on small business – ‘destroy em’ they say!

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Thursday, July 16, 2020

Yesterday the Victorian Labor government released its report into the ‘gig economy.’ The 228-page report should be read as a declaration of war against self-employed, small business people across Victoria, and Australia. This is so because a key recommendation calls for laws that would effectively make self-employment illegal.

The recommendation (page 193 of the report) reads:

Recommendation 6
The Inquiry recommends that the FW Act be amended to
(a) codify work status on the face of relevant legislation (rather than relying on indistinct common law tests)
(b) clarify the work status test including by adopting the ‘entrepreneurial worker’ approach, so that those who work as part of another’s enterprise or business are ‘employees’ and autonomous, ’self-employed’ small business workers are covered by commercial laws.

This dumping of the common law definition of self-employment with the creation of a new test (called the ‘entrepreneurial test’) would smash small businesses in Victoria.

We know this because we’ve been following in detail exactly the same laws in California that came into operation on 1 January this year, just before Covid-19 hit. We can confirm reports out of California this week that this ‘kill self-employment law’ has smashed 4.5 million Californian jobs on top of the Covid-19 damage. The Californian law explains why 27.7 per cent of California’s workers are on the dole compared to the national US average of 15.7 per cent under Covid-19.

This is the damage that Premier Dan Andrews and his government now seek to inflict on Victorians. The reports calls for the Federal Government to change the law and, if not changed Federally, for the Victorian government to do this in Victoria.

This is vindictive madness. It displays a distinct hatred of self-employed people, that we are worthless, and of no value to society or the economy. That we must be supressed and eliminated in Victoria.

And to set a course in this direction just as everyone is being smashed by Covid-19 displays an ideological disconnect from reality.

We’ll be preparing a full analysis of the report, but here is our submission to the inquiry in 2019 and our statistical analysis of the gig economy.

We’ll be calling on the Morrison Government to defend self-employed small business people from the Dan Andrews’ attack. But first we’ll get our full analysis done.

Frankly. Good Grief!!!!