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UK vs Australia: Government attitudes to self-employment

Tuesday, October 28, 2014

What a contrast!

In Britain, the Liberal Democrat Party (the junior coalition party in the British government) has heaped praise on the fact that self-employment in Britain is at a 40-year high of 4.6 million people. It’s the biggest single factor for the jobs growth surge that’s happening in the UK (but not happening in the rest of Europe!) The Lib Dems say that this is a direct result of the policy the government has pushed to make small business, self-employment more viable.

In Australia we seem to be doing the reverse. Independent Family First Senator Bob Day has asked questions of the Fair Work Ombudsman (FWO) in the Senate about the FWO’s aggression towards independent contractors.

The FWO admits to spending $300K (at least) on legal fees alleging that three independent contractors were employees. In the court ruling where the FWO lost, the judge said that the workers became independent contractors because they clearly wanted to. The company defending itself has spent $800,000 on legal fees. Yet the FWO is persisting with further legal action. There are allegations that the FWO is not following government requirements to behave as a ‘model litigant’.

This Australian action dovetails with the activities of the Australian Taxation Office to suppress self-employment. ICA has covered this in submissions to the Abbott government. Up until October 2012, the ATO was knocking back only about 200 ABN applications a month. In November 2012, without explanation, that number skyrocketed to more than 2,500 rejections a month. Now the ATO has told us that there has been no change in policy. That looks like bureaucratic deception or even an outright lie.

There seems to be a pattern emerging of Australian government institutions deliberately attacking and suppressing self-employment.


Tom J. commented on 29-Oct-2014 07:31 PM
I wonder if the Fair Work Ombudsmen would be as eager to prosecute a Government Agency for Sham Contracting? I doubt it. The NSW Department of Education and Securities had over 700 very vulnerable individuals on Sham contracts since 2002 until last July when a very hasty change was made for them all to become employees. Almost as if they were forewarned of a pending investigation. Their role as a contractor to the Dept. was to accompany students in a vehicle to and from school. They did not supply tools of trade and they could not employ anyone to do the job. They had set hours and a set income, and no opportunity to make a profit. Of course this all leads to employee no matter how you look at it. It seems the Dept. Lawyers thought that by paying their Super (no Work Cover) it somehow relinquished them from making them employees. Huh? According the FWO in the video, for it to be Sham Contracting there is a deliberate intention to underpay the individual and avoid paying other employee entitlements. These individuals were underpaid $6 per hour less than the equivalent under the Passenger Vehicle Legislation – where their job is clearly spelled out. There was no set minimum hours and they were only paid for the time the relevant student was on board – not for the time spent for the entire trip. As mentioned, they are now Dept employees, but the insult continued when the Dept found some obscure “Crown Award” with which to use. While similar to the Passenger Vehicle hourly minimum, and albeit they are now paid from when they are picked up and dropped home, there is still no set minimum hours, paid in 1 minute increments. Meaning they need to be available morning and afternoon each day but ultimately can be paid as low as $15 a day (depends on length of route). As a consequence of this new employee status, guess who also takes the brunt? Yep – the Independent Contractor. We are required to advertise or somehow acquire their employees (at our own expense). We are then required to organize the necessary WWCC and Police Check and employment paperwork for their employees. We are threatened with Contract termination if we can’t engage a suitable employee to use. If their employees decide to take their new found paid sick leave we must find a replacement or have the contract terminated We are paid a small loading for the out of pocket expenses relating to their pick up and drop off 4 times a day (rarely covers the cost) We are not paid for the potential ‘money making’ seat they take up in our vehicles Then there is the problem of them now being employees of the crown – we can’t replace them. Regardless that they may live 40 kilometres out of the area, regardless that there may be some personality or other conflicts arising, regardless that we may have a husband or wife approved for the same job – they must stay. Instead we MUST replace the driver – or lose the contract.

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