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Updates: Uber, fair contracts and independent contractors

Sunday, October 18, 2015

ICA is proud of its efforts over the last seven years arguing for the unfair contract laws for small business people. We’ve said that we’re delighted that the Turnbull government is moving forward with the laws. And we’re thankful to the Senate and to Senators for making sure the laws will have a wide application.

If self-employment is to be successful, contracts must have integrity, which is what the unfair contract protections are about.

But the long argument over defining just what is an independent contractor, or self-employed person, continues. This is ridiculous given that the law is settled on the matter. Noteworthy, then, that we see in the UK that ride sharer Uber has been declared legal. Whereas, in the USA, Uber still struggles to have its drivers accepted as independent contractors. It’s no wonder that ICA member Guy Forsyth expresses frustration at how different laws seem to define independent contractor differently. In fact, Guy has provided a good summary of the seeming confusion that is often created.

But, definitional confusion or not, the rise in self-employment is stark, particularly in the UK. It’s ignited a debate: Is the trend ‘forced’ or ‘desired’? New research from the UK says that the trend arises from a desire to be self-employed. The report says:
In the UK by late 2014 there were almost 0.75m more self-employed than at the start of the financial crisis in early 2008. This represents over 75% of jobs growth in the UK over the same period. This experience has attracted commentary from independent policy analysts and others, focusing on whether growth has been structural, reflecting changes in the nature of employment and attitudes towards business venturing, or cyclical, reflecting a post-crisis shift towards flexible insecure forms of employment as an alternative to long-term unemployment.
The paper suggests that the rise in self-employment is being created by a desire for independent entrepreneurship.
The paper concludes that there is little or no evidence for any net “push” effect into self-employment from weak local labour market conditions. The data are consistent with the net effect being one of “pull” in which improved local labour market conditions indicate better local business opportunities and market demand from higher spending power.
This reinforces statements by the Governor of the Bank of England that there’s a shift in society.

ICA says that regulations must respond to this positively. Unfair contract laws are a positive, enabling response to the micro-entrepreneurship trend.


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