Commenting on the Governments announcement that it plans to introduce a new law to promote independent contracting next month, ACTU President Sharan Burrow said:
The Independent Contractors Act is the Howard Govts next industrial relations onslaught.
Already we have seen the WorkChoices IR laws make it easier for employers to sack their permanent staff and re-employ them as casuals or on contracts with lower wages and conditions.
The Government now proposes to take this a step further with a new law that will allow more employers to avoid responsibility for paying superannuation, workers compensation, annual leave and other basic entitlements to people who are called contractors but are essentially employees.
A recent University of Melbourne study (1) found that up to 400,000 workers currently classified by the Government as independent contractors are actually employees that do all their work for the one employer.
The study found that as many as four out of every ten contractors are dependent not independent.
The fact is that many so-called independent contractors would prefer to be permanent employees receiving a decent wage and standard job entitlements such as paid leave, superannuation and access to workers compensation, said Ms Burrow.
Surveys of independent contractors have found that around one third are people that could not find permanent work, and three quarters believe that independent contractors are simply used by employers to avoid their obligations to staff.
Ms Burrow said, The recent case of Optus is a classic example which is likely to become more common as employers take advantage of the new laws. In April seventy Optus technicians lost their permanent jobs and were invited to buy their vans from the company, obtain an ABN number and re-apply for work with the company as independent contractors.
As contractors, the Optus workers will be up to $300 a week worse off by being required to pay their own superannuation, workers compensation, public liability insurance and cover the costs of a van, and all materials and equipment. Besides facing a drop in pay and losing their job security, the workers will also lose entitlements to paid sick leave, public holidays and annual leave and be under pressure to meet performance targets and to work in unsafe situations.
The Employment Minister Kevin Andrews should own up to the fact that the Governments new law is just another way of helping big business cut costs at the expense of workers wages and conditions and family living standards, said Ms Burrow.
(1) Non-Standard Workers in Australia: Counts and Controversies, Aust. Journal of Labour Law, 17-2, 2004, Anthony ODonnell
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