What the “Employee-like” industrial relations reforms will actually mean for Aussie workers

What does gig work have to do with self-employed tradies working in one of the oldest professions in history, the building and construction industry? 

How does setting minimum standards for food delivery workers pose a threat to self-employed tradies?

The answer is simple – the Government thinks they are both forms of so-called ‘insecure employment’ and wants to crack down on any work that isn’t full-time, traditional employment. 

Here’s everything you need to know about the ‘employee-like’ industrial relations reforms and how they pose a real threat to the tradition of the self-employed tradie in building and construction.

WHERE DID THE ‘EMPLOYEE-LIKE’ POLICY COME FROM?

The ’employee-like’ policy was part of the Government’s broader ‘Secure Jobs’ policy which set out a range of policies they said would help increase ‘job security’ by tackling ‘insecure employment’.  

The Government has never explained what ‘insecure employment’ actually is, and the ‘Secure Jobs’ policies don’t actually do anything to help workers in traditional full-time jobs. 

Instead, the policies are designed to make any arrangements other than traditional employment relationships much harder to start, continue or use. 

They do this by creating a range of new hurdles, barriers and red-tape for all forms of work that doesn’t fit the traditional full-time employee model. 

This captures work done under ‘independent contractor’ arrangements which means self-employed and independent tradies, of which there are over 260,000 in building and construction alone.

WHAT WAS THE ‘EMPLOYEE-LIKE’ POLICY SUPPOSED TO DO?

When the Government first announced its “employee-like” policy they said it was about ‘gig-workers’ or ‘the digital economy’ and other types of ‘new and emerging forms of work’. 

They said it was about setting minimum standards for workers engaged through a ‘digital platform’ and even gave it the title ‘A better deal for gig workers’.

To achieve this policy, the Government promised to give the Fair Work Commission powers to look at any work arrangement and decide if it needed to set minimum standards.

But this isn’t limited to ‘gig-work’ or ‘new and emerging forms of work’ as they said – instead the reality is that the ‘employee-like’ policy captures basically anything that isn’t traditional, full-time employment and opens them up for a complete re-write.

This means that independent contracting arrangements used by hundreds of thousands of self-employed building and construction tradies for over a hundred years could be completely turned upside down.

Worse, this could even result in self-employed tradies losing their businesses through being forced to become traditional employees.

HOW WILL THE ‘EMPLOYEE-LIKE’ POLICY WORK?

In simple terms, people involved in any arrangement under which work is performed will now have to go to the Fair Work Commission to prove why their arrangement shouldn’t be treated as a traditional, full-time employment relationship.

This includes independent contractors and self-employed tradies who will need to satisfy a series of tests to justify that they are ‘genuine’ independent tradies and demonstrate why they shouldn’t be made to become employees. 

Normally, these tests would be easy as the High Court of Australia recently ruled on a case that made it very simple – if there is a valid contract in place that says an arrangement to perform work is to be done as an ‘independent contractor’ then that’s what the arrangement should be.

But the Government’s ‘employee-like’ policy wants to re-write the test and go back to a much harder, more complicated approach. 

This means the test won’t be simple or easy to satisfy and will involve going through lots of complex legal questions in a situation much like a legal court.

It will involve handing over lots of documents and information, all just to prove that the independent tradie is ‘genuinely’ independent.  

The worst part is that the test will actually work in a way that says it doesn’t matter what the parties involved intended, wanted, or say – and it doesn’t matter what they’ve agreed in writing. 

In other words, what self-employed tradies want, say or have freely agreed won’t matter and doesn’t count.

Instead, it will be other factors in the test – to be decided by someone else sitting in a tribunal that is set up to deal with employment matters, not independent contractor issues. 

And, because of how the tests operate by looking at things in practice, satisfying it won’t just be a ‘one-off’ – and could mean people have to go through it again and again and again.

WHAT HAPPENS IF THE TEST ISN’T MET?

If any arrangement under which work is performed doesn’t meet the complex tests, then it won’t be considered a ‘genuine’ arrangement and the parties could be forced in to making it a traditional, employer-employee arrangement. 

This means two parties who are happy for the work to be an independent contractor arrangement could be forced into traditional employment arrangements.

It means that tradies who say they want to remain self-employed, could lose the existing right to run their own business and instead be forced into becoming a worker. 

And it doesn’t matter what the parties themselves want or say – somebody else, who have probably never even been near a construction site, will have the final say.

MEETING THE TEST DOESN’T MEAN PEOPLE GET TO KEEP THEIR RIGHTS

Even if the complex tests are met and people are able to prove their arrangement is ‘genuine’, this doesn’t mean that everyone will get to keep all their rights to be self-employed independent tradies. 

This is because the Fair Work Commission will also need to consider if it should create certain ‘minimum standards’ to apply to an arrangement, even if it is proven to be a genuine independent contractor situation.

These ‘minimum standards’ are likely to cover things such as:

• When work can and cannot be performed;
• How work is sought, offered and accepted;
• Minimum insurances and expenses that must be covered by the arrangement;
• How much the arrangement should be paid and terms of that payment;
• Hours when work can and cannot be performed;
• Who gets to decide what jobs can and can’t be done, and for who the jobs are done; and
• How any future arrangements are made and how they should operate.

Setting standards covering things like these will have a serious and negative impact and take away many of the existing rights for self-employed independent tradies in building and construction.

Essentially, it will create massive restrictions on tradies rights to decide who they work for, what jobs they take on and how much they charge for those jobs. 

THE TESTS MEAN BEING EXPOSED TO UNION CONTROL

Even if a self-employed tradie or independent contractor manages to meet the tests and are allowed to keep all their existing rights, there are still big risks with the ‘employee-like’ policy.

First there is the cost – going through the process of satisfying the tests to justify that they are ‘genuine’ independent tradies and demonstrate why they shouldn’t be made to become employees won’t be cheap and will probably need to involve lawyers.

Then there is the time spent in preparing for and going through the process – this is time lost where self-employed tradies could otherwise be working.

And there is the risk of being exposed to unions and union control, who under the ‘employee-like’ policy will likely get increased rights to intervene in the test process regardless of whether people want it or not.

Again, it won’t matter what the parties want or say. 

This risk is very real as unions have these automatic rights in almost all other processes available under the Fair Work laws and the ‘employee-like’ test process will likely be the same.

This means that not only will unions have a big say in whether or not a self-employed tradie should be allowed to keep their rights or run their own business, but also what ‘minimum’ standards should be set for a particular arrangement.

Everybody in building and construction knows how this will turn out and work in real-life – it will mean there will be huge pressure to do what the union says, follow what the union wants, and adopt the unions ‘one-size-fits-all’ pattern approach to things like hours and pay.

This will be on top of pressure being applied to independent self-employed tradies to ‘join’ the union – and you can almost bet that won’t be cheap for small business owners.

WHAT DOES MASTER BUILDERS SAY ABOUT THE ‘EMPLOYEE-LIKE’ POLICY?

Master Builders is saying to the Government exactly what everyone reading this is thinking – don’t let self-employed, independent building and construction tradies be captured by this ‘employee-like’ policy.

Go back to the start and look at what the Government first said – the ‘employee-like’ policy should be focussed only on ‘new and emerging’ forms of work such as ‘gig-workers’ who don’t work under any existing rules. 

This policy shouldn’t operate to capture the over 260,000 independent contractors and self-employed tradies in building and construction who have operated like this for over a hundred years.

Self-employed tradies have made their own decision to start a small business, work for themselves and decide what they do, when they do it and how much they will do it for.

Tradies don’t need someone else to make to make their decisions for them, dictate how and when they work, or take away their existing rights to remain self-employed.

The Government never said the ‘employee-like’ policy would apply to tradies, it’s not a form of ‘new and emerging work’ and building and construction has nothing to do ‘gig-workers’ or the ‘digital economy’.

Instead, the ‘employee-like’ policy should be limited to do only what the Government said it would do and simply shouldn’t apply to self-employed, independent building and construction tradies.

But we need your help to do this. Join the campaign by writing to your local MP, sign our petition and share your thoughts on www.defendyourrights.com.au.