COSBOA fears ’employee-like’ rules could come for all contractors, despite Burke’s assurances

Small business representatives have issued a broad-scale rejection of the federal government’s latest industrial relations reform package, despite Minister for Employment and Workplace Relations Tony Burke assuring entrepreneurs proposed changes to “employee-like” work will not encroach on “genuine small business”.

Burke revealed the outline for the proposed ‘Closing The Loopholes’ bill on Thursday, saying the next batch of legislation will make good on the Albanese government’s promise to update the rules for gig economy companies and the independent contractors that provide their labour.

The draft legislation proposes empowering the Fair Work Commission to set minimum standards for “employee-like” workers engaged by rideshare platforms, meal delivery services, and care platforms, who are currently engaged as independent contractors and go without many of the baseline entitlements offered to fully fledged employees.

Underpinning the draft legislation is a belief among the federal government that today’s gig economy platforms, particularly in the ride-share and meal delivery sectors, can unintentionally incentivise workers to take risks on the road and put their safety in jeopardy.

Under the model, eligible parties — that is, the platforms themselves — will be free to apply to the Fair Work Commission for minimum standards tailored to their specific operation.

“The Fair Work Commission will have discretion to consider a range of terms that may be included in an order, such as payment terms, working time, record-keeping and insurance,” Burke said.

However, the reforms will not apply minimum standards to overtime rates, rostering arrangements, and, crucially, “terms that would change how a worker is engaged” with the workplace.

“This ensures minimum standards will benefit workers without requiring them to forego the flexibility they value,” Burke said.

Seemingly responding to prior concerns from business representative groups that “employee-like” reforms covering the gig economy will spill over into more traditional contracting situations, Burke denied the proposal would encroach on those long-established standards.

“Our changes will in no way affect independent contractors who have a high degree of control and autonomy over their work, such as skilled tradespeople,” he said.

“This is about protecting workers who don’t meet the definition of ‘employee’ but who are not genuine small businesses either.”

The legislation will be tabled into Parliament next week.

Despite assurances, reform could hit small business contractors: COSBOA

Responding to the proposed “employee-like” reform package, and other elements of Labor’s industrial relations platform, the Council of Small Business Organisations Australia (COSBOA) on Thursday rejected the push outright and called on Parliament to oppose the reforms.

“The small business community rejects the intrusion of so much more complex regulation into the ability to be productive and flexible, let alone just getting on with being in business and employing more people,” the organisation said.

Giving the FWO power to set the minimum pay and insurance standards for gig economy workers could spill over into other sectors of the economy, the group feared.

“Contractors who run their own business, providing services to many customers, or are contracted for a term of a project will no longer be able to be their own boss.

“These changes force an ’employee-like’ relationship on everyone.”

Reflecting on upcoming legislation intended to criminalise wage theft at a federal level, COSBOA reiterated its view that many incidences of underpayment are the result of good intentions meeting a complex and confusing employee classification system.

“When government departments and regulators can get it wrong, despite their teams of payroll and IR specialists, why should businesses be prosecuted for unintended mistakes?” the group asked.

“Small business fear that these changes won’t close loopholes,” the organisation continued.

“No longer will an entrepreneur be encouraged to start and grow a business.

“Their initiative will be stifled.”

Industry groups, unions split over proposal

Those viewpoints were broadly shared by the Australian Chamber of Commerce and Industry (ACCI), which has previously stood with COSBOA in opposition of the Labor government’s ‘same job, same pay’ push.

The regulatory push has “over-reached through sheer ignorance of how tradespeople and other contractors conduct their business today,” said ACCI chief executive officer Andrew McKellar.

“They advertise their services online and the government has failed to adequately explain how their sweeping regulations will leave independent contractors alone.”

Conversely, the Transport Workers Union (TWU), which has long advocated for stronger regulation in the rideshare and meal delivery sector, has welcomed the so-called ‘Closing the Loopholes’ legislation.

“The archaic idea that workers’ rights depend on the label attached to them has meant that many who desperately need protections have missed out, with lethal consequences,” said TWU national secretary Michael Kaine.

But it is actually the unions that have an antiquated view of work in 2023, McKeller claimed.

Union groups are “pining for the days of punch-card clocks and knock-off whistles,” McKellar said.

“Much of the world just is not like that anymore.”