Is There a ‘Public Benefit’ in Improving Working Conditions for Independent Contractors? Collective Bargaining and the Trade Practices ACT 1974 (CTH)
| Author | Shae McCrystal |
| DOI | 10.22145/flr.37.2.4 |
| Published date | 01 June 2009 |
| Date | 01 June 2009 |
| Subject Matter | Article |
IS THERE A 'PUBLIC BENEFIT' IN IMPROVING WORKING
CONDITIONS FOR INDEPENDENT CONTRACTORS?
COLLECTIVE BARGAINING AND THE TRADE PRACTICES
ACT 1974 (CTH)
Shae McCrystal*
INTRODUCTION
The legal distinction between work performed by an employee under a contract of
service and work performed by an independent contractor under a contract for
services is a central preoccupation in the field of labour law. This preoccupation has
been traditionally focused on which workers fall within the common law definition of
'employee' (workers with a contract of service), which workers do not fall within the
definition but should and what legal consequences follow from the inclusion of a
worker within the labour law regulatory framework.1 Primarily the focus has been on
ensuring that the labour law net encompasses those workers who are considered to be
in need of the protections offered by labour law and debates over who those workers
are. However, until recently, little attention has focused on the regulation of those
workers who fall outside the definition of employee, where the worker's status as an
independent contractor is uncontested.
The relative inattention within the labour law context to the regulation of the
independent contractor labour market is not surprising. These workers are subject to
the ordinary rules of commerce, found largely within the common law and legislative
regimes like the Corporations Act 2001 (Cth) and the Trade Practices Act 1974 (Cth) ('TP
Act'). In other words, these workers fall under the general banner of 'commercial law',
an area which is fundamentally connected to labour law but conceptually distinct.
In recent years this inattention has changed dramatically, particularly as
independent contractors constituting a distinct class of small business actors, have
come under increased regulatory attention. Federally, the passage of the Independent
Contractors Act 2006 (Cth) ('IC Act') and the addition of 'sham contracting' provisions to
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* Faculty of Law, University of Sydney. I would like to thank Andrew Stewart for advice in
developing the ideas for this paper, Joellen Riley and Brett Williams for their comments
during the writing of this version of the paper and the anonymous referees for their helpful
suggestions. All errors or omissions remain my own.
1 For discussion of the definition of employment and the recent push to move beyond this
definition see the collection of chapters in Guy Davidov and Brian Langille (eds),
Boundaries and Frontiers of Labour Law (2006).
264 Federal Law Review Volume 37
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the federal workplace relations legislation2 singled out independent contractors as a
separate and distinct group for regulation. Further, the policy platforms of the
Australian Labor Party and the federal Liberal / National Coalition emphasise a
commitment to supporting 'the choice of Australians to pursue a career as independent
contractors'.3 This increase in regulatory attention at the federal level was partially
prompted by a desire on the part of the former Coalition government to exclude
independent contractors from State government legislation aimed at offering some of
these workers labour law style protections.4 However, it has also contributed to the
development of interest in labour law academics in exploring the regulatory
environment applicable to these workers.5 One particular focus of this attention has
been on considering how the working conditions of independent contractors might be
protected outside the traditional labour law context.
This paper falls squarely within this context by asking whether or not independent
contractors in Australia can engage in collective bargaining with the explicit goal of
improving their working conditions. Independent contractors do not come under the
employee collective bargaining processes within the Fair Work Act 2009 (Cth) ('FW Act')
so cannot collectively bargain; or create, register or enforce collective agreements in
that context.6 Instead, the capacity of independent contractors to form collectives and
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2 The sham contracting provisions are currently enacted in ss 357-9 of the Fair Work Act 2009
(Cth) which prohibit misleading conduct with respect to employment relationships.
3 Australian Labor Party, National Platform and Constitution 2007, adopted at the 44th National
ALP Conference, Sydney, April 2007, 64, para 147. This view was also expressed by the
former Coalition government in the second reading speech for the IC Act where former
Minister for Employment and Workplace Relations, Kevin Andrews stated: 'In 2004 the
Coalition said we would protect the right of independent contractors to work the way they
want and we will do so.' (Commonwealth, Parliamentary Debates, House of Representatives,
22 June 2006, 10).
4 In New South Wales, s 106 of the Industrial Relations Act 1996 (NSW) had fostered a busy
unfair contracts jurisdiction in which independent contractors could challenge the fairness
of their service contracts in the NSW Industrial Relations Commission. See Joellen Riley, 'A
Fair Deal for the Entrepreneurial Worker? Self-Employment and Independent Contracting
Post Work Choices' (2006) 19 Australian Journal of Labour Law 246, 252.
5 Since around the time of the passage of the IC Act, there have been two books and a
number of articles considering the regulation of independent contractors: Shae McCrystal,
'Regulating Collective Rights in Bargaining: Employees, Self-Employed Persons and Small
Businesses' in Christopher Arup et al (eds), Labour Law and Labour Market Regulation (2006)
597; Michael Rawling, 'The Regulation of Outwork and the Federal Takeover of Labour
Law' (2007) 20 Australian Journal of Labour Law 189; Riley, 'A Fair Deal for the
Entrepreneurial Worker?', above n 4; Joellen Riley, Independent Work Contracts (2007);
Andrew Stewart, Understanding Independent Contractors (2007). Interest in the regulation of
work performed outside the context of employment has also been explored by authors in
other jurisdictions. See, eg, Cynthia Cranford et al, Self-Employed Workers Organize: Law,
Policy, and Unions (2005).
6 Unless otherwise stated, the substantive provisions of the FW Act apply to 'employees'
employed by 'employers' within the definition of employer in s 12 of the FW Act. The word
employee is not defined, so the Act relies upon the common law definition of 'employee',
workers with a contract of service, which is determined at common law through the
'multiple indicia test'. See Hollis v Vabu Pty Ltd (2001) 207 CLR 21 and for discussion of the
legal distinction between employees and independent contractors see Rosemary Owens
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