The world of work has changed and we all know it, well most of us know it. It is continuing to change. Jobs disappear, and new ones are created. There are also more contractors in Australia then ever before and as a result there is confusion around the rules and processes associated with contracting.
This is an issue for all of us, that includes: regulators; big and small businesses; workers and contractors; parents; bookkeepers and accountants; lawyers; policy makers and of course unions.
The regulators and government agencies that have an interest in this subject include: the Fair Work Ombudsman, the Fair Work Commission, the Australian Taxation Office, ASIC, the ACCC, the Australian Bureau of Statistics and probably APRA. Others may include Safe Work Australia, various licensing agencies, local government and health inspectors. It’s a broad group.
So, what is the problem? One of the big issues is that we are having trouble even defining the problem. The issue is complicated by different needs of different industries and occupations and the regulations that need to be enforced and the way that has been designed.
To this end COSBOA will hold a round table on “Contracting” this week and in attendance will be representatives from the regulators, from industry and business, from small business advocates and from experts on the future of work. We will also hear about the “future World of Work” and some of the regulation ‘legacy’ issues that create problems for businesses, employees and regulators.
One of the first things we will deal with is the extremes of ideology. As always there are people at either end of the political spectrum who think they control the world and we should all do as we are told. The mindless far right think we should all be contractors and the crazy far left think we should all be employees. So, they have been left out this discussion.
What we will have is a discussion built on practicality and reality. Built on the basic ideologies of fairness, transparency, simplicity of policy, return for effort and recognition of people’s rights.
The problems seem to be determining when a person is a contractor or an employee. The ATO has its Personal Services Income regulations that it has to use when assessing people’s tax and employment situation.
One odd part of the regulation is that if a person is also a company, a Pty Ltd, then that person cannot be deemed to be an employee. Which is odd. The same person working on the same activity will be deemed an employee unless they have become a company then they won’t be an employee.
At the round table the role of the regulators will be a key consideration. If a regulators job is difficult and complicated than that probably means there is confusion for the self-employed and for employees.
Let’s confront and fix this problem before it gets out of hand. Below are some scenarios we will consider at the round table.
The industries represented will include: retail, transport, entertainment, communications, Self-managed superannuation funds, bookkeepers, the retail petroleum sector, construction, contracting among others. We will also have reps from regional Australia.
Here are some scenarios to consider.
Scenario 1
A person is working for one bookkeeper doing data entry. That person is travelling around Australia and is doing this to maintain an income while she travels. She would work for many bookkeepers if necessary but at this current moment she is working for one bookkeeper and is happy doing so. Can she be a contractor?
Scenario 2
A small business does not employ anyone and then finds the need to get help with a particular contract. The work is for $5,000. They find that employing a person for a short time is costly and confusing with a lot of regulatory requirements around awards, superannuation, workers compensation, minimum hours of work, single touch payroll, leave etc. They prefer to take on a person as a contractor. They approach a person to do the work. That person prefers to be an employee as there is too much complication getting an ABN and learning about GST and BAS’s.Can we make this simple? Is there a better way?
Scenario 3
A person contracts as a bookkeeper to several businesses. Over a period of time the bookkeeper ends up doing most work for just the one business, does that business person need to be forced to become an employee? The business would not employ them and would rather use another bookkeeper as they do not want to employ anyone due to the complexity.
Scenario 4
A young woman at school does baby sitting and gets an ABN, is this OK? She intends to start a business when she leaves school and wants to establish her business credentials.
Scenario 5 is yours
Do you have one? If so please send to info@cosboa.org.au