Current talks around changes to industrial relations (IR) laws should unequivocally exclude any changes to the right of Australian tradies to work as independent contractors, according to Housing Industry Association (HIA) Policy and Industry Deputy Managing Director Jocelyn Martin.
Martin’s call comes as the Government and Industry representatives met in Canberra last week to discuss a broad range of changes to areas in the IR space.
She said: “Independent contracting arrangements are a long-standing feature of the residential building industry.
“The industry relies on these work arrangements as a way of productively managing the needs of building businesses, especially smaller businesses.
“HIA estimates that over 80 per cent of the work completed in the sector is performed by independent contractors.
“For residential builders, it provides a flexible, workable and efficient model for engaging workers and managing the peaks and troughs of the home building cycle.
“Builders rely on access to good and reliable trade contractors to maintain competitiveness.
“Australians rely on independent contractors to build the houses that feed the desperate demand for affordable housing.
“Federal and state governments have long held different views on what constitutes an independent contractor creating challenges for the industry but threatening the ability for a trades person to remain their own boss, by forcing them to be classified as an employee would be a backward step.
“HIA is well equipped to help all sides of politics come to a sensible based definition for independent contracting, that will not impede the right for trades people to work independently.
“HIA suggests there needs to be a single national objective test, based on the ATO’s approach, to distinguish employees from independent contractors.”
The ATO consider whether a person works to produce a result, provides plant and equipment or tools of the trade (if required) and whether they are liable for rectification of any defective work to distinguish independent contractors from employees.
The advantage of this approach is that instead of defining an ’employee’, the rules merely identify who is an independent contractor.
Martin continued: “The task of governments should be to preserve and enhance genuine independent contracting businesses, not force small business to become employees.
“Restricting the use of independent contracting in the residential building industry will only serve to undermine the contribution of the sector to overall economic growth and exacerbate the challenge of making housing more affordable.”