Australian people have unparalleled freedom. Unfortunately liberties can be stealth like removed if people forget about the social and legal mechanisms that deliver liberty. In business the chief mechanism underpinning free transactions is the commercial contract; known in legal circles as the contract for services. This contract type ensures equality where people have a right to contract under offer and acceptance. The courts only interfere at the request of the parties.
Perhaps never before in the history of Australian Federation has this simple liberty through contract experienced such sustained attack. The latest assault is in Victoria where the proposed new industrial relations Act defines a contract for services to be employment. This plain legislative wording masks the enormity of cascading implications.
Employment by its legal nature involves the exercise of control of one human over another and perverts human behaviour. Industrial relations law vainly pretends to manage the perversions but in reality compounds them. The pulling of the commercial contract for services into employment legislation destroys the integrity of the right to contract. In doing this it threatens the basis of free business transactions upon which shared prosperity is created.
The Victorian Bill has wide intrusive scope. It deems partnerships larger than 3 as employment, captures leasing agreements as employment, makes a person who is not directly party to a contract liable for a contract and turns every work from home person who does clerical work into an employee. These historic provisions apply whether the worker agrees or not. It embraces freelance writers, many IT people, and legal, accounting and other partnerships. It undermines franchising and introduces contractual uncertainty threatening business activity.
Why is this being done? The justification is to protect the low paid and disadvantaged. But in the very research that preceded the Bill the evidence was of Victorian regulated employees being paid more than under Federal schemes. Low income was identified with micro and small business people particularly in regional areas. These are the people most in need. But what benefit powerful, new, intrusive processes will provide to these communities is unexplained. The detriment is more easily understood.
This assault against contractors has emerged in line with the expanding application of contracting principles in new economy and more recently old economy sectors. In learning to apply and live with bona fide contracting there are plenty of examples where errors, rorting, shams and cons occur. These cannot and must not be ignored and are addressed through existing legal processes outside of employment regulation. Refinement of the processes and business education is warranted.
However the addressing of problems through the corruption of commercial contract principles and the denying of the right to contract constitutes an attack against liberty. The NSW Government realised this in June this year and withdrew their similar legislation for further consideration. Likewise the New Zealand Government in their controversial re-regulation of employment flirted with pulling in contractors but after consideration of the principles at stake, maintained the integrity of the contract for services.
The Queensland test case of this model of legislation is demonstrating the incongruity of trying to regulate commercial contracts as if they were employment. It doesn't work!
Are these legislative assaults the actions of totalitarian regimes? Of course not! But each example indicates serious lack of understanding of liberty protecting contract principles and error of judgement.
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