Most comment on the government’s planned industrial relations changes, whether pro or con, has been utterly predictable. This is an issue on which most of the participants have dug themselves into deep trenches. So it was refreshing to read yesterday an article putting another perspective, by Ken Phillips in The Australian.

Phillips is, loosely speaking, on the “right”; he runs the “Work Reform Unit” at the Institute of Public Affairs. But some of his views are decidedly unconventional. His view of traditional workplace arrangements is uncompromisingly hostile: “The employment contract … is indisputably a legal contract of control and hence inequality. Any legal finding of the employment contract must discover that the employer has a ‘legal right to control’ the employee.”

He is quite right about this. The employment relationship is quite different from an ordinary contract; it gives the employer rights over their employees that in some ways are more akin to property rights. The relationship is hierarchical, whereas an ordinary commercial contract binds parties who are fundamentally equal in status.

Phillips’s answer is that workers should become independent contractors; he celebrates the continuing rise in the number of contractors, and supports the government’s planned Independent Contractors Act that will protect their status. By opposing these moves, he says, “unions have become both the last bastion of wage slavery and lobbyists for institutionalised exploitation.”

The status of independent contractors, however, is not just challenged by the unions. The Howard government defends them when it comes to undermining the industrial relations system, but is not at all keen about them undermining the tax system. Each year Tax Pack includes more and more complicated provisions to try to screen out contractors who the government thinks are “really” employees but are using a legal fiction for tax purposes.

Phillips says “unions insist that the independent workforce must be a sham and an employer conspiracy,” but he fails to address the question of what happens if they are right – as the government, wearing a different hat, evidently thinks they sometimes are. If workers are really leaving “employment” behind and becoming equal contracting partners, that’s a fine thing. But if they are just tying themselves up in bogus contractual arrangements they may find they have taken on all the disadvantages of the employment model while giving up any protections.

If Phillips is right, the courts may eventually disentangle those contracts and impose real reciprocal obligations on employers. But sceptics can be forgiven for thinking that’s not at all what the government has in mind.

Peter Fray

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