Gig economy reforms ‘an attack on construction industry’, government told

Reforms aimed at setting minimum standards for the gig economy will have dire ramifications for the construction sector, an association warns.

Proposed measures targeting employee-like forms of work will have adverse impacts for a range of industries including the building and construction sector, Master Builders Australia has cautioned.

The proposed measures are intended to give the Fair Work Commission the power to set minimum standards for workers in employee-like forms of work, including the gig economy.

Master Builders Australia strongly opposes the measures and warns the broad and vague construction of the policy will see a wide range of circumstances outside of the gig-economy being captured under the reforms.

“The employee-like measure has the potential to capture long-standing, lawful and legitimate arrangements used by building and construction industry participants,” the industry association said in its submission.

“The ‘employee-like’ measure as outlined in the consultation paper represents one of the most significant and real attacks on the rights of self-employed and independent contractors, including over 264,000 self-employed tradies that currently exist within the building and construction industry.”

The submission stated the measures were “an unwarranted and inappropriate attempt to provide an employment relations tribunal with significant and unnecessary powers to regulate the terms of commercial contracts”.

“An industrial tribunal is an industrial tribunal. It does not exist to regulate, interfere in or set commercial arrangements between recognised businesses entities,” it stated.

Master Builders Australia is also concerned measures could lead to the creation of standardised agreements across groups of independent contractors which would be anti-competitive.

This could lead to unproductive and inflexible work outcomes and increase the cost of construction for consumers.

“The [proposed reforms] would likely impose restrictions upon how and when specialist work can be undertaken and by whom, giving rise to significant disruptions in construction programming and project delivery,” it said.

“It would also create uncertainty about arrangements on foot and inject a new form of commercial risk for industry participants, thereby jeopardising the use of opportunities for those new to building and construction and the creation of future jobs.

Master Builders Australia chief executive Denita Wawn said the measures go far beyond the intended scope of sporting gig workers and leases the door open to “swallow industries across the economy”.

Ms Wawn said the building and construction industry attracts individuals who choose to go out and be their own boss and have the freedom to choose the hours they work, the projects they work on, who they work for and negotiate their own fees and conditions.

“If the policy is implemented as foreshadowed in this paper, it will fundamentally upend and damage the entire building and construction industry which is founded on a model of specialist contract work arising from the way in which building work is performed,” she stated.

“The dynamic nature and array of specialist contractors required on a project mean it is simply not feasible for businesses to have to permanently employ independent contractors, and critically, it takes away the rights of independent contractors to run their own business.”

Industry super fund Hesta has conversely welcomed the proposed measures to empower the Fair Work Commission to enforce minimum standards for workers including the gig economy.

“Hesta supports proposals which would allow workers engaged in ‘employee-like’ arrangements to be provided with certain basic minimum standards, including the entitlement to superannuation guarantee contributions,” the super fund said in its submission.

However, the guiding principles of the policy should have explicit regard to the retirement outcomes of workers, it said.

“The consultation paper does not refer to the superannuation guarantee as a minimum standard capable of being ordered by the Fair Work Commission. We therefore recommend that the legislation expressly include the superannuation guarantee as one such minimum standard,” it said.

Hesta also believe there is a need to revisit and reform the ‘deemed employee’ provisions of the Superannuation Guarantee (Administration) Act 1992.

“There is an express entitlement to SG contributions for gig economy workers, including those engaged in the care economy. This would provide a legal framework that protects those working in ‘employee-like’ forms of work from not receiving minimum superannuation contributions,” it said.