Solidarity

When finance minister Nick Minchin spoke to the hardline H R Nicholls Society earlier this year, he spoke frankly about the Howard Government’s industrial relations package. Minchin told his friends that although “the Australian people don’t agree at all with anything we’re doing on this”, there was “still a long way to go”. He hoped to eventually destroy “the whole edifice” of our existing IR system — “awards, the IR Commission, all the rest of it”. He was sorry that the Society’s union-busting expectations hadn’t been met — but he promised that the proposed Independent Contractors Act would bring a smile to their faces.

The legislation, which is due to be introduced to parliament tomorrow, is supposedly designed to “protect” contractors from being “roped into state laws” that give them minimum wages and conditions, job security, workers’ compensation and the like. According to IR minister Kevin Andrews, “For many, being an independent contractor is the preferred way of doing business in a modern Australia and this choice should be protected.” Indeed, many people do support these contracting arrangements, but very often they are the boss — it’s not the worker’s choice.

We only need to look at Coalition Senator Barnaby Joyce’s comments yesterday:

[I]f someone’s basically working in a master-servant relationship, they should be maintained as employees. Some employers will be pushing people to become contractors who, for all intents and purposes, are just employees, and of course once they become contractors they lose such rights as workers compensation and superannuation, sick leave and maternity leave, you know, public holidays, issues such as that.

This legislation is part of the Howard Government’s efforts to prop up sham contracting arrangements. In recent years there has been a concerted effort by businesses to pretend their workers are “independent”, and thereby to sidestep their obligations as employers.

There have always been genuine independent contractors in a wide range of industries, and nobody suggests that it is not a legitimate arrangement in many circumstances. Indeed unions are happy to help people whose work suits contracting — MEAA, for instance, represents many freelance workers. It is when traditional employment is dressed up as contracting that the problem arises. When somebody is sacked on Friday and comes back to work on Monday for the same company, with the same manager, doing the same work, and wearing the same uniform, people start to wonder how “independent” the arrangement really is — especially when the worker has lost a range of conditions, and picked up a host of new administrative costs.

Take the recent case of Optus, for example, which said it will use the new “operational requirements” excuse to sack 80 of its technicians and hire them back as contractors — as long as they buy their van, register an ABN, pay their own super, workers’ comp, insurance, materials and equipment, and give up sick leave and long service leave. Liam Hogan incisively described this as “outsourcing … the costs of actually employing people to the employees themselves. That’s just perverse.”

Like WorkChoices, the Government’s agenda in relation to independent contractors runs counter to strongly-held public opinion — people simply don’t support sham arrangements that rip off workers to fatten bosses’ wallets. In order to avoid significant electoral damage, the Government and the business lobby will need to create a false impression of public support for their position: that’s where the Independent Contractors of Australia and Owner Drivers Australia come in. They present themselves, in the media and in submissions to government inquiries, as representatives of independent contractors. In truth, they have a small membership base that is dominated by industry representatives, they are funded by industry bodies, and they are run by pro-business lobbyists.

Independent Contractors of Australia

Independent Contractors of Australia was formed in 2001 by two pro-business activists, Bob Day and Ken Phillips. It is registered in South Australia, though its postal address has always been in Victoria.

Membership

It is difficult to work out exactly who the ICA represents, or indeed who or how many are its members. It purports to defend the rights of independent contractors, but its constitutional membership is significantly broader than that. According to its website:

Membership is open to all persons who are or wish to be independent contractors or seek information on independent contracting and who wish independent contractors’ rights to be secured. (Emphasis added.)

This means that membership of the organisation is open to people who are not independent contractors or prospective contractors — including companies who see contracting arrangements as a nice way to sidestep their obligations as employers. Such companies would of course argue that they “wish independent contractors’ rights to be secured”, when what they really want is to undermine workers’ rights more generally.

On the same web page, the ICA claims to have “has established a broad and wide membership”, but it says nothing about how deep the membership is. It is hard to imagine a legitimate peak body that does not have a reasonable sized membership base.At a hearing of a recent federal parliamentary inquiry into independent contracting, Tony Burke asked for information about the group’s membership structure (pdf, p EWRWP 60):

Mr BURKE—As a peak body representing a wide variety of members, what is your membership?

Mr [Ken] Phillips—We have not set as our target being an organisation with a large membership. We have several thousand on our email database which people subscribe to. On our subscription base we have several hundred. … So for the $50 a year it costs to subscribe to us you are subscribing to an information service. So it is fairly limited and we have not been set up to have a massive membership base. We do not pretend to be.

Mr BURKE—If there is a board, there must be some membership base that elects that board—or is it a shareholder base?

Mr Phillips—We are established under the South Australian corporations act and so we operate under those rules in terms of membership, votes for committee members and that sort of thing.

Mr BURKE—What is your membership?

Mr Phillips—In the hundreds.

There is a subtle shift in this exchange, which is very important. At first, Phillips says there are “several thousand” on the email subscriber base. This is essentially meaningless, and we do not know how many of these take an active interest in the ICA, let alone support it. Phillips goes on to explain that there are “several hundred” who pay $50 a year to subscribe to the website — essentially to get access to a library of articles and “tax tips” from the president, Angela MacRae.

But when Tony Burke challenges him to say how many are genuine members of the ICA, who have a say in board elections, Phillips doesn’t want to give a figure. He explains that they are incorporated, so their membership follows the rules of the constitution in electing the board. When pressed, he says “hundreds”, confirming his earlier estimate of the number of subscribers. This is misleading, as it gives the impression that those subscriber members elect the board. They don’t.

Again, from the ICA website:

Membership is available under the ICA constitution in two forms. People can join online as a ‘Subscriber Member’ to gain access to the full content of the Website. People wishing to become a ‘Voting Member’ require a nomination form and need to apply to the committee. For enquires concerning voting membership, please … contact ICA.

Phillips was entirely honest at the Committee hearing. There are no doubt “hundreds” of members of the ICA, who “operate under those rules in terms of membership, votes for committee members and that sort of thing” — but under those rules, most of those “hundreds” of members don’t have a vote in the business of the Committee. They are simply buying literature from the ICA.

The number of true, voting members of the ICA is not known, but it is hard to imagine that many of the subscribers can be bothered contacting the ICA to find out what hoops they need to jump through in order to earn voting rights — no doubt they are carefully vetted to ensure that they conform to the group’s dominant ideology. However, despite this secrecy about its membership, the ICA is a lobby group and therefore must have a public face. When we look at who speaks for the organisation, who serves on its board, and where it finds its institutional support, we start to get a better picture of who the ICA really represents.

Bob Day AO

One of three board members identified on the ICA website, Bob Day, was a founding member of the ICA in 2001, its president until mid-2005. He is president of the Housing Industry Association, and owns a large, national home building company. His interest in independent contractors is not as a contractor, but rather as an employer who sees independent contracting as a means for business owners to cut costs.

Linked prominently on the ICA website, and one of the few documents provided free to the public, is an article by Day (pdf) that explains his support for contracting:

When business owners more fully understand the doctrine of — as former Prime Minister Robert Menzies once put it, “the sanctity of contract” … they will realise why such a dramatic increase in independent contracting has occurred in recent years and how they too could equally apply it to their own businesses. …

Independent contracting offers people a real choice between traditional employment with its familiar contents — annual leave, long service leave, sick leave, maternity leave, superannuation, redundancy payments etc etc, and a new structure which provides a legal mechanism for business owners and self-employed contractors to make arrangements which suit the parties themselves… Unfair dismissal claims, the “legal greenmail” which haunts most small businesses and are a major disincentive to small business proprietors to employ new staff, can simply be taken out of the equation. …

Independent contracting has other benefits too which small business owners are rapidly discovering. It avoids the time-consuming practice of contributing to long service and superannuation schemes and, most importantly, the responsibility to deduct tax. Independent contractors send their own tax payments to the ATO via quarterly BAS statements. The advantage of simplicity in these matters cannot be underestimated and anyone whoís had to do this paperwork (or pay someone else to do it for them) will understand the substantial benefit it offers.

It is hardly likely that someone who genuinely represents independent contractors would want them to have such a burden placed on them. For Day, independent contracting is clearly just a convenient mechanism by which business can avoid annual leave, long service leave, sick leave, maternity leave, superannuation, redundancy payments, protections against unfair dismissal, superannuation, tax, and paperwork. Responsibility for all of these should be transferred to the worker, who is “free” from secure employment. It is about cost-cutting, not workers’ rights.

That Day should take such a pro-business stance on the issue of independent contractors is no surprise, given his activist background. He is a board member of the right-wing Centre for Independent Studies, and writes for the Institute of Public Affairs, which bills itself as “Australia’s Leading Free Market Think Tank”.

Day is also a long-standing member of the hardline HR Nicholls Society, which seeks to marginalise unions and undermine protections for working Australians. He has been secretary of the Society for well over a decade, and regularly speaks at its conferences, railing against evil trade unions. At the 2006 conference, the Society’s founding president, Shane Stone, gave a talk about the group’s influence, and said this of Day and the ICA:

[O]ne of the most active members of that Association [Independent Contractors of Australia], Mr Bob Day, has been a member of the [HR Nicholls] Society’s Board of Management almost from the outset. I do not think he will contradict me if I say that he has taken the ethos of the Society into the work of the Association.

That, I think, is an accurate assessment. The ICA does not truly represent workers. It was established by ideological warriors to provide cover for their anti-union, pro-business agenda.

Ken Phillips

Another of the ICA’s founders, Ken Phillips, is now the Executive Director and acts as the ICA’s foremost public spokesperson. Like Bob Day, his interest in “protecting” independent contractors comes from vested interest and ideological obsession.

Phillips is a prominent activist in Australia’s right-wing think tanks. He is Director of the Workplace Reform Unit at the Institute of Public Affairs, a contributor to the Centre for Independent Studies’ Policy journal, and a vocal member of the HR Nicholls Society — not only does he regularly speak at its conferences, but he is sometimes a spokesperson in its press releases. There is little doubt that, like Day, Phillips brings the anti-union, pro-business, ideological obsessions of the HR Nicholls Society to the ICA.

But apart from his ideological position, Phillips also benefits financially from the imposition of contracting arrangements, as a management consultant:

He is a lobbyist specializing in work-related issues, and in that capacity consults to a wide range of organizations and businesses on practical processes for continuing reform inside businesses. … [He also] ran a jobs placement programme for an Asian community…

Phillips profits by encouraging business to switch from direct employment to contracting arrangements.

One high profile case he has strongly supported is the attempt by Kemalex Plastics to abolish “traditional” employment at the company and instead implement a contracting regime. Indeed, according to Alex Collins and Christian Seibert, Kemalex “hired workplace relations expert Ken Phillips to advise on its independent contractor arrangements”. In a string of opinion columns on the issue, Phillips does not disclose any personal involvement in the dispute. However, even if he was not involved in planning the Kemalex fight, it is clearly the type of program he endorses.

Kemalex boss Richard Colebatch says he first decided to shift his workforce to independent contracting arrangements ten years ago after hearing Ken Phillips speak at a HR Nicholls conference, and immediately set about restructuring his South Australian workplace. When he bought a Victorian plastics factory in 2003, he decided to implement the same plan. When the NUW resisted his attempts to shift workers onto “independent” contracts, and remove paid meal breaks from those who refused, the dispute became very nasty indeed. This is David Peetz’s account:

[I]t is clear the Government would like to see more employees become “independent” contractors along these lines.

That is precisely the intention of the forthcoming Independent Contractors Bill. This was made clear by [finance minister Nick] Minchin when he infamously presented the HR Nicholls Society’s annual Charles Copeman Medal.

The medal was awarded to Richard Colebatch, in charge of Kemalex Plastics, who last year was embroiled in a bitter dispute over his attempts to turn his employees into “independent” contractors and only recruit “independent” contractors to work on his production line.

At one stage, 12 “masked bikies” crashed through a mostly female picket line, while escorting a delivery vehicle on to the premises.

(The company’s unlikely explanation (pdf, p5) for this incident is that a group of “motor bike enthusiasts” were on their way to a funeral when they decided to make a detour to deliver some tyres to the Kemalex plant.)

Peetz continues:

It strains credibility to suggest that workers on a production line earning less than $15 an hour would voluntarily prefer to set themselves up as independent companies, doing the same work but without the rights of employees.

When “independent” contractors are entirely dependent on a single employer, the arrangements are in many ways a sham by which a corporation avoids its normal responsibilities as employer.

Yet this is exactly what Ken Phillips suggests to employers as a management consultant to business, then vigorously defends in the media as a self-declared spokesman for independent contractors. His involvement in the ICA is intended to give the impression of defending workers’ rights, when in fact Phillips acts on the side of employers who use contracting arrangements to sidestep their obligations.

Angela MacRae

The ICA’s current president, Angela MacRae, took up the position in mid-2005. She is a tax specialist who previously worked for Treasury, and was hired by the Prime Minister’s office to assist in bedding down the GST and PAYG regimes. Unlike Day and Phillips, MacRae does not appear to be heavily involved with any of the prominent right-wing think tanks. However, she is clearly aligned with Liberal Party policy, and was recently appointed to the Government’s Regulatory Taskforce. Its report contained a nasty surprise for working Australia:

Under existing rules, employers must pay super contributions (9 per cent of a worker’s wage) for any employee who earns more than $450 a month.

But the taskforce recommended that only workers who earn more than $800 a month should be eligible for super payments made by the boss.

Like Phillips, MacRae is a consultant to small business, presumably including the desirability of cutting costs by engaging contractors instead of hiring employees.

Stephen Harrison

Beyond the three board members listed on the ICA website, it is difficult to determine who else is involved with the organisation. One of these is Stephen Harrison, though he calls the group the Independent Contractors Association of Australia on his CV. He is a board member.

Harrison is a former president of the AWU, who is described on Crikey’s list of labour movement rats as follows:

Stephen Harrison: was shot out of the AWU by Bill Ludwig and went on to found a strike-breaking business called something like Independent Contracting.

He is indeed the Managing Director of a labour hire company called the Australian Independent Contractors Agency. Its tactics have attracted controversy, as employers engage the agency to unilaterally restructure their workforce:

AICA, headed-up by former AWU official Steve Harrison, makes its money by transforming wage workers into “independent contractors”. The process is promoted to employers sick of paying entitlements and meeting other legal obligations.

The process was described in a Federal Court case, Damevski v Giudice and Ors. A cleaning company sought to avoid its workers’ compensation obligations, and decided to sack all of its staff and rehire them as “independent” contractors. This is the “choice” the cleaners were offered:

The decision to become a ‘contractor’ is entirely up to each individual, and all I can do is strongly recommend that you give it your favourable consideration, however it would be remiss of me not to inform you of the potential ramifications for you should you not accept the AICA/MLC proposal.

Should you or any other staff member decline the AICA/MLC offer, I will be left with no alternative but to write to our client(s) and inform them of our intention to relinquish the relative contract(s). In that regard, you may be offered a position by the contractor appointed to take over the site(s), but such subsequent employment cannot be guaranteed.

They were told they could either accept the new contracting arrangement, or find work elsewhere. This is the “freedom” that Harrison supports, and his involvement in the ICA is designed to ensure that he can continue to profit by helping employers force their staff out of traditional, secure employment. The union, though, stood up for the employee, fought the case in the Federal Court, and won.

Harrison has been involved in a previous lobbying attempt on the issue of independent contractors. A year before ICA was formed, he was criticised for potentially misleading NSW parliamentarians about his position in the employment services industry:

The key Upper House members, who hold the balance of power, advised the Carr Government they would defer the entire package over concerns about the regulation independent contractors after being lobbied by former FIME national secretary Steve Harrison.

Harrison had approached the minor party representatives and independents under the guise of the Australian Independent Contractors Association.

Labor Council assistant secretary John Roberston says some of the crossbenchers may have been under the false impression that Harrison was representing a peak group, rather than his own private company.

This may have been unintentional, but the same can not be said about the ICA. It is at the forefront of a lobbying campaign, even though it primarily represents employer interests.

Tony Hulett

Another of ICA’s less public personnel is Tony Hulett; he says he is a member of the ICA committee, which probably means the board. Hulett a Melbourne lawyer who is on Law Committee of the Australian Institute of Company Directors. His practice is mainly for businesses, in areas including employment and restructuring (which is often a euphemism for imposing contracting arrangements on employees).

Norman Lacy

Another board member, Norman Lacy, is a former minister in a Victorian Liberal government, who claims expertise in “strategic management” and “organisational change techniques” (code language for downsizing and outsourcing, forcing people to become independent contractors). He is currently the Executive Director of the IT Contract and Recruitment Association — which does not represent contractors, but rather “some CEOs in the IT contract and recruitment industry”, who profit by encouraging firms to turn to contracting rather than direct employment.

Under Lacy’s direction, ITCRA has been pushing for a relaxation in visa requirements, so that recruitment agencies can bring in foreign IT workers on low pay. In 2003, DIMIA cracked down on the abuse of “457 visas” by IT recruiters — they’d been “getting money for jam, using their pre-qualified business sponsor status to push through hundreds of 457 visas each year for low-end IT contractors with minimal experience” — but that didn’t stop ITCRA: it is now pushing for relaxation of the rules about “417 visas”, so that recruiters can get a foot in the door elsewhere.

Australian IT contractors have been very critical of Lacy and ITCRA, as discussion on this industry website shows. Tony Healy explains why the locals are so angry with recruiters:

A 2002 study by researcher Bob Kinnaird in People and Place, published quarterly by the Centre for Population and Urban Research at Monash University, found overseas programmers were paid 15 per cent less than locals.

This is consistent with work by Professor Norman Matloff of the University of California at Davis who used American Bureau of Labour Studies figures to find overseas programmers in America were paid about 20 per cent less.

Those lower pay rates translate into higher margins for the recruitment firms that place these candidates.

Figures in the annual reports of some government departments suggest recruitment firms are retaining huge profits from placing programmers, charging as much as $180,000 for a programmer who may be paid about $70,000.

Again, this is consistent with reports from contractors that recruitment firms sometimes retain commissions up to 75 per cent of the hourly rate paid by an employer, which is clearly excessive.

Labour hire firms do nothing to justify that extraordinary margin.

Norman Lacy is not interested in protecting Australian contractors, but rather protecting the right of business to use contractors instead of staff — so that his members in ITCRA can continue to profit from the placement of cheaper foreign IT contractors.

Industry support

In addition to funds generated by its subscription service, the Independent Contractors of Australia is supported by the contracting industry. There are currently four ICA Supporters listed on the website. These groups

have made commitments with Independent Contractors of Australia to the cause of independent contractors and provide financial or organisational support to ICA in our campaigns.

At least three of these groups are contracting industry groups that profit from the shift to independent contracting. The ITCRA, discussed above, represents IT recruiting companies that benefit from a shift to outsourcing in the industry, and continues to advocate policies that are not supported by the workers — mainly independent contractors — in the Australian IT industry. Freelance is one of those IT recruiting companies, and will be discussed further below.

SRMRisk “assists independent contractors and businesses in meeting their statutory health and safety obligations” — that is, it provides a service that would not be necessary without contractors. If independent contractors were deemed to be employees for the purpose of health and safety regulation, much of SRMRisk’s work would disappear, though it would increase protections for contractors. SRMRisk’s “financial or organisational support” for the ICA no doubt assists its OHS lobbying, but it raises questions whether the ICA’s efforts are on behalf of independent contractors or the industry that has sprung up to sell them things they didn’t need when they were employees.

Website

The ICA’s website was designed and built by Fergco Pty Ltd, which is managed by Chris Ulyatt, who worked for seven years as Editorial Director at the Institute of Public Affairs. Fergco specialises in producing websites for groups that purport to reflect broad community sentiment, but which are in actual fact comprised of the same circle of people from the right-wing think tank fraternity. Examples include the HR Nicholls Society, the Lavoisier Group, and the Bennelong Society. This suggests that ICA is another cookie-cutter front group for the free market lobby.

Owner Drivers Australia

In April 2006 a new organisation was formed, calling itself Owner Drivers Australia. On 19 April, the Transport Workers Union questioned whether the Independent Contractors of Australia could speak for owner-drivers (pdf):

[T]he Transport Workers Union of Australia represents some 15,000 to 20,000 independent contractors involved in road transport.

Unlike the ICA, we actually go out and represent independent contractors on a daily basis.

We don’t simply represent businesses that use independent contractors.

Exactly one week later, on 26 April, the Owner Drivers Australia website was launched. Though it pretends to be an independent, grassroots organisation of transport workers, it is a subsidiary of the Independent Contractors of Australia, formed by the same group of free-market ideologues. According to the ODA’s website:

At this stage, we are formally a division of the ICA organisation, but operating as an independent subcommittee.

Like its parent body, ODA does not really represent transport workers.

Membership

Owner Drivers Australia, as a division of ICA, follows the same membership structure — that is, most members do not have a vote, they are merely website subscribers dressed up as members of the association.

The ODA site claims:

We have begun with an initial membership of several hundred with people drawn from across Australia.

You will recall that Ken Phillips told parliament the subscriber membership of the ICA is “several hundred”. The Sydney Morning Herald suggests that “[m]ore than a third of its membership base — which numbers in the hundreds — works in the IT sector.” If that’s the case, then it is impossible for the transport division of ICA to have “several hundred” members. Clearly, Owner Drivers Australia is artificially inflating its membership. It includes in its tally every member of its parent body regardless of their connection to the transport industry.

The TWU notes (pdf) that “[Membership can (and probably does) include transport companies that use owner-drivers, [and] non-transport companies who might occasionally use owner-drivers”. In a letter published in Crikey’s 27 May 2006 email newsletter, the TWU’s Fiona Sugden wrote:

Despite numerous enquiries from the TWU and Federal Members of Parliament, this organisation refuses to reveal who its membership actually is. When freight express owner driver Michael Evans decided to attend the Independent Contractors of Australia conference last year with genuine interest he was shocked to see there were no other owner drivers or independent contractors present. Michael contacted the TWU to express his concern about their plans at the conference to undermine independent contractors and said “it was a meeting of employers, not workers – clearly they don’t represent me.”

The Herald Sun recently published an article claiming that ODA is “an ‘owner-driver’ lobby group that has no owner-drivers” (25 May, p27). In response, the group issued a press release (pdf) claiming that “[a]s of a few weeks ago, we had around 500 members” — possibly true, but ODA does not claim that any of these members are owner-drivers. It refuses to provide a membership list, citing privacy concerns, but surely some of these proud owner-driver members would proudly announce their support for the ODA?

There remains no evidence that a single owner-driver is a member of the group, let alone that they were part of a grassroots organising effort.

Don D’Cruz

On 11 March, Don D’Cruz was the media contact on an ICA statement about owner-drivers. He is currently listed as “[t]he inaugural ODA spokesperson” on the new group’s website. Given that Owner Drivers Australia puts itself forward as the spontaneous creation of self-reliant truckies, you might expect that D’Cruz is an owner-driver. He is not.

D’Cruz is a think-tank activist. He was, until recently, a Research Fellow at the Institute of Public Affairs. He provides advice on running “corporate campaigns”. He was a director of NGO Watch; initially a “unit” of the IPA but later taken over by two US big business think tanks, the American Enterprise Institute and the Federalist Society.

In 2002, while D’Cruz was a director of the IPA’s NGO unit, a fellow director, Gary Johns, set out the group’s beliefs in a lecture to the Senate (pdf, p15):

[A]n NGO should provide data about their source of funds, their expertise, their membership and the means of electing their office-holders. Specifically, where a government grants standing to an NGO the following information should be gathered and made available to the public:

… Membership: There must be a verifiable list of the membership, one that distinguishes members—people with voting rights—from supporters. List should not be made public, although there should be evidence that new membership is encouraged.

Elections: Document the election process and processes by which members are able to be involved in the policy-formation, including the ability of members and supporter to access all decisions of the governing body.

… Financial statement: The financial position should be prepared in accordance with accepted accounting principles and include: significant categories of contributions and other income, expenses of major programmes and activities, and all fund-raising and administrative costs.

The Independent Contractors Association (including Owner Drivers Australia) do not meet those professed standards, despite being given “special standing” by its appointment to an Australian Taxation Office advisory committee in 2004.

Michael Kelson

On an ODA press release (pdf) about the proposed Independent Contractors Act, Michael Kelson is listed as the group’s spokesperson. Like D’Cruz, Kelson is not an owner driver. He is the Chief Executive Officer of Freelance, a global recruitment firm that specialises in the information technology industry. Freelance is listed as an ICA supporter, providing “financial or organisational support to ICA in our campaigns.”

Freelance stands to gain from an increase in independent contracting, as it charges 4% of a contractor’s income for its services. In 2004, Freelance was accused of involvement in a 457 visa scam. The Australian reported that Freelance was

… alleged to have sponsored large numbers of information technology workers from India on the pretext there was IT work for them in Australia.

Instead, many Indians who entered the country as software programmers and systems analysts found the jobs they had been promised lasted only a few months — if that.

Some were asked for more money to stay on the books of the companies that had sponsored them, and ended up working illegally as convenience store attendants, kitchen hands and cleaners.

Kelson denied that his firm was involved in the scandal, and indeed it was not prosecuted.

However, Kelson’s interest in independent contracting clearly stems from his role as an employer and recruitment agent (rather than as an independent contractor himself) and he is obviously not an owner driver.

Industry support

As a subdivision of Independent Contractors of Australia, ODA derives the same support from industry employer groups that ICA does. Furthermore, the Herald Sun alleges that its campaign has substantial corporate support:

[T]he Herald Sun has learned that large courier companies are secretly paying for the $100,000 campaign.

The group wants total deregulation of the transport industry so drivers and companies can negotiate contracts without award standards.

That would water down driver safeguards.

D’Cruz responded to the report on behalf of the ODA (pdf), saying the figure is “speculation” — but he does not deny the accuracy of that speculation, nor does he deny that it was provided by the courier industry rather than by owner drivers.

What does all of this mean?

As we have seen, the Independent Contractors of Australia began as a side project of pro-business, HR Nicholls Society activists. It is supported by other right-wing think tank operatives, and companies that profit as consultants and middle-men in the outsourcing industry. There is no evidence to suggest a significant rank-and-file membership, and to the extent that there are genuine independent contractors involved, they are more likely to be subscribers to McRae’s tax tips than voting members that control the organisation’s personnel and policy.

The Owner Drivers Association is even worse — it was started in a panic when the TWU questioned ICA’s standing to speak on behalf of truckies, but it is nothing more than a different website with a different think-tank operative, Don D’Cruz, manning the telephone.

These groups already have substantial influence over the Howard Government. In announcing the proposed legislation, Kevin Andrews claimed that it would “protect” 1.9 million independent contractors in the workforce — a figure that was spread by the ICA in January, based on the Institute of Public Affairs’s methodology. But this estimate was demolished by a Productivity Commission report, which found:

“This category experienced a decline in both relative and absolute terms between 1998 and 2001. From 2001 to 2004 it grew in number but not as a proportion of the workforce,” says the year-long study, The Role of Non-Traditional Work in the Australian Labour Market.

Phillips was forced to admit that he had included small businesses with employees in his figure.

The problem is that Government members are sucked in by the ICA and ODA campaign, believing it to be a genuine, grassroots movement. After the ODA sent coffee mugs to MPs, the backbench became furious that the proposed Independent Contractors Act would make allowances for owner-drivers in NSW and Victoria (thanks to a successful TWU campaign).

Journalists are complicit in giving these groups disproportionate influence by turning to them as representatives of contractors, rather than as corporate lobbyists. (The Herald Sun’s Gerard McManus is a notable exception.) They should be asking questions like:

• How many members are in your organisation?
• How many of those have voting rights?
• Who is on the board of your organisation?
• Do recruiting companies and businesses that engage contractors fund your organisation?
• When ODA claims to have 500 members, does that include people who are, for example, IT workers who joined the ICA?

If journalists won’t do it, we’ll have to be extra vigilant. Every time you read a report that quotes Phillips or D’Cruz claiming to represent independent contractors, write a letter to the editor explaining that ICA and ODA do not represent workers — they are part of the corporate lobby.

Independent contractors deserve protection, but they are best protected, like other workers, by preserving their right to form genuine representative bodies — unions — and to engage in collective bargaining. When assembly-line workers who do all their work in one factory are being called “independent” contractors and denied the right to join a union, something has gone horribly wrong.