Wilkinson Kate: Minimum Wage and Remuneration Amendment Bill — Second Reading 
Wilkinson Kate: Minimum Wage and Remuneration Amendment Bill — Second Reading 
[Volume:647;Page:16185] 
KATE WILKINSON (National) 
: 
 I am rising to speak to and oppose on behalf of the National Party the Minimum Wage and Remuneration Amendment Bill at the second reading. This member’s bill has gone right through the select committee process. It was well scrutinised and came back with the recommendation that it not proceed and that is exactly what should happen. 
The bill started off intending to impose the minimum wage on all independent contractors and one has to wonder why. It was ostensibly drafted to—as the author of the bill proclaimed—set out “a process for minimum remuneration to be determined for contractors and [enable] that to be enforced.” What exactly was the mischief that this bill was trying to address? Well worryingly the Minister of Labour at the time herself stated with such authority that this bill “addresses a very fundamental flaw in our employment relations legislation in that we do not have a minimum wage provision for those who are working under a contract for service … not only will this bill give those contractors legislative provision under the minimum wage legislation but it will also ensure that we have fair competition when we are looking at the contracts we provide for.” 
That Minister thought there is a fundamental flaw in our employment relations legislation because for example painters who are painting a house may have underquoted for a variety of reasons—perhaps the weather or a deliberate loss-leader. The owner of the house would have to make up the difference if it turned out that the painter did not earn the minimum wage for that job. Then there is the question of what the job entailed. Did it include all the paperwork the travelling to and from the job the cleaning the painting etc.? Independent contractors have their own incentive to get the job done as efficiently as possible. They are accountable for their productivity and therefore their rewards. This bill would be a bizarre incentive for contractors to prolong the job especially if they had no other work. 
Then the Minister made the extraordinary claim that “we should not have people who are able because they need to undercut another competitor to do a contract for something that may be doing them or their subcontractors no good at all.” Well I would have to say that it is no wonder we lost the Rugby World Cup—we are taught to compete but not to win. We had a Minister of Labour who said that competition is bad. She said that one cannot possibly quote less for a job than another contractor does and I say that that is bizarre. 
We have to try to work out what mischief this bill is intending or attempting to address. Why do we even need such a bill in the first place? Well that answer may indeed be addressed in the recommendations of one of the submitters the National Distribution Union which “urged the committee to recommend that the scope of the bill be extended to include an extension of collective bargaining rights to contractors.” That would mean that all contractors—all self-employed persons—would have to be members of a union because as we all know collective bargaining is the monopoly of the unions. So maybe this bill is really a hidden agenda simply to augment the membership and power of the unions. 
Nobody condones the exploitation of vulnerable workers whatever their occupation and whatever their employment status. If this bill is intended to prevent as much as possible the exploitation of workers then that is how it should have been drafted. But what it does is to absolutely confuse contract of service with contract for service. It says to contractors that they can quote whatever they like for their services they can paint houses for whatever price they think appropriate but if it turns out that the hours worked have been miscalculated—perhaps the weather has conspired against the contractor—if for whatever reason the hourly rate turns out to be less than the minimum wage then the house owner the innocent party has to make up the difference. 
Independent contractors should be free to set their own price and their own terms of the contract. I want to quote from a recent article that I have seen: “contractors should be regulated by commercial not industrial law. … unions should not be able to interfere in commercial arrangements involving contractors”. One might ask who the author of those quotes was. I would have to admit that it was Julia Gillard the Deputy Prime Minister of the Australian Labor Government. 
If we look at the mechanics of the bill we also have to ask what work is to be remunerated here. If a musician—an independent contractor—spends time rehearsing and practising is that chargeable time? Does that time have to be taken into account for the purpose of determining the hourly wage rate? If writers are contracted to write something do they get paid for just thinking? If they have a blank on creative thoughts—writer’s block—do they still get paid the minimum wage for that block? Practically speaking we would have legislation that is unworkable and impractical. 
If this bill is passed we would have situations where quotes are not worth the paper they are written on and are no longer able to be accepted at face value. People wanting their house painted will not be able to rely on a quote given to paint that house; they would have to get a quantity surveyor or a similar expert to determine how many hours the painting should take then allow a bit for weather allow another bit for unforeseen circumstances work it out and see whether it tallies to the minimum wage. There will be no such thing as a loss-leader and no such thing as a contract being performed just to advertise and market how good and reliable that contractor is. We would have a situation where some people will be able to demand payment for work that has not been completed for something that they have not produced or for a service that they have not provided. Writer’s block for several hours days or weeks could be very costly yet nothing has been produced. Real estate agents being paid on a commission basis would be paid even though not a single solitary sale was achieved. 
Requiring a principal to keep records for 6 years particularly if the principal is not even aware that the contractor may be a specified person or fall within the ambit of the bill is impractical unwieldy and another compliance burden. An example has been given of personal home-care support where a private carer is engaged on a per visit basis rather than an hourly rate basis. I ask whether we should expect elderly people needing such care to keep timesheets for 6 years. Even if unfortunately they subsequently die those records still have to be kept for 6 years just in case the caregiver falls within the ambit of this bill as an independent contractor and just in case for a variety of reasons the actual hours worked meant that the carer was paid less than the minimum wage. They would then have to try to explain or justify exactly what it was that the carer was being paid for—whether it included travel to and from the house sitting down for a cup of tea at the end of the job or whatever. 
If we look at the author’s justification for this bill we see that it was that contractors have few of the protections enjoyed by employees and are able to be paid at rates that are less than the minimum wage. But those workers have other freedoms and choices. They have the choice to work when they want to. They have the opportunity to deduct proper expenses from their taxes. They have the choice to work for less pay than others maybe because they want to market themselves as good-quality contractors. They choose to be independent contractors they choose not to be wage earners they choose to have some control over what work they do and what work they do not do and they choose within realistic parameters the hours of work they want to work. If they make a mistake in quoting or in the contract price then they have other remedies under other legislation such as the Contractual Mistakes Act or the Contractual Remedies Act. 
So what does this bill do? Firstly it blurs the distinction between a contract of service which is an independent contract and a contract for service—an employment contract. The bill creates uncertainty as to what work is to be remunerated—for example rehearsal times for musicians. It is not the right instrument to prevent the exploitation of vulnerable workers. Its record-keeping requirements would be unwieldy and impractical. It will impose administrative burdens on many who cannot meet them. National opposes this bill not because it condones the exploitation of vulnerable workers but because this bill is simply unworkable and unrealistic.