Definition of Worker Workers Compensation Legislation in NSW. Submission from the Recruitment and Consulting Services Association

Transcription

1 Definition of Worker Workers Compensation Legislation in NSW Submission from the Recruitment and Consulting Services Association March

2 THE RECRUITMENT AND CONSULTING SERVICES ASSOCIATION The Recruitment and Consulting Services Association Ltd ( RCSA ) is the peak body of the employment services industry in Australia and New Zealand. Formed in 1996 the RCSA boasts a national membership of 3,000, all of which are drawn from a diverse range of organisations and individuals including small owner-operator businesses, listed and non-listed Australian companies and Australia s large multinational corporations. Members of the RCSA provide a multitude of employment and other work related services including on-hired employee services, contracting services, recruitment services and consulting services. The RCSA maintains its head office in Melbourne and six Secretariats located in Victoria, New South Wales, South Australia, Western Australia, Queensland and New Zealand. The RCSA is instrumental in setting standards in the employment services industry. Such standards are set and maintained in relation to individual and corporate member professional development, education, training, industry compliance, industry performance and the establishment and maintenance of sustainable and effective legislative and regulatory regimes relevant to the industry. The RCSA Australia/New Zealand boast a very effective member committee structure that review and contribute to the establishment of professional conduct and equitable outcomes for corporate members, individual members, employees of corporate members (direct and on-hired) and contractors. Committees include the Australia/New Zealand Workplace Relations Committee, Australia/New Zealand Workers Compensation and Occupational Health and Safety Committee, Australia New Zealand Insurance Committee, Australia New Zealand Education and Training Committee and the Australia New Zealand Taxation Committee. RCSA has State specific committees in the State of NSW and has sought the opinions of members in NSW as to the potential impact of the proposed amendments to the definition of worker. This committee structure, which is supported by State based committees provides the RCSA with an unparalleled capacity to respond to inquiries of this nature in a manner that is accurate, effective and insightful. 2

3 Submission RCSA is particularly interested in this discussion paper as released by WorkCover NSW given that it has the potential to impact upon the operations of members and non-employed workers working on behalf of such members. RCSA submits that the changing nature of work has implications for business, government and workers alike and attempts to adapt legislation to meet the demands of such change needs to be considered in terms of the benefits arising out of the agency model at a broader level not simply perceived threats. RCSA submit that the third party employment facilitation role played by many of its members provides for many solutions in relation to the modern worker and this must be kept in mind at all times when considering changes to the way work is regulated. We submit that it is extremely important that WorkCover NSW recognise the breadth of services provided by workers on-hired by RCSA members. Such services are now far more prevalent in the technical and professional areas and the likelihood of workers being on-hired in unskilled, semi-skilled and trades capacities is very low. We therefore request that the examination of the redefinition of worker is not an over reaction to ODCO arrangements where this would appear to be more likely. The RCSA believes that it is important to take into consideration the different independent contractor engagement models as this will have a bearing on the definition of worker debate. Independent Contractor Types: Sole Trader (sometimes referred to as Individual ) Incorporated Entities Partnerships and Trusts With the exception of Incorporated Trusts, Partnerships and Trusts do not have a an independent legal existence. Furthermore, the relationship between the partners is governed by the Partnerships Act. In NSW Incorporated Entities and Incorporated Trusts are required at law to have workers compensation insurance. However, Sole Traders are unable to acquire workers compensation, and as such, they are the principle concern to Workcover s consideration of defining a worker. RCSA believe a reliance on a test based predominantly upon the supply of labour is outdated and there needs to be a recognition of tools of the mind 3

4 amongst executive, technical, professional and scientific disciplines rather than simply focusing on traditional forms of determining how services are provided. Following member consideration and further to the issues raised during our two meetings with WorkCover NSW we submit the following: 1. RCSA support in principle any moves to provide certainty in the determination of and distinction between independent contractors, deemed workers and workers under the Workers Compensation and Workplace Injury Management Act We particularly support the concept of providing a means by which the status of an individual can be determined with some certainty at the time of engagement of such partis services, rather than retrospectively. 2. RCSA accept the need for deeming provisions with respect to on-hired workers ( labour hire ) and have no particular issues with the operation of this section, aside from the reservations we expressed in the meetings with WorkCover whereby there is apparent potential for discrimination in terms of deeming of workers that may provide contracting services through a labour market intermediary such as an on-hire firm. 3. It is important that WorkCover does not consider the definition of worker in isolation, but rather considers the implications of the definition in the wider context of the Act. This is particularly the case with regards to return to work and rehabilitation obligations, which are the same for all classes of workers, deemed or otherwise. The on-hired employee services industry already experiences difficulties convincing some host organisations to actively participate in obtaining alternative duties for injured workers and this is likely to be exacerbated in relation to non-employees deemed to be workers. 4. We would like recognition from WorkCover that, particularly in the on-hired services ( labour hire ) industry, contracting arrangements are not necessarily created to avoid premium obligations or deprive workers of their entitlements. Rather they are often created at the request and to the benefit of the "contractor". In such circumstances it is possible that workers will not perform work for an RCSA member unless they are engaged under a contract for services and in such circumstances these parties should be able to obtain a declaration where the essential criteria are met. 5. RCSA agrees in principle with the methodology proposed by WorkCover for the determination of who is an independent contractor, subject to consideration of the unique circumstance that exists in the on-hired services industry. The principle issues in this regard are; (i) Clarification of the results test as it relates to independent contractors onhired through labour hire companies. We are particularly concerned that 4

5 the results test would be applied to the relationship between the contractor and the labour hire organisation, (meaning that there was no specific result or outcome to be achieved and therefore the test would fail) rather than to the results sought by the host organisation from the contractor. (ii) Clarification of the results test to ensure that regular "wage-like" payments to contractors who are on-hired are not construed as negating the fact that the contractor has been retained by the host organisation to achieve a particular outcome. (iii) The 80% rule should be applied on a "look through" basis so that a relationship with a single labour hire organisation (acting as essentially an agent), but multiple host clients, does not effect the operation of the rule. (iv) RCSA believe there should be some recognition in the definition of the fact that a contractor may perform work on one major project, for one host client, over a long period of time. This should not necessarily impact on their status as an independent contractor merely because their operation is not large enough to allow them to perform work for two clients simultaneously, or that the single contract takes a large amount of time to complete. 6. RCSA support moves to simplify the determination by providing a method by which an incorporated entity would automatically be deemed to be an independent contractor, subject to certain pre-conditions (such as confirmation of workers compensation insurance). However, we believe that it would be appropriate to extend the currency of such declarations to circumstances where similar or like work is performed through an recruitment firm. 7. RCSA support the creation of a central registry to be held and managed by WorkCover NSW whereby parties engaging contractors can ring in to check on the status of existing policies and the currency and scope of declarations to ensure avoidance of misrepresentation and circumstances where workers are only initially covered for workers compensation. Should you wish to discuss this submission with us further we would be happy to do so in person or by way of further submission. 5