Bob, I agree with your closing remarks about contractors being the happiest of workers and I might add some of the most productive.

During my working life I have hired many professional contractors to suppliment my workforce during periods of high activity. I have had problems with only 2 (both had CVs sighting experience far exceeding the skills demonstrated) and was able to have them replaced within a week.

When my company demanded that contractors be brought into the fold as permanent employees most left rather than join the company. Of those that took permanent positions after a year most had left. The most often cited reason was that contractors do not have to get involved in petty office politics nor do they have to do a lot of paperwork and other ancillary jobs not directly related to their assignments.

Bob offers no analysis of the growth in contracting, only political motherhood statements. Where is the growth in independant contracting ? Are the contractors genuinely independant ? Are Australian contractors happy, or is it just a Swedish thing ?

I think independant contracting is certainly good for big business -they can off load their risk and costs onto small business. And then screw them on the price.

I would think also that it would be hard to determine the actual level of disputation. A proper assessment may need to include those contractors who decided "fighting the man" isn't practical as they can't risk losing the family home in a legal battle with a multi national corporation.

My point is I don't dispute the phenomenon of independant contracting but I think there is a real lack of evidence to support the view that it is a desirable thing, or for that matter a bad thing.

Is there a role for Government in having a fair contracting regime for small business ?

When people are forced into becoming quasi contractors real problems will become apparent. A contractor has some real benifits, especially in regards to bussiness costs and taxation. However when a worker is made a contractor because of this neo-feudal law, watch the black market rise and tax income to the govt fall.

Whats the go here, neo-libs trying to convince people it is fine to become serfs and indentured slaves to thei landed gentry.
This article represents the sheer arrogance and is propaganda, promulgated by the greedy.

My interest is the IR legislation this act of piracy by John Howard,is more important then this.

Independent contracts are beneficial to very few workers.

My partner was a subcontractor in the building industry and he worked for on firm without benefit of sick pay, holiday pay and he had to organise his own superannuation. When he got to sick to work he couldn't get sickness benefits because he was self employed - but he got a health care card.

I have worked as a contractor in IT and I noticed that most contractors would get a 6 month contract then spend another 3 months looking for the next contract. I noticed that contractors who had just started their contracts would be organising tradesmen to undertake those jobs that needed doing that they could now pay for.

I have watched a friend's business consultancy lose business as her friends changed jobs and were no longer responsible for hiring contractors.

Essentially contractors don't train apprentices or graduates, rely on their social networks for new business and spend 50% of the year looking for work. A few contractors are well paid but most scrape by on less than average wages. Usually IT contractors are more concerned about increasing the number of contractors employed on the site rather than solving the clients IT problem.

Next time you are talking to your lawyer, ask him how many contractual disputes he is involved in.

The trend towards "CONTRACTing", "CONTRACTors" and "CONTRACTs" gives light to how many lawyers we have representing us in parliament.

Australians do not need anymore lawyers looking after their supposed National Interest.

The tone of Bob’s article makes IR sound wonderful and cosy. It is great for some people, they being employers. For a significant proportion of the population the new IR laws spell hell. Prior to the new laws being invoked, an abattoir in my State sought to make its workforce change from being workers to contractors. When analysed further it has become apparent that the workers were far worse off, they lost their entitlements and were paid less; creating sweat shop conditions.

The IR laws were swept through Federal Parliament in an inept manner as legitimate concerns were ignored, no glossing over the new IR regime by Bob in a Pollyannaish manner is not going to clear the underlying stench of working people being sold a pup. The IR legislation was swept through Parliament with no real debate, the electorate was poorly treated through this process; and so, comments made supporting IR will be treated with great mistrust. The gremlins will continue to roll out of the woodwork as unexpected consequences occur.

Sorry Bob, I think it's you who is ignoring the real world, and the facts, rather than Mr Beazley. I have 4 different experiences with contracting in the real world; 4 different fields, and they have all been negative.

The first is in my own field of IT; this has been commented on a fair bit already in this thread, so I won't go into any further.

The second & third are in the blue collar field, I have relatives who all work in the field of contracted labour for concreters, they are screwed royally by their quasi-employer on both conditions and income, and when one of them got sick recently there was NOTHING for him, all his income had been used week to week! He couldn't even get the "dole" as he was still "working".

The same is true of the other blue collar field I have experience with, contract carpet & vinyl layers. Sure they make good money, but the working life in this field is short. Recently one of the older guys I know had to give it up. Again, he had NOTHING! No super, no savings and NO OTHER SKILLS, at 45 no less! (As much his fault as the system's, but it lends the air of a lie to your Aussies are smarter now line of argument)

My 4th example shows this even further. I was part owner/manager of a small business, we originally used a franchise/contractor system with our workers but within 2 to 3 years out of 9 contractors who stayed with us throughout the process 7 had run their businesses into the ground through bad management and were in a debt spiral with us just buying the stock they needed to make a living each week. So we bought all the business back from them and made them all employees. (Which, I might add, worked out much better for everyone concerned) Out of the 7 only 1 had enough assets in the buy-back to cover their debt to us.

Your article is a sham with no evidence, and contracting is a disaster!

If Bob's puffery of the greatness of being an employee had some credibility why isn't Bob an employee?
Just choosing to be an employer goes against Bob's argument.
Actions speak louder than words and Bob's actions choose to be an employer and not an employee.
Why is that? Why is that? Why is that? Just why is that?

I consider the government's new industrial relations laws badly thought out, ideologically based and of no benefit in contributing to productivity increase in Australia.

By the same token, some of the people critical of Bob Day's piece are ideologically driven and ignore the evidence.

Day has a home building company. This is an industry that has traditionally run on a contractor and subcontractor structure, so he knows something whereof he writes.

There is though a fundamental difference between how the homebuilding industry has been structured and the new individual contract IR structure.

Like billie, I too have worked in IT with contractors, outsource service providers and salaried employees. In that context, what (s)he says is correct: contractors don't train younger folk. They also tend not to buy into the company's culture and objectives and disdain "office politics" and "bullsh*t". When the job market is buoyant, contractors can earn substantially more than permanent staff. When it stalls, they scuttle round, looking for permanent jobs.

But the home building industry is not quite like this. There are sole practitioners, but there are also many small firms, of maybe 2 or 3 or half a dozen tradespeople who will take on an apprentice or two. Within the firm, traditional employment relationships exist.

There are many things you can criticise about the structure.

In recent years as demonstrated by the current shortage, it has failed to train as many apprentices as are needed. Good tradespeople are not all good business managers and are frequently severely undercapitalised. hadz alludes to this in his fourth example.

When one of these tiny enterprises fails, there are rarely assets to satisfy creditors or help the principals to recover. If a fraudulent or incompetent builder creates some sort of disaster, customers have little chance of redress.

Even so, with all its warts it seems to be a system that delivers pedestrian homes, most times, efficiently, at a keen price.

But is this the new Howard model, Bob?

I don't think so.

Hadz,
I agree. I've seen the Wonderful World of Contracting from both sides.
My background is in telecommunications but I spent a period doing pay TV installation and casual telecoms installation work.

What I learned was the only way to survive was to "get in, get out, get paid". The margins are so low that you have to do shoddy work in order to break even, let alone make a living. It's the same in every industry I see. I'm "old-school" and this concept didn't sit well with me so I got out of it as fast as I could.

Despite all the cheerful rhetoric from companies contracting their work out, they only get what they pay for.

The Contractor doesn't care if the Company he's working for succeeds or fails, only if he/she gets paid.

As Keating said about life in Canberra, "if you want loyalty, get a dog".

Benefits from this approach are only short-term.

Wobbles,

There is no report I know of that Paul Keating ever said that. The original remark, "If you want a friend, get a dog", is attributed to Carl Icahn, http://en.wikipedia.org/wiki/Carl_Icahn

The meme subsequently featured in the movie, "Wall Street". Gordon "greed is good" Gecko said, "If you want a friend [on Wall Street], get a dog", http://www.imdb.com/title/tt0094291/quotes

The people the movie is about are, indeed, overwhelmingly on individual contracts but I'm not sure that you can equate greedy millionaires on Wall Street with Domestic TV installers.

MikeM, I didn’t intend to credit Keating as the author of that quote but he’s just the first one I remembered hearing it from and it stuck. I have heard and read variations from many sources since.

I was trying to illustrate the sentiment that businesses should realise that they will not get the same degree of company loyalty from a Contractor than from an employee.

Naturally, the importance of that loyalty depends on the attitude and requirements of the company, but in the instance of some sort of crisis, an “all hands on deck” approach may not be achievable if Contractors are not available when required.

I have seen at least one company that exploited Contractors so badly and gained such a bad reputation among them that it finds it difficult to get workers at all.

I certainly didn’t intend to equate TV installers with Wall Street millionaires.

Does any one else see the inconsistency in the federal government coming down like a ton of bricks on the Cowra Abbattoir for sacking 29 workers and asking them to reapply for 20 jobs.

From memory isn't that what Victorian government departments have made employees do repeatedly since 1992?

wobbles,

I don't deny that sometimes contractors are exploited sorely and on the other hand, sometimes contractors exploit their employers.

But that is true of salaried employees too.

I was involved in a situation where a large company outsourced its information technology. After an initial period of difficulty, both organisations bought into shared objectives and values. It became a really productive arrangement. (Regrettably, the company was bought by another one that didn't see the value in the arrangement, and dissolved it when it was really getting into its stride.)

One of the big lessons from this experience is that managing contractors is a specific skill, a skill that few companies have - and a painful skill to learn by trial and error. Contracting out to a service providing company is also not the same thing as the idiotic idea of contracting out to every one of your employees, right down to individual security guards and cleaners.

You almost have to ask what Kevin Andrews was smoking.

The same is true of outsourcing to corporations and of public/private partnerships. Early movers or incompetent managers are almost bound to fail.

The Howard government's stripping away trade union role in employee-employer negotiations will expose a lot of people to situations in which they have no experience.

Some harsh lessons will be learned.

The Cowra Abbattoir incident that billie mentions is a cosmic joke. I'm not an expert on employment law (in fact right now nobody is expert on the 2000 pages of legislation and regulations that have just come into force), but it seems that the government didn't understand the effect of its own legislation. It is engaged in a desperate damage limitation exercise.

According to tonight's news, the sackings have been retracted, but the government won't say whether they were actually legal.

MikeM,
You make some excellent points.
I get the feeling that we have both had similar experiences.

Contracting isn't all bad in all cases, but it may prove to be a potential time-bomb for employers in years to come.

I wonder how much of the skills shortage can be attributed to redundees leaving their former industries for something easier and not reincarnating themselves as Contractors.

I also don't think Andrews is smoking the wrong stuff. I suspect something in that hair dye he uses may be leeching into his brain.

Bob
This all sounds great (maybe),so why are our politicians in Canberra not fighting to be employed under these conditions?
Parliament operates on a very outdated system and the behaviour at question time would not be tolerated in any other "workplace" in the country.
If parliament operated under the super efficient contract system then maybe parliament house would only need to be opened for a few weeks each year.