Independent contractors a 'major issue' for Fair Work Ombudsman

Newly appointed Fair Work Ombudsman Sandra Parker says the divide between contractor and employee is "obviously a major issue" for the workplace watchdog.

However, the ombudsman dropped its case alleging Foodora engaged in sham contracting classifying workers as contractors instead of employees following the collapse of the food delivery company.

Fair Work Ombudsman Sandra Parker made her first public speech on a panel of regulators at the Vodafone National Small Business Summit.

Photo: Peter Braig

Grey areas

In her first public appearance since her appointment in June Ms Parker told the Vodafone National Small Business Summit last week contracting was an issue the ombudsman looks at regularly.

Ms Parker said she supported comments by Australian Tax Office commissioner Chris Jordan that clarity was needed on two "grey areas" in the definition of contractor and employee.

Mr Jordan identified a first grey area if a worker gets 80 per cent of their income from one source, notwithstanding they are a contractor it is determined to be income, and the second grey area as whether a worker is paid to deliver a result as opposed to payment for services.

"We obviously have a major issue with that as well and I agree with what Chris has said," Ms Parker said. "We look at that regularly where people who are required to be paid full entitlements when they are claiming to be independent contractors. We have a case running at the moment as you are probably aware."

The regulator panel at the National Small Business Summit included, from left: Chris Jordan of the Australian Taxation Office, John Price of the Australian Securities and Investments Commission, Fair Work Ombudsman Sandra Parker, Rod Sims of the Australian Competition and Consumer Commission, and David Locke of the Australian Financial Complaints Authority.

Photo: Peter Braig

However, the case has been dropped after Foodora went into administration with the ombudsman unable to continue the proceedings without the leave of the Federal Court or the administrator’s written consent.

The Federal Court made orders on Tuesday to vacate the court timetable for the highly anticipated case.

Ms Parker did not answer questions by Fairfax Media on how the ombudsman would continue its focus on contractors in light of the collapse of the legal proceedings.

Focus on small business

Ms Parker also told the summit she wanted to continue the work of her predecessor Natalie James in focusing on small business.

She said she has been listening in to calls to the FWO's small business helpline which receives 33,000 calls a year.

"A lot of those calls are about paying conditions and wanting to know rates etc but a lot of them are more complicated than that and they go to issues around dismissal and bullying and what people's rights and entitlements are," Ms Parker said. "It’s a massive operation and yes, it is a complicated system, but I think people are doing their best to help people navigate their way through that."

Ms Parker said she would also continue to focus on the ombudsman's workplace basics campaign where teams are sent into targeted areas.

"That’s not to come out and grab the books and tell people what they are doing wrong, it’s to actually help them and listen to their issues and hopefully provide assistance," she said. "It is absolutely my intention to continue the focus on small business."

Ms Parker was appointed by Craig Laundy, who was workplace minister at the time, in June after Ms James lost her bid to be reappointed for a second term.

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