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Wave of the Future: Self-Employed Numbers On the Rise

The number of independent contractors is on the rise, as can be seen in the most recent update from the Australian Bureau of Statistics, from 8.5% (986,000) of the workforce in 2013 to 11.2% (1,310,000) in 2015. This is the highest it’s been since the ABS started keeping records in 1978.

The number of self-employed persons who employ others balance this though, from 8.7% (1,013,500) to 6.6% (764,000). However, the total number of self-employed individuals still went up from 17.2% to 17.8% of the workforce.

In addition, jobs marketplace Upwork estimates that around 4.1 million people, or 32% of the workforce, performed freelance work in 2015. Around 51% of those who left traditional employment already earn more and 58% said they will no longer go back.

So what do these numbers actually mean for independent contractors/self-employed individuals themselves?

First, we can expect this segment of the workforce to continue to grow, thanks to new unfair contract protection laws which further promote self-employment. The Australian Consumer and Competition Commission reported that about 8 to 10 million contracts will need to be rewritten to comply with the new legislation.

According to the ACCC, contracts may be considered unfair if they have “terms that:

  • give one party an unconstrained right to unilaterally vary key aspects of a contract;
  • that unfairly seek to shift liability from the contract provider to the small business; or
  • that provide unnecessarily broad termination rights will almost always raise concerns about unfairness.”

Second, the growth of the independent contractor and freelance economy is changing the way employers regard their workforce. As decentralised work becomes more prevalent, both businesses and workers will only stand to gain more.

Businesses can take advantage of a more diverse workforce and reduced HR and administrative costs. Contractors and freelancers can negotiate rates higher than traditional employment can offer, and they gain more control over their work and income.

Recent overseas court decisions and global trends may further influence the future of Australia’s decentralised workforce. Of particular note are the October rulings in London and New York on employment versus contractor issues.

In London, two Uber drivers were declared to be employees by an Employment Tribunal. However, it’s expected that this ruling will be overturned, if Uber’s lawyers handle the appeal well, as was the case in the New York decision which reversed an earlier ruling on yoga teachers.

The New York City Council has also passed a new bill called the Freelance Isn’t Free Act. It provides legal protections for freelancers and independent contractors by mandating the creation of a contract between employer and worker for a project worth more than $800, which must be paid within 30 days.

Other countries such as Canada and Germany have even created an entirely new category for ‘dependent contractors’, granting additional protection to workers who can be considered somewhere in between an employee and an independent contractor, but depend on a single employer or client.

More independent contractors

As we perceive the growth of the self-employed economy to continue through 2017, companies need to pay more attention to their workforce, specifically in differentiating employees from independent contractors.

We’ve yet to see what new policies and legislations will further impact this industry in our country. We can only hope that our regulators are just as visionary and not fearful of upsetting the vocal minority of vested interest groups and public servants.

In the meantime, rest assured that we at Certica® will remain vigilant in our crusade of defending the rights and advancing the virtues of self employment.

We are #Readyfor2017!

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2 responses to “Wave of the Future: Self-Employed Numbers On the Rise”

  1. Matt says:

    I’m trying to find the evidence for the claims in the first paragraph, but the ABS reference doesn’t seem to contain those numbers. Is this comment based on any additional information?

  2. […] why the continued pursuit of casual, flexible arrangements by businesses? Does this not support the notion that full-time employment practices are too […]

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