Fashion industry says new laws stamping out independent contractors will cost jobs

The fashion industry says new legislation requiring outworkers to be paid as employees is leading to job losses in Australia.

Under the bill, which was passed last week, most provisions of the Fair Work Act currently applied to textile employees will be extended to contracted outworkers.

Council of Textile and Fashion Industries of Australia spokesperson Jo Kellock says the bill means contractors will be deemed employees and entitled to benefits such as leave and superannuation.

She says it also means it will become illegal for manufacturers to use contracted outworkers unless they employ them for a minimum of 20 hours a week

Kellock claims: “It will lead to reduced flexibility in the supply chain so manufacturers will be limited in what they can offer.

“Under that legislation all of the people need to be employed a minimum of 20 hours a week so the makers cannot afford them on their books.

“There are plenty of outworkers who want to work as independent contractors and are no longer able to do so.”

Kellock says the legislation will continue the contraction of the industry, which has seen a drop in workers from 48,000 in 2008 to current figures of 38,000.

“I am extremely concerned because we still have quite a flourishing design market and a lot of small boutiques and the Australian industry supplies that market,” she says.   

The council has set up a “Save Australian Fashion Industry” Facebook page in response to the new laws.

Arthur Thomas, director of the clothing manufacturer Gouda, is also critical of the legislation and claims he has already lost business as a result of the changes.

“Part of my discussions with my clients this week is that I am unable to get contractors as they do not want to work in that manner,” he says.

“There is no way I can handle the turnover I could with employees.

“My biggest client, who gave me 60% of work, is not going to give me any more work.

“I will be terminating six employees within two months if nothing changes and I will also have to terminate the arrangement of a pool of 25 contractors.

“I am one factory but there is quite a lot of us working like that.”

Thomas said he was unable to name the client that was going to cancel its ongoing work as a result of the legislation. 

However, the Textile, Clothing and Footwear Union of Australia, which has been the driving force behind the legislation, claims Australian jobs will not be affected.

Michele O’Neil, the national secretary for the union, says the Council of Textile and Fashion Industries of Australia’s claims of job losses are unfounded.

“We completely reject that claim and we think that there has been a large amount of misinformation and ill-informed comment around the effect of the legislation”, she says.

“A number of industry bodies have suggested this affects rates of pay and hours of work, but it has no effect on longstanding provisions for 20 years which gives workers at home the same rights as workers in a factory.

“We think that reputable companies in the industry support the legislation and there is nothing to fear for people who are doing the right thing.

“The loss of jobs in this industry in the past has been a result of tariff reductions and the increase in the Australian dollar.”

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