The federal government has enacted another element of its industrial relations reform package, with the passage last month of new legislation governing independent contractors.
The federal government has enacted another element of its industrial relations reform package, with the passage last month of new legislation governing independent contractors.
The Independent Contractors Act 2006 was passed in December, along with a corresponding amendment, and the reforms are expected to commence this quarter.
The legislation has the specified purpose of protecting the status of independent contractors by overriding state legislation to bring their employment under commercial, rather than industrial relations, law.
It also includes a new national unfair contracts regime, which will extend to incorporated contractors, and an amendment that contains penalties for employers who abuse the legislation through ‘sham’ arrangements, such as falsely representing employees as contractors or coercing employees to become contractors.
The legislation also prohibits the firing and rehiring of employees as independent contractors.
The new legislation further strengthens the national workplace relations system implemented under WorkChoices, as it overrides existing state and territory legislation, while exempting laws protecting outworkers and owner-drivers in Victoria and New South Wales.
The legislation also overrides legislation which may entitle those employed under a services contract to benefits enjoyed by employees, such as allowances, leave entitlements and recourse to industrial action.
Construction Contractors Association chairman John Phillips said the legislation would be of most benefit to smaller contractors who did not have the administrative resources of larger operators.
Chamber of Commerce and Industry WA executive director policy Deidre Willmot told WA Business News the industry body welcomed the changes.
“[The legislation] will protect self-employed people from being dragged into the industrial relations arena, by establishing that their arrangements are governed by contract law and not IR law, and prevent the state government from overriding those contractual arrangements and making them employees,” she said.
However, the CCI has expressed concern at the state government’s intention to pass legislation similar to that of Victoria concerning owner-drivers, which protects owner-drivers in the trucking industry through regulating price rates. The chamber claims that the new legislation could cause confusion when the federal government’s bill comes into effect.
The federal legislation currently exempts owner-driver legislation in Victoria and NSW, however Workplace Relations Minister Kevin Andrews has indicated this provision may be reviewed.
