Contractors who can't get paid under new laws will sabotage work, union says

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Contractors who can't get paid under new laws will sabotage work, union says

The National Secretary of the major building union has forecast small contractors will sabotage their work if they don't get paid, rather that be forced into expensive litigation under the Federal Government's new contractors legislation.

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The National Secretary of the major building union has forecast small contractors will sabotage their work if they don't get paid, rather that be forced into expensive litigation under the Federal Government's new contractors legislation.

CFMEU Construction Secretary, John Sutton, told a Senate inquiry into the Independent Contractors Act, which is currently before Parliament, that in the past any dispute over money involving a small contractor would be resolved in a state tribunal, with the union representing the contractor.

However under the proposed new law they would have to go to the Federal Court or before a federal magistrate.

He said the associated costs would force many to give up legal action and, as a result, some would seek recourse by destroying work they had already completed.

Small claims jurisdiction

Sutton received unexpected support from new Liberal Senator Corey Bernardi, who replaced former Defence Minister Robert Hill in May.

Senator Bernadi flagged possible amendments to the Federal Government's Independent Contractors Bill to establish a federal small claims jurisdiction.

She asked Sutton as he was giving his submission to the Committee: 'Would you support access to a small claims procedure akin to what happens within the state systems for independent contractors for disputes, but under the jurisdiction of the Federal Magistrates Court, for claims or disputes up to $10,000, as is applicable in most states?'

Sutton replied that he would support such an amendment 'if it was the only alternative available' but would prefer to maintain the current state regimes, typically under fair trading legislation.

Not worth pursuing

Sutton said costly court charges under the system proposed by the Federal Government meant smaller disputed amounts such as $5,000 or $8,000 would not be worth pursuing in the higher appeal courts.

'I'm well aware of what many sub-contractors have done in the past in the building industry,' he said. 'In the distant past, when they couldn't get any justice, they (would) resort to methods of getting square with the building company, that none of us would like to see occurring, such as going and pulling down the brickwork or pulling down the frame of the cottage, or destroying the work they've done, because they can't get justice out of the building company.

'I'm afraid a lot of small Australians, people who are battlers, will be forced back into that sort of uncivilised behaviour.'

Shift risk to taxpayers

Australian Democrats Senator Andrew Murray said the bills did not to require contractors to self insure for workers compensation injuries or pay superannuation, and this failure would eventually 'shift the risk' and costs onto taxpayers.

ACTU industrial officer Michelle Bissett told the inquiry the legislation did not adequately define the difference between independent contractors and employees.

ACCI workplace policy director Peter Anderson said the legislation need not deal with superannuation, workers compensation or taxation issues.

Transfer risk to the worker

NSW Minister for Industrial Relations, John Della Bosca told the Committee employers who make staff 'independent contractors' no longer have to provide:

  • minimum rates of pay
  • annual leave
  • long service leave
  • superannuation
  • workers compensation
  • sick leave, and
  • public holidays

'Contracting is a completely legitimate way to do business and earn a living, but it must not be used to undermine job security and transfer risk to the worker,' Della Bosca said.

Related

Independent contractors laws 'a sham' says Della Bosca

New independent contractors laws backed by ACCI

ACTU attacks new contractors law as threat to job security

  

 

 

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