Govt attacks Labor's plan for fairer contractors' laws

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Govt attacks Labor's plan for fairer contractors' laws

The Federal Government has attacked Labor's plan to allow more flexibility for employees to become independent contractors, but to tighten up the definition of a contractor to prevent 'sham' arrangements.

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The Federal Government has attacked Labor's plan to allow more flexibility for employees to become independent contractors, but to tighten up the definition of a contractor to prevent 'sham' arrangements.

Labor frontbenchers this week indicated that if it won the Federal election later this year Labor was prepared to consider allowing high-income earners greater ability to trade off award conditions in exchange for higher pay in individual contracts. But at the same time it wants to tighten up the definition of independent contractors to something closer to the Tax Office rules, which say they must not derive more than 80% of their income from one employer.

Labor's Independent Contractors Spokesman, Dr Craig Emerson, said Labor was even prepared to give the courts guidance on what constituted sham arrangement between an employer and a contractor, which might include the ATO definition.

Unfair contracts

Emerson told the media this week he would discuss with colleagues, options for the inexpensive legal remedying of complaints by contractors of unfair contracts being imposed on them.

Labor's moves on independent contractors have been cautiously welcomed by the ACTU.

However the Federal Government has denounced the plans, despite the fact that their own legislation late last year exempted outworkers in the clothing a textile industry and contract owner-drivers in NSW and Victoria.

The Minister for Employment and Workplace Relations, Kevin Andrews, said Dr Emerson's claims, that the Labor Party supports the right of independent contractors to determine their own working arrangements, are 'farcical'. 

Red tape

He said Labor's move would 'remove choice and flexibility' and lock thousands of workers out of the chance to become independent contractors.

The Minister for Small Business and Tourism, Fran Bailey, said Labor's plans for independent contractors would cost Australia's 800,000 independent contractors millions of dollars in lost business and 'tie them up in red tape and lengthy court battles'.

Bailey said if Labor proposes to require independent contractors to cap their earnings with one employer at 80%, this rule will cause independent contractors to knock back work and cost small business millions.

'If the independent contractor is currently receiving 79% of his/her income from one business, and is offered a few more hours work, Labor would have the small business just say no,' Bailey said.

She said guidance for courts to determine what constitutes an independent contractor will have small business 'tied up in lengthy court battles'.

Related

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