Govt sets new ‘Fair Work’ rules for contractors


Govt sets new ‘Fair Work’ rules for contractors

The Federal Government is introducing strict Fair Work Principles for contractors to ensure they are following the new IR laws.


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The Federal Government is introducing strict Fair Work Principles for contractors to ensure they are following the new IR laws.
IR Minister Julia Gillard said the new principles will ensure government procurement decisions ‘promote fair, cooperative and productive workplaces’.
Breach of rules equals breach of contract
Under the new principles any breach of industrial, OHS or workers compensation laws will also constitute a breach of the government contract.
‘The Fair Work Principles will support the creation of quality jobs and decent work by ensuring that Commonwealth procurement decisions are consistent with the Fair Work Act,’ Gillard said.
Undermine entitlements
‘In the past, contracting has sometimes been used as a vehicle to undermine the entitlements of employees. These Principals make it clear that the Federal Government does not support the use of contracting for this purpose,' she said
‘The Government will require all suppliers when submitting tenders to provide information about how they comply with the Fair Work Principles.'
‘This is particularly significant in industries like cleaning and textile, clothing and footwear where there has historically been underpayment, exploitation and unsafe work practices.’
Purchasing power
Gillard said the Government is using its purchasing power to promote fairness in the significant number of contractors with which we do business.
Information on the Principles released by Gillard states that fair, cooperative and productive workplaces involve not only fair wages and conditions and productivity, ‘but also respect for other workplace rights, high levels of OHS and the availability of training and apprenticeship opportunities’.
The Principles say all tenderers must respect freedom of association and the right to representation.
Free choice on unions
Specifically, tenderers must allow employees to be able to make a free and informed choice about whether to join a union and be represented at work.
To give effect to the Fair Work Principles, Australian Government tender documents for procurement will require the following:
  • Agencies must include contract provisions requiring contractors to comply with materially relevant laws and must, as far as practicable, require suppliers to apply such a requirement to sub-contractors.
  • A consequence of this contractual requirement is that a breach of any industrial law, occupational health and safety law or workers compensation laws, will also constitute a breach of the contract with the Australian Government.
  • Suppliers will be required to provide undertakings that they have not been subject to any adverse judgments for a breach of industrial laws, occupational health and safety laws or workers compensation laws during the past two years and are not subject to any outstanding claims (not including decisions under appeal).
  • Suppliers will be required to provide information about how they promote fair, cooperative and productive workplace relations as described above including, where appropriate, providing information about their commitment to supporting apprenticeships and education and training in the workplace.
The Principles say Australian Government agencies must take these requirements into account when awarding contracts.
They say that to support the above requirements suppliers may be required to provide information in relation to relevant matters, for example:
  • compliance with awards and industrial agreements and laws
  • providing annual leave and long service leave entitlements
  • the capacity to meet workers entitlements and the making of superannuation contributions
  • compliance with occupational health and safety and workers’ compensation laws.


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