New contractors laws 'too weak' says employer body

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New contractors laws 'too weak' says employer body

Australia's new independent contractors legislation, which was passed in Parliament last night, should have gone further according to the Australian Chamber of Commerce and Industry (ACCI).

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Australia's new independent contractors legislation, which was passed in Parliament last night, should have gone further according to the Australian Chamber of Commerce and Industry (ACCI).

And ACCI has warned if there is 'inappropriate regulation' of the new laws by unions, inspectors or courts, business will want them tightened.

Peter Hendy, ACCI Chief Executive, said the legislation means for the first time there are wide ranging laws designed to protect the commercial status of small business independent contractors.

He said the laws were necessary because State parliaments and unions had 'increasingly used industrial relations and employment law to regulate contracts between independent contractors and businesses which engage them'.

Should cover transport contractors

'Amendments made by the Senate were important and necessary, particularly changes to the new sham contract offences and the new national unfair contracts jurisdiction,' he said.

However Hendy said the amendments should have gone further.

'Contractors in the transport industry should have been covered by these new laws, powers to make regulations reactivating State regulation of contractors are undesirable, and prosecutions for alleged breaches of the sham contract offences should be the exclusive domain of government inspectors, not trade union officials,' he said.

Hendy said the contractors laws were a new body of Commonwealth law and 'its implementation must be monitored and checked against its purpose'.

Contractual freedom

'It is intended to provide contractual freedom to genuine contractors,' he said. 'If it is used by unions, inspectors or courts to inappropriately regulate contractual freedom, impede outsourcing and business restructure or increase litigation of contractual terms, then industry will seek further changes.'

Hendy said the government's planned implementation program needs to focus on education and information about these important new laws and to work with business organisations in this communication task.

Workplace Relations Minister Kevin Andrews said today the Independent Contractors Bill will:

  • override State and Territory laws which deem independent contractors as employees depriving them of their choice to work as independent contractors
  • strengthen and clarify the Government's commitment to ensuring that existing outworker protections are preserved - this is in line with the recommendations of the Senate Employment, Workplace Relations and Education Committee
  • provide a fairer and more accessible national unfair contracts review mechanism for independent contractors
  • maintain existing protections for owner-drivers in New South Wales and Victoria, the only two States where such legislation currently operates - a review will be undertaken with a view to achieving nation wide consistency of these types of laws in 2007

Andrews said the legislation will prohibit 'sham arrangements'.

'Penalties will apply to employers who knowingly seek to disguise employment relationships as independent contracting arrangements,' he said.

'The sham contracting provisions will also apply against employers who deceive employees in order that they become independent contractors, or who sack or threaten to sack a person in order to coerce them into becoming an independent contractor performing substantially the same work.

Genuine choice

'This reflects the Government's belief that while people should be able to choose the working arrangements which suit them best, these choices must be genuinely made.'

Andrews said the Office of Workplace Services will have jurisdiction to investigate and enforce these penalties on behalf of employees. An employer who is found to be in breach of any of these provisions can be fined up to $33,000.

He said there will be a three year transitional period to give business and workers time to adjust to the new legislation. The new independent contractor reforms are expected to commence in the first quarter of 2007.

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