Real contractors are never employees, ACCI tells Senate Committee

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Real contractors are never employees, ACCI tells Senate Committee

Independent contractors are business people, not employees, and should be covered by contract law and not industrial relations laws, the Australian Chamber of Commerce and Industry (ACCI) has told a Senate Inquiry.

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Independent contractors are business people, not employees, and should be covered by contract law and not industrial relations laws, the Australian Chamber of Commerce and Industry (ACCI) has told a Senate Inquiry.  

Peter Hendy, ACCI Chief Executive called for Australian governments to provide protection for genuine independent contracting across key areas of law and policy. 

‘Initiatives are also needed by governments and industry to improve contractual understandings between individual contractors and principals,’ he said.  

ACCI recommendations

In evidence before the House of Representatives Committee on Independent Contracting and Labour Hire at hearings in Melbourne ACCI recommended that the Commonwealth specifically seek to preserve freedoms to contract through legislation that would specifically override and preclude the operation of state laws that restrict freedom to contract. 

ACCI recommended that such legislation have the effect of: 

  • Removing deeming of individual contractors as employees from the Australian system of labour law.

  • Precluding the operation of state deeming provisions.

  • Ending applications to state authorities under state deeming provisions.

  • Reversing any previous declarations deeming contractors or classes of contractors to be employees.

  • Precluding industrial tribunals or third parties from imposing criteria or restrictions on the use (or otherwise) of contractors.

ACCI submitted that the growth of genuine independent contractors in the Australian economy has been ‘one of the success stories of our labour market and economy over the past fifteen years’. 

‘Independent contracting arrangements reflect the freedom and flexibility that creates efficiency and productivity for the client business, and greater income earning potential and work/life and family benefits for contractors,’ it said. 

Key principles put by ACCI

Among key principles put the Commission by ACCI were that: 

  • Persons genuinely and freely entering into contracts for the provision of their personal services as contractors should, provided those contracts are lawful, not have them varied, redefined, reshaped, annulled, downgraded or otherwise interfered with by persons or bodies (including governments, regulators, tribunals or courts) who are not parties to those contracts;
  • The common law provides a proper and sufficient basis on which the law should give legal recognition to a contract for services and a proper basis for setting out the necessary elements of a contract for services;
  • Contracts of employment where employees are labelled as contractors, but where in fact and law they are really employees, are sham contractor arrangements and do not have legal recognition as contracts for services at common law;
  • Arrangements which are non consensual or which are tainted by coercion or undue influence are not enforceable and do not have legal recognition as contracts for services at common law;
  • Genuine and consensual contacts for services are not inherently exploitative, unfair or otherwise requiring the attention of consideration of governments, parliaments or regulators.

Other recommendations

Among ACCI’s other key recommendations were: 

  • Laws regulating contractors, particularly laws which deem contractors to be employees or which provide an unfair contracts jurisdiction, are flawed,
  • Counter productive and should be repealed.
  • An appropriate and natural level of regulation of contract labour is generally delivered through the operation of common law tests in this area. In some limited cases a statutory provision can provide certainty for specific purposes, provided it does not weaken the status of contractors.
  • That the Committee conclude that no case has been made out for additional or dedicated regulation of labour hiring by parliaments. And that all dedicated or directed regulation of labour hiring at the federal or state level should be reviewed.

More information

The ACCI submission is on its website.  

It and other submission can be found on the Committee website..  

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