Some protection still in Contractor’s law - but wait for the details

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Some protection still in Contractor’s law - but wait for the details

The Federal Government’s new Independent Contractors Bill will maintain some current protections that unions feared would be lost, but the precise details of the legislation are still to come.

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The Federal Government’s new Independent Contractors Bill will maintain some current protections that unions feared would be lost, but the precise details of the legislation are still to come.

Among the matters protected are outworkers in the clothing trades being deemed to be employees, the rights of owner-drivers in NSW and Victoria, and the outlawing of ‘sham contracting’.

However unfair contract matters relating to independent contractors will be removed from the States using the corporations powers and will be able to be heard in the Federal Magistrates Court.

Late May- early June for legislation

The Minister for Workplace Relations, Kevin Andrews, told a press conference today that it was unlikely further details would be available before the legislation was introduced in late May, early June.

Andrews said legislation would protect the right of contractors to be truly independent – ‘that is, to prevent them from being roped into state laws which effectively force them to be “employees”, not “independent contractors”.'

Major elements of protection under the legislation are noted below.

Sham contracting

The Bill protects genuine employees from ‘sham’ contracting arrangements, sometimes used by unscrupulous employers to avoid payment of legitimate employee entitlements. The Office of Workplace Services will have jurisdiction to investigate and enforce penalties.

Owner-drivers in NSW and Victoria

Protections for owner-drivers in New South Wales and Victoria, the only two States with such legislation, will be maintained by the Bill.

Andrews said a review will be undertaken to rationalise and achieve nation-wide consistency of these types of laws. This will involve a public consultation process, with a discussion paper from DEWR, and will begin in 2007.

He said the Government recognises that owner-drivers, like outworkers, have historically been recognised as having particular vulnerabilities and requiring special protections.

Textile, Clothing and Footwear outworkers

The Bill will maintain the status of Textile, Clothing and Footwear (TCF) contracted outworkers as employees under State legislation.

Andrews said the Government recognises that outworkers need additional protection.

He said the Australian Fair Pay and Condition Standard will apply to contracted TCF outworkers in States and Territories where they are not covered by a law providing for some form of remuneration guarantee.

Three year transitional period

For independent contractors who have previously been ‘deemed’ employees, there will be a three year transitional period to give businesses and workers time to adjust to the new legislation.

Regulation of unfair contracts

Provisions in the Bill will replace the existing federal unfair contracts legislation (currently in the Workplace Relations Act) and provide that remedies may be sought in the Federal Magistrates Court.

‘This approach will retain access to a fair and reasonable federal remedy for genuine cases where unfair or harsh conditions have been imposed in a contract,’ Andrews said.

‘This national approach to unfair contracts will be achieved by overriding State unfair contracts legislation using the corporations power.’

This measure could block moves by NSW IR Minister John Della Bosca to have common law contract matters heard by the NSWIRC.

Existing protections under WorkChoices

Andrews said the provisions of the Bill are in addition to changes already introduced in the WorkChoices legislation which prohibits the inclusion of clauses in awards that restrict or impose conditions on the terms of engagement of independent contractors or labour hire workers.

The Workplace Relations Regulations prohibit inclusion of such clauses in workplace agreements.

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