26 July 2006
Prepared by Independent Contractors of Australia
This is a summary of the Bill for the layperson. It has been prepared by ICA to help improve understanding. The Bill has some complex legal clauses, particularly with relation to transition issues. This summary is a guide only. It is not complete.
||Sect 3 (1)|
|‘Services’ contracts governed by
||Sect 3 (2)|
|Independent contractor is not limited to a natural person—for example, can be a director of a family corporation||Sect 4|
|‘Services contract’ is a contract for services where one party is
NB 1: Does not touch contracts between two large corporations.
|Sect 5 (1) (2)|
|Voids State/Territory laws that treat independent contractors as employees for industrial relations purposes.
NB 1: Transition period applies, except for the voiding of unfair contract provisions (see below).
|Sect 7 (1)|
|Some State/Territory laws not voided
NB1: Subject also to transition issues (see below).
|Sect 7 (2)|
|Regulations may void other laws
This may cover laws not currently voided (for example, as listed in Sect 7(2))
|Laws not affected
||Sect 8 (2)|
|Sets up an unfair contracts process through Federal Magistrates and Federal Courts. Mediation services also available.||Sect 11-17|
|Unfair contracts process does not apply to
NB: For unfair contracts process to apply, work must be performed by a director/family member of corporation.
|Who can make an application?
Only a party to the contract
|What is ‘unfair’?
For the purposes of the Federal unfair contracts, courts must consider:
|Court may order
Each party must cover their own legal costs, etc. (unless ‘vexatious’ litigation).
|Specific provisions made for clothing outworkers.
Contracts entered into before the Act is proclaimed have State/Territory IR laws (except ‘unfair’) applying to them for three years unless ‘opt-in’.
|Sect 31 & 35(4)|
Parties to ‘services contracts’ may sign an agreement that ‘they no longer want the State or Territory contractor laws to apply’. Once signed, cannot be withdrawn.
|Sect 33 & 35|
|No coercion on opt-in
It is an offence to coerce, threaten or knowingly make false statements in relation to an opt-in agreement. Penalties under Crimes Act.
|Last contract applies
Clarifies that the contracts operating closest to the Act’s commencement date are relevant during the transition period.
|If a person misrepresents an existing or proposed employment relationship as independent contracting, it is illegal. Protection from sham contracts applies to all independent contractors. No exclusions.|
|Reverse onus of proof
Persons accused are deemed guilty and must prove their innocence by proving that they:
|900 & 901|
An employer must not dismiss or threaten to dismiss an individual for the sole or dominant purpose of engaging the individual as an independent contractor.
|No false statement
A person must not make a false statement to persuade or influence an individual to enter an independent contractor arrangement.