Employees No Longer: on the Federal Government’s Proposals for Contractors

By Giuseppe Carabetta and Cynthia Coleman

The government is committed to removing laws restricting the use of contractor arrangements.

One option mentioned in the Discussion Paper "Proposals for Legislative Reforms in Independent Contracting and Labour Hire Arrangements" includes amending the federal industrial statute (Workplace Relations Act 1996) to provide that awards and enterprise agreements cannot contain clauses restricting the use of contractors. The government sees these provisions as 'an inappropriate incursion by unions on employers' ability to run their businesses according to their own preference' (Australian Government 2005, p. 10). Other key proposals reflect the government's policy that contractors should be regulated by commercial, and not employment, law. These include:

Overriding State deeming provisions (for example, s 275 of Qld IR Act 1999 allowing the IRC to declare a class of contractors to be employees based on various criteria including relative bargaining power or economic dependency);

Overriding State unfair contracts provisions (for example, s 106 of the NSW IR Act 1996 allowing the IRC to review contracts which are 'unfair', including 'unfair, harsh or unconscionable' contracts); and

Removing (potentially) State laws other than general workplace relations laws which cover contractors (for example, workers compensation, anti-discrimination and occupational health and safety provisions).

The Discussion Paper highlights as a 'threshold issue' whether the proposed Independent Contractors Act should seek to override only those laws falling in categories (a) and (b), or whether it should also override laws in category (c).

(Australian Review of Public Affairs Digest 27 June 2005)