Independent Contractors Bill 2006: Summary
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.
Objects
b) Recognize independent contracting as a legitimate form of work that is commercial c) Prevent interference with the terms of genuine independent contracting arrangements |
Sect 3 (1) |
'Services' contracts governed by
b) Laws of the Commonwealth c) Laws of the States and Territories, except where those laws treat independent contractors as employees |
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 2: The independent contractor must perform the work---in other words, doesn't apply to supply of goods-only services. NB 3: Applies only to commercial contracts. NB 4: Does not apply to contracts in any State between two individuals or an individual and a trust. |
Sect 5 (1) (2) |
Voids State/Territory laws that treat independent contractors as employees for industrial relations purposes.
NB 2: State/Territory unfair contract provisions are replaced by new Federal unfair contract provisions (see below). |
Sect 7 (1) |
Some State/Territory laws not voided
|
Sect 7 (2) |
Regulations may void other laws This may cover laws not currently voided (for example, as listed in Sect 7(2)) |
Sect 10 |
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
|
Sect 11 |
Who can make an application? Only a party to the contract |
Sect 12 |
What is 'unfair'? For the purposes of the Federal unfair contracts, courts must consider:
|
Sect 15 |
Court may order
|
Sect 16 |
No Costs Each party must cover their own legal costs, etc. (unless 'vexatious' litigation). |
Sect 17 |
Specific provisions made for clothing outworkers.
|
Sect 18-30 |
|
Sect 31-37 |
Pre-reform contract 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) |
Opt-in 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. |
Sect 34 |
Last contract applies Clarifies that the contracts operating closest to the Act's commencement date are relevant during the transition period. |
Sect 35(2) |
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 |
Not Dismiss 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. |
902 |
No false statement A person must not make a false statement to persuade or influence an individual to enter an independent contractor arrangement. |
903 |
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