Australia: Unfair Contract Jurisdiction Further Restricted

The Federal Court has decided that it has no power under the Independent Contractors Act 2006 ("the Act") to make retrospective orders to remedy unfair contracts.

The Act enables certain contracts for services to be reviewed on the basis the contract is unfair or harsh, having regard to matters such as the bargaining positions of the parties and whether the contract provides remuneration that is less than an employee performing similar work. If such a finding is made, the Court can set aside all or part of the contract or vary the contract. However, this ruling will prevent orders seeking compensation for contracts declared to be unfair.

Practically, this may mean that applications under the Act are confined to orders seeking variation of contracts that are currently on foot, as opposed to those which have been terminated.

It is also worth noting that this part of the Act does not apply to a contract for services to which an independent contractor that is a body corporate is a party, unless the work to which the contract relates is wholly or mainly performed by a director of the body corporate or a member of the family of a director of the body corporate.

The regime provided by this Federal Act is much more limited than that provided by previous State regimes.

Sources:

Informax International Pty Limited v Clarius Group Limited (No. 2) [2011] FCA 934
Workplace Express

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