We reported in December 2006 on the changes to be made to independent contractor arrangements in Australia by the Independent Contractors Act 2006 (IC Act) and the Workplace Relations Legislation Amendment (Independent Contractors) Act (WR Act). The substantive provisions of the IC Act (Sections 3-43) commenced on March 1 2007.
The IC Act emphasises the commercial character of such relationships and seeks to exclude state and territory industrial laws from genuine independent contractor arrangements, but retains the operation of those laws with respect to non-workplace relations matters. These matters include anti-discrimination laws, superannuation, workers’ compensation, and occupational health and safety. The IC Act also provides for a limited national services contract review regime, enabling the Federal Court or Federal Magistrates Court to determine if a contract is harsh or unfair.
As a consequence of the commencement of the substantive provisions of the IC Act, Schedules 1 and 2 of the WR Act also became operative. Schedule 1 of the WR Act deals with the creation of ‘sham’ independent contractor arrangements. Penalties apply to those who:
Misrepresent an existing or proposed employment relationship as an independent contractor relationship.
Dismiss an employee for the purpose of re-engaging them as an independent contractor.
Knowingly make false statements in order to influence a person to become an independent contractor.
Schedule 2 relates to transitional provisions and consequential amendments.
Controversially, the IC Act does not offer any guidance as to who is an independent contractor as opposed to an employee. The existing common-law tests seeking to distinguish between a ‘contract for services’ and a ‘contract of service’ will still operate.
Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm.
DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.
This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.
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