For those who rely on labour hire, the Fair Work Legislation Amendment (Closing Loopholes No.2) Act 2024 introduces more changes to Australia's workplace laws. From 26 August 2024 independent contractors will be able to protect their legal interests by applying to the Fair Work Commission if they consider their services contract contains an unfair contract term.
A 'services contract' means a contract for services that relates to the performance of work by a contractor. Independent contractors or their industrial representatives may apply to the Fair Work Commission for an order granting the contractor a remedy if the service contract term is unfair.
The new right will be available for independent contractors below a contractor high-income threshold (which is set at $175,000 for 2024/25) who enter into a service contract on or after 26 August 2024. Contracts entered into before this date are not affected.
In determining whether a term is unfair, the Fair Work Commission may consider factors including:
- the parties' respective bargaining power
- whether the service contract as a whole displays a significant imbalance between the parties' rights and obligations
- if the contract term is reasonably necessary to protect the parties' legitimate interests
- whether the term under consideration imposes a harsh, unjust or unreasonable requirement on a party;
- whether the remuneration under the contract as a whole is less
then:
- regulated workers performing the same or similar work would receive under a minimum standards order/ minimum standards guideline; or
- less than employees performing the same or similar work would receive.
Available remedies include:
- making orders setting aside all or part of a services contract which, in an employment relationship would relate to a 'workplace relations matter', or
- amending or varying all or part of a services contract which in an employment relationship would relate to a 'workplace relations matter'.
'Workplace relations matters' includes remuneration, allowances or other amounts payable, leave entitlements, hours of work, industrial action and disputes between employees and employers, and enforcing/terminating contracts of employment, or making, enforcing or terminating other agreements determining the terms and conditions of employment. 'Workplace relations matters' does not include matters relating to preventing discrimination (unless contained in a state/territory law), superannuation/ taxation, workers compensation or work health and safety.
Independent contractors who are above the high-income threshold, or contractors who have entered into a service contract before commencement of the new provisions, may continue to apply to a court for a review of their services contract under the rules of the Independent Contractors Act 2006 if they consider the contract unfair or harsh.
If you need assistance with independent contractor relationships or contracts, please contact the Workplace team.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.