Independent contractors bill next month

Stan Beer
Sunday, 26 February 2006 18:03

IT People - Enterprise

The Minister for Employment and Workplace Relations Kevin Andrews has informed the IT Contractors and Recruitment Association (ITCRA) that an independent contractors bill to give Australia's nearly 2 million contractors the legal rights of businesses will be introduced into Federal Parliament in March.

ITCRA is involved in the drafting of the new bill, which is intended, according to the association to give contractors the right to operate as legitimate businesses rather than defacto employees. The working party, established with the support of the office of the Minister, met on 6 February in Canberra and will reconvene in early March.

ITCRA Executive Director Norman Lacy, who represents ITCRA on the Working Party together with representatives of the Australian Chamber of Commerce and Industry, Housing Industry Association, Australian Mines and Metals Association and the National Farmers Federation, said the first meeting on 6 February made significant progress in appraising the government of the group's views behind the draft Bill that had been submitted.

'The proposed legislation is highly significant because of its reach, its uniqueness and its impact. It represents a watershed in commercial and industrial relations law in Australia and the world. So far as we are aware it will be the first time that a nation has taken a defining stand for independent contractors to be corralled out of employment law into commercial law and had their status enshrined and protected there', Mr Lacy said.
 
'The Howard Government has strongly embraced independent contractors whilst maintaining their business status. PAYG is just one example. It resolved problems over the ATO's tax withholding powers. Its declared intentions for the Independent Contractors Bill will secure the right of independent contractors to be a business. Both are world-firsts.'

'According to analysis of Australian Bureau of Statistics figures, there are 1.9 million independent contractors in Australia. They make up 20 per cent of the total workforce and 28 per cent of the private-sector workforce. The size and rate of growth of this sector of the workforce alone makes this Bill', he said.

'The industry representatives on the Working Party are strongly in agreement in regard to  the objectives of the Bill and its constitutional and common law basis.
The objectives proposed are:
a) to enshrine, protect and enhance the freedom of Australians to engage in work as independent contractors;
b) to recognize and protect the right of Australians to be independent contractors free from interference; and
c) to provide the parties to independent contractor arrangements with relief in relation to unjust contracts.'
 
'The constitutional hook of the proposed legislation is that an independent contractor has a contract with a corporation. This is a concept that includes natural persons. It is proposed that the common law be the basis of the definition of an independent contractor,' Mr Lacy said.

It is proposed that the Bill will override and void Commonwealth or State laws that seek to define or deem an independent contractor, to control an independent contractor's work or to determine the price of a contract.

'The Bill will provide that the defining and settling of a dispute will not be conducted by an industrial jurisdiction. Instead it will make available a small claims style dispute resolution process. It will also provide that the unfair contracts provisions of the State's legislation and the unfair contracts provisions of the recent Work Choices legislation will be repealed,' he said.
 
'A 'Statement of Intent' which creates a presumption of being an independent contractor is to be included as a Schedule to the Bill. The effect of the statement when signed is that it puts the onus of proof on the third party disputing the status of the person.

'In respect to the reach of Act its jurisdiction is commercial law in particular the Trade Practices Act. It will specifically block Industrial relations and employment regulation. However, it will not extend to Taxation, Equal Opportunity or Occupational Health and Safety legislation,' Mr Lacy said.

There were areas of the proposed legislation where a variety of views existed among the members of the Working Party.
'In respect to those matters, ITCRA supported the views that
:
1. The Bill should not go to the price of a contract because unfairness and unjustness of a contract price is sufficiently covered in common law considerations.    
2. The payment of tax as a Personal Service Business should not be used as an indicator of being an independent contractor because it would tie the taxation and Industrial Relations considerations together.
3. State deeming for payroll tax and workers' compensation should not be overridden. 
4. A specific federal jurisdiction, perhaps the federal magistrate's court, should be used as the mechanism for dispute resolution with a claim limit of less than $10,000', he said.