Individuals can take advantage of the unfair contract provisions unless they are performing private or domestic work. Corporations that are independent contractors may have their contracts (excluding those for private or domestic services) reviewed where the work is wholly or mainly performed by the corporation’s director or members of the director’s family.
The Independent Contractors Act 2006 (Cth) replaced various State and Territory unfair contract laws with a new national system. The legislation establishes a process in which the Federal court or the Federal Magistrates Court can review contracts, and vary or set aside the contract if the contract is found to be unfair or harsh. There is no transitional period for those laws.
In deciding whether a contract is unfair or harsh the Court must consider the following:
- the relative bargaining strengths of the parties to the contract;
- any undue influence, pressure or unfair tactics which may have been used;
- whether the total remuneration paid to the independent contractor is less than an employee doing the same work would have received; and
- any other relevant matters.
Fair Work Act 2009 (Cth) – Sham contracts
The Fair Work Act 2009 (Cth) (FW Act) continues the protections against sham contracting that were contained in the Workplace Relations Act 2006 (Cth). The FW Act imposes civil penalties if an employer does any of the following:
- any undue influence, pressure or unfair tactics which may have been used;
- dismisses an employee in order to angage the individual as an independent contractor to perform the same, or substantially the same, work;
- represents an employment relationship as independent contractingl or
- makes false statement in order to influence or persuade an individual to enter into an independent contract.
Penalties of up to $33,000 (for corporations) or $6,000 (for individuals) apply.
A Fair Work Inspector, an employee or a union can commence legal proceedings in respoect of a sham contract arrangement.
Workplace inspectors from the Office of the Australian Building and Construction Commissioner (ABCC) are empowered to investigate suspected sham contract offences.
For Further Information
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Master Builders Australia Level 1, 16 Bentham Street Yarralumla ACT 2600 PO Box 7170 Yarralumla ACT 2600 Telephone: (02) 6202 8888, Fax: (02) 6202 8877 Email: enquiries@masterbuilders.com.au Website: www.masterbuilders.com.au Master Builders Association – Australian Capital Territory Master Builders Association – Newcastle Master Builders Association – New South Wales Territory Construction Association – Northern Territory |
Master Builders Association – Queensland Master Builders Association – South Australia Master Builders Association – Tasmania Master Builders Association – Victoria Master Builders Association – Western Australia |
Disclaimer: This information is provided as general advice on the workplace relations system. It does not constitute legal advice and it is always advisable to seek further information regarding specific workplace relations issues.