THE FEDERAL Government’s $15 million budget allocation for cracking down on sham independent contractor arrangements has been met with a mixed response, with business groups reservedly welcoming it while unions claimed the contribution was a token gesture
THE FEDERAL Government’s $15 million budget allocation for cracking down on sham independent contractor arrangements has been met with a mixed response, with business groups reservedly welcoming it while unions claimed the contribution was a token gesture.
The Government said the $15 million would be used to fund an education and compliance campaign and provide additional resourcing for the Office of Workplace Services to investigate cases where employment arrangements were disguised as contract relationships, according to Minister for Workplace Relations Kevin Andrews.
The Office of Workplace Services will also be given extra powers to enforce penalties for sham independent contractor arrangements, under the Independent Contractors Bill, scheduled to be introduced to the Parliament later this month.
However, the ACTU said the new legislation would undermine job security by making it easier for businesses to replace existing workers with independent contractors.
A recent University of Melbourne study found that up to 400,000 workers currently classified by the Government as independent contractors were actually employees that do all their work for the one employer.
It also found that as many as four out of every ten contractors are “dependent” and not “independent”
“Already we have seen the WorkChoices IR laws make it easier for employers to sack their permanent staff and re-employ them as casuals or on contracts with lower wages and conditions,” said ACTU president Sharan Burrow.
“The Government now proposes to take this a step further with a new law that will allow more employers to avoid responsibility for paying superannuation, workers compensation, annual leave and other basic entitlements to people who are called ‘contractors’ but are essentially employees.”
The Information Technology Contract and Recruitment Association (ITCRA) welcomed the introduction of the legislation, and said it would 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 have their status enshrined and protected there.
“The Bill will provide that the defining and settling of a dispute will not be conducted by an industrial jurisdiction,” said ITCRA executive director Norman Lacy.
“Instead it will make available a small claims style dispute resolution process. It will also provide that the unfair contracts provisions of the States’ legislation and the unfair contracts provisions of the recent WorkChoices legislation will be repealed,”Lacy said.
Peter Hendy, chief executive of the Australian Chamber of Commerce and Industry (ACCI), generally welcomed the Government’s plans, saying they would protect the status of independent contractors and prevent the industrial relations system (Federal or State) from being used to regulate their commercial relationsor status.
“Industrial relations laws apply to employees. Contract law applies to contractors. Australian law needs to make this clear, because the boundaries have been blurred by State and Commonwealth legislation,” he said.
