The Independent Contractors Act 2007 came into force on 1 March. The intention of this Act is to recognise and protect the unique position of independent contractors in the Australian workplace. It complements the Work Choices legislation which specifically addresses employees - permanent and casual. It follows a number of public inquiries which received submissions from interested parties including large recruitment firms as well as our industry association, RCSA.
Who is covered?
The Government has decided to continue with the common law definition of an independent contractor rather than adopting a particular definition such as that used by the ATO. The Regulation Impact Statement defines an independent contractor as a person who contracts to perform services for others without having the legal status of an employee. We feel that this describes the majority of those who work through Techwriter on contracts. However the tax, workers compensation and superannuation laws will still require us to treat individual contractors differently to those of you who work through a company structure.
The Statement acknowledges that various state governments have legislation that 'deems' some contractors to be employees and the Act is attempting to clarify the position by considering such contracts as commercial rather than employment agreements.
Key changes
According to the official government web site, "the independent contractors laws:
- stop state laws from requiring independent contractors to be treated as if they were employees;
- establish a three year 'transitional' period during which existing state laws may still apply to existing contracts;
- keep state laws protecting textile, clothing and footwear outworkers;
- do not affect New South Wales and Victorian laws specifically dealing with owner-drivers;
- replace New South Wales and Queensland unfair contracts laws with a new federal unfair contracts jurisdiction;
- make it illegal for an employer to disguise an employment relationship as an independent contracting arrangement;
- make it illegal for employers to threaten or mislead employees to get them to change their status to independent contractors."
The above is an outline of our understanding of the new legislation and its impact on us all. We will be still seeking further information and advice to ensure that our understanding is correct.
In the meantime, if you are interested in learning more, you can view the legislation, the Impact Statement and the public inquiry that preceded the drafting of the legislation by visiting: www.workplace.gov.au/workplace/Individual/Contractors
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