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Hon Kevin Andrews MP

Minister for Employment and Workplace Relations Minister Assisting the Prime Minister for the Public Service 05 December, 2006

Media Release

Government Delivers On Independent Contractors Election Commitment

The Independent Contractors Bill 2006 and the Workplace Relations Legislation Amendment (Independent

Contractors) Bill 2006 have now been passed by the Parliament.

This legislation delivers on the Coalition Government’s key commitment at the 2004 election to protect the

rights of independent contractors and allow them to choose the form of working arrangements that best suits

their particular needs.

Australia deserves a system that responds to the needs of individuals including those who have made the

deliberate choice to become an independent contractor and their families. This legislation makes that system a

reality.

Other amendments have also been passed which will improve the operation of the Workplace Relations Act.

These reforms will generally come into effect on Royal Assent, however, some of them will have retrospective

operation.

Independent Contractor Reforms

The Independent Contractors Bill will:

z override State and Territory laws which deem independent contractors as employees depriving them of

their choice to work as independent contractors; z strengthen and clarify the Government’s commitment to ensuring that existing outworker protections are

preserved. This is in line with the recommendations of the Senate Employment, Workplace Relations and

Education Committee; z provide a fairer and more accessible national unfair contracts review mechanism for independent

contractors; z maintain existing protections for owner-drivers in New South Wales and Victoria, the only two States

where such legislation currently operates. A review will be undertaken with a view to achieving nation

wide consistency of these types of laws in 2007.

The Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006 will prohibit sham

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arrangements. Penalties will apply to employers who knowingly seek to disguise employment relationships as

independent contracting arrangements.

The sham contracting provisions will also apply against employers who deceive employees in order that they

become independent contractors, or who sack or threaten to sack a person in order to coerce them into becoming

an independent contractor performing substantially the same work. This reflects the Government’s belief that

while people should be able to choose the working arrangements which suit them best, these choices must be

genuinely made.

The Office of Workplace Services will have jurisdiction to investigate and enforce these penalties on behalf of

employees. An employer who is found to be in breach of any of these provisions can be fined up to $33,000.

The Government has allocated $15 million over four years for the purposes of compliance and education.

There will be a three year transitional period to give business and workers time to adjust to the new legislation

The independent contractor reforms are expected to commence in the first quarter of 2007.

Amendments to the Workplace Relations Act 1996

As announced on 13 November, there are a range of amendments which relate to:

Protecting employee redundancy entitlements

These amendments will preserve agreement-based redundancy provisions for a maximum period of 12 months

after a workplace agreement is terminated unilaterally by an employer with 90 days notice. In relation to pre-reform agreements, the measures will apply where the Australian Industrial Relations Commission (AIRC)

terminates an agreement on application by an employer where it is not contrary to the public interest.

In addition, the measures will provide for notification of the continuing operation of preserved redundancy

entitlements. Preserved redundancy entitlements will also bind a new employer on transmission of business.

These are new protections and will be able to be enforced by the Office of Workplace Services.

Accrual of annual and personal/carer’s leave and the payment rule for personal/carer’s leave, compassionate

leave and leave for pregnant employees who cannot be transferred to a safe job

These amendments will:

z clarify that annual and personal/carer’s leave under the Australian Fair Pay and Conditions Standard will

accrue on the basis of a 38 hour week, and z make the payment rules for personal/carer’s leave, compassionate leave and leave for pregnant employees

who cannot be transferred to a safe job consistent with the payment rule for annual leave (that is, payable

at the employee’s basic periodic rate of pay).

Right to stand down employees

The amendment provides a right for employers to stand down employees without pay, in one or more of the

following circumstances:

z strike;

z break down in machinery;

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z work stoppage for which the employer cannot reasonably be held responsible.

These amendments are based on provisions that previously applied in Victoria and arrangements that exist in

numerous federal awards and agreements (including union collective agreements).

In addition, there are significant new remedies to prevent employer misuse of the stand down provisions:

z An employer will be prohibited from standing employees down in these circumstances unless it is

authorised by the Workplace Relations Act or relevant industrial instrument or contract of employment. A

court will be able to impose penalties of up to $33, 000 on a corporation that breaches this provision. The

Office of Workplace Services will be able to seek this penalty. z An employee who is stood down, or the Office of Workplace Services, will be able to seek an injunction

where a stand down is not authorised. z The model dispute resolution process will apply to disputes about the use of the stand down provisions in

the Act.

Cashing out personal/carer’s leave

The amendments enable employees and employers to agree to cash out personal carer’s leave that has accrued

pursuant to the Australian Fair Pay and Conditions Standard. An employee is able to cash out any amount of

personal/carer’s leave, provided that (for full-time employees working a 38-hour week) at least 15 days remain

available after cashing out and a number of other conditions are met, including:

z the relevant workplace agreement includes a specific provision that entitles the employee to elect to cash

out an amount of personal/carer’s leave. z the employee makes a separate written request to cash out personal/carer’s leave.

z The employee is paid an amount in lieu at a rate that is no less than the employee’s basic periodic rate of

pay.

z the employer has agreed before any cashing out occurs.

z the employer has not required or pressured an employee to cash out personal/carer's leave.

Other Amendments

In addition to these previously announced changes, the amendments include technical amendments to ensure

the legislation operates as originally intended. These amendments:

z clarify the relationship between the Standard and pre-reform CAs, pre-reform AWAs, section 170MX

awards and PSAs to ensure that if such instruments do not deal with one or more of the minimum

entitlements covered by the Standard, an employee will have the benefit of the Standard in respect of

those entitlements (these measures would apply retrospectively from 27 March 2006, the date that

WorkChoices commenced).

z ensure that employees can agree to waive, in writing, the requirement to have the information statement

and access to a workplace agreement for seven days before approving that agreement or a variation to it. z require an employer to provide a copy of an AWA to the employee as soon as practicable after the AWA

has been lodged. z enable Notional Agreements Preserving State Awards (NAPSAs) and Preserved State Agreements (PSAs)

to operate, within certain limitations, in conjunction with pre-reform CAs and AWAs (these measures

would apply retrospectively from 27 March 2006, the date that WorkChoices commenced). z clarify that a term of a NAPSA is only unenforceable in relation to a particular employee, where the

Standard also provides for a matter in relation to that employee (this measure would apply retrospectively

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from 27 March 2006, the date that WorkChoices commenced). z amend the rules which provide for the continuing operation of s170MX awards for a transitional period

where the employer is not a constitutional corporation (this measure would apply retrospectively from 27

March 2006, the date that WorkChoices commenced); and z make other miscellaneous changes.

For further information contact:

Brad Burke 0421 586 478

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