Contractor rights and protections
Protections at work
Under the Fair Work Act 2009, independent contractors are protected from:
- adverse action – for example, a business can't terminate a contract with a contractor because they made a complaint to a regulator about their workplace rights
- coercion – for example, a business cannot threaten to take action against a contractor to coerce them not to exercise their workplace rights
- abuses of freedom of association – contractors are free to join, or not join, a trade union or employer group.
Unfair contracts
Eligible contractors can apply to the Fair Work Commission if they think their contract contains an unfair term.
To decide if a contract term is unfair, the commission may consider:
- the parties’ relative bargaining power
- there is a significant imbalance in the parties’ rights and obligations under the contract
- if the contract term is reasonably necessary
- if the contract term imposes a harsh, unjust or unreasonable requirement
- if the contract provides remuneration less than that of an employee doing similar work
- any other matters it thinks is relevant.
If the contract contains unfair terms, the commission may make an order to change or cancel all or part of the contract.
Read more about the process and eligible contracts on the Fair Work Commission website.
Contractors can also ask a court to review a contract under the Independent Contractors Act 2006.
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Sham contracting
If a hirer engages you as a contractor but your work conditions are more like an employee, you may be in a sham contracting arrangement.
A sham contracting arrangement is when an employer attempts to disguise an employment relationship as a contractor relationship. They may do this to avoid certain taxes and their responsibility for employee entitlements like:
- minimum wages
- super
- leave.
It’s illegal for an employer to:
- misrepresent an employment relationship as an independent contracting arrangement
- dismiss or threaten to dismiss an employee for the purpose of engaging them as a contractor
- say something false to persuade an employee to become a contractor.
Help for sham contracting arrangements
If you think you may be in a sham contracting arrangement, you can ask for help from the Fair Work Ombudsman – call 13 13 94.
Work health and safety
All workers in Australia are entitled to a safe and healthy workplace. This means that employers — including self-employed contractors — must comply with the relevant state or territory's workplace health and safety laws.
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