Eric Abetz (Tasmania, Liberal Party, Minister for Fisheries, Forestry and Conservation) Share this | Hansard source

They are indeed, Senator Kemp. I now turn to the unfair contracts jurisdiction. The Independent Contractors Bill will override existing unfair contracts jurisdictions for independent contractors in those states where they exist—Queensland and New South Wales. Independent contracting is a commercial arrangement which should not be regulated by workplace relations laws that focus on employment considerations. The government considers that state unfair contracts jurisdictions have gone too far in attempting to rewrite commercial contracts which have been validly agreed between the parties. In both Queensland and New South Wales the relevant state industrial relations commissions can rewrite a contract applying to an independent contractor even where the terms of that agreement were fair when entered into. This is totally unacceptable and creates commercial uncertainty for both parties.

The new proposed jurisdiction will more appropriately focus on commercial considerations when determining whether a contract is unfair. Moreover, a single nationally consistent unfair contracts jurisdiction will minimise the confusion and inconsistency which arises from the duplication of multiple systems. To ensure that this new federal jurisdiction strikes the appropriate balance between the overly prescriptive New South Wales and Queensland jurisdictions and the absence of any contract review mechanism in other jurisdictions, I will shortly be moving a number of amendments to the unfair contracts provisions on behalf of the government.

A number of senators opposite have raised concerns about the expense of this jurisdiction. These concerns are as unfounded as they are misleading. The proposed provisions confer jurisdiction on the Federal Magistrates Court to review and vary harsh or unfair contracts. This jurisdiction will be significantly cheaper than the existing jurisdiction in New South Wales. To file a matter in the New South Wales jurisdiction and have it set down for a one-day hearing will cost a person $1,916. The same person will be charged only $769 to do the same thing in the Federal Magistrates Court—a saving of about $1,200. By conferring the federal unfair contracts jurisdiction on the Federal Magistrates Court, the government is making this jurisdiction more accessible to everyone.

Lastly, I would like to touch upon the sham penalty provisions that are proposed to be included in the Workplace Relations Act by the Workplace Relations Legislation Amendment (Independent Contractors) Bill. While the government fully supports the use of genuine independent contracting arrangements, it will not tolerate the actions of people who knowingly seek to disguise employment arrangements as independent contracting arrangements, thereby denying employees their lawful entitlements. To this end, the Workplace Relations Legislation Amendment (Independent Contractors) Bill includes four new civil penalty provisions to address sham arrangements.

Broadly speaking, these provisions would apply to persons who knowingly disguise employment relationships as independent contracting arrangements, persons who dismiss or threaten to dismiss an employee for the purpose of re-engaging that employee as an independent contractor and persons who seek to deceive or mislead others to persuade them to become independent contractors. These provisions provide substantial additional remedies where an employer seeks to avoid the payment of employment entitlements by wrongly classifying an employee as an independent contractor or coercing an employee to become an independent contractor. A corporation that is found to have breached any of these provisions will be able to be fined up to $33,000, and an individual will be fined $6,600.

Contrary to the claims of a number of senators opposite, these penalties would be able to be sought not only in the Federal Court but also in the Federal Magistrates Court. Further actions would be able to be commenced by an employee, a workplace inspector or, with the employee’s consent, an employee’s union. I would like to take this opportunity to foreshadow the government’s intention to move amendments to these provisions during the committee stage of the debate. These amendments will provide additional remedies for persons affected by a breach of any of these provisions. They will also clarify the government’s intention with respect to persons who knowingly seek to disguise employees as independent contractors.

During the debate yesterday, Senator Marshall made reference to the government’s fair pay and conditions standard in the Workplace Relations Act as the ‘low pay and conditions standard’. What a quite absurd remark. As Senator Marshall would be well aware, the Australian Fair Pay Commission recently handed down an increase of $27 per week to the minimum wage in Australia. Under this decision, Australian employees cannot be paid less than $511 per week. According to the latest OECD data, Australia has the highest minimum wage, as a proportion of median earnings, in the OECD—a very proud achievement.

The government will be opposing the Australian Democrats’ second reading amendment, for reasons that I think would be well known to everybody in this chamber—namely, that it was never the intention of either bill to dictate the way in which independent contractors should manage their affairs. One of the most fundamental advantages of being an independent contractor is the freedom and flexibility that comes from being able to make your own choices about how you work and how you structure your working arrangements. Just in case Senator Murray was not aware, we will not be supporting his amendments either. I commend the bills to the Senate.