Independent contractor disputes about unfair contract terms

These functions start on 26 August 2024 (unless an earlier date is proclaimed by the Commonwealth Government). We can only accept applications that relate to services contracts which are made (entered into) on or after 26 August 2024.  

We can cancel (set aside) or change (amend or vary) unfair terms that would relate to workplace relations matters if the independent contractor were an employee.

We can do this if:

• an independent contractor who is a party to a services contract, or a union or employer association that can represent them, applies to us, and
• in the year the application is made, the independent contractor’s annual earnings (and any other amounts) are less than the contractor high income threshold, and
• we are satisfied that the services contract contains one or more unfair terms which would relate to workplace relations matters if the independent contractor were an employee.

A services contract is a contract for services that relates to the performance of work by an independent contractor.  

The services contract must have a constitutional connection. This means that either:

• a party to the contract is:
  • a constitutional corporation
  • the Commonwealth or a Commonwealth authority, or
  • a body corporate incorporated in a territory in Australia
• the work is to be performed (or mainly performed) in a territory of Australia
• the contract was entered into in a territory of Australia
• at least one party is resident in, or has its principal place of business in, a territory in Australia, or
• the work is done in the course of constitutional trade or commerce. 

To decide whether a contract term is unfair, we can consider:

• the parties’ relative bargaining power  
• whether there is a significant imbalance in the parties’ rights and obligations under the services contract  
• whether the contract term is reasonably necessary to protect the legitimate interests of a party to the contract
• whether the contract term imposes a harsh, unjust or unreasonable requirement on a party to the contract
• whether the services contract provides for total remuneration that is less than:
  • what regulated workers performing the same or similar work would receive under a minimum standards order or minimum standards guidelines, or
  • what employees performing the same or similar work would receive.

We may also consider other relevant matters.  

We can only cancel or change unfair terms that would relate to workplace relations matters in an employment relationship (in other words, if the independent contractor was an employee). 

These are workplace relations matters:

• remuneration, allowances or other amounts payable to employees
• employees’ leave entitlements
• employees' hours of work
• enforcing or terminating contracts of employment  
• making, enforcing or terminating other agreements determining terms and conditions of employment
• industrial action by employees and employers (unless it affects essential services)
• disputes between employees and employers
• other matters that are substantially the same as matters that relate to employees or employers dealt with by or under the Fair Work Act 2009 or state or territory industrial laws.

These are not workplace relations matters:

• preventing discrimination or promoting equal employment opportunity (unless contained in a state or territory industrial law)  
• superannuation
• workers’ compensation
• occupational health and safety
• child labour
• public holidays (except rates of pay for public holidays)
• deductions from wages or salaries
• industrial action affecting essential services  
• jury service
• professional or trade regulation
• consumer protection
• taxation.

Applications may still be made to the Federal Court for an unfair contracts remedy under the Independent Contractors Act 2006:

• by independent contractors earning at least as much as the contractor high income threshold, and
• for services contracts that were entered into before 26 August 2024 (or an earlier date, if proclaimed).