Legislation and Case Law Update - Minimum standards introduced to protect independent contractors

Employment Law: 13 October 2024

Author: Stephen Curtain - Our People

From 26 August 2024 amendments to the Fair Work Act come into effect which extend protections afforded to employees otherwise not protected.

The Fair Work Commission now has power to set minimum standard orders as well as guidelines for two different categories of workers, employee-like workers doing digital platform work and regulated road transport operators (“regulated workers”).

Employee-like workers

These are people who are a party to a services contract, including as a company director, trustee or partner, who:
• perform most of their work under a services contract using or arranged by a digital labour platform other than as an employee;
• have low bargaining power or are paid less than an employee would get;
• have little authority over how they perform their work; and;
• either their contracting partner or the employee-like worker’s entity is a constitutional corporation.

Employee-like workers now have protection against unfair terms in their contracts and from being unfairly deactivated from their digital labour platform, called regulated businesses, which are online apps, websites or systems used to book or arrange services which engage the contractors directly or indirectly where the payments to the contractors are processed by the platform operator or via an associated entity or another contractor.

There are certain things that can and cannot be included in the minimum standard orders set by the Fair Work Commission, which can also set out minimum standard guidelines. Payment terms, working time, insurance, consultation and representation can be included but others, including overtime rates, rostering arrangements, matters primarily of a commercial nature that don’t affect the terms of engagement of the worker or that would deem the worker an employee, cannot. A failure to comply with minimum standard orders can result in penalties.

Where a digital platform operator suspends or terminates an employee-like worker, the worker can apply to the Commission to be reinstated and paid resultant income loss. In order to make an application, the worker have been performing work on a regular basis for at least 6 months from 26 August 2024 and earn less than the contractor high income threshold (currently $175,000). The application must be made within 21 days of being deactivitated.

Employee-like workers can also apply to the Commission for a remedy if they think their contract contains an unfair contract term provided the contract was entered into on or after 26 August 2024.

Regulated road transport operators

The Fair Work Commission now has power to set minimum standards and guidelines to apply to contractors performing a wide range of road transport work, primarily in the road transport and distribution, long distance haulage, waste management, cash in transit, and passenger vehicle transportation sectors. The intention is to develop an appropriate safety net of minimum standards for regulated road transport workers to ensure the industry is safe, sustainable and viable. In exercising its powers to set minimum standards the Commission must consult widely in the industry, publish a draft of the proposed order and ensure affected parties have a reasonable opportunity to provide feedback.
Regulated road transport contractors are those who:
• work in the road transport industry;
• are a party to a services contract, either as an individual, a director, trustee or partner;
• perform most of their work under a services contract other than as an employee; and
• are not employee-like workers; and
• either their contracting partner or the employee-like worker’s entity is a constitutional corporation.

The protections afforded to regulated road transport operators include protections against unfair termination, unfair terms in contracts and unfair deactivation from a digital platform. Where reinstatement is not an appropriate remedy, road transport contractors can claim up to 26 weeks of earnings or half the high income cap as compensation.

Recent case – Protection of future workplace rights

As a result of the recent case of Dabboussy v Australian Federation of Islamic Councils [2024] FCA 1074, workplace rights may now include future rights, which technically may not have arisen, for the purposes of adverse actions claims.

Section 340 (1)(b) of the Fair Work Act provides that a person must not take adverse action against another person to prevent them from exercising a workplace right.

In this case, the Federal Court considered that a prima facie case had been established that the employer’s decision to terminate an employee before the expiration of the employee’s probationary period was made in order to deny the employee the opportunity to make an unfair dismissal claim.

The Court considered this to be a breach of section 340 (1)(b) of the Act and took the unusual step of making interim orders reinstating the employee and restraining the employer from terminating his employment.

In so deciding the Court adopted the majority view of the High Court in Qantas Airways Limited v Transport Workers Union [2023] 412 ALR 134 about the existence of “future” workplace rights.

The effect of this is that such a termination may give rise to a General Protections claim.