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What Protections do Contractors Have?

Independent contractors have different obligations and freedoms than employees. As a result, various legislation aim to protect their rights. For instance, stipulations in the Fair Work Act of 2009 and the Independent Contractors Act of 2006 protect contractors’ rights from unfair working arrangements.

What Protections Does the Fair Work Act of 2009 Provide Independent Contractors?

The Fair Work Act of 2009 protects independent contractors from coercion, adverse action, and abuses of freedom of association.

Adverse Action

The Fair Work Act of 2009 protects contractors from having their contracts terminated by organizations because they complained to a regulator about their workplace rights.


The Fair Work Act of 2009 also prevents businesses from threatening action against contractors to prevent them from exercising their workplace rights.

Abuses of Freedom of Association

The Act also protects independent contractors by allowing them to join trade unions or employer groups without repercussions.

How Does the Independent Contractors Act of 2006 Protect Contractors?

Since contractors have different freedoms than employees, they’re also responsible for finding and negotiating with clients. Sometimes, contractors can end up in unfair contracts with clients because of these situations. The Independent Contractors Act of 2006 protects contractors from such contracts by allowing them to request a court to review their contract if it’s unfair or harsh.

Courts can consider contracts under the following conditions:

  • The court can assess the contractual terms and when the agreement was reached

  • They can also consider both parties’ relative bargaining strengths when the contract was agreed

  • The court can assess if there was undue influence or pressure against a party when the contract was signed. Similarly, they can also examine if unfair tactics were used when the contract was created.

  • The court can assess if the contract provides lower remuneration to contractors than employees doing similar work.

Once the courts have considered and assessed the contract, they can implement the following:

  • Changes in the contract’s terms

  • Setting aside the whole or part of the contract

Sham Contracting

The Fair Work Act of 2009 also protects workers employed by a business or an individual from being treated as individual contractors. Sham contracting arrangements can exist between workers and individuals where a company tells an employee they’re an independent contractor to avoid paying them legal entitlements. Organizations use sham contracting to avoid paying employees minimum wages, superannuation contributions, and paid leaves.

The Fair Work Act of 2009 prevents employers from misrepresenting employment relationships as independent contracting arrangements. It also prevents them from dismissing an employee to hire them as contractors.

Workers may be required to submit invoices and have an Australian Business Number (ABN). The Fair Work Act of 2009 protects workers from sham contracting arrangements. These arrangements carry hefty penalties imposed by courts, with the maximum fine being $13,320 for individuals and $66,600 for corporations.

Get Started with Achieve Corp

Are you an independent contractor looking for assistance with your payroll management needs? Would you like to maximize your income while legally minimizing taxes? Achieve Corp’s payroll management system can assist you.

Achieve Corp has a qualified team with the experience and capabilities to meet each contractor’s unique needs. The corporation has over 20 years of experience and has cemented itself as a leading payroll services provider for contractors. Contact us today to find out how we can help you.

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