Labour Contracting & On-Hiring

Independent_contractor.jpg

ACCI Stands For:
Freedom to provide labour
services through independent
contractor arrangements

And that this choice is respected & rewarded

Contracting (also referred to as independent contracting or labour contracting) refers to a
range of arrangements in which individuals (contractors) work under a contract for services
whereby they provide services in the form of the provision of labour to another business
(principals).

It includes circumstances where individuals choose to contract their vocational, professional
or trade occupational knowledge, experience and skills to business. This is in contrast to a
contract of service in which an individual becomes an employee, and the employing entity
becomes an employer with all the attendant liabilities and obligations.

On-Hiring (also referred to as labour hiring or agency employment) is generally an arrangement
whereby a labour hire entity or agency provides individual workers to a client or host with the
labour hire entity being ultimately responsible for the worker’s remuneration. These workers
may be employed directly by the labour hire entity, or be contractors to that entity.

Policy Principles:

  • It is important that people have freedom to contract. The underlying principle of freedom
    of contract is one of the basic pillars upon which our system of commerce and industry
    operates
  • Businesses should be free to make commercial and operational decisions on whether to
    undertake operational functions through direct employment, through contracting, or
    through on-hiring
  • Individuals should be free to offer their services either as employees or as they choose,as
    contractors or through labour hire agencies
  • Contracting and on-hiring make a significant contribution to the Australian economy and
    labour market, particularly through scope for innovation, availability of skills and
    experience and the creation of additional work opportunities. This positive contribution
    canonly increase into the future if law and policy serves to properly encourage and support
    capacities for contracting and on-hiring
  • Genuine and consensual contracts for services under which work is performed as agreed
    between principal and contractor are in and of themselves an inherently legitimate,
    welcome and beneficial form of commercial arrangement that adds value to the Australian
    economy and is no less legitimate than contracts of service/employment
  • On-hire working is also an inherently legitimate part of the Australian labour market. On-
    hiring offers productive and effective capacities to undertake essential operational
    functions which would not be possible under narrow strictures of traditional direct,ongoing
    employment
  • The values of entrepreneurship, risk taking, investment and choice which underpin
    contracting should be welcomed, encouraged and highly regarded by policy makers
  • Governments should not be in the business of deciding what working arrangements suit
    a business or individuals, nor of seeking to override personal choices and agreements
  • Regulating contractors as employees is a regulation of entrepreneurship and is not a
    legitimate part of Australian law.Seeking to regulate on-hire arrangements into some
    other arrangement is also not legitimate
  • There should be no scope to transform contract work into employment, save by the express
    mutual intention of the parties to abandon a contract for services, in favour of a contract of
    service. Third parties and regulators should not seek to impose employment relationships
    and obligations on parties who did not agree to or intend to enter such relationships
  • On-hiring is at all times a commercial arrangement. Employment obligations in on-hiring must
    be restricted to those between labour hire agencies and their employees.  Host companies in
    which the employees of on-hire companies work should not be asked to assume any
    employment-based obligations for these workers
  • Arrangements where employees are labelled as contractors, but are in fact and law employees,
    are sham arrangements and do not (and should not) have legal recognition as contracts for
    services at common law
  • Similarly, arrangements which purport to be ones of on-hiring but which are not legitimately of
    that nature do not and should not enjoy legal recognition as labour hiring
  • Arrangements which are non-consensual or which are tainted by coercion or undue influence
    are not enforceable and should not have legal recognition as contracts for services