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Significant problems in labor's 'sham contracting' proposals

"The 'sham contracting' proposals contained in the Exposure Draft released today by the Federal Opposition need more thought, as they would potentially cause widespread problems for companies and independent contractors. While the announced consultation process is welcome, industry can see some significant problems with the proposals," Innes Willox, Chief Executive of the Australian Industry Group said today.

"Independent contractors make up 8.5% of the Australian workforce with another 8.7% comprising business operators. We are talking over 2 million people. These independent contractors are the electricians, plumbers, truck drivers and IT professionals that we all know. The vast majority of independent contractors have absolutely no desire to be employees and would no doubt be strongly opposed to any legislative changes which had the effect of forcing them to become employees, or which led to businesses deciding that it is too risky to engage them.

"Tough sham contracting laws already exist within the Fair Work Act with heavy penalties for employers who break the law. The sham contracting laws were strengthened when the Act came into operation and the laws have proved to be effective when they have been used. Any problems that are seen to currently exist can be readily addressed through more resources being devoted to enforcing the existing laws.

"Ai Group intends to be actively involved in the Opposition's consultation process to ensure that industry's valid concerns about the proposals are fully understood," Mr Willox said.

Media Enquiries: Tony Melville - 0419 190 347