Independent Contractors Amendment Regulations 2010 (No. 1)

Administered by Department of Industry, Science and Resources

Legislation au F2010L01586 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Select Legislative Instrument 2010 No. 134

 

Subject -  Independent Contractors Act 2006

  Independent Contractors Amendment Regulations 2010 (No. 1)

 

The Independent Contractors Act 2006 (the Act) protects the freedoms of independent contractors to enter into contracting arrangements and recognises that these arrangements should be regulated by commercial, not workplace relations, law.

 

Section 43 of the Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out, or giving effect to the Act.

 

Subsection 7(1) of the Act excludes the operation of state and territory (state) laws that require independent contractors to be treated as employees, or requires them to be afforded employee like entitlements. However, state laws that would otherwise be excluded can be saved by regulations made under paragraph 7(2)(c) of the Act.

 

The Independent Contractors Regulations 2007 (the Principal Regulations) save the following state laws that provide employment like protections in the building and construction industry:

  • Building and Construction Industry Security of Payment Act 1999 (New South Wales)
  • Building and Construction Industry Security of Payment Act 2002 (Victoria)
  • Building and Construction Industry Payments Act 2004 (Queensland)
  • Construction Contracts Act 2004 (Western Australia)
  • Construction Contracts (Security of Payments) Act (Northern Territory)

 

In 2009 security of payment legislation was passed in the following state jurisdictions (the new laws):

  • Building and Construction Industry (Security of Payment) Act 2009 (Australian Capital Territory)
  • Building and Construction Industry Security of Payment Act 2009 (South Australia)
  • Building and Construction Industry Security of Payment Act 2009 (Tasmania)

 

The Independent Contractors Amendment Regulations 2010 (No. 1) (the Regulations) amend the Principal Regulations to prescribe the new laws under paragraph 7(2)(c) of the Act and preserve the application of the new laws to independent contractors. This allows independent contractors in the Australian Capital Territory, South Australia and Tasmania to access the benefits of the new laws. As the Regulations save the new laws from the operation of the Act, independent contractors are afforded the employee like entitlements which are provided by the new laws. These entitlements are similar to those already accessible by independent contractors in other jurisdictions, such as claiming payment for work done up and down the contract chain.

 

The new laws address the problem of security of payment for contract work undertaken in the building and construction industry. A failure to make payments for contract work has impacts along the contracting chain, including serious ramifications for the cash flow of subcontractors and suppliers. The effect of the new laws is that there is now a security of payments regime in every jurisdiction in Australia.

 

When the Principal Regulations were created, security of payment laws existed in all states and territories except for the Australian Capital Territory, South Australia and Tasmania. To ensure that independent contractors in the building and construction industry could access the benefits provided by these laws, all state and territory security of payment laws existing at that time were listed as exempt under the Principal Regulations to prevent them from being overridden by the Act. With the passing of the new laws, all Australian states and territories now have security of payment schemes in place. If the new laws are not listed as exempt under the Principal Regulations an inconsistency would exist. Security of payment laws would apply to independent contractors in New South Wales, Queensland, Victoria, Western Australia and the Northern Territory, but not to those in the Australian Capital Territory, South Australia and Tasmania.

 

Schedules 1 and 2 of the Regulations amends Regulation 4 of the Principal Regulations. By doing so, the new laws are saved from the operation of the Act, by virtue of paragraph 7(2)(c) of the Act. This allows independent contractors in the Australian Capital Territory, South Australia and Tasmania to access the benefits of the new laws.

 

In developing the Regulations, the Department of Innovation, Industry, Science and Research has not conducted public consultation. This is consistent with section 18 of the Legislative Instruments Act 2003 as the exemption of the new laws is minor or machinery in nature and does not substantially alter the law.

 

The Act does not specify any conditions that need to be satisfied before the power to make the Regulations may be exercised.

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The Regulations commence on 1 July 2010 for the Australian Capital Territory and Tasmanian Laws, and will also commence on the commencement of the South Australian law.

Overview

The Independent Contractors Amendment Regulations 2010 (No. 1) were introduced to address the problem of inconsistent security of payment laws across different jurisdictions in Australia, particularly in the building and construction industry. The Independent Contractors Act 2006 was enacted to protect the freedoms of independent contractors and to ensure that their arrangements are regulated by commercial law rather than workplace relations law. The regulations were created under section 43 of the Act, which allows the Governor-General to make regulations necessary or convenient for carrying out or giving effect to the Act. The policy objective was to preserve the application of the new security of payment laws passed in 2009 in the Australian Capital Territory, South Australia, and Tasmania, thereby ensuring that independent contractors in these areas could access the same employee-like entitlements as those in other states and territories. By amending the Independent Contractors Regulations 2007, these new laws were saved from the operation of the Act, preventing any inconsistency and ensuring uniform protection for independent contractors across Australia.

Scope and Application

The Independent Contractors Act 2006 applies to independent contractors across Australia, protecting their rights to enter into contracting arrangements and ensuring that these arrangements are regulated by commercial, rather than workplace relations, law. The Act excludes the application of state and territory laws that require independent contractors to be treated as employees or to be afforded employee-like entitlements, with certain exceptions that can be saved through regulations under the Act. The Independent Contractors Amendment Regulations 2010 (No. 1) were made to preserve the application of new security of payment laws in the Australian Capital Territory, South Australia, and Tasmania, ensuring that independent contractors in these jurisdictions can access the benefits of these laws, which address the problem of security of payment for contract work in the building and construction industry. The Regulations amend the Independent Contractors Regulations 2007 to list the new laws as exempt from the operation of the Act, thereby allowing independent contractors in these jurisdictions to claim payment for work done up and down the contract chain, similar to those already accessible by independent contractors in other jurisdictions. The Regulations came into effect on 1 July 2010 for the Australian Capital Territory and Tasmania and will also commence on the commencement of the South Australian law.

Key Provisions

The Independent Contractors Amendment Regulations 2010 (No. 1) amend the Independent Contractors Regulations 2007 to adapt to the introduction of new security of payment laws in the Australian Capital Territory, South Australia, and Tasmania. Specifically, the Regulations ensure that these new laws are preserved from the operation of the Independent Contractors Act 2006 (the Act) (Sections 1 and 2). This amendment is vital for maintaining consistency in the application of security of payment laws across Australia, ensuring that independent contractors in all jurisdictions have access to similar protections and entitlements. The obligations and requirements imposed by these Regulations primarily concern the preservation of state laws that provide security of payment in the building and construction industry. By saving these new laws from the operation of the Act, the Regulations ensure that independent contractors in the Australian Capital Territory, South Australia, and Tasmania can access the benefits of these laws, such as claiming payment for work done up and down the contract chain. This is achieved by amending Regulation 4 of the Principal Regulations (Schedules 1 and 2). There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for breaches of these Regulations. However, it is important to note that the Act itself provides a framework for regulating independent contractor arrangements, excluding state laws that require contractors to be treated as employees or afforded employee-like entitlements, unless saved by regulation. The Regulations ensure that independent contractors in new jurisdictions can access protections similar to those in other states and territories, thereby avoiding the potential for inconsistent legal treatment and ensuring fair payment practices in the building and construction industry.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.