Unfair contract terms

The recent amendments to the Fair Work Act 2009 (Cth) establish a new jurisdiction in the Fair Work Commission (FWC) for independent contractors to challenge unfair contract terms in services contracts. This guidance note explores the scope, eligibility criteria, and key legal principles underpinning these significant changes effective from 26 August 2024. It outlines the framework designed to provide an accessible, low-cost dispute resolution avenue, distinct from federal courts, enhancing protections for contractors with limited bargaining power.

Topics Covered

• New jurisdiction for unfair contract terms
• Eligibility and criteria for applicants
• Definition and application of unfairness grounds
• Case law examples illustrating unfair terms
• Jurisdiction over terminated contracts
• Dispute resolution process and possible orders
• Commencement and practical implications

Essential Insights

• Assess how the new FWC jurisdiction balances contractor protections with principals’ contractual freedoms.
• Understand the critical income threshold limiting access and its impact on contractor eligibility.
• Explore the nuanced “unfairness grounds” including how bargaining power and contract terms are evaluated.
• Review precedent cases that shape the interpretation of what constitutes unfair contract terms.
• Consider the unresolved question of FWC’s power to review contracts no longer in force.
• Recognise the penalties and procedural rules that influence dispute outcomes and compliance.