General information, not legal advice. The official places to check are the Fair Work Commission’s page on the contractor high income threshold and the Fair Work Ombudsman.
whose contractNot only riders
Part 3A-5 is about services contracts in general, so it can reach a courier or driver on an ordinary contract, not only someone working through an app. A services contract is a contract for services “that relates to the performance of work under the contract by an individual”, which must also have a constitutional connection (s 15H(1)). Under s 15H(2) that connection exists if:
- at least one party is a constitutional corporation, the Commonwealth or a Commonwealth authority, or a body corporate incorporated in a Territory; or
- the work is wholly or principally to be performed in a Territory, the contract was entered into in a Territory, a party lives in a Territory or has its principal place of business there, or the work is done “in the course of constitutional trade or commerce”.
Section 15H(3) adds a further connection where a platform arranged the contract, but it names only Parts 3A-2, 3A-3 and 3A-4. It does not name Part 3A-5.
which termsWorkplace relations matters
The Commission may act if it is satisfied the contract “includes one or more unfair contract terms which, in an employment relationship, would relate to workplace relations matters” (s 536NA(1)). Section 536JQ defines those matters, and lists what is excluded:
| A workplace relations matter (s 536JQ(1)) | Not a workplace relations matter (s 536JQ(2)) |
|---|---|
| (a) pay, allowances or other amounts payable to employees; (b) leave entitlements; (c) hours of work; (d) enforcing or ending employment contracts; (e) making, enforcing or ending other agreements setting terms of employment; (f) disputes between employees and employers, or their resolution; (g) industrial action; (h) any other matter substantially the same as one dealt with by the Act, the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 or a state or territory industrial law, unless the regulations specify it; (i) any matter the regulations specify. | Superannuation; taxation; workers’ compensation; occupational health and safety; child labour; jury service; deductions from wages or salaries; industrial action affecting essential services; professional or trade regulation; consumer protection; public holidays, except an employee’s rate of pay for one; discrimination and equal opportunity, but only under a state or territory law that is not an industrial law; and any matter the regulations specify. |
So a term about how much a contractor is paid can be looked at under Part 3A-5; a term about insurance for workers’ compensation, or about tax, falls outside it. Consumer protection is excluded too, and consumer law’s own unfair terms rules are outside this guide.
the weighingWhat the Commission may consider
Section 536NB(1) lists the matters the Commission may take into account in deciding whether a term is unfair:
- “the relative bargaining power of the parties to the services contract”;
- “whether the services contract as a whole displays a significant imbalance between the rights and obligations of the parties”;
- “whether the contract term under consideration is reasonably necessary to protect the legitimate interests of a party to the contract”;
- “whether the contract term under consideration imposes a harsh, unjust or unreasonable requirement on a party to the contract”;
- whether the contract as a whole provides total pay that is less than regulated workers doing the same or similar work would get under a minimum standards order or guidelines, or less than employees doing the same or similar work would get;
- “any other matter the FWC considers relevant.”
Matters (b) to (f) are assessed as at the time the Commission considers the application (s 536NB(2)). Item (e) is where the on-demand delivery order’s safety net can become a yardstick for a contract’s pay.
the remedyWhat the Commission can order
Under s 536NC it may set aside all or part of a services contract, or amend or vary all or part of it, in each case so far as the contract would, in an employment relationship, relate to a workplace relations matter. It must take into account fairness between the parties in deciding whether to make an order and what kind (s 536NA(3)), and it can act only on an application (s 536NA(2)).
who appliesThe application and the threshold
A party to a services contract, or an organisation representing a party’s industrial interests, may apply (s 536ND(1)). No application may be made unless, “in the year the application is made”, the person’s annual rate of earnings, with any amounts the regulations add, is less than the contractor high income threshold (s 536ND(2)).
The Act leaves the figure to the regulations, which may not reduce it (s 15C). Regulation 1.08AA of the Fair Work Regulations 2009 says: “The amount for the year starting on 1 July 2024 is $175,000.” For each later year it multiplies the previous year’s amount by the change in average weekly ordinary time earnings published by the Australian Statistician, rounded to 3 decimal places and never below 1, then rounds to the nearest $100. The regulation does not print the later figures. The Commission gives the threshold for the year starting 1 July 2026 as $190,100, adjusted each 1 July.
The Commission also notes that this threshold is not the high income threshold that applies to employees, and that a person earning above it can opt out of s 15AA of the Act, the section about whether a person is an employee. The same threshold limits who may apply for an unfair deactivation remedy.