Australia’s building and construction industry has expressed concern following Thursday’s ruling by Fair Work Australia in ADJ Contracting Pty Ltd which upheld the legality of enterprise agreements regulating the engagement of independent contractors.

Master Builders Australia chief executive Wilhelm Harnisch said the decision is inconsistent with good commercial practice.

“Master Builders believes that the regulation of independent contractors under enterprise agreements is inappropriate and should not be part of the workplace laws,” he said.

“The industry considers that yesterday’s decision gives cause for the Fair Work Act to be changed to preserve the integrity of independent contracts.”

Mr Harnisch explained that under the Fair Work Act’s bargaining regime, enterprise agreements are able to restrict how independent contractors may be engaged, requiring union consultation and ‘pay parity’ with employees. This means that independent contractors’ conditions are dictated by an enterprise agreement to which they’re not even a party.

According to him, this is back-door regulation which severely compromises employers’ ability to fill short-term gaps which cannot be covered by permanent employees.

“These efficiencies flow into the economy as a whole, generating further employment and helping to limit increases in the cost of housing,” Mr Harnisch said.

Master Builders is calling on the government to support independent contractors by prohibiting enterprise agreements from governing commercial contracts.