The National Electrical and Communications Association (NECA) has applauded the federal government’s plan to introduce legislation strengthening unfair contract term protections for small businesses and consumers.

NECA chief executive Oliver Judd has thanked minister Collins and minister Leigh on behalf of the industry, noting their announcement and comments were precisely what hard-working subcontractors in the electrotechnology sector had been calling for.

According to the government, the amendments will introduce civil penalty provisions outlawing the use of, and reliance on, unfair terms in standard form contracts. This will enable a regulator to seek a civil penalty from a court.

NECA welcomes the increasing number of businesses that will be afforded protections by lifting the small business eligibility threshold from less than 20 employees to less than 100 employees and introducing an annual turnover threshold of less than $10 million as an alternative criterion for determining eligibility.

“Finally, David has equal standing with Goliath, with a fair chance of contract term negotiations,” Oliver says.

“While NECA hasn’t seen the detail yet, we are hopeful that this long overdue legislative change will protect NECA’s members and the broader network of subcontractors, small businesses, workers, and consumers from being taken advantage of. NECA stands ready to assist the government in devising the most effective pathways to achieving this.

“Far too often, hardworking mum and dad small businesses are destroyed by contracts they are forced into by the heavy hand of bigger businesses. Small businesses don’t have the resources to challenge the power imbalance they face. Whether from large legal teams or the threat of not being awarded a contract unless they accept terms, these businesses just want an even playing field to negotiate sustainable and fair contracts.”

NECA has consistently spoken to all governments for greater protections for small businesses and, in particular, subcontractors delivering the hard work on the ground. NECA will also encourage the Labor Government to continue to take further actions to protect small businesses by:

• Preventing the amendment of Standards Australia Standard Form Contracts under licence to third parties.
• Preventing sub-contracts unfairly shifting project risk from the principal contractor to subcontractors. The risk needs to sit with those that have the capability to manage it.

This announcement will protect subcontractors from predatory behaviour and encourage more electricians to start their own businesses in the long term. As an organisation training apprentices and delivering the future electricians and subcontractors, we know this initiative will drive more investment and build greater confidence in the construction and electrotechnology sector.