Are They A Contractor Or An Employee?

Are They A Contractor Or An Employee?

Contractors and Employees are different.

Yes they are.

It is important that you as a small business owner get this distinction right.

We get asked for advice in this area of law quite a lot.

It comes from start up and new small businesses as well as long established businesses.

The law is a mix of legislation and the common law cases of superior courts.

The Fair Work Act 2009 and the Independent Contractors Act 2006 are both relevant.

There is also a plethora of Court cases that span many years.

They try to distinguish whether an arrangement put before them is an employment or a contractor agreement.

Are They A Contractor Or An Employee?

Some of these major decisions are more favourable to one line of argument. Others to the opposing.

All of which makes deciphering the legal requirements hard. Lawyering and certainty in this area is definitively even more pretty hard.

Quite rightly no single factor is determinative.

Courts continue to look at a combination of factors as they whether someone is a contractor or an employee.

Quite rightly they want to consider the facts of each particular case.

Elements like control, risk and the way a person carries out their work matter.

The easy ones are where the contractor relationship has been constructed as a sham. It isĀ  clearly an employee and the arrangement has never carried through as a contractor.

The harder cases are where genuinely it is difficult or arguable to say the arrangement is a contractor.

Those tend to have elements of an employee agreement about it.

Are They A Contractor Or An Employee?

By now you probably agree with me. Contractors and employees are different.

Confused, you are not alone.

This is why you need to obtain proper legal advice.

The consequences getting it wrong can be financially significant with liability not only to the employee but to a raft of government departments.

Are They A Contractor Or An Employee?

Give us a call on 9528 0235 for an obligation fee chat.

We have two handy offices one in the Sutherland Shire and one on the lower North Shore.

Below is a good link to a Fair Work Ombudsman publication on the subject.

Click Here

Here is another piece I wrote on the subject

Click Here

Paul Ippolito is Principal of Ippolito Lawyers. He is an experienced commercial lawyer who enjoys working with employers, contractors and employees. He has also lectured for nearly a decade in commercial and corporate law including employment law at The College Of Law.

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