Independent Contractor or Employee? Avoid Costly Mistakes.
Are you confident your contractors aren't actually employees? We recently dealt with a case where a business faced an unexpected claim from a contractor who argued they were unfairly dismissed as an employee.
Knowing the difference between an independent contractor and an employee is critical—not just for fair work compliance, but for taxation, insurance, and more. Questions like, "Is there an ongoing promise of work? Are hours fixed? Do they bring their own tools?" could help you avoid legal complications.
If you're unsure or want to review your situation, we're here to help. Contact me or our team at Millens for expert advice.
VIDEO TRANSCRIPT
Ross Millen:
Hi. We had a situation the other week where a client had someone working for them as an independent contractor. They had an independent contractor's agreement, and for whatever reason, they brought it to an end. And what happened? The independent contractor went to the Fair Work Commission and said, "Hey, actually, I was an employee and I had been unfairly dismissed, and now I'm bringing a claim." It's very important to be very sure about whether people working for you are employees or independent contractors.
Now, you've probably all heard about the guy that worked for 30 years for a company. He was an employee. He finished up on a Friday, and then he turns up to work doing exactly the same job on a Monday, but through a company using an ABN and saying, "Well, now I'm an independent contractor." That just doesn't work because the person is still an employee.
What's the things to look at? Well, is there any promise of ongoing work? Are there fixed hours to do the work, or is the person able to choose their own hours? Do they provide their own tools and equipment? Do they have a discretion as to how to provide the services? Can they use other people? Can they delegate? There's a whole range of tests that are used to determine whether someone's an employee or an independent contractor.
And why is that important? Well, not only for fair work, but also taxation obligations, work cover, insurance; a whole range of things that are important whether a person is an employee or an independent contractor. Now, if you are in this situation with people working for you or you are working or providing services to someone else, you've got any queries about this, remember to contact me or anyone else at Millens. We're here to help you deal with your employee independent contractor issues. Thank you.
