Update for independent contractors
Two recent High Court Rulings, have highlighted the importance of reviewing employment contracts. Whether intentionally, or unintentionally, it’s against the law for a business to incorrectly treat their employees as contractors or vice versa. It’s important that employers and contracts understand and familiarise themselves with the distinction. The two High Court rulings have emphasised the importance of the written contract. For more information, please click here.
Please note that this information is a summary, to provide general information. It does not constitute definitive advice. Members who are uncertain as to any aspects of the difference are encouraged to seek their own, independent advice.
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Employees
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Contractors
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- People working in a contract 'of service', serving the employer under a relevant award, agreement, or employment contract.
- Considered part of the business and (generally) told how, where, and when they work.
- Dedicate their time and effort primarily to one organisation.
- Take no commercial risks and the business is legally responsible for the work done.
- Employer provides all or most equipment and systems for doing the work.
- Must apply for time off.
- Paid by payroll system, with PAYG and any fringe benefits deducted. Eligible for superannuation.
- Have all minimum rights under employment laws.
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- People working in a contract 'for service', serving themselves by delivering outcomes to their client(s).
- Self-employed, running their own independent business.
- Can work freely for a number of organisations (or sub-contract the work out).
- Dictate their own time off and may or may not be available for work.
- Take commercial risks and are legally responsible for their work.
- Use all or most of their own equipment and processes.
- Invoice for their work.
- Have most workplace rights but different tax, insurance, and superannuation responsibilities.
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