Independent Contractor or Really an Employee?

Employees and independent contractors might both be engaged in a workplace but have different rights and obligations at work

Often, employees are entitled to a range of benefits including annual leave, sick leave, superannuation and redundancy pay, that an independent contractor might not be entitled to.

Traditionally, the courts applied a "multifactorial approach" when determining whether a worker was an employee or independent contractor. This meant looking at a list of factors to work out the totality of the workplace relationship and the day to day conduct between the parties, without being restricted to the terms of any written contractual agreement.

In 2022, the High Court handed down two important decisions determining the nature of workplace relationships:
Construction, Forestry, Maritime, Mining and Energy Union & Anor v Personnel Contracting Pty Ltd [2022] HCA 1
ZG Operations & Anor v Jamsek & Ors [2022] HCA 2

These decisions saw a shift away from the traditional approach, giving primacy instead to the terms of the written contract.

In circumstances where the parties have set out the terms of the engagement in a written agreement, a Court will generally consider the relationship through that lens.

However, simply calling a contract an ‘independent contractor agreement’ or ’employment contract’ is not sufficient to determine the legal status of the relationship.

The new legal authorities also do not mean that a Court won’t look at whether a contract has changed during a worker’s engagement, so that it has been varied to change the worker’s status from being an independent contractor to being an employee, or vice versa.

What does this mean for you?
Determining the legal status of a worker’s workplace relationship is complex. At Taylor & Scott, our team of lawyers can assist you and provide advice as to your rights and obligations at work.

At Taylor & Scott, We Care For You.