Two recent High Court of Australia cases have demonstrated the importance of precise and accurate written agreements when a business is seeking to engage workers.
Whether a person can be classified as an employee or a contractor has been an ongoing legal debate in Australia since at least 1930 when Yellow Cabs successfully turned their employee taxi drivers into independent contractors. Since then, the Courts have worked to define this further, and have tried to establish tests to identify those roles.
The distinctions and factors regarding the employee vs contractor debate are very nuanced and matters can be litigated until, like in these cases we discuss below, they reach the High Court of Australia.
Without trying to overly simplify two very complex factual and legal cases that were litigated for over five years, the High Court has made it clear that greater certainty will be afforded to a business owner who has a clear written contract with the worker, be they an employee or an independent contractor, and that has an agreement that clearly outlines the rights and obligations of both parties and properly and correctly records the nature of the relationship.
How the parties conduct themselves after the agreement is signed is now measurably less important in determining the true legal relationship.
The key takeaway for business owners is this:
All businesses should have accurate and precise written agreements for ALL employees and independent contractors, or any third parties. The accuracy and terms of these agreements are vital in characterising the employee/ contractor relationship and protecting the business.
Businesses who engage independent contractors should audit their existing agreements to reduce possible risk and ensure that any new contractors have accurate written agreements that precisely outline the nature of the relationship and the obligations of each of the parties.
We have been advising clients on this area of the law for more than 30 years and can advise businesses as to their legal rights and obligations under existing or new arrangements. We regularly advise businesses on how to best engage employees or contractors.
Please do not hesitate to email or call on 07 3220 1144 if you would like to discuss your personal circumstances on this, or any other matter.
The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.