The High Court has recently provided clarity on determining if a person is a contractor or employee.
The analysis is now by reference to the terms of the workplace contract.
Previously, the courts would characterise the workplace relationship by considering factors beyond the terms of the workplace contract. Such factors included the level of supervision, the right to delegate work to others, sick leave entitlements, holiday entitlements and income tax deductions (the totality principle).
The High Court’s decisions now specify that the contract and the relationship defined in the contract between parties is the primary determination tool. However, the indicia or totality principle still has a role to play where there is uncertainty.
As such, employers should be aware of the importance of the parties’ rights and obligations and ensure that they are clearly stated in the workplace contract.
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