An issue which confronts many small to medium businesses is whether their employees fall within an employee / employer relationship or a contractor / principal relationship. The legal status of these workers has far reaching and significant repercussions, from payment, workers compensation requirements, insurances, termination and more.

It must be understood that simply because a worker has a contract for services as a contractor, it does not necessarily mean that they are one and vice versa.

The Business Law Brisbane considers these issues at length and provides for ways to question the legal status of the employment relationship.

A “sham contract’ is a contract which considers that a worker is a contractor but in actual fact, the worker ought to be considered otherwise.

A very accurate way of considering this issue is the old saying “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.” You can’t simply put a label on a worker and state they are a contractor/employee when everything else indicates otherwise.

How the courts look at these matters, is through the ‘multi-factor’ test which amongst other things considers, whether the work require a special skill set or qualification, if there are rules in regards to attendance, time, delegation of duties, uniforms, ability to negotiate prices, requests for holidays / time off.

There are multiple factors which need to be considered before an employment contract is drafted to ensure the accuracy of the employment relationship.

Make contact with Christie brisbane business lawyer if you have a question on your employment status or if you’re about to enter into a new employment arrangement.