Distinguishing Between An Employee And An Independent Contract

1323 WordsNov 19, 20156 Pages
Distinguishing between an employee and an independent contract is of fundamental importance and central to employment relations law in Australia. This is because the nature of the rights held and the duties owed by parties in an employment relationship is largely determined by the classification of their working status. These include accommodating relevant award terms and conditions, abiding by State and federal laws on notice and unfair dismissal, providing certain leave entitlements and workers’ compensation premiums, deductible tax summaries, and assuming liability for the torts of a worker. Some employers may intentionally try to disguise the arrangement as being one of principal-contractor as these are generally less regulated than…show more content…
The paper will evaluate these difficulties, ultimately arriving at the conclusion that the multifactorial test is still the most useful and relevant test for identifying an employment relationship. Whether or not a worker is employed as an employee (contract of service) or independent contractor (contract for service) is viewed by many courts as a mixed question of fact and law. If the relationship is solely dependent upon the true construction of a written document it is regarded as a question of law. But, if the relationship has to be determined by an investigation into the factual circumstances in which the work is performed it must now be regarded as a question of fact. The written contract containing both expressed and implied terms and conditions of employment is relevant but not conclusive when determining between an employee and independent contractor, and whilst the proposed Independent Contractors Act 2006 (Cth) naturally reflects the code and conduct of independent contractor, the simple definition of the term is still absent. Thus, it is necessary to turn to the principles underlying common law for determining the nature of the work relationship that exists between two parties where services are being provided in exchange for remuneration. Traditionally, the control test has been used to hinge on the degree of control which the person
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