Tag: employment agreement

Recently we have had a number of human resources enquiries from employers about obtaining independent contractor agreements. Sometimes, upon learning more about the specific work relationship, the worker in question most likely should be an employee and the employer is actually at risk of what is termed Sham Contracting under the Fair Work Act 2009.

Sham contracting occurs when an employer deliberately disguises an employee/employer relationship as an independent contracting arrangement. This generally occurs in situations when a business needs work to be done by someone, but it doesn’t want the responsibility of paying for employee entitlements such as annual leave, workers’ compensation and superannuation.

Quite often employers we speak to confirm that the reason the worker has been engaged as an independent contractor is due to it being more cost effective to do so. Their thinking is that if they can avoid paying entitlements to the worker, employing someone becomes more affordable. The problem with this scenario is that the choice to save a few bucks could very easily result in fines that are substantial in comparison to the money saved. Plus, there is generally the requirement to pay back to the employee the entitlements such as annual leave and superannuation that have not been issued.

We recommend all employers review any independent contractor arrangements to ensure they are not creating a risk. There are a number of common factors that should be considered when determining who is an independent contractor and who is an employee. Some of these include the degree of control the worker has over the work performed, who controls the hours of work, whether anyone else can do the work, how the worker is engaged for the work, and who provides the tools and equipment for the work. The relationship should be looked at holistically rather than considering only one of the elements and it is always a good idea to have this review conducted by a professional.

In summary, it’s important to highlight that employees cannot be independent contractors simply by calling them such in a contract – careful consideration must be given to what is the true nature of the relationship. A very well-known quote by Justice Gray from the 1989 case Re Porter: Ex Parte TWU (1989) 34 IR 179 sums up this fact well and inspiration for our lead blog picture:

“Parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognise it as a duck”.

If your company uses independent contractors and you are concerned, we offer a free initial consultation for employers. Call us on 07 5655 4047 or book online here.

Q. I am a small business owner and have a number of casuals as employees. Do I need to give them a written Employment Agreement (a casual contract)?

A: There is no legal requirement to provide employees who are casuals with a written casual contract of employment. However, employers are always better off providing one in case something goes wrong with the relationship between the employer and their employees in the future. This will then provide a point of reference to assist you if the employee starts accusing you of unreasonable things.

Too many times employment relationships start off well where both the employer and employee are happy, but then these relationships begin to sour over time or as the relationship begins to end. Where a casual contract is in place the employer is better protected for future issues that may arise overtime or very quickly.

Industryus HR has a full-service employment agreement drafting service, where we take the hassle out of small business trying to understand the legalities of drafting these documents. Call us on 07 5655 4047 or send us a message via our contact page to find out more and gain assistance from a HR specialist on these matters or any other matters you may have.

FY2019 is just around the corner and many businesses have either already commenced planning and budgeting or are about to start thinking about it. Have you thought about HR Support ?

It’s very common for small businesses to lack proper and compliant human resources practices, and it can seem overwhelming when thinking about where to start. The good thing is that it doesn’t take too much to get your HR basics in order. So, for those business owners who are ready to put some focus into HR to help decrease exposure and improve workplace productivity, below are three suggestions which are valuable whether your business has 1 or 100 employees.

1. Implement employment agreements for all employees (including casuals), or have an audit of your current employment agreements conducted to ensure your business is protected.

2. Have position descriptions drafted for all positions so that there is clarity about what each role does, where each role fits, and what each role’s purpose is within the business.

3. Get essential employment policies in place such as a strong Code of Conduct and a clear Discrimination and Harassment policy so that employees know what is expected of them and to reduce your business’ exposure to claims.

If you would like assistance with HR Support, Industryus HR specialises in all three areas and can make it a simple and pain free process. Contact us on 07 5655 4047 or click here for a free and no obligation quote, tailored to your business requirements.