There is no easy answer to the question “who is an employee”?
This issue is particularly important in the transport and logistics sector given businesses frequently engage owner drivers as independent contractors. Merely labelling the relationship is not enough to ensure that the driver will not be deemed to be an employee. The other factors to consider include:
• the level of control exercised over the manner in which work is performed and the hours of work;
• the ability of the driver to perform work for others;
• whether the driver provides and maintains significant tools or equipment;
• the right of the driver to delegate or subcontract work;
• whether the driver is presented to the world at large as an employee or representative of the business;
• the deduction of income tax; and
• whether the driver is remunerated by periodic wage or salary or by reference to completion of tasks.
We recently acted for a large community service organisation in defence of a claim for unfair dismissal in FWA. The claim was bought by a person our client had engaged to provide workplace training services. The contract purported to be a ‘contract agreement’ and made no mention of an employment relationship. In addition, the trainer had his own ABN, paid tax, provided his own vehicle to service the contract and was paid for jobs completed rather than hours worked. Despite all of these factors against an employment relationship the claim was made on the basis that our client exercised a degree of control over the trainer’s work. We are still waiting for FWA to hand down its decision on the case.
To minimise your exposure to these types of claims it is important to carefully consider the terms of the engagement to make sure that the nature of the relationship is clear. It is prudent to have well drafted contracts in place which set out the terms of the arrangement in detail.
For further information on anything in this article or related isues please contact the author:
Jim Rutherford
Principal and Accredited Specialist in Workplace Relations Law and Criminal Law
03 5226 8579
jrutherford@harwoodandrews.com.au
Rohan Kux
Lawyer
03 5226 8564
rkux@harwoodandrews.com.au