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Independent contracts should not to be confused with Australian Workplace Agreements (AWAs) which are sometimes called 'individual contracts'.  Workers with AWAs are employees, however workers with independent contracts are often considered 'independent' of any employer.  'Independent contractors' is a catch-all term used for turning an employee into something different.  Workers should be very wary of companies who use such arrangements.  The Union recommends strongly against any worker becoming a 'contractor'.  There are reasons for this. 


Firstly, many companies seek to replace their workforce with 'independent contractors' to save money and shift the risk of failure onto others.  For example contractors are regularly expected to pay their own entitlements such as annual leave, public holidays and many other conditions workers take for granted these days.  (You don't know what you've got till it's gone.)   The boss will often expect workers to take out their own workers compensation insurance and pay their own superannuation.  In some cases bosses will tell workers they will be paid extra to cover such expenses, but surprise, surprise the 'extra' never covers the real expense.  Some simple logic applies here.  If the boss is doing it to reduce costs, why would they give you enough 'extra' to cover such expenses?  It would cost the same.  Hmmmm, do your maths. 


Secondly, contracting arrangements commonly involve avoidance of tax or other payments like superannuation or workers compensation.  When your boss gets caught out, who do you think they will look at next? 


Thirdly, if you are involved in some kind of rort or avoidance and things turn nasty with the boss, how will you recover money that is owed to you? 


Fourthly, the 'independent contractor' relationship IS GOVERNED BY CONTRACT LAW.  If you stuff up or the boss decides for whatever reason they wish to engage another 'contractor' to replace you, this may be goodbye for you.  Think of it like getting your car fixed.  You don't like one mechanic: you stop using them and they stop getting work from you! 


Fifthly, it is very rare to find 'independent contractors' are independent.  They usually depend on the one company for their work, they usually don't control their work (eg. they can't leave early if they want to), the boss gives them directions (usually through a supervisor) and they are usually paid in a way determined by the boss.  Funnily enough, this is the definition of an employee!  


You should note that regardless of what two people may call an arrangement, if certain conditions are met, such as these, the arrangement is a contract of employment.  This was confirmed in a recent High Court case called Hollis v Vabu where the Court found that contract couriers were in fact employees. 


So, you've signed up to a contracting deal only to find you are actually an employee in reality.  You gave a lot away, such as Award conditions, but what did you gain?


Often independent contracting is promoted through an agency.  These workers no longer get sick or annual leave and may have no worker's compensation cover.


The Union strongly recommends you avoid such arrangements and seek advice as soon as you hear about independent contracting at your workplace. 


Bosses will often get workers in one-by-one to avoid the word getting out.  Bosses will tell you it is none of your business what contract other workers are being paid under.  But clearly it is!  Avoid meeting with your boss alone in these circumstances.


Bosses will sometimes tell workers they cannot have a copy of the contract or they should not show other people their contract.  How absurd.  Can you think of any other contract which you cannot have a copy of, or get advice about?  When you take out insurance for your car or engage a builder to do renovations on your house you enter into a contract.  Have you ever heard of an insurance company or builder saying you can't keep a copy of the contract or get advice on it?  So why at work! 


Members currently engaged through an 'independent contract' should seek advice from the Union as soon as possible.  Our advice might assist you in managing the contract to better suit you or getting out of the contract.  Independent contractors can still be Union members. 






It is important to remember that just because you and others think you are NOT an employee, you might be anyway.  This effects your tax obligations.  The following Australian Tax Office links set out the tests that apply to work out what kind of tax you are required to pay.  The boss may not care whether you should be paying income tax, because it is YOU who pays it.  If the boss doesn't deduct the right amount of tax from your wages, you still may be left with a significant tax billSee these links:





The Superannuation Guarantee laws require employers to pay Superannuation into an approved fund for all eligible employees.  But are you an employee? Is the boss your employer?  You may be owed money for superannuation.  For answers to these questions see the link below:





Workers Compensation laws require the owner of a workplace to take out workers compensation insurance for all 'workers'.  This term is very wide and includes people who may not be employees.  If your contract requires you to take out personal accident cover, you may be being duped. An injury at work should be covered by the workplace or boss.  See the link below:



Page registered by Karen Self on 15/05/03 01:55 for topic NEWS UPDATE.
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