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Contractors vs employees

Jodie Austin, Jane Carnegie, Erica McAvaney, Anna Howard, Denise Walters, Demelza Thorpe and Evelyn Pollard at the Murray Bridge lunch.

MURRAY BRIDGE:  The differences between contractors and employees were the focus for a return to Murray Bridge for the Women in Business Regional Network.

The Swanport Hotel hosted the network’s first in-person event in Murray Bridge since COVID-19 restrictions hit in March.

The guest speaker Evelyn Pollard from Evelyn Pollard Consulting had an unusual message for the women to help them decide whether or not they should be engaging contractors or employees, “If it quacks like a duck, then it probably is a duck!”.

Her unusual saying became clear as she provided comprehensive checklists for business owners to decide whether or not under Fair Work Commission guidelines the people they were paying to work were legally employees or whether they could be classed as contractors or sub-contractors. 

Evelyn explained that just because someone may qualify under the Australian Tax Office guidelines as a contractor didn’t mean that the arrangement met Fair Work legislation guidelines.

Employers often choose to tell someone to “get an ABN” before they are engaged to do work, but Evelyn pointed out that this may not protect a business against claims for rights as an employee. 

Often businesses opted for a sub-contractor arrangement as they feared the performance review processes required to dismiss someone, however recent court decisions had made it even more difficult for businesses to avoid their responsibilities in this regard with many finding their sub-contractor arrangement was actually deemed to be legally an employer/employee relationship.  Businesses and individuals involved in the decision-making could then be fined and also have to backpay substantial amounts, up to six years, if found to be in breech.

Among the factors that lean towards a contractor rather than an employee description are:

A contractor is free to work for someone else;

They are in control over the job including hours, who undertakes the task and how the job is done;

They are legally liable for the quality of the job, including providing insurance, and also provide the tools and materials to carry it out;

They spend a significant amount of their income for their own business pursuits;

They advertise and promote their services to others;

They are responsible for their own tax affairs.

Evelyn also urged anyone either employing or contracting someone to have a legal contract in place outlining the details of the arrangement and stating the responsibilities of both parties.

Evelyn also urged anyone either employing or contracting someone to have a legal contract in place outlining the details of the arrangement and stating the responsibilities of both parties.

A copy of Evelyn’s Powerpoint slides is available for download in the Members Only section of the website.  Note:  You must be a financial member to access the slides.