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‘It’s The Law’ – Engage correctly

its the law by patrick smith 2018

Wimmera solicitor Patrick Smith is writing for The Weekly Advertiser.
Mr Smith’s monthly column ‘It’s The Law’ will explore legal issues and how they might affect people in the Wimmera, Mallee and Grampians.
Mr Smith was born in and raised in Horsham. He obtained Bachelor degrees in Economics, International Studies and Laws – Honours – from the University of Adelaide. He returned to Horsham with his wife Emma to raise a family in January 2017 and works with O’Brien Lawyers.

Sham contracting
At this time of the year many Wimmera businesses are considering taking on new staff to help them in the new year.
Ensuring staff are engaged correctly is important as a recent case of mine shows.
I helped an employee, who had been treated poorly by their employer, successfully sue their employer under the Fair Work Act’s sham contracting provisions.
We successfully proved the employer disguised the employment relationship as an independent contracting arrangement.
Determining whether a person has been hired as an independent contractor or whether they should have been engaged as an employee can be complex.
The following are some common factors that might contribute to determining whether a person is an employee or independent contractor, as detailed by Fair Work Australia:
• An employee will typically perform work under the direction and control of their employer, while an independent contractor typically has a high level of control.
• An employee will typically work standard or set hours; contractors typically decide what hours to work through agreement.
• Employees typically have an expectation of ongoing work, while independent contractors are engaged for a specific task.
• An employee will typically bear no financial risk as this is the responsibility of their employer. An independent contractor typically bears the risk for making a profit or loss on each task, and responsibility and liability for poor work or injury sustained while performing the task. As such, a contractor will generally have their own insurance policy.
• Employees typically have superannuation contributions paid into a nominated superannuation fund by their employer, while contractors pay their own superannuation.
• Employees typically have all tools and equipment provided by the employer, while a contractor typically uses their own.
• An employee will typically have income tax deducted by their employer. An independent contractor typically pays their own tax and GST to the Australian Taxation Office.
• An employee will typically be paid regularly, while an independent contractor typically has obtained an ABN and submits an invoice for work completed or is paid at the end of the contract or project.
• An employee will typically be entitled to receive paid leave or receive a loading in lieu of leave entitlements in the case of casual employees. An independent contractor typically does not receive paid leave.
In my recent case, three of the above nine considerations indicated my client was an independent contractor rather than an employee.
However, looking at the totality of the relationship, the Industrial Division of the Magistrates’ Court found that my client was an employee and awarded him almost $100,000 for unpaid entitlements and civil penalties.
If you are an employer or an employee and aren’t sure the terms of employment are fair, the Fair Work Australia website provides helpful resources which might help you.
If you require specific legal advice, you should visit your solicitor.

The entire November 21, 2018 edition of The Weekly Advertiser is available online. READ IT HERE!

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Posted on Nov 21 2018

Posted by on Nov 21 2018. Filed under Business & Finance, Community. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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