Independent Contracting Guide

South Australian Business News • HR and workplace relations

Elisa Luck

Tuesday, September 17th 2024

Did you know that a new definition of employment has been introduced into the Fair Work Act? The amendments introduce a new definition of employee into the Fair Work Act 2009 and a new jurisdiction allowing the Fair Work Commission to vary contract terms.

Some key highlights for employers to be aware of:

a new definition of “employee” for the purposes of the Fair Work Act 2009 (FW Act)
a new jurisdiction enabling the Fair Work Commission to review and vary “unfair” contract terms.
new provisions broadening the offence of “sham contracting”, which broadly involves unreasonably mischaracterising the relationship of employment as one of contracting
The new definition requires greater focus on how the relationship between a principal and the worker operates in practice as opposed to solely focusing on the terms of the contract between the parties. –
However, the terms of a contract will still remain influential and for persons engaging contractors it will be important that they review both the contract terms and the key features of the relationship in practice to determine whether the worker should be characterised as an employee.
- A failure to correctly characterise the relationship could give rise to a range of unintended liabilities, including:
  - Liability for annual leave and personal leave
  - Liability for notice or redundancy payments
  - Liability for underpayment if award penalties or loadings have not been satisfied by the pay rate provided to a contractor
  - An opt-out régime has been introduced for certain contractors earning above the “contractor high income threshold” (the threshold is yet to be specified).

If you want to find out more, South Australian Business Chamber members can access our Independent Contracting Guide plus other Guides here. These Guides are intended to help employers navigate these changes and offer practical advice for complying with new obligations.

It is important that employers are familiarised with these changes. These changes will affect a wide range of businesses across different sectors.

Need help?

Employers and businesses are strongly encouraged to seek individual advice tailored to their specific needs contact our Business Advice Hotline today on (08) 8300 0000 (select option 1).

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