King & Wood Mallesons

Asia-Pacific 100 position: 3

Door-to-door sales ‘contractors' found to be employers

By Lillian Rizio

This recent decision considers the vexed question of when a worker may be classified as an independent contractor.

This decision confirms that employers should be cautious about engaging independent contractors, particularly where the contractor is an individual. Care needs to be taken in structuring and implementing such arrangements, given the risk of breaching the Fair Work Act 2009 (Cth) (FW Act).

Sections 44 and 45 of the FW Act prohibit an employer failing to provide employees with benefits to which they are entitled under the National Employment Standards (which contain, among other things, entitlements to annual leave) and any applicable industrial award. Section 357 of the FW Act renders it unlawful for an employer to represent to a worker that the worker’s contract of employment is an independent contracting arrangement. Civil penalties of up to AUS$51,000 (£30,000) for a corporation, or AUS$10,200 (£5,900) for an involved individual, apply for breaches of these provisions…

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