The Fair Work Commission (FWC) recently handed down a decision[1] which concluded that an Uber driver was not an employee for the purposes of the Fair Work Act 2009 (Cth) (FW Act), but an independent contractor, meaning that his unfair dismissal application was dismissed.
The decision, the first of its kind in Australia, only increases the tension between the rise of the gig economy and the traditional indicia courts use to determine the presence of an employment relationship.
In Germany, the distinction between employees and independent contractors (also referred to as freelancers) is particularly important. For example, the question of whether a person is an employee or an independent contractor determines whether they are protected against unfair dismissal and also affects how they are treated for statutory social security and income tax purposes.
Employee or contractor?
The ContractorCheck Canada application (App) is a practical tool developed by the Norton Rose Fulbright employment and labour team. It is designed to help employers accurately determine the status of their workforces and whether they should be considered contractors or employees.
Defining employees versus contractors can be sometimes challenging; improperly classifying them
The test for determining whether a worker is a contractor or an employee continues to trouble Australian businesses. This is because there is no single factor which is determinative. It is necessary to weigh all the relevant factors and consider the totality of the relationship between the parties.
However in considering the various factors, a number of recent cases have focussed attention on whether the person is working in the business of another (an employee), or conducting his or her own business in the pursuit of profit as an entrepreneur (an independent contractor).
A recent Full Federal Court decision, Tattsbet Limited v Morrow, suggests that this approach deflects attention from the central question. In the leading judgment, Justice Jessup said that the central question is not whether the person is an entrepreneur: it is whether he or she is an employee.
On July 15, 2015, the United States Department of Labor (DOL) issued a memorandum on “The Application of the Fair Labor Standards Act’s ‘Suffer or Permit’ Standard in the Identification of Employees Who are Misclassified as Independent Contractors.” After clarifying the distinction between an employee and an independent contractor and emphasizing that the
On July 2, 2015 the U.S. Court of Appeals for the Fifth Circuit held the U.S. Department of Labor (DOL) liable for an employer’s attorneys’ fees resulting from a bungled and abusive investigation of alleged violations of the Fair Labor Standards Act (FLSA). The facts of the case – Gate Guard Services, L.P. v. Thomas
Norton Rose Fulbright’s ContactorCheck provides a preliminary assessment of whether your Australian worker(s) should be characterised as employees or independent contractors. The tool also points out the risks associated with incorrect characterisation.
Importance of the issue
Independent contractors comprise between 9% and 17% of the Australian workforce. The Australian Bureau of Statistics “Forms of Employment”
Local radio station, Kaya FM recently terminated its contract with controversial DJ Phat Joe (real name Majota Khambule). It was the beginning of the end of the relationship between the parties when the content manager of the station sent a letter to Khambule, complaining of incidents of “gratuitous smut, sexual innuendo and partisan politicking”, in