Independent contractors & the common law
The Independent Contractors Act 2006 relies on the common law meaning of independent contractor. The common law is a set of legal principles, which have been developed through decisions in the courts. To determine whether a person is an independent contractor or an employee, a court considers a number of factors which look at the entire working relationship on balance.
Generally, an independent contractor works to achieve results and maintains a high level of discretion and flexibility as to how work is performed. However, the contract may set out precise terms around materials used and methods of performance, and still be a contract for specific services. These are only some of the factors courts take into account.
In making a decision, courts consider the individual circumstances of a case and provide recognition to the key characteristics of employees and independent contractors.
What to do...
- To find out what factors the courts take into consideration, read the Independent contractors and employees page on the FairWork ombudsman website or you can download the fact sheet Contractors and employees - what's the difference.
- Complete our independent contractors decision tool to find out whether the courts are likely to consider you to be an independent contractor or employee.