The High Court has delivered two judgements that can be expected to have a major influence on independent contracting in the future.   There were two cases.   Jamsek and Personnel Contracting.

Jamsek  ( Employer Win )

This looked at Truck drivers who had been employees for years and changed to contractors in early 1980's, purchased trucks and plant, and operated in partnership with their wives.   The Federal Court found they were in fact employees (the company had day to day control, they had to work particular hours, they used the employer logo, etc) and so super and other employment benefits were payable.

The High Court overturned the ruling because the contractors possessed a) significant assets, and b) operated as a partnership, like a   business.

Personnel Contracting  ( Employer Loss )

A labour hire company engaged an individual as a contractor.   He worked on building sites under supervision and control, worked regular hours, and followed company directions.   The high level of employer control and lack of business characteristics led to the determination he was an employee.

What does it mean for business?

In these cases there was as much focus on the specific terms of the contract as the post-contractual conduct.   However, the label parties give to the relationship are not really relevant, that is, their rights and duties characterise the relationship.

What now?

1. The contract must be in writing and the terms that define a worker's status must be agreed at contract formation.   These must be as robust as possible to avoid employment claims in the future.

2. Post-formation, all factors relevant to the ongoing contractual relationship will be considered to determine a worker's true status.

3. In Q'ld, an independent contractor is included for WorkCover and Payroll Tax.

4. An independent contractor is entitled to superannuation under the Tax Act (The ATO can go back indefinitely).

5. Fair Work will investigate any claim for underpayment, so ensure the contract terms are clear, retain all worker claims for payment (for hours, times worked, use of own equipment, details of payments, etc.).

It seems to me that the "usual" type of sub-contractor arrangement, of an individual ABN and an invoice showing an hourly rate won't succeed in the future, and claims for under-payment and superannuation are highly likely.   If you intend to engage sub-contractors, ensure the contract is comprehensive and precise and signed by both parties.   Keep all documentation.   Bear in mind it costs an employee nothing to lodge a claim to FairWork, Superannuation, or WorkCover, the employer has to prove the person is a true contractor.