With the COVID-19 outbreak affecting the economy and job market, an increasing number of Australians are becoming full-time or part-time contractors. The fact that thousands are choosing to contract over the lure of fixed jobs, incomes, and hours speaks volumes about the advantages that the field of contracting has to offer.
Contracting, as an employment arrangement, is rapidly gaining in popularity. What are your legal rights? Do contractors enjoy the same rights as employees?
Who Is a Contractor and How Are They Different from Employees?
Contractors are individuals who work on a contract basis to provide materials, services, or products. They are paid on an hourly or daily basis, unlike employees who get paid a regular salary. In terms of responsibilities, a contractor’s job profile is similar to that of a regular employee, except that they usually earn more.
The reason behind contractors’ higher earnings is that they often forfeit typical entitlements that regular employees take for granted. Employers can sometimes find it difficult to classify a worker as an employee or as a contractor.
We explain significant differences between contractors and employees below:
- Contractors have more control over their work than employees who work under the direction of their employers.
- Contractors are responsible for their risks, profits, or loss while employees enjoy a regular salary independent of company performance (except in the case of cutbacks).
- Contractors do not enjoy superannuation benefits, unlike employees, except in a few cases.
- Contractors pay their tax and GST to the government while employees receive their taxes after deducting income tax. An employer cannot withhold the taxes of a contractor.
- Contractors are not entitled to annual, sick, long, personal carers, or extended leave.
Contractors are often exposed to new skills and environments during the course of their work. The employer can dismiss the contractor, or the contractor can discontinue working without due process.
However, a number of disputes and problems may arise if the contract agreement is unfair, broken, or breached. Please contact an experienced lawyer if you need more information about your legal rights as a contractor.
The Legal Rights of Contractors
The Fair Work Act of 2009 protects independent contractors from unlawful and unfair practices. For example, an employer cannot force a contractor to forego their rights, and contractors cannot be coerced into unlawful contracts containing unreasonable terms. Contractors are entitled to control over their work, fair hours of work, and may work on multiple projects.
Similarly, contractors are free to join or not join an employer or union group. A court may cancel an agreement if the contractor was forced to sign it under undue pressure or if the terms of service contravene Australian laws.
One of the best ways contractors can protect themselves is by investing in liability insurance. In addition, contractors must operate under the obligations and duties listed out in the contract agreement.
Looking for Legal Guidance?
Whether you’re a contractor or an employer looking to get reliable legal advice, please feel free to contact Owen Hodge Lawyers on 1800 770 780. We can help clarify your position and update you regarding your rights in the event of a dispute.