Independent Contractors – Can they be unfairly dismissed?

The Fair Work Commission (FWC) recently dealt with an unfair dismissal claim whereby a bookkeeper argued she was unfairly dismissed. The claimant claimed that despite being classified as a contractor and receiving $45 per hour, she worked under direct supervision and was an employee. The company disagreed and said she wasn't an employee but provided services through her business entity, JKJ Bookkeeping.

To ascertain whether the claimant was able to make this claim, the FWC needed to determine whether she was, in fact, an employee or independent contractor.  The FWC noted that without a written agreement between the parties, they had to examine the nature of the engagement and conduct. The FWC's decision was directed by recent High Court cases on how employment status is determined, i.e. by looking at how contractual terms on formal arrangements (as opposed to daily operations) determine the employment status.  

The individual confirmed agreeing to a $45 hourly contractor rate after further discussions around an earlier lower rate under the Award. The Managing Director said the individual requested to work through their business entity at the higher contractor rate. The individual had to supply her own laptop and maintained freedom to service other clients. Additionally, the individual held professional indemnity insurance and managed her own tax arrangements, submitting invoices through her business entity.

After examining all evidence, the FWC dismissed the unfair dismissal application, confirming that the claimant was an independent contractor, citing that she was able to service multiple clients, provided an invoice for payment, paid her own tax and maintained her own insurances. In saying so, the FWC specifically addressed and warned against sham contracting concerns.

If you are experiencing a similar situation and are unsure how to manage it, please contact HRAnywhere on 1300 208 828 or info@hranywhere.com.au.