The question of whether a relationship is a true independent contractor relationship or one of employer and employee remains a vexed question, but one that can have alarmingly significant consequences.
27 years ago, the High Court of Australia warned that “parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody call it a duck”¹.
Yet still we commonly see parties choosing to characterise the relationship as a contractor arrangement when in reality it is an employment relationship. Not only is misrepresenting an employment relationship as an independent contracting arrangement an offence², but it brings with it significant liability for unpaid employment benefits such as annual leave, long service leave and award entitlements.
Simply putting in place a written independent contractor agreement is not the magic answer. The courts will, and do, look beyond the contract to the actual circumstances of the relationship and will determine what the real relationship is. The two following cases bring this issue to the fore.