Employees vs Contractors

If you pay someone as a contractor, that does not automatically mean that they are recognised as a contractor under Australian taxation laws.  Generally, if the person works for you on an hourly basis, does not control their own time or workflow decisions, and does not work for a number of different employers, it is likely that they will be classified as employees by the ATO.  In this case, as an employer you are obliged to provide them with workers’ compensation cover and superannuation guarantee payments and to deduct tax from their pay.  The ATO website has information about the differences between employees and contractors – including an online decision tool (a quick series of “yes/no” type questions) to help you decide which category a worker should correctly fit into.

Seasonal Workers

A new program called the Seasonal Worker Program commenced in July 2012, whereby workers from the Pacific region and East Timor can work in Australia on a short-term basis in certain defined jobs, to help employers meet their high seasonal demand for workers that cannot be provided by local labour.

Workers employed through the program have the same rights as other workers covered by Australia’s national workplace relations laws.

The Seasonal Worker Program is managed by the Department of Education, Employment and Workplace Relations (DEEWR). Click here for more information about the program including how you can get involved.

Unfair Dismissal

We have found that many employers are very concerned about the possibility of an unfair dismissal claim being made against them – to the extent that they are hesitant to manage employees over performance issues.  Alternatively, some employers think that the provisions do not apply to them because they are a small business – without being sure what the definition of a small business is.  Here are the facts:

An employer cannot be found to have dismissed an employee unfairly PROVIDED THAT:

  • the business employs fewer than 15 employees (that’s all employees, not full-time equivalents, and includes casuals employed on a regular basis, as well as the person being dismissed)
  • the business follows the Small Business Fair Dismissal Code when dismissing an employee.

In general, an employee has been unfairly dismissed if they take a claim to Fair Work Australia (FWA) and FWA finds that:

  • they were dismissed, and
  • the dismissal was harsh, unjust or unreasonable, and
  • the dismissal was not a case of genuine redundancy.

For more information, visit the Fair Work Australia or Fair Work Ombudsman website.