Contractor with multiple clients still an employee

In the recent decision of Jill Freestone v Morris and Partners Pty Ltd, the Australian Industrial Relations Commission ruled that for purposes of the federal unfair dismissal legislation, an employment relationship existed between the company and its contracted bookkeeper, even though the bookkeeper had been treated and paid as a contractor for 10 years.

Ms Freestone, a bookkeeper by trade, provided services to Morris and Partners managing their accounts. When her services were terminated, she made an unfair dismissal claim under the Workplace Relations Act 1996.

The employer argued that the Commission did not have jurisdiction because Ms Freestone was a contractor and not an employee.  It was said that the bookkeeper was a contractor as she carried on her bookkeeping duties under a registered business name, invoiced the company for her services, referred to GST charges in her invoices and operated some seven other businesses at the same time as providing the bookkeeping services, including a fruit juice franchise, antique store, reflexology clinic, jewellery business and cosmetic franchise.

The Commission decided that the contractor was in fact a part-time employee  who did not have a separate place of work, did not provide or maintain significant tools or equipment and whose work could not be delegated or subcontracted.

Whilst not novel in its application of the law, this decision highlights the risks in treating a service provider as a contractor when in reality, they may be an employee.

To clarify any questions relating to your existing employees and contractors contact either Ian Curlewis on 08 9288 6756 /, Michael Jensen on 08 9288 6944 / or Benn Wallace on 08 9288 6741 /

Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.