Employee or Contractor? Can employers disguise a genuine employment relationship?
In February this year the Fair Work Commission (FW) rejected an application for unfair dismissal brought by a Victorian Uber driver1, and in doing so provided useful guidance in the key distinguishing factors to be considered when assessing whether a worker is an employee or an independent contractor.
The decision in the Uber case shouldn’t fool you into thinking that the differences between employees and independent contractors are simple and clearly defined. There is no single factor determining whether a person is an employee or a contractor. Rather the Courts will need to consider the totality of the relationship between the parties.
A sham contracting arrangement is when an employer attempts to disguise an employment relationship as an independent contracting arrangement. This is usually done to avoid the company’s liability to pay employee entitlements, or potential vicarious liability that might be incurred by an employer.