I can’t think of anyone who loves to pay employee superannuation, workers compensation insurance and pay-as-you-go employee income tax.
They would all much rather just pay an hourly rate and let everybody else worry about the detail.
Well, that might be an exaggeration. There are many grateful and responsible employers who make the effort, despite the obvious financial burden.
They understand that looking after their employees is a very sound investment.
Of course there are circumstances where contracted labour is understandable, and when managed within the rules it is entirely acceptable. But those rules are far from straightforward and even the regulator has difficulty making the correct call. Is it any wonder that otherwise law-abiding businesses want to take the easy way out?
And then there are the cowboys who just don’t care.
Despite all that, the contractor versus employee debate just gets more interesting.
On one hand we have food delivery business, Menulog, pushing ahead with plans for drivers to become employees under a new industrial award. They say it will probably cost more but “it’s the right decision”.
On the other side of the industrial landscape, a competitor food delivery business, Deliveroo, is holding fast to their view that independent contractors are the labour force of choice. This is in the face of a Fair Work Commission determination that a driver’s dismissal “is harsh, unjust and unreasonable”. It further ruled that the unfairly dismissed worker was not an independent contractor.
While these two scenarios focus on the food delivery business, it has connotations for every industry where contractors are preferred as the labour supply of choice.
It also has relevance where employers profess to engage “independent contractors” for tasks such as office administration (virtual assistants) and bookkeeping, but insist on treating them just like any other employee.
Let’s get down to the big question. How do you decide who’s a contractor and who’s an employee?
I say “if it looks like a duck, walks like a duck and it quacks like a duck, it is a duck”, and then ask “If it looks like an employee, is managed like an employee and works like an employee, do you have an employee or a contractor?”
In most cases that’s all you need to know.
If you want to know more, or you need to test your own circumstances, you know where to find me.
