HR help for Disability and Aged Care businesses in Wollongong and the Illawarra.
Work Cover NSW applies a “results” test to determine whether a contractor (who does not provide services through a corporation) is an employee. This generally requires establishing that a contractor has been engaged to achieve a specified result, supplies their tools and equipment and is responsible for fixing defects.
If the “results” test is not met, Work Cover will require the payment to the contractor to be included in the workers’ compensation insurance costs.
If the contract payment is not included in the worker compensation premium, a penalty of up to 100% of the relevant premium can be imposed on the business.
Reliable Couriers Pty Ltd
This case illustrates the need for businesses to appreciate that engaging staff as independent contractors may not release them from all legal obligations usually associated with an employment relationship. Reliable Couriers engaged couriers as independent contractors and did not name them for workers’ compensation premium-setting purposes.
The court found that although the contractors were not employed, reliable couriers must include the payments to the contract in the workers’ compensation premium calculations, and the contractor did not meet the results test.
Businesses may be able to avoid this obligation by ensuring their contractors have the legal status of corporations, partnerships, or trusts.
Disability and Aged Care Businesses in Wollongong and the Illawarra should contact John on 0407 069 507 to help engage contractors and how to manage the workers’ compensation premium requirements.
