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Employers face ‘Duck Test’
The observation by the Federal Court of Australia that "parties cannot create something which has every feature of a rooster but call it a duck and insist that everyone else recognise it as a duck" in relation to the test that is applied to determine whether a worker is an employee or a contractor has implications for all employers.
While the contract may describe the relationship between the parties, it is not determinative. The courts will look at the totality of the relationship and employ what has been hailed the 'Duck Test'.
Head of Australian law firm Lander & Rogers' Workplace Relations & Safety Group Andrew Farr warns employers to ensure their contracts properly reflect the nature of the relationship with a worker.
Farr explains "an independent contractor who looks like an employee or is treated like an employee, may well be an employee. Making this mistake can be very expensive to businesses."
Amelia Lynch, lawyer in Lander & Rogers' Sports Business Group added "in sectors where there is traditionally a lot of fluidity between employee and independent contractor status, such as sports and event administration, it is especially important to review existing contractor arrangements and ensure any new arrangements are analysed and evaluated with the 'Duck Test' in mind."
In addition to legal costs, a finding that an independent contractor is in fact an employee can leave businesses liable for employee entitlements including annual leave, long service leave, superannuation, workers compensation and payroll tax. In addition, a penalty under the Fair Work Act may also apply.
Farr and Lynch gave their opinions at this week's Lander and Rogers/Sportspeople Sports Industry Seminar in Melbourne.
Lander & Rogers is a leading independent Australian law firm that is a principal advisor to many publicly listed and private Australian companies, Australian subsidiaries of global companies, as well as all levels of government. Lander & Rogers' Sports Business Group specialises in advising sporting organisations, sporting venues, professional sporting clubs and major events.
Through membership with TerraLex and Mackrell International - two leading international law networks, both endorsed by Chambers Global - Lander & Rogers support the business interests of clients seeking to do business in Australia, as well as those of our clients who wish to do business in overseas jurisdictions.
For more information go to www.landers.com.au
Click here to view the Lander and Rogers entry in the Australasian Leisure Management Supplier Directory.
8th December 2009 - SOUTH AUSTRALIA REJECTS DUCK SHOOTING BAN
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