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Legal Issues - Employer-independent contractor distinction revisited

THE Western Australian Industrial Relations Commission has dismissed an action by two former workers who claimed unfair dismissal against a personnel agency and a construction company, finding that the workers were independent contractors and not employees and therefore the commission had no jurisdiction to hear the matter.

Commissioner Jack Gregor said he was required to consider the nature of the relationship in light of such factors as the degree of control both men had over the work, whether they were paid by results or on an hourly basis, whether they supplied their own tools, the provision of leave, superannuation and other entitlements and whether income tax was deducted from their pay.

He found that the personnel company had no ability in its contract to control the workers at work and that although their payments were made on an hourly rate and not as a lump sum that would infer an independent contractor arrangement, there was no expectation of overtime or allowances and no expectation to have annual or sick leave.

In addition, both of the workers accepted payments with tax deducted at a rate of 20 per cent and did not pay PAYE income tax.

The workers also supplied their own safety gear and tools.

On top of this, both men were invited to sign a contract that acknowledged that there was no employer-employee relationship.

After consideration of the evidence, Mr Gregor found that the two workers were in fact independent contractors and not employees as they had claimed.

That being the case, the commissioner had no jurisdiction to hear and determine the matters and dismissed the two applications.

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