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Taking a common law view

THERE are at least eight common law tests that can be used by the courts to decide if a worker is a contractor or an employee, according to law firm Deacons.

The ‘control’ test looks at whether the business controls, or has the right to control, the timing, location and other aspects of the individual’s work.

The ‘results’ test asks if the individual has been contracted to produce a specified result.

Contractors would normally send an invoice to the business upon completion of a specified task, rather than receive payment based on hours of work.

Deacons lawyer Peter Katz said the Office of State Revenue had increasingly been using the ‘integration’ test.

This looks at the principal nature of the individual’s work and whether it is integral to the business.

For instance, a computing specialist could be considered peripheral to the activities of a law firm.

Other tests focus on the responsibility for rectification of any defects and the supply of plant and equipment.

Contractors typically would be responsible for rectification and would supply their own equipment.

Contractors also bear a risk of loss or a chance for profit from their work. The existence of employee entitlements, such as paid leave, can also be used to help decide if a worker is a contractor or an employee.

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