Types of Workers

Based on the contribution of Craig Dowling and Neill Campbell for The Law Handbook 2016, published by Fitzroy Legal Service, originally amended by ClareMcKenzie for the NT Law Handbook, as amended by Bradley Allen Love Lawyers, Canberra, by Gabrielle Sullivan, May Oboodi and Robert Allen and current to March 2018.

Before discussing rights and obligations of employees, it is necessary to determine whether or not a worker is an employee, and what type of employee they are. Generally, all workers can be divided into two broad categories: employees and non-employees. Within each, there are many different sub-categories (see the table below).

Employees	Non-Employees
Permanent (including fulltime and part time)	Contractors (including independent contractors)
Casual	Volunteers
Other (including apprentices)	Others/uncertain (Uber)

A contract determines whether or not a worker is an employee and, if so, their type of employment (specifically, whether the employee is fulltime, part time or causal). This question is essential because the type of employment determines what benefits the employee is entitled to under the Fair Work Act and other pieces of legislation.

Only permanent employees are entitled to all the protections under the Fair Work Act and other employment instruments, while independent contractors (who are not employees) are only entitled to certain limited protections, typically under other pieces of federal or territory legislation.

While it is often clear based on the contract whether or not a worker is an employee, and what type of employee they are, this is not always the case. Furthermore, although some contracts say that a worker is an independent contractor, if the conditions of their work are more akin to those of an employee, it is possible that they are an employee under the law – despite what the contract claims.

It is therefore essential to look at the actual circumstances of the work, and not just at the contract, in order to determine what the type of employment is in any given case.

Employee or independent contractor?

Most of the protections offered by the Fair Work Act and industrial relations system are only available to employees and not independent contractors. It can sometimes be very difficult to say whether someone is an employee or an independent contractor. Some of the characteristics of an independent contractor are that they:

• control the way their work is to be done;
• can assign or delegate (subcontract) the work to others outside the organisation;
• are paid on a fixed price basis payable at the completion of the task;
• may supply special equipment or tools to do the job;
• pay a significant proportion of the business expenses from their own income or are paid without income tax deducted; and
• directly profit (or suffer losses) from the business.

Sometimes it can simply be unclear whether or not a worker is an employee or an independent contractor. For example, the position of Uber and other technology-based platforms is yet to be firmly settled under Australian industrial law.

The fact that a written contract describes someone as an independent contractor does not necessarily mean they are for legal and tax purposes, particularly if everything else points to them being an employee. Sham contracting is an example of this.

Sham contracting

The Fair Work Act prohibits "sham contracting" arrangements where an employer treats an employee as an independent contractor in order to avoid having to meet its obligations to that employee under employment laws.

Under the sham contracting provisions of the Fair Work Act, an employer cannot:

• misrepresent an employment relationship or a proposed employment arrangement as an independent contracting arrangement;
• dismiss or threaten to dismiss an employee for the purpose of engaging them as an independent contractor; or
• make a knowingly false statement to persuade or influence an employee to become an independent contractor.

The Fair Work Act provides serious penalties for contraventions of these provisions. If an employee believes they are part of a "sham contracting" arrangement, the employee can complain to the Fair Work Ombudsman.