Captcha Image
Subscribe to: eNewsletter

Follow Us

You are here: >> Inspire Success

Inspire Success

Providing hints, tips and ideas that help you maintain high performing workplaces that are customer focussed and free of conflict

The Small Business Fair Dismissal Code

Rae Phillips - Saturday, September 19, 2015

The Small Business Fair Dismissal Code applies to small business employers with fewer than 15 full time equivalent employees and is there to ensure that any termination follows a fair process.

This is what we know about small business' and dismissal:

  • Employees working in a small business cannot make a claim for unfair dismissal in the first 12 months following their engagement;
  • If an employee is dismissed after this period and the employer has followed the Code (and can provide evidence) then the dismissal should be deemed to be fair;
  • Employees who have been dismissed because of a business downturn or their position is no longer needed cannot bring a claim for unfair dismissal. (However, the redundancy needs to be genuine and filling the position with a new employee or changing the name of the role is not a genuine redundancy).
  • It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. (Although for this to work for you, your business will need relevant policies and the employees must have been trained in the detail)

If those points don't apply, then this is what we know:

  • In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
  • The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
  • The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response.
  • Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

So  as is usually the situation, it is always best to follow a fair process, and in this case - use the form provided for us by the legislators.

Small Business Fair Dismissal Code Checklist

Is this something that could be an issue at your place? Inspire Success is all about making HR SIMPLE - no matter what size your business is. Contact Inspire Success for further information or 1300620 100

Social Media and your People Policies

Rae Phillips - Friday, September 18, 2015

People around the world are members of at least one social network. We have a permanent online presence where we create profiles, share photos, share our thoughts with friends and spend hours just catching up with what friends are doing with their life. 

As a business owner you might have nightmarish visions of your employees wasting hours on Facebook and Twitter etc. While most employers are willing to close an eye to the occasional quick browse and update, they are more concerned about those who abuse the system.

Social media is the use of web based and mobile technologies for social interaction. eg Linked in, Facebook, You Tube and Twitter, although there are many others.

Social media can be great!
We can use it to widen our business circle of contacts and advertising for free; it can can help our business remain in touch with customers and is very useful for social networking; Costs are low; In recruitment it is a useful tool for finding and attracting talent. 

But there can be big issues!

1. The main concern for organizations is not social networking sites per se but the people using them. Users’ actions are often based on impulse and not a genuine awareness of what they are doing.

2. Productivity is generally the main problem employers have with social media and the distractions it causes. When unacceptable amounts of time are being spent on these sites it is costly and can lower the morale of those who are not engaging. 

3. Although updates to social networking sites may not take up huge amounts of bandwidth, the availability of video links posted on these sites (or links taking users to sites like YouTube) creates problems for IT administrators. There is a cost to Internet browsing, especially where high levels of bandwidth are required. 

4. A comment made by an employee on social media or their actions on a social network might breach their duties to preserve confidentiality or faithfully serve their employer. For example, 

(a) a UK case involved a recruitment consultant who copied client e-mail addresses, resigned and then used Linked-In to invite them to be part of his network. He did this so he could solicit them for his own business. The Court agreed that e-mail addresses were confidential; even though once the clients accepted his invitation they ceased to be confidential. By collating them for use post-employment, the employee was breaching his duty to faithfully serve his employer, and he ought to be restrained from taking advantage of his wrongdoing.
(b) Recently, FWA dealt with a case where an employee published a blog disparaging his employer's investigation into sexual harassment and e-mail misuse. FWA ruled that the publication justified his dismissal because it was publicly accessible through a Google search and attacked the integrity of the management of the employer. This could easily be you, or me or someone we know!

So how do your small businesses remain relevant but also protect your risk?
You need to be pro-active in protecting yourself and assess whether the risk of allowing your employees to use social networking sites at work is acceptable or not. As we see it, we have four options:-

1. Block the internet
2. Allow employees to use the internet but manage what sites they can look at
3. Restrict access – allow access at lunch, before work hours and after work hours or block certain sites
4. Let them go for it carte blanche, trust that they won’t do anything they shouldn’t.

Could any of these apply at your place? Which one are you applying right now? How's that working for you?

What ever you decide, there are some things you must do:

1. Educate staff on what social media is and what they are permitted and not permitted to access. Often employees don’t fully understand what they can and can’t share on these sites. Educating them on proper use is key and also ensuring they understand the security issues that can result in what they do online.

2. Set internet usage policies – have all employees sign policies related to the use of internet at work, access to social networking sites and what they are allowed to do while employees at your business. Train your supervisors and make sure they are coaching the team.

3. Monitoring web activity is important and employees should be aware that their actions on the internet and in email are being monitored and that failure to adhere to company policy can result in disciplinary action and / or dismissal. Work with your IT team or provider to make sure the technical side of things is addressed.

Social media marketing can help small businesses boost sales and is useful for sharing information with a broad audience. As technology develops more and more, it is important for businesses to take advantage of all of the new things being offered that will help them to grow the business. The advances in social media are so fast paced, it is important to stay connected on a regular basis so new opportunities are not missed.

The one thing that is certain is that social media is here to stay. There are great benefits but potentially great problems for businesses. As we see more lawsuits arising from social media and employees, we are certain to see companies using more scrutiny and policies in relation to social media in the workplace.

Is this something that could be an issue at your place? Inspire Success is all about making HR SIMPLE - no matter what size your business is. Contact Inspire Success for further information or 1300620 100

Top 10 tips to minimise risk at your work party

Rae Phillips - Monday, September 07, 2015

End of year parties are getting booked, soon it will be time to share the details with your employees. You want your team to enjoy themselves and the party to be a relaxed and enjoyable get together. However, a relaxed and sociable environment mixed with alcohol means that there is an increased chance of risky and/or inappropriate behaviour, which you will be held liable for, even if the event is not held on work premises..


Follow our top 10 tips to make sure you can have some fun together, celebrate the end of a year and get ready to welcome in a new one together.  

The obligations of employers serving alcohol falling into four key areas:

  • Duty of care - encompassing a common law duty to provide a safe workplace;
  • Sexual harassment - while not isolated to functions, this is "obviously an area that is exacerbated by drug and alcohol taking", and is the biggest area of risk at end-of-year celebrations, Connolly says;
  • Workplace health and safety - "Under WHS legislation an employer has very serious and primary obligations to ensure the health and safety of employees (and others), and excessive consumption of alcohol and/or drug taking can have a direct impact upon that obligation"; and
  • Workers' compensation - "If there's an incident at a work function, it will be work related and workers' compensation will be applicable, which has a direct impact upon premiums but most importantly the expense, cost and time of having to rehabilitate an injured worker."

In most legal contexts, the Christmas party (same rules apply for any work function) will be considered as part of the 'workplace' even when not on the work premises. As such, all the duties and obligations of the employer that apply in the office/workplace continue to apply for the duration of the function or party.

Here are our top 10 tips to minimise risk at your work party:

  1. Ensure all your HR and Work, health and safety policies are up to date – with particular focus on discrimination, bullying, harassment, workplace behaviour, alcohol and drug use. Ensure you have a clear grievance resolution procedure in the event that there is an incident at the party. Circulate these policies now!, discuss them at weekly team meetings, ensure the messages of these policies are clearly understood by all employees and any questions they may have answered. This will ensure your employees know what is expected of them in terms of behaviour at all times;
  2. If you are using an offsite venue make sure you go and have a look and conduct a safety check (you are looking for clear emergency exits, fire equipment, lighting etc);
  3. While alcohol is usually the norm at parties, have non-alcoholic drinks available also. Provide plenty of water so employees consuming alcohol can slow down the pace if required. When supplying/serving alcohol ensure normal responsible service of alcohol standards are adhered to;
  4. Do not allow any types of drinking games, high alcohol consumption prizes etc;
  5. Food and plenty of it should be provided at the party;
  6. Let your employees clearly know the start and finish times;
  7. Consider providing transportation for employees after the party ends, like a mini-bus or Cabcharge vouchers (or at least inform employees of transport options available). Providing transportation is not obligatory for employers but can be a very effective risk minimisation measure;
  8. Ensure responsible managers clearly understand substance abuse and alcohol policies and that they know to step in should any situation get out of control;
  9. Check your insurance covers work party activities;
  10. Clearly advise employees beforehand that any festivities continuing after the work party conclusion time are not endorsed by the employer and are on the employees’ own time.

With organisation and good preparation, you can ensure that it is a happy, safe and incident-free holiday season. Enjoy!

Is this something that could be an issue at your place? Inspire Success is all about making HR SIMPLE - no matter what size your business is. Contact Inspire Success for further information or 1300620 100

Health and Safety policies and procedures – why are they important?

Rae Phillips - Saturday, September 05, 2015

Your work, health and safety policies and procedures are very important and it’s critical they are up to date, have been shared with and discussed with your employees. They demonstrate that your business is WHS compliant and also guide the future action of your employees. 

What policies and procedures you have in place will depend on the nature of your business. For example some companies would require a chemical management policy while others would not have a need. Professional advice will help you identify what policies and procedures are important for you.  Here are some examples: 

  • WHS Policy
  • Communication and Consultation policy
  •  WHS Responsibilities
  •  Hazard identification
  •  Drug and Alcohol policy
  •  Risk assessment
  •  Contractor safety
  •  Fatigue management
  • Mental Health Policy
  •  Vehicle Safety
  • Injury Management
  • Workplace Bullying
  • Return to Work
  • Evacuation Procedures
  • Manual Handling
  • Personal Protective Equipment

Best practice would have you developing the policies, sharing with your workers, training everyone in the content and conducting regular safety related meetings. 

WHS policies and procedures should be communicated to all workers - including employees, contractors, volunteers and visitors. Anyone who performs work at your business premises should be aware of the policies and procedures which exist in the interests of workplace health and safety - to fail in providing this information will set your business up for failure.

Here is an example of a self assessment you can use to see where you are at with Work Health & Safety at your place. Then you can decide what policies you need to help guide the behaviour of your workers and visitors. Let us know if you find it helpful.

Is this something that could be an issue at your place? Inspire Success is all about making HR SIMPLE - no matter what size your business is. Contact Inspire Success for further information or 1300620 100

Workplace Bullying - Understanding the Impacts

Rae Phillips - Tuesday, September 01, 2015

Did you know that a recent study by Queensland's Griffith University has found that bullying in the workplace now affects at least one in four Australian employees in one way or another - either because they're being bullied themselves, or because they have witnessed a co-worker being bullied. Bullying in the workplace can cause huge problems for your business and is fast becoming one of the biggest issues facing Australian employers. Therefore it is essential you as an employer understand what workplace bullying is, the effects it can have on your business and what you need to do to prevent it .

What is workplace bullying:

Bullying and harassment in the workplace can take many different forms. Bullying includes abuse, physical or verbal violence, humiliation and undermining someone's confidence. Bullying behaviour can include:

  • competent staff being criticised, having responsibilities removed or being given trivial tasks to do
  • shouting at staff
  • persistently picking on people in front of others or in private
  • blocking promotion
  • regularly and deliberately ignoring or excluding individuals from work activities
  • setting a person up to fail by overloading them with work or setting impossible deadlines
  • consistently attacking a member of staff in terms of their professional or personal standing
  • regularly making fun of  the same person

What are the costs to you as an employer:

Bullying in the workplace increases incidences of absenteeism, stress leave and staff turnover and thus reduces employee efficiency and productivity levels. Bullying has a flow on effect - it can break down teams, contribute to the failure of projects, increase the workload of other staff members, damage your business's reputation and generally destroy employee trust and confidence in your management.

Not too long ago, a former senior executive of Berlei lingerie lodged a $9 million unlawful dismissal claim against Berlei's parent company Pacific Brands, alleging bullying and discrimination. Also, a senior sales consultant with IBM lodged a complaint with the Human Rights Commission seeking $1.1m in damages, claiming IBM failed to take action to stop her being sexually harassed and bullied by her male supervisor for two years. And don't forget the David Jones sexual harassment and bullying case - initially launched at $37 million!

It's now more important than ever that you are doing everything in your power to prevent bullying occurring in your workplace.

What are the steps you can take to help prevent bullying in your workplace:

  1. Develop a workplace bullying and harassment policy. The policy should define exactly what bullying and harassment is, how you expect your employees to behave, what employees should do if they feel they are being bullied and what action you will take if an allegation of bullying is made. All employees need a copy, supervisors need to be trained and you should discuss it regularly.
  2. Make sure you encourage respectful and courteous behaviour in the workplace. Take action against bullying and discrimination showing you do not support it and promote the principles of dignity and respect.
  3. Make sure you understand what constitutes bullying - and make sure everyone else in your workplace does too. Your employees need to know exactly what is acceptable behaviour and what isn't. 
  4. Respond as soon as possible to any evidence of inappropriate bullying behaviour. You need to show your employees that you are serious about tackling bullying in the workplace. 
  5. Monitor your workplace for any bullying constantly. You need to keep an eye out for warning signs, like employees taking excess amounts of leave or becoming withdrawn or looking stressed. 
  6. Train your supervisors and managers about your workplace bullying policy. You should also encourage them to address any problem behaviour as soon as possible, regardless of whether or not a formal complaint has been filed.
  7. Provide information about workplace policies and procedures on bullying prevention to all employees (including casual and labour hire workers) when you induct them. You could also consider introducing a buddy system for young and new workers.

Is this something that could be an issue at your place? Inspire Success is all about making HR SIMPLE - no matter what size your business is. Contact Inspire Success for further information or 1300620 100.


When is a direction "lawful and reasonable"?

Rae Phillips - Monday, August 31, 2015
Employers that require information about an employee's medical condition can direct them to attend a medical examination, but must take care to ensure the direction is "lawful and reasonable" an employment lawyer warns.

Employers often receive medical certificates that leave prolonged absences unexplained, and are useless when it comes to determining an employee's fitness for work, says Shannon Chapman, a senior associate at Ashurst.

Ideally, simply requesting the information they need from the employee will result in voluntary provision of further details of their condition, how long they're likely to be off work, and when they're likely to return.

But there are times when that doesn't work. 

  1. If requests for further information fail, an employer's first option is to request that the employee attend a medical examination, and the employee can consent to do so. 
  2. The second option is to rely on an express right in the employee's contract of employment, but express rights clauses within contracts are not all that common. 
  3. A third and also rare possibility is to rely on a legislative requirement for the employee to be assessed, but in many cases, the only option employers have is to provide "a lawful and reasonable direction" that the employee attend a medical examination. 

"If the direction is in fact lawful and reasonable, then the employee has a duty to comply... and failure to do so can result in various consequences, including in some circumstances termination of employment," Chapman says.

"The key issue is of course whether or not the direction is lawful and reasonable", she says, and this will depend on the circumstances.

Four factors that will weigh in an employer's favour include when:

  1. the employer is dealing with a lengthy unexplained absence for which no medical certificates at all have been provided;
  2. medical certificates are vague or lacking necessary details – "You may not even know exactly what is wrong with the employee, what their restrictions are [and] what they can and can't do";
  3. the employer has received zero or insufficient information about the employee's prognosis, for example to determine whether might be able to perform restricted duties; and
  4. the medical evidence is conflicting. "Sometimes an employee will present medical evidence which says that they're unfit for work and at the same time they might present some evidence that says they're fit for work with particular restrictions, and when you've got a situation like that it's particularly difficult for you to understand and know what the true position actually is."

Lessons from case law

Circumstances where an employee's absence affects the employer's ability to plan and manage its business can also support a direction to attend an examination, Chapman says.

"If the person sits within a key work group and you need to be able to assess whether you've got that key skill going forward... it might also be reasonable."

In the case of AIPA v Qantas, for example, the employer threatened to discipline a worker for failing to provide information about his prognosis and return to work plans.

Hearing his adverse action claim, the Federal Court found that Qantas did not intend to interfere with the employee's workplace rights, but requested the information to enable it to plan its roster and staffing levels.

Further, the Court ruled that when it is necessary for employers to meet their work health and safety obligations, they have an implied right to require employees to provide medical evidence to confirm they are fit for work. They can also require employees to attend a medical examination, provided the request is on reasonable terms, to confirm their fitness.

It said the direction given to the employee fell reasonably within the scope of his contract of service and was not unlawful.

A caution on psychiatric exams

Chapman notes that in some cases where a worker has a physical injury, employers have been known to direct them to attend a psychiatric examination, as a way to get around the physical restrictions. "I'd recommend exercising some extreme caution if you're thinking about doing that," she warns.

"There have been cases where employers have relied on evidence to that effect to then dismiss someone, and that decision has then been overturned.

"If that occurs, it's quite likely that decision would be challenged unless you've got some reasonable and legitimate basis to say that you require the employee to be assessed by a psychologist or psychiatrist."

Is this something that could be an issue at your place? Inspire Success is all about making HR SIMPLE - no matter what size your business is. Contact Inspire Success for further information or 1300620 100.

Are you setting your new Leaders up for success?

Rae Phillips - Saturday, August 15, 2015

We all know that it is a good idea to promote from within. So you’ve promoted one of your Stars to their first leadership position but you are worried. If they don’t work out or take too long to get up to speed then all eyes will be on you! So what can you do to ensure your budding leaders get the best possible start to their new role?

A comprehensive induction program designed specifically for new leaders is what you need, and it should be in addition to your existing Induction.

What you want to happen is a change in thinking. They will go in thinking like team members and come out with the knowledge, skills and attitude they need to start being team leaders. Whether you do this as a group event or create a way that individuals can work through it alone, it is vital that you offer new leader induction when they are first appointed.

Your New Leader program should cover off these key areas:

  • the corporate strategy to help them understand the big picture
  • the leadership philosophy of the organisation
  • how their team fits into the organisation
  • the expectations for their role as a leader
  • the reporting requirements they must now meet
  • the relevant policies, procedures and practices
  • relevant, current leadership initiatives and issues
  • other leaders they will be working with
  • ways to get to know their team

This is also a good time to introduce them to senior leaders, directors or owners of the organisation. Even if they have been working with you for a while they might not have met all the people who run it. If you want them to really feel like a member of the leadership team this step is a symbolic, but important one.

We recommend that this is a formal process. You want them to know that they have support and that you recognise this is an important transition for them.

Is this something that could be an issue at your place? Inspire Success is all about making HR SIMPLE - no matter what size your business is. Contact Inspire Success for further information or 1300 620 100.

Are Family Responsibilities Playing Havoc With Workplace Productivity?

Rae Phillips - Friday, August 14, 2015
According to an Australian Bureau of Statistics survey of families, 29 per cent of employed parents had difficulty managing work and caring for children.

And more than 30% of workplace absenteeism can be attributed to family issues.

Does that sound right for your workplace?

Managing work and family life affects not only family functioning but also workplace performance. Not surprisingly, studies reveal that family responsibilities affect business productivity and competitiveness.

And of course ‘family responsibilities’ aren't isolated to just raising kids.

So your need measures in place to help your employees balance work and family. This makes life easier for them and intelligent business sense.

There are many options – and obligations – when it comes to managing staff with family responsibilities. We have outlined a few that we think are important:

  • Parental Leave Policy 
  • Flexible Working Arrangements Policy 
  • Working from Home Workplace Health and Safety Checklist

It is important to have good systems to manage these flexible arrangements. It's not just a nice idea, you are required by law to provide them.

Is this something that could be an issue at your place? Inspire Success is all about making HR SIMPLE - no matter what size your business is. Contact Inspire Success for further information or 1300 620 100

The dangers of misinterpreting doctors advice

Rae Phillips - Wednesday, August 12, 2015
An organisation unlawfully discriminated against an employee when it acted on an HR manager's misinterpretion of advice about the worker's medical condition, a court has found.

The probation and parole officer, who had worked for Corrective Services NSW since 2001, was on sick leave at various times after being diagnosed with Crohns disease in 2009 and Idiopathic Hypersomnolence in 2011, and had her duties informally adjusted.

In 2011 the department told the officer her secondment as an intelligence analyst within the the department's Corrections Intelligence Group was to end, partly because she needed regular access to a bathroom, so was unable to travel for more than 30 minutes. She was told she would be medically retired unless she was found fit to return her former position.

Hearing the worker's disability discrimination claim in the Federal Circuit Court, Judge Nick Nicholls said the "sole basis" for the decision to end her secondment was a "factually incorrect" interpretation of her medical practitioner's advice, which actually specified that she could take trips longer than 30 minutes if she was able to plan for a bathroom break along the way.

The worker's line manager, who was also an HR manager, was found to be the source of the decision.

The judge said there was no evidence that any of the worker's managers or supervisors turned their minds to the inherent requirements of the parole position and the reasonable adjustments that could be made to accommodate her.

Instead of attempting to implement her doctor's advice they continued to require her to take leave. This conduct exacerbated the worker's psychological condition and contributed to her difficulties, which included depression, suicidal thoughts, insecurity, bankruptcy and humiliation.

"On the evidence, CSNSW's conduct in relation to [the worker], and its dealings with her during this period, was characterised by various misunderstandings, assumptions without foundation, an unclear, or lack, of understanding of relevant obligations, and an attitude of presumption, if not a failure to bring an open mind to the resolution of various matters.

"An example of this latter characteristic is [a supervisor's] 'decision' as early as August 2010 that the only option... was that she should be medically retired. All of these elements amounted to CSNSW not attempting to implement reasonable adjustments to assist [the worker], as required by the [Disability Discrimination Act]."

Instead, the judge said CSNSW's primary focus was on "dealing with a person whom they saw had an illness which necessitated long, disruptive and unplanned absences from work which impacted on the efficiency of the work of the office, and impacted on other staff".

While the judge acknowledged that the employer faced some difficult issues, he said these did not exclude its "failed" responsibility to achieve a balance by providing reasonable adjustments.

These failures in making reasonable adjustments and the employer's lack of fairness in its communications with the officer were exacerbated by putting her "on extended leave and recreational leave, and without notification or consultation, sick leave... and then leave without pay."

Judge Nicholls said CSNSW "acted arbitrarily and capriciously" in this regard, with its "unexplained failure to act in good faith" also giving rise to a finding that it acted unreasonably.

He ruled that CSNSW breached the Disability Discrimination Act, the employment contract and its own published policies in treating the worker less favourably as a result of her disability.

He ordered the Department to re-credit her leave entitlements and pay compensation for loss or damage suffered, including $75,000 for pain and suffering and breach of contract, and $98,863 plus interest for loss of wages, leave entitlements, superannuation, psychologist costs and loss of promotion opportunities.

Is this something that could be an issue at your place? Inspire Success is all about making HR SIMPLE - no matter what size your business is. Contact Inspire Success for further information or 1300620 100.

Thanks to HR Daily for this article.

Are you guilty of sham contracting?

Rae Phillips - Wednesday, August 12, 2015
The misclassification of employees as contractors has become more than some dry matter of employment law lately.

First there was ABC's Four Corners investigation into the conditions for some migrant workers, which discovered that many workers who arrive in Australia are wrongly treated as contractors, underpaid and subjected to dangerous conditions.

Then there was the Victorian Government's announcement that it would establish an inquiry into labour hire and sham contracting, and the ACTU's call to establish a national register of labour hire firms.

Meanwhile, a subsidiary of Roy Morgan Research could be going all the way to the High Court of Australia to settle its contractor woes.

Linkhill was hit with a whopping $300,000 penalty for underpaying 10 contractors who a Federal Circuit Court ruled were actually employees. However, it argues that it was making generous over-award payments to the workers that would have otherwise covered employee entitlements, and that prosecutors misrepresented its arrangements.

This is all at the sharp end of sham contracting (or in Linkhill's case, the awfully expensive end). But businesses hire people to carry out work every day, from secretaries to cleaners to IT professionals – and their legal status will vary. What are the essential criteria to cover your back?

A 'sham' independent contractor arrangement is made when one or both parties know, or ought to reasonably know, that it is not a true independent contractor arrangement and you are liable under the Fair Work Act for civil penalties if you:

  • misrepresent an employment relationship as an independent contractor relationship to an employee;
  • dismiss or threaten to dismiss an employee in order to re-hire them as an independent contractor in a job that is the same (or substantially the same), or;
  • make a false statement to a current or former employee in order to influence them to perform the same work as an independent contractor.

Employee and contractor: the key distinctions

You can defend yourself against a penalty for sham contracting if you genuinely didn't know a relationship was that of employer and employee, not of independent contractor and principal.

But that gets you nowhere if a court or tribunal finds you've been reckless about facts that would have put a reasonable person in your position on notice – even if the sham contracting wasn't intentional.

So how do you avoid walking blindfolded into misrepresenting an employment relationship?

These are some of the key indicators that the Fair Work Ombudsman and the courts would expect a reasonable person to have mind to:
  • The level of control over the working relationship (do you control how, where and when a worker's work is performed?)
  • Tax arrangements (do you deduct PAYG income tax yourself from the worker's remuneration or is this left up to the worker themselves?)
  • How the worker is paid (Use an IT professional as an example. Are they paid periodic wages or salary to keep your computer systems ticking over, or do they come in to complete certain tasks for your business that they later invoice for?)
  • How equipment is supplied (Are you supplying the tools and equipment used, or does the worker provide and maintain their own significant tools and equipment to do the work?)
  • How the relationship looks 'from the outside' (Does the worker act as a representative of your business when he or she is working, under your own branding and goodwill? Or do they have a separate place of work, create their own goodwill, and advertise their services independently of you?)
  • Note that no single one of these indicators will clearly determine a worker's status. Employers (and employees!) can attempt to arrange their taxes to unlawfully claim an independent contractor relationship.

And an experienced, specialist worker who you don't need to exercise much control or supervision over will still in many cases be classified as an employee.

If your contractual arrangements with a worker are ever examined, it will involve taking a look at the whole working relationship - not just the written agreements, but the substantial terms and conditions on which work is performed day-to-day.

That means that you should doing the same. Many "employee or contractor" tests will be straightforward, but a few can be complex.

Is this something that could be an issue at your place? Inspire Success is all about making HR SIMPLE - no matter what size your business is. Contact Inspire Success for further information or 1300620 100.

Thanks to Portner Press and their workplace bulletin for the content of this article.

Recent Posts


workplace health & safety Medical Certificates reducing stress workers compensation tips Individual Flexibility Agreements stress in the workplace fair work act L&D Leave Deferral exit Succession Planning older safety payments WHS social climate obligations IFA recruit Penalties reward reduce staffing costs Long service leave reference checking employee communication performance reviews induct public holiday competitive edge Inspire Success procedures First Aid pre-injury Independent Contractor social media earnings occupational health and safety policy filing fee staff retention fair work act compliance enterprise agreement learning legislation gen x redundancy feedback Better Off equality hazards recruitment Party improve productivity employee engagement High Income Threshold baby boomers gen y training roster recession proof your business PCBU compliant workplace key talent early retirement scheme Return to Work Referee Changes holiday season work test WHS Audit selection shut downs suspension WorkCover NSW communication job stress workplace legislation modern awards stress bullying workplace policies accountability parental leave competitive edge, staff management national wage reporting Productive Compensation Cap 2013 rates notice Sham Contracting discrimination Gender Equality Act employees success improving performance Christmas taxation Goals Superannuation generation theory call-out increase giving effective feedback WHS Act improve customer service women dismissal Superstream entitlements staff christmas party termination reduce staffing costs pay rate performance management genuine redundancy Availability for Duty Unfair Dismissal report