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ARTICLE · 27 MAY 2023

Contractor or employee: The contract reigns supreme

Holding Redlich
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The determination of whether a party is an employee or an independent contractor is based on the terms of the contract.

AustraliaEmployment and HR
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Today the Full Federal Court handed down a landmark case on the ongoing contractor vs employee debate in JMC Pty Ltd v Commissioner of Taxation [2023] FCAFC 76. The Court's decision was a resounding win for our client JMC, emphasising the importance of written contracts in determining employment status.

The decision reaffirms that where a relationship is comprehensively set out in a written contract which is not a sham, the determination of whether a party is an employee or an independent contractor will be based on the terms of the contract.

The decision further confirms:

  • the importance of delegation and subcontracting rights and the scope of the same to the characterisation of an individual as employee or contractor - and that the right being subject to consent does not mean the right does not exist

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This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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