ARTICLE · 23 DECEMBER 2015

Sham contracting poses great risks for employers

Colin Biggers & Paisley

Explore more from Colin Biggers & Paisley

Incorrectly classifying employees as "independent contractors" can expose your company to serious risks and penalties.

AustraliaEmployment and HR

Amy Goricanec

In brief - High Court rules that Quest contravened the Fair Work Act

Incorrectly classifying your employees as "independent contractors" rather than employees can expose your company to serious risk, adverse consequences and penalties.

Workers found to be Quest's employees, not independent contractors

Numerous companies are finding themselves subject to penalties imposed for breaches of section 357 of the Fair Work Act 2009 (Cth) after findings that the "independent contractors" they have hired are in fact their employees.

It is unlawful for an employer to represent to a person who is in fact its employee that the contract made with that person is a contract for services under which the person performs work as an independent contractor. This is known as "sham contracting".

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