LawAnswers.com.au - Australia's #1 Legal Community

LawAnswers.com.au is a community of 10,000+ Australians, just like you, helping each other.
Ask a question, respond to a question and better understand the law today!
Join us, it only takes a minute:

NSW Employee or Subcontractor?

Discussion in 'Employment Law Forum' started by Mark90, 28 May 2015.

  1. Mark90

    Mark90 Member

    Joined:
    28 May 2015
    Messages:
    2
    Likes Received:
    0
    Hi,

    I'm a chiropractor and technically I'm a sub contractor and I've just started a new job. The guy running the clinic is asking me to sign a contract which has some things that make me question whether I actually am a sub contractor or an employee.

    My biggest concern is one of the clauses in the contract states that I'm not allowed to work within 10 km of the clinic location during the time I am there and 12 months after I leave. Is he allowed to restrict where I work under employment law, if I actually am a sub contractor?
     
  2. Tim W

    Tim W Lawyer

    Joined:
    28 April 2014
    Messages:
    1,722
    Likes Received:
    404
    You may be involved in a thing called "sham contracting".
    It's a device used by unscrupulous employers to evade their responsibilities for PAYG tax, super, WHS, leave entitlements etc.
    It's not lawful for either of you to be in a sham contracting arrangement.

    By way of background, this may be helpful.
    So might this.
    And if you scroll down to the bit about sham contracts, this is pretty good too.
     
  3. Sophea

    Sophea Well-Known Member

    Joined:
    16 April 2014
    Messages:
    2,300
    Likes Received:
    335
    Hi Mark90,

    Yes a sub-contractor agreement can indeed contain a restraint of trade clause, and if you agree to it, your boss can legally restrict where you work. These are quite common in both employment and sub-contractor agreements and are the basis of many claims. So make sure you are prepared to comply with the restrictions if you agree to them.
     
  4. Mark90

    Mark90 Member

    Joined:
    28 May 2015
    Messages:
    2
    Likes Received:
    0
    Thanks for the response Tim. I do fit under most of the criteria for a sub contractor. For the sake of argument lets say I am a sub contractor, is he allowed to limit the area in which I work (10 Km radius of the location for 12 months) after my contract is finished or I quit
     
  5. Tim W

    Tim W Lawyer

    Joined:
    28 April 2014
    Messages:
    1,722
    Likes Received:
    404
    I'm not going to try to talk you into the idea that you are sham contracting.
    But, since you are talking about "a new job", and "...or I quit",
    I remain to be convinced that you are in a bona fide employment arrangement.

    Consider hairdressers - they have a system where a hairdresser purportedly rents a chair in a salon,
    and operates as a theoretically independent business.
    Likewise, GP doctors in medical centres.... sometimes, they are not plain old employees, nor part owners of the centre.
    Sometimes, the GP is a sole trader, who is essentially renting work space (an office/ consulting room),
    and paying (either a flat fee or a percentage) for the support services, like someone to handle bookings and meet and greet patients.
    Both are basically, serviced office arrangements.

    So far as your "job" is concerned, ask yourself these questions:
    • Whose patients are they - yours, or the principal's (ie your employer's) ?
      (a good test of that is whether or not you have unrestricted access
      to the files of "your patients", even if centrally stored);

    • Does it have to be you that works?
      For example, if you wanted to send in a locum because you want a holiday,
      or were sick, can you just send one of your own choosing,
      or do you need some kind of consent from your employer?

    • Are you liable for your own professional indemnity and (maybe) public liability insurance?

    • What are the arrangements for sick leave?

    • Do you get a pay packet, or do you bill on a Tax Invoice?

    • Is there a dispute resolution clause in the contract?

    • Who does your tax?
    As to the restraint of trade terms, I agree with @Sophea in that it's technically possible.

    I would add however that if the effect of a restraint clause is to limit (otherwise fair market) competition,
    or to unfairly protect a monopoly in a small or closed market (eg the only Chiro in the village), or
    limits your right to work in the field (you are, after all, supposedly independent!), or
    is in some other way unreasonable, then you may find that the court would hold the restraint of trade clause to be inoperative.

    Deals involving Restraint Of Trade clauses are advanced player stuff.
    I therefore strongly suggest getting proper legal advice before you sign anything...
    no matter how much you want the "job".
     
    Rod and Sophea like this.

Share This Page

Loading...