If you are a locum optometrist, or engage locums, Industry Legal Group (ILG) has released a new guide for Optometry Australia members containing legal advice when entering into a contract for service.
This advice relates to obligations to pay superannuation guarantee contributions, withhold payroll tax and workers’ compensation cover, and contains case scenarios to help you better understand this complex topic.
Determine whether the locum is an employee and contractor
According to ILG’s guide, locum contractors may, depending on the circumstances, be deemed employees/workers for superannuation, tax and workers compensation purposes. It should not be assumed that a locum is a contractor purely because they have an ABN and/or issue invoices. This is a common myth and isn’t sufficient in itself to make a determination. Depending on whether the locum contractor or employee, different rights and obligations will apply.
While employees are employed under an employment contract (i.e., contract of service), independent contractors conduct their own business and are engaged to provide services to other persons.
Having a contract is key
Locum contracts are often a complex topic, and two recent High Court decisions in 2022 (Operations v Jamsek and Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd) are the latest authority in this space.
The High Court decisions are significant as they uphold that the written contract is key to determining the legal relationship. In other words, the terms of the contract will be considered to determine if there is an employer and employee relationship or if the person providing services is a contractor.
This is a shift away from the traditional (and often complex and uncertain) multifactor test which considers relevant factors on a case-by-case basis to determine whether a person is an employee or an independent contractor.
That said, defining the engagement status of a person as a contractor in a contract is not sufficient to prevent the terms of the contract indicating an employee and employer relationship, unless the rights and obligations under the contract reflect such an engagement status. However, if the terms of the contract reflect the desired relationship or engagement status, follow the terms of the contract to assist with preventing a successful challenge on the contract.
Contact ILG for advice
To assist locums and those who engage locums with understanding this topic, all Optometry Australia members have access to our HR helpline and legal partner, Industry Legal Group (ILG). ILG can help provide advice, review contracts or prepare contracts for employees or independent contractors (sole-trader or company structure), and all Optometry Australia members can access this contract template service at a member-only rate.
To contact ILG, call 1300 101 391 or email them at email@example.com and supply your membership details. ILG is staffed with HR advisors and lawyers with tailored knowledge of the optometry profession and employment conditions, and all advice is completely confidential.
Download ILG’s guide for locums here.
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