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Independent Contractor Agreements: Remember To Check The Fine Print!

May 9, 2023

If you are engaging an independent contractor or you are an independent contractor yourself, your relationship should be formalised into an agreement.

Remember, contracts become crucial not when the relationship is going well but when it breaks down.

Here is a line of questions to ask yourself:

  1. Does the contract reflect an independent contractor relationship, or does it appear to be an employee/employer
    relationship? Be careful of sham contracting!
  2. Does the contract protect my intellectual proprietary rights?
  3. What does the contract say about jurisdiction in the event of a dispute?
  4. What are my payment terms?
  5. If I don’t get paid, can I charge interest? What about my legal fees or mercantile fees if I have to proceed with debt
    recovery against the other party?
  6. Is there a personal guarantee?

These questions give you an idea of what to look for.

Below is a case study of a scenario of what can happen if you don’t have an independent contractor’s agreement in place and a dispute arises:

“Company A engaged an independent contractor (the Contractor) to conduct videography and photography services to promote Company A. There was no independent contractor’s agreement in place. The terms of the agreement were agreed to orally and over emails and text messages.  Much to the surprise of the Contractor, Company A used their own photographer on the shoot to take additional footage using the lighting, setup, and design of the Contractor. Further, employees of the Company posted videos and photographs of the Contractors’ equipment, configuration, and products on their social media accounts. Unfortunately for the Contractor, because there was no agreement in place, they had no recourse to protect their intellectual proprietary rights, they could not compel the Company to discard the footage taken or its employees from removing the footage from social media, and the Contractor lost out on payment for additional footage they otherwise may have been entitled to.”

Without an independent contractor agreement, there may be ambiguity or uncertainty regarding the nature of the working relationship, the scope of work, payment terms, and other vital details. This could lead to disputes or legal issues down the line. It is complicated to argue a binding legal obligation when it is not agreed to in writing, not impossible, but difficult and time consuming.

In addition, Queensland has specific laws and regulations that apply to independent contractors, such as the Fair Work Act, Superannuation Guarantee (Administration) Act, and the Workers’ Compensation and Rehabilitation Act. An independent contractor agreement can help ensure that businesses are compliant with these laws and regulations.

Overall, while not a legal requirement, having an independent contractor agreement in Queensland is highly recommended for businesses engaging the services of independent contractors as it provides clarity on the working relationship, protects the business from liability, helps protect the business’s intellectual property, ensures compliance with laws and regulations, and provides a framework for dispute resolution.  The same benefits are extended to the Contractor in protecting the Contractor’s interests.

Here at Van Rooyen Law, we offer the service of checking the terms of your agreements, saving you time, and then advising you whether your existing agreements provide the proper protection for your business needs.

If you do not have existing agreement, it is better to be late in getting them than to not have them at all. So call us for a fixed fee proposal, and we will do all the work for you.

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Terms & Conditions: Did You Download Your T&C’s From The Internet?

We get it! Your focus is on running your business, so who has time to go draft terms and conditions when you are already time-poor? After all, you can just download them from the internet. Right? Well, yes, you can. However, is it worth it? Your terms and conditions set out the terms and conditions on which you are being engaged by your customers/users. This is a legally binding document that defines your relationship with your customers and users. That is why it is imperative that your T&Cs serve you and your business while protecting your best interests. Below is a case study of where inaccurate, internet-downloaded T&Cs, can run awry: “Company A is engaged by Company B to provide services as an independent contractor. Company A performs the works as agreed; however, Company B refuses to pay what is due and owing. Unfortunately, there was no written independent contractor’s agreement in place to manage the dispute. Accordingly, with a partly written and partly oral agreement in place, we looked at Company A’s terms and conditions. The T&Cs were never provided during the quotation process; however, they were on Company A’s website. Here is where the rubber hits the road. Company A is based in Queensland. Company B is based in Western Australia. The works were conducted, and the debt arose in New South Wales. However, unbeknownst to Company A, the internet-downloaded T&Cs on their website state clearly that any and all disputes must be litigated in the State of Victoria.” As you can see by the above scenario, this is a costly and complicated dispute for Company A because, irrespective of the argument for appropriate jurisdiction, Company A would likely not be successful in keeping the matter in Queensland if an application for change of jurisdiction is brought by the other party. Further, this hinders any discussions in settlement negotiations because Company B is in a position where they know that any litigation would be very costly for Company A, and they will use it to their advantage. A further consideration is that if you are a business that creates unique designs, technologies, systems, or products, you need to ensure that your intellectual proprietary rights with respect to those products are clearly articulated. In summary, having well-written T&Cs is essential for a business as it sets out the legal relationship between the business and the customer, protects the business from legal disputes, helps establish intellectual property rights, complies with legal requirements, and provides evidence in legal disputes. Here at Van Rooyen Law, we offer the service of checking your terms and conditions for you, saving you time, and then advising you whether your existing T&Cs provide the proper protection for your business needs. If you do not have existing terms and conditions, it is better to be late in getting them than to not have them at all. So call us for a fixed fee proposal, and we will do all the work for you. *For the purpose of the above case study, we have not discussed whether or not having the T&Cs on the website alone was sufficient, and that is a separate consideration that must be taken into account. *

Terms & Conditions: Did You Download Your T&C’s From The Internet?

We get it! Your focus is...

Independent Contractor Agreements: Remember To Check The Fine Print!

If you are engaging an independent contractor or you are an independent contractor yourself, your relationship should be formalised into an agreement. Remember, contracts become crucial not when the relationship is going well but when it breaks down. Here is a line of questions to ask yourself:
  1. Does the contract reflect an independent contractor relationship, or does it appear to be an employee/employer relationship? Be careful of sham contracting!
  2. Does the contract protect my intellectual proprietary rights?
  3. What does the contract say about jurisdiction in the event of a dispute?
  4. What are my payment terms?
  5. If I don’t get paid, can I charge interest? What about my legal fees or mercantile fees if I have to proceed with debt recovery against the other party?
  6. Is there a personal guarantee?
These questions give you an idea of what to look for. Below is a case study of a scenario of what can happen if you don’t have an independent contractor’s agreement in place and a dispute arises: “Company A engaged an independent contractor (the Contractor) to conduct videography and photography services to promote Company A. There was no independent contractor’s agreement in place. The terms of the agreement were agreed to orally and over emails and text messages.  Much to the surprise of the Contractor, Company A used their own photographer on the shoot to take additional footage using the lighting, setup, and design of the Contractor. Further, employees of the Company posted videos and photographs of the Contractors’ equipment, configuration, and products on their social media accounts. Unfortunately for the Contractor, because there was no agreement in place, they had no recourse to protect their intellectual proprietary rights, they could not compel the Company to discard the footage taken or its employees from removing the footage from social media, and the Contractor lost out on payment for additional footage they otherwise may have been entitled to.” Without an independent contractor agreement, there may be ambiguity or uncertainty regarding the nature of the working relationship, the scope of work, payment terms, and other vital details. This could lead to disputes or legal issues down the line. It is complicated to argue a binding legal obligation when it is not agreed to in writing, not impossible, but difficult and time consuming. In addition, Queensland has specific laws and regulations that apply to independent contractors, such as the Fair Work Act, Superannuation Guarantee (Administration) Act, and the Workers’ Compensation and Rehabilitation Act. An independent contractor agreement can help ensure that businesses are compliant with these laws and regulations. Overall, while not a legal requirement, having an independent contractor agreement in Queensland is highly recommended for businesses engaging the services of independent contractors as it provides clarity on the working relationship, protects the business from liability, helps protect the business’s intellectual property, ensures compliance with laws and regulations, and provides a framework for dispute resolution.  The same benefits are extended to the Contractor in protecting the Contractor's interests. Here at Van Rooyen Law, we offer the service of checking the terms of your agreements, saving you time, and then advising you whether your existing agreements provide the proper protection for your business needs. If you do not have existing agreement, it is better to be late in getting them than to not have them at all. So call us for a fixed fee proposal, and we will do all the work for you.

Independent Contractor Agreements: Remember To Check The Fine Print!

If you are engaging an independent...

Independent Contractor Agreements: Watch Out For Sham Contracting!

As more and more employees seek autonomy and flexibility in their working conditions, there is a move away from the traditional employee/employer relationship and a sharp increase in the use of independent contractor agreements in various industries. Of course, there are pros and cons to the self-employment model; however, whether or not it is suitable for you and your business is not only an important consideration but could be a crucial consideration for the health and longevity of your business. Suppose you’ve made an employment offer to an individual, but they request to be hired as an independent contractor instead; however, they insist that they will still perform their duties as contained in your letter of offer. In that case, this should trigger an immediate red flag for you as an employer. In essence, if you hire someone as an independent contractor yet they perform as an employee, it doesn’t matter what the written contract says. In effect, that written contract could be a ‘sham contract’. It may be deemed as the employer trying to shirk its responsibilities to the employee concerning their entitlements and can carry heavy penalties. Think of the adage, “if it looks like a duck, walks like a duck, and quacks like a duck, then it may be a duck”, even if you try and call it a pigeon. So if it looks a like an employee, walks like an employee, and talks like an employee, irrespective of whether you’ve called it an independent contractor, it is still an employee. Independent contractors do not obtain the same benefits and entitlements as an employee under workplace laws with respect to superannuation, workers’ compensation, leave entitlements, and other employment benefits. The significant risk here is to the employer, which could ruin its business. Below is an example: “Company A enters into an independent contractor’s agreement with John Smith for a 4-year period. During the 4 years, John Smith attends to his work how, where, and when Company A tells him to. Further, John Smith attends networking events as a representative of Company A and is paid a commission on successful sales through that representation. John Smith is not permitted to delegate his work, and Company A provides him with all the tools and equipment necessary to perform his duties. Because John Smith is an independent contractor, Company A pays him only the amounts agreed to in his contract, excluding employee entitlement such as superannuation. After 4 years, the engagement ends, and a friend of John Smith tells him that it appears that John Smith was actually an employee all this time. John Smith makes a complaint to Fair Work, stating he thinks he is an employee. On examination, it is determined that Company A and John Smith were actually in an employee and employer relationship because Company A had all the control, John Smith served Company A in its business, John Smith was remunerated by way of time worked and commission, was unable to delegate his work, was supplied with all the tools and equipment necessary and Company A carried all the risk. As a result, Company A had to pay John Smith his entitlements as an employee (including superannuation) over the last 4 years, plus the deficit in earnings he would have received under the applicable award and a penalty”. The moral of the case study is, before you enter into an independent contractor’s agreement, make sure that it is not, in fact, an employee/employer relationship and contact us for assistance if you are unsure. Remember, contracts are in place for when everything goes wrong, not when it is going right.

Independent Contractor Agreements: Watch Out For Sham Contracting!

Suppose you’ve made an employment offer...

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