It’s worth noting the ATO and Fairwork Australia are actively scrutinising ‘sham’ Contractor Arrangements and an employer should be wary that they are not putting their business at risk by engaging in such contracts. Although there are many circumstances where it is lawful for a business to engage an independent contractor, the law is there to protect employees from being treated as independent contractors when they should in fact be regarded as an employee.
Having your documentation in relation to the contractors or consultants is vital if you want to stay out of the sham contracting minefield. Furthermore A consultancy agreement gives you strong legal recourse if either party fails to honour their obligations under the agreement.
For more information on why you should use a consultancy agreement please click here