The penalties for breaching the sham
contracting provisions can be up to $51,000
for companies and $10,200 for individuals
for each contravention. Back pay, including
superannuation, may also be ordered.
It is therefore important to properly work
out whether a fitness professional or other
worker is an employee or independent
contractor.
Who is an employee/independent
contractor?
Essentially, employees work in and are a
part of your business, whereas independent
contractors run their own business. It is not
as simple though as just saying someone is
running their own business and is therefore
an independent contractor.
There are a number of factors which
must be considered in determining whether
someone is an employee or an independent
contractor. Some of the factors may point
to someone being an employee while other
factors may point to the same person being
an independent contractor. The whole of the
relationship of the parties must therefore be
considered, not just one factor.
Both the Fair Work Ombudsman and
the Australian Taxation Office (ATO) have
published tables of factors which need to
be considered when determining whether a
worker is an employee or a contractor.
Business.gov.au and the ATO also have
online Independent Contractors Decision
Tools which can be used to help determine
whether someone is an employee or
independent contractor.
There are legitimate and appropriate
circumstances where personal training and
other fitness services can be provided by
independent contractors. The important thing
though, for the reasons discussed above, is
to make sure that to the fullest extent possible
you have got the relationship with your fitness
professionals (and other workers) right.
This article has provided a general
outline only of some of the issues relating to
employees and independent contractors. It
does not constitute legal advice and should
not be relied upon as such. Specific legal
Any questions?
If you have a legal question about
running a fitness business, email
[email protected] and your
question may be addressed in the next issue.
and financial advice should be obtained
in relation to the specific details of each
proposed employment and independent
contractor arrangement.
For references read this article at
fitnessnetwork.com.au/resource-library
Leon Ponte, Juris Doctor (Law) is the founding
principal of Ponte – Business Lawyers for Business
and is in a select group of approximately only 110
lawyers accredited as specialists in business law
by the Law Institute of Victoria. He has a strong
personal interest in the fitness industry, holding
Certificates III and IV, and has provided advice to
fitness facilities, personal trainers and suppliers to
the industry. ponteblfb.com.au
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