And you thought it was just an Australian issue. Wrong! The Supreme Court of California (yes, you read correctly, California) handed down a decision at the end of 2018 in a case involving the trucking firm Dynamex Operations West. Dynamex was using a business model that is popular in Australia where its drivers supplied their own vehicles (and fuelled and maintained them) which enabled the company to characterise its drivers as independent contractors.
That idea bit the dust in the Californian Supreme Court who found the drivers to be employees in disguise so to speak. Could it happen here?
Yes it could and I think you will find more and more of these cases being heard in Australian courts over the next few years. Is there any reason why this is such a hot button issue? My own view is that the explosion of the gig economy (Uber, Deliveroo, Airtasker etc.) has resulted in a commensurate explosion of workers who are termed independent contractors. This is cheaper for the business principal (no leave accruals, no workers comp etc.) but of course the big loser is the Australian Taxation Office. I would imagine that the ATO has been watching the gig economy sector very closely.
The union movement has been doing the same but for different reasons. While the union movement might be giving heart wrenching speeches about fairness and equity, the plain fact is that for the most part independent contractors are beyond the reach of traditional trade unions. Probably no sector has more to lose from an explosion of independent contractors than the union movement. Union membership would be hard hit if independent contractors continued to grow in the workplace at the rate they have been.
If your business is dependent on its workers being contractors you might want to get some professional advice just in case. A court finding that your workers have always been employees in the eyes of the law could be disastrous.