Under the Fair Work Act 2009 (Cth), certain workers are eligible to receive compensation when dismissed from their employment in a manner that’s deemed harsh, unjust, or unreasonable. This raises the question: can a contractor claim unfair dismissal compensation?
Regrettably, independent contractors are not shielded from unfair dismissal as they’re not employees, and only employees are eligible for unfair dismissal compensation.
Nevertheless, there might be instances where the agreed-upon relationship has been mischaracterised as a contractor relationship, when it is actually an employment relationship. In such circumstances, since the worker is essentially an employee, they can be protected from unfair dismissal.
What Defines an Independent Contractor?
An independent contractor is a person that operates their own business and dictates their work parameters. They offer their services to others, unlike employees who work in someone else’s business under the employer’s control regarding how, where, and when they execute their work. Typically, contractors are free to determine their service charges, select their service delivery method, and work for multiple clients simultaneously.
Unfair Dismissal and Contractor Rights
Interestingly, it is not uncommon for some workers to be engaged as a contractor, complete with an ABN and invoicing for their work, but do not meet the legal criteria of a contractor. In these cases, even though labelled as a ‘contractor’, they’re likely to be an employee, meaning they’re potentially eligible for compensation.
The courts and commissions, while acknowledging the label given to the relationship, will scrutinise the substance of the relationship and determine its true characteristics before making a decision regarding compensation for unfair dismissal.
How are Employee and Contractor Statuses Determined?
The court or tribunal involved will assess various factors relating to the working relationship to determine if you are an employee and therefore eligible to claim for unfair dismissal:
- How the work is performed and controlled.
- Whether or not the person can delegate their work.
- If the person promotes their services elsewhere.
- Whether the person works exclusively for one company.
- How the person is remunerated for their work.
Remember, contractors do have workplace rights and protections, albeit with different responsibilities regarding insurance, taxation, and superannuation. The label might indicate one thing, but the actual agreement and relationship may indicate otherwise.
The Fair Work Commission can discern whether or not the dismissal was unfair through an analysis as part of a jurisdictional hearing, irrespective of the relationship’s label.
Time Limits for Unfair Dismissal Claims
All employees, regardless of whether their claim for unfair dismissal is lodged with the Victorian Industrial Relations Commission or Fair Work Commission, have 21 days from the dismissal date to file an application. This period can be extended, but only under exceptional circumstances.
It’s important to obtain reliable legal advice before submitting a claim, to establish whether you have been genuinely engaged as an independent contractor, or if the relationship has been mislabelled.
Employee Rights and Unfair Dismissal
Employees, barring those from a small business, must have been employed for a minimum of 6 months before they can file for unfair dismissal. Employees employed by a small business can only file for unfair dismissal after being employed for 12 months.
Should You File for Unfair Dismissal?
Unfair dismissal can involve complex legal matters that require a lawyer’s expertise. At Frontline Employment Defenders, our dedicated, diligent, and seasoned employment agents can advise you on whether there are grounds for unfair dismissal and help you determine the best course of action.
With our ‘no win no fee’ policy, you can confidently access our services areas Bayswater, Kilsyth and Greater Melbourne. Don’t let bullying and unfair dismissal go unchecked. Stand up for your rights with Frontline Employment Defenders.
Call Frontline Employment Defenders Now so we can help you 1300 089 353 or visit https://www.fled.com.au