Drawing up agreements with contractors can be complicated. Alleviate the uncertainty by following these simple guidelines.
Chris McArdle of KPMG Legal is an accredited specialist in employment law. Here are his basic guidelines for drawing up an agreement that clearly defines the terms of a contractor's employment and avoids confusion between cats and dogs.
1. Make sure they really are 'contractors' and not employees. It is therefore desirable that they qualify for all of the following:
- They provide their own equipment at their own expense.
- They are retained for a specific nominated task and not just for a period of time.
- They have an ABN number.
- They have their own workers compensation policy (which you must 'cite').
- You don't specify hours â€" just tasks.
2. The agreement should, if possible, contain all of the above provisions but must have a term (that is, it runs out on a particular day). For your own protection it must also have 'a termination during currency' provision of, for example, one week, one month or three months in case the task ends prematurely or it simply doesn't work out.
Remember if you want a dog to be a cat then that's bad luck. Just because you say someone is a contractor the taxation authorities may not agree and the employment tribunals will certainly not agree. For that reason the criteria set out above are most important. The contract itself should be in simple language that everyone can understand (whichfores and wherefores and heretofores add nothing) and should contain a suggestion that the contractor get legal advice before they sign it.
