Understanding the Difference Between Employee and Independent Contractor

Business Law

Contents
SCENARIO 1..................................................................................................................................2
Relevant law related to case........................................................................................................2
Understanding and acting on the difference................................................................................4
SCENARIO 2..................................................................................................................................4
BBC claim against Felix and Oberlisk........................................................................................4
REFERENCES................................................................................................................................6
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SCENARIO 1
Relevant law related to case
Issue: In the present situation Jacky is being appointed by Felix and Oberlisk to work for
two to three days in their office, according to her choice. On the end of month Jacky was being
given the amount on basis of number of days worked and it was based on daily amount. No
amount was being dictated for payment of tax and Jacky has been told to submit her on quarterly
tax statement to the ATO and she can pay according to her requirements. She brings her own
computer to workplace as the Felix computer was not reliable and was quite old. Her friend told
Jacky that she was an employee but Felix and Oberlisk told her that she was independent
contractor.
Rules: In an employment contract, employee is being appointed by employer for regular
salary and wages, in which employees agree to give their services. On the other hand,
independent contractor is those who provides their services for a part of having share in profit
related to commercial business.
Indicia of Employment Relationship
 Commercial risk faced by organisation and employee is not responsible for any loss
related to poor workmanship
 Company provides the time and location for doing work
 Equipment’s related to work are also provided by organisation
 Worker can not perform same work for any other company
 If worker used their own equipment, its is reimbursed through allowance.
Indicia of a Busines
 Worker sets their own hour of work
 They also make use of their own equipment’s
 Workers also bears the risk related to commercial loss
 Worker is provided with power to advertise their services to public.
 Workers are held responsible for their own expenses.
Mode of remuneration: Employees are been paid wages for the hours work whereas independent
contractor is always being paid for the pre-decided negotiation and remuneration.
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