Am I entitled to superannuation as a contractor?

Are you a contractor or an employee?

It may be that an employer has incorrectly labelled an employee as a contractor in order to avoid paying that employee his or her statutory employment entitlements. Superannuation for example, may be one of these entitlements. Specific provisions in the Fair Work Act 2009 (Cth) exist in order to prevent employers from claiming that an employee is an independent contractor so as to avoid paying superannuation.

The difference between an employee and a contractor is an important one for all workers. For more information regarding the distinction between contractor and employee, click through to read further.

A wide range of entitlements and protections are conferred upon workers by legislation and industrial awards or agreements. Courts and tribunals have dealt comprehensively with the issue for a number of years: see for example Abraham Abdalla re Abraham Abdalla v Viewdaze

Pty Ltd t/as Malta Travel [2003] AIRC 504; Brodribb Sawmilling Company Pty Ltd [1986] HCA 1; Hollis v Vabu Pty Ltd (2001) 207 CLR 21.

It is not uncommon for an employer to incorrectly refer to a worker as an independent contractor. Where an employer has done this deliberately, they may be acting in breach of Division 6 of the Fair Work Act 2009 (Cth) that prohibits the making of ‘Sham Arrangements’. This Division was created to protect employees by exposing employers who were unlawfully treating workers as contractors when they were in fact employees.

The primary provision in Division 6 of the Act regarding sham arrangements is section 357(1) which holds that ‘a person (the employer) that employs, or proposes to employ, an individual must not represent to the individual that the contract of employment under which the individual is, or would be, employed by the employer is a contract for services under which the individual performs, or would perform, work as an independent contractor’.

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