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Worker's ability to delegate or subcontract their work

To determine if a worker is an employee or independent contractor, consider if work can be delegated to another person.

Last updated 21 April 2024

To determine if a worker is an employee or independent contractor based on the legal rights and obligations (i.e. the terms) in the contract you entered into with your worker, consider whether a worker's agreement allows them to pay another person to do the work for them.

Worker can't delegate or subcontract their work

This is a characteristic of an employee.

A worker can't delegate or subcontract their work if:

  • the contract requires them to personally do the work
  • the contract does not contain a right which allows the worker to delegate or subcontract their work
  • a worker can't do the work themselves and they organise or are contractually required to organise for another person to do it, but your business pays the other person – this is substitution, not delegation or subcontracting the work.

Example: a worker can't delegate or subcontract their work

A commercial cleaning business has a contract to clean several small offices. The business has several cleaners who do the cleaning work, including Ann and Ben.

Ann can't do her shift and her contract does not allow her to pay someone else to do the work, so she organises Ben to cover for her. The business pays Ben for his extra cleaning shift.

As Ann only organised for Ben to complete her shift and did not pay him, she has not delegated or subcontracted the work.

End of example

Worker can delegate or subcontract their work

Having a contractual right to delegate or subcontract work is a characteristic that strongly indicates the worker is an independent contractor.

A worker can delegate or subcontract their work if they can contractually pay another person to do the work and this right is not:

  • limited in scope (i.e. only discrete tasks can be delegated or subcontracted)
  • legally incapable of exercise
  • a sham.

Example: a worker can delegate or subcontract their work

A remedial massage therapist, Con, has a contract with an aged care facility to provide massage therapy to residents.

The written agreement between Con and the aged care facility specifies:

  • that Con has the right to subcontract his work to another person
  • that the person to who Con subcontracts his work must be a suitably qualified massage therapist who has a current police clearance and the appropriate insurance to do the work.

Con is unwell and can't work for a week, so:

  • Con organises for another massage therapist suitably qualified to cover his work
  • the aged care facility still pays Con as outlined in the contracted agreement
  • Con pays the other therapist for their work.

Because Con organised for another person to perform his work he was required to pay that person to do the work, because he has subcontracted the work.

End of example

 

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