IR Q&A Issue 18
Q: I have used the same contractor for the last 10 years. As far as I am aware, he only works for me. How can I tell if he is a genuine contractor or an employee?
A: There are a number of factors that would need to be considered before this question could be answered. Here are some questions for you:
- Does your contractor have the ability to subcontract or delegate the work that you give to them?
- How is the contractor paid? On an hourly rate? Agreed contract amount for his component of the job?
- What tools, materials, etc. does the contractor provide to complete the job?
- How much control does he have over how/when the job will be done?
- Is he responsible for his works?
- Can he/does he work for other builders?
Depending on how you've answered these questions, will determine the relationship between you and your contractor.
Q: Help me explain the difference between a cost-plus contract v lump sum?
A: A cost-plus contract is also referred to as a 'do and charge' contract. Under this arrangement, there will be no fixed contract fee although sometimes an estimate might be given (always be careful in doing so and if required, provide a ball-park figure). Under a cost plus arrangement, the builder will generally charge out on an hourly basis for labour undertaken plus the cost of the materials used plus a builder's margin. These claims (made in accordance with the terms of the contract) should be also be supported by invoices for labour and materials in accordance with the contract.
A lump sum contract is where, at the time of signing the contract, the parties have agreed on a set figure to cover the cost of all labour and materials for the completion of the project and which also includes the builder's profit for the project. The progress payment schedule will set out the amounts to be paid and at the completion of each stage of works.
For both contracts, variations to the scope of the contract might affect on the total cost of the works. Always remember to read your contract and follow the correct procedures for variations!
Q: Can I fire a worker for sending explicit photos to other workers through social media platforms, such as Snapchat?
A: Potentially, if you have a social media policy in place and following an investigation, the conduct gives you grounds for dismissal.
There was a recent Fair Work Commission decision (Fussell v Transport for NSW  FWC 1182) which considered this very situation. In summary, a male employee had sent an inappropriate image to a female colleague via Snapchat. Following an investigation of this complaint, the male employee was dismissed for serious misconduct. The employer had a social media policy in place which the male employee was aware of and the interaction with another staff member, although outside work time, was deemed to be out of work conduct and was contrary to the social media policy and the staff code of conduct, in effect. In this situation, the dismissal of the employee was deemed to be justified.
Putting a social media policy in place, in my opinion, is a good idea. It is important that all staff are aware of their obligations under the policy and the possible outcomes should the conduct (even outside work hours) could result in disciplinary action.
If you have any queries or would like to ask a question, please contact Legal Manager Kristie Burt on 6175 5919 or email email@example.com