This week someone enquired about casual help and how to go about it. The enquiry was this: “I’m away for work a few days a week, so I need someone to feed horses, clean stables and what not. I’ve found a girl, but not sure how to go about it. Could I just pay her cash or should I ask her to get an ABN (Australian Business Number) and invoice me? Naturally I want to protect myself in case of an accident, but I also want to do the right thing by her. She’s happy to get paid cash but my concern is simply if there’s an accident.”
Equestrian establishments, both businesses and hobbies, all need assistance on a temporary, at-call and infrequent basis. Understandably, the dollar cost to the establishment over and above cash paid in hand as well as the indirect costs of staff administration are things ideally avoided when help is intermittent or occasional. But let’s be upfront about it. What is sought to be avoided are employee compliance obligations such as PAYG (Pay As You Go) tax deductions, leave entitlements (holiday and sick pay in the case of non-casual employees), compulsory superannuation and worker’s compensation insurance, at the same time as avoidance of liability in the event of an accident to the girl. In other words, looking at the matter through a legal lens, can the girl enquired about be engaged as a contractor and not as an employee, responsible for her own tax, leave, insurances, health and safety? The simple answer is No.
The idea of asking the girl to obtain an ABN and to invoice for her work is a futile attempt to constitute the girl a contractor, not an employee. The presence of an ABN is, however, irrelevant to the proper legal classification of the girl’s working arrangement as the law looks to the substance of the working arrangement, not its form. For the same reason, describing the girl as contractor in her engagement letter or contract is futile: If she is legally an employee, describing her as a contractor makes no difference. Cash payments also fall into irrelevancy on the legal question. In fact, these steps indicate that the employer is attempting to disguise the true employment nature of the arrangement to dodge PAYG withholding and super obligations. An employer runs the gauntlet in the event of a complaint by the girl about her pay or an investigation into an injury to her in the workplace. The Australian Taxation Office, Fair Work Commission or the relevant State or Territory Workplace Health and Safety Office, can and do impose fines and penalties for not treating the girl as an employee on top of compensation. Be warned!
When the law has to decide if anyone engaged on a temporary basis is an employee or not, there are a number of factors to identify and evaluate for the purposes of deciding the question. Equestrian establishments need myriad tasks performed by stable hands on an occasional basis, as in the case of the enquirer. The following factors lead inexorably to the conclusion that stables hands are employees: they must perform the work themselves and are not able to delegate the work to anyone else, they are paid for the time they spend working and not on results achieved, they are supplied with the tools and equipment to perform their work and, most crucially of all, they are or can be directed as to where, when and how they work to achieve their assigned tasks.
The question of whether the girl is an employee or a contractor is in any event inconsequential when it comes to an accident. Every equestrian establishment has a duty to provide a safe workplace to everyone in it, be they contractors, employees, spectators and volunteers. The laws that affect work, health and safety are State and Territory based and legal advice should be obtained about them. Public liability insurance is an important means of mitigating the financial risk of a serious incident. In the case of workers, equestrian establishments must put in place compulsory worker’s compensation insurance and enquiry should be made of State and Territory workplace insurance authorities to determine if cover is required (sometimes dependent on a wages threshold) and premium cost.
Despite the brevity of a job or the irregularity of work, a stable hand will be an employee at law. He or she might be a casual, part time or permanent employee and it follows that employee compliance obligations exist. Labour is a business cost that must be properly factored into the price of agistment services or simply absorbed as the price of pursuing a sporting or recreational interest.
14 September 2017
© 2017 Michael Mackinnon, Solicitor & Independent Counsel