From 1 July 2013, the definition of a 'worker' for the
purposes of the workers' compensation legislation in Queensland
will be narrowed. The new definition will mean that fewer
independent contractors will be required to be covered under a
principal's workers' compensation policy. The changes will
particularly affect contractors in the construction and transport
industries who are currently required to be covered under the
Broad scope of current definition
The current definition of a 'worker' under the
workers' compensation legislation in Queensland is very broad
and captures many contractors, such as owner drivers and
tradespeople who run their own businesses. Although these
contractors are often not considered employees for any other
purpose (such as superannuation and leave entitlements), they are
still considered to be a 'worker' for the purposes of
workers' compensation. The definition of a 'worker'
under the current workers' compensation legislation includes,
among other things, an individual:
who is paid for labour only, or substantially labour only;
who does not meet all of the following criteria:
is paid for a specific result;
has to supply all of the plant, equipment or tools of trade to
do the work; and
is liable for rectifying defects in the work.
The new the definition of a 'worker' will be:
a person who works under a contract; and
in relation to the work, is an employee for the purpose of
assessment for PAYG withholding under the Taxation
Administration Act 1953 (Cth).
This means that business owners will only be required to include
an individual contractor under their workers' compensation
policy if the contractor works under a contract and is an employee
for PAYG taxation purposes.
This is positive news for businesses because the new definition
is easier to understand and apply. No longer will business owners
need to undertake a complex analysis of the remuneration structure
and method of work between the parties to determine workers'
Examples of individual contractors who may no longer be
covered under the principal's workers' compensation
WorkCover Queensland has issued a statement stating that
examples of individual contractors who may no longer be covered
under a principal's workers' compensation policy are those
supply and operate their own plant, such as earthmoving
equipment or trucks, as part of their contract;
work mainly or substantially for labour only, quote for the
job, provide their tools of trade or rectify defects at their own
have a personal services business determination from the
Australian Taxation Office.
What businesses should do in response to the new
Businesses should review their arrangements with each individual
contractor to determine whether the contractor will continue to be
required to be covered by its workers' compensation policy.
This will involve:
analysing whether the contractor meets the new definition of a
'worker' under the workers' compensation legislation;
reviewing the contractual arrangements between the
Winner – EOWA Employer of Choice for Women Citation 2009,
2010, 2011 and 2012
Winner – ALB Gold Employer of Choice 2011 and 2012
Finalist – ALB Australasian Law Awards 2008, 2010, 2011 and
2012 (Best Brisbane Firm)
Winner – BRW Client Choice Awards 2009 and 2010 - Best
Australian Law Firm (revenue less than $50m)
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).