Changes to the definition of "worker" in the
Workers Compensation and Rehabilitation Act 2003
("the Act") commenced on 1 July 2013.
These changes have altered the definition of "worker"
to effectively exclude subcontractors. The changes bring the
definition into line with the definition of "worker"
under the Commonwealth income taxation legislation. Specifically,
the definition of "worker" in Section 11 of the Act has
been amended to be "a person who works under a contract"
and "is an employee for the purpose of assessment for PAYG
withholding" under the Commonwealth income taxation
The practical impact of this change is that workers with their
own ABN, such as subcontractors, will be excluded from being able
to make claims for compensation under the Act. A person is
generally considered a subcontractor if:
They operate their own business and are responsible for
reporting income for tax purposes;
They are paid pursuant to a quote or based on the result
They provide most or all of the tools or equipment needed to
perform the work;
They are free to contract with a third party to complete the
They are able to decide the method of work.
The changes have meant that both employers and subcontractors
need to reassess the insurance that they hold to ensure they are
adequately protected in case of injury or claims.
Employers should have public liability insurance that is
adequate to protect themselves from common law claims by
subcontractors for workplace accidents and injuries. Most employers
will already hold a policy of public liability insurance, however,
it will be crucial that the insurance policies are reviewed to
ensure they will cover these circumstances.
Subcontractors will also need to obtain personal insurance, such
as income protection insurance, to ensure that they are covered if
they are injured in workplace accidents.
We have an experienced state-wide insurance department who can
provide legal advice on all aspects of insurance and injury law. If
you would like further information on this issue, or any other
issues, do not hesitate to contact one of our offices.
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.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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