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Control over work

When working out if a worker is an employee or contractor, you must consider who controls the way the work is done.

Last updated 5 January 2017

To work out if a worker is an employee or contractor, one factor to consider is whether your business, or the worker, controls the way the work is done.

Your business controls the way the work is done

This is a characteristic of an employee.

Your business controls the way the work is done if your business has the right to direct:

  • what work the worker does
  • where the work is done
  • how the worker carries out the work
  • when the worker completes the work, for example, your business sets the worker's hours.
Start of example

Example

A telecommunication business hires a worker to answer inbound calls in their call centre.

The business has a computer system that automatically routes phone calls to call centre workers based on their knowledge skill set. The call centre worker must answer each phone call according to the business's procedures and scripting.

The call centre worker has five shifts each week, which the business rosters.

The business controls the way the work is done as they direct what, where, how and when the work is done.

End of example

Worker can decide the way the work is done

This is a characteristic of a contractor.

The worker can decide the way the work is done if they are free to exercise their discretion in completing the work (subject to the terms and conditions in any contract or agreement).

A business has the right to specify how the contracted services are to be done. However, such control must be specified in the terms and conditions of the contract or agreement; otherwise the worker is free to exercise their own discretion.

Start of example

Example

A large domestic house builder uses several stylists who create personalised interior solutions for their display homes.

Each stylist is assigned a job to fully fit out and decorate one display home. They liaise with the architect to understand the styling and furnishing needs specific to the intended purchasers of that house. The stylist creates the design and can choose their own suppliers.

The stylists determine how best to complete each job within the agreed budget and timeframe the builder has specified. Each stylist can decide the way the work is done as they are free to exercise their discretion in completing the work.

End of example

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