Employee Status for Building Contractors? What You Need to Know

Earlier this year and last, we shared a pair of cases that looked at the question of if and when a person regarded as a contractor can be defined as employee. That can be an important question, as employees receive rights and benefits that contractors do not.

A recent Employment Court case advances the discussion even further. A builder was brought on by a building company as an independent contractor. But despite the label, the Court held that in reality, the builder operated as an employee.

It came down to what the relationship actually was, rather than what it was labelled. Factors in that consideration included the control the company exercised over how the builder worked, including stipulated hours; the fact that the builder couldn’t subcontract or work for others; that tax was deducted from his pay by the company; and he didn’t supply his own tools.

The relevance to everyone else? While the decision applied to this specific case, it has precedent value for similar situations. Lawyer Gary Pollak, who acted for the builder in this case, notes that up to 20% of New Zealand workers may be on similar contracts. It’s another reminder that for both contractors and those who contract them, it’s vital to be certain what your relationship is.

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