Published in the Coffs Coast Advoate on 18 July 2015 by Jack Blaxland.
John is a farmer who has a farm where he breeds beef cattle.
John essentially works his farm by himself but occasionally he seeks paid help and on this occasion he seeks help from another farmer by the name of Bill who comes to John’s property to help him put up fencing over a period of eight weeks. John pays Bill an amount of $1,000 for each of the eight weeks work being a total of $8,000.
John does not have a workers compensation insurance policy.
Unfortunately Bill has an accident at the end of the eight weeks where he cuts his hand badly and as a result is unable to work for a number of weeks.
Bill sees a solicitor and is advised that he is a worker within the definition under the Workplace Injury and Management Workers Compensation Act 1998 and makes a workers compensation claim against John on behalf of Bill for weekly payments at the prescribed rate of 90% of such wages and also makes a claim for his medical expenses.
It was John’s view that Bill, who had his own Australian Business Number (ABN), was an independent contractor.
John sees his solicitor who advises that under the legislation a person who is considered to be a contractor who neither sublets the contract nor employs any worker is taken to be a worker employed by John.
John’s solicitor also informs him that as he has paid Bill more than $7,500 he is not an exempt employer who does not need to have a workers compensation policy.
Fortunately for John, Bill recovers from his injuries fully after a number of weeks and John is able to settle the claim by way of a payment of 90% of Bill’s wages and his medical expenses.
John is informed by his solicitor that it is fortunate that Bill did not have a serious injury (such as an injury where Bill becomes a paraplegic as a result of a tractor rolling on him or something like that) where there could be millions of dollars of compensation sought which could ruin John financially.
