Financial Services

UWA employee and contractor comparison

Further information

  • UWA Insurance
  • Terms and conditions – services

A standard point of differentiation between employees and contractors is that employees work under a 'contract of service' and independent contractors work under a 'contract for services'.

The main differences between employees are laid out on this page.

Employee

Lawful authority to command
Under a contract of service, the payer usually has the right to direct the manner of performance. Of course, where the nature of the work involves the professional skill or judgment of the worker, the degree of control over the manner of performance is diminished. What is important is the lawful authority to command that rests with the payer.
How is the work performed?
Tasks are performed at the request of the employer. The worker is said to be working in the business of the payer.
Risk
An employee bears little or no risk. An employee is not exposed to any commercial risk. This is borne by the employer. Further, the employer is generally responsible for any loss occasioned by the poor workmanship or negligence of the employee.
Place of performance
A worker under a contract of service will generally perform the tasks on the payer's premises using the payer's assets and equipment.
Hours of work
An employee generally works standard or set hours.
Leave entitlements
The contract generally provides for annual leave, long service leave, sick leave and other benefits or allowances.
Payment
An employee is generally paid an hourly rate, piece rates or award rates.
Expenses
An employee is generally reimbursed for expenses incurred in the course of employment.
Appointment
An employee is generally recruited through an advertisement by the employer.
Termination
An employer reserves the right to dismiss an employee at any time (subject to State or federal legislation).
Delegation
An employee has no inherent right to delegate tasks to another. However, there may be a power to delegate some duties to other employees.

Contractor

Lawful authority to command
The hallmark of a contract for services is said to be that the contract is one for a given result. The contractor works to achieve the result in terms of the contract. The contractor works on his/her own account.
How is the work performed?
An independent contractor enters into a contract for a specific task or series of tasks. The contractor maintains a high level of discretion and flexibility as to how the work is to be performed. However, the contract may contain precise terms as to materials used and methods of performance and still be one for services.
Risk
An independent contractor stands to make a profit or loss on the task. They bear the commercial risk. The contractor bears the responsibility and liability for any poor workmanship or injury sustained in performance of the task. Generally, a contractor would be expected to carry his or her own insurance policy.
Place of performance
A contractor, unlike an employee, generally provides all his or her own assets and equipment.
Hours of work
An independent contractor generally sets his or her own hours of work.
Leave entitlements
Generally, an independent contract does not contain leave provisions.
Payment
Payment to an independent contractor is based upon performance of the contract.
Expenses
Generally, independent contractors incurs their own expenses.
Appointment
Independent contractors are likely to advertise their services to the public at large.
Termination
An independent contractor is contracted to complete a set of tasks. The payer may only terminate the contract without penalty where the worker has not fulfilled the conditions of the contract. The contract usually contains terms dealing with defaults made by either party.
Delegation
An independent contractor may delegate all or some of the tasks to another person, and may employ other persons.

Back to top