Employment and Contracting Risk Mitigation

There are risks in employing people and there are risks in engaging consultants.  We help clients reduce these risks through advice and screening.

With employment, employment overheads at about 30% on top of salary are high.  There are also risks in employing people.  The bigger risk is of course terminating poor performers, marginal poor performers in particular.  Careful recruiting and sound HR and IR advice reduces this risk.  Variable workloads can also be challenge.

Engaging contractors can help in that one only pays for the specialist expertise, or the peak in workflow when one needs it.   Some organisations also engage contractors on a long-term basis as part of their strategy to reduce the risk of having full-time employees.  This does not absolve organisations from all risk.  The arrangement can for example be seen as sham contracting.  Consultants and contractors like to be seen as such – until something goes wrong.  Then their lawyer will try to make the case that they are really employees and should have cover for superannuation, leave, workplace safety etc. 

We help clients reduce risk by doing things that demonstrate that it is a business-to-business contract and not an employment contract.  Things to be checked include:  

• Pty Ltd or Sole Trader entity?  To protect yourself from liability, it is prudent to only engage Pty Ltd entities.

• Professional Indemnity insurance

• Public Liability insurance

• Accident Insurance

• Work situation: Location, equipment, supervision, etc