Unless you are in full-time regular employment, you may be unclear about whether you can make a workers’ compensation claim.
In Australia, if you are an employee, your employer is required to cover you for workers’ compensation so that you can make a claim for loss of income, medical and rehabilitation expenses and depending upon your circumstances, some other losses. You are covered for workers’ compensation if the injury arises out of the course of your employment.
In the age of the gig economy, many people find themselves outside the usual workplace role. Whether you are covered for workers’ compensation will depend upon your circumstances.
In What Circumstances Can You Make a Claim – Some Examples
If you run your own business through a company and you are a Director of that company then you are only covered for workers’ compensation if you have taken out a workers’ compensation policy. Take for example a plumber, Dave, who runs his own incorporated business, Dave’s Plumbing Pty Ltd, and is contracted to do the plumbing on a new house built by home building company ABC Building Pty Ltd. The contract for the job is between Dave’s Plumbing and ABC Building. If Dave injures himself after falling down a hole on the site, therefore, his company is responsible for any workers’ compensation claim, not ABC Building. This is because the contract is between two companies, not between an employer and an employee.
If however Dave works as a sole trader or in a partnership he may not be covered for workers’ compensation. He is not required to have a workers’ compensation policy if he works for himself and it is important that he… (dictation incomplete).
What if Dave operates as a sole trader with no employees? In this situation, Dave can’t take out workers’ compensation insurance to cover himself in case of injury. Instead, Dave would need to look to income protection, personal accident insurance, or total and permanent disability (TPD) policies to cover him in the event of work injury. Income protection policies will usually cover you for loss of income arising from serious injury as the result of an accident, or if you contract a serious illness, while personal accident insurance will cover for loss of income as a result of an accident but not illness.
Similarly, partners of an unincorporated partnership may but are not required to take out workers’ compensation insurance. Both sole traders and partners are required to take out workers compensation policies to cover their employees.
A Worker or a Contractor?
Employers are required to maintain a workers’ compensation policy which recovers their workers, but not self-employed contractors. Some contractors, however, are ‘deemed’ workers for the purpose of workers’ compensation.
Some of these classes of workers may include outworkers, salespersons, rural workers and contractors under labour hire service arrangements. Someone may be hired as a contractor and treated as such for payment of tax, but still be considered a worker for the purpose of workers’ compensation insurance. Invoicing with an ABN is not a definitive indicator of a person’s status as either worker or contractor.
Whether someone is a self-employed contractor or an employee/worker is often at the heart of disputes in workers’ compensation claims.
In the simplest terms, a contractor is more likely to:
- be carrying out a particular task which requires using their own skill and judgment;
- employ others, delegate or sub-let work;
- provide a quotation for the job;
- supply their own tools and materials;
- carry on a business in their name, or through a business name.
By contrast, workers are more likely to be paid for working a specific time period, have materials and equipment supplied by an employer, work exclusively for the employer, and be subject to the PAYG tax regime.
An employer who hires subcontractors needs to be clear about whether they are classified as contractors or employees, and therefore about the ability of those workers to make a claim for worker’s compensation under the employer’s policy in the event of work injury.
If you are an independent contractor you may be able to claim compensation for the injuries you have suffered if those injuries were caused by the negligence of another party. Those rights will most often be available where it was not an employer who was paying workers’ compensation to you that caused the injury.
Speak with the Experts
At BPC Lawyers, we are specialists in workplace injury claims, whether they involve a workers’ compensation claim or for self-employed people who need to make their own claim for damages.
Being injured at work when you’re self-employed can be a scary and stressful experience. If you’re not able to claim workers’ compensation, you may be wondering how you’re going to pay the bills and look after your family if you’re not able to work. We will help clarify the issues for you and advise on the best course of action in making a claim.
If you’re setting up a new business, or are already operating one, we can also advise on the types of insurance you should have and what to look out for in assessing policies.