Independent contractors & the common law

The Independent Contractors Act 2006 relies on the common law meaning of independent contractor. The common law is a set of legal principles, which have been developed through decisions in the courts. To determine whether a person is an independent contractor or an employee, a court considers a number of factors which look at the entire working relationship on balance.

Generally, an independent contractor works to achieve results and maintains a high level of discretion and flexibility as to how work is performed. However, the contract may set out precise terms around materials used and methods of performance, and still be a contract for specific services. These are only some of the factors courts take into account.

In making a decision, courts consider the individual circumstances of a case and provide recognition to the key characteristics of employees and independent contractors.