30 September 2024
Employees vs. contractors under a Shared Facilities Agreement
A worker cannot be both an employee and a participant in a Shared Facilities Agreement (SFA) with the same employer. Participants in a SFA are not employees and, as such, do not receive entitlements such as annual leave, sick leave, or minimum rates of pay. Typically, they have control over the use of shared facilities, manage their own tools and equipment, and set their own schedules. In contrast, part-time, full-time, or casual employees work under the direction and control of their employer, with the employer determining the hours, work location, and methods of work.
However, it is possible for a worker to be employed by one company while participating in an SFA with another clinic or service provider. To ensure the correct classification and relationship for all parties involved, it’s crucial that both individuals and employers carefully consider specific factors when establishing these agreements.
Level of control: While an employee works under the direction of a superior on an ongoing and systematic basis, a contractor operating under an SFA enjoys a high level of independence and flexibility in how and when their tasks are completed.
Hours of work: An employee typically has a standardised set of hours specified in their contract. In contrast, a contractor under an SFA controls when their work is performed but may need to adhere to hours set by the agreement. For individuals who are employed by one company while also working as a contractor under an SFA for another, managing work hours effectively is essential. Establishing clear boundaries between employment and contract work helps ensure that expectations for both roles are met.
Expectation of work: Employees, whether part-time or full-time, are engaged on an ongoing basis. Contractors under an SFA, however, are usually engaged for specific tasks or projects within a specific timeframe defined by an SFA.
Delegation of work: Employees and contractors under an SFA are typically required to complete their own work duties and responsibilities. Typically, the two working relationships do not allow the flexibility to delegate or subcontract work to others.
Refusal of work: Except for casual employees, most employees are expected to accept reasonable work requirements. Contractors under an SFA generally have the discretion to refuse work offered to them, based on their agreement and workload.
Equipment: Employees usually have tools and equipment provided by their employer or receive a tool allowance. Contractors under an SFA, however, normally use their own specialist equipment as stipulated in their agreement.
Conflict of interest: For both employees and contractors working under an SFA, particularly for contractors working at multiple practices, it is important to acknowledge there may be a risk of confidentiality issues and the sharing of private information such as proprietary methods, client lists, and financial information. Additionally for practices with competing interests, such employees and contractors may struggle to avoid certain conflicts and provide services that may impact their impartiality.
Whilst the differences between both employees and contractors under an SFA revolve around the nature of their work relationship, it’s important that the differences are understood so that all parties are clear on the different role expectations and to ensure compliance with legal requirements.
For more information on this article please call the ADA HR Advisory Service on 1300 232 462.
