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EMPLOYEES, CONTRACTORS OR SOMETHING ELSE?

Why written agreements are important

Written agreements offer clarity and certainty. Verbal agreements, however, are often not accurate as memories fade, one party’s version may be different from the other’s and, as time lapses, circumstances change and parties’ intentions change too.

When the terms of what have been agreed fail to be recorded in written form, this opens the door for dispute. Consider this: you have been engaged by a business to perform work for the business. In the absence of a written agreement, a key question is whether you have been hired as an employee or a contractor (or something else). Each of these different relationships have significantly different legal, tax and financial implications both for you and the business.

When a dispute arises and there is significant disagreement between the parties, one thing is certain – parties often resort to litigation which is costly and time consuming. Instead, have a written agreement which defines what has been agreed and that legal proves the agreement and its terms.

Written agreements provide protection for the parties so that they are aware of the capacity in which they enter the agreement, the obligations imposed on them and their rights and entitlements. Written agreements are usually enforceable unless there are  factors which nullify or invalidate them.

A written agreement, however, cannot ‘make’ someone an independent contractor. A person is or is not an employee or independent contractor based on applicable legal tests. The parties agreeing that a party is an employee or an independent contractor is not the point. Nevertheless, a written agreement can still serve as important documentation to support employee or contractor status.

Even with a written agreement in place, a court can still look behind the document to define the true relationship between the parties. The terms of the written agreement, however, serve as a first point of evidence for a court to assess the facts in any litigation. That is, the written terms give guidance to a court and, to a certain extent, limit ambiguity if terms have been drafted correctly.

As you can see, the benefits of a detailed, clear and well written agreement are many. It should always be a basic principle and best business practice to enter into written agreements with parties you intend to have dealings with – whether they be contractors, employees, customers, suppliers, partners, shareholders or even investors.

The team of lawyers from our Commercial & Disputes Division are highly experienced and can provide advice on any matters pertaining to agreements you may need reviewed and refreshed or have prepared from scratch.

Please don’t hesitate to reach out to us at any time for assistance via our switchboard on +61 3 9822 8588 or via email on supportteam@burkelawyers.com.au.

Insight written by Elizabeth Ong & Meghan Warren

Contacts

Meghan Warren

Principal

Meghan Warren

Principal
LL.B GAICD B.Bus (FinPlan)
Meghan is one of the few lawyers in Australia admitted in the State (Victoria) and Federal jurisdictions of Australia, and as an Attorney at Law to the New York State Bar in the United States.

Kristy Muhlhan

Principal

Kristy Muhlhan

Principal
LL.B (Hons) GRAD DIP. L.P., GAICD.
Since 2014, she has been an owner and Principal of the firm and has mastered a broad range of essential commercial and business skills which go hand in hand with the work she does for...

Rosy Roberts

Principal

Rosy Roberts

Principal
LL.B (Hons) B.A GAICD
Rosy has extensive experience in Litigation & Alternative Dispute Resolution having represented clients in all Victorian State Courts and the High Court of Australia. She is also a VCAT appointed Administrator.

Elizabeth Ong

Special Counsel

Elizabeth Ong

Special Counsel
LL.B.(Hons) CLP GDLP
Elizabeth is committed to providing world class, comprehensive commercial solutions and corporate advice tailored to the best interests of her clients. She is fluent in written and verbal English, Mandarin, Cantonese, Hokkien and Malaysian languages.

Bianka Duzelovski

Lawyer
LL.B BMS
Bianka has an extensive background both in private practice and as internal counsel for a number of high-profile building and commercial businesses so provides the perfect balance of legal skills to our Commercial, Disputes and...

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