A contract that was not reviewed before signing, or a contractor arrangement that does not reflect how someone actually works, are the two most common employment law problems we see. Both are fixable early and expensive late.
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The most common employment contract situations: an employee signs a contract without reviewing the restraint of trade clause, the IP ownership provision, or the termination terms, and discovers six months later that the document they signed does not reflect what they were told. Alternatively, a business has been engaging workers as independent contractors for years, and receives a Fair Work Ombudsman notice advising that those workers should have been employees all along. The back-payment exposure runs to tens of thousands of dollars per worker.
At Leo Lawyers, we advise employers and employees on employment contracts, contractor agreements, and workplace policies across New South Wales and Victoria. We draft compliant contracts that protect the business, review agreements before employees sign them, advise on the sham contracting risk created by the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024, and act when an employment relationship has broken down over a contract dispute. Since 1 January 2025, intentional misclassification of employees as contractors is a criminal offence under the Fair Work Act 2009 (Cth), with penalties of up to $2.35 million per contravention for corporations.
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The National Employment Standards (NES) under the Fair Work Act 2009 (Cth) set eleven minimum entitlements that apply to all employees in the national workplace relations system regardless of what their contract says. A contract term that purports to exclude or reduce an NES entitlement is void to that extent. The eleven standards are:
The contract governs everything above this floor: salary, duties, location, hours beyond the minimum, restraints of trade, IP ownership, confidentiality, and termination provisions. Getting those terms right is where employment contract advice adds the most value.
| Factor | Points Toward Employee | Points Toward Contractor |
|---|---|---|
| Control over work | Employer directs how, when, and where work is done | Worker controls how and when tasks are completed |
| Tools and equipment | Employer provides tools and equipment | Worker provides their own tools and equipment |
| Delegation | Worker cannot subcontract or delegate the work | Worker can subcontract or send someone else to do the work |
| Business integration | Worker is integrated into the business and represents it | Worker operates their own independent business |
| Financial risk | Worker bears no financial risk for defective work | Worker bears the risk of profit and loss |
| Exclusivity | Worker works only for this business | Worker provides services to multiple clients |
| Payment basis | Paid by time (hourly or salary) | Paid by result or output |
Since 26 August 2024, under the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024, Fair Work now examines the totality of the relationship including the practical reality of how the worker actually operates, not just the terms of the written contract. A contract that says ‘contractor’ is the starting point, not the conclusion. If the practical reality of the arrangement is that the worker is an employee, the arrangement will be treated as employment regardless of what the document says.
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We act for employees reviewing a contract before signing, executives negotiating the terms of a new role or an exit, and businesses that need compliant employment contracts and contractor agreements drafted from scratch. We also act for businesses whose existing contractor arrangements may now create sham contracting exposure under the 2025 criminal penalty regime, and for employees and employers in dispute over changes to employment conditions.
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