Changes to employment law

The Government has announced a range of changes to employment law, which could come into effect later in 2025. One change highly relevant to landscapers is the introduction of a “gateway” test to determine whether someone is a contractor or an employee

The difference between a contractor and an employee is a contentious issue that sometimes ends up in court. The proposed introduction of a new “gateway” test for determining whether a worker is a contractor or an employee could help employers navigate this convoluted issue. For contractors, the new test declares that:

• There must be a written agreement with a worker specifying that they are an independent contractor.

• The business cannot restrict the worker from working for another business (including competitors).

• The business cannot require the worker to be available to work at specific times of the day or days, or for a minimum number of hours; or the worker can sub-contract the work.

• The business does not terminate the contract if the worker does not accept an additional task or engagement.

“The coalition Government has agreed to amend the Employment Relations Act to provide a gateway test that businesses can use when responding to a claim that a person is an employee and not a contractor,” said Workplace Relations and Safety Minister Brooke van Velden. “If the working arrangement in question meets the four factors set out in the test, then the person is considered to be a contractor. If one or more of these factors are not met, then the existing test will apply.

“This new approach will provide businesses with more certainty to proceed with innovative business models involving contractors where this is appropriate, and also enable businesses to offer better terms and conditions to their contractors with less concern that it might impact the contractor’s status.”

Unknowns remain

Employment law firm Ben Gully noted a number of details that still needed to be ironed out regarding the announcement, including:

• The extent busineses can limit or restrict the application of the “gateway” test, while still satisfying them.

• Whether the proposed changes will apply to agreements entered into before the law comes into force.

• What recourse a worker has if the contract meets the Contractor Criteria but then a business terminates the contract after a worker fails to accept an additional task or engagement?

“If this amendment to the legislation is enacted, businesses will need to consider carefully how they set up workers going forward, as well as whether they want to reconfigure existing contractor relationships to bring them within the Contractor Criteria and, if so, how to go about that,” said the law team at Ben Gully.

Minimum wage rising

It’s also important to note that, as of 1 April 2025, the minimum wage for adults increased from $23.15 to $23.50 per hour. The starting out and training minimum wage also increased from $18.52 to $18.80 per hour.