Definition of a Worker
This bulletin provides information on who is and is not considered a Worker under the Return to Work Act1986 (the Act).
A worker is a person who is employed on a casual, part-time or fulltime basis. This includes visa workers and labour hire workers.
Interpretation of a worker
A worker is someone who performs work or a service for another person under a contract and is an employee for PAYG purposes as defined by the Taxation Administration Act, even if the employer is not withholding tax when they should be.
Most employer/worker relationships are easily determined based on this definition.
To help resolve the less obvious examples of workers, the Return to Work Act and Regulations specifically define some classes of persons as being workers or not being workers.
Australian taxation guidance
The definition of worker has been aligned with the PAYG test applied under Australian Taxation Office (ATO) laws.
If it is determined a person is an employee using ATO guidance (even if the employer thinks they are a contractor) then the individual should be covered for workers’ compensation.
An individual engaged by a labour hire business is a worker of that business. If the worker is injured at another workplace through the arrangement of labour hire, the worker would claim for workers compensation from the labour hire business.
Note: The Act provides for the definitions of Labour hire arrangements and Provider of labour hire services, which are terms required to ensure individuals under a labour hire arrangement are deemed workers for the purpose of the Act.
Workers covered under specific circumstances
A person who is a director (by whatever name called) of a body corporate, is not a worker of that body corporate. However there is a provision under the Act for directors to be covered for workers compensation.
Directors of a company must be PAYG to be covered under the company’s’ workers compensation policy with an approved insurer. The directors’ name, remuneration and the nature of their employment must be disclosed to the insurer at the time a director is appointed, and each time the policy is renewed, or indemnity is effected.
Family members of employer
A person who is a member of the immediate family of the employer, and who lives with the employer is not a worker, however like directors, there is provision under the Act for immediate family members who live with the employer to be covered under an employer’s policy.
If the business is owned by an individual or partnership (not a company), immediate family members of those individuals are only covered if their personal details and their remuneration are disclosed to the insurer at the time the person commences employment, when a policy is obtained or at the renewal of a policy.
Immediate family members are:
- a spouse
- a parent (including a stepmother or stepfather) or grandparent
- a child (including a stepchild) or grandchild
- a brother or sister (including a half-brother or half-sister)
Note – a person who is a member of the immediate family of the employer who works for the employer, but does not live with the employer, is a worker under the Act and therefore must be covered for workers compensation.
Volunteers – are generally excluded, however:
A person who, without remuneration or reward, voluntarily engages in the following are covered for workers compensation:
- Emergency services – under the Emergency Management Act
- Fighting a fire – under the Bushfires Act
- Fighting a fire or other emergencies – under theFire and Emergency Act
Other classes of workers
The following workers are classed as a person, or a member of a class of persons, that would be covered for workers compensation under the Act.
- Members of the operations branch of St John Ambulance NT Inc.
- Serving as a juror under the Juries Act
- A jockey or stable hand under the Racing and Betting Act
Community court orders
A person performing work under a community court order is deemed a worker under the Return to Work Act. Community court orders are defined under the following legislation:
- Community work order - Fines and Penalties (Recovery) Act, Sentencing Act or Youth Justice Act
- Community custody order, community based order – Sentencing Act
Domestic employee of householder
The exception is when the individual is employed or engaged by a householder and is paid at or earns more than 20% of average weekly earnings.
A sports person is not typically considered to be a worker. The exception is when a person under a sporting contract earns more than 65% of average weekly earnings.
Who is not a worker
An individual is a contractor if it is determined that the individual is a contractor using ATO guidance. They would typically be:
- individuals providing substantial plant/heavy machinery (truck drivers, earthmoving machinery, courier/delivery van) would usually be classed as a contractor
- individuals who are, or have specifically written in their contract (as long as the contract accurately reflects the true working arrangement), that they can subcontract/employ others to do the job will be classed as a contractor
- individuals who quote for jobs (provides upfront total price for the job), provide tools for their trade, and rectify defects at their own expense, will also be a contractor and not a worker
Specifically excluded by the Act and Regulations
In the Return to Work Act some persons are specifically excluded from the definition of a worker. Those defined as not being a worker include:
- a person in the service of the Commonwealth
- a voluntary worker who in relation to the voluntary work, receives nothing more than reasonable travel, accommodation or other out of pocket expenses
- a person who employs another person who is engaged in the work or service under consideration
- a person who is engaged other than for the purposes of the employers trade, business or enterprise and the employer does not make any PAYG withholding payments in respect of that person
The Return to Work Regulations specifically list certain persons as not being a worker. Those defined as not being a worker include:
- share fisherman – crew of a fishing vessel who are paid wholly or mainly by a share in the profits or gross earnings from the workings of the vessel
- a foster parent under the Care and Protection of Children Act
- a child care worker who cares for another person’s child at the carers residence
Definition of worker (V1.1 – 29/07/ 2020)