This ICA dictionary clarifies the meaning of key words and their use.
Independent Contractor. Is a person who works under a commercial contract. The person can operate as an individual, through a partnership or company or trust. Such persons are regulated by commercial laws. Their status can only be certified by the courts under common-law processes. They have the right to control the terms of their own working contract/s.
Employee. Is a person who works under an employment contract. An employee is always an individual. They are regulated by industrial relations laws. They do not have the right to control their working contract, which is controlled by the employer, union or tribunals. An employee is the reverse of an independent contractor.
Contractor. Is also a person who works under a commercial contract and can operate as an individual, a partnership or company or trust. The words ‘contractor’ and ‘independent contractor’ are used with lack of precision in normal language. Generally, however, the common idea of a contractor is that of a company which undertakes a job but uses employees or other independent contractors—as in ‘contracting out.’
Contracting Out. This occurs when a business uses another party to perform work under a commercial contract.
Labour Hire. A system in which people are supplied to a business with payroll administration and other matters handled by an agency. In most cases, the people supplied are employees of the agency. With some arrangements, the people supplied are independent contractors.
Odco Contracting. A specific system of labour hire in which independent contractors are supplied.
Employ & employment. The terms applied when employees are used.
Engage & engagement. The terms applied when independent contractors are used.
‘Contract for services’ = commercial contract. This is the term the courts use to describe an independent contractor’s contract. It is the legal description of a commercial contract.
‘Contract of service’ = employment contract. This is the term the courts use to describe an employee’s contract. It is the legal description of an employment contract.
Dependent Contractor. Is a nonsense expression that has no meaning at law or in practice. By definition a ‘dependent’ contractor is an employee. A person cannot be both legally independent and dependent at the same time.
Independent Employee. Is another nonsense expression that has no meaning at law or in practice. By definition an ‘independent’ employee is a contractor. A person cannot be both legally independent and dependent at the same time.