Think you’re not an employer? Think again!

Most of us have had a friend help us out around the house or yard whether it is to assist us with fencing, landscaping or assistance with house renovations or cleaning. If you find yourself agreeing to a friend helping you, beware that you may actually be found to be an employer. It sounds crazy but this is what happened to a couple that allowed a friend to help them out when they were renovating their house.

The ‘friend’ assisted a couple on a few occasions within a period of one month and was reimbursed the cost of fuel and for the materials that he brought to the house. There was never a discussion of wages, hours of work and it was clear from the version of events put forward that it was simply an offer of help from one friend to another.

A few months later, the couple found themselves liable for a workers’ compensation claim from their ‘friend’ in a decision by WorkCover Queensland (WorkCover). WorkCover issued a frankly erroneous statement of decision which found their friend to be a ‘worker’ and that they were his employer. It was clear WorkCover heavily relied on the worker’s statement of events without taking due consideration of the couple’s alternate version.

As the couple were not covered by a responding insurance policy or a WorkCover policy, WorkCover advised that they were liable for a workers’ compensation claim for an amount over $15,000 with the possibility of further medical costs being incurred, including possible surgery for which they would be liable. If the claim was upheld by WorkCover the couple would be in a dire financial situation.

Under the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (Workers’ Compensation Act) a person is deemed to be a ‘worker’ that person:

  1. “Works under a contract; and
  2. In relation to the work, is an employee for the purpose of assessment for PAYG withholding under the Taxation Administration Act 1953 (Cwlth), schedule 1, part 2-5.”

There was no evidence that the ‘friend’ was working under a contract other than the couple advising that ‘he did a bit of work around the house’. The ‘friend’ advised that he was in receipt of an hourly wage although there was no evidence provided to support this claim.

After engaging our firm the couple then appealed the WorkCover decision to the Regulator who ultimately set aside the decision and found that the ‘friend’ was not a worker. The decision of the Regulator was that there was no evidence of a contract being in place nor was there any evidence of payments being made to the ‘friend’. On this basis, a finding was made: the friend was not a worker; the couple were not an employer and they are no longer liable for what could have been astronomical surgical bills on top of a $15,000 plus claim.

Many people would (reasonably) believe that there is no way they could be found liable as an employer when simply agreeing to let a friend help out around the house, but as this case demonstrates it can happen.

To prevent this from happening to you we recommend the following tips:

  • If a friend is performing services at your home it is best to have the details in writing, via text message will suffice provided you keep a copy of the message;
  • Be clear that it is not a working relationship and that they are in no way obliged to offer you any help;
  • Any payment for reimbursement of expenses should be done via banking so these amounts can be traced and that prior to payment a receipt is produced before reimbursement occurs;
  • Never say to any insurer that the friend worked for you, this implies that you are an employer and you may be found liable by WorkCover and you may be found to engaging in fraud.

In the event that you may find yourself in such a situation or you are concerned that a friend may be planning to submit a WorkCover claim after recently helping you out we recommend obtaining legal advice urgently.

If you are found to be an employer and liable for a WorkCover claim NB Lawyers offer a legal consultation to all employers.

For further information please contact Jonathan Mamaril, Principal on 07 3876 5111 or email [email protected].

Written by:
Jonathan Mamaril
Principal & Director
NB Lawyers – the Lawyers for Employers
07 3876 5111
[email protected]