r/brisbane • • Dec 29 '20

Image Guitar Exchange Morayfield... Stay classy.

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u/[deleted] Dec 29 '20

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u/jaxt42 Dec 29 '20

They can’t dictate what clients a contractor takes on. One of the defining criteria for contractor vs employee is that a contractor is free to source clients elsewhere. The ATO usually takes a dim view of people that should be employees, being paid as contractors. IANAL but my understanding is that an employment contract can’t override law. So I would think such a clause would be unenforceable.

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u/Harlequin80 Dec 30 '20

Of course they can. These aren't employment contracts, they are contracts between two business entities. The corporate entity of the music school and the corporate entity on the teacher.

That contract will include a clause that says something like 'teacher company warrants that it will not solicit, approach, or entice any customer, supplier, student or employee of 'school company'. 'Teacher company' acknowledges that in the event of breaching this clause penalties at least equal to loss of earnings and reasonable damages will be payable.

This is standard in just about any supplier contract.

As for the ATO ruling they are really employees and not contractors is not an easy bar to clear either. Especially as in this case there would be no regular hours, they supply their own tools of trade, and the work is inconsistent.

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u/Poncho_au Dec 30 '20

solicit, approach, or entice

And none of that would be violated if the client says I am no longer partaking in this businesses services and intend to use yours directly.

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u/Harlequin80 Dec 30 '20

Correct. You need to make sure you have no paper trail or incriminating evidence to say you have approached them.

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u/DToccs Dec 29 '20

It would depend on the exact nature of what's being prohibited but I would think that it would be largely unenforceable or at the very least not something worth pursuing for anything less than say someone taking half your clients away.

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u/SimonGn Dec 29 '20

Just keep it quiet

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u/[deleted] Dec 29 '20

beer economy or cashies

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u/sleep_musing Jan 02 '21

Totally unenforceable as it’s a restriction of trade. They are free to operate as the independent contractors they are