Many of the rights enjoyed by employees do not extend to independent contractors who work in trade, on their own account.
For this reason, many employment disputes start with the question, was the employee truly an employee, or rather, an independent contractor?
If the answer is that the employee was in fact an independent contractor, their employment dispute will fail, and the argument generally defaults on ordinary contract law principles.
Over the years, arguments about whether a worker is an employee or an independent contractor have been fertile ground for lawyers. Recent (February 2026) changes to the Employment Relations Act 2000 mean the parties themselves have more power to settle the argument at the time they sign the contract.
In reality, we think that the power to settle the argument will be with the party with more resources and money. There may be an increase in large, sophisticated businesses requiring their workers to sign independent contractor agreements, and while this will be fair in some cases, we suspect it will result in unfairness in others.
Specifically, the Employment Relations Act 2000 now excludes, from its suite of protections, workers who sign contracts that contain all of these factors:
- That the worker is an “independent contractor,” and
- That the worker can work for other contractors if he or she chooses, and
- That the worker can do the contracted work at a non-specific time of day and week, and can assign the work to sub-contractors, and
- That the worker can decline to perform additional work if he or she chooses, without breaching the contract, and
- That the worker had the option of independent advice before signing.
Generally, from our experience as a Community Law Centre dealing with workers who do not run their own businesses, the protections of the Employment Relations Act 2000 are critical. In your working life, you do not want to be excluded from it without careful consideration.
The main message, from our perspective, is that if you are a worker, and you are used to a regular hourly wage or annual salary, as well as things like holidays, sick leave, parental leave, and some degree of certainty around hours and days of work, then you should be very cautious about signing any contracts calling you an independent contractor – especially since the law change in late February 2026. It may also be a good time to revisit your employment agreement and check everything is as expected.
If you have any questions, especially before accepting a new job or signing a new agreement with your existing employer, we recommend you get legal advice or speak to a trusted union representative or industry expert.