Are you having issues with an independent contractor you’ve hired? Or are you disappointed with the work that’s been done so far? Although this can be a frustrating situation to be in, it’s important that you resolve these issues before further problems occur down the line. Keep reading this guide to find out what you can do when a contractor you’ve hired has breached their obligations.
Firstly, it’s important to note that terminating a contractor should be done for one of two reasons: substandard performance and/or non-performance of work. These are both clauses you should include in your contractor agreement. We’ll explain what these are below.
Substandard performance
Independent contractors are an attractive option for businesses as they usually offer a certain level of expertise. Further, the project is often temporary, meaning that permanent employment is not an option. However, there can be times where your contractor isn’t performing up to scratch. Substandard performance may be the result of frequent mistakes or unsatisfactory work on a larger scale. Either way, if your contractor isn’t performing how they should be, it can be hugely detrimental to your business.
A clause which allows for termination on the basis of substandard performance means you’ll have recourse when work isn’t done properly. You may also wish to include a warning provision. This is so that your contractor has a chance to improve before terminating the contract.
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Non-performance
Different to substandard performance, non-performance is when work isn’t done on time (or at all). If your contractor is causing delays or you’re not seeing results, termination may be the best option.
Similar to substandard performance, you should have a clause which allows you to terminate the contract on this basis.
Drafting your termination clause
A termination provision or clause will allow you to terminate a contract under agreed circumstances. In this sense, the independent contractor will need to agree to the substandard performance and non performance clauses before they start working.
This can also be beneficial to your contractor as it will more clearly lay out the expectations you have when it comes to the job you’ve hired them for.
Unfair termination
As an employer, you must comply with employment laws and ensure that termination is properly conducted. The Independent Contractors Act 2006 (Cth) provides guidance on grounds for unfairness that may entitle a contractor to claim for an unjust dismissal. If you’re uncertain as to whether you have adequate termination rights, you should seek guidance from an employment lawyer.
How To Fire An Independent Contractor (2023 Update)
