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How To Fire An Independent Contractor

How To Fire An Independent Contractor

Learn more about the legal avenues available if you are not satisfied with a contractor’s performance.

28th September 2016

Have you had a bad experience with an independent contractor? Are they not performing up to standard? As a small business owner, ensuring that parties to a contract uphold their relevant obligations is vital for business operation.

However, you cannot simply “fire” an independent contractor. With that said, an employment contract that has been dishonoured through the contractor’s substandard performance or non-performance of work will enable you to rescind the contract.

What Constitutes Substandard Performance?

Usually, independent contractors are hired because they are able to offer specialised skills and services to a business.

Substandard performance may be the result of frequent mistakes or unsatisfactory work that leads to poor quality outcomes. It may also be an indication that the contractor is unable to cope with increasing volumes of work.

These issues regarding unsatisfactory performance will be particularly relevant if you plan on expanding your business or outsource more progressively complex operations. In the event of these situations, you can create a contractor agreement for free with LawPath.

Methods to Reduce the Chance of Conflict

To avoid disputes and maintain a good business relationship with an independent contractor, it is recommended that you implement an effective measure to monitor performance. For example, a regular feedback system could operate to minimise the chance of a contractor not completing a given task on time. Open communication is key.

When drafting the contract, you should aim to specifically discuss all the requirements and expectations of the task with your subcontractor. Make sure that the terms are clear to all involved.. Addressing problematic areas and identifying disagreements before entering into a binding contract will serve to prevent greater stress. This will assist in reducing the need for litigation in case of future arguments arising.

Including A Termination Provision

A termination provision or clause allows a party to terminate a contract under agreed circumstances.

Provided that you and the independent contractor agree to contract and negotiate in good faith, inserting a termination clause into the contract can be an efficient method of discharging obligations in the result of serious conflict.

If possible, the termination clause should be expressed prior to the expiration date of the contract. However, sometimes an employer who withdraws from the contract before expiration may be required to pay the salary outstanding.

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Unfair Termination

As an employer, you must comply with employment laws and ensure that termination is properly conducted. The Independent Contractors Act 2006 provides guidance on grounds for unfairness that may entitle a contractor to claim for an unjust dismissal.

If you are uncertain as to whether you have adequate termination rights, we advise you seek guidance from one of our professional employment lawyers to ensure you make the correct decision.

Are you in need of a contractor’s agreement? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our largest online network of expert lawyers or to get answers to your legal questions.

Carmen Zhu

Carmen is a Paralegal working in our content team which aims to provide free legal guides to facilitate public access to legal resources. With an interest in consumer and professional negligence law, her primary focus is on the importance of expanding legal awareness to business longevity.