FWC clarifies that directing contractors on time, place, standards does not create an employment relationship
Businesses that engage independent contractors can continue to set operational expectations and impose certain requirements without those arrangements automatically becoming employment relationships, following a recent Fair Work Commission (FWC) ruling.
The decision, handed down in Williams v Mind Matters Sydney Pty Ltd [2026] FWC 1163, has been welcomed as a clarification for employers navigating the boundary between contractor and employee classifications under the Fair Work Act 2009.
The case involved a psychologist who claimed he had been dismissed from employment with Sydney-based psychology practice Mind Matters in February 2025.
The applicant argued the arrangement was an employment relationship due to the level of control exercised over his work, including supervision, the imposition of key performance indicators (KPIs), mandatory administrative tasks, and restrictions on client selection.
Mind Matters rejected the claim, arguing the psychologist had been engaged as an independent contractor under a formal Independent Contractor Agreement (ICA) signed in December 2023.
Employers' control over contractors
The FWC agreed. In dismissing the application, it found the practical reality of the arrangement was wholly consistent with the terms of the agreement.
On the question of supervision, the Commission found it could not be attributed to employer control.
"The supervision of the Applicant was a mandated requirement of his registration as a psychologist, and was required as part of him seeking to obtain clinical psychologist status," Deputy President Boyce wrote.
"The position would be the same whether or not the Applicant was an employee or a Contractor."
Similarly, the FWC found there was no evidence that KPIs had been imposed.
"There is no evidence that the Applicant was subject to KPIs," the decision states. "When the Applicant chose to enter into the ICA, he promised to provide the Respondent with a Completed Service in accordance with the terms of the ICA. A Completed Service has nothing to do with a KPI."
Administrative tasks also did not exceed what had been agreed upon contractually, and the applicant retained control over his own calendar, giving him effective control over client allocation.
Additionally, the Commission drew a distinction between control over the conditions of work and control over the substance of work.
"The Applicant's claim that he was not free to take, or not take, on clients, is contrary to the evidence. He had control over his work calendar, and he could (and did), block out time in his calendar which resulted in client bookings not being able to be made during such block out periods," the decision states.
The ruling also directly rejected the notion that a genuine independent contractor must operate entirely free from direction.
"The fact that a principal may require that an independent contractor perform their work at a certain time or place, document the completion of such work, or demand that a particular standard be met, does not mean that 'control' over the work performed is being exercised by the principal," Boyce wrote.
"Any suggestion that for a person to be a 'true' independent contractor they must exist in some form of unbridled utopia, free from all direction and control in the performance of their work, ought never be countenanced."
What this means for HR leaders
Workplace Law said the decision should provide comfort to businesses using contractor arrangements.
"The FWC's comments in this decision should reassure principals or employers that engagement of an independent contractor does not mean that the contractor must be given complete autonomy or freedom over the work that is to be performed," the firm said.
"Independent contractors must also be able to 'fit in' to the way in which a principal requires the work to be done or the service to be provided, and this does not automatically equate to an employment relationship."
