Payroll Tax and Service Agreements – What Medical Practices Need to Know in 2026

Payroll Tax and Service Agreements – What Medical Practices Need to Know in 2026

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Payroll Tax and Service Agreements - What Medical Practices Need to Know in 2026

Author: Craig Hong, Zach Sudiro

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3 min read

14 Oct 2026

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    Key Takeaways
  • ࠂ
    Payroll Tax rules vary by State – Exemptions, concessions, thresholds and rates differ across Australia, making it essential for practices to understand their state or territory’s requirements.
  • ࠂ
    Service Agreements matter – Current, signed Service Agreements should accurately reflect practitioner arrangements, including billing, service fees and the flow of funds.
  • ࠂ
    Review & reduce risk – Practices should review agreements, payment arrangements and operational processes to identify potential payroll tax exposure and ensure they are appropriately structured and documented.

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Payroll tax remains a significant issue for medical, dental and allied health practices across Australia.

The application and enforcement of payroll tax varies between states and territories, as do rates, thresholds, exemptions and concessions. This can make it difficult for practices to understand their obligations and assess whether payments made to practitioners may attract payroll tax.

With Revenue Offices continuing to scrutinise practitioner arrangements, practices should understand the rules that apply in their jurisdiction and ensure their contractual, financial and operational arrangements are appropriately structured and documented.

Payroll Tax Relief for Medical Practices by State and Territory

Current as at September 2026. Payroll tax rules and Revenue Office guidance are subject to change.

Australian Capital Territory (ACT)

Annual Threshold: $1.75 million
Rate: 6.75% for annual wages from $1.75 million to $20 million (variable rates for annual wages exceeding $20 million)

GP Clinics:

From 1 July 2025, medical practices that engage general practitioners, or other contractors who perform medical services that are bulk-billed or certain services under the Veteran’s Entitlements Act 1986 (Cth) or under the Workers Compensation Act 1951, are exempt from paying payroll tax on wages for those services performed.

New South Wales (NSW)

Threshold: $1.2 million
Rate: 5.45%

GP Clinics:

From 4 September 2024, medical centres can claim a rebate of payroll tax for payments made to GP Contractors if they meet the relevant proportion of general practitioner services under the “prescribed billing arrangements” which are subject to the following thresholds:

  • Metropolitan Sydney: 80% of general practitioner services; and
  • Other areas: 70% of GP services

Suburb classification can be found on the Revenue NSW website.

The prescribed billing arrangements for general practitioner services include the following:

  • Bulk billing arrangement, where a person responsible for paying for the services assigns their right to a Medicare benefit for the service; and the general practitioner accepts the Medicare benefit as full payment for the service.
  • Veterans arrangement, for general practitioner services, refers to arrangements under which the general practitioner accepts full payment for services listed under the Department of Veteran Affairs and its relevant Acts of Commonwealth; or approved by the Chief Commissioner of Revenue NSW.

Queensland

Threshold: $1.3 million
Rate: 4.75% for annual wages below $6.5 million and 6.95% for annual wages more than $6.5 million

GP Clinics:

From 1 December 2024, wages paid to contracted GPs are exempt from payroll tax.

Dental Clinics:

An amnesty was provided for payments made to contracted and registered dentists from 1 July 2018 to 30 June 2025. There are currently no exemptions or amnesties available for dental clinics in Queensland.

South Australia

Threshold: $1.5 million (with up to $600,000 deduction)
Rate: 0%-4.95% (variable for annual wages between $0 to $1.7million)

GP Clinics: From 1 July 2024, an ongoing exemption applies to wages relating to bulk-billed services only.

The bulk-billing exemption applies to GP services and does not extend to other staff, pathology or allied health services.

Dental & Specialist Clinics:

Currently, no relief or exemptions apply after 1 July 2024.

Victoria

Threshold: $1 million
Rate: 4.85%

GP Clinics:

From 1 July 2025, a payroll tax exemption applies only to wages paid or payable by a general practice medical business to contractor GPs for medical services performed that are fully-funded consultations. This exemption does not apply to dental or allied health medical centres.

Western Australia

Threshold: $1 million
Rate: 5.5%

Western Australia assesses payroll tax based on a common law employer-employee relationship rather than extended contractor provisions. Doctors who run their own true businesses are generally not counted as taxable wages.

The $1 million payroll tax threshold is subject to a diminishing threshold for employers or groups with Australian taxable wages between $1 million and $7.5 million.

Medical Clinics:

WA does not apply payroll tax to payments made to contracted GPs or allied health practitioners.

Tasmania

Threshold: $1,250,001 million
Rates: 4% for annual wages between $1,250,001 million and $2 million. 6.1% for annual wages above $2 million.

Medical Clinics:

There are no exemptions or amnesties currently available.

Tasmania has not issued public guidance on how payroll tax applies to medical centres.

Northern Territory

Threshold: $2.5 million
Rate: 5.5% for annual wages less than $100 million, 6.5% for annual wages more than $100 million.

Medical Clinics:

There are no exemptions or amnesties currently available.

The Northern Territory has not issued public guidance on how payroll tax applies to medical centres.

Increased Scrutiny - Is your Practice Audit-Ready?

While greater certainty now exists in some jurisdictions, there is no single Australian payroll tax position for medical practices.

Revenue Office audit activity is continuing, with practitioner arrangements, contractor payments and the supporting financial and operational records of practices coming under scrutiny.

Practices that cannot rely on an exemption or concession should review their practitioner arrangements and supporting documentation to identify and address potential payroll tax exposure.

One of the key documents is the Service and Facilities Agreement (SFA).

What is a Service and Facilities Agreement?

An SFA governs the relationship between a practice and an independent practitioner operating their own medical or healthcare business.

Under a typical arrangement, the practice provides the practitioner with facilities and administrative services required to operate their business, and the practitioner pays the practice a service fee in return.

An SFA should clearly document the parties' respective rights and obligations, including the services and facilities provided, practitioner independence, service fees, billing and payment arrangements, patient records and termination arrangements.

Why Service Agreements Matter for Payroll Tax

A well-drafted SFA can help:

  • Clearly establish the intended legal and commercial relationship between the practice and practitioner;
  • Document how patient fees and service fees are collected and paid;
  • Support the practice's payroll tax position;
  • Ensure contractual arrangements align with the way the practice operates;
  • Reduce the risk of disputes during and after a practitioner's engagement; and
  • Support future restructuring, sale or succession.

However, simply having an SFA is not enough.

Revenue Offices may look beyond the title of an agreement when determining whether practitioner payments are subject to payroll tax. The terms of the agreement, the flow of funds between the patient, practitioner and practice, and the way the arrangement operates in practice can all be relevant.

Don't Overlook the Flow of Funds

How patient fees are collected and how service fees are paid can be particularly important.

Practices should review their banking and payment arrangements alongside their SFAs to ensure the documented arrangement is appropriately structured and accurately reflects the intended relationship between the practice and practitioner.

Changes to payment gateways, EFTPOS arrangements, bank accounts, billing systems or administrative processes should also prompt a review of the relevant SFA and payroll tax position.

Make sure your Agreements are Signed

An unsigned or expired agreement can create significant risk.

Practices should ensure SFAs are properly executed before a practitioner commences, rather than treating signatures as an administrative task to be completed later.

Electronic signing, central agreement registers, automated reminders and clear responsibility for practitioner onboarding can help ensure agreements do not remain unsigned or expire unnoticed.

What should Medical Practices do Now?

Medical, dental and allied health practices should:

  • Understand the payroll tax rules, rulings and exemptions that apply in their state or territory;
  • Assess whether practitioner payments may be subject to payroll tax;
  • Ensure every practitioner has a current and signed SFA;
  • Review the flow of funds and banking arrangements between patients, practitioners and the practice;
  • Check that SFAs accurately document the intended practitioner arrangements;
  • Review agreements when billing processes, ownership, structure or operational arrangements change; and
  • Seek legal and accounting advice where there is uncertainty or potential exposure.

How Hillhouse can help

Payroll tax and practitioner arrangements are complex, and the position continues to evolve.

Hillhouse Legal Partners works closely with medical, dental and allied health practices to provide practical, commercially focused advice on Service and Facilities Agreements, practitioner arrangements and payroll tax risk.

If your practice does not have current SFAs in place, your agreements have not been reviewed recently, or you are concerned about your payroll tax position, now is the time to act.

Our experienced Health & Medical legal team can help you identify potential risks, strengthen your agreements and implement practical solutions that work for your practice.

Contact Craig Hong, or Zach Sudiro on (07) 3220 1144 or email@hillhouse.com.au.

Areas of Expertise

Health & Medical
Corporate & Commercial
Related Posts:
Australia’s New Merger Laws Are Now in Force: What Business Owners Need to Know

Australia’s New Merger Laws Are Now in Force: What Business Owners Need to Know

Home » Corporate & Commercial

Australia’s New Merger Laws Are Now in Force: What Business Owners Need to Know

Author: Vicki Yeung, Malcolm Chan

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3 min read

10 Sep 2026

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    Key Takeaways
  • ࠂ
    Mandatory ACCC notification has applied since 1 January 2026 to acquisitions that meet the relevant thresholds and are not exempt.
  • ࠂ
    Further requirements for certain asset acquisitions and share acquisitions resulting in specified voting-power increases commenced on 1 April 2026. The voting-power requirements apply only where the general notification thresholds are also met.
  • ࠂ
    A notifiable acquisition cannot be completed until ACCC approval is obtained or a notification waiver is granted.
  • ࠂ
    The Phase 1 notification fee is $56,800 for 2026-27, while Phase 2 fees can be significantly higher.
  • ࠂ
    Early advice can help businesses work out whether notification is required and build realistic timing and costs into the deal.

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Australia’s merger laws changed significantly on 1 January 2026. For acquisitions that meet the notification thresholds, businesses must now notify the Australian Competition and Consumer Commission (ACCC) and obtain clearance before the deal can proceed.

Since the new regime began, further asset and voting-power thresholds have commenced and the ACCC has updated its guidance based on the first months of operation. If you are buying a business, shares or assets, merger clearance now needs to be considered early - not just before completion.

What’s Changed on 1 January 2026?

Australia moved from a largely voluntary merger clearance system to a mandatory regime. If an acquisition is within scope, meets a notification threshold and no exemption applies, the parties must notify the ACCC and wait for clearance before completing.

The rules apply broadly to acquisitions of shares and assets. They can also capture a series of smaller acquisitions over time.

New from 1 April 2026: asset and voting-power thresholds

The merger regime was expanded further on 1 April 2026, introducing additional notification requirements that businesses need to consider when assessing a proposed acquisition. These changes apply to:

  1. Certain asset acquisitions

Some acquisitions of assets that do not comprise all or substantially all of a business may now require notification where the relevant acquirer-revenue and transaction-value thresholds are met.

  1. Changes in voting power

Additional rules can apply to certain increases in voting power. The precise trigger differs according to the type of target entity, the acquirer’s existing voting power and whether the acquirer controls the target. For example, this can include an increase from 20% or less to more than 20% in an unlisted company that is not widely held, or an increase from more than 20% but less than 50% to 50% or more in a body corporate. Not every increase in voting power above 20% automatically requires notification.

Do You Need to Notify the ACCC?

The thresholds are not simply a single dollar test. The main tests are generally summarised below:

Threshold When it may apply Key figures
Large merged firm The combined Australian revenue of the parties is substantial and the target revenue or transaction-value limb is met. Combined Australian revenue of at least $200m AND the:·         target Australian revenue is at least $50m; OR·         global transaction value is at least $250m
Very large acquirer A very large Australian business acquires a smaller target. Acquirer group Australian revenue is at least $500m AND target Australian revenue is at least $10m
Serial acquisitions Relevant acquisitions during the preceding
3 years may be aggregated where they predominantly involve the same or substitutable goods or services.Note: The ACCC’s August 2026 FAQs confirm that qualifying acquisitions completed before 1 January 2026 may be counted but acquisitions with target Australian revenue below $2m are excluded.		 Ordinary $200m combined-revenue or $500m acquirer-revenue limb must still be met (subject to exclusions).  That is the accumulated target Australian revenue is at least $50m (large merged firm) or $10m (very large acquirer).
Certain asset acquisitions From 1 April 2026, some asset acquisitions that are not all or substantially all of a business can be caught. Applies where the acquirer group has Australian revenue of at least $200m AND:·         global transaction value is at least $200m; OR·         Australian revenue is at least $500m AND global transaction value is at least $50m

Important: Where one or more of the notification thresholds above are met, notification is only required if the target is connected with Australia and no exemptions apply.  Meeting a monetary threshold is only part of the analysis.  Every transaction needs to be considered on its own facts. The Australian connection, exemptions, transaction structure, voting power and previous acquisitions may also matter. 

What about Exemptions?

Some transactions are exempt even if a threshold would otherwise be met. Exemptions cover particular land and financial-market transactions, internal restructures, acquisitions by external administrators and other specified arrangements.

The practical message? Do not assume a deal is outside the regime because it involves assets, a minority interest or a smaller target. Check the rules early.

The Application Process

For a transaction that may need ACCC clearance, the process can be viewed in four steps:

 

ACCC-Flow-Chart

Which Pathway Should You Use?

For straightforward transactions, the ACCC says the short notification form will be appropriate in most cases. A long form is more likely to be needed where there is greater competition risk or complexity.

A notification waiver may be available for a transaction that technically meets a threshold but clearly does not raise material competition or consumer concerns. If granted, the waiver removes the obligation to lodge a formal notification. A waiver application is not simply a preliminary step before a formal notification, and businesses should choose the pathway that best fits the transaction. If the ACCC does not decide a waiver application within 25 business days, it cannot grant the waiver and is considered a deemed refusal.

Pre-notification discussions are optional but can be useful for complex deals or where the information requirements are unclear. The FAQs also confirm that parties may be able to notify on the basis of a sufficiently developed Heads of Agreement rather than waiting for every transaction document to be finalised.

How long can the ACCC review take - and what does it cost?

Stage Timing What it means 2026-27 fee
Pre-notification discussion No set timeline Allows parties to provide draft notification application and transaction documents to identify if further information is needed.ACCC recommends parties initiate this process at least 2 weeks before formal notification for acquisitions that clearly do not raise material concerns.If no determination is made in 25 business days, the application will be deemed to be denied. $8,300
Phase 1 Up to 30 business days* Initial review of application lodged.  Most transactions are expected to be resolved here. Earliest approval is generally in
15 business days.  Merger will either be cleared in this phase or progress to Phase 2.		 $56,800
Phase 2 Up to a further 90 business days* A deeper review where competition concerns require further assessment. At the end, the merger can be put into effect with or without conditions or be blocked by the ACCC. $475,000 to $1.595m (additional fee, depending on transaction value)
Public-benefit application
(where available)		 50 business days* Optional application. Only available after the ACCC has either not approved the acquisition or approved it subject to conditions. Must be made within 21 calendar days after the relevant ACCC decision. $401,000

* Statutory periods can be extended or adjusted in certain circumstances or unilaterally varied by the ACCC.

One Timing Trap to Remember

ACCC approval does not always mean the transaction can complete immediately. There is generally a 14-calendar-day period after the ACCC publishes its reasons before completion can occur, allowing time for an application to the Australian Competition Tribunal. An approved acquisition generally also needs to be completed within 12 months of the ACCC’s decision.

What’s Happening in Practice

The ACCC’s half-year results give businesses some useful comfort. From 1 January to 30 June 2026, it received 145 merger notifications and 286 notification waiver applications. It approved 115 notifications in Phase 1, with 6 notifications progressed to Phase 2 for a more in-depth assessment.

The ACCC also reported that 92% of acquisitions were decided within 20 business days through either an early Phase 1 decision or a notification waiver. That is encouraging, but businesses still need to allow time before lodgement to assess thresholds, prepare the application and deal with information requests.

Four Things to do Before Your Next Acquisition

1. Check the ACCC notification rules early, while the deal structure and timetable are still being developed.

2. Look at the parties’ Australian revenue, transaction value and relevant acquisitions made during the previous 3 years and consider whether the April 2026 asset or voting-power rules apply.

3. Build ACCC timing, fees and the post-approval waiting period into the transaction documents and completion plan.

4. Get advice before assuming an exemption or notification waiver will apply.

The Bottom Line

The new merger regime is now part of doing deals in Australia. For many acquisitions, the ACCC process will be straightforward. But if notification is required, getting the timing or threshold analysis wrong can delay completion and add significant cost.

The best approach is to consider merger clearance at the start of the transaction, so you know what is required before the deal gathers momentum.

Planning an Acquisition? Talk to Us Early.

If you are buying a business, shares or assets, getting the ACCC analysis right from the outset can save time, cost and uncertainty later.

Our Hillhouse Corporate & Commercial team can help you assess whether notification is required, identify the right ACCC pathway and structure the transaction around a realistic approval and completion timetable.

Contact Vicki Yeung, Senior Associate or Malcolm Chan, Associate, to discuss your proposed acquisition before you commit to the deal timetable.

E: vicki@hillhouse.com.au or malcolm@hillhouse.com.au

P: 07 3220 1144

This article is general information only and reflects the position as at September 2026. It is not legal advice. Merger notification requirements are transaction-specific and may change.

Areas of Expertise

Corporate & Commercial
Related Posts:
AI in Healthcare: Managing Privacy, Legal & Compliance Risks

AI in Healthcare: Managing Privacy, Legal & Compliance Risks

Home » Corporate & Commercial

AI in Healthcare: Managing Privacy, Legal & Compliance Risks

Author: Craig Hong

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3 min read

20 Aug 2026

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    Key Takeaways
  • AI can improve efficiency and patient care, but healthcare professionals remain responsible for protecting patient information and meeting their legal and professional obligations.
  • Practices should understand how AI providers collect, store and use patient data, and ensure their privacy policies and patient consent processes reflect their use of AI.
  • AI should support, not replace, professional judgement, with appropriate governance, cybersecurity safeguards and oversight in place.

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"Artificial Intelligence is transforming healthcare, offering significant opportunities to improve efficiency and patient care. However, innovation must be supported by strong governance, robust privacy practices and sound clinical judgement. Understanding your legal obligations before implementing AI is essential to protecting your patients, your practice and your reputation."

Craig Hong - Director, Hillhouse Legal Partners

Artificial Intelligence (AI) is rapidly changing the way healthcare is delivered. From AI-powered clinical scribes and practice administration to diagnostic support and patient communications, AI is helping healthcare professionals improve efficiency, reduce administrative burden and enhance patient care.

However, these technologies also introduce important legal, privacy and compliance obligations. Healthcare professionals, practice owners and healthcare businesses remain responsible for protecting patient information, obtaining appropriate consent, complying with privacy legislation and ensuring AI supports, not replaces, professional judgement.

This fact sheet outlines the key legal considerations every healthcare professional should understand before implementing or expanding the use of AI.

How AI Is Being Used in Healthcare

AI is increasingly being integrated into both clinical and administrative functions, including:

Practice Administration

  • AI clinical scribes and consultation transcription
  • Appointment scheduling and workflow management
  • Billing and administrative support
  • Patient communications

Clinical Support

  • Diagnostic assistance
  • Clinical decision support
  • Identification of potential medication interactions
  • Medical imaging analysis

Research & Innovation

  • Clinical research
  • Drug discovery and development
  • Analysis of large health datasets

While AI can significantly improve efficiency, it also creates new legal, privacy and governance responsibilities for healthcare professionals and healthcare businesses.

Key Legal Considerations Before Introducing AI

Before implementing any AI platform, healthcare professionals and practices should carefully assess how the technology collects, stores and uses patient information.

Where Is Your Patient Data Stored?

Many AI providers process or store information using overseas servers. Before adopting an AI platform, healthcare professionals and practices should understand:

  • where patient information is stored;
  • whether information is transferred outside Australia;
  • whether overseas privacy protections are comparable to Australian standards; and
  • whether additional patient consent is required.

Does the AI Provider Use Your Data?

One of the most important questions to ask any AI supplier is whether uploaded information is used to train or improve its AI model.

Before engaging an AI provider, healthcare professionals and practices should understand:

  • whether patient information is retained;
  • whether information is anonymised;
  • whether data is used for ongoing AI development;
  • whether this can be contractually prevented; and
  • how information is permanently deleted when no longer required.

Healthcare professionals and practices should exercise particular caution when using free or consumer AI platforms, as patient information may be retained or used to improve the provider's AI model.

Review Your AI Supplier Agreement

Before purchasing or subscribing to an AI platform, carefully review the provider's terms and conditions. Key contractual issues include:

  • ownership of uploaded information;
  • confidentiality obligations;
  • cybersecurity standards;
  • data retention periods;
  • liability if the system fails;
  • termination rights; and
  • deletion of patient information when the agreement ends.

Understanding these contractual arrangements before implementation can help minimise legal, privacy and operational risks.

Privacy & Patient Consent

Patient health information is among the most sensitive forms of personal information protected under the Privacy Act.

If AI is used within your practice, patients should be informed: that AI is being used;

  • what information is collected;
  • how that information is used;
  • where it is stored;
  • whether information is disclosed overseas; and
  • whether any automated decision-making occurs.

Privacy policies and patient consent documentation should accurately reflect the use of AI within the practice.

Where appropriate, patients should also have the opportunity to ask questions and opt out of AI-assisted processes.

From 10 December 2026, organisations subject to the Privacy Act will also be required to disclose the use of automated decision-making processes involving personal information in their privacy policies.

AI Does Not Replace Professional Responsibility

AI is designed to support healthcare professionals, not replace them. Healthcare professionals remain responsible for:

  • exercising independent clinical judgement;
  • reviewing AI-generated information;
  • ensuring clinical decisions remain appropriate;
  • maintaining accurate patient records; and
  • meeting all professional and ethical obligations.

AI is a tool to support clinical decision-making, not replace it. Healthcare professionals remain legally responsible for patient care.

Medicare & Billing Considerations

Healthcare professionals and practice owners should also consider the Medicare implications of AI-assisted healthcare.

While AI may assist with documentation or clinical support, healthcare professionals remain responsible for ensuring Medicare billing requirements are satisfied.

Healthcare professionals should not assume services generated primarily through AI will qualify for Medicare benefits without appropriate clinical involvement.

Cybersecurity & AI

AI increases cybersecurity risks, making it essential that healthcare professionals and practices ensure AI providers meet appropriate security standards and patient information remains protected.

This includes:

  • multi-factor authentication;
  • secure user access controls;
  • encryption of patient information;
  • regular software updates;
  • incident response planning; and
  • ongoing staff training.

Healthcare continues to be one of Australia's most targeted industries for cyber incidents, making robust cybersecurity practices essential.

AI Governance Is Essential

As AI becomes more widely used across healthcare, practices should establish clear governance around its implementation, while healthcare professionals should understand their professional responsibilities when using AI to support patient care.

This may include:

  • an approved AI usage policy;
  • staff education and training;
  • documented approval processes for new AI tools;
  • regular review of AI outputs;
  • periodic supplier reviews; and
  • ongoing monitoring of legislative and regulatory developments.

Good governance helps ensure AI is used safely, ethically and in compliance with legal and regulatory obligations.

What Healthcare Professionals Should Do Now

To minimise risk and support compliance, we recommend:

  • understanding how AI is currently being used within your practice;
  • reviewing AI supplier agreements and licence terms;
  • confirming where patient information is stored and processed;
  • reviewing privacy policies and patient consent documentation;
  • ensuring appropriate cybersecurity safeguards are in place;
  • developing or reviewing internal AI governance policies;
  • providing staff education and training on the appropriate use of AI;
  • considering Medicare billing implications; and
  • obtaining legal advice before implementing new AI technologies.

How Hillhouse Legal Partners Can Help

Hillhouse Legal Partners has been supporting Australia's health and medical profession for over 30 years.

  • Our Corporate & Commercial team regularly advises healthcare professionals, practice owners and healthcare businesses on:
  • AI governance and implementation;
  • Privacy Act compliance;
  • patient consent documentation;
  • AI supplier and software agreements;
  • technology procurement;
  • cybersecurity and data governance;
  • medical practice risk management; and
  • regulatory compliance.

We understand the commercial realities of modern healthcare and provide practical, commercially focused advice to help our clients embrace innovation while managing legal and regulatory risk.

Need Advice on AI in Your Practice?

Artificial Intelligence is evolving rapidly, but your legal obligations remain.

Whether you are introducing AI for the first time or reviewing
existing systems, our experienced team can help you navigate
the legal, privacy and regulatory considerations with confidence.

This fact sheet provides general information only and should not be relied upon as legal advice. Specific legal advice should be obtained based on your individual circumstances.

Areas of Expertise

Corporate & Commercial
Health & Medical
Related Posts:
Contractor or Employee? What a Recent Fair Work Decision Means for Businesses

Contractor or Employee? What a Recent Fair Work Decision Means for Businesses

Home » Corporate & Commercial

Contractor or Employee? What a Recent Fair Work Decision Means for Businesses

Author: Robert Lamb, Anthea Sun

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3 min read

11 Aug 2026

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    Key Takeaways
  • ࠂ
    Some direction or oversight of an independent contractor does not, by itself, make them an employee.
  • ࠂ
    When determining whether someone is a contractor or employee, the Fair Work Commission (FWC) will look at the whole relationship - including the terms of the contract and how the arrangement operates in practice.
  • ࠂ
    Businesses engaging contractors should ensure their agreements accurately reflect the intended relationship and, importantly, that the arrangement operates consistently with those terms in practice.

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Businesses engaging independent contractors will often need to provide some level of direction or oversight to ensure work meets their operational and professional requirements.

But when does that oversight become enough to suggest the contractor is actually an employee?

A recent Fair Work Commission decision involving a registered psychologist provides useful guidance for businesses, particularly professional and healthcare practices engaging independent contractors.

The Case

In Williams v Mind Matters Sydney Pty Ltd [2026] FWC 1163, a registered psychologist engaged under an Independent Contractor Agreement claimed that, despite the terms of his agreement, the way he worked in practice meant he was actually an employee.

This distinction was important because he was seeking to pursue a general protections dismissal claim under the Fair Work Act 2009.

The psychologist argued that he was effectively an employee because:

  • he was subject to day-to-day supervision;
  • he received instructions about how to perform certain tasks;
  • he was required to complete administrative tasks;
  • he was required to meet Key Performance Indicators (KPIs);
  • he did not have complete freedom to select his clients; and
  • he was required to provide six weeks’ notice to suspend his room rental arrangement.

Mind Matters maintained that he had always been engaged as an independent contractor.

What Did the Fair Work Commission Consider?

The FWC looked at the overall relationship between the psychologist and the practice and found that the way the arrangement operated was consistent with the Independent Contractor Agreement.

Importantly, some of the factors the psychologist relied on did not necessarily point to an employment relationship.

For example, his supervision was a requirement of his professional registration. The administrative requirements and alleged KPIs were also consistent with obligations contained in his contractor agreement.

He retained control over his availability and therefore when he could accept clients.

The FWC also found that a business can place certain requirements on a contractor without automatically creating an employment relationship. Mind Matters could set requirements around when and where services were provided, documentation and professional standards, but it did not control how the psychologist delivered his professional services to clients.

Other practical factors also supported his status as an independent contractor. He worked at another psychology practice, operated as a sole trader, invoiced under his own ABN and charged GST.

The Decision

Looking at the relationship as a whole, the FWC found that the psychologist was an independent contractor, not an employee.

The Independent Contractor Agreement was found to be valid and enforceable, and the way the parties worked together was consistent with its terms. As a result, the psychologist could not pursue his claim on the basis that he had been dismissed as an employee.

What Does This Mean for Businesses?

This decision is a useful reminder that having an Independent Contractor Agreement is important - but the agreement also needs to accurately reflect the relationship in practice.

If your business or practice engages contractors:

  • make sure your contractor agreements clearly reflect the intended working relationship;
  • ensure the way you work with contractors is consistent with those agreements;
  • be mindful of the level and type of control you exercise over contractors; and
  • regularly review contractor arrangements as roles and working practices evolve.

Getting the arrangement right from the outset can help reduce uncertainty and the risk of costly disputes later.

If you engage independent contractors and are unsure whether your agreements or working arrangements appropriately reflect the relationship, our Employment & Industrial Relations team can help.

Contact Robert Lamb or Claudia Molachino on 07 3220 1144, or email our team at email@hillhouse.com.au to discuss your contractor arrangements.

Areas of Expertise

Employment & Industrial Relations
Corporate & Commercial
Related Posts:
ACCC v Coles: A Landmark Case in Consumer Protection

ACCC v Coles: A Landmark Case in Consumer Protection

Home » Corporate & Commercial

ACCC v Coles: A Landmark Case in Consumer Protection

Author: Craig Hong, Claudia Molachino

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3 min read

19 May 2026

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    Key Takeaways
  • ࠂ
    The Federal Court’s findings against Coles over its “Down Down” campaign show that retailers may breach consumer law when advertised discounts are based on prices that were only briefly increased beforehand
  • ࠂ
    The case highlights that even commercially justified price increases can still mislead consumers if “sale” pricing does not reflect a genuine and sustained previous price
  • ࠂ
    The decision sends a strong warning to supermarkets and retailers that discount advertising must accurately represent real consumer savings under Australian Consumer Law

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ACCC v Coles: A Landmark Case in Consumer Protection

On 14 May 2026, the Federal Court of Australia found that Coles Supermarkets Australia Pty Ltd (Coles) made false or misleading representations about the prices of products, in contravention of sections 18(1) and 29(1)(i) of the Australian Consumer Law (ACL).

Background

The Australian Competition and Consumer Commission (ACCC) commenced proceedings against Coles in September 2024, alleging that it made false or misleading representations about the prices of 245 products (affected products). Separately, a class action was also brought against Coles in relation to those products. The Federal Court previously ordered that liability in both proceedings be determined jointly.

The allegations concerned Coles’ ‘Down Down’ promotional pricing tickets, which advertised discounted prices against a ‘Was’ price. It was alleged that Coles temporarily increased the prices of the affected products by at least 15% for a relatively short period before including those products in its Down Down promotion at prices that were the same as, or higher than, the original prices. The ACCC argued that the discounted prices were not genuine and were therefore false or misleading.

Key issues

The Court considered a sample of 14 affected products and accepted that the Down Down tickets conveyed to ordinary consumers that Coles had discounted the price of those products from the ‘Was’ price and that the discount was genuine.

To determine whether consumers had been misled, Justice O’Bryan considered, in relation to the sampled products:

  1. the reason/s for the price increase prior to inclusion in the Down Down promotion
  2. the extent of the price increase
  3. the number of products sold at the ‘Was’ price
  4. how long the products were sold at the ‘Was’ price

His Honour concluded that:

  1. the price increases were due to increases in supplier costs and were commercially justifiable
  2. the increased prices were not ‘artificially high’
  3. products were sold at the ‘Was’ price in the ordinary course of business and in commercial volumes
  4. products were generally sold at the ‘Was’ price for four weeks, which, having regard to the matters below, was not a reasonable period

In determining what constituted a reasonable period, the Court considered several matters, including a previous internal policy requiring a product to be sold at a particular price for 12 weeks before that price could be advertised as a ‘Was’ price on a Down Down ticket. Notably, that policy had been relaxed due to perceived competitive pressure from Woolworths.

The Court considered that if an ordinary consumer were told a product had been sold at the ‘Was’ price for less than 12 weeks, they would not regard the discount as genuine.

Decision

The Court ultimately found that 13 of the 14 sampled Down Down tickets were misleading because the ‘Was’ prices displayed on the promotional tickets were not maintained for a reasonable period and did not accurately represent the previous prices of the products. As a result, the discounts represented were not genuine and were misleading.

The only sampled Down Down ticket found not to be misleading did not include a ‘Was’ price.

Penalties and other orders sought by the ACCC, as well as compensation sought separately in the class action, are yet to be determined by the Federal Court, although it is anticipated that the amounts involved will be substantial.

Impact for businesses

The judgment serves as an important reminder for businesses to maintain transparency and accuracy in their marketing practices. Businesses should review their promotional strategies and internal policies to ensure strict compliance with the ACL.

If you are unsure about your obligations, please contact us.

 

Areas of Expertise

Corporate & Commercial
Related Posts:
The Cost of Poor Documentation to Medicos – Webinar with Hillhouse and Pilot Partners

The Cost of Poor Documentation to Medicos – Webinar with Hillhouse and Pilot Partners

Home » Corporate & Commercial

The Cost of Poor Documentation to Medicos – Webinar with Hillhouse and Pilot Partners

Author: Craig Hong

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54 min watch

5 May 2026

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    Missed the live session? You can now watch the replay.

    With increased ATO scrutiny and recent court decisions placing medical practices under the spotlight, this practical webinar with Craig Hong (Hillhouse Director) and Tom Howard (Pilot Partners Associate Partner – Taxation) unpacks where practices are being caught out - particularly around documentation and intra-group arrangements - and what you should be doing now to reduce risk.

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    Areas of Expertise

    Corporate & Commercial
    Health & Medical
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