In the case of ACE Insurance Ltd v Trifunovski (No 2) [2012] FCA 793, the Federal Court ordered compensation and imposed a penalty of $10,000 against a company which engaged 5 insurance sales representatives as independent contractors, when in fact they were held to be employees.

Before this case, the company received legal advice that the sales representatives were not employees and acted on this advice. However, since receiving the advice a High court case changed the law on this issue and therefore, invalidated the advice.

The case demonstrates that companies should seek legal advice before engaging an individual as an independent contractor and ensure that such arrangements are reviewed regularly.