A Subcontractor Agreement is a legally binding contract between the head contractor and the subcontractors.
This contract defines who is responsible for:
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For the construction industry only
For non-construction industries
e.g. truck drivers, freight, cleaners, couriers, sales, contractors.
The head contractor must get an independent contractor agreement signed by the independent contractor to formalise and define the relationship between them.
If someone is hired for a few hours, or a couple of days at a time, this does not define them as an independent contractor.
Just because someone works under an ABN, this does not define them as an independent contractor.
A person submitting an invoice for works completed does not define them as an independent contractor.
Contracting arrangements are commonplace, but it does not mean that a particular person can be treated as an independent contractor.
If a worker is legally an employee; having a signed agreement will not override the employment relationship or make the worker an independent contractor.
Clearly sets out the rights and obligations of each party, the head contractor and the sub contractor.
Assists the head contractor, thereby ensuring they are working within the limits of the law in providing a strong, concise foundation for the basis of the business relationship.
Starting work without a signed Subcontractor Agreement means the head contractor’s position is not clear; or even worse, extremely weak.
Greatly reduces the risk of uncertainty.
Used by the head contractor for low-medium cost, average-term jobs.
-Multiple projects for a defined period of time (Eg.12 months)
Used by Head Contractor for high-cost, long-term jobs.
Must be signed by the Sub Contractor for every new project.