What is the results test?

A person engaged under a contract mainly for the supply of work, will be a worker if they do not meet all three elements of the results test.

For a person to meet the three elements are, they:

• are paid to achieve a specified result or outcome and
• have to provide the plant and equipment or tools of trade needed to perform the work and
• are, or would be, liable for the cost of rectifying any defect in the work performed.

1. Achieving a specified result or outcome

To satisfy this element of the results test, generally the person’s contract must require:

the person to complete a specified result and

that payment is an agreed price, based on completing the specific result, rather than an hourly or daily rate.

To satisfy this part of the test, the contract to complete a specified result or outcome must be with one individual (person). A person engaged as part of a group or gang will not satisfy this part of the test.

A person engaged under an overall contract for ongoing work will also not satisfy this element of the results test.

2. Providing the plant and equipment or tools of trade needed to perform the work

To satisfy this element of the results test, the person’s contract must usually require that the person provide all the plant and equipment or tools of trade that he or she needs to perform the work under the contract.

3. Liability for the cost of rectifying defects in the work performed

To satisfy this element of the results test, the person’s contract must make him or her legally liable for the cost of rectifying any defect in the work performed.

Rectification would normally require the person to be responsible for the supply of the labour necessary to rectify the faulty work. If the person would be responsible for paying for the faulty work to be corrected, for completing the work in his or her own time, or to have an amount deducted from retention monies, they meet the third element of the results test.

A contractual requirement to hold professional or product liability insurance may demonstrate that a person is liable for rectifying defects in their work. It should be clear that the insurance would cover the cost of rectifying defects in the person’s work. Public liability insurance will not satisfy this element of the results test.

What is the ‘Substantially Labour Only Test’?

A person who is engaged for labour only or substantially labour only, will be considered a worker. If the payment to the person is mainly for labour, then the person will be a worker. If the payment to the person is mainly for equipment, then the person will not be a worker.

What evidence is needed for the results test?