The Independent Contractors Act 2006 relies on the common law meaning of independent contractor. The common law is a set of legal principles, which have been developed through decisions in the courts. In order to determine whether a person is an independent contractor or an employee, a court considers a number of factors which look at the entire working relationship on balance.

Generally, an independent contractor works to achieve the results in terms of the contract and maintains a high level of discretion and flexibility as to how the work is to be performed. However, the contract may contain precise terms as to materials used and methods of performance, and still be a contract for specific services. These are only some of the factors the courts would take into account.

In making a decision, the courts consider the individual circumstances of a case while providing appropriate recognition to the key characteristics of employees and independent contractors.