Web and Digital Contractor Agreement Lawyers Adelaide: Contractor or Employee, IP and Confidentiality
Web and digital contractor agreements in South Australia
Digital work is often done by freelancers and small agencies, and the agreement with them decides two things businesses get wrong: whether the person is really a contractor, and who owns what they make. Talon Legal drafts and reviews contractor agreements for Adelaide businesses and agencies that engage developers, designers, copywriters and marketers, and for the freelancers themselves. Book a same-day free 30-minute consultation or call (08) 7094 2021.
Web contractor agreement key facts
| Issue | Position in South Australia |
|---|---|
| Employee or contractor | For Fair Work Act purposes, decided by the real substance, practical reality and true nature of the relationship, considering its totality and how the contract is performed in practice (Fair Work Act section 15AA, from 26 August 2024). |
| The earlier approach | Where a relationship was wholly in a written contract, the plurality of the High Court treated the contract's terms as decisive (CFMMEU v Personnel Contracting at [43] to [44]). Section 15AA was enacted in response. |
| Sham contracting | An employer must not represent an employment contract as a contract for services, unless it reasonably believed the contract was one (section 357). |
| Converting employees | An employer must not dismiss an employee to engage them as a contractor to do the same work (section 358). |
| Unfair terms for contractors | The Fair Work Commission can deal with unfair terms in services contracts of contractors earning below the contractor high income threshold (sections 536NA and 536ND). The ACL also protects small businesses on standard form contracts (ACL section 23). |
| Who owns the work | The contractor, unless there is a written, signed assignment (Copyright Act sections 35(2) and 196(3)). Future work can be assigned in advance (section 197(1)). |
| Moral rights | The contractor keeps them (section 195AN(3)). A written consent covering specified acts and works allows editing and use without attribution (section 195AWA). |
| Confidential information | Protected in equity if identified with specificity, confidential in nature, received in confidence and misused without consent (Optus Networks v Telstra at [39]). |
| Customer data | A business covered by the Privacy Act must take reasonable steps to protect personal information it holds, including where contractors access it (APP 11.1). |
| First step | Same-day free 30-minute consultation. Call (08) 7094 2021. |
Need a web contractor agreement lawyer in Adelaide?
Our web contractor agreement lawyers in Adelaide act for businesses and digital agencies that engage freelance developers, designers, copywriters, marketers and other specialists, and for freelancers reviewing a client’s terms. A contractor agreement sets the work, the fees, the ownership of what is created, confidentiality and how the engagement ends. The Fair Work Act 2009 (Cth) decides whether the relationship is really employment, and the Copyright Act 1968 (Cth) decides who owns the work. This page states the law current to 24 October 2026.
This guide is part of our online business and e-commerce practice. Related guides cover website development agreements, website content and copyright, IT offshoring agreements and technology IP and IT disputes.
Consultants and marketing agencies outside web work can start with our guides to consulting agreements, confidentiality agreements and NDAs and agency and PR agreements.
Free Consultation. Send us the contractor agreement before the work starts. Book a same-day free 30-minute consultation or call (08) 7094 2021.
On this page
- What should a contractor agreement cover?
- Is a freelancer an employee or a contractor?
- What is sham contracting?
- Can contractors challenge unfair terms?
- Who owns the work a contractor creates?
- How should confidential information be protected?
- What about contractors working overseas?
- How should the engagement end?
- How similar matters tend to play out
- How we act on contractor agreements
- Case law
- Frequently asked questions
What should a contractor agreement cover?
The work, the money and the rights. The agreement should describe the services or deliverables, how and when they are delivered, the fee model, invoicing and payment terms, who supplies tools and accounts, and how changes are agreed. For ongoing engagements it should say how much notice either side must give.
It should also deal with ownership of everything the contractor creates, the contractor’s pre-existing materials, confidentiality, access to systems and customer data, insurance, and the return of materials at the end. A web contractor agreement lawyer will also read it for what it says about control, hours and exclusivity, because those terms bear on whether the relationship is really employment.
This page deals with the Fair Work Act. Tax, superannuation and workers compensation obligations should be checked separately.
Is a freelancer an employee or a contractor?
It depends on the real relationship, not the label in the agreement. For the purposes of the Fair Work Act, whether an individual is an employee of a person, in the ordinary meaning of that expression, is determined by ascertaining the real substance, practical reality and true nature of the relationship (section 15AA(1)). The totality of the relationship must be considered, with regard not only to the contract’s terms but also to other factors, including how the contract is performed in practice (section 15AA(2)). Section 15AA commenced on 26 August 2024.
The section changed the approach for Fair Work Act purposes. In CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1, the plurality held that where the parties’ relationship is comprehensively committed to a written contract, not a sham and not varied, the legal rights and obligations in the contract are decisive of its character ([43] to [44]). Section 15AA was enacted as a response to that decision and a companion case (section 15AA note). For Fair Work Act purposes, how the arrangement works day to day now counts alongside the contract.
In practice that means looking at the arrangement as it actually runs. A freelancer with several clients, their own tools and a fixed-price brief looks like a contractor. A full-time “contractor” with a company email address, fixed hours and a manager looks like an employee, whatever the agreement says.
A limited opt-out exists for higher earners. Where an individual’s earnings under the relationship exceed the contractor high income threshold, the person engaging them may notify them, and the individual may then elect that section 15AA not apply to the relationship (section 15AB).
What is sham contracting?
Misrepresenting employment as contracting. A person that employs, or proposes to employ, an individual must not represent to them that the contract of employment is a contract for services under which they work as an independent contractor (Fair Work Act section 357(1)). It is a civil remedy provision.
There is a defence. The provision does not apply if the employer proves that, when it made the representation, it reasonably believed the contract was a contract for services (section 357(2)). In deciding whether the belief was reasonable, regard must be had to the size and nature of the employer’s enterprise (section 357(3)).
Converting staff is also prohibited. An employer must not dismiss, or threaten to dismiss, an employee in order to engage them as an independent contractor to perform the same, or substantially the same, work (section 358).
Can contractors challenge unfair terms?
Yes, in two ways. Under Part 3A-5 of the Fair Work Act, the Fair Work Commission may make an order about a services contract if it is satisfied the contract includes unfair contract terms that, in an employment relationship, would relate to workplace relations matters (section 536NA(1)). The matters it may consider include relative bargaining power, significant imbalance, whether a term is reasonably necessary to protect legitimate interests, whether it imposes a harsh, unjust or unreasonable requirement, and whether total pay is below what employees doing similar work would receive (section 536NB(1)). An application can be made only if the contractor’s annual rate of earnings is below the contractor high income threshold (section 536ND(2)).
The Australian Consumer Law also applies. A contractor that is a small business, with fewer than 100 employees or turnover under $10,000,000, contracting on a standard form, is protected against unfair terms (ACL section 23(1) and (4)). Making such a contract containing an unfair term the business proposed, or relying on one, has been a contravention since 9 November 2023 (section 23(2A) and (2C)).
Who owns the work a contractor creates?
The contractor, unless the agreement assigns it. The author of a literary or artistic work, including code, designs and copy, owns the copyright (Copyright Act section 35(2)). Only work made by an employee under a contract of service belongs to the employer automatically (section 35(6)).
An assignment must be in writing and signed by or on behalf of the assignor (section 196(3)). An agreement signed before work begins can assign the future copyright, which vests in the business as the work is created (section 197(1)). That is the clause most often missing from freelance engagements arranged by email.
Contractors keep moral rights, the rights of attribution and integrity, because those cannot be assigned (sections 193, 195AI and 195AN(3)). A written consent genuinely given, covering specified acts and works, allows the business to edit and publish the work without infringing them (section 195AWA).
Many contractors bring their own tools, templates and code libraries. The agreement should exclude those from the assignment and give the business a perpetual licence to use them in the deliverables. Our website content and copyright guide covers licences in more detail.
How should confidential information be protected?
By a clear clause, backed by equity. Contractors often see source code, customer lists, pricing and product plans. The agreement should define what is confidential, limit its use to the engagement, require security measures, and require return or destruction at the end.
Equity protects confidential information alongside the contract. In Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21, the Full Court set out the elements of a breach of confidence: information identified with specificity, with the necessary quality of confidence, received in circumstances importing an obligation of confidence, and misused, or threatened to be misused, without consent ([39]). The Court also held that an exhaustive contractual definition of confidential information did not, by itself, exclude equitable obligations ([29]).
Customer data raises privacy obligations. A business covered by the Privacy Act must take reasonable steps to protect personal information it holds from misuse, interference, loss and unauthorised access, modification or disclosure (APP 11.1). Contractors with access to customer records should be bound to the same standard and given only the access they need.
What about contractors working overseas?
They add cross-border privacy rules and enforcement problems. Before disclosing personal information to an overseas recipient, a business covered by the Privacy Act must take reasonable steps so that the recipient does not breach the APPs (APP 8.1), and it can be liable for what the recipient does (section 16C). Our IT offshoring agreements guide covers governing law, arbitration and ownership of code written offshore.
How should the engagement end?
With a handover. The agreement should require the contractor to deliver all work in progress, source and design files, credentials and documentation, to return or destroy confidential material, and to confirm deletion of customer data. An APP entity that no longer needs personal information for any permitted purpose, and is not required by law to keep it, must take reasonable steps to destroy or de-identify it (APP 11.2).
It should also settle the final invoice and say which obligations, such as confidentiality and the IP assignment, survive termination. A business that wants a former contractor to stop competing for its clients needs a properly limited restraint, which should be drafted with care.
How similar matters tend to play out
Three illustrations of how the law on this page combines on ordinary facts. They are not predictions. Outcome depends on the documents, the evidence and the court.
Lower range. An Adelaide agency engages a freelance illustrator for a client campaign under an email exchange. The client later wants to use the illustrations in other campaigns. The illustrator owns the copyright (section 35(2)), and nothing was assigned (section 196(3)). A short assignment and moral rights consent, priced into the next job, fixes it.
Middle range. A start-up engages a “contractor” developer full time for 18 months, on fixed hours, with a company laptop and email, reporting to the chief technology officer. The written agreement calls them a contractor. Under section 15AA, the practical reality of the relationship decides, and on these facts it looks like employment, with exposure for unpaid entitlements and sham contracting (section 357).
Upper range. A business ends its in-house design team and offers the same designers contractor agreements to do the same work. Dismissing employees in order to re-engage them as contractors for the same work is prohibited (section 358). The business should take advice before the restructure, not after.
How we act on contractor agreements
We act for businesses and agencies engaging contractors, and for freelancers reviewing terms. For a business, the aim is a relationship that is genuinely contracting, ownership of the work, confidentiality and a clean exit. For a freelancer, it is fair terms, clear scope and payment.
| Stage | What happens | What we do |
|---|---|---|
| Structure | The business decides how to engage the person. | Assess the relationship against section 15AA and the sham contracting rules. |
| Drafting | The contractor agreement is prepared or reviewed. | Draft scope, fees, IP assignment, moral rights consent, confidentiality and data terms. |
| Operation | The engagement changes over time. | Review whether the practical reality still matches a contractor relationship. |
| Dispute | Ownership, payment or status is disputed. | Advise on copyright, the contract and Fair Work exposure. |
| Exit | The engagement ends. | Enforce handover, return of materials and data deletion. |
We cannot promise an outcome, and no lawyer can. We can make sure the agreement matches the relationship and secures the work.
Every hour matters. Book a same-day free 30-minute consultation, or call (08) 7094 2021 now.
Contractor case law
Personnel Contracting shows how employment status was approached before section 15AA. Optus deals with the confidentiality points every contractor engagement raises.
| Case | Court | Principle | Pinpoint |
|---|---|---|---|
| CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 | High Court | Written contract decisive of employment status; for Fair Work Act purposes section 15AA now requires the whole relationship to be considered | [43], [44] |
| Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21 | Full Federal Court | Elements of breach of confidence; contract does not exclude equity | [29], [37], [39] |
Case notes
CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1
The plurality held that where a relationship is comprehensively committed to a written contract that is not a sham or varied, the contract’s legal rights and obligations are decisive of its character ([43] to [44]). The worker was declared an employee (orders). For Fair Work Act purposes, section 15AA, which was enacted in response, now requires the whole relationship, including how the contract is performed, to be considered.
Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21
The Full Court held that an exhaustive contractual definition of confidential information did not exclude equitable obligations of confidence ([29]), that the parties could agree a party alleging misuse may elect between contract damages and an account of profits ([37]), and set out the four elements of breach of confidence in equity ([39]).
Frequently asked questions
Is a freelance web developer an employee?
It depends on the real relationship. For Fair Work Act purposes, the real substance, practical reality and true nature of the relationship decide it, including how the contract works in practice (section 15AA).
Does calling someone a contractor make them one?
No. Since 26 August 2024, for Fair Work Act purposes, the label is only part of the picture, and the way the arrangement works in practice is considered too (section 15AA(2)).
What is sham contracting?
Representing to an employee that their employment contract is a contract for services. It is prohibited unless the employer reasonably believed the contract was one (Fair Work Act section 357).
Can a business turn its employees into contractors?
Not by dismissing them to re-engage them as contractors for the same or substantially the same work, which is prohibited (section 358).
Who owns code or designs a contractor creates?
The contractor, unless the copyright is assigned in writing and signed (Copyright Act sections 35(2) and 196(3)). The assignment can be agreed before the work starts (section 197(1)).
Can a contractor stop a business editing their work?
They keep moral rights, including the right of integrity, which cannot be assigned (sections 195AI and 195AN(3)). A written consent covering specified acts and works removes the problem (section 195AWA).
Can a contractor challenge unfair terms in their agreement?
Yes. The Fair Work Commission can deal with unfair terms in services contracts of contractors earning below the contractor high income threshold (sections 536NA and 536ND), and small businesses on standard form contracts are protected by the ACL (section 23).
How should confidential information be protected with contractors?
With a clear confidentiality clause, limited access and return or destruction at the end. Equity also protects confidential information that is identified with specificity and misused without consent (Optus Networks v Telstra at [39]).
Do contractors need to protect customer data?
The business does, and the contract should pass the standard on. A business covered by the Privacy Act must take reasonable steps to protect personal information it holds (APP 11.1).
Do I need a web contractor agreement lawyer?
For any engagement where the business needs to own the work or the relationship is long-term, yes. A web contractor agreement lawyer can align the agreement with the relationship and secure ownership before the work starts. A free 30-minute consultation will tell you where you stand.