Australia’s fitness industry has long preferred independent contractors over in-house employees as they’re easier for businesses to set up and manage. Recently however, gyms have been switching to traditional employment relationships as a way of limiting ‘risks’ in their operations, which frankly, leaves us baffled.

KX Pilates, a rapidly growing fitness company based in Victoria, has recently converted all of its trainers into employees in all of their studios spread across five states, for fear of running into Fair Work and ATO issues in the future.

The reason: the blurred line that determines whether a worker is indeed an independent contractor or an employee. They believe that the ongoing ambiguity in classifying their workforce places their operations at risk. This in turn could limit business growth and creates uncertainty in planning and forecasting.

It’s worth mentioning here that the company spent hundreds of thousands to bring about this change.

Needless to say, such a transition is drastic and not feasible or warranted for other fitness clubs. What the company did seems like a knee jerk reaction that may not consider best practice, and it could actually have the negative effect of putting them in the jurisdiction of the FWO and other regulators.

The majority of fitness trainers are independent contractors for good reason. Gym memberships constantly fluctuate, so flexibility in work hours is key for both trainer and owner to maximise worker availability. Moreover, the additional costs involved with permanent staff is also a considerable concern.

At Certica, we believe you can have your cake, and eat it too. Fitness centres and other businesses can take advantage of engaging independent contractors, who in turn can still receive benefits that are normally afforded only to employees, such as superannuation and WorkCover.

It all depends on having a system in place that manages the required compliances laid out by the FWO, as well as other statutory obligations, to ensure a contracting relationship is observed and maintained, both in write my research paper and in practice.

We might have to wait a long time before we can hope to see the contractor-vs-employee debate settled once and for all. Nevertheless, there’s certainly a way for organisations to address any perceived fears with their contractor workforce. Risks can be mitigated by carefully examining current processes and policies, and then applying the corresponding compliant measures.

If you have concerns about your own contracting arrangements, we urge you to seek industrial relations advice – our IR Champions are always ready to help.

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