Technology & Cyber Risk Law FAQs

Misclassifying a software developer as an independent contractor when they are legally an employee is a severe compliance risk. While the High Court in CFMMEU v Personnel Contracting previously prioritised the written contract, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) introduced a statutory test requiring an assessment of the real substance and practical reality of the relationship. If a developer works full-time for your startup, uses your equipment, and cannot delegate tasks, they are highly likely to be deemed an employee, triggering superannuation and leave back-pay liabilities.

While the Fair Work Act 2009 (Cth) does not explicitly mandate a single written document, failing to execute a written contract creates immense legal exposure. Without a written agreement, the terms of employment default to the applicable modern award and the National Employment Standards. A written contract allows a startup to set lawful terms beyond the minimum, including confidentiality obligations, post-employment restraints of trade, and crucially, express intellectual property assignment clauses to ensure the startup owns the code its developers write.

Web scraping personal information must comply with the Privacy Act 1988 (Cth) unless an exemption applies. While a small business exemption currently exists for entities with a turnover under $3 million, startups that ’trade in personal information’ lose this exemption entirely. Furthermore, scraping copyrighted data to train AI models without a licence may constitute infringement under the Copyright Act 1968 (Cth), as Australia lacks a broad fair use exception for text and data mining.

Under the Copyright Act 1968 (Cth), authorship fundamentally requires a human creator. The High Court in IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458 confirmed that originality requires independent intellectual effort, and the Full Federal Court in Commissioner of Patents v Thaler confirmed AI cannot be an inventor. Code generated entirely by AI without sufficient human direction cannot be copyrighted in Australia. Developers must heavily architect and modify AI outputs to ensure the codebase remains a protectable asset.

Post-employment restraints are only enforceable in Queensland if they go no further than is reasonably necessary to protect a legitimate business interest, such as trade secrets or highly confidential algorithms, following the High Court in Stenhouse v Coleman. Because courts will strike out an unreasonable restraint entirely, startups must use cascading restraint clauses providing multiple alternative periods and geographic scopes. Utilizing a garden leave clause during the notice period is often a more effective immediate protection.