Work contracts between fitness/personal trainers and gyms: Dodgy as?

by | 10 February 2026 | Bulletin

We have on several occasions had to give advice to fitness/personal trainers wishing to end their engagement contracts with gyms or personal training establishments.  There is often a significant power imbalance between the individual trainer and the business which can make this a distressing experience.  Typically, these arrangements involve young people with little real world work experience engaging with large gym businesses under a contracting or services and facilities type agreement whereby:

  1. The trainer has to have their own ABN;
  2. The trainer pays a bond or “licence fee” in return for the grant of a licence to access the gym to provide their services;
  3. The trainer has to pay up front weekly rent (usually by direct debit);
  4. The income from training clients is shared between the gym and the trainer;
  5. The gym generates client invoices and processes payments;
  6. The trainer must wear the gym’s uniform;
  7. There is no ability to delegate work without the gym’s approval;
  8. The expectation is that the trainer will work within certain periods of time or sessions;
  9. The trainer cannot work for other local gyms without permission;
  10. The trainer must comply with the gym’s policies and service standards;
  11. Approval is needed for any advertising;
  12. No superannuation is payable;
  13. The trainer must have their own insurances;
  14. There is no ability for the trainer to terminate the contract during a minimum period and lengthy notice periods for termination by the trainer are required, but not the gym;
  15. The contract is subject to post engagement restraint clauses involving both non compete and non solicit provisions.

In most cases the reality is that trainers do not obtain their own clients or operate their own independent business and have little real control over their own work.  They are effectively working to promote the gym’s business.  In our view, it is a sham if the trainer has little control over their hours, rates or tasks or is treated as staff while using an ABN to bypass legal requirements.  Trainers may not have an appreciation of the legal aspects of the relationship into which they are entering or understand that they may earn more as an employee.  Some gyms frankly take advantage of this situation.  It is often a brutal introduction to the realities of commercial life.  If a trainer wishes to end the relationship, they risk losing their “bond”, can be required to serve a lengthy notice period and can receive threatening letters about taking clients and working for other businesses.  It is important to understand that contractors are not entitled to the benefits of employment including minimum rates of pay, leave or unfair dismissal laws.

Trainers can in effect be left to fend for themselves with little or no help from the authorities and private lawyers can be expensive.  The law about who is a contractor and who is an employee can also be complex.  Indeed, in the case of Christopher Bond v Doxi Pty Ltd t/a Jetts Wanneroo [2020] FWC 2538 it was held that both forms of relationship could exist at the same time.  Gyms are also becoming more sophisticated in their approach to these issues and are making alterations to their terms of engagement (such as the ability of the trainer to invoice their own clients directly) to muddy the legal waters.  There is no guarantee that, for example, an unfair dismissal claim as an employee will be successful – see Tayla Xerri v Perpetual Health and Fitness Industries Pty Ltd [2025] FWC 2969.  There, the trainer could accept or decline clients and payment was made directly to the trainer.  But for an example where a claim was successful, see Allison Priolo v Derrimut Health & Fitness Pty Ltd [2024] FWC 995.  In that case, it was significant that Mr Priolo was “indivisibly integrated into Derrimut’s business.  .”

So what should personal trainers do?

  1. Avoid getting into this situation in the first place – read any proposed contract thoroughly, ask questions about what it means and get advice about your options. You don’t want to get experience 10 minutes after you need it.  See our bulletins on contracting and services/facilities agreements.
  2. Consider whether you really wish to operate your own business or not with the expenses (eg indemnity and public liability insurance) and uncertainty this involves.
  3. If you are entering into a contractor agreement, be aware that contractors now have rights to raise disputes in the Fair Work Commission about unfair clauses. See our bulletin on unfair contract disputes.
  4. Understand the applicable legal framework and consider whether you really are an employee – recent amendments to the Fair Work Act mean that the “real substance, practical reality and true nature” of the relationship and not just the form are relevant issues. This may be relevant to underpayment of wages and entitlements and termination.
  5. Consider whether you are entitled to superannuation as a contractor – sole traders providing effectively their own labour and with no practical ability to delegate their work are entitled to superannuation – see the ATO superannuation web page for more information.
  6. Get advice about whether any restraints are likely to be enforceable. General non compete clauses are likely to be outlawed in the next few years, at least for most employees.  See our bulletin on restraints.
  7. Consider raising sham contracting issues with the Fair Work Ombudsman – fairwork.gov.au (but remember the Fair Work Ombudsman is different to the Fair Work Commission). Don’t expect much assistance though.  Appreciate also that it will usually be impractical for you to take legal action on this basis.

These comments are of general application but of particular importance for those starting out in the industry.  Please contact us if you would like any further information or help.