The High Court has recently heard two appeals together from judgments of the Full Court of the Federal Court of Australia,1 in cases involving the characterisation of an employment relationship. Both decisions provide direction as to how the court will approach determining the issue as to whether a worker is an employee or independent contractor.
The facts
In both proceedings, the respective workers were seeking employment entitlements under the Fair Work Act 2009, amongst other legislation.
Personnel Contracting, concerned a 22-year old backpacker who was working on a holiday visa. The worker, Mr McCourt, was engaged by a labour-hire Company, Construct, pursuant to a signed Administrative Services Agreement (ASA). Construct then assigned Mr McCourt to work on two construction sites operated by Hanssen.
Mr McCourt did not have a contract with Hanssen. Construct had an executed Labour Hire Agreement with Hanssen, which relevantly provided that Mr McCourt was engaged on a ‘daily hire basis’ and was to be paid at an hourly rate agreed to by Hanssen and Construct. The ASA provided that, while working at Hanssen’s constructions sites, Mr McCourt would be under the supervision and direction of Hanssen employees. Furthermore, Mr McCourt’s primary legal obligation was to ‘[c]o-operate in all respects with Construct and [Hanssen] in the supply of labour to [Hanssen]’.
The second matter, ZG Operations, concerned two workers who had been engaged by ZG Operations as truck drivers between 1977 and 2017. At some time in 1985 or 1986 both workers were offered the opportunity to become ‘contractors’. This opportunity meant that they were required to purchase their own trucks from the company and pay the maintenance and operational costs of those trucks; all for the provision of delivery services, which would be invoiced to the company. Both workers agreed and set up partnerships with their respective wives.
Each partnership executed written contracts outlining these terms, where the partnerships would later invoice the company for its services. Any income received in accordance with the contracts was considered ‘partnership income’.
In neither case was there any suggestion that the contract between the parties was a sham, had been varied, or was otherwise displaced by the conduct of the parties.
1 Construction, Forestry, Maritime, Mining and Energy Union & Anor v Personnel Contracting Pty Ltd [2022] HCA 1 (‘Personnel Contracting’); ZG Operations & Anor v Jamsek & Ors [2022] HCA 2 (‘ZG Operations’).
