Case Update: Construction, Forestry, Maritime, Mining And Energy Union & Anor v Personnel Contracting Pty Ltd [2022] HCA 1 (“Personnel Contracting”) and ZG Operations & Anor v Jamsek & Ors [2022] HCA 2 (“Jamsek”)
Contractor vs Employee
The recent High Court decisions of Personnel Contracting and Jamsek offer employers with a refreshed view of what the Court will look at in determining whether an individual should be categorised as an employee or contractor.
Focusing on Contracts
In both High Court decisions, the approach taken was that given the parties had comprehensively reduced the terms of their relationship to writing, and there was no suggestion that the contract was a sham or otherwise displaced by the conduct of the parties, the Court was satisfied to characterise the relationship in accordance with the terms of those contracts.
Is the Multi-factorial Approach Dead?
The High Court did not suggest that the multi-factorial approach to determining the characterisation of a relationship for service was now redundant. Rather, it was agreed between the justices that the state of the law had always been that where there the relationship is comprehensively documented primacy should be given that contract. However, where the contract is not sufficiently clear, there is no written contract or there is dispute as to the existence of one, a Court will still look at how the parties conducted themselves during the term of the engagement to determine the true nature of the working relationship.
A Timely Reminder
The decisions of Personnel Contracting and Jamsek are a timely reminder for principals and employers to review their contracts. It is essential that the written agreement between parties comprehensively details the nature of the working relationship, what obligations each of the parties owe and the extent to which each party has control over the work being provided.
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