The jurisdiction of the Federal Court of Australia (and to a lesser extent the Federal Circuit Court of Australia) is vast. Their judges are all eminent lawyers and by and large their judgements and decisions are reliable, if not impressive, statement s of the law. Fortunately for fair work practitioners like me, their decisions are often made about issues of law with particular relevance to employment and fair work law, and are generally a much more intellectually persuasive and reliable source of guidance than decisions of the Fair Work Commission………….obviously with some exceptions because there are some members of that institution who are impressive lawyers.
Here is an example. It is a summary of the current way in which practitioners should distinguish between employees and independent contractors (ie the distinction between a contract of service and a contract for services); obviously of profound importance I employment law.
“The question whether a person who engages in work for another is an employee or independent contractor must be determined by having regard to a wide range of factors or indicia. One of the key factors is the degree of control that can be exercised over the person who performs the work: “whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions”: Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 404 (per Dixon J).
Control, however, is not the sole criterion. In Stevens v Brodribb Sawmilling Company Pty Ltd (1985) 160 CLR 16, Mason J (with whom Brennan and Deane JJ relevantly agreed) said (at 24):
But the existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment. The approach of this Court has been to regard it merely as one of a number of indicia which must be considered in the determination of that question: Queensland Stations Pty. Ltd. v. Federal Commissioner of Taxation; Zuijs’ Case; Federal Commissioner of Taxation v. Barrett; Marshall v. Whittaker’s Building Supply Co. Other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee.
Mason J also said (at 29) that “it is the totality of the relationship between the parties which must be considered”.
Wilson and Dawson JJ in Stevens v Brodribb stated that while the “control test” may be the surest guide in many cases, it is not a sufficient or even an appropriate test in all cases. As for the other indicia, Wilson and Dawson JJ said (at 36-37):
The other indicia of the nature of the relationship have been variously stated and have been added to from time to time. Those suggesting a contract of service rather than a contract for services include the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like. Those which indicate a contract for services include work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of goodwill or saleable assets in the course of his work, the payment by him from his remuneration of business expenses of any significant proportion and the payment to him of remuneration without deduction for income tax. None of these leads to any necessary inference, however, and the actual terms and terminology of the contract will always be of considerable importance.
Having said that, we should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the relationship of master and servant. The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance. That is best illustrated by turning to the circumstances of this case and in particular to those circumstances which were suggested as indicating that Gray was the servant of Brodribb.
In Hollis v Vabu Pty Ltd (2001) 207 CLR 21, a decision of the High Court concerning whether bicycle couriers were employees or independent contractors, the majority considered that the question hinged on whether, viewed as a practical matter, the bicycle couriers were running their own business or enterprise and had independence in the conduct of their operations. The majority (at ) approved the statement by Windeyer J in Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 at 217 that the distinction between an employee and an independent contractor is “rooted fundamentally in the difference between a person who serves his employer in his, the employer’s, business, and a person who carries on a trade or business of his own”.
It would appear that Mr Bywater’s common question 1 is largely based on this aspect of the judgment of the majority in Hollis.
The majority in Hollis also emphasised (at ) that the relationship between the parties was not to be found merely from the contractual relationship, but also from the “system which was operated thereunder” and the “work practices imposed”. The majority also referred to Stevens v Brodribb and reaffirmed that it was the “totality of the relationship” which had to be considered. The factors that the majority considered as relevant to the totality of the relationship, and as bearing on the question, included: the level of skill applied to the couriers’ labour; whether the couriers were required to wear a uniform; the extent to which the couriers’ leave was regulated by the courier company; the extent to which the finances of the couriers were supervised or controlled; the extent to which the courier company controlled the allocation and direction of deliveries; and the extent to which the couriers’ equipment was supplied or paid for by the courier company.
It can be seen from Hollis that the list of potentially relevant factors is very broad, that the weight to be given to the factors may vary in any given case, and that none of the factors are necessarily determinative. The task is essentially evaluative. In that regard, in Lopez v Deputy Commission of Taxation (2005) 143 FCR 574, 600 at , the Full Court referred with approval to what was said by Mummery J in Hall (Inspector of Taxes) v Lorimer  1 WLR 939 at 944:
[It] is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. “
Bywater v Appco Group Australia Pty Ltd (2018) FCA FCA 707 delivered 18 May 2018 per Wigney J