Employee or contractor? Fair work test

“On this question, it is relevant to note that the High Court has recently revised the applicable legal principles to determine whether a person is an employee or an independent contractor in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (‘Personnel Contracting’) and ZG Operations Australia Pty Ltd v Jamsek (‘Jamsek’). 8 A useful analysis was applied in the Commission decision of Waring v Hage Retail Group Pty Ltd:9

“[52] In two judgements delivered on 9 February 2022 the High Court of Australia pronounced on the law that applies in determining whether, absent a specific statutory rule, a person is an employee or contractor. In doing so, the Court reviewed past decisions of the Court (and other courts) and set out afresh relevant legal principles.

[53] In important respects the law as expressed by the High Court in Jamsek and Personnel Contracting has modified, if not replaced, former approaches. In particular, the past approach of the Commission (itself based on past court authority) as outlined in the leading full bench case of French Accent is, with some limited caveats, no longer good law.

[54] The High Court, via the combination of judgements in both Jamsek and Personnel Contracting, has largely rejected an approach whereby the relationship between parties across its life span is examined (including how the relationship operates in practice). The Court has stated that contractual terms and not performance, where those terms can be ascertained and where the contract is not a sham, will determine the true nature of the relationship. However, the Court has observed that the manner in which the relationship is worked in practice may be relevant for certain limited purposes, such as to find contractual terms where they cannot otherwise be ascertained or to determine the nature of any variation to agreed terms.

[55] Indicia (such as those identified in earlier cases in the Court) may be relevant but only insofar as the terms of the contract give voice to them. One approach, to be used as a guide, is to look at whether, under the contract, the worker is engaged to work in the business of another, though this may not necessarily be useful in all cases. The extent of a contractual right to control, as evident from the terms of the contract itself, remains a major signifier of an employment relationship. That an arrangement was brought about by the superior bargaining power of one party has no bearing on the meaning and effect of the contract.

[56] Amongst the caveats expressed by the Court, is that a mere label acting as a subterfuge to the true nature of the contractual relationship will not determine the status of the parties. In this respect at least, the law remains unchanged by these recent decisions.” (footnotes omitted).”

Extract from  Souraki Azad v Hammond Park Family Practice Pty Ltd T/A Jupiter Health Warnbro – [2022] FWCFB 66 delivered 4 May 2022 per Catanzariti VP, Easton DP and McKinnon