What’s a contract got to do with it? Determining employment versus independent contracting relationships Earlier this year, the High Court handed down two decisions which stressed the primacy of contractual terms in determining employment versus independent contracting relationships. The High Court held that where parties have comprehensively committed the terms of their relationship to a written contract, it was ‘unnecessary and inappropriate’ to undertake a detailed review of the work practices of the parties. In doing so, the High Court limited (but did not abolish) the application of the well-known ‘multifactorial’ test. Comments made by the High Court when considering 'Odco' style contracting arrangements in one of the cases that we will discuss below casts doubt on whether the popular engagement model can be used without significant risk to labour hire businesses.
Diana Diaz, Special Counsel, Gadens
the High Court found that Mr McCourt, a labourer engaged by a labour hire provider (Construct), was actually an employee. Mr McCourt had signed an Administrative Services Agreement (ASA) with Construct which characterised him as a ‘self-employed contractor’. Mr McCourt was assigned to two construction sites run by clients of Construct, including Hanssen and performed labouring tasks under the supervision and direction of Hanssen’s supervisor. A Labour Hire Agreement was in place between Construct and Hanssen pursuant to which Construct commercialised ‘its right to control the work that Mr McCourt would do and how he would do it’.
William Marshall, Senior Associate, Gadens
Personnel Contracting In Construction, Forestry, Maritime, Mining and Energy Union & Anor v Personnel Contracting Pty [2022] HCA 1 (Personnel Contracting),
The tripartite arrangement – an independent contractor agreement between Construct and Mr McCourt as a contractor, and a labour hire agreement between Construct as the provider and Hanssen as the client – is known as an ‘Odco’ style arrangement.
Carlyna Yap, Lawyer, Gadens
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