HRBC Forum Summary

Employees, Casuals, Labour Hire and Independent Contractors – getting the contract right

In our May HR Breakfast Club seminar, Legal Director of the Employment & Investigations team, Gabrielle Sullivan, and guest speaker Kieran Pender from the International Bar Association (IBA), spoke about getting the basics of the contract right in relation to Employees, Casuals, Labour Hire and Independent Contractors.

Gabrielle and Kieran focused their seminar on four core matters including; the distinction between an Employee and a Contractor, the distinction between a casual and permanent within an employment relationship, practical implications and possible future developments.

Employee v Contractor

Gabrielle and Kieran began by highlighting the Employee v Contractor relationship as the binary distinction at the heart of Australian employment law. It was noted that employees have a whole suite of workplace rights, whereas contractors do not. This distinction can often be blurred due to the fact case law has developed a long list of indicative criteria, although none are decisive and are based on a fact-heavy inquiry. It was later presented that in the past three decades there has been an increase of the use of contract labour. While contrasting how to determine each of these employment relationships, Gabrielle and Kieran referenced two recent cases: CFMMEU v Personnel Contracting (2022) and ZG Operations v Jamsek (2022). These authorities outlined the evolution of the test in determining if one is an employee or independent contractor in being ‘all in the contract.’ The ratio highlighted from Personal Contracting summarises that where the terms of the parties’ relationship are in a written contract, the legal rights and obligations are decisive of the character of the relationship.

Employment – Casual v Permanent

Gabrielle and Kieran later discussed the difference between a casual and permanent employee based on the authority WorkPac Pty Ltd v Rossato. Additionally, they set out the legal framework in Section 15A of the Fair Work Act 2009. The central principle which derived out of WorkPac v Rossato was the fact that it did not include a mutual commitment to an ongoing working relationship between the parties after the completion of each assignment. The express terms of the relationship between them were distinctly inconsistent with any such commitment. It was then noted of the amendment of s15A which defines what a casual employee is and provides an exhaustive list of factors. It also minimises the risk for employers engaging casual employees over an ongoing period with a degree of regularity in evaluative process.

Practical Implications

Gabrielle and Kieran then addressed some practical implications of what has been discussed above. These included:

1. It is the substance of the written contract that matters, not the labels.

2. Provided the contract is carefully drafted, it will be determinative of the legal status of the relationship.

3. Courts and tribunals will not engage in factual inquiries into the practical nature of the relationship.

4. This gives organisations more flexibility in workforce management and minimises legal risk.

5. But it is not entirely risk free.

Future Developments

Gabrielle and Kieran offered some insight on future developments in this area. These included:

  • A Labour government is expected to use legislation to provide greater protections for contractors.
  • Coalition victory will see continuation of hands-off approach.
  • Federal election will have important consequences for IR regulation, particularly regarding the consequences of these High Court decisions.
  • Unlikely to be immediate workforce changes, but a longer-term trend.

They concluded by touching on the fundamental questions raised in Ethos: Journal of the ACT Law Society, Autumn 2022 by John Wilson & Kieran about the power imbalance in most employment-like relationships and the protective purpose of Australian employment law.

To register for future HR Breakfast Club forums, visit our monthly forum page and register to attend.If you have any questions or wish to discuss your circumstances with a lawyer, please contact the BAL Lawyers Employment Law & Investigations team on 02 6274 0999.

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