Since the High Court delivered its judgments in the cases of Jamsek and Personnel Contracting earlier this year, the lower courts and commissions have been busy applying the High Court’s authority in cases where the question of whether a worker is an employee or contractor arises.

While engaging a contractor through a corporate structure is not determinative in establishing contractor status, it generally does assist if it can be shown a contractor is responsible for their own tax, insurances, providing their own equipment and operating their own business.

In the recent case of Fair Work Ombudsman v Avert Logistics Pty Ltd (2022), the Federal Circuit and Family Court of Australia found that Avert Logistics Pty Ltd (Avert) drivers were independent contractors, not employees.

Avert contracted with four drivers to provide pickup and delivery services to its customers. One driver was contracted through the driver’s company, two other drivers were contracted through their partnerships and another was contracted as a sole trader.

Avert supplied the drivers’ vans, with the drivers responsible for registration and insurance. The Fair Work Ombudsman (FWO) argued that the drivers were employees as the arrangements with the drivers were more indicative of employment

relationships, where vans were provided and they were required to comply with directions.

The Court ultimately held the drivers were independent contractors as:

• the drivers were responsible for registration and insurance of the vans;
• the drivers were responsible for finding replacement drivers if they could not undertake the jobs themselves;
• the written contracts indicated the services could be provided by a company entity; and
• providing directions to the drivers did not of itself make them employees.

In Searle v Luxwood Homes Pty Ltd (2022), the Fair Work Commission (FWC) had to determine whether a worker was a contactor or employee in the absence of a written contract between the parties.

Mr Searle commenced unfair dismissal proceedings in the FWC when his services were terminated by Luxwood Homes Pty Ltd (Luxwood). Luxwood argued Mr Searle was an independent contractor and thus precluded from bringing unfair dismissal proceedings.

The FWC held Mr Searle was an independent contractor because:

• Mr Searle determined his own hours, rate of pay, location of work and work priorities;
• Mr Searle could delegate work and was able to work for other contractors;
• Mr Searle contracted with Luxwood through his company Anypoint Pty Ltd;
• the software used by Anypoint Pty Ltd was owned by Mr Searle and licensed by Luxwood; and
• Mr Searle determined the needs of the Luxwood business and hence Luxwood exercised little control over him.

The High Court independent contracting decisions and the cases that have followed demonstrate the paramount importance of ensuring that all independent contracting arrangements are set out in a comprehensive written contract.

By Kelly Godfrey