It is the scenario that no one ever thinks will happen: you are at work when something terrible happens and you are injured. If this happens you may be significantly out of pocket, as not only do you have medical expenses to contend with, but you are also without income. It’s fine though. You’re an employee and can claim workers’ compensation insurance. But not everyone is so lucky and you might work as a contractor. Someone told you that you can’t claim workcover, but with any luck you have income protection insurance. But maybe you can still claim workers’ compensation insurance.
What was originally well established might now be questioned following a recent High Court decision. To this point cases like Stevens v Brodribb Sawmilling Co Ltd (1986) 160 CLR 16 and Hollis v Vabu Pty Ltd (2001) 75 AJLR 1356 have helped in developing a checklist of sorts to determine if you are an independent contractor, or a casual employee. The checklist includes:
You don’t need to check off the entire checklist to be considered an employee. For example, you might be contracted to work at a site, and you invoice the principal contractor for the work completed. Despite this method of payment, the principal contactor provides you with the tools and equipment required to do the work; they tell you what hours to work; and all of your work is directed and overseen by the principal contractor. This might mean you are more like a casual employee than a contractor, and if you are injured, you might be entitled to claim workers’ compensation benefits.
However, this understanding might now change.
Although in a Fair Work Act context, the High Court in CFMMEU v Personnel Contracting [2022] HCA 1 decided on a worker’s challenge to their legal status as a contractor, who argued he was in fact an employee. A labour hire company supplied a worker to a builder. The agreement labelled the employee a ‘self-employed’ contractor. The builder nominated times and work as directed by the customer.
Although the High Court agreed unanimously that the worker was an employee of the labour hire company – rather than a contractor, the High Court criticised the checklist approach, describing it as impressionistic, amorphous and leading to uncertainty. The High Court said that the focus should be on whether the work is for the principal’s business or for their own independent business.
The High Court said the issue is not how the contract is performed, nor assessments on the substance or practical reality of the relationship, but rather on the terms and conditions of the contract, and the rights and obligations they create.
The question of whether you are an employee or a contractor was never simple and easy, however the question may now be more complicated following this High Court decision. Perhaps the checklist approach to determine if you are an employee or contract will no longer be used, instead turning to the rights and obligations created by the contract.
If you have suffered a work injury, or need further information on whether you are an employee, or a contract, contact our office on 1300 285 888.
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Queensland
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Queensland
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