Parties dispute Appellant's Employment with Respondent
The respondent and second appellant entered a written contract describing the second appellant as "self‑employed contractor". The respondent assigned the second appellant to work on a construction site run by the respondent's client.
The second appellant agreed with respondent to co‑operate with respondent and client in all respects in supply of his labour to client. The Court, in determining whether the second appellant was an employee of respondent, considered that there was no contract between the second appellant and client.
Facts:
The respondent (trading as "Construct") is a labour-hire company based in Perth, which engages workers to supply their labour to building clients. Construct's major client was Hanssen Pty Ltd ("Hanssen"), a builder of high‑rise residential apartments and offices. In 2016, Mr McCourt was a 22‑year‑old British backpacker who had travelled to Australia on a working holiday visa. Mr McCourt obtained a "white card", which enabled him to work on construction sites.
He signed an Administrative Services Agreement ("ASA"), which described Mr McCourt as a "self‑employed contractor". Construct contacted him to offer him work at Hanssen's Concerto project site beginning the following day. When he arrived on site, Mr McCourt was given the Hanssen Site Safety Induction Form and Hanssen Site Rules. He was told that he would be supervised primarily by a leading hand employed by Hanssen, Ms O'Grady.
Mr McCourt did not sign a contract with Hanssen. Mr McCourt worked at the Concerto site between 27 July and 6 November 2016 under the supervision and direction of Hanssen supervisors, including Ms O'Grady. Although Construct staff sometimes conducted site visits, they never directed Mr McCourt in the performance of work, except to draw his attention to workplace health and safety issues in the manner of his work. On 6 November 2016, Mr McCourt finished work at the Concerto site and left Perth.
He returned the following March and, on 14 March 2017, recommenced work on the Concerto project. On 26 June 2017, he began working on Hanssen's Aire project, performing work that was substantially identical to the Concerto project. On 30 June 2017, Mr McCourt was told that he was not to continue working at the Aire project. Mr McCourt and the Construction, Forestry, Maritime, Mining and Energy Union commenced proceedings against Construct seeking orders for compensation and penalties pursuant to ss 545, 546 and 547 of the Fair Work Act 2009 (Cth) ("the Act") on the basis that Construct had not paid Mr McCourt according to his entitlement, as an employee of Construct, to payment in accordance with the Building and Construction General On-site Award 2010.
Similar orders were sought against Hanssen, on the basis that it was liable as an accessory for Construct's alleged breaches. The proceedings were dismissed by the primary judge (O'Callaghan J). The primary judge's conclusion was upheld on appeal by the Full Court of the Federal Court of Australia.
Issue:
Whether or not Mr McCourt was an employee of Construct for the purposes of the Act.
Applicable law:
Fair Work Act 2009 (Cth), ss 13, 14 - provides that the statutory command to give "employee" and "employer" their ordinary meanings requires no less and permits no more.
Western Australian Industrial Appeal Court in Personnel Contracting Pty Ltd v Construction, Forestry, Mining and Energy Union of Workers [2004] WASCA 312-involved "essentially the same dispute between the same parties".
Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2020] FCAFC 122 - held that the gravamen of the concept of control was not the circumstance that the putative employee was in fact in a position of subordination but rather that it is the putative employer which commands the right to subordinate the employee in a position of service to the employer.
Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 - held that some understanding as to the relative significance of the various factors is desirable, both to minimise the extent to which application of the test may produce an impressionistic and subjective outcome on the one hand, and to avoid the injustice of a mechanistic checklist approach on the other.
Hollis v Vabu Pty Ltd [2001] HCA 44 - where in their Honours' view, it was another way of putting the proposition that an independent contractor "carries out his work, not as a representative but as a principal".
Marshall v Whittaker's Building Supply Co [1963] HCA 26- Windeyer J said that the distinction between an employee and an independent contractor is:
"rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carries on a trade or business of his own."
Analysis:
The relationship between Mr McCourt and Construct was governed by the ASA. The relationship between Construct and Hanssen was governed by a Labour Hire Agreement ("LHA"). There was no contractual arrangement between Mr McCourt and Hanssen. Under the LHA, construct's workers were referred to Hanssen on a "daily hire basis" for which Hanssen agreed to pay Construct at an hourly rate, negotiated between Hanssen and Construct, and invoiced weekly. Construct was responsible for the suitability of its workers, and agreed to replace a worker at no charge if notified of the worker's unsuitability within four hours on the first day of an assignment.
Hanssen agreed to comply with all workplace health and safety laws applicable to Construct's workers. It is unnecessary to refer to the terms of the LHA in any greater detail because Mr McCourt was not a party to the LHA. His contract with Construct was not affected by the terms of the LHA. Clause 4 of the LHA, however, is significant because its import was reflected in the ASA.
Clause 4 was entitled "Direction", and provided that Construct's contractors are under the client's direction and supervision from the time they report to the client and for the duration of each day on the assignment. Under the ASA, Construct had the right to subject Mr McCourt to the direction of Hanssen in respect of what work he was to do and how he was to do it. The various terms of the ASA wherein Mr McCourt warranted that he was a "self‑employed contractor"and that he would not represent himself as being an employee of Construct were clear statements of intent that the relationship between Construct and Mr McCourt was not to be one of employment, but one of principal and independent contractor.
Conclusion:
The Court allowed the appeal with costs. The order of the Full Court of the Federal Court of Australia made on 17 July 2020 is set aside and in its place, it is ordered that:
(a) the appeal be allowed;
(b) the order of the Federal Court of Australia made on 6 November 2019 be set aside;
(c) it be declared and ordered that, between 27 July 2016 and 6 November 2016 and 14 March 2017 and 30 June 2017, the second appellant was employed by the respondent; and
(d) the matter be remitted to the primary judge for determination according to law.
