On 25 July 2016, Mr McCourt was offered a contract at Personnel Contracting. He was asked to a conference to sign the contract, and during discussions, Mr Van Der Plas, the representative, emphasized that he was a contractor and not an employee. Mr McCourt was hired out to do unskilled labour for Personnel’s clients, particularly Hanssen.

Mr McCourt, previously a backpacker, was a dedicated labourer who was hired out by Personnel Contracting to a large construction company, Hanssen. Mr McCourt worked in two Perth construction sites and signed multiple contracts & induction documents to do so. He brought his own PPE equipment for his first day.

Mr McCourt’s remuneration was negotiated by a designated Personnel client services representative of construction. He was paid for every hour of his work on a flat rate basis. He was assigned to work for 50 hours a week. If he were unable to work, or if he were running late, he would need to have let his representative know.

However, issues arose when Mr McCourt believed he was an employee of Personnel and thus should be paid under the appropriate award (Building & Construction General On-Site award 2010).

Key Issue:

There were two key questions put to the Court by Mr McCourt:

• Whether Mr McCourt was an employee of Personnel or an independent contractor retained by Personnel.
• If Mr McCourt was an employee, is he considered a casual employee?

The trial judge held that Mr McCourt was an independent contractor. Mr McCourt and CFMEU (his union) appealed the decision.

Assessing the line between Employee and Independent Contractor

The Court in CFMEU v Personnel, reiterated that the test for assessing employment relationships require the Court to look holistically at the relationship. The factors considered should include, but is not limited to, the contract, the objective of the contract and the relevant factual circumstances of the relationship. However, it is prudent to note that it is up to the discretion of the Court as to how much weight they place on each factor.

The Court considered the following factors:

• Contract terms: this factor is not determinative and should be disregarded where terms fail to correspond with the real arrangement between the parties (Performing Right Society v Mitchell & Booker Pty Ltd). However, where the legal relationship is vague, the contract terms may hold more weight, on the condition that it is not a sham.

Note that contract terms which merely restate obligations by law are also considered in the Court’s employment relationship assessment.

• Control: the level of control exerted by the alleged employer is not a determinative factor in circumstances such as labour-hire arrangements, as multiple parties exert control over the worker.
• Entrepreneur Test: the entrepreneur test requires the Court to assess whether the person is doing business for someone else or for themselves. The Court also assesses whether the person accrues any business risk in the venture. This test may be helpful but was declined as it was only obiter dicta in On Call Interpreters.

The Court held that the trial judge erred since they only looked at the words “Self-employed” on the contract, rather than looking at the fact that Mr McCourt was not working towards his own business. The other appeal grounds were dismissed.

Where did it fail?

An earlier case, Personnel v CFMEU heard in WAIAC, was decided on identical facts to Mr McCourt’s case. The Court in Personnel v CFMEU held on the same facts, that the worker was an independent contractor.

Although the Court in Mr McCourt’s case was prepared to find Mr McCourt as an employee, they could not do so as the earlier case could not be overturned. Further, the Court could not depart from the earlier judgement as the facts are identical between the two cases.

The above information is intended as general information and is not intended to be relied on as legal advice.

If you are looking for advice on your employment rights or if you are looking to review your employment contracts, call one of our experienced lawyers now on (02) 9920 1787 to find out how we can assist you. Pannu Lawyers are highly experienced in drafting & reviewing employment contracts as well as resolving civil disputes between employees and employers.