“What was really surprising is that the Federal Court actually agreed with them,” added Izzo. “The Court ruled that there were in fact employees of the company. The principal then appealed this finding – which is where ABLA came in. We acted for the New South Wales Business Chamber as an amicus curiae, or friend of the court. The crux of the appeal was that in the traditional conventional approach, where you supply a vehicle that size, workers tend to be a contractor, not an employee.”
The Federal Court looked at the entire period of the relationship between the workers and the company too. The Court specifically looked at how the pair had related to their company over the course of two decades – finding they were more of employees.
“However, the High Court quickly ruled that this wasn’t permissible,” Izzo told HRD. “We’re in a relationship is wholly recorded in a written contract, you can’t look at the conduct after formation of the contract. Ordinarily, you’re only meant to look at the contract itself, the promises exchanged on forming the contract, to determine its character. The Federal Court was looking at the full life of the relationship to try and assess its character – and the High Court said ‘no, your job is just to construe the contract’.”
A key takeaway for employers in this case is the High Court’s criticism of affording any real substance to the label the parties give to the employment relationship. Essentially, it really doesn’t matter what the parties call their relationship – the courts will always implement a multi-factor test to look at all of the indicators.
“One of the biggest factors they’ll look at is the level of control that a principal might exert over a worker,” added Izzo. “They’ll look at the extent to which the worker could be said to be running their own business, or does it appear as if they’re in someone else’s business?”