Two High Court cases this week have provided more clarity on when ABN Holders can be considered employees. These cases are ZG Operations v Jamsek and CFMMEU v Personnel Contracting. Both considered whether a worker engaged as a contractor was entitled to Fair Work Act protections. However, the two cases resulted in opposite outcomes.
In Jamsek, the claimants were truck drivers who had worked for the same company for 30 years, but since the 1980s the drivers had been engaged as contractors. They owned their own trucks, and entered into contracts to carry goods for the company. As they were considered contractors, they were not given statutory superannuation benefits. It was important that they were not engaged as individuals, but as partnerships (set up between the worker and their spouse). The partnership were required to buy, insure and maintain the trucks. The High Court held that it was those partnerships who were contracted, and the workers were not employees. This meant they were not entitled to superannuation or other employment protections.
In Personnel Contracting, the claimant was a backpacker who performed unskilled work for a labour hire company. The claimant was engaged under a contract which referred to him as an independent contractor working in his own business, and he provided some of his own personal protective equipment. However, he was engaged in his personnel name, and all of his work was supervised and directed by others. The High Court held that he was not genuinely engaged in his own business, and he was an employee. Therefore, he was entitled to employment protections.
The lesson from these cases is that simply because someone is called a contractor does not necessarily mean they really are. The courts will look behind the labels used in documents and look at the real nature of the relationship.