In a recent decision the Full Federal Court has again found that an independent contracting arrangement was in fact employment within the meaning of the Fair Work Act 2009 (Cth). The Court took the usual approach, which is to assess the total employment relationship, considering all of the surrounding circumstances. However, the judgment suggests an increase in the degree of independence and control required for the Court to recognise a bona fide independent contractor relationship.
The case involved two truck drivers engaged as independent contractors for 35 years. Various factors relating to their engagement reflected common features of independent contracting. For example, the drivers made significant investments in their own trucks, had a significant degree of control over their work and had some opportunity to increase or decrease their profitability. Despite this, the Court found that the drivers did not have any real independence. The Court emphasised the inability of the drivers to generate goodwill as an important factor in the decision. Justice Perram noted that the drivers did not market their services or engage in work for anyone else over the course of their engagement. The matter has been remitted to the primary judge to decide on the appropriate compensation and penalties. This could include 35 years of compensation for unpaid superannuation and leave entitlements. The decision demonstrates yet again that when it comes to independent contracting the Court is concerned with the substance of the relationship, ascertained by a range relevant factors. Contact M+E for advice on your contracting arrangements to avoid potential disputes.