Worker or contractor? Consideration in the context of a multi-party relationship
This Victorian Court of Appeal decision considers the application of the common law test for an employee in the context of a multi-party arrangement.
- Whether or not the Worker was an employee or contractor for EVS.
The second respondent was a mechanic who operated a mobile roadside assistance van (Worker) and who performed work for the applicant, Eastern Van Services Pty Ltd (EVS). The van used by the Worker and his uniform were Royal Automobile Club of Victoria (RACV) branded, and he provided emergency roadside assistance (ERA) services to RACV members. The Worker did not, however, have a legal relationship with RACV. RACV contracted EVS to provide ERA services and, in turn, EVS had a contract with the Worker.
The Worker lodged a claim form under the Workplace Injury Rehabilitation and Compensation Act 2013 (Act) in relation to an injury he sustained when he was providing ERA to an RACV member. In his form he listed the employer responsible for his workplace as the parent company of EVS. As a result of the claim, a dispute arose as to whether the Worker was a ‘worker’ within the meaning of the Act. The Victorian WorkCover Authority (VWA) determined that the mechanic was a ‘worker’ within the meaning of the Act on the basis that the contract between the Worker and EVS was a contract of service, which made him an employee (VWA Determination).
The decision at trial
EVS appealed the VWA Determination to the Victorian Supreme Court. The trial judge dismissed the appeal, concluding that the Worker’s work for EVS had little or nothing to do with any business of the Worker’s own and that the relationship between the Worker and EVS was one of employer/employee.
The issue on appeal
The issue on appeal was whether the trial judge erred in finding that that the Worker was an employee of EVS.
The Decision on appeal
In considering the element of control in categorising the relationship between the Worker and EVS, the Court of Appeal noted that control may be less significant or reflected differently in multi-party arrangements when compared to a bilateral relationship. Here, it was relevant that while the relationship carried a high degree of control over the presentation of the Worker and integration into the RACV network, the Worker retained significant control in the way he utilised his skills and judgement in providing services. The freedom of the Worker to decline work was also found to be relevant. Other relevant factors included that the Worker could delegate work, was not required to commit to minimum work levels and did not receive typical employee benefits such as annual leave and sick leave. Notably, the agreement between the Worker and EVS contained an express clause stating that the Worker was a contractor of EVS. It was found that the agreement was longstanding and the label of ‘contractor’ fit harmoniously with the agreement as a whole and was not simply a self-serving label.
The appeal was allowed and the Court of Appeal found that the Worker was not a common law employee of EVS and did not fall within the definition of ‘worker’ under the Act.
Implications for you
This decision provides guidance as to critical elements of an employee/employer relationship, in contrast to a contractor relationship, in the context of a multi-party relationship and emphasises the requirement to consider common law factors such as control, risk, mode of remuneration, tax arrangements and level of skill required in addition to the contractual intentions of the parties.