After injury, employer argues he was independent contractor
The County Court of Victoria recently dealt with a complex case involving a bricklayer who claimed to be a worker under the Workplace Injury Rehabilitation and Compensation Act 2013. The court had to determine whether the bricklayer was indeed a "worker" as defined by the Act or an independent contractor.
This case highlights the ongoing challenges in distinguishing between employees and contractors in the construction industry.
The decision provides valuable insights into how courts assess working relationships, especially in trades where informal arrangements are common.
Background of the case
The worker, a 50-year-old bricklayer with about 30 years of experience, had been operating as a subcontractor for most of his career. He typically moved from job to job, working when the pay, conditions, and location suited him. Sometimes he invoiced his work using an ABN, while other times he worked for cash.
In August 2017, the worker was contacted by a bricklaying business owner to help with a job in Glenhuntly. The business owner operated through a company, held WorkCover insurance, and engaged contractors as needed.
On 21 August 2017, while working at this site, the worker fell from a scaffold and injured his right ankle. This incident led to a WorkCover claim and, eventually, the legal proceedings to determine his status as a worker.
The claim and initial acceptance
Following the incident, the worker filed a WorkCover claim for compensation. In the claim form, he described himself as a sub-contractor and stated he had commenced working for the employer on approximately 8 August 2017 at an hourly rate of $37.50.
The employer, in response, completed an Employer Injury Claim Report, stating that the company did not usually have workers and that the worker was only contracted for two days.
Despite these conflicting accounts, the WorkCover claims agent accepted the claim on behalf of the employer's company. This acceptance later became a point of contention in the court proceedings.
The parties’ arguments
The worker subsequently lodged a "serious injury" application, which was rejected. This led to the current proceedings where the court had to determine, as a preliminary question, whether the worker was indeed a "worker" within the meaning of the Act.
The employer argued that the worker was an independent contractor, not an employee. They pointed out that the worker had an active ABN and had been operating as a subcontractor for years. The employer claimed that the arrangement was for a short-term job with no promise of ongoing work.
On the other hand, the worker contended that he was indeed an employee of the bricklaying business. He argued that the business owner had control over his work, provided materials and equipment, and set his hours.
The worker also claimed that he expected ongoing work based on the employer's statements about having "a lot of work on."
Determining the worker’s status
The court considered several factors in determining whether the worker was an employee or a contractor:
- Control over the work
- Provision of tools and equipment
- Expectation of ongoing work
- Method of payment
- Tax arrangements and superannuation
The court noted the importance of looking at the totality of the relationship, as emphasised in previous cases:
"Modern authority is to the effect that it is the totality of the relationship between the parties which must be considered."
The court faced challenges in assessing the evidence, as much of it was based on recollections of verbal agreements made years ago. Both the worker and the employer provided inconsistent or unreliable evidence at times.
The court observed:
"There is no escaping the fact that some of the evidence of the worker is unreliable. Whether that is a credit point is irrelevant. For what it is worth, I do not consider that the worker has set out to give false evidence. He was asked to recall events from many years ago, with no objective evidence and, at the risk of repetition, the whole arrangement with [the employer] was a very loose one."
The court also had to consider the significance of the initial acceptance of the WorkCover claim. While this was seen as an admission, the court noted that it should not be elevated to something it was not.
The claims agent had made the decision without the benefit of all the evidence that was now before the court.
The court’s decision
After careful consideration of all the evidence and legal principles, the court concluded that the worker was not a "worker" as defined by the Act. The court's reasoning included:
"The way the worker has worked for thirty years; the way he arranged the work with [the employer]; the limited terms that were discussed or agreed with [the employer]; and the limited control by [the employer] over the way the worker was working when the incident occurred all tend to the conclusion that he was not a 'worker' for [the business] when assessed in accordance with common law principles."
The court also noted:
"If I concluded that the worker was a 'worker' in this proceeding, it would effectively mean that on each occasion he has worked over the last 30 years, he has been a 'worker'. That sits uncomfortably with the way he has organised himself, free to pick and choose the types of work and where he works, as well as the applicable method of payment, the lack of tax deducted, the lack of any sick or holiday leave or superannuation." Consequently, it denied the claim and dismissed the application.
This decision highlights the complexity of determining worker status in industries where informal arrangements are common. It underscores the importance of clear agreements and documentation in employment relationships, particularly in trades and construction work.
