Construction, Forestry, Maritime, Mining and Energy Union & Anor v Personnel Contracting Pty Ltd

The High Court of Australia considered a dispute between the Construction, Forestry, Maritime, Mining and Energy Union and another party (the applicants) and Personnel Contracting Pty Ltd (the respondent). The core of the dispute concerned the employment status of a labourer engaged by the respondent, specifically whether he was an employee or an independent contractor for the purposes of the *Fair Work Act 2009* (Cth).

The central legal issue before the High Court was to determine the correct test for characterising an individual as an employee or an independent contractor, particularly in circumstances where the written contract between the parties did not reflect the reality of the working relationship. The Court was required to consider how to apply this test when the contract itself contained terms that purported to define the relationship as one of independent contracting, despite the practical realities of the work performed.

The High Court held that the determination of whether a worker is an employee or an independent contractor is a question of law, to be determined by reference to the rights and liabilities of the parties as defined by their contract. Where the contract is in writing and its terms are not in doubt, the court must ascertain the rights and liabilities of the parties from the contract and then determine the character of the relationship. The Court affirmed that the label given to the relationship by the parties is not determinative, and the substance of the relationship, as evidenced by the contractual terms, must be examined. In this instance, the Court found that the contractual terms established a relationship of employment, notwithstanding the label of "independent contractor" used in the agreement.