A recent case has confirmed the position in relation to what constitutes an employee compared to a contractor.
In a case between Deliveroo Pty Limited and a delivery driver, the rationale of previous cases (Personnel Contracting and Jamsek) was confirmed, where it was found that decision makers needed to look no further than the terms of the written agreement made between the parties when deciding whether it is an employee or contractor arrangement. This is based on there being no suggestion of variation of a contract, the contract being a sham, or where there is some other legal reason to depart from the terms of the contract. It was found that the reality of the working relationship and how the parties interact is irrelevant and that more importance is to be given to the practical and contractual terms agreed between the parties.
In this particular case, the court found that there was a lack of control by Deliveroo and that the delivery driver was able to contract his duties as someone would reasonably be allowed to, as if their relationship was that of an independent contractor. While Deliveroo had a requirement for deliveries to be made within a “reasonable time period” and to act professionally and courteously when dealing with others as well as provide services with due care, skill, and ability, this did not provide Deliveroo with control in the sense considered under the employee-contractor test. These were merely performance standards consistent with an independent contractor arrangement, rather than a degree of control.
This case, and the line of cases that underpinned this decision, will give clarity on the area and will place more reliance on what the contract says than any other factors. It is likely that future cases in this area will follow the precedents that have been laid down by these cases.
If you have any doubt about what your situation is in relation to employee v/s contractor, don’t hesitate to contact your client manager.
Author – Michael Goodrick
*Correct as of 27 September 2022
*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.