Australian workplace lawyers are parochial by nature. We don\u2019t look at international examples very often. \u00a0And given the tens of thousands of pages of domestic industrial instruments that we are forced to wade through each year, we can hardly be blamed for not seeking out more in our spare time.<\/p>\n
California, in particular, rarely gets a mention in the Australian workplace law context unless it involves<\/span> something scandalous about Hollywood,<\/span><\/a> or something very \u2018cool\u2019 about <\/span>Silicon Valley. <\/span><\/a>\u00a0But in recent months, the Supreme Court decision of <\/span>Dynamex Operations West, Inc v The Superior Court of Los Angeles County<\/span><\/i><\/a> (<\/span><\/i>Dynamex<\/i><\/b>)<\/span><\/i>, has caught everyone\u2019s attention, for significantly developing the law of the state in relation to independent contractors. \u00a0<\/span><\/p>\n Australia, where the law of independent contractor relationships is confusing and unsatisfactory, would be wise to take heed of this, as it offers us plenty to think about. <\/span><\/p>\n The Australian position on Independent Contractors <\/b><\/p>\n The Federal parliament made a bold statement years ago against \u2018sham contracting\u2019 \u2013the avoidance of paying employee entitlements by presenting an employment relationship as a contractor relationship. \u00a0We don\u2019t like \u2018sham contracting\u2019 – it’s \u2018un-Australian\u2019. Parliament has made it a civil penalty provision, and we impose large fines against offenders. <\/span><\/p>\n However, the parliament has not told us what \u2018sham contracting\u2019 actually is. They have never told us who is an independent contractor, and who is an employee. \u00a0Typical to Australian politicians, parliament has managed to take a \u2018tough stand\u2019 \u2013 while at the same time managing to not make any effective law. And this presents key practical issues. <\/span>Having a strict prohibition against \u2018sham contracting\u2019 is an illusory protection, unless we have an equally stringent distinction between employee and contractor. <\/span><\/p>\n Currently, to find out if someone is an employee, we need to delve into the depths of the common law. \u00a0Thirty years ago, in <\/span>Stevens v Brodribb Sawmilling Co<\/span><\/i> (1986) 160 CLR 16<\/span><\/a> (Stevens)<\/span><\/i>, the High Court gave its seminal ruling on this issue. \u00a0Stevens, a truck driver involved in the Brodribb\u2019s logging operations was injured through the negligence of Gray, a \u2018snigger\u2019 working for Brodribb. If Gray could be classified as an employee of Brodribb, then Brodribb would be liable for Grey\u2019s injuries under the doctrine of vicarious liability. \u00a0If not, he would only be able to seek compensation from Gray. <\/span><\/p>\n In determining this question, the High Court pointed to a number of factors of importance including:<\/span><\/p>\n The High Court noted that Gray was paid by the job and no income tax was deducted. He provided his own equipment. He was free to seek other work and, whilst work had been regular, Brodribb was under no obligation to provide it to him on an ongoing basis. Gray was free to set his own hours, received no holidays and could delegate his work to others (and Gray in fact had in the past delegated work to his son). As a result, Gray was not an employee of Brodribb and therefore, Brodribb was held not liable to Stevens for the injury caused.<\/span><\/p>\n\n