Truckies: Employees or Contractors?
This week, the High Court of Australia is set to hear the appeal to Jamsek v ZG Operations Australia Pty Ltd [2020] FCAFC 119. In Jamsek, the Full Federal Court decided that two truck drivers were employees, even though they were engaged as contractors for nearly forty years.
Just this month, the High Court of Australia clarified in WorkPac v Rossato & Ors [2021] HCA 23 the conditions that must be met for an employment relationship to be made out. We spoke at length about the decision in this blog, but to quickly summarise, there must be:
- a firm, advance commitment to continuing and indefinite work; and,
- this commitment must be based on a binding, written employment contract.
Up until this decision, the contract could be less indicative than the actual substance of the working arrangement in determining whether a worker is a casual or permanent employee. Courts would often look to the entire working relationship to assist in making a determination.
In Jamsek, the truck drivers were engaged in accordance with an independent contractor agreement – not an employment contract. While we cannot anticipate what the High Court of Australia will decide, it is certain that the decision will reverberate across Australia. While the cases are different and cannot be directly compared, the decision by the Full Federal Court in Jamsek appears to be at odds with the High Court of Australia’s recent decision in Rossato. Whichever way the High Court of Australia decides Jamsek will have lasting implications for employers across Australia. We expect that the decision will expand upon the factors leading to an employment or a contractor relationship.
Next Steps
Australian employers should closely watch the Jamsek appeal, and be prepared to review their employment and contractor agreements in accordance with the decision. Regardless of the decision, employers must also remember that the March 2021 changes to the Fair Work Act 2009 (Cth) continue to apply, and any casual employment contracts must specifically identify the casual loading requirements.