By Jack de Flamingh and Bella Moore -
Snapshot
- When categorising a work relationship the frame of reference should exclude post-contractual conduct, other than where variation, waiver or estoppel are at issue.
- In establishing the terms of the contract, it is still necessary to take into account the traditional indicia of the existence of principal/contractor relationships and be wary of common law and equitable principles relating to sham arrangements.
- Odco contracts are now more difficult to rely on.
On 9 February 2022, the High Court handed down two decisions that provide important guidance as to the categorisation of work relationships in Australia. The decisions of CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 (‘Construct’) and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 (‘Jamsek’) each affirm that the key determinant of the character of any given work relationship is to be found in the terms of the contract (whether written, oral or a combination thereof) between the parties.
The decisions, which follow the High Court’s earlier decision in WorkPac Pty Ltd v Rossato [2021] HCA 23 (‘Rossato’), demonstrate there is clearly majority support in the High Court for restricting the frame of reference within which work relationships are to be categorised by excluding post-contractual conduct, other than where variation, waiver or estoppel are at issue. Even then, the frame of reference is restricted to the rights and entitlements flowing from the contract itself, rather than the manner in which it is performed.
Despite the fluid approach often adopted when considering employment relationships, the High Court has confirmed that principles governing the interpretation of contracts of employment are, and should be, ‘no different from those that govern the interpretation of contracts generally’ (Construct at [60])).
