The full bench of the Federal Court recently delivered a judgement that two independent contractor truck drivers employed as such for 40 years were in fact employees. The decision, Jamsek v ZG Operations Australia Pty Ltd (2020) reinforced the view that a longstanding employment relationship can demonstrate a worker as an employee.
In the matter, the two truck drivers commenced working as employees upon starting at the company in 1977. In late 1985, they requested pay rises; with the rejection of the pay rise, the company instead offered the drivers an opportunity to become contractors. Notably, their place in the company was noted as ‘unsecured’ if they did not agree to this and so, the truck drivers agreed to become contractors. The drivers wore company uniforms, had the company logo on their trucks and set up partnerships with their respective spouses, entering contracts on behalf of the partnership with the company.
In assessing the employment relationship, the Federal Court noted that the existence of a partnership does not in itself preclude an employment relationship. Further, the contract terms agreed to in the truck drivers becoming contractors provided no room for negotiation and may have involved undue pressure on the company’s part. The use of the company’s logo, the structured hours and annual leave entitlements also amounted to the decision that the truck contractors were in fact employees.
This case reminds us that an employment relationship cannot be solely deemed by written contract terms. When engaging contractors, employers must ensure they act in a consistent manner; not just relying on contractual labels and theoretical implications of the employment relationship.
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