Mr. McCourt was found as an employee of Construct, rather than a contractor.

Metals and Mining Review | Monday, February 24, 2020

The High Court in a decisive judgment on tripartite labor-hire arrangements focused on the written contract

FREMONT, CA: An appeal from the Full Court of the Federal Court of Australia was allowed by the High Court finding that a laborer engaged by a labor-hire company was an employee. Mr. McCourt, an inexperienced backpacker who sought work on a construction site, was engaged by Personnel Contracting Pty ltd (Construct), a labor-hire company. The Administrative Services Agreement (ASA) was signed by Construct and Mr. McCourt which named Mr. McCourt as a self-employed contractor. Construct assigned Mr. McCourt to work on the construction sites of Hanssen with a Labor Hire Agreement with Hanssen Pty Ltd, although there was no contract between Mr. McCourt and Hanssen.

The proceedings against Construct were commenced by Mr. McCourt and the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) for seeking compensation and orders for penalties under the Fair Work Act 2009 (Cth) on the basis that Mr. McCourt was not paid his wages as an employee under the Building and Construction General On-Site Award 2010. Although at first instance, the primary judge found Mr. McCourt, on basis of a multifactorial analysis, that he was an independent contractor considering the contractual terms of the ASA and the work practices imposed by both Construct and Hanssen. However, this was later upheld in the Federal Court of Australia.

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Mr. McCourt was found as an employee of Construct, rather than a contractor by the High Court of Australia appeal. The majority held that the relationship will be determined by referring to the rights and obligations created by the contract and that the terms of a relationship are committed to a written contract, and that contract is not challenged as invalid or otherwise waived. In accordance with established principles of contractual interpretation, these are to be construed.

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