The legal issue is if XYZ Pty Ltd Can be held responsible for the injuries suffered by Lewis. Lewis a truck driver who drives XYZ truck has been injured at the depot where he attends every day, Monday to Friday, to pick goods for delivery since 2001 after the advertisement they had placed for drivers. The question arises as to if it can be established that XYZ Ltd is liable under the law of Fair Work for the injuries suffered by Lewis. For this reason, it requires being seen if XYZ Ltd had entered into the contract with Lewis either as an employee or as an independent contractor. This case relates to the benefits and privileges that pertain to an employee that an independent contractor cannot enjoy.
To come to the decision of the liability of XYZ Ltd towards Lewis, first it requires establishing if the company has an obligation towards the safety of Lewis and if it exists; it requires establishing if that the company has breached such duty (Winter, 2015). In this regard, the Fair Work Act requires the injuries suffered by the plaintiff in the due course of the business to be compensated by the defendant. Actions in favor of the ‘sham contracts' provisions under the Fair Work Act involves all knowing or reckless behaviors that result in denial of workers employment benefits and protection (Champ, 2015). These provisions are contained in the General protections provision of the Fair Work Act as applied to proceedings against such behaviors, for instance; the Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd, the high court made it ruling (Barnes & Lafferty, 2010) in accordance to:
Section 357- Relates to misrepresenting employment as independent contracting arrangement:
1) A person (the employer) that employs, or proposes to employ, an individual must not represent to the individual that the contract of employment under which the individual is, or would be, employed by the employer is a contract for services under which the individual performs, or would perform, work as an independent contractor.
2) Subsection (1) does not apply if the employer proves that, when the representation was made, the employer:
- Did not know; and
- Was not reckless as to weather;
The contract was a contract of employment rather than a contract for services.
Section 358- relates to dismissing to engage as the independent contractor.
An employer must not dismiss, or threaten to dismiss, an individual who:
- Is an employee of the employer; and
- Performs particular work for the employer; to engage the individual as an independent contractor to perform the same, or substantially the same, work under a contract for services.
Section 359- Relates to Misrepresentation to engage as independent contractor.
A person (the employer) that employs, or has at any time employed, an individual to perform particular work must not make a statement that the employer knows is false in order to persuade or influence the individual to enter into a contract for services under which the individual will perform, as an independent contractor, the same, or substantially the same, work for the employer. The court has described ‘sham,’ Lockhart. J described this word in Sharrment Pty Ltd v Official Trustee in Bankruptcy () as:
“…something that is intended to be mistaken for something else or that is not really what it purports to be. It is a spurious imitation, a counterfeit, a disguise or a false front. It is not genuine or true, but something made in imitation of something else or made to appear to be something which it is not. It is something which is false or deceptive.”
This definition implies an intentional disguise, but some situations override it impacts where parties to a relationship have advanced to maintain a contract for services that nevertheless is viewed to have legal characteristics that comprise a contract of employment (Davis, n.d.).
Lewis working hours vary according to the delivery tasks assigned thus he has no control of the work. Lewis drives XYZ truck. Thus he uses tools of XYZ Ltd in the performance of the work. Although he does not wear uniform Lewis abides by depot rules on smoking, drug use, maintaining radio contact with the depot when delivering goods. He his paid on hourly rate after deductions relating to his use of the truck (insurance, vehicle registration, etc.) are made. Under the fair work Act an independent contractor is left with freedom on how he should complete the work, gets own insurance, uses own tools and pays own taxes as compared to employees who are under the employer control and the employer caters for other benefits such as compensation or insurance. In our case scenario, Lewis seems to have much control from XYZ Ltd in the performance of his job and drives XYZ truck as a tool to perform his work. This definitely makes him under the Fair Work Act to be an employee of XYZ Ltd.
As an employee of XYZ Ltd, the company has committed some omissions in the performance of the employer-employee contract. Moreover, Lewis as an employee is denied paid sick leave, and also he takes four weeks unpaid annual leave each year which violates the rights and privileges of an employee thus treating him as an independent contractor. This relates to Linkhill Pty Ltd v Director of the Fair Work Building Industry Inspectorate case in 2015; the High Court deprived of Linkhill Pty Ltd, a chance to make an appeal against the ruling by Full Federal Court’s decision. In its decision the Full Federal Court found Linkhill to have affianced into Slam contracting by having underpaid its ten contractors, contrary to Linkhill claims that stated they had paid them above award rates. XYZ Pty Ltd fails to meet the compensation required for an employee (Karsten, 2011).
Asking Lewis to sign a form of acknowledgment that indicated he worked as an independent contractor, the company was breaching Section 357 of the General protections provision of the Fair Work by making a statement that it knows is false. The case relates to a ruling made on Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd case in 2015. It concerned two housekeepers who had employed for some years by Quest South Perth Holdings Pty Ltd (Quest), they had entered into contracts with a labor hire providers (Contracting Solutions) to work for Quest (Karsten, 2011). The High Court ruled against Quest by holding that the Housekeepers were workers of Quest via an implied contract and held the company liable for breaching the provisions of Section 357 of the Act, which forbids bosses from making a misrepresentation to their employees regarding their employment standing.
On the grounds of the law mentioned above and its application to the common case facts, it can hold that XYZ Pty Ltd has misrepresented employment as independent contracting arrangements. Therefore, it can hold that XYZ is liable for breach of the Fair Work Act of 2009. The rationale behind this conclusion is the fact that XYZ Pty Ltd made and advertisement for driver jobs which attracted Lewis, Lewis working hours vary according to the delivery tasks assigned thus he has no control of the work. Lewis drives XYZ truck. Thus he uses tools of XYZ Ltd in the performance of the work. Although Lewis does not wear the uniform, he abides by depot rules on smoking, drug use, maintaining radio contact with the depot when delivering goods. He his paid on hourly rate after deductions relating to his use of the truck (insurance, vehicle registration, etc.) are made. These evidence existences of an employment contract between Lewis and XYZ Pty Ltd. The Fair Work Act in Section 357 details the misrepresentation of employment as independent contracting arrangements an attempt by some employers aimed to evade meeting their employees' benefits and safety entitlements which have portrayed in XYZ Pty Ltd case scenario.
Cite this page