Classification: employee

## Approach

This task asks for an application of the *WorkPac Pty Ltd v Rossato* (2021) / *Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd* (2022) line of High Court authority. The 2022 case directly on point is *Personnel Contracting*, which involved a young British backpacker labourer ("Mr McCourt") engaged by a labour-hire company (Construct) under a written contract that called him a "self-employed contractor". The facts in this hypothetical track that case closely, so I reasoned from the controlling approach the Court adopted there.

## (a) Classification

**Classification: employee**

## (b) Controlling approach and leading case

The leading case is **Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 275 CLR 165** (often "the *Personnel Contracting* case", decided alongside *ZG Operations Australia Pty Ltd v Jamsek* (2022)).

The controlling approach: where the parties have committed the terms of their relationship to a **comprehensive written contract that is not a sham (and is not varied or discharged), the character of the relationship is determined by the legal rights and obligations established by that contract** - not by a wide-ranging review of how the parties actually conducted themselves over the life of the relationship. The Court rejected the older "multifactorial" test insofar as it licensed looking at the parties' subsequent post-contractual conduct to characterise the relationship. Instead the question is whether, on the rights and duties the contract creates, the worker is serving in the business of the other party (an employee) or carrying on a business of his own (an independent contractor). The "own business / employer's business" inquiry, and in particular the contractual **right to control** the work, is central; the totality of the contractual rights is weighed, but the analysis is anchored in the contract's terms.

A "label" the parties put on the relationship (here, "self-employed contractor") is **not determinative**. It cannot override the substance of the legal rights created. Where, as here, the contract obliges the worker to do the work the company directs, to work when and where it tells him on its client's sites, gives the company the right to control how he performs the work, and the worker has no business of his own, supplies no significant equipment and cannot delegate, the contractual rights point to a relationship of employment. The contractual label to the contrary carries no weight against that substance.

## (c) One practical consequence for the engaging business

Because the worker is an **employee**, the engaging business carries employer obligations and liabilities it would not owe a genuine contractor. For example, it must make **superannuation guarantee contributions** on the worker's behalf (and is exposed to the superannuation guarantee charge plus penalties and interest if it did not). Other equivalent consequences flow from the same finding - liability for PAYG withholding, payroll tax, National Employment Standards / award entitlements such as paid leave, unfair dismissal exposure, and potential back-pay claims and penalties for misclassification - but the superannuation guarantee liability is a clear single example.