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Contractor rulings good for business; Clear arrangements crucial

Yesterday's High Court rulings on contractor/employee disputes will be good for business certainty and employment, but they highlight where organisations must pay particular attention to service agreements.

In the Personnel Contracting (trading as Construct) case, the High Court found that the contract in place with an on-hire worker provided for substantial control on Construct's part, and the worker was clearly an employee. In the ZG Operations case, however, the workers who disputed their characterisation were independent contractors, not employees (both rulings are summarised here).

Both decisions stressed the primacy of the contracts entered into, in determining disputes over whether workers are employees or contractors.

"Where the terms of the parties' relationship are comprehensively committed to a written contract, the validity of which is not challenged as a sham nor the terms of which otherwise varied, waived or the subject of an estoppel, there is no reason why the legal rights and obligations so established should not be decisive of the character of the relationship," the majority bench ruled.

This means that in future disputes, "it will not be necessary to 'rake over' the subsequent day-to-day workings of an arrangement to determine the character of the relationship", Kingston Reid partner Christa Lenard tells Shortlist...