Until now, organisations have faced uncertainty when engaging workers as independent contractors.

In what has been a welcome relief to many businesses, last month the High Court in the two landmark decisions of Construction, Forestry, Maritime, Mining and Energy Union & Anor v. Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd & Anor v. Jamsek & Ors [2022] HCA 2 (together, High Court Decisions) upheld the primacy of the terms of the written agreement as key in establishing the legal character of the relationship.

This has provided businesses with greater clarity and certainty.

What is the new legal position?

The question of whether a worker is an independent contractor or an employee is complex.

The High Court has now placed a strong emphasis on the written agreement in determining the legal character of the relationship. If the rights and obligations written into that agreement point to an independent contractor relationship, and the agreement is not rendered ineffective because of a sham or illegality, then the legal character of the relationship is not affected by the way the agreement operates in practice.

As a result, according to the majority decision, unless a party seeks to challenge the efficacy of the contract, the courts are not empowered to consider the history of the party’s dealings to determine if the relationship is one of employment or independent contracting at law.

However, the High Court was not unanimous in the...

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