Watson Law recently acted for two (2) very hardworking clients and after a four year battle the clients were successful in obtaining judgment against their employer to be paid all their entitlements for more than a 20 year period.
Jamsek v ZG Operations Australia Pty Ltd [2020] FCAFC 119
Background Facts:
Mr Whitby and Mr Jamsek (the men) commenced working for ZG Operations (then Thorn Lighting) (the company) in 1977 as employees. In 1985 the men were given a choice “face redundancy or accept a change in the nature of the relationship dictated by the business’ to become contractors. Both men chose to remain working with the company as contractors and did so until they were terminated in late 2016. Little changed from the men’s work as employees to as ‘contractors’. The main difference that occurred was the men taking over the risk and expense of owning and operating their own delivery trucks. The men had no real or effective control in respect of the key aspects of the work relationship. The company effectively continued to dictate the hours during which the men were to be available for work, what they were to do, the remuneration that they were to receive, the annual leave that they could take, the paperwork they had to complete and other key rights and obligations.
First Instance Decision:
The Trial Judge in this matter ultimately found that the men were contractors when considering the totality of the relationship, noting that they had established partnerships, purchased and maintained trucks and were conducting their own business.
Appeal:
The Full Court comprising of Perram, Wigney and Anderson JJ determined that the Appellants were employees for the purposes of the Fair Work Act 2009 (Cth), the Superannuation Guarantee (Administration) Act 1992 (Cth) and the Long Service Leave Act 1955 (NSW).
The Full Court determined the following in relation to key factors:
- Formation and operation of partnerships: ‘partnerships were partners in name only, and not joint contributors to the income earning activities of the partnerships’ (at [191]).
- Intent behind the 1986 contract: ‘the reality is that there was little or no room for negotiation in respect of the formation of the terms of the contract’ (at [199]).
- Contribution of the vehicles: ‘it is but one factor, and must be considered in light of all the circumstances of the case… there will be circumstances where the provision of a truck by a person will not be determinative of the relationship’s characterisation’ (at [208]).
- Broad contractual mechanics: ‘the broad form of the contracts between the applicants and the company favoured the conclusion that there was no employment relationship…but, this does not preclude the existence of an employment relationship’ (at [211]).
- Day to day control of the applicants: ‘With respect to the primary judge, the fact that the company ostensibly required, or at least expected, the applicants for a substantial part of their relationship to adorn their trucks with the company logo and wear (and least in part) clothing adorned with the company logo, deserved greater emphasis in assessing the nature of the relationship between the applicants and the company’ (at [224]).
- Exclusivity of work and right to subcontract: ‘An evaluation of the totality of the relationship between the parties in the present case requires the court to assess what the parties in fact did over the nearly 40 years of their relationship. During that period, the business operated by the company was the applicants’ sole source of income. Throughout that period, the applicants worked more or less regular hours with a constant set of duties and working arrangements. In these circumstances, the fact that the contracts did not prevent the applicants driving their trucks after working hours and on the weekends for additional customers is, in my view, of limited significance’ (at [223])
- Capacity to generate goodwill: ‘The applicants were required to work from 6 am to at least 3 pm on each work day Monday to Friday. There was accordingly no realistic opportunity for the applicants to generate goodwill. There was nothing for the applicants to sell over and above their vehicles’ (at [237])
- Absence of written contracts: ‘the lengthy periods during which there was an absence of written contracts, in light of the other circumstances of the present case, underlines the immutability of the working relationship and the centrality of the applicants to the company’s organisation’ (at [241])
The matter is to be remitted to the Trial Judge for quantification of entitlements and penalties.
If you have any questions or concerns about your work relationship, then please get in contact with our Watson Law (02) 4647 5526 or via email This email address is being protected from spambots. You need JavaScript enabled to view it..