The High Court has allowed an appeal from a decision of the Full Federal Court on employee and independent contractor indicia. The Fair Work Ombudsman applied for a penalty order against Quest South Perth for allegedly making a false statement that two of its housekeeping employees were independent contractors, contrary to s 357(1) of the Fair Work Act 2009 (Cth). The Full Federal Court held that while the housekeepers remained employees no penalty was payable because the misrepresentation was about the existence of a contract between the employees and a third party, rather than about the nature of the contract between Quest and its housekeepers.
The High Court unanimously allowed the appeal. The Court (French CJ, Kiefel, Bell, Gageler and Nettle JJ) held that s 357(1) does prohibit an employer from misrepresenting to an employee that he or she works as an independent contractor under a contract for services with a third party. Disagreeing with the narrower construction of the FCAFC (see at ), the Court held that the plain language of s 357(1) did not suggest that it was confined to apply only to representations about contracts between the employer and employees (at ):
The reference in the provision to ‘the contract of employment under which the individual is, or would be, employed by the employer’ is a reference to the object of the prohibited representation. It is not a reference to the content of the prohibited representation. The content of the prohibited representation is expressed in terms which require nothing more than that the contract which is the object of the representation ‘is a contract for services under which the individual performs, or would perform, work as an independent contractor’. The provision is silent as to the counterparty to the represented contract for services.
Further, confining the provision to only cover contracts between the employer and third parties would not achieve the purpose of the scheme (to protect an employee from being misled about the status of his or her employment), would give the section a capricious operation, and was not supported by the legislative history of the provision (see –). The Court varied the order of the first instance judge, declaring that the respondent had contravened s 357, and remitted the proceeding to the Federal Court to determine any pecuniary penalties.
|High Court Judgment|| HCA 45||2 December 2015|
|High Court Documents||Quest South Perth Holdings|
|Full Court Hearing|| HCATrans 285||4 November 2015|
|Special Leave Hearing|| HCATrans 193||14 August 2015|
|Appeal from FCAFC|| FCAFC 37||17 March 2015|
|Trial Judgment, FCA
|| FCA 582||14 June 2013|