The Fair Work Ombudsman alleged the conversion breached section 357 of the Fair Work Act 2009. This section prohibits employers from misrepresenting employment as an independent contracting arrangement. The Full Bench of the Federal Court of Australia found Quest South Perth had not contravened section 357 because it had used a third party to convert the employees to independent contractors. The Fair Work Ombudsman then appealed that finding to the High Court of Australia, asking it to find whether an employer can avoid contravening section 357 by introducing a third-party labour hire company into an agreement between itself and its employee. The High Court of Australia found that Quest South Perth had contravened section 357 of the Fair Work Act 2009.
Quest is a company that operates serviced apartments at sites across Australia. Quest South Perth was one such site, and it employed two housekeepers and a receptionist who were paid an hourly rate.[2] Quest held meetings with a third-party labour hire company, which told Quest it could "convert" the employees to independent contractors,[3] with the benefit of this being that they would be no longer entitled to most of the protections, rights, and conditions of Australian labour laws.[1] This would include the provisions within the National Employment Standards, a set of eleven minimum entitlements for employees in Australia, in addition to the minimum wage.
The contracting company held meetings with the three employees and pressured them to become independent contractors, stating that it would be advantageous, without disclosing the disadvantages of losing their workplace rights.[1] The employees signed an agreement to work as independent contractors.[4] The Fair Work Ombudsman then initiated proceedings alleging Quest South Perth had breached section 357 of the Act.[5]
Federal Court cases
First Federal Court decision
The case commenced at the Federal Court of Australia before Justice McKerracher. The Ombudsman argued two misrepresentations had been made: that the employees were dismissed only to be re-employed doing the same role as independent contractors, or that this is what was represented to the individuals when in fact they were employees. Both arguments, if proven, constituted a breach of section 357 of the Act.[5] Justice McKerracher dismissed the first argument, finding the workers consciously decided to convert from employee to independent contractor. On the second argument, Justice McKerracher found the Ombudsman was unable to prove the workers had remained employees.[5]
Appeal to the Full Federal Court
The Ombudsman appealed to the Full Court of the Federal Court, which was dismissed.[6] Justices North and Bromberg observed that "when determining whether a relationship is one of employment", it is necessary "to ensure that form and presentation do not distract the Court from identifying the substance of what has been truly agreed".[7] The decision constituted a way of avoiding a breach of section 357 of the Act by involving a third-party labour hire company.[8]
The Ombudsman then appealed the Full Federal Court's decision to the High Court of Australia, with the appeal posing a key issue: whether an employer could avoid contravening section 357 of the Act by introducing a third-party labour hire company into an agreement between itself and its employee.[8] The High Court, in summary, held an employer could not.[9]
The High Court held that the Full Federal Court had interpreted section 357 of the Act with a narrow construction not supported by its text and that the section prevents an employer from misrepresenting to an employee that they work for a third party.[8] The High Court ruling means it is unlawful to use a third party to disguise a true employment relationship.[10]
In a joint judgment, the High Court majority consisting of Chief Justice French and Justices Kiefel, Bell, Gageler, and Nettle found that Quest's attempt to "convert" the employees to independent contractor status constituted a breach of section 357 of the Act and that "Who might be the counterparty to the represented contract for services, and whether that counterparty might be a real or fictional entity, is correspondingly immaterial to the operation of the provision".[11]
Labour laws, labour code or employment laws are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, employer, and union.
Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The interests of the employees are commonly presented by representatives of a trade union to which the employees belong. A collective agreement reached by these negotiations functions as a labour contract between an employer and one or more unions, and typically establishes terms regarding wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs. Such agreements can also include 'productivity bargaining' in which workers agree to changes to working practices in return for higher pay or greater job security.
Overtime is the amount of time someone works beyond normal working hours. The term is also used for the pay received for this time. Normal hours may be determined in several ways:
In employment law, constructive dismissal, also called disguised dismissal, constructive discharge or constructive termination, occurs when an employee resigns due to the employer creating a hostile work environment. This often serves as a tactic to avoid payment of statutory severance pay and benefits. In essence, although the employee resigns, the resignation is not truly voluntary but rather a response to intolerable working conditions imposed by the employer. These conditions can include unreasonable work demands, harassment, or significant changes to the employment terms without the employee’s consent.
An employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibilities between parties to a bargain. The contract is between an "employee" and an "employer". It has arisen out of the old master-servant law, used before the 20th century. Employment contracts relies on the concept of authority, in which the employee agrees to accept the authority of the employer and in exchange, the employer agrees to pay the employee a stated wage.
Australian labour law sets the rights of working people, the role of trade unions, and democracy at work, and the duties of employers, across the Commonwealth and in states. Under the Fair Work Act 2009, the Fair Work Commission creates a national minimum wage and oversees National Employment Standards for fair hours, holidays, parental leave and job security. The FWC also creates modern awards that apply to most sectors of work, numbering 150 in 2024, with minimum pay scales, and better rights for overtime, holidays, paid leave, and superannuation for a pension in retirement. Beyond this floor of rights, trade unions and employers often create enterprise bargaining agreements for better wages and conditions in their workplaces. In 2024, collective agreements covered 15% of employees, while 22% of employees were classified as "casual", meaning that they lose many protections other workers have. Australia's laws on the right to take collective action are among the most restrictive in the developed world, and Australia does not have a general law protecting workers' rights to vote and elect worker directors on corporation boards as do most other wealthy OECD countries.
WorkChoices was the name given to changes made to the federal industrial relations laws in Australia by the Howard government in 2005, being amendments to the Workplace Relations Act 1996 by the Workplace Relations Amendment Act 2005, sometimes referred to as the Workplace Relations Amendment Act 2005, that came into effect on 27 March 2006.
{{Infobox union | name = MEAA | location_country = Australia | affiliation = ACTU, FIA, IFJ,[[Australian Labor Party |NSW Labor] | members = 15,800 | full_name = Media, Entertainment & Arts Alliance | native_name = | image = | founded = 1992 | dissolved = | merged = | headquarters = Redfern, New South Wales | key_people = Erin Madeley, Chief Executive | website = www.meaa.org | footnotes = }} The Media, Entertainment & Arts Alliance (MEAA), also sometimes referred to as the Alliance, is the Australian trade union and professional organisation which covers the media, entertainment, sports and arts industries.
The Employment Rights Act 1996 is a United Kingdom Act of Parliament passed by the Conservative government to codify existing law on individual rights in UK labour law.
The New Zealand Employment Relations Act 2000 is a statute of the Parliament of New Zealand. It was substantially amended by the Employment Relations Amendment Act 2001 and by the ERAA 2004.
In Australia, labour hire is referred to by the legal term of art labour hire arrangement, and it refers to the employment practice of an employer supplying its employees to another workplace, for profit.
Casual employment or contract employment is an employment classification under employment law.
An employment contract in English law is a specific kind of contract whereby one person performs work under the direction of another. The two main features of a contract is that work is exchanged for a wage, and that one party stands in a relationship of relative dependence, or inequality of bargaining power. On this basis, statute, and to some extent the common law, requires that compulsory rights are enforceable against the employer.
The Office of the Australian Building and Construction Commissioner (ABCC) (2005–2012) was an independent, statutory authority, responsible for monitoring and promoting workplace relations in the Australian building and construction industry. The ABCC provided education, investigated workplace complaints and enforced compliance with national workplace laws in the industry. The ABCC did this by:
South African labour law regulates the relationship between employers, employees and trade unions in the Republic of South Africa.
The Fair Work Act 2009(Cth) is an Act of the Parliament of Australia, passed by the Rudd government to reform the industrial relations system of Australia. Replacing the Howard government's WorkChoices legislation, the Act established Fair Work Australia, later renamed the Fair Work Commission.
The National Employment Standards (NES) is a set of eleven minimum entitlements for employees in Australia who are covered by the Fair Work Act 2009. An award, enterprise agreement, other registered agreement or employment contract cannot provide for conditions that are less than the national minimum wage or the National Employment Standards and they can not be excluded. The NES have applied to employees since 1 January 2010, having replaced the previous five entitlement standard under the WorkChoices legislation.
Commonwealth Bank of Australia v Barker is a leading Australian judgment of the High Court which unanimously and firmly rejected the proposition that contracts of employment in Australia should contain an implied term of mutual trust and confidence.
Labour hire is a form of employment in which an employer directs their de jure employees to perform work at an external workplace, belonging to a client of the legal employer.
CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 is an Australian labour law case of the High Court of Australia on the employment relationship between an individual who signed a contract for services and a labour hire organisation. The High Court departed from the approach widely taken by lower courts in holding a "multi-factorial" approach to determining an employment relationship. The High Court found that the totality of the circumstances was not always the correct approach for identifying whether an individual was engaged as an employee or independent contractor. Rather, the contents of a contract may instead indicate the relationship. The High Court found the worker at the centre of the dispute between the parties was an employee of the labour hire agency for whom he had worked, rather than an independent contractor. The judgment means worker relationships will be defined by the terms of their contract.
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