Elisha v Vision Australia Limited: HCA Rules on Psychiatric Harm

Elisha v Vision Australia Limited [2024] HCA 50

Judgment date: 11 December 2024
High Court of Australia
The bench of judges: Gageler CJ; Gordon, Edelman, Steward, Gleeson, Jagot and Beech-Jones JJ
Damages; Breach of contract; Scope of contractual duty; Remoteness

The case Elisha v Vision Australia Limited [2024] HCA 50 revolves around employment law, focusing on breach of contract and negligence claims following the dismissal of the appellant, Mr. Adam Elisha, from his role at Vision Australia Limited. Given below is a summary of the facts and judgment.

Facts and Case Background (Elisha v Vision Australia Limited)

Mr. Elisha was employed by Vision Australia as an adaptive technology consultant under a 2006 employment contract. The contract made reference to compliance with regulatory requirements and the employer’s policies and procedures.

In March 2015, an incident occurred at a hotel during work-related travel where Mr. Elisha was accused of aggressive behaviour toward hotel staff. Vision Australia’s disciplinary process culminated in a “stand down letter” and subsequent termination of employment, alleging misconduct based on prior aggressive behaviour, which had not been formally raised or substantiated.

The process was described as a “sham” by the primary judge. Allegations of prior aggression were relied upon without informing Mr. Elisha or allowing him to respond. The decision-makers had limited direct interaction with Mr. Elisha and relied on vague and unsupported claims.

Following his dismissal, Mr. Elisha was diagnosed with major depressive disorder and adjustment disorder. Evidence suggested these were directly tied to the unfair dismissal process.

Legal Proceedings

Mr. Elisha initiated legal action claiming:

• Breach of contract due to non-compliance with the disciplinary procedures.

• Negligence for failing to provide a safe system of investigation and decision-making.

The primary judge awarded damages for breach of contract but dismissed the negligence claim.

The Court of Appeal overturned the primary judgment, finding that psychiatric injury damages were too remote and could not be recovered for breach of contract. It also ruled out negligence claims.

High Court Judgment (Elisha v Vision Australia Limited)

The High Court upheld that Vision Australia’s disciplinary policies were incorporated into Mr. Elisha’s employment contract. The breach of these policies, particularly the failure to provide procedural fairness, caused Mr. Elisha’s psychiatric injury.

The injury was not too remote as psychiatric harm was a foreseeable consequence of a flawed dismissal process.

The court deemed it unnecessary to decide whether a tortious duty of care existed (negligence), given the success of the contractual claim.

The High Court reinstated the primary judge’s decision to award damages for breach of contract, emphasizing the seriousness of the procedural breaches. The appeal was allowed, and the orders of the Court of Appeal were set aside.

Significance

This case suggests that procedural fairness in employment dismissals is really important and clarifies the scope of recoverable damages for breach of contract in such contexts. It also throws light on the limits of negligence claims in employment law. The Court declined to expand the duty of care owed by employers to cover the disciplinary process, citing potential incoherence with employment law and existing statutory regimes.

Quotes from the case

“The disciplinary process conducted by Vision Australia was found to breach cl 47.5 of the Vision EA and the 2015 Disciplinary Procedure, both of which were held to have been incorporated into the 2006 Contract.” (Primary judge O’Meara J)

“The disciplinary process conducted by Vision Australia was found to breach … the 2015 Disciplinary Procedure … If a proper process had been undertaken, a proper consideration of the hotel incident would have led to the conclusion that the events probably involved no element of harassment or bullying … Mr Elisha would not have developed the serious psychiatric injury from which he suffers.” (Primary judge O’Meara J)

“It was reasonable to expect that Mr Elisha would have been so distressed by the manner in which Vision Australia breached the 2006 Contract and by the consequences of the breach for him, including his dismissal for alleged misconduct from the employment that he had held for nearly a decade, that there was a serious possibility that Mr Elisha would suffer a serious psychiatric injury.” (Gageler CJ, Gordon, Edelman, Gleeson, and Beech-Jones JJ)

References:

https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/2024/50.html

YOU MIGHT ALSO LIKE:

Deliveroo Australia Pty Ltd v Diego Franco – Key Gig Work Case

Zuijs v Wirth Brothers Pty Ltd [1955]: A Legal Case Summary

MORE FROM LABOUR LAW:

ZG Operations Australia Pty Ltd v Jamsek [2022]: Australian Law

ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; (2022) 275 CLR 254; 96 ALJR 144; 398 ALR 603; 312 IR 74

High Court of Australia
Judgment date: 9 February 2022
Kiefel CJ, Gageler, Keane, Gordon, Edelman, Steward and Gleeson JJ.
Nature of employment relationship – Employee or independent contractor

The case ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 deals with the determination of whether two former truck drivers, Martin Jamsek and another respondent, were employees or independent contractors of ZG Operations Australia Pty Ltd.

Case Background (ZG Operations Australia Pty Ltd v Jamsek)

The respondents worked as truck drivers for the appellant’s predecessors since 1977. In 1986, they were required to purchase their own trucks and entered into contracts with the company through partnerships formed with their spouses. They invoiced the company for services and declared partnership income.

In 2017, after the termination of their contracts, the respondents sought statutory entitlements, claiming they were employees under the Fair Work Act 2009 (Cth), the Superannuation Guarantee (Administration) Act 1992 (Cth), and the Long Service Leave Act 1955 (NSW).

Primary Legal Question

Whether the respondents, under the changed contractual arrangements, were employees or independent contractors.

Court History

The primary judge ruled that they were independent contractors.

The Full Court of the Federal Court reversed this decision, finding them to be employees.

The High Court ultimately reinstated the view that they were independent contractors, allowing the appeal by ZG Operations.

High Court’s Rationale (ZG Operations Australia Pty Ltd v Jamsek)

The High Court emphasized the significance of the written contracts governing the relationships between the company and the partnerships. The respondents were found to have acted as partners in a business providing delivery services, rather than as employees. The partnerships owned and bore the operational risks of the trucks, further supporting the conclusion of independence. Disparities in bargaining power and other contextual factors, while relevant, were insufficient to alter the contractual character of the relationship.

In the words of KIEFEL CJ, KEANE AND EDELMAN JJ. –

“…the character of the relationship between the parties in this case was to be determined by reference to the rights and duties created by the written agreement which comprehensively regulated that relationship.”

“…the reality of the situation is that the partnerships, and not the respondents individually, owned and operated the trucks. The partnerships contracted with the company and invoiced the company for delivery services provided by the operation of the trucks. The partnerships earned income from the company, incurred expenses associated with the ownership and operation of the trucks, and took advantage of tax benefits of the structure. It is not possible to square the contention that the respondents were not conducting a business of their own as partners with the circumstance that, for many years, they enjoyed the advantages of splitting the income generated by the business conducted by the partnerships with their fellow partners.”

Significance of the case

The decision clarifies that the characterization of a worker’s relationship with a company must primarily derive from the written contractual terms unless claims like sham arrangements or unconscionable conduct are made. It underscores the boundaries of employee vs. contractor distinctions in the context of modern labour arrangements.

List of references:

https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/2022/2.html

YOU MIGHT ALSO LIKE:

Deliveroo Australia Pty Ltd v Diego Franco – Key Gig Work Case

Zuijs v Wirth Brothers Pty Ltd [1955]: A Legal Case Summary

MORE FROM LABOUR LAW:

Deliveroo Australia Pty Ltd v Diego Franco – Key Gig Work Case

Case name & citation: Deliveroo Australia Pty Ltd v Diego Franco [2022] FWCFB 156

Court: Fair Work Commission – Full Bench
Date of Decision: 17 August 2022
Judges: Vice President Hatcher, Vice President Catanzariti, Deputy President Cross
Areas of Law: Employment Status; Worker Classification; Unfair Dismissal

Background of the Case (Deliveroo Australia Pty Ltd v Diego Franco)

Diego Franco worked as a delivery rider for Deliveroo Australia Pty Ltd from April 2017 to April 2020. His work arrangement was governed by a “supplier agreement,” which was revised multiple times.

In April 2020, Deliveroo identified Mr. Franco as having delayed delivery times. On April 23, 2020, Deliveroo emailed him stating he had failed to deliver orders on time, breaching his agreement. On April 30, 2020, Deliveroo disabled his access to the Rider App, effectively terminating his engagement.

Franco filed an unfair dismissal claim with the Fair Work Commission (FWC), which ruled in his favour.

Initial Fair Work Commission Ruling (May 18, 2021)

Commissioner Cambridge determined that Franco was an employee of Deliveroo, not an independent contractor. His dismissal was unfair, as it was harsh, unjust, and unreasonable. He was not given clear expectations regarding delivery times. Further, he was not given an opportunity to respond before being terminated. He should be reinstated with lost wages restored.

Deliveroo’s Appeal

Deliveroo challenged the decision, arguing Mr. Franco was a contractor, not an employee. They contended the Commissioner had misapplied the legal test for employment classification. The dismissal had a valid reason (poor delivery performance) and proper procedural fairness was followed.

Full Bench of the Fair Work Commission Decision (August 17, 2022)

The Full Bench reviewed the appeal in light of new High Court precedents in Personnel Contracting and Jamsek, which emphasized that employment relationships should be determined primarily by contract terms. The contract’s written terms are the deciding factors, rather than the actual working relationship.

Reassessment of Employment Status:

The Full Bench ruled that Franco was not an employee but an independent contractor. It based this on the terms of the 2019 supplier agreement, which:

Did not establish an employer-employee relationship.
Allowed Franco to choose when and where to work.
Permitted him to work for competitors simultaneously. (He also worked for competitors Uber Eats and DoorDash.)
Gave him control over delivery routes and equipment.
Allowed him to delegate work to others.

Ignorance of Actual Working Relationship:

Despite evidence that Deliveroo exercised significant control over Franco’s work in practice—through its algorithm, performance monitoring, and branding—the court ruled against considering these real-world conditions. Instead, it focused solely on the written contract.

Jurisdictional Error in Original Decision:

Since Franco was found to be a contractor, he was not protected from unfair dismissal under the Fair Work Act 2009. This rendered the original FWC decision invalid.

The Full Bench admitted that Deliveroo treated Franco unfairly, but it stated that it had no jurisdiction to remedy the unfairness due to his independent contractor status.

Here is an excerpt from the judgment

“The ……… conclusion is that Mr Franco was not a person protected from unfair dismissal within the meaning of s 382 of the FW Act and the Commission had no jurisdiction to entertain his unfair dismissal application nor power to grant him the remedies that it did. The Commissioner’s decision and order must therefore be quashed, and Mr Franco’s unfair dismissal application must be dismissed as incompetent. Regrettably, this leaves Mr Franco with no remedy he can obtain from the Fair Work Commission for what was, plainly in our view, unfair treatment on the part of Deliveroo.” (p. 57)

Outcome of the Appeal:

The appeal was upheld. The original decision was quashed and Franco’s unfair dismissal claim was dismissed.

Takeaway from the case (Deliveroo Australia Pty Ltd v Diego Franco)

The ruling clarified that in the gig economy, contractual terms, rather than practical work conditions, determine employment status. The case highlights the challenges gig workers face in securing employee protections under Australian labour laws.

References:

https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FWCFB/2022/156.html

YOU MIGHT ALSO LIKE:

Zuijs v Wirth Brothers Pty Ltd [1955]: A Legal Case Summary

Stevens v Brodribb Sawmilling Co Pty Ltd (1986)

MORE FROM LABOUR LAW:

Zuijs v Wirth Brothers Pty Ltd [1955]: A Legal Case Summary

Case name & citation: Zuijs v Wirth Brothers Pty Ltd [1955] HCA 73; (1955) 93 CLR 561

Court: High Court of Australia
Date: 15 December 1955
The bench of judges: Dixon CJ, McTiernan, Williams, Webb and Taylor JJ
Appellant: Constantin Zuijs
Respondent: Wirth Bros. Pty. Ltd. (circus proprietors)

What is the case about?

In Zuijs v Wirth Brothers Pty Ltd, the key issue revolves around whether the appellant, an acrobat performing at a circus, should be considered a “worker” under the Workers’ Compensation Act 1926-1948 (N.S.W.). The appellant sought compensation after sustaining injuries during a performance and argued that he was either employed under a contract of service or that he should benefit from Section 6(3A) of the Act.

Section 6(3A) establishes a deemed employment relationship under certain conditions, such as when a contractor does not operate an independent trade or business and performs work exceeding five pounds in value.

Initial decision in Zuijs v Wirth Brothers Pty Ltd

The Workers’ Compensation Commission ruled that Zuijs was not employed under a contract of service, nor did he fall within the purview of Section 6(3A), denying him compensation.

This decision was appealed to the Supreme Court of New South Wales, which upheld the Commission’s findings. Further, the case was escalated to the High Court of Australia.

Judgment of the High Court

The High Court found that the appellant was working under a contract of service, meaning he was an employee of the circus.

The decision of the Supreme Court of New South Wales was overturned, and the matter was remitted for further consideration in line with the High Court’s interpretation.

Reasoning (Zuijs v Wirth Brothers Pty Ltd)

Even though the acrobatics themselves require a high degree of individual skill and personal performance, the circus, as the employer, had control over other aspects of the job. These included decisions about the schedule of performances, rehearsals, safety measures, costumes, and conduct. The employer’s ability to control these ancillary aspects suggests a relationship of employment, rather than independent contracting.

Regarding the applicability of Section 6(3A), it was found that the provision requires a contract involving work worth more than five pounds. However, it is clear that the trapeze artist’s role, being part of a touring circus, involves repeated acts for a weekly wage, not a one-off task or a contract based on specific, measurable work. Therefore, the provision that requires a contract for a particular task with a defined value does not apply here.

In this regard, the judges stated as under:

“In our opinion this provision is entirely inappropriate to the kind of contract in question in this case. That is shown by the opening words, “Where a contract to perform any work exceeding five pounds in value”. You cannot satisfy this condition by a contract of indefinite duration for repeated performances of an act on a trapeze.”

Significance

This case highlights the importance of interpreting the nature of employment contracts carefully, especially in situations involving specialized work like that of an acrobat.

References:

https://jade.io/article/65112

YOU MIGHT ALSO LIKE:

Stevens v Brodribb Sawmilling Co Pty Ltd (1986)

MORE FROM LABOUR LAW:

Stevens v Brodribb Sawmilling Co Pty Ltd (1986)

Stevens v Brodribb Sawmilling Co Pty Ltd (1986) is a case of workplace negligence. The case revolves around the distinction between an employee and an independent contractor. Given below are the case details:

Case name & citation:	Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
The concerned Court:	High Court of Australia
The bench of judges:	Mason, Wilson, Brennan, Deane and Dawson JJ.
Decided on:	13 February 1986
Area of law:	Employment status under labour law

Facts of the case (Stevens v Brodribb)

Brodribb Sawmilling Co Pty Ltd had a large sawmill in eastern Victoria and conducted extensive logging activities in the nearby area. The company hired people to do the requisite tasks such as felling, snigging (loading), and truck driving. Grey was hired to use a tractor that he supplied himself to push or drag felled logs to a loading ramp and then load the logs onto a truck. On the other hand, Stevens was engaged to drive the timber load to the sawmill. He was to use his personal truck for this purpose.

A “bush boss” who was an employee of Brodribb oversaw the logging activities. On the day of the incident, Gray was having trouble loading a short log onto Stevens’ truck. In an attempt to assist, Stevens used a chain to secure the log to the tractor blades. But before he walked away from there, Gray moved the tractor dislodging the log which rolled down the ramp and hurt Stevens accidentally. He sustained severe injuries and filed a claim for damages against both Gray (for his negligence) and Brodribb Sawmilling Co Pty Ltd.

Issue

The main issue, in this case, was to determine the employment status of Gray and Stevens. Whether they should be classified as employees or independent contractors?

Judgment of the Court in Stevens v Brodribb

Brodribb Sawmilling Co Pty Ltd was concerned about the legal implications of classifying the two men as either employees or independent contractors. If Gray and Stevens were deemed independent contractors, the sawmilling company could avoid vicarious liability for Gray’s negligent actions nor would it be personally liable to Stevens for breach of employer’s duty to provide adequate equipment and a safe system of work.

The High Court of Australia decided that Gray and Stevens were independent contractors. But it also established that even in cases where an individual is classified as an independent contractor, the principal may still owe a duty of care to him pursuant to the general principles of negligence. This means that the sawmilling company still had a responsibility to take reasonable precautions to ensure the safety of Stevens. Though in this specific case, on the issue of liability to the injured (Stevens), the High Court found that Brodribb had not breached its duty of care.

Employee vs Independent Contractor

In deciding the employment status of Gray and Stevens, the judges considered that the element of control alone is not the sole criterion to determine the relationship of employment. Several other factors were listed for example:

mode of remuneration of the workers
provision and maintenance of equipment (who provides the equipment)
hours of work and provision for holidays or leave
obligation to work at the employer’s direction
the deduction of income tax
payment of significant business expenses from remuneration
the creation of goodwill or saleable assets
delegation of work or sub-contracting
work involving a specialized profession or trade

Quotes from the case

Mason J said as under:

“…the existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment. The approach of this Court has been to regard it as merely one of a number of indicia which must be considered in the determination of that question … Other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee.”

List of references:

You might also like:

More from labour law:

Sweeney v Boylan Nominees Pty Ltd [2006]: A Summary

Sweeney v Boylan Nominees Pty Ltd [2006] is a famous labour law case from Australia.

Case name & citation: Sweeney v Boylan Nominees Pty Limited [2006] HCA 19; (2006) 227 ALR 46; (2006) 226 CLR 161
The concerned Court: High Court of Australia
Decided on: 16 May 2006
Area of law: Employment status under labour law; Vicarious liability

Given below are the case facts.

Facts of the case (Sweeney v Boylan Nominees)

Mrs. Sweeney sustained injuries when a refrigerator door at a service station fell off and smacked her on the head. Earlier in the day on which Mrs. Sweeney was hurt, the owners of the service station had already informed Boylan, who owned the refrigerator, that there was a problem with the door. Mr. Comninos, a mechanic, was dispatched to the service station to undertake repairs. The trial judge determined that Mr. Comninos failed to exercise reasonable care, which resulted in Mrs. Sweeney’s injuries. This finding was not challenged on appeal.

Mrs. Sweeney filed a lawsuit against the owners of the service station and Boylan.

Issue that arose

The main issue of the case was the nature of Boylan’s engagement with Mr. Comninos. That is, whether he was an employee or an independent contractor.

Boylan had six employees in its service department, three field service employees who performed repairs at Boylan’s clients’ locations, and two contractors (including Mr. Comninos) who did the same work as the field service employees. Although Mr. Comninos worked for Boylan on a regular basis, the contractors were only required to work when the field service personnel were fully occupied. Mr. Comninos was referred to as “our mechanic” in Boylan’s service reports, and he was empowered to collect the amount due when repairs were finished. Boylan also referred to Mr. Comninos as “our mechanic” in a report to its public liability insurer.

Unlike the field service personnel, Mr. Comninos was not obligated to accept jobs from Boylan, wore no Boylan uniform, was not based on Boylan’s premises, and invoiced Boylan for the hours he worked. Mr. Comninos also possessed his own trade certificate and contractor’s license, as well as his own public liability and workers’ compensation insurance, and drove his own van with his own firm name on it.

Judgment of the Court in Sweeney v Boylan Nominees

Trial judge:

Mrs. Sweeney’s claim against the owners of the service station was dismissed in the District Court of New South Wales. And this claim was not pursued further on appeal. Mrs. Sweeney, on the other hand, prevailed in her case against Boylan on the grounds that it was vicariously liable for the negligence of Mr. Comninos. The trial judge determined that the mechanic was acting as a servant or agent of Boylan, and he had the approval and authority from Boylan to carry out the work in question. In reaching this, the trial judge gave significant weight to the various documents that referred to Mr. Comninos as “our mechanic.”

Court of Appeal:

The New South Wales Court of Appeal overturned the trial judge’s decision and ruled that the relationship between Boylan and the mechanic, Mr. Comninos, was not that of an employment relationship. The Court of Appeal cited several reasons to support this finding:

Boylan did not exert control over Mr. Comninos in his day-to-day work activities.
There was no mutual obligation between Boylan and Mr. Comninos to provide and accept work.
Mr. Comninos conducted his work under his own name.
Mr. Comninos supplied his own equipment and tools for the tasks and bought his own spare parts.
Boylan paid Mr. Comninos based on a piecework basis.
Mr. Comninos issued his own invoices to Boylan.
Mr. Comninos provided his own insurance coverage and managed his superannuation.

All of these factors distinguished his independence from Boylan’s direct employment. This indicated that he was an independent contractor and not an employee.

High Court:

The High Court upheld the decision of the New South Wales Court of Appeal.

The majority underlined the importance of distinguishing between employees and independent contractors in determining the scope of vicarious liability. It moved away from relying solely on the control test and preferred to consider the totality of the relationship between the parties as articulated in Hollis v Vabu Pty Ltd (2001).

The Court accepted that the facts did not support a finding that Mr. Comninos was an employee. Therefore, Boylan was not held vicariously liable for Mr. Comninos’ actions, and Mrs. Sweeney’s claim against Boylan was not upheld based on vicarious liability.

List of references:

You might also like:

More from labour law:

Cassidy v Ministry of Health [1951]: Facts and Principles

Cassidy v Ministry of Health [1951] is an important tort and labour law casethat deals with the concept of Res Ipsa Loquitur (Latin for “the thing speaks for itself”) and the liability of a hospital for the negligence of its employees.

The case details are as follows:

Case name & citation:	Cassidy v Minister of Health [1951] 2 KB 343
Court and jurisdiction:	Court of Appeal; England and Wales
The bench of judges:	Somervell, Singleton and Denning, L.JJ.
Area of law:	Employment status under labour law; vicarious liability

Facts of the case (Cassidy v Ministry of Health)

The plaintiff underwent medical surgery for his two stiff fingers at a hospital run by the defendant. As a result of the negligence of one of the doctors involved in the operation, the plaintiff’s hand became stiff affecting majorly all of his fingers. The plaintiff brought a lawsuit against the hospital authority, alleging negligence and seeking to establish vicarious liability.

The defendant contended that the doctors or the staff operating were not considered as its servants as it did not exercise control over how they performed their duties. Hence, it should not be held vicariously liable.

Issue

Whether the hospital authority was liable for the negligence on the part of its doctors.

Judgment of the Court in Cassidy v Ministry of Health

The Court held that the hospital authority was responsible for the negligence of its doctors. The doctor operating the surgery (or doctors involved in the incident) was to be categorized as a servant of the defendant because the defendant had chosen him/her for the job and the person was fully integrated into the defendant’s organization. Their selection was not based on the patient’s choice. Therefore, the defendant was held liable for the negligent actions of the doctors during the course of their employment at the hospital.

Applying the doctrine of Res Ipsa Loquitur

In this case, the doctrine of Res Ipsa Loquitur was applied.

The plaintiff said, “I went into hospital to be cured of two stiff fingers. I have come out with four stiff fingers and my hand is useless. This should not have happened if due care had been used. Explain it if you can.”

Given this, it was established that since the plaintiff had suffered an injury during a medical procedure performed by the hospital staff and the exact cause/particular employee responsible for the negligence cannot be identified by him, the hospital authority will be presumed to be negligent unless it proves that none of its employees had acted negligently during the treatment. In other words, the doctrine of Res Ipsa Loquitur was applied. This doctrine allows the court to infer negligence on the part of the hospital authority based on the nature of the accident itself, even without direct evidence of negligence. The circumstances surrounding the case were such that the injury could not have occurred without some degree of negligence on the part of the hospital or its staff.

Quotes from the case

Denning LJ gave the following views:

“I take it to be clear law, as well as good sense, that, where a person is himself under a duty to use care, he cannot get rid of his responsibility by delegating the performance of it to someone else, no matter whether the delegation be to a servant under a contract of service or to an independent contractor under a contract for services.”

“……Whenever they accept a patient for treatment, they must use reasonable care and skill to cure him of his ailment. The hospital authorities cannot, of course, do it by themselves: they have no ears to listen through the stethoscope, and no hands to hold the surgeon’s knife. They must do it by the staff which they employ; and if their staff are negligent in giving the treatment, they are just as liable for that negligence as is anyone else who employs others to do his duties for him.”

Conclusion

The level of control exercised by a superior over his subordinates plays a major role in determining an employer-employee relationship. However, since the case of Cassidy v Minister of Health, it has been evident that relying solely on the control test can be inadequate, especially in a hospital setting. This case established that hospitals can be held liable for the negligence of doctors who are employed on a full-time basis by them. The control test alone cannot be sufficient to determine liability in such situations. Because in the case of a professional employee such as a doctor, the employer may lack knowledge of the specific field and may not be able to exert direct control over the doctor’s practice.

List of references:

You might also like:

More from labour law:

Case Summary of Hollis v Vabu Pty Ltd (2001)

Case name & citation: Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 181 ALR 263; (2001) 207 CLR 21

The concerned court: High Court of Australia

Decided on: 09 August 2001

The bench of judges: Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne & Callinan JJ

Area of law: Employment status under labour law

What is the case about?

Hollis v Vabu (2001) is a famous Australian case on employment law. The nature of the employee-employer relationship was the primary focus of this case. The issue was whether the claimant was an employee or an independent contractor. Given below are the case details.

Facts of the case (Hollis v Vabu)

Vabu conducted business under the name of ‘Crisis Couriers’ and it had 20 to 30 bicycle and motorcycle couriers. In December of 1994, a pedestrian, Mr. Hollis was on his way out of a building where he had just picked up a parcel. After stepping onto the footpath, he was injured as a result of being knocked down by a cyclist who was wearing a jacket marked with the Crisis Couriers logo.

Mr. Hollis thus brought a claim against the company for damages. He claimed that the courier was working for the company and acting as its employee and agent when he was riding the bicycle.

Issue

Was the courier an employee? If yes, was Vabu vicariously liable?

Judgment of the Court in Hollis v Vabu

When determining the true nature of a relationship of employment in the past, control was the only factor that was taken into account. However, the High Court ruled that the totality of the relationship between the parties must be taken into account. This includes factors such as remuneration (including whether there are invoices, whether the contractor is registered for GST, and whether tax is being withheld), who decides the hours that the contractor will work, who provides the equipment, and so on.

Ultimately, the High Court, by majority, decided that the bicycle courier was an employee of Vabu, and as a result, Vabu was found to be vicariously liable for the act of the courier who knocked down Mr. Hollis.

Factors considered in the decision

The judges of the High Court issued a joint judgment in which they applied the multi-facet test. In this test, they not only considered the contractual terms that were in place between Vabu and the couriers, but they also investigated “the system which was operated thereunder and the work practices imposed by Vabu.” This was done in order to determine the entirety of the relationship that existed between the two parties.

The following factors were taken into account:

the courier was not operating an independent business of his own
the courier did not provide skilled labour or labour that required special qualifications
the couriers did not have much say in the manner in which their work was performed
the courier company had significant actual control over the activities of the couriers
as a method of identification, the company uniform was required to be worn by the couriers, and they were presented to the general public and people who used the courier service as emanations of the company
the company supplied the uniforms and radios that the couriers used to communicate with the company
the company supervised the finances of the couriers, making deductions for unsubstantiated charges and for insurance, and fining the couriers when they caused damage to company property or failed to return it
there was no room for the couriers to negotiate the rate of their remuneration
the company decided when and how often couriers could take leave, and leave was not available during certain times of the year that were particularly busy, such as Christmas and Easter

The joint judgment presented the view that it couldn’t be said that the couriers were independent contractors simply because they owned their own bikes, bore the expense of running them, and supplied many of their own accessories. There was nothing contrary to the relationship of employment. This was even more so because the capital outlay was relatively small and because bicycles are not tools that are inherently capable of being used only for the courier/delivery work, but rather offer a means of personal transportation as well as a means of recreation outside of working hours.

List of references:

You might also like:

More from labour law:

Williams v Compair Maxam Ltd [1982]: Facts and Principles

Case name & citation: Williams v Compair Maxam Ltd [1982] IRLR 83; [1982] ICR 156

Court and jurisdiction: Employment Appeal Tribunal, England and Wales

Decided on: 22 January 1982

The learned judge: Browne-Wilkinson J

Area of law: Redundancy; unfair dismissal

What is the case about?

When an employer is contemplating having to lay off employees, he or she cannot cherry-pick the employees they wish to retain. Instead, they must have appropriate redundancy criteria from which to select the employees who are at risk of being made redundant or laid off. This requirement for redundancy criteria was established in Williams v Compair Maxam Ltd.

Case facts (Williams v Compair Maxam Ltd)

In this case, Compair Maxam Ltd was experiencing a drop in business and recognized the need to implement cost-cutting measures. Its departmental managers decided to select a team of core staff members who they deemed necessary to retain to ensure the continued viability of the business. They did not have any particular criteria for redundancy and instead chose based on personal preference; the Union was not consulted at any point. As a consequence of this, the remaining staff members were dismissed on the grounds of redundancy.

After that, a few of the employees attempted to file claims for unfair dismissal. They were unsuccessful at the tribunal, which found that the managers’ preference was a reasonable way of doing the job. They filed an appeal against this on the grounds that it was unfair, and their appeal was ultimately successful. It was held by EAT that there was an error of law when the tribunal reached the conclusion and that the dismissal selection was unfair.

The principles of redundancy

In the given case of Williams v Compair Maxam Ltd, the Employment Appeal Tribunal (EAT) outlined some guidelines that a reasonable employer should adhere to in the event that they intend to dismiss an employee on the basis of redundancy. It was emphasized by the EAT that these were not legal precepts but rather standards of conduct. They served as important guidance on the selection of employees for redundancy.

These principles are:

1. Notice of impending redundancies:

The employer would do their best to provide employees and their representatives with as much advanced notice as possible when there was going to be a redundancy.This will enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider the possibility of alternative solutions, and, if necessary, find alternative employment either within the undertaking or elsewhere.

2. Consultation with the union:

The employer will have a discussion with the union about the most effective ways by which the desired management result can be accomplished in a way that is fair to the employees and causes them as little hardship as possible. In particular, the employer would consult with employee representatives to establish selection criteria.

3. Objective criteria:

The selection criteria would be based, as much as possible, not on the personal opinion of the person making the selection, but on objective criteria. That is, the criteria should be such that it can be judged against things such as attendance record, efficiency at the job, experience, or length of service.

4. Selection based on criteria:

The employer would make every effort to ensure that the selection is made fairly based on these criteria. And it will take into account any representations or suggestions that the union may make regarding the selection.

5. Alternative employment:

Instead of dismissing the employees, the employer will look into providing them with alternate employment opportunities. He would see whether he could offer alternative employment.

List of references:

You might also like:

More from labour law:

A Case Summary of Lane v Shire Roofing Co (Oxford) Ltd [1995]

Case name & citation: Lane v Shire Roofing Co (Oxford) Ltd [1995] IRLR 493; [1995] EWCA Civ 37

Court and jurisdiction: Court of Appeal of England and Wales

Decided on: 16 February 1995

The bench of judges: Nourse LJ, Henry LJ and Auld LJ

Area of law: Personal injury under employment law

What is the case about?

This is a UK labour law case concerning the scope of employment to determine the duty of care for the health and safety of employees.

Facts of the case (Lane v Shire Roofing Co)

Mr Lane was a roofer by trade. He carried out operations as a one-man firm and was considered to be self-employed for tax purposes. Shire Roofing made the decision to hire him on a “payment by job” basis. Since Shire Roofing was a new company, it did not want to commit to hiring a large number of long-term employees and instead mostly employed people for individual jobs.

Mr Lane preferred to work from his own ladder but had provided no materials. He was re-roofing a house when he had an accident that caused him to fall off his ladder and sustain serious injuries. If he was employed by Shire Roofing, the company owed a duty of care to look out for his health and safety. The High Court decided that he was an independent contractor; as a result, the company was found not liable. The plaintiff appealed.

Issue

Was Shire Roofing Co (Oxford) Ltd liable for the injury sustained by Mr Lane?

Judgment of the Court in Lane v Shire Roofing Co (Oxford) Ltd

The Court of Appeal decided otherwise.

The question that was most important to the Court of Appeal was whether or not Mr Lane worked for Shire Roofing as an employee or whether he was self-employed or an independent contractor. The Court took note of the fact that there are some perceived benefits that come with the relationship between workers and employers when it is not one of employment (for the worker tax advantages; and for the employer the avoidance of legal duties to employees).

Henry LJ held that there are therefore “good policy reasons in the field of safety at work to ensure that the law properly categorizes between employees and independent contractors.”

His Lordship believed that elements such as “control” or “was the workman carrying on his own business, or was he carrying on that of his employers?” should be taken into consideration. These questions need to be addressed in the context of who is accountable for the overall safety of the man performing the work in question. In this instance, it was Shire Roofing Co (Oxford) Ltd, and hence Mr Lane was employed by them and they were therefore liable.

The reasoning behind the decision

The Court found that it’s possible that the control test (i.e., who lays down what is to be done and how it is to be done, who provides the materials and plant, etc.) may not be conclusive, especially in the case of highly skilled workers who have the discretion to choose how their work should be done. In situations like this, the question that needs to be asked is: Whose business was this? Whether the workman was conducting his or her own business, or that of his or her employers?

On this basis, the Court of Appeal determined that Mr Lane was an employee of Shire Roofing. The Court reasoned that, while the level of control exercised by the company would depend on the need to supervise and direct Mr Lane, it was clear that the job at the house was the company’s business, not Mr Lane’s. The Court felt that the facts were much closer to a situation in which an employer hires men simply to do labouring work than to a situation in which a specialist subcontractor is hired to perform some part of a general building contract.

Conclusion

This decision demonstrates that when a court is considering the issue of whether or not a person is an employee in the context of health and safety at work, the court may take a broad view of what constitutes employment.

The judgment in Lane v Shire Roofing Co (Oxford) Ltd stated:

“When it comes to the question of safety at work, there is a real public interest in recognizing the employer/employee relationship when it exists, because of the responsibilities that the common law and statutes place on the employer.”

List of references:

You might also like:

More from labour law: