ON 13 FEBRUARY 1986, the High Court of Australia delivered Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 (13 February 1986).

http://www.austlii.edu.au/au/cases/cth/HCA/1986/1.html

Per Mason J at 24:

“The first question to determine is whether the relationship between Brodribb and Gray was one of employer and employee or one of principal and independent contractor…A prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter. It has been held, however, that the importance of control lies not so much in its actual exercise, although clearly that is relevant, as in the right of the employer to exercise it (Zuijs v. Wirth Brothers Pty Ltd [1955] HCA 73; (1955) 93 CLR 561, at p 571;
Federal Commissioner of Taxation v. Barrett [1973] HCA 49; (1973) 129 CLR 395, at p 402; Humberstone v. Northern Timber Mills [1949] HCA 49; (1949) 79 CLR 389). In the last-mentioned case Dixon J. said (at p 404):

“The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.”

But 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 merely as one of a number of indicia which must be considered in the determination of that question (Queensland Stations Pty Ltd v. Federal Commissioner of Taxation [1945] HCA 13; (1945) 70 CLR 539, at p 552; Zuijs’ Case; Federal Commissioner of Taxation v. Barrett, at p 401; Marshall v. Whittaker’s Building Supply Co. [1963] HCA 26; (1963) 109 CLR 210, at p 218). 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.”

Per Wilson and Dawson JJ at 35:

“The classic test for determining whether the relationship of master and servant exists has been one of control, the answer depending upon whether the engagement subjects the person engaged to the command of the person engaging him, not only as to what he shall do in the course of his employment but as to how he shall do it: Performing Right Society, Ld. v. Mitchell and Booker (Palais de Danse), Ld. (1924) 1 KB 762. The modern approach is, however, to have regard to a variety of criteria. This approach is not without its difficulties because not all of the accepted criteria provide a relevant test in all circumstances and none is conclusive. Moreover, the relationship itself remains largely undefined as a legal concept except in terms of the various criteria, the relevance of which may vary according to the circumstances.”

Per Brennan J:

“The entrepreneur’s duty arises simply because he is creating the risk (Sutherland Shire Council v. Heyman [1985] HCA 41; (1985) 59 ALJR 564, at p 587; [1985] HCA 41; 60 ALR 1, at p 42) and his duty is more limited than the duty owed by an employer to an employee. The duty to use reasonable care in organizing an activity does not import a duty to avoid any risk of injury; it imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimize other risks of injury. It does not import a duty to retain control of working systems if it is reasonable to engage the services of independent contractors who are competent themselves to control their system of work without supervision by the entrepreneur. The circumstances may make it necessary for the entrepreneur to retain and exercise a supervisory power or to prescribe the respective areas of responsibility of independent contractors if confusion about those areas involves a risk of injury. But once the activity has been organized and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur. If there is no failure to take reasonable care in the employment of independent contractors competent to control their own systems of work, or in not retaining a supervisory power or in leaving undefined the contractors’ respective areas of responsibility, the entrepreneur is not liable for damage caused merely by a negligent failure of an independent contractor to adopt or follow a safe system of work either within his area of responsibility or in an area of shared responsibility.”

Sydney, Australia

1300 00 2088