Emancipated Labour Contracting: Could it be a thing?

Over the past couple of weeks, I’ve been talking about the unintended consequences of the recent High Court decisions that have led to the supposed demise of the Odco model of labour hire contracting. I’ve been writing about and discussing the legal significance of those cases and what they really mean. You can find most of what I’ve been writing here. on the Recruiters’ Casebook.

Today, and in the lead up to WorkAccord’s Tuesday TalkAbout on 29 March, when we’ll be discussing the topic: Independent Contracting On-Hire: Where to from here? I want to shift direction and plant the seeds for a forward-looking discussion about something that I’ll call, emancipated labour contracting.

Emancipated Labour Contracting

Emancipated labour contracting is simply labour contracting that is freed from the type of contractual dependency, subservience, and control which led the High Court to find that the Odco contractors in CFMMEU v Personnel Contracting were employees.

In Personnel Contracting, Kiefel CJ and Keane & Edelman JJ said that the labour hire firm:

 “…was exercising, and commercialising, its right to control the work that [the worker] would do and how he would do it. The marketability of … a labour‑hire agency turned on its ability to supply compliant labour; without that subservience, that labour would be of no use to [its] clients. That right of control was therefore the key asset of [its] business.”

para [76]

That largely untested understanding of the nature of a labour hire business led those three judges to conclude:

“[the worker’s] work was dependent upon, and subservient to, [the labour hire firm’s] business. That being so, [the worker’s] relationship with [the labour hire firm] is rightly characterised as a contract of service rather than a contract for services. [The worker] was [the labour hire firm’s] employee.” [89] – [90]

paras [89] – [90]

Gageler & Gleeson JJ said much the same thing

…by supplying his labour to [the Host], [the worker] was at the same time supplying his labour to [the labour hire firm] for the purposes of [the labour hire firm’s] business. He was not in any meaningful sense in business for himself”

para [158]

Gordon J similarly said that:

“[the worker] agreed to work in the business or enterprise of [the labour hire firm] promising he would work at its direction for the benefit of [the labour hire firm’s] business of supplying labour to [its] customers and, in return, he was paid by [the labour hire firm].”

para [200]

Control + Integration = Subservience

Can you see what is happening here; how the court has commodified the labour hire firm’s control of the worker (and the work opportunity) to make it appear that the worker is working in the labour hire firm’s business so as to reject any notion that the worker might have retained a measure of independence?

Although the judges are using the language of “control”, they really appear to be applying  a version of the integration test.

New Questions

So, the questions that we might now ask begin to look like this:

  • Is it possible to free or emancipate contractors from the type of control that the Court now regards as indicative of employment in a labour hire context?
  • What would emancipation involve? How would you present it in a contract – given that the court will focus on the terms of the contract to determine the nature of the legal relationship?   
  • Could an on-hire engagement and supply model that doesn’t promise “compliant” or “controlled” labour really work? Is it marketable? Are the on-demand platforms already doing something similar?
  • Why would anyone NOT want to be an employee?  Is it possible to point to any intelligible business purpose that could underpin an emancipated labour contracting model?

Join the Conversation

I hope you’ll start to ask some questions of your own and either bring them along to WorkAccord’s Tuesday TalkAbout on 29 March 2022, or engage in the extended discussion via the Labour Hire Licensing & Regulation (Aust. & N.Z.) LinkedIn Group? We’d love to hear from you.

Let’s talk!

Andrew C. Wood


When your “contractors” turn out to be your employees (#9) …

What will your regulators do?

It’s not only your relationship with your workers that’s been affected by the High Court’s recent decisions about how we should be deciding if a worker is a “contractor” or an employee.

What about all those regulatory and revenue authorities – tax, super, workers compensation, payroll tax, WHS , labour hire licensing etc – that have published guidelines and “contractor tools” that apply the multi-factor test as it was used before the High Court restricted its operation?

You’re cordially invited to bring your questions along to WorkAccord’s Tuesday TalkAbout on 29 March 2022, and engage in the extended discussion via the Labour Hire Licensing & Regulation (Aust. & N.Z.) LinkedIn Group? We’d love to hear from you.

Let’s talk!

When your “contractors” turn out to be your employees (#8) …

What about your staff consultants whom you’ve engaged as independent contractors?

Does the High Court’s dependent-on-and-subservient-to test in Personnel Contracting apply equally to your internal consultants as well as to your on-hire workers? What is that test anyway? How do you apply it in different settings?

You’re cordially invited to bring your questions along to WorkAccord’s Tuesday TalkAbout on 29 March 2022, and engage in the extended discussion via the Labour Hire Licensing & Regulation (Aust. & N.Z.) LinkedIn Group? We’d love to hear from you.

Let’s talk!

When your “contractors” turn out to be your employees (#7) …

What happens if the contractor is working through their own company?

Can your on-hire agency still be the employer? Could someone else be the employer? The client perhaps? What could possibly go wrong? After all, setting up your workers in their own company is always the best option, isn’t it? … Well … isn’t it .. ???

You’re cordially invited to bring your questions along to WorkAccord’s Tuesday TalkAbout on 29 March 2022, and engage in the extended discussion via the Labour Hire Licensing & Regulation (Aust. & N.Z.) LinkedIn Group? We’d love to hear from you.

Let’s talk!

When your “contractors” turn out to be your employees (#6) …

What about the contractors whom you’ve put out to be engaged by a payroll provider?

Are “all bets off”? Will a court look to identify the “true” employer? And might it be you, your client, or your payroll provider?

You’re cordially invited to bring your questions along to WorkAccord’s Tuesday TalkAbout on 29 March 2022, and engage in the extended discussion via the Labour Hire Licensing & Regulation (Aust. & N.Z.) LinkedIn Group? We’d love to hear from you.

Let’s talk!

When your “contractors” turn out to be your employees (#5) …

Do the on-demand platforms gain a competitive advantage over the on-hire agencies?

The decison in CFMMEU v Personnel Contracting identified a flaw in the “Odco” model of labour hire contracting. Does the same flaw exist in the engagement and supply model used by on-demand platforms?

You’re cordially invited to bring your questions along to WorkAccord’s Tuesday TalkAbout on 29 March 2022, and engage in the extended discussion via the Labour Hire Licensing & Regulation (Aust. & N.Z.) LinkedIn Group? We’d love to hear from you.

Let’s talk!

#contracting #labourhire #gigeconomy

When your “contractors” turn out to be your employees (#4) …

What happens to other provisions in your contracts – like your restraint of trade and temp-to perm fee provisions? Are they still any good?

What flows from basing your worker engagement and supply model on a false premise?

You’re invited to bring your questions along to WorkAccord’s Tuesday TalkAbout on 29 March 2022, and engage in the extended discussion via the Labour Hire Licensing & Regulation (Aust. & N.Z.) LinkedIn Group? We’d love to hear from you.

Let’s talk!

#contracting #labourhire

When your “contractors” turn out to be your employees (#3) …

What happens to your client contracts, if you’ve agreed to supply on-hire contractor services? Are they still any good? Are you in breach?

Why not bring your questions along to WorkAccord’s Tuesday TalkAbout on 29 March 2022, and engage in the extended discussion via the Labour Hire Licensing & Regulation (Aust. & N.Z.) LinkedIn Group? We’d love to hear from you.

Let’s talk!

When your “contractors” turn out to be your employees (#2)…

…what penalties might you be facing? 

You’ll recall that the Personnel Contracting Case involved an application for penalties for breach of the Award and the High Court has sent it back to the Federal Court to be decided on the basis that the worker was an employee.

Why not bring your questions along to WorkAccord’s Tuesday TalkAbout on 29 March 2022, and engage in the extended discussion via the Labour Hire Licensing & Regulation (Aust. & N.Z.) LinkedIn Group? We’d love to hear from you.

Let’s talk!

When your “contractors” turn out to be your empolyees…

What about claims for past entitlements, like leave? Will there be double dipping? Are the “off set” provisions in your contracts any good?

You’re invited to bring your questions about the future of independent #contracting #labourhire along to WorkAccord’s Tuesday TalkAbout on 29 March 2022, and engage in the extended discussion via the Labour Hire Licensing & Regulation (Aust. & N.Z.) LinkedIn Group.

Let’s talk!