An important decision has been made in South Australia clarifying the employment relationship to some extent of hire car drivers.
A driver was granted workers compensation but his employer Blue Ribbon challenged the decision by Return to Work SA. Blue Ribbon argued the driver was not engaged under a contract of service and therefore was not a worker with compensation rights under the State’s laws.
In the SA Tribunal, the driver accepted he had never been told he was an employee, nor entitled to leave benefits, superannuation or workers compensation coverage, but he also denied ever being told he would be considered self-employed.
The Deputy President Judge noted that despite the absence of any written contract, it was clear that both parties intended to form a legal relationship. (Blue Ribbon relied on handshake agreements to lease vehicles to drivers)
Some aspects of the relationship pointed to the driver being an independent contractor such as:
• he paid a portion of his fuel costs.
• he cleaned each vehicle at his own expense.
• he had no leave or super entitlements, and
• he had an ABN and his tax agent submitted a quarterly BAS.
The Judge however found that these factors were outweighed by the factors in favour of a contract of service existing, including:
• the driver was told which vehicle to use and where to pick it up and where to drop it off.
• jobs were allocated to him by Blue Ribbon and he worked exclusively for Blue Ribbon.
• he completed Blue Ribbon time sheets.
• he wore clothing requested by Blue Ribbon.
• he handed out Blue Ribbon business cards.
• aside from cash payments he was paid by Blue Ribbon and
• he had no business structure of his own, nor did any advertising or promotion of his driving work
Therefore, the Judge found the driver was ” providing little more than his labor ” which defined a contract of service resulting in the driver being ” a worker ” under the relevant Compensation Act.