Today's landmark High Court judgment rejecting long-term contractors being treated as employees draws a line in the sand for the status of owner drivers.
The High Court was considering an appeal against the Full Federal Court's decision in Jamsek v ZG Operations Australia Pty Ltd. The appeal began being heard in August last year.
The case concerns two drivers who were contracting with a company and supplying vehicles for their work continuously for 40 years.
The Full Federal Court found that written contracts presented as evidence showed that the relationship was an employment arrangement when other factors were taken into account, such as the fact that the contracts excluded the right of the owner drivers to accrue goodwill.
The High Court's upholding of the appeal by the company means the drivers will not receive unpaid leave. The issue of whether they receive superannuation entitlements under statute has been referred back to the Full Federal Court.
"The argument that the drivers had been operating independent businesses has been successful: they were contractors," said National Road Transport Association CEO Warren Clark.
"This is a hugely significant judgment for our industry," Mr Clark said.
"It shows that owner drivers are independent contractors and that contracts with business entities should be upheld. The High Court found that the owner drivers were not employed by the company.
"They were members of partnerships which carried on the business of providing delivery services to the company.
"The formal contractual arrangements have been given priority by the High Court.
"This means that participants in the road transport industry must ensure that they don't sign a contract and put it in the bottom drawer. It is an essential business tool."
Click here to view the Jamsek summary.
