Australia's highest court has found that an unskilled backpacker hired to work on Perth construction sites was an employee, not an independent contractor.
In a majority decision on Wednesday, the High Court overturned a Federal Court decision and allowed an appeal launched by the CFMMEU.
Daniel McCourt was aged 22 when he arrived from Britain on a working holiday visa in 2016 and started looking for construction work.
He signed an agreement with labour hire company Personnel Contracting Pty Ltd, trading as Construct, to work as an unskilled labourer.
The court heard Construct assigned Mr McCourt to work across two Perth construction sites run by Hanssen.
He had signed an administrative services agreement with Construct which described him as a "self-employed contractor".
Mr McCourt supplied his own hard hat, steel-capped boots and hi-vis clothing but most of his tools and equipment were provided by Hanssen, with whom he did not have a contract.
"For a period of months, he engages in basic labouring tasks; he takes out the bins, cleans workspaces and moves materials," Federal Court Justice Michael Lee observed in an earlier hearing.
"He is not an entrepreneur nor a skilled artisan; he is paid by the hour, and when at work, is told what to do and how to do it."
Mr McCourt worked across two Hanssen sites periodically over a period of 12 months up until June 2017 when Construct stopped giving him work.
He and the CFMMEU then launched proceedings against Construct and Hanssen seeking compensation on the basis that he was an employee and therefore should have been paid in accordance with the relevant award.
A Federal Court judge dismissed the claim, finding that Mr McCourt was an independent contractor.
The decision was also upheld on appeal, with the full court noting its limitations as an intermediate appellate court.
But a majority of High Court judges found Mr McCourt had no control over the work he carried out which was "subordinated" to Construct under the agreement between the two parties.
Under that agreement, Construct had the right to determine where Mr McCourt worked and to require him to "cooperate in all respects" with the labour hire company.
"That being so, Mr McCourt's relationship with Construct is rightly characterised as a contract of service rather than a contract for services," Chief Justice Susan Kiefel and Justices Patrick Keane and James Edelman said.
"Mr McCourt was Construct's employee."
The court ordered that the matter be sent back to the Federal Court for determination.
In a dissenting opinion, Justice Simon Steward said allowing the appeal would "greatly damage the respondent's business and the businesses of many others".
Workplace law firm Kingston Reid said the decision would provide businesses that genuinely entered into contractor relationships "more certainty that the arrangement will stand the test".
