Vicarious Liability and Contract (1 Viewer)

[MichaelJackson2]

G'day folks!

Just wanted to ask a quick question about vicarious liability. The most recent cases of Hollis v Vabu [2001] HCA 44 and Sweeney v Boylan Nominees [2006] HCA 19 were concerned with distinguishing between a 'contract of empoyment' from a 'contract of service' (i.e. 'employee' vs 'independent contractor'), where the element of 'control' over the person being negligent ('employee') by the 'principal' ('employer') was the main determinative (but not conclusive) factor the courts looked at (traditionally this was always the starting point).

Now if the contract between these two parties expressly stipulated that the type of engagement was a 'contract of services' and 'not one of employment', then would that absolve the 'principal' (person hiring the other fella) from vicarious liability flowing from a negligent act on part of the other fella notwithstanding that the principal had a great deal of control over the fella and that all the elements which would usually substantiate to a 'contract of employment' were present?

Any thoughts would be much appreciated. Just saw this type of clause in a contract between my mum and some dude she was going to hire and was a little sus on whether it would have any effect.

Cheers!

 

[Frigid]

first i think the correct terms are "contract of service" (ie employment) and "contract for services" (ie independent contractor).

but my gut feeling is that the court would look at the "totality of the relationship" (Hollis, [24]).

although the contract and the degree of control are good places to start (and usually the contract is where the court finds the intentions of the parties), what the parties call the contract is not determinative. for policy reasons, to simply abandon the imposition of vicarious liability because of a contractual clause would be to favour form over substance.

besides, in some circumstances, a non-delegable duty of care may arise (but this is another can of worms).

see a lawyer?

 

[wheredanton]

Now if the contract between these two parties expressly stipulated that the type of engagement was a 'contract of services' and 'not one of employment', then would that absolve the 'principal' (person hiring the other fella) from vicarious liability flowing from a negligent act on part of the other fella notwithstanding that the principal had a great deal of control over the fella and that all the elements which would usually substantiate to a 'contract of employment' were present?

Substance not form. An employer is vicariously liable for the actions of its employees. If the person falls within the control test and other such tests (indicia of employment) it doesn't matter what the contract says. The employer can't escape vicarious liability by simply calling a contract a contract of service when the person is clearly an employee.

 

[MichaelJackson2]

hmmm bugger yeah that's what i feared i'd hear. oh well, thanks heaps for that.

 

[hfis]

If it were possible to persuade the courts on such an issue, I see no reason why people would not be able to simply insert provisions stating "this is not a lease" and "the promisee shall not be considered an employee" in order to exclude the standardly implied terms arising in leases/employment contracts respectively. The courts love to rub their collective hard-on for the written word and 'substance of the bargain', but there is a limit.

 

[wheredanton]

If it were possible to persuade the courts on such an issue, I see no reason why people would not be able to simply insert provisions stating "this is not a lease" and "the promisee shall not be considered an employee" in order to exclude the standardly implied terms arising in leases/employment contracts respectively

huh?

That would allow employers to get the benefit of having the worker as an employee without the obligation to treat the person as an employee.

 

[Frigid]

huh?

That would allow employers to get the benefit of having the worker as an employee without the obligation to treat the person as an employee.

that's what hfis is saying.

 

[MoonlightSonata]

Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 45-46, Para 58, per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ:

It should be observed that this conclusion is different from a decision of the Court of Appeal of New Zealand upon somewhat similar facts in TNT Worldwide Express (NZ) Ltd v Cunningham. There, an "owner-driver" vehicle courier employed under a standard form contract was held to be an independent contractor. One term of the contract stated that "THE relationship between the Contractors and the Company is and shall be for all purposes that of independent Contractor and neither this Agreement nor anything herein contained or implied shall constitute the relationship of employer and employee between the parties". Although such terms are not of themselves determinative, as parties cannot deem the relationship between themselves to be something it is not, this term was held to summarise the relationship between the parties accurately. Casey J pointed out that the contract contained terms which suggested that "each party was genuinely trading off benefits under one relationship for perceived advantages under the other". Thus, for example, although the courier company controlled the appearance of the courier's vehicle, the courier was given control of his own chosen area of territory, was responsible for employing relief drivers, and "could certainly profit from sound management and performance of his task. Indeed, it seems obvious that this was the principal attraction of the arrangement". The courier was required to hold a continuous goods service licence under the Transport Act 1962 (NZ), was assured a guaranteed minimum payment per month and was subject to a twelve month restraint of trade clause from the date of termination of the [46] agreement. As a result, by reason of the terms in the contract, the courier "accepted only that degree of control and supervision necessary for the efficient and profitable conduct of the business he was running on his own account as an independent contractor". This is unlike the present case where, as discussed above, the bicycle couriers could not be said to have been conducting any business of their own. (Footnotes omitted)

So the answer seems to be that the terms "independent contractor" and "employee" are not determinative.

 

[neo o]

I think a quote from an English case (can't recall which) best sums this up - "You can't call a duck a rooster and expect others to treat it as such".

 

[wheredanton]

I think a quote from an English case (can't recall which) best sums this up - "You can't call a duck a rooster and expect others to treat it as such".

That was the quote I was thinking of.

 

[Frigid]

I think a quote from an English case (can't recall which) best sums this up - "You can't call a duck a rooster and expect others to treat it as such".

i like this one, even though not really relevant.. hehe:

A power to make laws with respect to lighthouses does not authorize the making of a law with respect to anything which is, in the opinion of the law-maker, a lighthouse.