Reading time: 3 minutes

The varied nature of work in a labour hire company often gives rise to the question of whether a worker is an employee of the labour hire company or whether they are an independent contractor who is in business for themselves. I’m afraid there is no hard-and-fast answer to this question. Whether a worker is an employee or an independent contractor will very much depend on the individual circumstances surrounding the engagement. Nevertheless, the following considerations shed some light on the situation.

The totality of the relationship consideration

In determining whether someone is an employee or an independent contractor, the landmark case of Hollis v Vabu (2001) 207 CLR 21 held that the totality of the relationship is to be considered.

In considering the totality of the relationship, numerous factors are relevant. In particular:

  • the mode of remuneration;
  • the provision and maintenance of equipment;
  • the provision of various entitlements (e.g. leave, superannuation, professional indemnity, public liability, worker’s compensation);
  • the deduction of income tax;
  • the right to delegate work;
  • the ability of the employee to generate good will for the business;
  • the employer’s rights of suspension and termination; and
  • the professional trade or calling of the worker are all relevant considerations, to name a few.


When making an appraisal of whether an individual is an employee or an independent contractor, the relevant degree of control that the labour hire employer can exert over the worker is of paramount importance. When we speak of control, we are not talking about the active exertion of control over the daily activities of the worker, but rather the ultimate right to control both substantial and incidental matters. As a labour hire employer, you can hardly be expected to control the day-to-day activities of your workers. At best it would be almost impossible and at worst it would be highly inappropriate. I can only imagine the faces of your host clients as you stroll onto their business premises, uninvited, to check on your staff. Nevertheless, if the ultimate say so rests with you and not the worker, chances are the person is your employee and not an independent contractor.

Substance over form

I know what you’re thinking. If the written agreement with my worker says that they are an independent contractor, surely that is the end of it? I’m afraid that is not the case. Time and time again labour hire employers have gotten themselves into trouble because they rely on written documents to this effect, or what the law calls “form”. Ultimately, parties to a contract who expressly state that they are or are not in an employer-employee relationship, cannot simply rely on the agreement if it does not reflect the reality of the situation.


Whether a worker is a casual employee or an independent contractor will ultimately determine the rights that you must afford the worker and the obligations that you bear in relation to the same. If you are unsure about the status of your current workers, contact our team of highly trained employment lawyers.


Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards