The Classification between an independent contractor and employee has raised a number of issues throughout the past 50 years. Failing to create an effective formality to be applied by the courts to any particular case, it has lead to commercial uncertainty through Australia. This essay will analysis Stevens V Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 decision regarding the high court process in distinguishing between whether there was an relationship between the employer of employer/employee or employer/independent contractor.
While working for Brodribb Sawmilling Co, Stevens and Gray were employed by Sawmilling Co Pty Ltd as a trucker and snigger. During 1985, while Gray was moving a Log onto Stevens truck, …show more content…
The commercial implications that arose form Stevens26 found large corporations using the capacity of the Multi-Test to ‘minimise social wage costs, providing legal validation for the businesses to classify employees as contractors’27. These individuals became stand-in employees, still under the control of these corporations, with the ‘formality of freedom as an illusory trap’28. Therefore this has meant, that by applying Stevens multi-factor test, more times than less, the type of worker will be classified as an independent contractor, which means they will only have limited rights under the Act 29. By wrongfully labeling employees, it can have potentially serious consequences for the employer, opening up claims for unfair dismissal, vicarious liability, potential prosecution and financial penalties, particular in regard to company’s failure to pay tax30. The effect of Stevens has meant that many businesses are now exposed to having to pay hundreds of thousands of dollars back to the government from past taxes31.
In conclusion there seems that the Multi-Indicia test is without its faults, but it is without doubt that Stevens32 was an independent contractor. However without further legislation, further developments in regard to the employee or independent contractor will be limited to the interpretation of the test by future judges, as