Worker or Contractor – Intention to Create Legal Relations

Maatta v Owen Dwyer t/as Owen Dwyer Builders [2022] NSWPICPD 18 (13 May 2022)

Mr Maatta (the Appellant) was performing carpentry work using a power saw at a building site when a piece of metal penetrated his eye.

He alleged that at the time of injury he was a ‘worker’ or a ‘deemed worker’ for the purposes of claiming workers compensation. Mr Dwyer (the Respondent) asserted that the Appellant was an independent contractor and not worker or deemed worker under the 1998 Act. In the first instance, Member Beilby found in favour of the Respondent. The appeal was heard by Deputy President Wood.

Legislation and case law

According to Section 9 of the Workers Compensation Act 1987 (the 1987 Act), in order to obtain an entitlement to compensation, the Claimant must establish that at the time of injury they were a ‘worker’.

In Section 4 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) the term ‘worker’ is defined as a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing).

Cl 2 Sch 1 of the 1998 Act extends the definition of ‘worker’ by deeming certain classes of persons to be ‘workers’, including (but not limited to) persons in labour hire arrangements and some contractors.

In Secretary, Department of Family and Community Services v Bee [2014] NSWWCCPD 66 DP Roche found that the Applicant was not a ‘worker’ or ‘deemed worker’ as the evidence did not establish that the parties had an intention to create legal relations, so as to enter into a contract of service.

Submissions and decision

The Appellant asserted that he was employed by the Respondent on a full time basis. He said that Mr Robb, a subcontractor of the Respondent, had asked him to work on behalf of the Respondent on the date of his injury.

The Respondent advised that he is a sole trader and only engages subcontractors, not employees. His subcontractors (including the Appellant) each hold their own ABN and insurance. The Respondent denied asking the Appellant to work on the date of injury. He had paid Mr Robb for the Appellant’s work performed on the date of injury.

In the first instance, the Member concluded that there was no evidence of an intention to create legal relations between Respondent and the Appellant and that Section 4 of the 1998 Act requires there to be a contract of service. The Member referred to the observations made by Roche DP in Secretary Department of Family and Community Services v Bee as to the assessment of whether there was an intention to create legal relations and concluded that:

(a) Mr Robb contacted the Appellant about attending the site;

(b) Mr Robb paid the Appellant, and

(c) the Respondent was unaware that the Appellant was present on the site.

She concluded that there was the absence of an intention to create legal relations between the Respondent and the Appellant on the day of the injury. The Member went on to say that the fact that there was no intention to create legal relations was also fatal to the Appellant’s assertion that he was a deemed worker within the meaning of Cl 2(1) of Sch 1 to the 1998 Act, which also requires there to be a ‘contract.’

On appeal, DP Wood found that there was no error in the Member’s decision, which was therefore upheld.

Implications

In order for a Claimant to establish that they are a ‘worker’ or ‘deemed worker’ for the purposes of claiming workers compensation, they will need to demonstrate that there was an intention between the parties to create legal relations, so as to enter into a contract. This may be difficult to establish where their attendance on site and payment for their services has been arranged by a third party.

Should you have any queries concerning a particular workers compensation matter, please contact our team on either (02) 4929 9333 or (02) 8297 5900.