From Lexology, David Pearce discusses a case in Australia in which the Court of Appeal said that the nature of an employer-worker relationship, is determined by considering the the context in which the relationship was formed. David writes:
Cagney v D&J Building Contractors Pty Ltd [2025] QCA 116
- For the purpose of a common law claim, common law principles rather than administrative decisions or statutory criteria will determine whether a person is a “worker” under the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (WRC Act), giving consideration to the nature of the employment relationship, contractual rights and obligations and the context.
- A decision by WorkCover Queensland or the Workers’ Compensation Regulator (Regulator) to accept a compensation claim does not create an estoppel that would prevent an employer from disputing employment status in a common law damage claim.
- This case is a reminder that contractors need to exercise caution in their engagements, especially under informal terms involving cash payments – a practice that remains common in many industries, particularly construction.
Mr Cagney (Cagney) sustained injuries after falling from a ladder while performing one day of carpentry work on a construction site operated by D&J Building Contractors Pty Ltd (DJBC). The arrangement between Cagney and DJBC was informal, negotiated via text messages, and remunerated in cash. Immediately preceding the accident, Cagney and DJBC had both been subcontractors on another building site operated by a third party.
Cagney successfully claimed workers’ compensation from WorkCover, which accepted he was a “worker” under the WCR Act. DJBC challenged this decision. However, the challenge was rejected by the Regulator with no further appeal pursued.
Cagney later sued DJBC for common law damages, asserting his status as an employee and contending that the Regulator’s decision created an estoppel preventing DJBC from denying his status as a worker. The District Court of Queensland rejected his claim on the grounds that:
- there was a contract for services (i.e. a commercial subcontracting arrangement) between Cagney and DJBC, rather than a contract of service (i.e. an ongoing employment relationship); and
- Cagney was not a worker under the WCR Act.
The trial judge concluded that the decision by WorkCover to provide compensation to Mr Cagney was only final in respect of the relevant provisions of the WCR Act and did not preclude DJBC from disputing his status as a worker in proceedings at common law or in equity.
Read the full story at Independent contractor or employee? The court nails it down! – Lexology
