Latest news for labour hire employers
We act for several labour hire employers and often see the same conundrum: who really controls a worker’s employment and working conditions?
There’s now some good news for labour hire employers and their insurers who may find themselves free from exposure in some cases.
For this occasion or pro hac vice
The recent decision in Ward v Endeavour Coal Pty Ltd has dealt with the concept of pro hac vice, meaning ‘for this occasion’, and whether employment can transfer entirely to a host employer in some labour hire arrangements.
This may mean a labour hire employer no longer owes a non-delegable duty of care in those circumstances.
What happened in Ward v Endeavour Coal Pty Ltd
Mr Ward was employed to work at the Appin Colliery Mine. In 2021 he was injured when being driven in a specialised mining vehicle (SMV) by Mr Carroll, a fellow worker who was employed by labour hire organisation WorkPac, and placed with Illawarra Coal Holdings Pty Ltd, his host employer and the mine operator.
The Court found Mr Ward’s injury was caused by Mr Carroll driving the SMV too close to a piece of equipment called a salter, causing Mr Ward’s arm to be injured as a result.
Who is responsible
One of the key issues in this case was who should bear responsibility for Mr Carroll’s negligent driving. Another was how this exposure should be apportioned between his labour hire employer and the mine operator who was his host employer.
The Court held that while WorkPac was Mr Carroll’s employer, his employment had been transferred to the mine operator (his host employer) pro hac vice.
A complete transfer of employment pro hac vice will occur when the employment relationship is assigned, such that a host employer (or another party) has the control to direct not only what work an employee undertakes but also how and when the employee should do that work.
The issue of control
In practice, this is not an unusual situation, particularly on mine sites or in factories where site access is limited and a labour hire supplier effectively has no control over the work systems, equipment, instructions provided to workers or capacity to supervise.
Control over these things, which would usually form part of the employment relationship, is transferred to the host employer who has control over the workers’ employment and employment conditions.
In Ward the Court looked at the role of both Workpac and the mine operator noting Workpac was responsible for recruiting and screening candidates, ensuring medical fitness for work, undertaking payroll and managing performance while the mine operator undertook site specific inductions, provided tools and equipment and managed the day-to-day performance of work, direction, supervision, safety and productivity.
The judgement
The Court held that it was the mine operator who controlled how the work would be done, assigned the relevant task to Mr Ward and Mr Carroll, trained both in its processes and procedures and provided both with instructions.
The Court said, “For all relevant practical purposes associated with the manner in which the work was done, the second defendant [the Mine operator/ host employer] was in control.
“There was no document, whether it be the contract, procedures, rules or regulations, which suggests that the third defendant [labour hire operator] had any right or other entitlement to instruct Mr Carroll as to how he was to drive whilst working underground in the Mine.”
Mr Carroll’s employment was transferred to the Mine operator who bore all liability for the incident.
What does this mean for employers and their insurers
Clarification around the concept of pro hac vice is important for host employers and their public liability insurers.
It highlights that Courts will look at the practical application of ‘control’ to determine if the employment relationship has been transferred to the host employer. When this happens, an employer’s usual non-delegable duty will also transfer to the host employer, freeing the labour hire organisation from any exposure at all.
About the author
Belinda Hughes is a Director of Hughes and Lewis Legal