Hrm222 Contract of Service/Contract for Service Comparison

Topics: Supreme Court of the United States, Bicycle messenger, Courier Pages: 6 (1832 words) Published: March 25, 2014
Contracts can be delegated through contract of service or contract for service and are regulated by the common law. The contract of service is comprised within an employee-employer contract, whilst the contract for service is based upon a contractor-client contract. A number of tests including, but not limited to; control, mutuality of obligation, integration, results and risk test, have been applied to denote the distinction between the two determinants. Hollis v Vabu (2001) 207 CLR 21 and Australian Air Express Pty Limited v Langford [2005] NSWCA 96 portrays the legalities of contracts and enables interpretation towards the existing nature of ‘contract of services’ and ‘contract for services’.

Hollis v Vabu (2001) 207 CLR 21 is a case of two parties, Gary John Hollis (appellant) and Vabu Pty Ltd trading as ‘Crisis Couriers’ (respondent). Initially it was presented through the District Court of New South Wales, then to the Supreme Court of New South Wales and latter the appeal was further attended to, in the High Court of Australia. The respondent (providing services of delivering and picking up parcels) had been operating a bicycle courier at the time of the appellant's injury. The appellant sued the respondent due to being hit by the respondent during the course of work and had incurred injury to the knee, inflicted 25% deficit to the knee and was unfit to work for a substantial period of time. The initial decision by the Supreme Court of New South Wales (Vabu v FCT (1996) 33 ATR 537) was in favour of the respondent, stating that negligence by the bicycle courier was admissible as the bicycle courier was seen as an independent contractor and not an employee of the respondent’s. Davies AJA dissented on this issue and reinforced that “[i]t was inevitable, as a result of the way in which the business of [Vabu] was structured, that people going about their ordinary business in the streets of Sydney would be injured.” The appeal by the High Court of Australia had overridden the initial outcome under the control test validation nevertheless dissonance was present by McHugh and Callinan in accordance with “The relationship between the respondent and the bicycle courier who struck down the appellant was that of employer and employee. The respondent thus was vicariously liable for the consequences of the courier's negligent performance of his work: at [61], [73].” In the case of Humberstone v Northern Timber Mills [1949] 79 CLR 389, Humberstone was a timber carrier and was able to carry timber for those whom required his services. For many years, he had carried timber only for Northern Timber Mills. Humberstone whilst repairing his truck, sustained an injury, lapsed into a coma and died. In the court case, Dixon J. states, “The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter's order and directions." In this case, the court upheld the decision to be a contract for services, where the person is constituted to be an independent contractor (contrary to the final decision in the Hollis v Vabu (2001) 207 CLR 21 case). Returning to the Hollis v Vabu case, the assisting variables alongside the control test for the decision by the High Court of the bicycle couriers being considered as “employees” in the case of the respondent included; “the lack of discretion for couriers to accept or reject work, the identification of the courier with the businesses of the courier’s firm, the administration of pay and conditions consistent with an employer relationship, the provision of necessary tools and equipment (that is, mode of transportation) by the couriers was not inconsistent with an employment relationship, and the considerable scope for the actual exercise of control by the...

References: Hollis v Vabu (2001) 207 CLR 21
Scott v Davis (2000) 204 CLR 333
Stevens v Brodribb Sawmilling Co Pty Limited (1986) 160 CLR 16
Humberstone v Northern Timber Mills [1949] 79 CLR 389
Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561
“Employee or Independant Contractor?”: Australian Air Express Pty Limited -v- Langford [2005] NSWCA 96 | Curwoods Case Notes. 2013 [ONLINE] Available at: [Accessed 13 May 2013].
EMPLOYMENT CONTRACTS. 2010 [ONLINE] Available at: [Accessed 13 May 2013].
Allens Arthur Robinson, 2011
Marshall, B. 2006, Working it out – Employee or independent contractor?. The National Legal Eagle, 12:2, p. 14-19.
[ 1 ]. Vabu v FCT (1996) 33 ATR 537
[ 2 ]
[ 5 ]. “Employee or Independant Contractor?”: Australian Air Express Pty Limited -v- Langford [2005] NSWCA 96 | Curwoods Case Notes. 2013 [ONLINE] Available at:
[ 8 ]. Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561
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