This New South Wales Supreme Court ruling has reinforced the existing regime concerning the view of labour hire companies as the true employer of a labour hire employee.
In issue
- The principal issue to the claim was whether the plaintiff was employed by the entity he was performing work for, or instead, whether the plaintiff was a labour hire employee who was supplied as labour to a host employer.
The background
On 9 February 2018, Sheik Abdul Tazleem (the plaintiff) was working as a diesel mechanic at an industrial premises operated by Better Truck Repairs Pty Ltd (BTR) in South Windsor, Sydney (the premises) when he sustained personal injuries.
The plaintiff had been directed to repair the bucket of an excavator (the bucket). The bucket was attached to the tines of a forklift. To repair the bucket, the plaintiff was required to remove the bucket from the forklift tines. Whilst the plaintiff was attempting to remove the bucket from the forklift tines, the bucket suddenly detached from the forklift tines and struck the plaintiff.
In the pleadings, the plaintiff alleged he was employed by JP Business Consulting Pty Ltd (JPBC), and JBPC provided the plaintiff’s labour to BTR pursuant to a labour hire arrangement.
Since the incident, BTR had entered liquidation, and its public liability insurer, Certain Underwriters at Lloyd's, was joined to the proceedings under the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) (the first defendant). JPBC had also been deregistered, leading to the Workers Compensation Nominal Insurer being joined in its place (the second defendant).
The first defendant said BTR was the plaintiff’s employer, and as a result, the first defendant’s public liability policy would not respond by virtue of the employment exclusion clause, which excluded coverage for injuries sustained by an ‘employee.’ The first defendant’s policy also contained a $50,000.00 labour hire excess.
Central to the dispute was whether the plaintiff was employed by BTR or JPBC, as this would determine whether the first defendant’s public liability insurance policy applied.
Prior to engaging solicitors, the plaintiff did not know about the existence of JPBC, and thought he was employed by BTR at the time of the incident.
The first defendant argued BTR was the plaintiff’s employer because:
- after the plaintiff posted his resume on a job seeking site, he was contacted directly by BTR
- the plaintiff was interviewed by an employee of BTR who ‘offered him employment at BTR as a diesel mechanic’ (albeit there was no written contract of employment)
- JPBC had no involvement in the engagement of the plaintiff nor did not ‘supply’ the plaintiff to BTR, and
- the plaintiff sometimes wore a BTR uniform.
The second defendant admitted that JPBC employed the plaintiff.
The decision at trial
Employer of the plaintiff
The Court determined that the plaintiff was employed by JPBC. In coming to this conclusion, the Court had reference to:
- A contractual agreement existed between JPBC and BTR whereby JPBC agreed to supply labour for works being completed by BTR. This contractual agreement envisaged a labour hire relationship between the 2 entities.
- JBPC’s workers compensation insurer was notified about the incident and paid benefits to the plaintiff following the incident. Whereas, there was no evidence to suggest BTR had a workers compensation policy nor that BTR notified its workers compensation insurer about the plaintiff’s injury.
- JBPC paid the plaintiff’s wages (as evidenced by the plaintiff’s payslips).
- Whilst the plaintiff may have been interviewed and offered employment by an employee of BTR, this did not automatically equate to a finding that BTR was the plaintiff’s employer. The first defendant did not call evidence from the BTR employee who interviewed and hired the plaintiff. The Court drew a Jones v Dunkel inference against the first defendant for failing to call this witness.
- With respect to the plaintiff wearing a BTR uniform, the Court noted it is not uncommon in a labour hire scenario for a host employer to dictate the uniform a contractor wears.
Given the Court’s finding that the plaintiff was an employee of JBPC, the Court held that the first defendant’s public liability insurance policy was applicable to the plaintiff’s claim, subject to a $50,000 excess.
Primary Liability
Both defendants admitted JBPC and BRK each owed a respective duty of care to the plaintiff.
Both defendants also admitted JBPC and BRK each breached their respective duty of care to the plaintiff.
Both defendants argued that a finding of contributory negligence should be made given the plaintiff was an experienced diesel mechanic and the removal of the bucket was dangerous.
The Court attributed contributory negligence of 15% to BTR and 10% to JPBC (with the Court acknowledging JBPC owed a higher duty of care as the plaintiff’s employer).
Apportionment
Liability was apportioned between the defendants, with 80% assigned to BTR and 20% to JPBC, reflecting BTR’s greater responsibility for supervising the plaintiff’s work.
Implications for you
This case highlights the importance of clearly identifying the particular relationships at play in labour hire cases. Whilst a host employer can take an active role in the hiring and deployment of persons, this does not detract from the responsibilities of a plaintiff’s legal employer.
Tazleem v Certain Underwriters at Lloyds Listed in Annexure “A” [2026] NSWSC 124
