Hollis v Vabu

Pictured: the UTS Tower in Ultimo, the suburb in Sydney where Hollis was injured

The trial judge found that the cyclist was employed (in a colloquial sense) by Vabu Pty Ltd, and had been negligent in causing Hollis' injuries. No contributory negligence was made out, and damages were assessed at $176k.[7] He found that Vabu set pay rates with no scope for negotiation. Jobs were allocated to couriers by a fleet controller at Vabu's premises.[8] Vabu also assumed all responsibility for direction, training, discipline, and attire of couriers. Couriers were provided with equipment, which was Vabu's property and included the communication equipment. Couriers were required to wear Vabu's supplied clothing at all times, partly to advertise the company's services. Deductions from pay for insurance were imposed by Vabu on the couriers without opportunity for negotiation.[9]

He also noted that couriers were in a 'take it or leave it' situation regarding pay, and that provisions for insurance excess that couriers were required to pay disincentivized them from reporting accidents.[10]

Despite these findings, the trial judge decided the case for Vabu Pty Ltd. He regarded himself as bound to regard the cyclist as an independent contractor of Vabu, due to a recent NSWCA decision. That case had decided Vabu's couriers were independent contractors in a proceeding under the Superannuation Guarantee Act 1992.[11][12]

At appeal, the parties accepted the facts in the Superannuation dispute would apply to the case. Hollis made a concession that the couriers were not employees but independent contractors. The hearing then proceeded on that basis.[13] Hollis was unsuccessful and appealed to the High Court.

The court decided an employment relationship existed between Vabu and its bicycle couriers.[13]

They noted the absence of annual leave, superannuation, and sick leave from any contracts between Vabu and the couriers. Nevertheless, the court said, the relationship between the parties wasn't found 'merely from those contractual terms'. The court instead considered 'the system which was operated thereunder and the work practices imposed by Vabu' as establishing the 'totality of the relationship' between the parties.[14]

In assessing that relationship, the court discussed facts which led to their ultimate finding of an employment relationship.[15] Among these facts were:

• Low cost of equipment borne by the cyclists.[16]
• Lack of skilled labour, or labour which required special qualifications.[17]
• An inability to generate goodwill or make an independent career as a free-lancer.[17]
• Couriers having little control over the manner in which they performed their work.[Note 2][18]
• They were presented to the public as 'emanations of Vabu'. [Note 3][19]
• Vabu superintended the couriers' finances.[Note 4][20]
• Vabu required the couriers to submit requests for leave, indicating that they had limited scope to pursue 'any real business enterprise on their own account'.[21]
• The couriers being required to provide equipment that they also used in their personal life.[22]
• Vabu's control went further than only 'incidental or collateral' matters. It had 'considerable scope for the actual exercise of control'.[Note 5][23]
• The couriers did more than supplement or perform only part of Vabu's business; rather, to 'customers they were Vabu and effectively performed all its operations in the outside world.[24]

The per-delivery remuneration method was also discussed by the court, but it was said this was compatible with an employment finding.[20] The policy consideration of deterrence was also relevant. Vabu knew of dangers to pedestrians yet failed to adopt effective means for couriers to be personally identified.[25]

After noting these factors, the majority distinguished the facts from a similar case in New Zealand.[26] They observed that drivers in that case had 'control over their own chosen area of territory', were responsible for employing relief drivers, held their own licenses, and could profit from their management efforts. Only a minimal amount of control and supervision of drivers was contracted for.[27]

It then concluded by declaring the relationship between Vabu and the courier as being that of employer and employee. Vabu was therefore held vicariously liable for the courier's negligence.[28] The court ordered the trial judge's assessment of $176k be paid to Hollis, and that Vabu bear costs.[29]