Are you an employee on your farm ?

Most farms are operated by various legal entities with the employer being either a company, a trust or a partnership. Are you clear on where you stand in relation to the employer? Are you a director, a shareholder, a partner, or are you actually an employee of one of those entities.

This will become important if you are injured on the property whilst working. Will you be covered by workers compensation, will you be able to claim against the owner’s public liability insurance?

This question was recently before the court in Queensland where a person repairing a tractor that was up on jacks and stands had the tractor fall on him when another worker entered the cab.

The farm was owned by a family trust which involved the injured worker, his wife and family. The injured worker was working on the farm for the purposes of the trust. The injured worker was also a member of a partnership with his wife and brother, which owned farming equipment including the subject tractor which was often hired to the farm business. On the day of the accident the injured worker’s brother directed the day-to-day operations of the harvesting business, and assigned work to the injured worker.

WorkCover, which is the workers compensation provider in Queensland, argued that it was not liable for any payout as the injured worker was not an employee, and therefore not entitled to compensation. WorkCover also argued that the business arrangements were a sham.

However, the court found that the injured worker was an employee of the business as at the time of the accident he was being paid wages from which tax was withheld and superannuation was paid and was not a director of the business. Although the tractor was owned by the family partnership, the maintenance which the injured worker was performing on the tractor at the time his injuries were sustained was not performed as a partner in the partnership. The injured worker was working on the tractor because another employee had raised issues about the steering, and the repairs were necessary to enable that employee to continue his work for the defendant.

The injured worker was awarded almost $1.3 million in damages.

This case underscores the importance of clearly establishing employment relationships and the need for accurate documentation and clarity in business arrangements in order to avoid disputes over employment status. Andrew can assist in drawing up appropriate contracts for all employees.