When a Contract Calls You a “Contractor” but the Law Says Otherwise
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Published: 11 November 2025 | Reviewed: 5 December 2025
(3-minute read)
This case shows how easily a person can be
labelled a “self-employed contractor” on paper while
working every day under someone else’s control -
a structure that turns independence into an illusion.
The Case in Brief
CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 concerned a simple structure with enormous consequences: a young British worker signed a contract stating he was a contractor, yet everything about his daily work life looked like employment.
Daniel McCourt worked full-time on a Perth construction site. He used no tools of his own. He had no business of his own. He followed the builder’s directions every day. The labour-hire company, Construct, paid him by the hour.
The written document called him “self-employed”.
The lived reality was something very different.
His union argued that the label did not match the relationship. The High Court agreed.
What the Court Decided
The High Court held that Mr McCourt was an employee of Construct, not an independent contractor.
The majority judges emphasised three structural points:
Contracts cannot disguise control. Even clear written terms cannot transform a dependent worker into a business owner if the substance of the arrangement is one of direction and subordination.
The character of the relationship matters. Courts look at rights and obligations created by the contract and how the arrangement operates in fact, especially where standard form contracts create ambiguity.
Labels have no legal force. A clause calling someone a contractor does not change the legal nature of the relationship if the worker is, in substance, part of the putative employer’s business.
Justices Gordon and Steward agreed in the outcome.
Justices Gageler and Gleeson wrote separately, stressing that performance of the contract, how the work is actually done, can reveal the true relationship.
Across the Court, one theme was clear: the law protects substance over form.
Why This Case Still Matters
The judgment reshaped how Australians understand employment in an era of gig work, labour hire, and complex contracting models.
It clarified that:
Documents cannot erase dependency.
Work rights follow reality, not marketing language.
Labour-hire structures must reflect genuine autonomy if they claim to create it.
Courts will not allow legal drafting to shift risks unfairly onto vulnerable workers.
For anyone signing a contract that uses terms like “independent”, “self-employed”, or “subcontractor”, this case is a warning: the label does not determine your rights, the structure does.
For businesses, the message is equally direct: contractual design must match actual practice.
The Clean Law Parallel
This judgment exposes a universal risk: when written words do not reflect real power.
Clean Law’s structural safeguard, the Independent Statement, is designed to prevent that exact mismatch.
It ensures both sides confirm that rights, obligations, and control lines match lived reality, not convenience, custom, or drafting habits.
Learn more:
These structures ensure that the character of a legal relationship is transparent from the start, not left to be reconstructed in hindsight.
When Paper and Reality Diverge
CFMMEU v Personnel Contracting shows how quickly power imbalances can hide inside paperwork. A single label shifted risks, obligations, and expectations, until the Court stepped in.
The case reinforces a simple truth: clarity is a protection, not a formality.
Clean Law applies that truth to every engagement. Words must match reality. Duties must match authority. And every client must understand the structure they are stepping into.
When reality is clear, fairness follows.
Read more on CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1
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By Nicky Wang
Principal Solicitor
Legal Liaison Ltd (trading as Clean Law)
Prepared in accordance with public-interest governance,
annual Law Society trust-account audits, and ACNC-reported standards.
Disclaimer: This page is intended to provide general information only and is not legal advice. The contents may not reflect the most current legal developments and do not take into account your individual circumstances. You should not act or refrain from acting on the basis of this information without obtaining legal advice tailored to your situation.
