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De Martin & Gasparini Pty Ltd v Bartlett (NSWCA 2025)

Key Takeaways

For the purposes of attributing liability in negligence to a host employer, the distinction as to whether a worker is a labour hire worker or a direct employee of the host employer is important.

A host employer would be vicariously liable for the tortious conduct of a worker supplied under a labour hire agreement only if there was a requisite transfer of control. The reference to “control” is a reference to whether the host employer had the power to control the manner in which the negligent act was undertaken.

Brief Facts

The injured worker was a concreter whose labour had been supplied to De Martin & Gasparini Pty Ltd (DMG), the host employer and the appellant in the proceedings. On 26 April 2018, the injured worker and another unidentified worker were instructed to move a concrete hose on a building site that weighed approximately 45 to 50 kg. The injured worker alleged that the unidentified worker picked up the hose and began walking before he was ready to lift or move, resulting in a jerking movement which caused him to sustain a back injury.

The injured worker brought proceedings against both DMG and the Workers Compensation Nominal Insurer in place of his direct employer, which had been deregistered.

In the primary proceedings, DMG argued that it could not be held vicariously liable for the actions of the other worker, as that other worker was unidentified. On that basis, DMG said a finding of negligence could not be made against it. In the event that DMG was wrong on that issue, the parties had agreed to an apportionment of negligence of 90% to DMG and 10% to injured worker’s direct employer.

The injured worker succeeded on the issue of negligence, with the primary judge determining that the unidentified worker had failed to coordinate the lifting of the concrete hose and that DMG as the actual or deemed employer of that unidentified worker was vicariously liable for that act. In addition, it was held that there was no contributory negligence on behalf of the injured worker.

DMG appealed, challenging the findings in relation to negligence, contributory negligence and the calculation of damages.

Judgment

Leeming JA (McHugh JA and Price JA agreeing) allowed the appeal in part. DMG was once again found liable in negligence, however, the Court departed from the primary’s judges reasoning in coming to that conclusion. The Court also applied a deduction of one third for injured worker’s own contributory negligence.

Vicarious liability

A notable feature of the evidence at trial was that the other worker was never identified. Accordingly, it could not be determined whether they were a labour hire worker or a direct employee of DMG. The primary judge considered that this distinction did not matter in circumstances where DMG exercised control over the unidentified worker “as if” he was DMG’s employee. However, the Court of Appeal considered this distinction was important for the purposes of attributing liability in negligence to a host employer.

To determine such distinction and whether there had been a transfer of employment, the Court applied Mt Owen Pty Ltd v Parkes (NSWA 2023); 324 IR 34 at [49]:

Nevertheless, the transfer of control will not usually be sufficient to shift vicarious liability to the host for whom the work is done unless that party is also in control of the manner in which the work is undertaken. The relevant factors are frequently found in the following considerations:

1. the contract of employment of the worker;
2. the contract pursuant to which the services of the worker are transferred to a third party, and
3. evidence as to how the work is undertaken and controlled by the third party.

In this case, there was no evidence of the contract of employment or labour supply contract. Accordingly, the focus was on the third element, being if the work undertaken was controlled by DMG. The Court explained that the reference to “control” is a reference to whether the so-called “host employer” had the power to control the manner in which the negligent act was undertaken.

The Court accepted DMG’s submission that there was no requisite transfer of control in respect of a familiar task of moving a concrete pipe on a building site, which the injured worker had said he had performed repeatedly throughout his career. Further, there was no evidence that DMG had taken any steps to control the manner in which the injured worker and/or the unidentified co-worker, were to perform the task. The Court held:

A person is not without more vicariously liable for the tortious act of an independent contractor who performs a casual act of negligence when carrying out a function which is well within his or her expertise and as to which there has been no direction in relation to the manner of its performance. The reasoning by the primary judge to the effect that it was sufficient that the Civic employees were treated “as if” they were DMG employees is insufficient to establish DMG’s vicarious liability for a casual act of negligence when performing a familiar task.

The Court disagreed with DMG’s submission that it was “completely speculative” as to who the “other worker” was. Ultimately, the Court relied on the contemporaneous “Day Sheet” which provided a list of employees of DMG and another labour hire company and the activities to be undertaken by each person to conclude that ‘merely as a matter of statistics, there is a good chance that it was one of the eight employees, as opposed to one of the four workers supplied by Civic’ who was the ‘other worker’. The Court accordingly found, on the balance of probabilities, that the unidentified worker was an employee of DMG and for whose tortious conduct DMG was vicariously liable.

Contributory negligence

The Court held that the primary judge’s reasoning as to contributory negligence disclosed error. In doing so, it found that on the evidence, there was a failure by both the injured worker and the unidentified worker to coordinate the lift and lateral transfer of the pipe. In relation to the injured worker, it was found that he had failed to take reasonable care to protect himself from injury which included taking steps to remind or direct the unidentified worker to not commence the lift until the injured worker was ready. The Court of Appeal assessed the injured worker’s contributory negligence at one-third.

Implications

This decision reasserts the general position that a transfer of control is required for a host employer to be considered vicariously liable for the tortious act of a worker supplied under a labour hire agreement.

Accordingly, if a labour hire worker is carrying out a function within their expertise, and as to which there has been no direction in relation to the manner of its performance by the host employer, then the host employer is unlikely to be vicariously liable for any casual act of negligence on the part of the labour hire worker.

The decision further confirms that experienced workers have an obligation to take reasonable care to protect themselves from injury, and that a failure to do so may lead to a finding of contributory negligence.