Deutz Australia Pty Ltd v Skilled Engineering Ltd and Anor

(2001) 162 FLR 173; [2001] VSC 194

Supreme Court of Victoria

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Interrogate

Catchwords

1. Tort
2. › Vicarious liability
3. › Labour hire
4. › Employee hired out to third party
5. › Negligent conduct of employee causing damage to property of third party
6. › Whether labour hire company vicariously liable
7. › Whether employee servant pro hac vice of third party
8. › Principles governing transfer of employment
9. › Heavy onus on general employer to establish transfer
1. Tort
2. › Vicarious liability
3. › Servant pro hac vice
4. › Tests for transfer of employment
5. › Whether hirer had right to control not only what worker did but how he did it
6. › Whether worker was serving the hirer or merely serving the interests of the hirer
1. Insurance
2. › Insurance Contracts Act 1984 (Cth)
3. › Section 66
4. › Subrogation
5. › Whether hired worker was 'employee' of hiring company
6. › Meaning of 'employee'
7. › Whether contract of service required
1. Contract
2. › Labour hire agreement
3. › Characterisation of contract
4. › Whether contract to supply a man or to supply services of a particular kind
5. › Implication of terms
6. › Whether breach established by single negligent act of supplied worker

Quick Take

A labour hire company remains vicariously liable for the negligence of its employee who damages the property of the company to which the employee has been hired out, unless the hiring company can establish that the employee became its servant pro hac vice — a heavy burden that is rarely discharged. The strict Mersey Docks tests for transfer of employment apply without dilution in this third category of case. A hired worker who is not employed under a contract of service with the hiring company is not an 'employee' for the purposes of s 66 of the Insurance Contracts Act 1984 (Cth) and cannot invoke that section to defeat a subrogated claim. A labour hire contract for the supply of a qualified worker is properly characterised as a contract to supply a competent man, not a contract to supply services of a particular kind; accordingly, the s 74(1) TPA warranty relates to the selection process, not to the quality of the work performed.