Background
Carlo Germanotta sustained an injury on 15 August 2018 while repairing a cane harvesting tractor owned by a family partnership but used by CRG Harvesting Pty Ltd. The tractor dislodged from its jack, crushing Carlo beneath it. CRG Harvesting admitted negligence, including through one of its employees, Mr Sheedy.
Workcover Queensland refused to indemnify CRG Harvesting for the workers’ compensation claim, arguing that Carlo was not a “worker” under the Workers’ Compensation and Rehabilitation Act 2003 (Qld). Workcover contended Carlo either: (1) had no contract of employment with CRG Harvesting; (2) was not an employee for PAYG withholding purposes; or (3) was a director of CRG Harvesting and thus excluded from coverage. The trial judge rejected all three arguments and found Carlo was a worker. Workcover Queensland appealed.
The key issue was whether an employment relationship existed between Carlo and CRG Harvesting in the absence of any written contract. The trial judge inferred the contract from the parties’ conduct over a four-year period.
The Court’s Holding
The Court of Appeal (Mullins P, Bond JA, Doyle JA) unanimously dismissed the appeal. The court affirmed that Carlo was a worker under the Act and that Workcover Queensland was liable to indemnify CRG Harvesting.
On the employment contract question, the court held that a contract of employment could properly be inferred from conduct, even without written agreement or direct evidence of a verbal contract at formation. The court found compelling evidence of an employment relationship: Carlo received fixed weekly payments year-round (despite seasonal work demands), CRG Harvesting made superannuation contributions on his behalf, PAYG tax was withheld and remitted to the ATO, payroll records identified him as a salaried employee, and this arrangement persisted consistently from 2014 to 2018. The court rejected the argument that a “wages reversal” made retrospectively in late 2019 (after the injury) negated the pre-existing employment relationship.
On the director question, the court found Carlo was not acting in the position of a director despite having signed some director-related documents. These were administrative errors produced by the accountant’s office and never sent to ASIC or the ATO. Carlo had minimal involvement at company meetings, took no role in managerial or financial decisions, and the trial judge found he lacked capacity to direct operations and had no understanding of what a company director did. Renato made the operational decisions and directed Carlo’s daily work.
Key Takeaways
- Employment contracts can be established by inference from conduct in the absence of written agreements or direct evidence of oral formation, provided there is objective evidence showing the parties’ meeting of minds.
- Fixed regular remuneration, superannuation contributions, PAYG tax withholding, and payroll records maintained over years constitute strong indicia of an employment relationship.
- A director exclusion from worker status requires actual exercise of director functions and control, not merely formal appointment or erroneous documentation.
- Later changes to compensation structure do not retroactively alter the character of an employment relationship that existed when work was performed.
- Worker status under Queensland law depends on PAYG withholding definition of “employee,” tying workers’ compensation entitlement to tax law characterization.
Why It Matters
This decision provides important guidance on determining worker status in family business and agricultural contexts where formal written contracts are uncommon. By permitting inference from conduct, it protects workers whose employment arrangements lack documentation but are clearly operational in nature. The ruling reinforces that substance trumps form: administrative errors or later changes cannot disguise the actual working relationship. For insurers and employers, it signals that courts will look at the totality of remuneration and control arrangements to characterize employment relationships for indemnity purposes.
The decision also clarifies that the director exclusion—which bars directors working for their own corporation from worker status—requires genuine exercise of directorial authority, not just technical appointment. This prevents corporate structures from becoming vehicles to artificially exclude workers from coverage.