Case Study: Hollis V Vabu

2056 words 9 pages
CLAW1001: Commercial Transactions A

Case Analysis
Hollis v Vabu Pty Ltd [2001] HCA 44

Submitted by: Sindhuja Shankar
SID: 305 127 950
3/10/2007
Table of Contents

Introduction 3
Case Summary 3 Facts 3 Issues 3 Ratio 3 Decision 4
Critical Analysis 4
Commercial Implications 5
Legal Implications 6
Conclusion 6
Bibliography 7
Appendix † Research Plan 8
Introduction
The case Hollis v Vabu Pty Ltd[1] confirms the long held doctrine that employers are vicariously liable for the negligence of their employees during the course of their employment. In comparison to cases such as Humberstone v Northern Timber Mills[2] and Stevens v Brodribb Sawmilling Co Pty Ltd[3], which appear to contribute to the
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This decision is supported by the Quarman v Burnett[9] case in which Parke B held that the wearing of uniforms was “evidence of the man being their servant”.

The Hollis v Vabu case also found the economic relationship between the parties as a significant factor in determining the nature of employment decisions. Vabu Pty Ltd v Federal Commissioner of Taxation[10] case found that the bicycle couriers were independent contractors. The Court of Appeal gave significant weighting to this decision. In contrast, the High Court’s decision regarding taxation of income factor is more reflective of current business conditions. Labour on-costs are a major consideration for employers and it is not unusual for employers to use different classifications to reduce their payable tax. The High Court’s decision to consider the case as a whole in finding that Vabu superintended the courier’s finances is a development in the application of common law to modern social structure.

Commercial Implications
The major commercial implication of the Hollis v Vabu case is for employers. Outsourcing business activities is becoming an increasingly popular practice in the current business environment. It also impacts businesses that exercise outsourcing practices which “purport to engage independent contractors but which in reality retain an employer-style degree of control…”[11]. The outcome of this case places extra pressure on employers given that they may be held

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