'Judging the Employment Status of Workers: An Analysis of Commonsense Reasoning' by Carolyn Sutherland in [2022] 46(1) Melbourne University Law Review 281 comments
The ‘common sense’ of judges has typically played a crucial role in developing common law principles. ‘Common sense’ draws upon judges’ knowledge of everyday life in the community in which the courts operate to ensure that the common law reflects shared community values. This is illustrated in Australian judicial decisions that determine employment status by categorising a worker as either: an employee, who is entitled to a safety net of statutory protections; or an independent contractor, who is running a business on their own account and cannot access these protections. In these decisions, judges often rely on intuition to apply a multi-factorial test to a wide range of contexts. When determining that particular facts point towards a classification of one status or another, and by placing particular weight on one factor over another, judges draw heavily on values and assumptions that are drawn from their own experience as proxies for values and assumptions in the wider community. Assumptions drawn from judges’ own experience are typically presented as ‘common sense’ and signalled by reference to common knowledge, well-known phenomena and notorious understandings. However, rapid changes in business models, and the selection of judges from a narrow socio-economic pool, make it difficult for judges to maintain an up-to-date understanding of the everyday reality of workplaces. As a consequence, the ‘common sense’ of judges may fall out of step with the ‘common sense’ of the broader community. Where this results in judicial reliance on commonsense knowledge that is discriminatory and partial, the legitimacy of legal judgment may be called into question.
Court decisions about the status of workers (as either employees or independent contractors) provide a useful context in which to explore the capacity of the common law to evolve to accommodate the realities of contemporary life. These cases tap into the contest of ideas over the economic and social effects of modern work arrangements. For example, the rise of the gig economy as a consequence of rapid advances in technology produces conflicting narratives about the capacity of the model to either exploit workers or to provide new and desirable options for flexible work. To resolve disputes about worker status, it is important that courts explicitly engage with these and other underpinning assumptions about the nature of work. Scholarly analysis of judicial decisions about the status of workers suggests that courts are not meeting this challenge. The decisions have been criticised for incoherence in both judicial reasoning and outcomes. Lizzie Barmes argues that problems of inconsistency and even illogicality reflect the difficulty that courts face in ‘fitting the law to the reality of working lives’.
This article is concerned with commonsense assumptions for two reasons: first, because those assumptions may be hidden in judicial reasoning, reducing transparency; and second, because the content of those assumptions is often shaped by the feudal roots of the contract of employment and the (often narrow) sociocultural experiences of judges, reinforcing rather than combating the imbalance of power between capital and labour. As a consequence, commonsense reasoning may fall out of step with community expectations about justice in labour law.
This article aims to identify and, where appropriate, challenge the assumptions that underpin judicial reasoning. It will pay particular attention to the language used by judges and highlight instances where this language perpetuates notions that appear obvious and inevitable, but are in fact outmoded, inaccurate or misaligned with the values of the wider community. When judges draw on commonsense reasoning (explicitly or implicitly), there is a risk that their assumptions will reinforce a conservatism that overlooks the lived experience of workers. Ultimately, the ideal is to subject commonsense assumptions to a process of critical reflection by judges, and to broaden the range of perspectives that are reflected in legal judgments to ensure the continued relevance of labour law to all participants in the labour market.
This article is divided into five parts, commencing with this introduction (Part I). Part II examines the nature of commonsense reasoning by exploring the relationship between ‘common sense’ and the common law, and by considering the potential for commonsense reasoning to either undermine or enhance good judgment. Part III provides the context for the analysis of cases about the status of workers: first, by explaining the legal criteria for categorising workers as either employees or independent contractors; second, by justifying the analytical focus of the paper on judicial language and reasoning, rather than on doctrinal coherence and outcomes; and finally, by identifying the ways in which examples of commonsense reasoning can be identified. Part IV examines selected decisions of Australian courts that deal with the characterisation of workers as either employees or independent contractors. This analysis highlights three examples of assumptions that influence decisions in this context: first, that free enterprise and market-based solutions produce optimal outcomes for society as a whole; second, that a worker’s investment in capital indicates a desire to be an entrepreneur; and third, that the demands of modern business arrangements necessitate the exercise of high levels of control over independent contractors (without transforming their status into one of employment). The final section of this article (Part V) concludes by highlighting reflective practices of judging. These practices prompt judges to question whether their assumptions are drawn from historical and cultural contexts that may be outdated or exclusionary, and to consider whether matters that are taken to be ‘common sense’ are, in reality, commonly held and aligned with the views of the wider community.
A ‘Common Sense’ and the Common Law
One of the perceived strengths of the common law is its capacity to adapt to a changing social context. As articulated by McHugh J of the High Court:
The genius of the common law is that the first statement of a common law rule or principle is not its final statement. Rules and principles are modified and expanded by the pressure of changing social conditions and the experience of their practical application in the life of the community.
Renowned United States evidence scholar Ronald Allen goes further, arguing that the law is, and must be, ‘the embodiment of common sense’. Given its interaction with ‘virtually all of life’, if the law ‘were not generated largely from and consistent with the conventional interactions of individuals, it would not survive’. This expectation that the law will be generated and maintained to reflect evolving social conditions suggests that judges must actively monitor those conditions in order to meet the demands of justice in common law cases. In addition, there may be cases where conventional interactions within the community are exclusionary and outdated. In such cases, one legitimate role of the judiciary might be to mete out justice that challenges the conventional, dominant view.
The demands of justice may also require judges to consider whether the application of ‘common sense’ reinforces existing power structures or challenges those structures. This will depend on whether judges are alert to the possibility that their knowledge will, at times, reflect their place within the dominant classes, and whether they are willing to proceed in a way that ‘imaginatively references’ the broader, everyday experiences of workers. The factual accounts of workers’ experiences are often presented to judges in considerable detail. To maintain the connection between law and the community, it is important that workers’ accounts are reproduced in judgments in ways that reflect, rather than dismiss, those experiences. But this is unlikely to happen where the lived experience of workers, particularly those in a weak labour market position, are overlooked in judicial accounts — either because they do not readily align with judges’ experience of the world, or because they do not easily fit within the established legal tests.
Those who support formal legalist approaches to judging may object that the role of judges is not to supplant the legislative function by changing the legal tests (to accommodate workers’ needs), but to implement the existing law. According to American jurist, Richard Posner, such approaches are ‘premised on a belief that all legal issues can be resolved by logic, text, or precedent, without a judge’s personality, values, ideological leanings, background and culture, or real-world experience playing any role’. However, it is widely recognised that judicial decision-making in a common law system may legitimately involve creativity and choice. More than 80 years ago, Harlan Stone of the Supreme Court of the United States suggested that the task of the common law system was to provide ‘suitable protection and control of the varying interests which a dynamic society creates’. In performing this task, a judge has ‘liberty of choice of the rule which [they] appl[y]’ — a choice that will depend on ‘the relative weights of the social and economic advantages which will finally turn the scales of judgment in favour of one rule rather than another’. Here, we find acknowledgement of the vital role that the judiciary can play in balancing competing interests within society. It is well-established that, in categorising workers as employees or independent contractors, judges in common law countries are required to perform a substantial policymaking function because of the rapidly evolving contexts in which these decisions are made, and the lack of legislative guidance about this distinction. In cases about worker status, judges are typically required to assess detailed facts and balance the interests of capital and labour. In so doing, judges frequently rely on ‘common sense’ to connect legal reasoning to the values of the community.
In the context of a landmark case about worker status in the High Court, Stevens v Brodribb Sawmilling Co Pty Ltd, Mason J articulated the view that the common law is ‘sufficiently flexible to adapt to changing social conditions’. This view has more recently been endorsed in a different context by Kirby J of the High Court, who confirmed that the ‘common law does not exist in a vacuum. It is expressed by judges to respond to their perceptions of the requirement of justice, fairness and reasonableness in their society’. However, the principles developed by the common law to address these requirements are necessarily vague to allow adaptation to the particular facts of the case, requiring judges to draw heavily on intuitive assumptions to apply those principles. These assumptions are derived from a number of sources, including the experiences of each judge in their private life, and common law values that are drawn from counsels’ submissions and from judicial immersion in precedent. Reliance on judicial experience can be problematic because judges are often drawn from a demographically narrow group that is not representative of the broader community. As an illustration of the limits of judicial experience, Barmes highlights Baroness Hale’s declaration in Edwards v Chesterfield Royal Hospital NHS Foundation Trust that her Ladyship was ‘the only member of this court to have spent a substantial proportion of her working life as an employee rather than as a self-employed barrister or tenured office holder’. Common law values in employment cases tend to reflect the historical influence of master and servant legislation on the contract of employment, giving precedence to the owner of capital to manage labour in a way that suits their own objectives. Both sources of judicial assumptions (personal experience and the values that are embedded in common law precedents) tend to constrain the rapid evolution of the common law and its capacity to support the progressive aims of labour law legislation, particularly the need to address structural inequality between capital and labour.
B Commonsense Reasoning and Its Consequences
Commonsense reasoning has the potential to either undermine or enhance good judgment. Writing about judicial decision-making in poverty law cases in Canada, Patricia Cochran warns against the tendency for commonsense reasoning to ‘harbour stereotypes, reproduce unjust power relations, and silence marginalized people’. In employment law cases, judicial reliance on stereotypes can limit expectations about what an employee or an independent contractor in a modern workplace might look like. Judges sometimes rely on stereotypes based on their own limited knowledge to make findings about matters which are capable of verification via social science evidence. This creates problems of accuracy where judicial findings may be contradicted by the latest empirical studies. Judges may also cling to the status quo because of a lack of understanding of potential alternatives. When stereotypical thinking is presented in judicial reasoning as an aspect of ‘common sense’, the implication is that this knowledge is ‘self-evident’, leading to reasoning and outcomes that may baffle workers who experience working life differently.
For example, in cases about worker status, judges may defer to the choices made by workers to become self-employed and may emphasise the opportunities available for the worker to make a profit. It may seem self-evident to judges that the parties should be held to their choices, particularly given the importance of freedom of contract as a common law principle. In contrast, a reflective approach would require an investigation into the worker’s economic dependence on a single business for work and a recognition of the significant limitations that govern their choices as a practical reality.
There is also a danger that the use of commonsense reasoning may prioritise the views of those whose socio-economic status is similar to that of most judges, and overlook the perspectives of workers from a lower socio-economic class. In her in-depth qualitative analysis of a United Kingdom (‘UK’) decision dealing with worker status, Barmes illustrates the ‘muting, distracting effect’ of the legal process in which an employer’s harsh treatment of Polish migrant workers was dispassionately recounted by judges whose reasoning was narrowly focused on the legal distinction between employees and independent contractors rather than the significance of the workers’ stories.
Margaret Davies has highlighted that the UK Feminist Judgments Project was similarly concerned with the need to introduce into judicial reasoning a ‘thick description’ of human relationships, and to recognise the influence of various forms of social power on these relationships. Both Barmes and Davies acknowledge that judges are constrained by the requirements of the relevant legal framework and the litigation process, but Davies nevertheless envisions the potential for judges to push against these constraints by consciously incorporating marginalised perspectives into their decisions. Despite the potential pitfalls of commonsense reasoning, this article does not argue for its elimination in judicial decisions. There are many circumstances in which judicial reliance on ‘common sense’ is both necessary and beneficial. Efficiency in the litigation process is perhaps the most obvious benefit that flows from the adoption of commonsense reasoning. The doctrine of judicial notice recognises this benefit by allowing judges to draw upon common knowledge that is indisputable and capable of verification without formally proving that knowledge.
It is also worth recognising that judicial reliance on commonsense assumptions is, to some extent, unavoidable. Rather than rejecting those assumptions, the intuitive aspect of commonsense reasoning can be harnessed to enhance judgment. For example, ‘common sense’ makes an important contribu- tion to decision-making when it is used by a judge as a check against absurd reasoning or outcomes. In cases about the status of workers, this typically occurs where the application of the legal tests points towards a particular characterisation of the status of the worker, but the judge applies an additional lens (sometimes described as a ‘smell test’) to challenge that characterisation.
It is nevertheless important to ensure that intuitive reasoning is checked by careful deliberation and to guard against the incorporation of out-of-date or ‘elite’ assumptions that may form part of an intuitive judicial response. American cultural anthropologist, Clifford Geertz, points out that ‘common sense remains more an assumed phenomenon than an analyzed one’. Drawing on an anthropological perspective, Geertz suggests that
[i]f we look at the views of people who draw conclusions different from our own by the mere living of their lives ... we will rather quickly become aware that common sense is both a more problematical and a more profound affair than it seems ...
This article will identify examples of commonsense assumptions that should be challenged because of their capacity to reinforce unequal power structures between hirers and workers and thereby undermine the purposes of labour law. It will also identify examples where ‘common sense’ is turned into ‘good sense’ through a process of reflection that broadens the field of enquiry to include an examination of how the social context and power dynamics have contributed to the matrix of facts that are presented to the judge.
