Fair Work Act 2009
s.604—Appeal of decision

Dr Oisin Tracey
v
Murdoch University
(C2022/6026)

Appeal against decision [2022] FWC 2094 of Commissioner Williams at Perth on 11 August 2022 in matter number C2021/7445.

Introduction

[1] Dr Oisin Tracey has lodged an appeal against a decision of Commissioner Williams issued on 11 August 2022 1 concerning an application made under s 739 of the Fair Work Act 2009 (Cth) (FW Act) for the Commission to deal with a dispute pursuant to the dispute resolution procedure in clause 34 of the Murdoch University Enterprise Agreement 2018 (Agreement) or under the relevant modern award, specifically, clause 30 of the Animal Care and Veterinary Services Award 2020 (Award). Dr Tracey characterised the dispute as requiring arbitration of the following question:

“Is Dr Oisín Tracey a national system employee of Murdoch University for the work performed through the Specialty Training Program in Small Animal Emergency and Critical Care (from 13 January 2020 to 13 January 2021) and the Specialty Training Program in Veterinary Anaesthesia and Analgesia (from 25 January 2021 to 24 January 2022), at the School of Veterinary Medicine and The Animal Hospital at Murdoch University?”

[2] It was not in dispute before the Commissioner that if Dr Tracey was, at law, an employee of Murdoch University (University), he would be a “national system employee” within the meaning of s 13 of the FW Act. The Commissioner determined that Dr Tracey was not an employee of the University and thus was not competent to bring the dispute to the Commission either under the Agreement or the Award. 2 Dr Tracey contends in his appeal that the Commissioner’s determination was in error and that the correct answer to the above question is “yes”.

Background facts

[3] Except for one matter, which we shall identify, the Commissioner’s findings concerning the background facts of this matter were not challenged in the appeal. It is convenient therefore to set out those facts in a way which largely repeats, albeit with some summarisation, paraphrasing and supplementation, paragraphs [9]-[48] of the Commissioner’s decision.

[4] Dr Tracey graduated from University College Dublin, Ireland, with an Honours Degree of Bachelor of Veterinary Medicine in 2016. He moved to Perth that same year, and has held Certificates of Registration as a Veterinary Surgeon with the Veterinary Surgeons Board of Western Australia (VSBWA) since then.

[5] The University includes a School of Veterinary Medicine (School) which offers a Doctor of Veterinary Medicine degree. This degree is accredited by the Australian Veterinary Board’s Council, the Royal College of Veterinary Surgeons and the American Veterinary Medical Association. It is a requirement of this accreditation that the School provide postgraduate clinical training programs. Consequently, the School operates an animal hospital known as “The Animal Hospital at Murdoch University” (Hospital). The Hospital’s primary purpose is as a teaching laboratory for veterinary students, both undergraduate and postgraduate. Its secondary purpose is to benefit the wider community including the veterinary profession. The Hospital provides veterinary services to the public, and it also serves as a tertiary referral centre for veterinary practitioners in Western Australia. The School receives some budgetary support from the University to operate the Hospital, but the Hospital is required to be cost-neutral and therefore charges for the services it provides to the public to cover expenses as much as possible. The Hospital does not currently make a profit.

[6] The School offers a number of advanced clinical training programs each year. Positions in these programs are advertised and they are filled by a competitive selection process. The two main specialty training programs are 12-month specialty training programs or three-year residency programs. The 12-month programs are a critical stepping stone for candidacy for the three-year residency programs, which in turn provide prescriptive training for eligibility for specialty certification. To obtain specialist certification, a candidate must have completed a three-year residency program and an examination which is administered by a European, American or Australian specialist college. The 12-month specialty training programs are designed to provide clinical, research and teaching experience in the discipline of the student’s choosing. Examples of disciplines include emergency and critical care (ECC), anaesthesia, equine medicine and surgery, diagnostic imaging or small animal surgery. The aim of the 12-month speciality training programs is to provide a foundation for future training in a residency in order to become a clinical specialist or academic in the veterinary discipline of the student’s choosing. In some cases, trainees have gone straight into an academic position. The specialty training program is often the first part of the training process towards achieving a specialisation under the Veterinary Surgeons Act 1960 (WA). Most three-year residency programs have strict guidelines that must be met by the certifying colleges. One of these requirements is that applicants have completed at least one year of advanced training after veterinary school, preferably at a university.

[7] The Commissioner found that the 12-month specialty training programs are “structured graduate degree programs” and that “[d]uring the specialty training program trainees also undertake a postgraduate degree and as such, are enrolled as a full-time graduate student”. 3 Dr Tracey contends that these findings are in error because the traineeships are not postgraduate degree programs and are separate from the postgraduate Diploma and Masters degree programs. We will return to this contention later.

[8] The University pays participants in the 12-month specialty programs an annual stipend, which is divided across the 52 weeks of the program. PAYG tax is deducted from the stipend.

[9] Trainees are required to complete a research project as part of their graduate studies and are encouraged to write and publish case reports or a small case series to support their candidacy for ongoing residency training or postgraduate degree studies. 4 Trainees also participate in activities including journal club, seminars and fortnightly interdisciplinary case rounds, and they assist in teaching undergraduate students in the hospital and in the laboratory. This provides an opportunity for trainees to gain real-time experience in teaching and to apply the pedagogy they are learning.

[10] In 2019, the University advertised for vacancies in its three-year residency programs and its 12-month specialty training program. In respect of the latter, the advertisement relevantly stated:

“12 month Specialty training

•  Emergency and critical care (small animal)

•  Small animal surgery

•  Small animal medicine

•  Anaesthesia

The Specialty Training Program with a Veterinary Education Emphasis is a year‐long training program in the School of Veterinary Medicine at Murdoch University in Western Australia. The training program offers experience in a specialty discipline with an emphasis on veterinary education through concurrent enrolment in a Graduate Diploma in Tertiary Education (G1025). This position would suit a veterinary graduate with some experience, interested in university training or pursuing a residency. Exceptional new graduates will be considered. A taxable stipend of $30,000 is offered for enrolment in G1025.

Application for residency and trainee positions is restricted to veterinarians with a degree that can be registered in Western Australia. Australian and New Zealand citizenship or Australian permanent residency status is required for eligibility for full tuition-fee support. Successful applicants who do not meet citizenship or residency criteria are responsible for International Student Tuition Fees.”

[11] The advertisement went on to say that candidates would be chosen after a competitive selection process.

[12] Dr Tracey applied for both the three-year ECC residency program and the 12-month ECC specialty program. He was advised by letter dated 17 September 2019 from Dr Giselle Hosgood, Professor of Small Animal Surgery in the School, that his application for the latter program, for the period 13 January 2020 to 13 January 2021, was successful. The letter relevantly stated:

“I have attached the following documents below for your perusal and signature where applicable. Please return a signed copy of this letter verifying your acceptance and that you have received and read the documentation. Please also return a signed copy of the Conditions of Stipend. I would like you to start your graduate school application immediately.

1. Conditions of Stipend (signature required)

2. Speciality Trainee program description

3. Leave form.”

[13] The Conditions of Stipend document attached to the letter provided:

“The stipend shall be governed by the following conditions:

Eligibility

1. In order to be considered for a stipend, an applicant shall be recommended by the Principal of the College of Veterinary Medicine and the Dean of the Faculty of the School of Education after a competitive selection process.

2. A student must be enrolled as a full time student on an internal basis in a postgraduate degree at the University.

Stipend and Allowances

3. An annual taxable stipend of $30,000 will be paid for a period of 12 months for the duration of study. The level of the stipend shall not be reduced during the period of the award. The stipend will be paid on a fortnightly basis.

4. Tuition fees are applicable and domestic fees will be paid for by the School of Veterinary and Life Sciences.

5. A stipend may be supplemented by other similar awards or by funds placed at the disposal of the University. (A “similar award” means another award, stipend, bursary or the like which provides benefits similar to those provided under the Award).

6. There is no funding or reimbursement for relocation expenses (including travel).

7. All other student fees (SSAF, parking, fines, miscellaneous administrative fees) will be paid by the student.

Annual Leave

8. Students are entitled to up to 10 days paid annual leave per year. Annual leave is calculated on a pro-rata basis and no more than 10 days annual leave may be accumulated.

9. Leave must be taken during the tenure of the stipend and must be approved by the supervisor before it is taken.

10. University holidays are not included in the 10 days leave.

11. There is no compensation for unused leave.

Personal Leave

12. Up to 10 days personal leave are available per year. Personal leave is calculated on a pro-rata basis and no more than 10 days will be accumulated.

13. Leave must be approved by the supervisor before it is taken. Relevant documentation must be submitted to the supervisor to support the personal leave.

14. There is no compensation for unused leave.

Employment

15. Scholarship holders may undertake employment subject to the following conditions:

a. Such work is to be of a part-time nature only;

b. A full-time candidate may undertake up to 240 hours of employment per year, but normally no more than 8 hours in any one week, including weekends. If the employment consists of tutoring and/or lecturing, the total includes the time required for preparation and marking. Any employment beyond these limits requires the approval of the student’s principal or sole supervisor and the Manager of the Graduate Centre.

Work undertaken must not interfere with the student’s program or pose a conflict of interest.

Suspension

16. Stipend holders may be eligible to apply for suspension of their studies where the circumstances are exceptional and beyond the control of the student.

Termination

17. The stipend will be terminated at the end of the 12 months, as stipulated in the Training in Veterinary Education Program Description.

18. The stipend will be terminated before this time if after due enquiries, the University concludes that students have not fulfilled their obligations, met the eligibility criteria or if they are not making satisfactory progress.

Specific University Obligations

19. The University will be fair and equitable in the use of its discretionary powers.

The University will advise students of appropriate appeal mechanisms for resolution of any academic disputes that might arise during their candidature.

The University will pay the student all entitlements due under the Award.

Specific Student Obligations

20. Program obligations

a. The students shall agree to the conditions of the Training in Veterinary Education Program, as specified by the Department administering the Training program. The student should receive a copy of the Training in Veterinary Education Program description from their supervisor at the beginning of the program and provide a signed acknowledgement of such receipt.

General

Students shall:

a. Diligently and to the best of their ability apply themselves to the successful completion of the degree;

b. Abide by all University statutes, regulations, policies and procedures during the course of their degree;

c. Abide by the NH & MRC codes on human and animal experimentation, guidelines established by the Australian Government’s Recombinant DNA Monitoring Committee and rulings of the safety and ethics committees of the University.”

[14] Attached to the Conditions of Stipend document was an “Acceptance Advice” which stated:

“I accept the offer of the above stipend at Murdoch University subject to the stipend conditions, which I have read and accept. I provide an assurance that I will be able to devote myself to my studies during all required working hours throughout the year.

I have not and will not sign over the Intellectual Property involved in any work I conduct during the tenure of this award, without the prior written approval of the Director of the Division of Research and Development.”

[15] The program description for the 12-month ECC program for 2020-2021 (ECC Program) was as follows:

“Murdoch University, School of Veterinary Medicine

Specialty Training Program in Small Animal Emergency and Critical Care

Program Description 2020-2021

The specialty training program is a structured 12 month program designed to provide clinical training in the fields of emergency and critical care (ECC) and to allow completion of a graduate diploma in postgraduate education. The learning objectives are:

•  T[o] obtain knowledge and practical skills in the field of small animal ECC

•  To understand the principles of tertiary teaching at a tertiary level; and

•  To obtain experience in clinical teaching at a tertiary level.

Ultimately the aim of the training program is to provide a foundation for future training as a clinical specialist and/or academic in the field of veterinary special[ties]. All training will be undertaken within The Animal Hospital at Murdoch University (TAHMU), School of Veterinary Medicine, or within the School of Education at the Murdoch University campus.

The training program is divided into three main components:

1. Training within the clinical disciplines of small animal ECC

2. Assistance with teaching within several undergraduate units in the Doctor of Veterinary Medicine program

3. Completion of the Graduate Diploma in Education (Tertiary and Adult)

The average time assigned to each of the above areas each will vary throughout the year. Each component is described in more detail below.

1. Training within the clinical disciplines of small animal emergency and critical care

Clinical duties in the training program will include:

•  Assisting with providing a critical care service to TAHMU

•  Assisting with providing emergency services to primary accession and referral emergency patients

•  Participation in clinical research undertaken within TAHMU

•  Participation in ECC academic activities including case rounds, journal club, and research rounds

•  Participation in multidisciplinary rounds (MDR) and seminar

2. Assistance with teaching within several undergraduate units in the Doctor of Veterinary Medicine (DVM) program

The ECC specialty trainee will participate in practical classes and clinical teaching in the following units within the DVM program[:]

•  VET638; Small Animal Practice 2, the unit that includes the ECC core rotation

•  VET618; Equine, Afterhours, and Diagnostic imaging, the unit that includes the ECC afterhours rotation (shared with equine afterhours)

•  VET652; Advanced Topics Small Animal

•  VET 651; Advanced Topics Mixed Animal Practice

3. Completion of the Graduate Diploma in Education (Tertiary and Adult)

Completion of the GradDipEd is a mandatory component of the ECC specialty trainee position. This diploma is an established Murdoch University CRICOS registered course designed to train the participants to teach adults a specialist subject in a range of settings. The diploma is a one-year full-time course. The course is beneficial to any veterinarian planning to enter an academic career.

Supervision

The ECC specialty trainee is overseen by the School of Veterinary Medicine academics (Dr Claire Sharp, Lisa Smart, Melissa Claus), TAHMU ECC registrar (Dr Corrin Boyd), and TAHMU ECC veterinary supervisor (Dr Jill Griffiths).”

[16] Dr Tracey signed his acceptance of the letter of offer and the acceptance advice for the stipend on 20 September 2019. He participated in the 12-month ECC program during the period specified in the letter of offer. The clinical component of the program required him to work in the Hospital alternating weekly between day shifts and evening shifts. He also enrolled as a full-time student in the Graduate Diploma of Education (Tertiary and Workplace) at the University, as required by the Conditions of Stipend document and the ECC Program, and successfully completed this course by the end of the 12-month ECC Program. While undertaking the program, Dr Tracey was, in addition and separately, employed on a casual basis by the University to work shifts as an emergency veterinarian at the Hospital. When he did so, he was paid in accordance with the Agreement.

[17] Whilst undertaking the 12-month ECC program, Dr Tracey applied for a 12-month specialty training program in Veterinary Anaesthesia and Analgesia (Anaesthesia Program), while also applying again for a three-year residency. Dr Tracey was offered a position in the Anaesthesia Program for the period 25 January 2021 to 25 January 2022, subject to a letter of offer and conditions of stipend which were identical to those he accepted for the EEC Program. Dr Tracey signed his acceptance of this offer on 16 December 2020. The program description for the Anaesthesia Program was as follows:

“Specialty Training Program In Veterinary Anaesthesia And Analgesia 2019

The specialty training program is a structured 12-month programme designed to provide clinical training in the fields of anaesthesia and analgesia and to allow completion of a graduate certificate in teaching skills. The learning objectives are:

•  To obtain knowledge and practical skills in the field of anaesthesia and analgesia of all veterinary species particularly small animals and horses

•  To understand the principles of teaching at a tertiary level

•  To obtain experience in clinical teaching at a tertiary level

Ultimately, the aim of the training program is to provide a foundation for future training as a clinical specialist and/or academic in the field of veterinary science.

All training will be undertaken within Murdoch University Veterinary Hospital (MUVH), School of Veterinary and Life Sciences, or within the School of Education at the Murdoch University campus.

The training program is divided into four main components:

1. Training within the clinical discipline of veterinary anaesthesia and analgesia

2. Assistance with teaching within several undergraduate units in the veterinary science programme

3. Completion of the Graduate Diploma in Education (Tertiary and Adult) (G1025)

4. Completion of a research project or case series

The average time assigned to each of the above areas each week will vary throughout the year. Notably greater time will be assigned to practical teaching of undergraduate veterinary students and to completion of the Graduate Diploma in teaching periods. In non-teaching periods, a relatively greater proportion of time will be assigned to working and training within the anaesthesia section of MUVH. There will [be] the possibility of assisting/completing a research project if interested. The following table is a guide to time allocated to different aspects of the training program.

1. Training within the clinical discipline of veterinary anaesthesia

Clinical duties within the training programme will include:

•  Assisting with providing anaesthesia service to MUVH

•  Participation in journal club, case rounds, and seminars

•  Participation in research undertaken within the MUVH

•  Participation in multidisciplinary rounds and seminars

2. Assistance with teaching within several undergraduate units in the veterinary science programme

It will be necessary to participate in practical classes and clinical teaching in the following units within the undergraduate veterinary degree programme:

•  Third year

•  VET301 S2 Principles of Surgery & Anaesthesia

•  Fourth year

•  Vet607 S1 and S2 DVM surgery laboratory classes

•  Fifth year

•  VET638 SAP 1 and 2 Anaesthesia core clinical rotation teaching and assistance with anaesthesia for surgery performed during shelter rotation

•  Vet652 Small animal streaming

3. Completion of the Graduate Diploma in Education (Tertiary and Adult) (G1025)

Completion of the Graduate Diploma in Education (Tertiary and Adult) will be mandatory during the training period. This diploma is an established Murdoch University CRICOS registered course designed to train the participants to teach adults a specialist subject in a range of settings. The diploma is a one-year full time course, and is already an obligatory component of internship programmes in other clinical specialties within the School of Veterinary and Biomedical Sciences. The course is beneficial to any veterinarian planning to enter an academic career.

Additional units must be completed during the programme. These optional units will be chosen to specifically enhance teaching ability within the field of veterinary science.

Supervisors:

Teaching/research

Dr Anthea Raisis

Dr Martina Mosing (Mag. med. vet. Dr. med. vet, Dip ECVAA)

Clinical supervision

Dr Eleanor Drynan

Dr Griet Haitjema

Dr Leon Warne”

[18] Although the program description for the Anaesthesia Program referred to a requirement to complete the “Graduate Diploma in Education (Tertiary and Adult)”, Dr Tracey had already completed this. He instead undertook a Masters of Education degree. Dr Tracey was also casually employed in the anaesthesia department of the Hospital during the period of the Anaesthesia Program and was paid for this work.

[19] Dr Tracey gave extensive evidence before the Commissioner describing the work he performed in the Hospital pursuant to the ECC Program and the Anaesthesia Program, including his rostered hours of work. In summary, his evidence was that, when performing veterinary work, he did so largely unsupervised and in a way which was largely indistinguishable from employed veterinarians in the Hospital, including himself when he performed such work as a casual employee.

[20] Dr Tracey initiated his dispute with the University in June 2021, whilst he was undertaking the Anaesthesia Program. The matter which caused Dr Tracey to initiate the dispute appears to have been that he was only entitled to two and not four weeks’ annual leave. The University seems to have acceded to Dr Tracey’s position about this (although there may have been confusion between annual and personal leave) since, on 15 July 2021, Professor Hosgood sent the following email to participants in the specialty training programs:

“Please note that moving forward, for the remainder of your program, you will be entitled to have had a full 20 days of personal leave for the year. It must be taken before the end of the program as we cannot pay out unused leave. It is also important to know that for any public holiday worked, as for anyone at the university, you are entitled to a day in lieu, and you are also entitled to a minimum of one full week (7 days) during the limited service period over Christmas and New Year.”

[21] However, this concession did not resolve the dispute because Dr Tracey went on to claim an entitlement to all the benefits of the Agreement as an employee. He subsequently filed his application under s 739 of the FW Act on 5 November 2021.

The decision under appeal

[22] The Commissioner found that the relationship between the University and Dr Tracey for the ECC Program and the Anaesthesia Program was in each case the subject of a comprehensive written contract consisting of the letter of offer, the conditions of stipend and the relevant training program description document. 5 On this basis, the Commissioner was satisfied that the principles in CFMMEU v Personnel Contracting Pty Ltd6 (Personnel Contracting) were applicable to the relationship in each case.7 The Commissioner also noted that there was no suggestion in the evidence that the contracts were a sham nor that, after the contracts were formed, the parties had agreed to any variation.8 The Commissioner analysed the terms of the contracts and, in respect of the program description documents, concluded that they “unambiguously detail a program of training” and that nothing in them refers to employment.9 As to the conditions of stipend documents, the Commissioner again concluded that there is nothing in them which suggests that the 12-month specialty training programs were an employment relationship.10 The Commissioner, applying Personnel Contracting, found that the rights and obligations of the parties under each of the contracts were comprehensively recorded and not varied by any subsequent conduct, that the agreed contractual terms very clearly show that the relationship was that of University and student trainee, and there was no basis to find that the relationship between Dr Tracey and the University was that of employer and employee.11

Appeal grounds and submissions

[23] Dr Tracey’s notice of appeal references a separate document lodged concurrently with the notice, the “Appellant Outline of Arguments” in which he sets out the basis of his appeal. Two grounds of appeal may be discerned in that document:

(1) The Commissioner made a significant error of fact in finding that the Speciality Training Programs were postgraduate degree programs.

(2) The Commissioner made an error of law in determining that because Dr Tracey was a student trainee, he could not also be an employee of the University.

[24] Dr Tracey submitted that permission to appeal should be granted because the appeal raised the novel issue of how the key propositions in Personnel Contracting and ZG Operations Pty Ltd v Jamsek 12 (Jamsek) should be applied to the question of whether a person is a student or an employee rather than an independent contractor or an employee. He submitted that permission should also be granted because the Commissioner failed to give adequate reasons for his decision, and because the decision directly impacted the position of other specialty-trainees.

[25] As to his first ground of appeal, Dr Tracey submitted that the Commissioner erred in finding that the training programs he undertook were “postgraduate degree programs”, since they were extra-curricular to the studies he undertook in his Graduate Diploma and Masters courses and not incorporated in any way into those courses, neither course had any requirement for students to engage in a trainee work placement, and the training programs did not contribute to his academic credits for those courses or his eventual attainment of the Graduate Diploma and Masters qualifications. Dr Tracey characterised the training programs as being “structured but informal training programs” which did not involve summative assessment or result in a qualification and observed that they were not described in the contractual documents as postgraduate degree programs unto themselves. He submitted that the training programs “attempt[ed] to legitimise themselves by piggy-backing on other post-graduate programs”.

[26] As to his second ground of appeal, Dr Tracey submitted that the Commissioner erred in assuming that a student trainee cannot be an employee and that, to the contrary, the ordinary understanding of a trainee at common law is one of an employee. In the latter respect, Dr Tracey pointed to multiple provisions in the FW Act applicable to training arrangements. He submitted that the correct question was whether he was a student trainee who was an employee or was not an employee — a question which was to be answered by properly characterising the relationship. Dr Tracey referred to clause 20 of the Conditions of Stipend documents, which required agreement to the conditions of the programs as specified in the program descriptions. In respect of the ECC Program, Dr Tracey pointed to the requirements to assist with providing a critical care service to the Hospital and providing emergency services to primary accession and referral emergency patients, and to participate in practical classes and clinical teaching. In respect of the Anaesthesia Program, Dr Tracey referred to undertaking duties including assisting providing anaesthesia services to the Hospital and assisting with teaching several undergraduate units in the veterinary science program. In both cases, the program descriptions listed his various supervisors. He submitted that these contractual obligations required him to perform work in the Hospital and the School under the direction of the identified supervisors and demonstrated that the University had a high degree of contractual control over what work he performed and how he performed it, for which he was paid remuneration. This signified an employment relationship.

[27] Dr Tracey submitted that his training programs did not meet the definition of “vocational placement” in s 12 of the FW Act in that he had a contractual requirement for payment, the programs were not undertaken as a requirement of an education or training course, and they are not authorised under any legislation or statutory instrument. Accordingly, he submitted, he was a national system employee when undertaking the ECC Program and the Anaesthesia Program.

[28] The University submitted, in summary, that the contractual documents described the relationship as that of a training program, not employment, and Dr Tracey applied for the programs knowing that this was the arrangement. The position descriptions outline the clinical training components of the specialty training programs, learning objectives and development of skills, once again unequivocally demonstrating a training program. The University submitted that the letters of offer refer to a stipend, not a wage, and observed that Dr Tracey signed these letters in the capacity of “Student”. On the basis of these matters, the University submitted that the relationship was a pedagogical one, not of one of employment.

[29] The University submitted that were three aspects to Dr Tracey’s training programs: supervised clinical experience, teaching involvement and more direct pedagogical experiences. Dr Tracey only asserted he was an employee whilst attending the clinic and otherwise did not contest he was a student for all his other activities which, it was submitted, only underlined the improbability that whilst enrolled and participating in the training programs, he was at times in an employment relationship and at other times in a pedagogical relationship. Applying the principles in Personnel Contracting and Jamsek, the University submitted that the following considerations establish that there was no employment relationship:

(a) Dr Tracey applied for the advertised training program;

(b) both program descriptions describe the programs to be training programs, specify the learning objectives, and explain the three main components which involve training, learning and completion of the Graduate Diploma (and the Masters);

(c) to be eligible for the stipend, the applicant must be a full-time student;

(d) tuition and domestic fees will be paid by the School; 

(e) there is no compensation for unused leave;

(f) scholarship holders may undertake other employment subject to conditions and the work undertaken must not interfere with the training programs; and 

(g) the stipend will be terminated at the end of the 12 months or earlier if the students have not met their eligibility criteria or are not making satisfactory progress in the training programs.

[30] The University rejected Dr Tracey’s contention that the contracts provided a right to remuneration, submitting that the payment was a stipend and was not wages and that the contracts did not suggest any right to wages. In relation to the definition of “vocational placement” in s 12 of the FW Act, the University said that it placed no reliance on this provision.

[31] As to the asserted significant error of fact, the University submitted that the training programs are described as graduate degree programs because the trainees have to be enrolled in a graduate course in order to be accepted into the program, as the contracts provided and the evidence demonstrated. As to permission to appeal, the University accepted that the Commissioner’s decision might directly impact other specialty trainees but that permission should nevertheless be refused given that no viable error of fact or law has been identified.

Consideration

[32] This matter is one of considerable complexity. There is a dearth of authority on the issue of whether a training arrangement which involves the performance of work on one side and the payment of money on the other may properly be characterised as involving an employment relationship. Case authorities concerning the characterisation of an employment relationship are overwhelmingly concerned with determining whether a given relationship pursuant to which work is performed is one of employment or an independent contracting relationship. They consequently focus on the distinguishing characteristics of these two mutually-exclusive categories of contractual arrangements such as the “own business/employer’s business dichotomy” and the “control test”. It is not easy to derive legal principles from these cases which provide a ready answer to the question which the Commissioner was required to determine. It is correct, as Dr Tracey submitted, that to characterise a contractual relationship as having the provision of training as its purpose does not exclude the possibility that it is also an employment relationship. It is also correct, as Dr Tracey submitted, that various provisions the FW Act (for example, ss 139(1)(a), 153(3)(c) and 284(3)(a)) contemplate that “training arrangements” 13 may apply to employees and, further, that the Commission’s awards make provision for trainees and apprentices (including apprentices who are undertaking a course of secondary education) on the basis that they are employees.14 However, no underlying legal principle can be derived from these propositions which serves to aid the task of characterising the nature of Dr Tracey’s relationship with the University in respect of the ECC Program and the Anaesthesia Program.

[33] Notwithstanding this difficulty, and noting that there was no dispute between the parties that their relationship was contractual in nature, three basal legal principles relevant to the determination of this appeal may be identified. First, as stated in Personnel Contracting, where the relationship is the subject of a comprehensive written contract, the characterisation of the relationship is to be undertaken solely by reference to the rights and obligations specified in that contract, and it is not permissible to examine or review the performance of the contract or the course of dealings between the parties other than to ascertain whether any of the contractual terms have been varied. 15 In his decision, as earlier stated, the Commissioner found that there was a comprehensive written contract in respect of each training program, consisting in each case of the letter of offer, the Conditions of Stipend document and the program description. This finding was not challenged in the appeal and we agree with it, subject to the caveat that there appears to have been two variations by conduct to the contract for the Anaesthesia Program, namely that Dr Tracey was required to undertake the Masters course in substitution for the Graduate Diploma course to which the contract referred and that his personal leave entitlement was increased from two to four weeks.

[34] Dr Tracey gave extensive evidence below as to his performance of clinical work, including as to the rostering of his hours of work, the number of hours of work which he performed, and the level of direction to which he was subject. Had this evidence concerning the performance of the contracts been taken into account, as it would have been under the approach favoured in decisions such as Stevens v Brodribb Sawmilling Co Pty Ltd 16 and Hollis v Vabu Pty Ltd17 which prevailed pre-Personnel Contracting, it may have favoured a conclusion that Dr Tracey was an employee of the University. However, the Commissioner did not have regard to this evidence, and he was clearly correct not to do so. Dr Tracey did not contend otherwise in his appeal.

[35] Second, the “irreducible minimum of mutual obligation” required for a contract to establish an employment relationship is that the putative employer must, under the contract, be obliged to pay remuneration to the putative employee as consideration for the services reasonably demanded under it, and the putative employee is obliged to perform such services. 18

[36] Third, the label or characterisation placed on the relationship by the contract is not relevant even as a “tie-breaker”, 19 or at least it is not determinative.20

[37] The terms of the contractual documents here make no reference whatsoever to the existence of an employment relationship, but this cannot by itself be a matter of significance since, in accordance with the third principle stated above, the characterisation of a contract cannot be determined by its contractual labelling (or the lack thereof). On one view, the Commissioner placed too much emphasis in paragraphs [76]-[82] of his decision on the fact that the contractual documents describe a training arrangement and make no reference to employment. However, the correctness standard applies to this appeal, so the question remains whether the Commissioner’s conclusion concerning the question posed for determination (which went both to the Commission’s jurisdiction in the matter as well as to the merits of the dispute) was correct.

[38] In our view, the application of the second principle above to the terms of the contractual documents is critical to the resolution of this appeal. The question which arises is whether the stipend for which the Conditions of Stipend document provides is, under the terms of the contractual document, payable as consideration for the performance of work by Dr Tracey such as to constitute a “work-wages” bargain.

[39] It may first be observed that the word “stipend” is one of broad meaning: although it encompasses payment in the nature of salary for work performed, it also encompasses payments that are not necessarily linked to the performance of work, with the key criterion being that the payments are of a fixed and regular nature. 21 Further colour is given to the use of the word by clause 5 of the Conditions of Stipend document, which refers to “similar awards”, being “another award, stipend, bursary or the like which provides benefits similar to those provided under the Award”. The reference to an award or bursary providing “similar benefits” to the stipend suggests that its purpose is not to remunerate for the performance of work but rather to provide financial incentivisation and support for undertaking studies. A “bursary” in particular is confined to that purpose.22 We note at this point that Dr Tracey submitted that the description of the $30,000 annual payment is merely an instance of mere contractual “labelling” which should be ignored. However, while accepting that it is not determinative, we do not consider that it is irrelevant: in the context of a contractual arrangement involving a university, the description of the payment as a “stipend” must be taken into account as indicative of its purpose.

[40] It is next necessary to identify the contractual obligations which the Conditions of Stipend document specifically relates to the payment of the stipend. These are as follows:

(1) Clause 1 requires, as a precondition, that the recipient be recommended by the specified academics after a competitive selection process. It is significant, we consider, that one of the two specified academics is the Dean of the Faculty of the School of Education, making it apparent that the stipend relates at least in part to the undertaking of studies in the field of education (not just veterinary medicine).

(2) Clause 2 requires, as a condition of the stipend, enrolment in a postgraduate degree at the University. Read with paragraph 3 of the program description, the relevant degree must be in the field of education. This expressly relates the stipend to the undertaking of postgraduate study in that field.

(3) It is implicit from clauses 8-14 that, apart from the specified periods of leave to which the recipient of the stipend is entitled, the stipend recipient is required to attend to the obligations under the overall arrangement for the remainder of the 12-month period.

(4) Clause 15 operates to limit the extent to which the recipient can undertake employment outside of the overall arrangement.

(5) It is implicit in clause 18 that the recipient must, in addition to meeting the requirements of clauses 1 and 2, “fulfil[] their obligations” and “mak[e] satisfactory progress”.

(6) Clause 20 requires the recipient to “agree to” the conditions of their training program as specified in the program description.

(7) The “General” obligations relate to diligent application to the successful completion of the required degree, compliance with relevant University rules during the course of the degree, and compliance with applicable safety and ethics rules.

[41] In addition, the Acceptance Advice for the Conditions of Stipend document incorporates two additional obligations (continuing the previous numbering):

(8) The recipient must devote themselves to their “studies” during all required working hours throughout the year.

(9) The recipient will not sign over any intellectual property without prior approval.

[42] In summary, none of the obligations on Dr Tracey in consideration for which the stipend is paid is expressed as concerning the performance of work as such. Further, obligations (2), (4) and (7) clearly relate to the requirement to undertake a postgraduate degree, and obligations (1), (5), (6) and (8) relate at least in part to undertaking that degree. Obligations (4) and (9) concern matters unrelated to any requirement to perform work for the University.

[43] As earlier outlined, Dr Tracey submits that the route to the establishment of a work-wages bargain is via obligation (6), which he says in effect incorporates by reference obligations contained in the program descriptions to perform specified “clinical duties” in the Hospital (pursuant to numbered paragraph 1 of the program description for the ECC Program and numbered paragraph 1 of the program description for the Anaesthesia Program). These “clinical duties”, Dr Tracey contends, constitute work that contributes to the provision of the services which the Hospital provides to its fee-paying clients.

[44] This submission has a significant degree of superficial attraction. However, that impression is coloured by the evidence before us concerning the employment-like way in which Dr Tracey was actually required in practice to discharge his obligation to undertake clinical duties in the Hospital. However, as earlier stated, we are not permitted to have regard to that evidence in undertaking the task of characterising the contractual arrangements between Dr Tracey and the University (noting that this evidence was admitted by the Commissioner, and thus appears in the appeal book, because the hearing before the Commissioner took place on 2 February 2022, a week before the High Court delivered the Personnel Contracting and Jamsek decisions). If attention is confined to the terms of the program descriptions, it is reasonably apparent that the requirement to perform clinical duties is but one component of an integrated training program which also requires the completion of a postgraduate course in education, participation in university teaching for training purposes, and undertaking research and other academic activities. In that context, the clinical duties specified are for the purpose of training – in the case of the ECC Program, to “obtain knowledge and practical skills in the field of small animal ECC” and, in the case of the Anaesthesia Program, to “obtain knowledge and practical skills in the field of anaesthesia and analgesia of all veterinary species particularly small animals and horses”.

[45] It may be accepted, as Dr Tracey submitted, that a person may be undergoing training and performing work in employment simultaneously, as happens with trainees, apprentices, interns and “on-the job” training generally. But the critical point here is that, on an overall analysis of the contractual terms, the annual stipend is paid as consideration for Dr Tracey undergoing an integrated program of study and training, not for the performance of work. On this basis, it cannot be said that the “irreducible minimum of mutual obligation” required for the existence of an employment relationship exists in this case. The contractual arrangements between Dr Tracey and the University in respect of the ECC Program and the Anaesthesia Program were not, in our view, “work-wages” bargains. They had a different character.

[46] There are, as Dr Tracey pointed out, certain employment-like provisions in the contractual arrangements — particularly the leave entitlements in the Conditions of Stipend document. But without the fundamental element of an employment relationship being present, these provisions cannot be determinative of the outcome.

[47] As to Dr Tracey’s contention that the Commissioner made an error of fact in describing the ECC Program and the Anaesthesia Program as “postgraduate degree programs”, we think this is largely a matter of semantics. It is clear, as earlier explained, that the completion of a postgraduate course was a fundamental requirement of each program, and this is sufficient to justify the Commissioner’s description of the programs. In any event, if there was any factual error as alleged, it did not lead to the Commissioner reaching the wrong conclusion.

[48] Because this appeal has raised issues of some novelty and complexity, we consider it is appropriate to grant permission to appeal. However, our conclusion is that the Commissioner’s decision is correct and, accordingly, the appeal must be dismissed.

Orders

[49] We order as follows:

(1) Permission to appeal is granted.

(2) The appeal is dismissed.

ACTING PRESIDENT

Appearances:

O Tracey, the appellant, in person.
J Bourke KC for the respondent.

Hearing details:

2022.

Sydney, Melbourne and Perth by video link using Microsoft Teams:
26 October.

Printed by authority of the Commonwealth Government Printer

<PR748433>

 1   [2022] FWC 2094

 2   Ibid at [102]

 3   Ibid at [18], [21]

 4   Ibid at [25]

 5   Ibid at [71]-[72]

 6   [2022] HCA 1, 398 ALR 404, 312 IR 1

 7   [2022] FWC 2094 at [73]

 8   Ibid at [75]

 9   Ibid at [81]-[82]

 10   Ibid at [94]

 11   Ibid at [97]-[100]

 12   [2022] HCA 2, 398 ALR 603, 312 IR 74

 13   Defined in s 12 of the Fair Work Act 2009 (Cth) to mean “a combination of work and training that is subject to a training agreement, or a training contract, that takes effect under a law of a State or Territory relating to the training of employees”

 14   E.g. Building and Construction General On-site Award 2020, clause 19.7 and Schedules C and D

 15   [2022] HCA 1, 398 ALR 404, 312 IR 1 at [40]-[62] per Kiefel CJ, Keane and Edelman JJ; [172]-[178] per Gordon J; [203] per Steward J

 16   [1986] HCA 1, 160 CLR 16

 17   [2001] HCA 44, 207 CLR 21

 18   Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25, 72 CLR 435 at 466 per Dixon J; Building Workers’ Industrial Union of Australia v Odco Pty Ltd [1991] FCA 87, 29 FCR 104 at 114; Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 342; Forstaff and Ors v The Chief Commissioner of State Revenue [2004] NSWSC 573, 144 IR 1 at [79]-[91]; Neil and Chin, The Modern Contract of Employment, 2nd ed (2017) at [1.13]-[1.14]

 19   [2022] HCA 1, 398 ALR 404, 312 IR 1 at at [58], [63]-[66], [79] per Kiefel CJ, Keane and Edelman JJ

 20   Ibid at [127] per Gageler and Gleeson JJ, [184] per Gordon J, [203] per Steward J

 21   See Macquarie Online Dictionary and Shorter Oxford English Dictionary

 22   Ibid