1
Fair Work Act 2009
s.604 - Appeal of decisions
Kimber
v
Western Auger Drilling Pty Ltd
(C2015/632)
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER ROBERTS
SYDNEY, 13 JULY 2015
Appeal against decision [2015] FWC 38 of Commissioner Spencer at Brisbane on 4 March
2015 in matter number U2014/5107.
[1] This is an appeal by Ms Louise Kimber (the Appellant) against a decision1 (Decision)
of Commissioner Spencer upholding a jurisdictional objection brought by Western Auger
Drilling Pty Ltd (Respondent) against the Appellant’s application for an unfair dismissal
remedy pursuant to s. 394 of the Fair Work Act 2009 (Cth) (the Act).
[2] Prior to the hearing of the appeal, Ms Anderson of Counsel sought permission to
appear for the Appellant and Mr Reed of Counsel sought permission to appear for the
Respondent. Given the complexity of the matter, and having regard to s.596 of the Act,
permission was granted to both parties to be represented.
Background
[3] The matter at first instance concerns a jurisdictional decision only in relation to a
determination of the length of the employment relationship between the parties and the date of
dismissal.
[4] The Respondent raised jurisdictional objections in relation to the Appellant’s unfair
dismissal application on the basis of s. 382(a) of the Act, contending that the Appellant had
not served the minimum employment period under s. 383 of the Act. The Respondent
submitted that the Appellant was an independent contractor for the Respondent from 13
March 2013 and then commenced employment with the Respondent on 2 January 2014. The
Respondent submitted that in these circumstances the Appellant did not meet the minimum
employment period of six months required by the Act. The Appellant conceded that she
worked as an independent contractor for the Respondent between 13 March 2013 and 11 July
2013, but contended that from 11 July 2013, her role changed to that of an employee of the
Respondent.
[2015] FWCFB 3704
DECISION
E AUSTRALIA FairWork Commission
[2015] FWCFB 3704
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Relevant Provisions of the Act
[5] The relevant statutory provisions are set out, as to whether the Appellant is an
employee who has completed a period of employment of at least the minimum employment
period and whether there was a dismissal at the initiative of the employer.
[6] Section 382 of the Act provides as follows:
“382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his
or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the
employment;
(iii) the sum of the person’s annual rate of earnings, and such other
amounts (if any) worked out in relation to the person in accordance
with the regulations, is less than the high income threshold.”
[7] The minimum employment period is defined in the Act as follows:
“383 Meaning of minimum employment period
The minimum employment period is:
(a) if the employer is not a small business employer—6 months ending at the
earlier of the following times:
(i) the time when the person is given notice of the dismissal;
(ii) immediately before the dismissal; or
(b) if the employer is a small business employer—one year ending at that time.”
[8] Section 386 of the Act provides as follows:
“386 Meaning of dismissed
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the
employer’s initiative; or
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(b) the person has resigned from his or her employment, but was forced to do so
because of conduct, or a course of conduct, engaged in by his or her employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified
period of time, for a specified task, or for the duration of a specified season,
and the employment has terminated at the end of the period, on completion of
the task, or at the end of the season; or
(b) the person was an employee:
(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any
reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(c) the person was demoted in employment but:
(i) the demotion does not involve a significant reduction in his or her
remuneration or duties; and
(ii) he or she remains employed with the employer that effected the
demotion.
(3) Subsection (2) does not apply to a person employed under a contract of a kind
referred to in paragraph (2)(a) if a substantial purpose of the employment of the
person under a contract of that kind is, or was at the time of the person’s
employment, to avoid the employer’s obligations under this Part.”
Decision at First Instance
[9] The key issue in the Decision was whether the Appellant was an employee or an
independent contractor during the relevant period (11 July 2013 to 2 January 2014).
[10] In the Decision, the Commissioner reviewed some relevant authorities on the approach
to be taken to distinguish between employees and independent contractors. In particular, she
adopted the approach taken in ACE Insurance Limited v Trifunovski and others2 and Abdalla
v Viewdaze Pty Ltd3 as endorsed and set out by the Full Bench of the Commission in Jiang
Shen Cai T/A French Accent v Michael Anthony Do Rozario (French Accent)4 namely to
make an assessment of a variety of factors or indicia. For completeness we will set out the
general approach to distinguishing between employees and independent contractors as found
in French Accent and [21] of the Decision:
“(1) In determining whether a worker is an employee or an independent contractor
the ultimate question is whether the worker is the servant of another in that
other’s business, or whether the worker carries on a trade or business of his or
her own behalf5: that is, whether, viewed as a practical matter, the putative
[2015] FWCFB 3704
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worker could be said to be conducting a business of his or her own6 of which
the work in question forms part? This question is concerned with the objective
character of the relationship. It is answered by considering the terms of the
contract and the totality of the relationship.7
(2) The nature of the work performed and the manner in which it is performed
must always be considered. This will always be relevant to the identification of
relevant indicia and the relative weight to be assigned to various indicia and
may often be relevant to the construction of ambiguous terms in the contract.
(3) The terms and terminology of the contract are always important.8 However,
the parties cannot alter the true nature of their relationship by putting a
different label on it.9 In particular, an express term that the worker is an
independent contractor cannot take effect according to its terms if it
contradicts the effect of the terms of the contract as a whole10: the parties
cannot deem the relationship between themselves to be something it is not11.
Similarly, subsequent conduct of the parties may demonstrate that relationship
has a character contrary to the terms of the contract12.
(4) Consideration should then be given to the various indicia identified in Stevens
v Brodribb Sawmilling Co Pty Ltd13 and the other authorities as are relevant in
the particular context. For ease of reference the following is a list of indicia
identified in the authorities:
Whether the putative employer exercises, or has the right to exercise, control
over the manner in which work is performed, place or work, hours of work
and the like.14
Control of this sort is indicative of a relationship of employment. The
absence of such control or the right to exercise control is indicative of
an independent contract15. While control of this sort is a significant
factor it is not by itself determinative16. In particular, the absence of
control over the way in which work is performed is not a strong
indicator that a worker is an independent contractor where the work
involves a high degree of skill and expertise17. On the other hand,
where there is a high level of control over the way in which work is
performed and the worker is presented to the world at large as a
representative of the business then this weighs significantly in favour of
the worker being an employee18.
“The question is not whether in practice the work was in fact done
subject to a direction and control exercised by an actual supervision or
whether an actual supervision was possible but whether ultimate
authority over the man in the performance of his work resided in the
employer so that he was subject to the latter’s order and directions.”19
“[B]ut in some circumstances it may even be a mistake to treat as
decisive a reservation of control over the manner in which work is
performed for another. That was made clear in Queensland Stations
Pty. Ltd v Federal Commissioner of Taxation, a case involving a
droving contract in which Dixon J observed that the reservation of a
[2015] FWCFB 3704
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right to direct or superintend the performance of the task cannot
transform into a contract of service what in essence is an independent
contract.”20
Whether the worker performs work for others (or has a genuine and
practical entitlement to do so).
The right to the exclusive services of the person engaged is
characteristic of the employment relationship. On the other hand,
working for others (or the genuine and practical entitlement to do so)
suggests an independent contract.
Whether the worker has a separate place of work21 and or advertises his or
her services to the world at large.
Whether the worker provides and maintains significant tools or equipment.22
Where the worker’s investment in capital equipment is substantial and
a substantial degree of skill or training is required to use or operate
that equipment the worker will be an independent contractor in the
absence of overwhelming indications to the contrary23.
Whether the work can be delegated or subcontracted.24
If the worker is contractually entitled to delegate the work to others
(without reference to the putative employer) then this is a strong
indicator that the worker is an independent contractor25. This is
because a contract of service (as distinct from a contract for services)
is personal in nature: it is a contract for the supply of the services of
the worker personally.
Whether the putative employer has the right to suspend or dismiss the person
engaged.26
Whether the putative employer presents the worker to the world at large as
an emanation of the business.27
Typically, this will arise because the worker is required to wear the
livery of the putative employer.
Whether income tax is deducted from remuneration paid to the worker.28
Whether the worker is remunerated by periodic wage or salary or by
reference to completion of tasks.29
Employees tend to be paid a periodic wage or salary. Independent
contractors tend to be paid by reference to completion of tasks.
Obviously, in the modern economy this distinction has reduced
relevance.
[2015] FWCFB 3704
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Whether the worker is provided with paid holidays or sick leave.30
Whether the work involves a profession, trade or distinct calling on the part
of the person engaged.31
Such persons tend to be engaged as independent contractors rather
than as employees.
Whether the worker creates goodwill or saleable assets in the course of his
or her work.32
Whether the worker spends a significant portion of his remuneration on
business expenses.33
It should be borne in mind that no list of indicia is to be regarded as
comprehensive or exhaustive and the weight to be given to particular
indicia will vary according to the circumstances. Features of the
relationship in a particular case which do not appear in this list may
nevertheless be relevant to a determination of the ultimate question.
(5) Where a consideration of the indicia (in the context of the nature of the work
performed and the terms of the contract) points one way or overwhelmingly
one way so as to yield a clear result, the determination should be in
accordance with that result. However, a consideration of the indicia is not a
mechanical exercise of running through items on a check list to see whether
they are present in, or absent from, a given situation. The object of the exercise
is to paint a picture of the relationship from the accumulation of detail. The
overall effect can only be appreciated by standing back from the detailed
picture which has been painted, by viewing it from a distance and by making
an informed, considered, qualitative appreciation of the whole. It is a matter of
the overall effect of the detail, which is not necessarily the same as the sum
total of the individual details. Not all details are of equal weight or importance
in any given situation. The details may also vary in importance from one
situation to another. The ultimate question remains as stated in (1) above. If,
having approached the matter in that way, the relationship remains
ambiguous, such that the ultimate question cannot be answered with
satisfaction one way or the other, then the parties can remove that ambiguity a
term that declares the relationship to have one character or the other34.
(6) If the result is still uncertain then the determination should be guided by
“matters which are expressive of the fundamental concerns underlying the
doctrine of vicarious liability” including the “notions” referred to in
paragraphs [41] and [42] of Hollis v Vabu.
[11] The Commissioner considered the evidence before her and applied the above indicia to
determine the nature of the overall working relationship at [24]-[63] of the Decision. Based on
her review of the relevant indicia, the Commissioner made the following relevant findings:
[2015] FWCFB 3704
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“[64] On the material provided, taking into account a review of the indicia, it is
concluded that the Applicant’s arrangement with the Respondent transitioned from an
independent contractor to an employment relationship on 2 January 2014. It was
agreed the Applicant commenced as an independent contractor and the parties had
operated via a contractor arrangement via the provision of an ABN since March 2013
and the Applicant was remunerated in response to her invoices until late December
2013.
[65] The terms of an employment relationship were then negotiated between the
parties in late December 2013, and the Applicant became an employee of the
Respondent on 2 January 2014. The finish of the invoicing and the payments reflect
this change.
[66] The nature of the working relationship prior to that point has been considered
according to the indicia in the relevant case authorities. This is not a case where the
Respondent has deliberately avoided their obligations to an employee. Whilst, on the
evidence, the parties had been contemplating the Applicant’s transition from
contractor to employee, the varying invoices occurred up to December 2013. Although
the Applicant’s invoices changed from an hourly rate to a daily rate in July 2013, the
Applicant neither received any annual leave or payment for public holidays. The
actual commencement of an agreed employment relationship with a negotiated salary
began on 2 January 2014 with the changed remuneration arrangements and the end of
invoicing.
[67] On the evidence, the Applicant was conducting her own business until such a
time as the terms of an employment relationship were negotiated and commenced. A
contractor or health and safety consultant may well start providing services as a
contractor and transition to employment with a company, if the company decides to
offer a role as an employee. This does not mean that the period performed as a
contractor must be deemed to be employment by the company prior to engagement as
such, even though the role and the work performed has not significantly changed.
Given the nature of the initial and on-going work, the Applicant continued to maintain
autonomy over her work.
[68] That the Applicant worked as a contractor commencing in March 2013 is not
disputed. A contractor relationship was in place until the Applicant commenced as an
employee on 2 January 2014. On this basis, (given the period of employment), it
cannot be construed that when the Applicant’s employment ended, the Applicant was
protected from unfair dismissal. The application is jurisdictionally barred pursuant to
s.382(a), on the basis that the Applicant has not met the minimum period of
employment, as the Applicant, between 2 January 2014 and either of the alleged end
of employment dates (14 February 2014 or 11 March 2014), had not been employed
for six months.”
[12] In relation to the question of dismissal, the Commissioner found:
“[84] Whilst the conflicting circumstances surrounding the end of the employment
relationship have been set out, on the evidence, the Applicant was initially an
independent contractor and then an employee from 2 January 2014, but the period of
the employment relationship, on either final date, was less than the statutory
[2015] FWCFB 3704
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requirement of six months to afford protection from unfair dismissal. Therefore, a
determination is not required as to whether a dismissal occurred, given the application
is already jurisdictionally barred in accordance with s.382(a).”
[13] The Commissioner went on to conclude:
“[85] It is determined that the Applicant commenced as an employee on 2 January
2014. Prior to this she was an independent contractor. Accordingly, the Applicant is
not a person protected from unfair dismissal under s.382(a) of the Act, as she has not
met the minimum period of employment of six months. The application for unfair
dismissal remedy, made pursuant to s.394, is jurisdictionally barred and is therefore
dismissed.”
The Appeal
[14] The Appellant raised, under 8 different headings, a series of multi-faceted grounds of
appeal in the Notice of Appeal. These were amplified in the Appellant’s written submissions
and in oral submissions at the hearing. They relate to the Commissioner’s treatment of the
various indicia and have been set out under the relevant indicia headings below:
(1) Personal Services
[15] The Appellant submitted that the Commissioner erred at paragraph [31]-[33] of the
Decision in the application of the law relating to the definition of an employee in failing to
find that the Appellant was an employee at least from 11 July 2013 by:
a) failing to consider, or properly consider, any criteria other than the method of
remuneration;
b) placing undue consideration on the fact that the Appellant issued a small
number of invoices for 4 days rather than 5;
c) failing to place sufficient weight on the fact that the bulk of the invoices were
issued for a 5-day week and a consistent day rate;
d) failing to consider the Appellant’s submissions where they point to the other
indicia supporting her claim to have been an employee at least from 11 July
2013;
e) failing to consider and apply the principles set out in French Accent in
particular where the court said: “Where a consideration of the indicia (in the
context of the nature of the work performed and the terms of the contract)
points one way or overwhelmingly one way so as to yield a clear result, the
determination should be in accordance with that result” in circumstances
where the other indicia, in the main, favour a finding that the Appellant was an
employee from at least 11 July 2013;
f) failing to consider that the Court in French Accent said that the method of
remuneration is the least important factor in considering whether someone
meets the test of “employee”; and
[2015] FWCFB 3704
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g) failing at paragraph [33] of the Decision to properly consider the evidence of
the Appellant that she had no ability to subcontract her work to third parties.”
(2) Control Test
[16] The Appellant submitted that in relation to paragraphs [34]-[41] of the Decision, the
Commissioner erred in failing to properly consider the evidence about the level of supervision
provided to the Appellant contained in the letter of Mr Riwoe dated 5 March 2014 (exhibit
KCB1 to the affidavit of Kara Burgess sworn 12 November 2014) when concluding at
paragraph [41] of the Decision that “There was continuing autonomy by the Applicant in the
performance of her work, in the creation of systems and documents for the Respondent”.
(3) Superannuation
[17] The Appellant submitted that the Commissioner erred in failing to find at paragraphs
[42]-[44] of the Decision that the payment of the equivalent of 9.71 months of superannuation
at 9% was indicative of an employment relationship for that period.
(4) Uniform
[18] The Appellant submitted that the Commissioner erred at paragraph [55] of the
Decision in failing to find that:
(a) the Appellant was required to wear a uniform;
(b) she was not required to pay for it35; and
(c) this was an indicia supportive of an employment relationship.
(5) Provision of Tools and Transport
[19] The Appellant submitted that the Commissioner erred at paragraphs [58]-[60] of the
Decision in failing to find that the fact that the Appellant used the Respondent’s tools and
equipment was indicative of an employment relationship. The Appellant worked from the
offices of the Respondent from 11 July 2013 and used their tools for her work.36
(6) Periodic Wage
[20] The Appellant submitted that the Commissioner erred at paragraphs [47]-[49] of the
Decision in failing to find based on the evidence that:
(a) from 11 July 2013 the Appellant was paid to work 5 days per week and paid on
a daily rate;
(b) there is no element of a task related payment;
(c) the Appellant noted ‘employee status’ on invoices; and
(d) this was indicative of an employment relationship.
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(7) Professional Trade or Distinct Calling
[21] The Appellant submitted that the Commissioner erred in failing:
(a) to place sufficient weight on the fact that all of the Appellant’s work was with
the Respondent;
(b) to find that this is an indicia that tends to confirm an employment arrangement
unless it is clearly negated by other evidence; and
(c) to place sufficient weight on the fact that the Appellant’s employment was
‘formalised’ by putting her ‘on the books’.
(8) Goodwill or Saleable Assets
[22] The Appellant submitted that the Commissioner erred in failing to consider this indicia
of employment because:
(a) the authorities establish this as an important criteria;
(b) it is more important indicia than method remuneration;
(c) a contractor has interest in establishing value in their business. Running a
business is associated with risk and reward. Payment tends to reflect that fact;
(d) there was no evidence that the task of establishing workplace health and safety
practices was defined by timeframe and in fact, it was an on-going
requirement;
(e) the evidence points to the necessity to employ a person to establish and
supervise on an on-going basis the necessary procedures within the Respondent
company;
(f) there was no evidence that the Appellant could “sell” the contract she had with
the Respondent to a third party as part of some business she had established to
provide workplace health and safety advice generally.
[23] On the basis of the evidence before the Commission, the Appellant submitted that the
Commissioner should have made a finding that the Appellant was an employee of the
Respondent from 11 July 2013 and therefore the jurisdictional objection of the Respondent
should have failed.
[24] With respect to the issue of public interest, the Appellant submitted that the Decision:
manifested a substantial injustice and is counterintuitive, disharmonious and
inconsistent with legal principles set out by the Full Court in French Accent
and other relevant decisions as to the factors to be considered in deciding
whether someone meets the test of “employee”;
[2015] FWCFB 3704
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if allowed to stand would not only prejudice the Appellant and others in her
position but encourage employers to contract out of employment obligations.
It is in the public interest to grant permission for the appeal to ensure
consistency and continuity in defining the factors that determine
“employment”; and
the decision was illogical, irrational, contrary to established legal principles,
and so lacking evidentiary basis for the findings made as to involve
jurisdictional error on the part of the decision maker. To allow the decision to
stand would be so manifestly unjust as to be against the public interest.
[25] The Respondent submitted that no error had been shown in the approach adopted by
the Commissioner, the factual findings made or the application of the relevant legal principles
and as such the appeal should be dismissed. In the Respondent’s submission, the conclusions
of the Commissioner were open to her on the evidence available and manifested no error.
[26] The Respondent addressed all 8 grounds of appeal raised by the Respondent in written
and oral submissions.
[27] First and in relation to the issue of “personal services” and the Appellant’s submission
that the Commissioner at paragraph [33] of the Decision failed to properly consider the
evidence of the Appellant that she had no ability to subcontract her work to third parties, the
Respondent submitted that this was a misconstruction of the Commissioner’s findings. In the
Respondent’s submission, the Commissioner correctly noted that neither party had addressed
whether it was contemplated that the Appellant subcontracted the work to another party. As
such, the point made by the Commissioner was that there was no evidence of a contractual
entitlement to subcontract. In the Respondent’s submission there was no error in this
conclusion in circumstances where there was no evidence led either way.
[28] Further, in relation to the Appellant’s submission that the Commissioner at paragraph
[13] of the Decision could have found that employment might be constituted by something
less than full time employment, the Respondent submitted that this argument should not be
allowed to run as the matter at first instance was run by the Appellant on the basis that she
was full time employed by 11 July 2013. Moreover it did not point to any error on the part of
the Commissioner in the Respondent’s submissions.
[29] Second, in relation to the “control test” issue, the Respondent submitted that the
Commissioner correctly weighted up the evidence as to control and concluded that the
Appellant had a degree of autonomy over the work performed by her. In resolving the conflict
between the evidence of the Appellant and Ms Giles (the Respondent manager), the
Commissioner properly pointed to the evidence that the Appellant by her billing procedures
between July and December 2013 had held herself out as an independent contractor. As such,
the Respondent submitted that the Appellant’s submission was merely a complaint that the
Commissioner did not accept her evidence where it conflicted with the evidence led by the
Respondent.
[30] Third, in relation to the “superannuation” issue, the Respondent submitted that the
evidence of late payment of superannuation on behalf of the Appellant in June 2014 was
neutral. There was no evidence as to why the payment was made and s. 12(3) of the
Superannuation Guarantee (Administration) Act 1992 obliged the Respondent to treat a
[2015] FWCFB 3704
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contractor working wholly or principally for labour only as an employee for the purposes of
the superannuation legislation.
[31] Fourth and in relation to issue of uniform”, the Respondent submitted that while the
Appellant was required to wear a uniform with the Respondent’s insignia on site, the
Appellant conceded that the contractors to the Respondent were required to wear the
uniform.37 The Appellant’s evidence38 that persons she identified as subcontractors were
required to pay for their uniform, whereas she was not so required, was not able to be tested.
As such, the Respondent submitted that the Commissioner made no error in concluding that
the wearing of a uniform was not conclusive of an employment relationship.
[32] Fifth and in relation to the “provision of tools and equipment”, the Respondent
submitted that the Commissioner did not err in concluding that no significant weight could be
attributed to the Appellant using the Respondent’s laptop and mobile phone given that the
work performed under the contract was of an intellectual nature, compiling workplace health
and safety documents to ensure the Respondent’s compliance with the relevant regulatory
framework. As the Appellant recorded in her evidence, the phone was an old phone belonging
to Ms Giles which was given to the Appellant in April 2013, at a time when it is not disputed
by the Appellant that she was a contractor, and the Appellant used the phone thereafter, even
when working remotely from the Respondent’s site. Likewise, nothing significant could have
been attached to the Appellant having worked from the Respondent’s offices after 11 July
2013 in the Respondent submission. The Respondent noted Buchanan J’s comments in Ace
Insurance Limited v Trifunovski39: “Working in the business of another is not inconsistent
with working in a business of one’s own”.
[33] Sixth and regarding the “periodic wage” issue, the Appellant relied on being paid at a
fixed daily rate for working 5 days a week from 11 July 2013, however, the Appellant
continued to supply invoices. The Respondent submitted that the Commission was not in error
in concluding at paragraphs [47]-[49] and [61] of the Decision that the change from an hourly
rate to a daily rate was equally consistent with a change in the mode of remuneration under a
contractor for services. Further, apart from 22 December 2013, the Respondent submitted that
there was no evidence of the hours worked on any particular day. There was also evidence of
working on at least 2 Sundays without explanation. The Respondent noted that the Appellant
was an experienced and mature aged worker with relevant knowledge of correct practices. In
these circumstances, the Respondent submitted that the Commissioner correctly pointed out
that the Appellant continued to supply invoices until 23 December 2013 and did not invoice
the Respondent for public holidays.
[34] Seventh and in relation to the issue of “goodwill or saleable assets”, the Respondent
submitted that the Appellant was overreaching by suggesting that this criteria is more
important than others. In the Respondent’s submission, French Accent does not elevate its
importance.40 In Stevens v Brodribb Sawmilling Company Pty Limited,41 Wilson and Dawson
JJ listed this criteria amongst a group of criteria which might points towards a contract for
services and observed that “none of these [indicia] leads to any necessary inference, however,
and the actual terms and terminology of the contract will always be of considerable
importance”.42 In the Respondent’s submission the Commissioner made no error in regarding
the criterion as not determinative.
[35] In the Respondent’s submission the Commissioner paid heed to the relevant
authorities which provided that, in determining whether a particular relationship is one of
[2015] FWCFB 3704
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employer and employee or principal and independent contractor, it is necessary to look at the
totality of the relationship to determine whether the Appellant served the Respondent in the
Respondent’s business or was a person who carried on a trade or business of her own. The
Respondent submitted that the Commissioner did not err in having regard to the proposition
that when the relationship is ambiguous, the parties may remove the ambiguity by the
agreement which they make with one another. The best objective evidence of that agreement
between 11 July 2013 and 21 December 2013 in the Respondent’s submission, was the
continued adoption by the Appellant of the invoice method of billing the Respondent’s for
services rendered with the conscious inclusion of GST.
Consideration
[36] The decision subject to appeal was made under Part 3-2 – Unfair Dismissal – of the
Act. Section 400(1) provides that permission to appeal must not be granted from such a
decision unless the Commission considers that it is in the public interest to do so. Further, in
such matters appeals on a question of fact may only be made on the ground that the decision
involved a ‘significant error of fact’.43 In Coal & Allied Mining Services Pty Ltd v Lawler and
others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under
s.400 as ‘a stringent one’.44
[37] The test of assessing whether the public interest is enlivened is discretionary,
involving a broad value judgement.45 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,46
a Full Bench summarised the concept of public interest in the following terms:
“Although the public interest might be attracted where a matter raises issues of
importance and general application, or where there is a diversity of decisions at first
instance so that guidance from an appellate court is required, or where the decision at
first instance manifests an injustice, or the result is counter intuitive, or that the legal
principles applied appear disharmonious when compared with other recent decisions
dealing with similar matters...”
[38] Otherwise, the grounds for granting permission to appeal include that the decision is
attended with sufficient doubt to warrant its reconsideration or that substantial injustice may
result if leave is refused.47
[39] The matter was conducted as a telephone conference at first instance by way of the
Commissioner questioning the Appellant and Ms Giles. Both parties were legally represented
but chose to rely on their written submissions. As such, there was no detailed examination of
the various conflicting factual assertions made by the parties. Given the factual nature of the
determination required to be made to establish whether the Appellant could be characterised
as an employee for the relevant time period, to not allow the appeal in circumstances where
key evidence was not fully tested could manifest an injustice and result in an outcome that is
inconsistent or incongruous with the relevant existing authorities. We are satisfied that the
public interest has been sufficiently enlivened and we therefore grant permission to appeal.
[40] The question of whether a person is an employee for the purposes of an application for
an unfair dismissal remedy made under s. 394 of the Act is one of jurisdictional fact as is the
related question in this case; whether the appellant had completed the minimum employment
period at the time of her dismissal. In this appeal we must therefore determine whether the
Commissioner reached the right conclusion as to whether the Appellant was an employee or
[2015] FWCFB 3704
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contractor during the relevant period and whether she had completed the minimum
employment period, not simply whether the Commissioner’s finding in this respect was
reasonably open to her.
[41] The courts have developed a multi-factorial approach, in which there is no single
decisive criterion to determine whether a contractual relationship is one of employment or one
subject to a contract for services. This approach requires the consideration of the various
indicia as summarised in French Accent set out above. It is also clear from the decision of the
Full Bench of the Federal Court in ACE Insurance Limited v Trifunovski and others, that no
one single criterion will necessarily be determinative and that each matter will turn upon the
particular circumstances of the case, with the decision maker weighing all the relevant
factors.48
[42] French Accent also endorses the following propositions in Abdalla v Viewdaze Pty Ltd
t/a Malta Travel that:
“the ultimate question will always be whether the worker is the servant of another in
that other’s business, or whether the worker carries on a trade or business of his or
her own behalf49: that is whether, viewed as a practical matter, the punitive worker
could be said to be conducting a business of his or her own50. This question is
answered by considering the terms of the contract and the totality of the
relationship51.”
[43] Both Counsel for the Appellant and Respondent made much of the application of the
recent Full Federal Court case of Tattsbet Limited v Morrow (Tattsbet)52 to the present matter.
However, we note that each case will turn upon its own facts and this is simply one
unremarkable case which discusses the characterisation of a person as employee or contractor
in a particular factual context. It is clear at paragraphs [63]-[71] of the Tattsbet decision that
the consideration required was of the matters which were relevant in the particular situation
and as His Honour Chief Justice Allsop noted at paragraph [5], “The statutory and factual
context will always be critical in a multifactorial process of characterisation of a legal and
human relationships: employment”. We have already noted the relevant leading authorities
setting out the approach to be taken when deciding whether to characterise someone as
employee or contractor. It is necessary to look at the totality of the relationship to determine
whether the Appellant served the Respondent in the Respondent’s business or whether she
was carrying on a trade or business of her own. This must be an objective test taking into
account all of the indicia and looking at what the evidence actually demonstrates on an
objective basis.
[44] We have considered all the evidence before the Commission and the submissions of
both parties and we find that the evidence overwhelming indicates that the Appellant was an
employee from at least 11 July 2013. We find that the Commissioner erred in overly relying
on the manner in which the Appellant was remunerated to decide whether or not she was an
employee or a contractor and failing to properly consider any other criteria other than the
method of remuneration. Indeed it is somewhat unfortunate that the matter was conduct as a
jurisdictional conference without an adequate opportunity to properly test some of the
conflicting factual assertions. There was not adequate examination of the conflicting factual
assertions nor was sufficient time afforded to going into any details as to those testimonial
matters that might have gone to assisting the Commission in determining whether those
assertions where in fact, correct or not. If other evidentiary issues had been properly explored,
[2015] FWCFB 3704
15
it would have been found that the method of remuneration was merely one element in a
relationship in which all the other elements pointed to employment.
[45] There is no dispute that the Appellant started off as a contractor of the Respondent.
However, we find that on balance the evidence goes to the fact that this relationship changed
on 11 July 2013. The Appellant says at paragraph 24 of her Affidavit that she informed the
Respondent manager, Ms Giles, that she would like to take up the opportunity of full time
employment and this is corroborated by email annexed LK2 to her affidavit.53 We note that
the Appellant continued to remit invoices until December 2013 and the Respondent says that
this is evidence of the fact that she was still a contractor at that time. However, the Appellant
contends that she regularly asked Ms Giles to be put on the payroll and her understanding was
that she would be put on the payroll in July 2013. As this did not occur she was told by Ms
Giles that it would occur when Ms Giles got around to it. There is confirmation of this mutual
understanding from Ms Giles where she is speaking to this issue on transcript at first instance
and says “Louise kept asking me could she go back on the payroll, blah, blah, blah and yes,
basically”.54 It was the Appellant’s expectation that when she relocated to the premises of
Western Augur Drilling there would be an employment relationship in place between the
parties. Indeed, the undisputed fact that the Appellant relocated to the premises of the
Respondent is in itself indicative of a more fundamental change in the relationship. We also
note that from 11 July 2013 the bulk of the invoices were issued for a 5-day week and a
regular day rate rather than the previous hourly rate, which is consistent with the Appellant’s
understanding that she was an employee from 11 July 2013. We accept that the Appellant
continued to remit invoices as a matter of practicality in circumstances where the Respondent
was too busy to update her method of remuneration in a timely manner. However, even if we
did not accept the Appellant’s evidence on this point, the remaining indicia discussed below
still overwhelmingly weigh against characterising the Appellant as an independent contractor.
[46] Regarding the control test and issue of supervision, in the supplementary affidavit of
the Appellant55, the Appellant purports that she had direct supervision by Mr Gary Atkinson
who as the Chief of Operations, was her superior. That Mr Atkinson gave directions and was
in a supervisory position over the Appellant is consistent with the contents of the letter that
was written by solicitors for the Respondent in response to questions asked of Mr Atkinson
with respect to allegations of sexual harassment and bullying.56 The Appellant’s evidence is
that she relocated to work directly from the premises of the Respondent, not for her
convenience, but so that she could engage in her work under the supervision of the
Respondent.57 The Appellant’s evidence is that the Appellant was represented as the safety
officer for the Respondent and that it was a necessary legislative requirement of the
Respondent to employ someone to establish and supervise workplace health and safety
practices. The Appellant’s evidence is that the Respondent had previously employed Ms
Giles to do this work until she became too busy.58 On the basis of the evidence led before the
Commission, we find that the Appellant was working under the control of the Respondent as
an employee.
[47] It is undisputed that between 11 July 2013 and 2 January 2014, the Appellant solely
worked for the Respondent. During this time the Appellant worked full time hours and
overtime. As a matter of practicality, she could not work for anyone else but the Respondent.
Moreover, she was not creating general documents that were being used by the Respondent,
but rather creating documents solely for the use of the Respondent which she did not retain.59
There is no evidence that the Appellant ran a business of her own during this period. Nor is
there any evidence that the Appellant subcontracted her work to third parties during the
[2015] FWCFB 3704
16
relevant period. We find that the fact that the employee worked solely for the employer and
did not subcontract any work weighs in favour of the finding that she was an employee.
[48] Regarding the issue of uniform, the evidence before the Commission indicates that
upon relocation, the Appellant was required to wear a uniform but was not requested to pay
for it whilst other sub-contractors were required to pay for their uniforms.60 The requirement
of the uniform weighs in favour of the finding that the Appellant was an employee.
[49] The Appellant’s evidence is that she worked from the offices of the Respondent from
11 July 2013 and used their tools for her work including a phone and labtop.61 The evidence
before the Commission is that she did not spend any of her own money on business expenses
or purchasing supplies for the Respondent during this time. We find that this factor weighs in
favour of finding the Appellant was an employee during the relevant period.
[50] On the evidence before the Commission, the Appellant could not sell her contract with
the Respondent. We find that absence of a goodwill or saleable asset is factor that weighs in
favour of a finding that the Appellant was an employee during the relevant period.
[51] Regarding the issue of superannuation, the Appellant contends that it is indicia of
employment. We find that the Appellant fell within the expanded meaning of “employee”
under s. 12(3) of the Superannuation Guarantee (Administration) Act 1992 and if payment is
made pursuant to this meaning, it is not indicative of anything other than that the person
comes within the expanded meaning of the legislation. We find that the issue of
superannuation is a neutral factor.
[52] The Respondent seeks to rely on Justice Jessups’s comments in Tattsbet to assert that
the presence of GST collections by the Appellant and her compliance with the regulatory
requirements which apply to the provisions of services by persons who are not employees,
weighs against the relationship being characterised one of employment.62 We note that Justice
Jessup’s comments were made in the context where the relevant agent was engaged not
merely to provide personal services by way of labour but to run a business for the Respondent
and was free to utilise other labour employed by the agent. It is in that context that the GST
discussion occurs, not in a vacuum, and as such the present case may be distinguished from
the circumstances in Tattsbet. Even if we are to apply Tattsbet, there is a real question of
whether the Appellant’s participation in the GST system could perhaps be better characterised
as tokenistic.
Conclusion:
[53] We find that in totality, the evidence weighs in favour of the Appellant being
characterised as an employee of the Respondent for the minimum employment period
pursuant to s. 383 of the Act.
[54] We find that the Commissioner’s conclusion that the Appellant was not an employee
of the Respondent for the relevant time period was an error on a question of jurisdictional
fact. In these circumstances and consistent with s.400(1) of the Act, we consider that it is in
the public interest to grant permission to appeal, that the appeal must be upheld. On a
rehearing we find that the Appellant was an employee of the Respondent at all times from 11
July 2013 until the date of her dismissal. Consequently we find that the Appellant had
[2015] FWCFB 3704
17
completed the minimum period of employment and is therefore protected from unfair
dismissal.
[55] We order as follows:
(1) Permission to appeal is granted.
(2) The appeal is upheld.
(3) The Commissioner’s decision in Kimber v Western August Drilling Pty Ltd
[2015] FWC 38 is quashed.
(4) The Respondent’s jurisdictional objection is dismissed.
(5) The matter is to be remitted to Commissioner Simpson for conciliation.
VICE PRESIDENT
Appearances:
S D Anderson of Counsel instructed by J Johnson of Johnson Solicitors for the Appellant.
R Reed of Counsel instructed by D Riwoe of Aden Lawyers for the Respondent.
Hearing details:
1 June
2015
Brisbane
Printed by authority of the Commonwealth Government Printer
Price code C, PR567931
1 Kimber v Western August Drilling Pty Ltd [2015] FWC 38.
2 [2013] FCAFC 3.
3 (2003) 122 IR 215.
4 French Accent v Michael Anthony Do Rozario [2011] FWAFB 8307.
5 Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210 at p. 217 per Windeyer J approved by the majority in
Hollis v Vabu (2001) 207 CLR 21 at para [40]; see also Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
(Brodribb) at p. 37.3 per Wilson and Dawson JJ.
6 Hollis v Vabu (2001) 207 CLR 21 at [47] and [58].
THE FAIR WORK COMMISSION THE SEAA
[2015] FWCFB 3704
18
7 Brodribb esp Mason J at p. 29.3.
8 Brodribb per Wilson and Dawson at p. 37.2.
9 “The parties cannot create something which has every feature of a rooster, but call it a duck and insist that everyone else
recognise it as a duck.” Re Porter (1989) 34 IR 179 at p. 184 per Gray J; Massey v Crown Life Insurance [1978] 2 All ER
576 at p. 579 per Lord Denning approved by the Privy Council in AMP v Chaplin (1978) 18 ALR 385 at p. 389.
10 AMP v Chaplin (1978) 18 ALR 385 at 389.
11 Hollis v Vabu (2001) 207 CLR 21 at para [58].
12 AMP v Chaplin (1978) 18 ALR 385 at p. 394.
13 (1986) 160 CLR 16.
14 Brodribb.
15 Flows from the reasoning of Mason J in Brodribb at p 24.
16 Brodbribb esp Mason J at p 24.4.
17 Zuijs v Wirth Bros. Pty. Ltd (1955) 93 CLR 561 at p. 571.
18 Hollis v Vabu (2001) 207 CLR 21.
19 Humberstone v Northern Timber Mills (1949) 79 CLR 389 at p. 404 per Dixon J.
20 Brodribb per Wilson and Dawson JJ at p. 36.
21 Ibid at p. 37.1.
22 Brodribb per Mason J at p 24.6.
23 Hollis v Vabu (2001) 207 CLR 21 at [47] see also [58].
24 Brodribb per Mason J at p. 24.7.
25 Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 539; AMP v Chaplin (1978) 18 ALR 385
at p. 389.
26 Brodribb per Wilson and Dawson JJ at p. 36.9.
27 Hollis v Vabu at [50].
28 Brodribb per Mason J at p. 24.6; Wilson and Dawson JJ at p. 37.2.
29 cf Brodribb per Mason J at p. 24.6.
30 as to paid holidays, see Brodribb per Mason J at p. 24.6.
31 Brodribb per Wilson and Dawson JJ at p. 37.1.
32 Ibid at p. 37.2.
33 Ibid at p. 37.2.
34 Massey v Crown Life Insurance [1978] 2 All ER 576 at page 579 per Lord Denning.
35 Affidavit of Ms Kimber at [29].
36 Affidavit of Ms Kimber at [24]-[27].
37 Kimber supplementary affidavit at paragraphs 8; AB p 126.
38 Ibid.
39 (2013) 209 FCR 146 at 182 [128].
40 [2011] FWAFB 8307 at [30].
41 (1986) 160 CLR 16.
42 (1986) 160 CLR 16 at 36-37.
43 Section 400(2).
44 (2011) 192 FCR 78 at [43].
45 Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210 at [6].
46 [2010] FWAFB 5343 at [27].
47 Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210 at [7].
48 ACE Insurance Limited v Trifunovski and others[2013] FCAFC 3 per Lander J at [9].
49 Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 at 217 per Windeyer J approved by the majority in Hollis
v Vabu (2001) 207 CLR 21 at para [40]; see also Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
(Brodribb) at 37.3 per Wilson and Dawson JJ.
[2015] FWCFB 3704
19
50 Hollis v Vabu (2001) 207 C:R 21 at [47] and [58].
51 Brodribb esp Mason J at 29.3.
52 [2015] FCAFC 62.
53 Appeal Book 84.
54 At FN110.
55 Appeal Book page 127.
56 Appeal Book 152-154.
57 Affidavit of Ms Kimber filed 18 July 2014 at [4].
58 Affidavit of Ms Kimber filed 18 July 2014 at [4].
59 Appeal Book page 128.
60 Affidavit of Ms Kimber at [29].
61 Affidavit of Ms Kimber at [24]-[27].
62 Tattsbet at [70].
