1
Fair Work Act 2009
s.394—Unfair dismissal
Shelton Muller
v
Timbecon Pty Ltd
(U2022/2774)
DEPUTY PRESIDENT BELL MELBOURNE, 6 OCTOBER 2022
Application for an unfair dismissal remedy – whether employee or contractor – not an
employee – application dismissed.
[1] On 4 March 2022, Mr Shelton Muller (Applicant / Mr Muller) made an application
(the Application) to the Fair Work Commission (Commission) for relief from unfair dismissal
under s.394 of the Fair Work Act 2009 (the Act). The Applicant alleges he was unfairly
dismissed by Timbecon Pty Ltd (Respondent) on 14 February 2022.
[2] The Respondent has raised a jurisdictional objection, contending that Mr Muller was
not an employee. The Respondent states Mr Muller was subcontracted as an independent
contractor, and that on 14 February 2022 it notified him that it was terminating the contract
under which Mr Muller had provided services, with immediate effect.
[3] By way of overview, Mr Muller was a photographer. He was first engaged (to use a
neutral term) by the Respondent in November 2016, on a three-day a week basis. In January
2017, this became five days per week. There were no written terms of the contract, as varied.
The original engagement and the variation were agreed orally between the Applicant and Mr
Hague Haswell, who was the Managing Director for the Respondent.
[4] It was not in contention if, properly characterised, Mr Muller was found not to be an
employee then his claim for an unfair dismissal remedy would necessarily fail because he would
not be an employee who was “dismissed” for the purpose of s.385(a) and 386(1) of the Act.
[5] If, however, the Applicant was found to be an employee then it falls to me to determine
whether the Applicant was unfairly dismissed. A significant majority of the material filed by
the parties and time spent at the hearing was directed at the issue of whether the Applicant was
an employee or a contractor.
[6] It was not otherwise in controversy that the Small Business Fair Dismissal Code did not
apply (s.385(c)), nor was this a case of genuine redundancy (s.385(d)), nor that the application
[2022] FWC 1685 [Note: An appeal pursuant to s.604 (2022/7121) was
lodged against this decision - refer to Full Bench decision date 24 February
2023 [[2023] FWCFB 42] for result of appeal.]
DECISION
AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2023fwcfb42.htm
[2022] FWC 1685
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was made outside the 21 day period required by s.394(2). The Applicant did not consider that
reinstatement would be an appropriate remedy and instead sought compensation in lieu of
reinstatement.
[7] Each of the parties were represented by counsel, with permission to be represented
having previously been granted. I was significantly assisted by their representation. After
having consulted with the parties, I determined the matter was more appropriate to proceed by
way of a hearing: s.399.
[8] Each of Mr Muller and Mr Haswell gave evidence and each was cross-examined.
Background and factual findings
[9] By way of overview, many of the factual matters were not in dispute or not seriously
challenged (other than for relevance or weight, for which a significant number of matters were
challenged). I make the following findings.
[10] Prior to his engagement with the Respondent in late 2016, Mr Muller had worked as
photographer for about 35 years and, relatively more recently, as a videographer. Of that time,
Mr Muller states he worked “mostly as a contractor”, being a person whom, he agreed, provided
services and issued invoices for those services. While the Applicant had previously undertaken
work as an employee, it was for a minority of that time and occurred around 10 years or more
before his engagement with the Respondent in late 2016.
[11] At least by 2016, it appears that Mr Muller operated through (or perhaps utilised) Living
in Pictures, ABN 29 053 505 493. This has some relevance, as will become apparent. Living in
Pictures was not an entity in its own right but appeared to be a trading name for the Applicant’s
wife and was registered to her as an individual/sole trader.
[12] Throughout his period in the photography profession, the Applicant developed
considerable professional skill and expertise a photographer. He had a number of his own tools
of the trade, namely cameras (and, I assume, a number of related parts and components). The
Applicant agreed that his stock of investment he had made over that time was a very substantial
investment in those tools of the trade.
[13] By around the start of September 2016, the Applicant was told by a friend that the
Respondent was seeking a photographer. The potential opportunity had some attraction to the
Applicant, as it represented the possibility of regular and reliable amounts of paying work.
[14] The business of the Respondent at that time was (and still is) a hardware store selling
woodworking tools. Mr Haswell explained that most of the products that the Respondent was
selling were imported, and he describe having a strong online presence. In around September
and October 2016, the Respondent had around three full-time staff and maybe one or two other
casual staff members. The Respondent needed high quality photography and videos in its
marketing work to enable customers to buy its products on the website, as well as for marketing
through digital marketing channels, in catalogues, and magazines.
[2022] FWC 1685
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[15] Mr Haswell agreed in his evidence that, at the time (i.e. around September 2016), he
was initially seeking an employee to fill his business needs.
[16] On 7 September 2016, the Applicant sent an email to the Respondent. In the email, the
Applicant introduced himself and explained he was writing with regards to photographic work
he understood the Respondent required. He stated that while he was no longer a full-time
photographer, he had been in the photographic industry for 35 years and actually began his
career working for a tools and equipment magazine.
[17] On 14 September 2016, Mr Haswell sent Mr Muller an email. It read:
“Hi Shelton,
Sorry for emailing you about this again but we've had quite a number of people contact
us about doing this work and probably the most efficient way to go through a few queries
we have is via email. We've also been talking about it here and we've changed the scope
of the work we are looking for so we’re not sure if this will suit or not? Anyway, if you
can get back to me about the below queries that would be great.
1.
We’ve decided to increase the scope of the work that we’d like done. Rather than doing
the work on an ad hoc basis we’d prefer to implement a more time-structured
arrangement that would be part-time, potentially moving to a full-time basis and
encompassing more marketing tasks. Are you interested in this? If not, then I am not
sure that this will work out for us as we are definitely looking for someone who is
probably more interested in a “traditional” job rather than doing contract work we’re
outsourcing.
2. The job we are looking for would primarily be visual content creation - through both
photography and videography (YouTube video’s etc.). We need our marketing
photography done (static product and in-use shots) plus we also need someone who can
drive the creation of short how-to videos on products (ranging in 30-second - 5 minute
lengths).
3. The other major component is managing our online marketing - we are currently
doing social media marketing poorly and need that to be lifted and improved so it works
for us - which will largely come from the content created as outlined above. We also
need to work done on the website like how-to articles, updating products etc. Would
you be willing/able to do this type of work as well? We are looking at outsourcing some
of this work to a marketing company we work with now so it may be just that you need
to manage the relationship we have with them than having the necessary experience to
do it yourself.
If you can have a think through this and come back to me if you are interested in this
role that would be great. If so, we can talk about it more but I think possibly you and
some of the other applicants wouldn’t be interested in this sort of thing whereas others
may be, so I guess the first thing to do is work that out and see if there’s something we
can do together.
[2022] FWC 1685
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Many thanks,
Hague.”
[18] On 15 September 2016, Mr Muller sent a further email to Mr Haswell, in which he
reaffirmed his experience in the area and proposed that the two meet in person to discuss the
matter further. A meeting ensued.
[19] It is not in dispute that, on 23 September 2016, the parties met. There were discussions
at the meeting that led to an agreement. According to Mr Muller’s witness statement:
“(a) Mr Haswell stated that he wanted a time structured arrangement that would be part
time and potentially full time; and
(b) Mr Haswell stated that he wanted someone interested in a “traditional job”; and
(c) I replied that a more structured contractor arrangement worked for me as I wished to
continue being able to provide photographic services for long time clients and continue
in the diversity of content creation I had always enjoyed.”
[20] Mr Haswell’s witness statement account is somewhat more detailed. According to Mr
Haswell, at that meeting:
“(a) I explained that the position would start on a part-time basis but would potentially
become full-time, and that it would involve broader responsibilities than only
photography;
(b) The Applicant stated that he did not want to become an employee, but would accept
the position as an independent contractor;
(c) I explained that the Respondent would prefer that the Applicant be an employee
because that was the relationship we were familiar with;
(d) The Applicant insisted that he be an independent contractor if he was to accept the
position, and proposed that he could do so on a time-structured basis. I accepted the
proposal and offered a position to the [Applicant]:
i. as an independent contractor;
ii. to work for three business days each week and to be paid an hourly rate of
$39.00 per hour plus GST to be paid by fortnightly invoices. This rate was higher
than the rate which I would have offered to an employee to reflect that as an
independent contractor the Applicant would not receive entitlements such as
paid annual leave;
iii. to perform photography and other marketing tasks; and
[2022] FWC 1685
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(e) The Applicant accepted this offer (the Contract). The Contract was never reduced
to writing.”
[21] Mr Haswell agreed in his oral evidence that the discussions he had were solely with Mr
Muller (and not his wife, for reasons that will become more apparent) nor on behalf of any
entity other than Mr Muller. Mr Haswell was not otherwise challenged on the above extract
from his witness statement, although he confirmed there was an agreement that Mr Muller
would be paid on a fortnightly basis. It was put to Mr Haswell, who agreed, that the tasks Mr
Haswell was seeking by way of an employee in September 2016 were the tasks and
contributions made by Mr Muller over the next five years that he worked for the Respondent.
[22] Mr Muller described the initial tasks involved, which he said he had discussed or looked
into in the lead-up discussions before he started working with the Respondent. Mr Muller said
his tasks were to provide product photographs for Mr Haswell’s website, which Mr Haswell
was building. Mr Muller said Mr Haswell required quite a number of product photographs to
be taken, both in the “Amazon” style of being on white, and also a high level type of commercial
product images for the website and for advertising material. Mr Muller said there were quite a
number of products to get done. Initially, Mr Muller said that a secondary part of his tasks was
to film and edit “how to style” and product-based videos that they would put onto the
Respondent’s YouTube channel. Mr Muller said that part of his role grew quite proportionately
over the years, but essentially those were his main tasks.
[23] Some of the further detail described by Mr Haswell is agreed to by Mr Muller, although
the timing is potentially different. Mr Muller says that following the meeting on 23 September
2016, he “decided to accept the arrangement set out in the email of 14 September 2016 and
communicated this in a follow up meeting at the work premises.”
[24] Mr Muller also describes that by around November 2016, during the “interview,
telephone conversations and email correspondence” around that time that he and Mr Haswell
had “agreed” the following terms:
“(a) I would perform work as a photographer and videographer for Timbecon;
(b) I would also perform some marketing tasks;
(c) I would work three days per week (usually Wednesdays, Thursdays and Fridays);
and
(d) I would be paid $39.00 per hour and render a fortnightly invoice according to
Timbecon’s staff pay cycle.”
[25] Having regard to the evidence of the parties, I find that on 23 September 2016, Mr
Muller and Mr Haswell (the latter on behalf of the Respondent) had a discussion with a view to
reaching an agreement. Initially, Mr Haswell was seeking to engage Mr Muller on a part-time
basis, although he expressed his view that the role might need to become full-time. It was
discussed that Mr Muller’s work would be primarily as a photographer but also as a
videographer. It was also mentioned and agreed at that time that the work might include some
[2022] FWC 1685
6
“marketing” tasks, although there is no evidence of whether any specific marketing tasks were
discussed.
[26] Mr Haswell stated that he initially wanted to engage Mr Muller as an employee. This is,
I note, not controversial as both witnesses gave evidence to that effect, albeit Mr Muller’s
statement uses the language of a “traditional job”. So far as that difference might be relevant, I
accept the word “employee” was used, although I also expect that the description of a
“traditional job” was also used by Mr Haswell, as this is the language he used in an email two
days’ prior.
[27] More importantly is what else was discussed about this topic, and I find that Mr Muller
stated that he did not want to be an employee but would accept the position as a “contractor”.
Mr Muller accepted the proposition put to him in his oral evidence that he expressed the
preference that he engage with the Respondent “as an independent contractor including by
issuing invoices for your time”. I doubt that Mr Muller used words so precise, but I accept he
made it clear he proposed to be engaged as a “contractor”.
[28] Also discussed was that the arrangement would be “time-structured”, which was
discussed further to mean that work would be performed for three full days on Wednesday,
Thursday and Friday.
[29] Mr Muller’s witness statement states that an element of the discussion included his wish
to continue to provide photographic services for long time clients and to continue in the
diversity of content creation he had always enjoyed. While Mr Haswell does not refer to this
element of the discussion in those terms, he gives evidence about the Applicant “wanting to be
an independent contractor … to have the freedom to work for third parties.” I accept Mr
Muller’s witness statement evidence reflects that it was raised. I also take comfort in this finding
from the fact that it was likely to be a matter of some importance to Mr Muller and, for that
reason, something he was likely to have raised.
[30] The remuneration was, unsurprisingly, a matter of discussion. It was not in contention
that a rate of $39 per hour was discussed and accepted. What is less clear is whether that amount
was expressly stated to include GST or not. Mr Haswell says it was the rate discussed “plus
GST”. Mr Muller simply says it was a term that “I would be paid $39.00 per hour” and
reaffirmed in oral evidence the “particular hourly rate agreed” was “$39”.
[31] The specific question of GST was not put to either witness. I am satisfied, however, that
the fact of the rates being “plus GST” was discussed, albeit briefly, although for reasons that
will become apparent, no GST was in fact charged prior to November 2019. Mr Haswell was
running a retail business where goods were continually bought and sold. Perhaps with very few
exceptions, those transactions would all attract GST and I consider it likely that Mr Haswell
would have specifically mentioned it to avoid any misunderstanding. I accept his witness
statement evidence on that point. At the very least, I am satisfied that the rate agreed to was a
figure that excluded any GST.
[32] While I prefer Mr Haswell’s evidence on this question, I make it clear that Mr Muller
gave evidence candidly and honestly. However, in his oral evidence, Mr Muller stated that there
were some aspects he could no longer recall (and, given that the events in question occurred
[2022] FWC 1685
7
nearly six years ago, that is not a criticism). Mr Muller also says in his witness statement that
following the meeting on 23 September 2016, he “decided to accept the arrangement set out in
the email of 14 September 2016 and communicated this in a follow up meeting at the work
premises” (my emphasis). With no disrespect to Mr Muller, noting again the passage of time
between those events and the hearing, that explanation muddles a few matters. I do not consider
that the email of 14 September 2016 contained an “arrangement” capable of acceptance. It did
not include rates, the nature of the engagement, which days would be worked, how many days
would be worked, nor anything about invoicing. For those matters to have been agreed, I
consider they were all matters discussed at the meeting on 23 September 2016.
[33] A further matter discussed at the meeting – and agreed between the two witnesses – was
invoicing. Mr Haswell requested invoices to be issued fortnightly, which was said to reflect the
Respondent’s pay cycle for employees.
[34] Neither witness gave evidence that a matter of discussion concerned Mr Muller’s
capacity to delegate work or not. It was not discussed.
[35] In oral examination, Mr Muller acknowledged that he had reached an “agreement” with
Mr Haswell regarding a number of elements. While the fact of an “agreement” is somewhat of
a conclusionary label (as distinct from what he recalls was said), I do not consider that some of
those matters were actually discussed at the meeting, despite Mr Muller agreeing to them as
being part of the “agreement”. In addition to the fact that these matters were not, in terms,
contained in either witnesses’ written statement, I consider that the following matters better
reflect Mr Muller’s understanding of the effect of the agreement that had been arrived at, rather
than matters actually discussed. For example:
• Mr Muller agreed that “the company would have a stream of work where they would
have in mind a particular kind of work product that they wished to end up with”.
• Mr Muller agreed he “would apply [his] professional skill and experience to deliver
the work product of the required kind and quality”.
• Mr Muller agreed that “the understanding of the agreement that you had when it was
formed in November 2016, the understanding you had of the agreement was that a
term of it was that you were to devote your full attention to the needs of Timbecon for
those hours that you were engaged to work for them and that you had full freedom to
engage in your profession including by working for other clients outside of those
days”.
• Mr Muller agreed that “you would be available to perform work in not less than the
amount discussed”. And it was an element of the agreement that “Timbecon would
supply at least enough hours of work to meet your availability for those”.
[36] As to the identity of the contracting parties, the Respondent’s Form F3 and its written
submissions contend that it had contracted initially with “Living in Pictures”. I find there was
no discussion to that effect at the meeting on 23 September 2016. In cross-examination, Mr
Haswell agreed he had no discussion with Mr Muller’s wife and that all discussions were solely
with Mr Muller. The following proposition was put to Mr Haswell, with which he agreed:
[2022] FWC 1685
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“And no time did you reach agreement with an entity other than Mr Muller; it was Mr
Muller who was agreeing to the things that were agreed to at the commencement of the
arrangement?---Yes.”
[37] The evidence does not describe a specific start date for the parties’ arrangement.
[38] I consider that the discussion on 23 September 2016 formed the basis of the terms of the
agreement entered into between the parties. While the absence of a clear start date perhaps
suggests that Mr Muller might have gone away to think about what was discussed, it is tolerably
clear that a start date must have been discussed either then or very soon after. I set out further
below my findings as to the initial contractual terms as formed by the parties to this point.
[39] By around 18 October 2016, Mr Muller had purchased some specific items for his work
– totalling $1,380 - with the Respondent and sent a tax invoice to the Respondent on that date
seeking reimbursement. The equipment included stands and lighting equipment. That invoice
(which was in the name of ‘Living in Pictures’ photographers) was paid, although it appears
that the equipment itself remained the property of Mr Muller, given that he purchased it and it
was not made clear it was purchased on behalf of the Respondent. No separate GST was
charged. It also appears (most likely by around this date) that the Respondent had agreed to
supply – and did supply – a camera.
[40] On 8 November 2016, Mr Muller sought a quote from a third-party vendor for either an
“iMac or Macbook Pro for video editing for a month or so”. Mr Haswell approved (and I
inferred the Respondent eventually paid for) a quote by the next day for a rental through to 23
December 2016.
[41] Mr Muller commenced work in “November 2016”, according to the parties. I infer the
date was around 9 November 2016, as Mr Muller was issued with a ‘timbecon’ email address
on 9 November 2016 and the Macbook computer, above, appears to have been arranged from
that date.
[42] The evidence of the exact tasks and responsibilities (and any changes) between 9
November 2016 and January 2017 (when the arrangement was varied) is somewhat scant. On
16 December 2016, Mr Muller attended a staff meeting of the Respondent. As previously noted,
the Respondent was a much smaller business at the time, with around five staff (excluding Mr
Muller and Mr Haswell). Mr Haswell asked Mr Muller to prepare minutes of the meeting, which
it appears that he did. The minutes record the meeting ran for about 50 minutes. For Mr Muller,
the minutes recorded he would need to work with two other staff for the processes involved
with new products in relation to barcoding, weighing, recording information and placing those
products onto the website. There was some discussion about uniforms, although the minutes do
not say whether or not Mr Muller wore a uniform. For roles and responsibilities, the minutes
recorded:
“Hague wants to drink more beer. Hence the need to confirm the roles and responsibilities
of each member of staff.
Jason - Shop Manager, Warranties, Spare Parts, Accounts receivable, incoming
enquiries and general shop sales.
[2022] FWC 1685
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Jesse - Sales, merchandising, restocking, price tagging, assembly of machinery, display,
local supplier stocktakes.
John – incoming goods, supply and store, restock, stock retrieval, overseas supplier
stocktakes, assisting with mail order, product returns,
Trish – her role is self-evident.
Shelton - Media Coordinator and media production, marketing.
Gio – General labouring and odd-job assistance when required.”
[43] Mr Muller witness statement exhibited evidence of the invoices he issued prior to around
November 2019 in relation to GST. He stated (and I accept) that the invoices for the pre-
November 2019 period did not include an amount for GST.
[44] Mr Muller also says, and it is not in dispute, that at no time was he paid superannuation,
annual leave, personal leave or public holiday pay during his time with the Respondent. He was
only paid pursuant to the invoices he issued.
[45] The evidence of the witnesses, largely uncontradicted, was that Mr Muller’s hours were
from 8:00am to 5:00pm. As Mr Haswell notes (and I accept), extra or different hours were
sometimes required. But I accept that, prior to January 2017, Mr Muller typically worked from
8:00am to 5:00pm, unless otherwise directed, for the three days a week he was then working.
[46] Mr Muller’s witness statement stated that “Mr Haswell managed my performance and
would give me feedback on all work I performed as well as directions as to how he wanted my
work to change”. Mr Haswell disputed the performance management by him of Mr Muller but
accepted there were required outcomes expected of Mr Muller’s work. Mr Muller’s evidence
was presented at a level of generality – e.g. feedback on “all” work - which makes it difficult
to conclude there was any specific prescription or control exercised (let alone actual examples
of how, other than by conclusionary statements) in the period prior to January 2017.
[47] Mr Muller says that “I was allowed some creative freedom when performing my duties
but I understood this to be part of the role I was engaged to perform. However, Mr Haswell and
then Mr Madden both monitored my performance and gave me feedback.” Mr Muller gives
later examples and says that the “level of control over my performance was greatest from 2020
onwards when Mr Madden [a manager who was, by that time, responsible for overseeing Mr
Muller’s work] would supply documents with exact scripts, timing of videos and other controls
such as lighting…”. Mr Haswell accepted that often specific scripts were provided to be used.
I accept Mr Muller’s evidence, as just stated, save that prior to the arrival of Mr Madden (in
2019, as discussed below), I consider any degree of prescription insisted upon by Mr Haswell
was primarily outcome-based. While Mr Haswell agreed in cross-examination that he had
control and direction over what Mr Muller did when at work, I consider the reality is that it was
qualified by what was described above.
[48] The evidence from both witnesses describing a variation from three days’ work to five
days’ work was brief and essentially consistent. I accept that in about December 2016, Mr
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Haswell asked Mr Muller to increase his hours to a full-time equivalent. Mr Muller explains he
initially pushed back, and he told Mr Haswell he had only agreed to work three days. Mr
Haswell pressed his request and – I infer sometime not long after – Mr Muller agreed. Mr Muller
commenced working five days from around January 2017.
[49] In relation to equipment used, I have noted that some equipment was supplied to the
Applicant by the Respondent and some was reimbursed. However, the Applicant also used his
own equipment. Mr Haswell’s witness statement said, which I accept, “The Applicant provided
his own cameras and other specialist equipment which he advised us cost several times the
value of the equipment which we provided.” Having regard to the 35 years of practice as a
photographer, so much is unsurprising.
[50] Mr Haswell states that there was no other discussion regarding changes to their
agreement at this time beyond the change to the hours to be worked. I accept that evidence,
save to note that there was an additional discussion that appeared to have occurred around that
time to the effect that Mr Muller would work one of the five days at home. That request was
made by Mr Muller, which Mr Haswell agreed. The usual day at home was Tuesday. While the
evidence was not clear as to the exact time this discussion occurred, I infer it most likely took
place as part of the discussions leading up to the change from three days to five days.
[51] I pause in the narrative to note that the Applicant’s evidence contained significant detail
about the nature of various tasks and responsibilities he performed throughout the duration of
his engagement with the Respondent. The Respondent objects to the relevance of this evidence,
which is a matter I will return to later on. Paragraph 9 of Mr Muller’s first witness statement
sets out in subparagraphs (a) – (u) – which span approximately two and a half pages - many of
those tasks. I note, in particular, that paragraph 9 of Mr Muller’s statement is essentially
forward-looking from January 2017. At paragraph 8 of his statement, Mr Muller states that in
around January 2017 he had agreed to work full-time. Paragraph 9 then states that “From this
time forward Timbecon implemented the following work practices: …” (my emphasis).
[52] Other than what I have set out above, it is less clear, however, on the state of the evidence
of the specific nature of the work that was being undertaken during the period from November
2016 leading up to the contractual variation in January 2017. For reasons that will become clear,
I consider it important to identify the tasks that were being performed prior to the (uncontested)
contractual variation in January 2017, having regard to the Applicant’s reliance on the terms of
the initial contract or the terms of that contract, as varied, to establish his status as an employee
either at the commencement of his engagement or at the variation when he began working five
days a week. The short explanation is that it was largely uncontroversial between the parties
that I could have regard to events occurring prior to entry into a contract or a contractual
variation but the parties disagreed as to whether I could have regard to factual matters occurring
after those points in time.
[53] Notwithstanding the essentially forward-looking nature of Mr Muller’s evidence from
paragraph 9 of his first witness statement onward, there are some aspects of Mr Muller’s
evidence from those parts that identify matters occurring during the period from November
2016 to the contractual variation in January 2017.
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[54] At paragraph 9(d) of Mr Muller’s first statement, he states his work included “marketing
and miscellaneous tasks”. His evidence was that these included creating and implementing
weekly promotions and competitions, organising advertising in magazines, writing and editing
content for mailing lists. Mr Haswell says that Mr Muller’s marketing work was “tangential”
to his main work and was a “negligible” portion of the total work. Mr Muller’s reply to Mr
Haswell’s evidence was to the effect that “[i]nitially”, he and Mr Haswell “worked very
closely” on weekly emails, marketing projects and other matters, and that Mr Muller was
“considered by the individuals in [external publishing companies] as the contact for Timbecon.”
Mr Muller says that “I progressively picked up more marketing duties when I became full-
time.”
[55] Mr Haswell was cross-examined about those matters. The effect of his evidence was to
largely reaffirm his witness statement evidence that Mr Muller’s marketing work was tangential
and that Mr Muller’s primary work was directly connected to his photography and videography
work. Mr Haswell was cross-examined on some meeting minutes titled “Marketing meeting –
actions and responsibilities”.1 The document is undated. No evidence was led to suggest it was
a meeting that occurred prior to 2017 and I am not satisfied it occurred before then. As best as
I can discern from the individuals listed in those minutes, a number of whom were not listed in
the meeting minutes of 16 December 2016, that suggests (given the size of the business at the
time) that this meeting occurred sometime after – potentially well after – January 2017.
[56] I find that so far as Mr Muller undertook marketing tasks prior to January 2017, they
were limited in scope and were primarily as an adjunct to his photography and videography
work. I consider this also reflects what the parties agreed at the commencement of his
engagement. I accept that Mr Muller was involved in meetings about marketing and the meeting
minutes of December 2016 describe his role as “Media coordinator and media production,
marketing”. A key purpose of Mr Muller’s photography and videography work was, however,
the creation of content that would be used in the Respondent’s marketing and I am not
persuaded I can read too much more into that brief summation.
[57] Mr Muller says his email signature he used was “Media Creation” for “Timbecon”. I
find it is likely he created this signature by at least 12 January 2017, when he sent an email with
that signature. Mr Haswell’s evidence was that he did not give Mr Muller that title. In cross-
examination, Mr Haswell stated he was not specifically aware that Mr Muller used that title
during his time he worked there. I find that second explanation implausible, given the length of
time it was in use, but I accept that, prior to January 2017, Mr Haswell did not tell Mr Muller
to use that title and may well have been unaware of the fact that Mr Muller had created that
signature at the time.
[58] Less controversially, Mr Muller states he “performed work as a photographer and
videographer for Timbecon”. Mr Haswell agrees and, while Mr Muller’s evidence was directed
from January 2017 “forward”, it is also clear that Mr Muller performed that work prior to
January 2017.
[59] On a related matter, Mr Muller states that at various times he was referred to and
described as “on staff”, the “official Timbecon photographer”, an “in-house specialist” and “in
house photographer” both within the Respondent and to external parties. Mr Muller exhibited
copies of emails containing those terms. The earliest of those emails was 22 March 2017 and
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the latest was 6 April 2021. The email of 22 March 2017 was an email by Mr Muller,
introducing himself to a person who appears to be an external person with experience in
Youtube videos. I note Mr Muller does not use any of the specific terms he describes in his
statement, although he did relevantly write “My name is Shelton Muller and I am the media
creator here at Timbecon in Reservoir. In essence, I am responsible for producing our videos
and commercial product images to promote the company's services and products.”
[60] The description by Mr Muller in his email of 22 March 2017 of his responsibilities to
that point is a pithy summation of what he said about that in oral evidence, as set out above.
[61] Mr Muller says he was required to wear a uniform and “generally” did so. It is not clear
when this practice started, however. Mr Muller attached a staff photograph, which included him
in a uniform but the photograph appears to have been taken toward the end of 2020. While I am
not satisfied that a clear practice existed in the first two or three months of work, I consider it
likely that Mr Muller did wear a uniform during that period. In this respect, I note that uniforms
were referred to in the meeting minutes of 16 December 2016, which also recorded a preference
of Mr Haswell for uniforms to look professional and presentable. Mr Haswell says that, to be
inclusive, uniforms were offered to Mr Muller but he says they were not required for him. Mr
Muller says he was “directed”. There is no evidence that satisfies me there was any particular
discussion about whether he was required or directed to wear it or that he might otherwise
decline a uniform or that a uniform was being offered to be inclusive. I find that Mr Muller did
wear a uniform of some kind very shortly after starting. I find that Mr Muller was simply offered
a uniform shortly after starting and he accepted it and wore it. That practice remained largely
unchanged.
[62] Mr Muller says he was required to attend daily morning meetings with other staff and
says further that he was reprimanded once for not attending. The date of the reprimand is
unclear. While Mr Haswell disagrees that Mr Muller was censured, he does agree that it was
“necessary” for Mr Muller to attend meetings of the marketing team because that related to Mr
Muller’s work. I accept that Mr Muller attended staff meetings of the Respondent when they
occurred, most likely from shortly after he commenced in November 2016 (as the minutes of
the meeting dated 16 December 2016 indicate). I’m not satisfied the evidence shows any
reprimand until after January 2017.
[63] There are other practices or tasks that I am not satisfied were part of the landscape prior
to January 2017.
[64] Mr Muller’s statement gave examples of matters directed at showing that Mr Muller
was “directed by Timbecon on when and how I was to perform work. Indeed, Mr Muller [sic.,
‘Mr Haswell’] had complete control of what specific duties I performed each day and how I
performed them.” However, many examples were clearly matters well after January 2017. They
included a COVID policy and cleaning roster (September 2020), an email requiring assistance
to move business premises (17 January 2017), a direction to work on a particular Saturday (7
March 2018).
[65] Mr Muller says, and I accept, that he was required to comply with various policies of
the Respondent. However, the examples given were the COVID policy and cleaning roster
(September 2020, being the same as the one noted above), directives regarding the purchasing
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of stock (November 2017), an annual leave email (September 2017), and an email regarding
clean workspaces and areas (August 2020).
[66] Mr Muller states he was required to obtain approval from Mr Haswell if he was going
to be absent from work or running late. Again, however, there is no evidence that satisfied me
of any example, let alone clear practice prior, to January 2017. The documentary examples
given were either undated text messages (with one referring to “another great year”, being a
statement suggestive of not having been sent in the first month or two of their engagement) and
another with a leave policy was dated 24 January 2022.
[67] Mr Muller says he was placed on a cleaning roster with other staff (including, I note,
Mr Haswell). The email establishing that roster was sent in November 2017.
[68] Mr Muller gives evidence, which I accept, that he was reimbursed for expenses,
including expenses such as stationary. The two examples given were from September 2017
(approximately for $300) and February 2018 (approximately for $100).
[69] In about 2019, the Respondent employed Mr John Madden. Mr Muller describes him as
the “Marketing Manager” and says Mr Madden “closely supervised and managed my work”,
which included “the length of videos, look, production, scripting etc.” Mr Haswell says that Mr
Madden had primary responsibility for managing Mr Muller’s work from 2020, not 2019,
although given the generalities in dates by each witness, I anticipate any differences are not
material.
[70] In about November 2019, the parties agree that Mr Muller’s rates increased from $39
per hour to $43 per hour. The increase was unilaterally offered by Mr Haswell. Mr Muller says
Mr Haswell did not “offer” the raise, he simply “implemented” it. Prior to the increase, Mr
Muller charged no GST. Following this increase, Mr Muller’s invoices specifically included
GST. The change, as described, is somewhat of a curiosity. The increase represents almost
precisely a ten percent increase, albeit one reflecting GST. I understand that, at the time, the
threshold for GST registration was about $75,000, so the fact that Mr Muller was not collecting
GST prior to then might have been explained on that basis. However, neither party sought to
examine this issue further and neither stated that the increase had any particular significance
beyond the fact that there was a one-off increase.
[71] Mr Muller says he was “unable” to delegate his work to others and was required to
perform it personally. His first witness statement says that around mid-2021, he suggested to
Mr Haswell and Mr Madden that Mr Muller’s wife – also a photographer – could perform some
work to enable some deadlines to be met. Mr Muller says that Mr Haswell and Mr Madden
rejected the proposal and told him to perform the work personally. Mr Haswell disputed this
and said there was never any discussion about those matters and that it did not matter if Mr
Muller delegated work to outside of the office as long as the work was done on time and
properly. In cross-examination, Mr Haswell stated it was a conversation he did not specifically
recall and gave evidence suggesting that any conversation that was had was likely with Mr
Madden only. I generally accept Mr Muller’s evidence on this matter, although I consider that
the direction was more likely issued by Mr Madden than Mr Haswell.
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[72] Mr Muller gave evidence that, from time to time, he was asked by Mr Haswell to
perform for third-parties. He gave examples where Mr Muller’s work was charged by the
Respondent to third-party businesses. He also gave examples where Mr Muller’s work was
provided to “friends” of Mr Haswell. Mr Muller says (and I accept), he was not offered the
opportunity to quote or charge directly for that work. Mr Muller provided emails with two
examples. One of those examples was from December 2021. It is difficult to understand exactly
what was involved here, as the initiating email from Mr Haswell refers to the “one” photo that
had previously been taken for (I infer) the Respondent’s business.
[73] The second email is an email chain from 14-15 November 2016. The email chain
contains a quote from a business called “malt creative”. The initiating email is from malt
creative to Mr Haswell. The “Project Brief” in the quotation attached stated “Design and
Animation of Timbecon Branding Elements including Introduction Panel, Title Panel, Overlay
Panel and Out Sequence (with Website, Social and CTA)”. A note to the quote stated that the
supplier “…is able to work with you to assist with alternative methods of delivery including
phase rollouts or an abridged solution to assist with any budgetary requirements”.
[74] On 15 November 2016, Mr Haswell forwards the email to Mr Muller, with a note “Woah
nelly!!! Is this what you had in mind?!?!?” Mr Muller’s response was “Hey mate! At THAT
price? No way!!! I’ll make one myself.”
[75] Mr Muller explains his invoicing practices and various entities he used throughout the
engagement with the Respondent. As noted above, he initially invoiced in the name of Living
in Pictures from the commencement of the engagement (and certainly did so in the period to
January 2017). Invoicing in that name continued to 18 June 2018, after which Mr Muller sent
invoices from “N. Muller & S. Muller”, which Mr Muller described as a partnership. A
partnership of N Muller & S Muller was registered with an ABN number different to Living in
Pictures. Mr Muller says the partnership was created on 17 May 2018 and cancelled on 30 June
2020. While the partnership was “cancelled” (I infer this to mean either dissolved or its
registration was cancelled), Mr Muller continued to issue invoices in that entity’s name because
he forgot to change the invoice name back to Living in Pictures.
[76] In relation to taxation, Mr Muller states that no tax lodgements were ever lodged against
the partnership as it was largely forgotten. I note in general terms, however, that partnerships
will ordinarily not pay income tax in any event, as liability for taxation is distributed among the
partners. Mr Muller says the partnership did not split income among the two partners but, rather,
it was “just a means for me to receive my salary”. Mr Muller says he lodged individual tax
returns. Mr Muller was not challenged about these matters. I note that the registration details
provided by Mr Muller indicate ‘N Muller & S Muller’ was not registered for GST, although
invoices from this entity later provided for GST as did invoices under the name of that entity
that were issued after it was “cancelled” on 30 June 2020. It was not explained in the evidence
how Mr Muller remitted the GST that was being collected after November 2019, although I
presume it was being done so in his personal name.
[77] In February 2021, Mr Muller was provided with a “Permitted Worker Permit” (for the
purposes of the various COVID-19 work restrictions that were in force at the time), which stated
that he was an employee. It was not signed by Mr Haswell. Mr Haswell says that Mr Muller
[2022] FWC 1685
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was initially not issued with such a permit earlier on in 2020 but, as Mr Muller said he was
uncomfortable signing a permit for himself, a permit was issued for Mr Muller.
[78] There was other evidence given by the witnesses that does not strictly bear on matters
discussed or raised between the parties. For example, Mr Muller says that once he started
working five days a week with the Respondent, he made no attempt to seek further work save
for “sporadic” work on weekends at weddings. I accept that evidence.
[79] Mr Muller also says he “did not retain any intellectual property rights in the
photographs and videos” he produced for the Respondent. Mr Haswell agrees, although the
evidence in both witnesses’ case appears to be a legal assumption about those matters, and I am
not satisfied there was any specific discussion held to that effect.
Applicable principles – employee or contractor
General principles
[80] Unsurprisingly, the parties addressed me on the applicable principles, as recently stated
by the High Court in its decisions of CFMMEU v Personnel Contracting Pty Ltd [2022] HCA
1 (Personnel Contracting) and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2
(Jamsek).
[81] The Applicant relied upon – which the Respondent concurred with - the following
summary recently set out by Deputy President Anderson in Waring v Hage Retail Group Pty
Ltd [2022] FWC 5402 (footnotes omitted):
“[52] In two judgements delivered on 9 February 2022 the High Court of Australia
pronounced on the law that applies in determining whether, absent a specific statutory
rule, a person is an employee or contractor. In doing so, the Court reviewed past
decisions of the Court (and other courts) and set out afresh relevant legal principles.
[53] In important respects the law as expressed by the High Court in Jamsek and
Personnel Contracting has modified, if not replaced, former approaches. In particular,
the past approach of the Commission (itself based on past court authority) as outlined
in the leading full bench case of French Accent is, with some limited caveats, no longer
good law.
[54] The High Court, via the combination of judgements in both Jamsek and Personnel
Contracting, has largely rejected an approach whereby the relationship between parties
across its life span is examined (including how the relationship operates in practice).
The Court has stated that contractual terms and not performance, where those terms can
be ascertained and where the contract is not a sham, will determine the true nature of
the relationship. However, the Court has observed that the manner in which the
relationship is worked in practice may be relevant for certain limited purposes, such as
to find contractual terms where they cannot otherwise be ascertained or to determine the
nature of any variation to agreed terms.
https://www.fwc.gov.au/documents/decisionssigned/html/2022fwc540.htm
[2022] FWC 1685
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[55] Indicia (such as those identified in earlier cases in the Court) may be relevant but
only insofar as the terms of the contract give voice to them. One approach, to be used
as a guide, is to look at whether, under the contract, the worker is engaged to work in
the business of another, though this may not necessarily be useful in all cases. The extent
of a contractual right to control, as evident from the terms of the contract itself, remains
a major signifier of an employment relationship. That an arrangement was brought about
by the superior bargaining power of one party has no bearing on the meaning and effect
of the contract.
[56] Amongst the caveats expressed by the Court, is that a mere label acting as a
subterfuge to the true nature of the contractual relationship will not determine the status
of the parties. In this respect at least, the law remains unchanged by these recent
decisions.”
[82] As is often the case, the principles were not themselves in controversy, but the
application of those principles was in issue. In addition to the general question of
characterisation, there were discrete issues of controversy in the matter before me: the use of
post-contractual conduct to assist in determining the terms of an oral contract; the use by the
parties of ‘labels’ to describe the legal character of the arrangement between them; and the
terms of the contract itself.
Oral contracts
[83] A point of distinction in the matter before me and Personnel Contracting was that the
contract between the parties in the matter before me contained terms that were wholly oral (and
to be implied). The parties did not suggest – correctly in my view – that different principles to
those set out in Personnel Contracting would apply, although there are some particular matters
concerning post-formation conduct and variation that I will address.
[84] Where there is a wholly written contract whose terms are not disputed, there is usually
no difficulty identifying those terms for the purpose of undertaking the exercise in
characterisation (although the task of characterisation may still be a difficult one). Where the
contract is not wholly in writing, it is necessary at the threshold level to identify the terms of
the contract, the parties to it, and when it was formed. Many aspects are often not in dispute but
in all likelihood, some will be, given the nuance of the characterisation exercise that will derive
from those terms. Where (as is the case here) a variation occurs, it is also necessary to identify
the scope of any variation and when it occurred.
[85] The principles applicable to proof of oral contracts was stated by Hammerschlag J in
John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 4513 at [93]-[94].
At [93], Hammerschlag J was referring to when an oral contract could be accepted as being
made. The making of an agreement is not in dispute in the matter before me. However, I
consider his Honour’s observations are apposite in identifying the terms of an oral agreement.
At [94] – [95], his Honour stated:
“94 Where a party seeks to rely upon spoken words as a foundation for a cause of
action, including a cause of action based on a contract, the conversation must be proved
to the reasonable satisfaction of the court which means that the court must feel an actual
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persuasion of its occurrence or its existence. Moreover, in the case of contract, the court
must be persuaded that any consensus reached was capable of forming a binding contract
and was intended by the parties to be legally binding. In the absence of some reliable
contemporaneous record or other satisfactory corroboration, a party may face serious
difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained
or established independently of the nature and consequences of the fact or facts to be
proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence
of a given description, or the gravity of the consequences flowing from a particular
finding are considerations which must affect the answer to the question of whether the
issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction
should not be produced by inexact proofs, indefinite testimony, or indirect inferences:
see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR
691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49
NSWLR 315 at 319.
95 The sensation of feeling an actual persuasion, after a contest, that an event has
happened or that something exists is one which is well known and recognised by
experienced trial judges for what it is.”
[86] As to the implication of terms into an oral contract, I consider the relevant principles are
those initially advanced by Deane J in in Hawkins v Clayton (1987) 164 CLR 539 at 571 and
later developed by McHugh J and Gummow J in Byrne v Australian Airlines Ltd (1995) 185
CLR 410 at 442. In the latter case, their Honours stated (citations omitted, emphasis added):
“In such situations, the first task is to consider the evidence and find the relevant express
terms. Some terms may be inferred from the evidence of a course of dealing between
the parties. It may be apparent that the parties have not spelled out all the terms of their
contract, but have left some or most of them to be inferred or implied. Some terms may
be implied by established custom or usage, as described above. Other terms may satisfy
the criterion of being so obvious that they go without saying, in the sense that if the
subject had been raised the parties to the contract would have replied "of course". If the
contract has not been reduced to complete written form, the question is whether the
implication of the particular term is necessary for the reasonable or effective operation
of the contract in the circumstances of the case; only where this can be seen to be true
will the term be implied”
[87] As with written contracts, recourse may be had to external events, where appropriate, as
explained by Gordon J in Personnel Contracting at [175] (citations omitted, emphasis added):
“Recourse may be had to events, circumstances and things external to the contract which
are objective, which are known to the parties at the time of contracting and which assist
in identifying the purpose or object of the contract. The nature of the specific job that
the purported employee applied for as well as the nature and extent of the equipment to
be supplied by that purported employee for that particular job may well be relevant to
the question of characterisation of the contract. Indeed, it is often relevant, but not
determinative, to observe that the purported employee must supply some uniform, tools
or equipment. But again that observation must be made in context. The context is the
nature and extent of what is required to be provided under the contract. In many forms
[2022] FWC 1685
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of employment, employees provide their own uniform and bring their own tools to
work.”
Characterisation – traditional indicia
[88] As Wigney J recently stated in JMC Pty Limited v Commissioner of Taxation [2022]
FCA 750 (JMC v COT) at [23], the task of characterising the terms of the contract, once
properly identified, is often informed by two particular considerations:
“The first consideration is the extent to which the putative employer has the right to
control how, where and when the putative employee performs the work: Personnel
Contracting at [73]-[74] (Kiefel CJ, Keane and Edelman JJ); [113] (Gageler and Gleeson
JJ); see also Brodribb at 24 (Mason J) and 36-37 (Wilson and Dawson JJ). The second
is the extent to which the putative employee can be seen to work in his or her own
business, as distinct from the business of the putative employer – the so-called “own
business/employer’s business” dichotomy: Personnel Contracting at [36]-[39] (Kiefel
CJ, Keane and Edelman JJ); [113] (Gageler and Gleeson JJ); cf [180]-[183] (Gordon J).
Neither of those considerations are determinative and both involve questions of degree.”
[89] In relation to the element of control, as stated by Kiefel CJ, Keane and Edelman JJ in
Personnel Contracting at [73] (and see also JMC v COT at [24]):
“ … the existence of a right of control by a putative employer over the activities of the
putative employee serves to sensitise one to the subservient and dependent nature of the
work of an employee, so as to assist in an assessment of whether a relationship is
properly to be regarded as a contract of service rather than a contract for services”
[90] As for the “own business/employer’s business” dichotomy, Wigney J summarised the
matter thus in JMC v COT at [25] (original emphasis):
“ … it also “usefully focusses attention upon those aspects of the relationship generally
defined by the contract which bear more directly upon whether the putative employee’s
work was so subordinate to the employer’s business that it can be seen to have been
performed as an employee of that business rather than as part of an independent
enterprise”: Personnel Contracting at [39] (Kiefel CJ, Keane and Edelman JJ); cf [180]-
[182] (Gordon J). Another way of framing the question, which focusses more directly
on the terms of the contract, is whether the person “is contracted to work in the business
or enterprise of the purported employer”: Personnel Contracting at [183] (Gordon J)
(emphasis in original). One consequence of answering that question in the negative may
be that the person is not an employee.”
[91] While the elements of control and the own/employer’s business dichotomy are
significant matters, it remains appropriate to consider the “totality” of the relationship between
the parties albeit – importantly – as framed by the rights and duties established by the parties’
contract. As stated by Kiefel CJ, Keane and Edelman JJ in Personnel Contracting at [61]
(citations omitted, emphasis added):
[2022] FWC 1685
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“The foregoing should not be taken to suggest that it is not appropriate, in the
characterisation of a relationship as one of employment or of principal and independent
contractor, to consider "the totality of the relationship between the parties" by reference
to the various indicia of employment that have been identified in the authorities. What
must be appreciated, however, is that in a case such as the present, for a matter to bear
upon the ultimate characterisation of a relationship, it must be concerned with the rights
and duties established by the parties' contract, and not simply an aspect of how the
parties' relationship has come to play out in practice but bearing no necessary connection
to the contractual obligations of the parties.”
[92] With the important limitation placed upon recourse to the “various indicia” being
established from the terms of the parties’ contract, the indicia described in Stevens v Brodribb
Sawmilling Co Pty Ltd (1986) 160 CLR 16 (Stevens) at 24 per Mason J remain relevant
(citations omitted, emphasis added): 4
“But the existence of control, whilst significant, is not the sole criterion by which to gauge
whether a relationship is one of employment. The approach of this Court has been to
regard it merely as one of a number of indicia which must be considered in the
determination of that question:… Other relevant matters include, but are not limited to,
the mode of remuneration, the provision and maintenance of equipment, the obligation
to work, the hours of work and provision for holidays, the deduction of income tax and
the delegation of work by the putative employee.”
[93] To similar effect, Wilson and Dawson JJ said in Stevens at 36 – 37 (emphasis added):
“The other indicia of the nature of the relationship have been variously stated and have
been added to from time to time. Those suggesting a contract of service rather than a
contract for services include the right to have a particular person do the work, the right
to suspend or dismiss the person engaged, the right to the exclusive services of the person
engaged and the right to dictate the place of work, hours of work and the like. Those
which indicate a contract for services include work involving a profession, trade or
distinct calling on the part of the person engaged, the provision by him of his own place
of work or of his own equipment, the creation by him of goodwill or saleable assets in
the course of his work, the payment by him from his remuneration of business expenses
of any significant proportion and the payment to him of remuneration without deduction
for income tax. None of these leads to any necessary inference, however, and the actual
terms and terminology of the contract will always be of considerable importance.”
Characterisation – the use of “labels”
[94] The Respondent places some importance on the fact that the parties called the
relationship a contracting relationship. The Applicant’s written submissions state that “the High
Court has held that the label ascribed by the parties to the engagement is of no consequence”. I
do not accept the Applicant’s submission that the High Court made such a definitive statement,
although I accept the parties’ own descriptions cannot be determinative.
[95] Regarding the “label” issue, the Applicant’s written submissions relied upon the
following paragraphs from Personnel Contracting: per Kiefel CJ, Keane and Edelman JJ at
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[58], [63]-[66], [79]: Gageler and Gleeson JJ at [127]; and Gordon J at [184]. At [66], having
just referred to a statement in Chaplin to the effect that ambiguity in the character of a
relationship might be removed by a provision whereby the parties agreed on terms descriptive
of their status or relationship, Kiefel CJ, Keane and Edelman JJ stated (emphasis added):
“As a matter of principle, however, it is difficult to see how the expression by the parties
of their opinion as to the character of their relationship can assist the court, whose task
it is to characterise their relationship by reference to their rights and duties. Generally
speaking, the opinion of the parties on a matter of law is irrelevant. Even if it be accepted
that there may be cases where descriptive language chosen by the parties can shed light
on the objective understanding of the operative provisions of their contract, the cases
where the parties’ description of their status or relationship will be helpful to the court
in ascertaining their rights and duties will be rare.”
[96] Hence, while Kiefel CJ, Keane and Edelman JJ stated that recourse to the parties’ own
descriptions would be “rare”, Gordon J, with whom Steward J agreed on this matter, stated the
matter with some difference in emphasis. It is clear that Gordon J considered that any recourse
to the parties’ own descriptions should not be given excessive weight – let alone being
determinative - and that the whole of the contract is to be construed, including whatever labels
the parties have used. Gordon J stated at [184] (citations omitted, emphasis added):
“This Court has previously cautioned against ascribing too much weight to "labels" used
by parties to describe their relationship. The whole of the contract is to be construed
including whatever labels the parties have used to describe their relationship, but those
labels are not determinative: "parties cannot deem the relationship between themselves
to be something it is not". Adopting and adapting what was said by Gleeson CJ,
Gummow, Kirby, Hayne and Crennan JJ in Bluebottle UK Ltd v Deputy Commissioner
of Taxation in relation to a clause of deeds of assignment headed "Equitable and Legal
Assignments": the classification adopted by the parties in the contract is not
determinative. The classification turns upon the identification of the nature and content
of the rights created by the contract and the identity of those parties which enjoyed those
rights. The contract can have no greater efficacy than that given by the rights which
provided its subject matter.”
[97] I consider that the principle enunciated by Gordon J regarding labels is similarly
reflected by the joint judgment of Gageler and Gleeson JJ, who state at [127] (citations omitted,
emphasis added):
“The third of those principles, although stated by means of a quotation from an earlier
English decision, was entirely in accordance with the common law as then understood
in Australia. Legal characterisation of a relationship into which parties have entered
under a written contract has never been thought to be controlled by the contractual
language chosen to describe the relationship. The characterisation must turn on the
substantial relations between the parties, which might be informed but cannot be altered
by the presence in the contract of "elaborate provisions expressed in terms appropriate
to some other relation". Michael Black QC pithily encapsulated that understanding in an
employment context in the submission that "the parties cannot create something which
[2022] FWC 1685
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has every feature of a rooster, but call it a duck and insist that everybody else recognise
it as a duck".”
Characterisation - evidence of post-contractual conduct
[98] The second matter relates to whether evidence of conduct occurring after the formation
of the contract might be had regard to in characterising the contractual relationship. I consider
the judgments of Kiefel CJ, Keane and Edelman JJ at [45], and Gordon J (Steward J concurring)
at [176] make it clear that such conduct cannot, as a general rule, be admitted for the purpose
of construing the contract as made.
[99] There are exceptions to the admission of post-contractual evidence, although I consider
them confined. In the case before me, the terms of the contract between the Applicant and
Respondent were constituted wholly by oral terms (and terms that might be implied). Perhaps
with an eye to those matters, the Applicant relied upon the following proposition from
Personnel Contracting (a case concerning a wholly written contract) by Kiefel CJ, Keane and
Edelman JJ at [42] (footnotes omitted):
“A contract of employment may be partly oral and partly in writing, or there may be cases
where subsequent agreement or conduct effects a variation to the terms of the original
contract or gives rise to an estoppel or waiver. In such cases, it may be that the imposition
by a putative employer of its work practices upon the putative employee manifests the
employer's contractual right of control over the work situation; or a putative employee's
acceptance of the exercise of power may show that the putative employer has been ceded
the right to impose such practices.”
[100] Similarly, reliance was placed by the Applicant on statements by Gordon J at [177] and
at [183]. Paragraph [177] of her Honour’s judgment is as follows (citations omitted, original
emphasis):
“Of course, the general principle against the use of subsequent conduct in construing a
contract wholly in writing says nothing against the admissibility of conduct for purposes
unrelated to construction, including in relation to: (1) formation – to establish whether
a contract was actually formed and when it was formed; (2) contractual terms – where
a contract is not wholly in writing, to establish the existence of a contractual term or
terms; (3) discharge or variation – to demonstrate that a subsequent agreement has been
made varying one or more terms of the original contract; (4) sham – to show that the
contract was a "sham" in that it was brought into existence as "a mere piece of
machinery" to serve some purpose other than that of constituting the whole of the
arrangement; and (5) other – to reveal "probative evidence of facts relevant to
rectification, estoppel or any other legal, equitable or statutory rights or remedies that
may impinge on an otherwise concluded, construed and interpreted contract". The
relevance of subsequent conduct for the purposes of a particular statutory provision,
legislative instrument or award was not in issue in this appeal.”
[101] The relevant part of paragraph [183] of her Honour’s judgment relied upon by the
Applicant was (footnotes omitted):
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“ … That does not detract from the fact that where the contract is oral, or partly oral and
partly in writing, subsequent conduct may be admissible in specific circumstances for
specific purposes – to objectively determine the point at which the contract was formed,
the contractual terms that were agreed or whether the contract has been varied or
discharged.”
Consideration
[102] Before setting out my conclusions about the terms of the contract between the parties
(as varied), it is necessary to make some observations regarding the case before me, having
regard to the High Court’s statements on recourse to post-contractual conduct.
[103] The Applicant’s case relied upon the contract initially formed between the parties in
September 2016, as it was varied in about January 2017 when the days to be worked were
changed from three days to five days. It was a matter specifically confirmed for the Applicant
in closing address.
[104] What follows from this is that I consider that conduct occurring after those points in
time cannot be relied upon to establish the terms of the contract, as varied, except to demonstrate
that there was a particular term at either of those points in time. Taking the five matters listed
by Gordon J in paragraph [177] of Personnel Contracting, it was not suggested that there was
doubt about “formation” (although the identity of the parties to the contract that was formed
was initially in dispute), nor was a “sham” asserted and nor was rectification or estoppel in issue
(c.f. Personnel Contracting at [177]).
[105] As to post-contractual conduct to prove a contractual “variation”, it was agreed between
the parties that, in about January 2017, the days required to be worked changed from three days
to five days. It is not necessary to have recourse to post-contractual conduct for proof of that
variation. I accept that does potentially leave available post-contractual conduct to assist in
determining if there were other variations to the contract that occurred between September 2016
and January 2017 and I set out my findings on those matters below.
[106] I also accept that post-contractual conduct in the matter before me is potentially capable
of resolving a dispute where that dispute concerns the “existence” (and, I consider it follows
where an oral term is concerned, the “scope”) of a particular term in the initial contract or that
contract as varied.
[107] But with those exceptions aside, I do not consider that the terms of the contract, as varied
in January 2017, might be added to or subtracted from by reason of post-contractual conduct
occurring after those events unless I consider that conduct was factually reflective of the
statements and conduct occurring at the time the contract was originally agreed and upon
variation. Put another way, the fact that certain practices might have been occurring in
November 2021 is not determinative of them having been in place in November 2016.
The contract – formation and parties
[108] I now set out my findings as to the terms of the contract. I refer to my findings of fact
set out above.
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[109] I find that the initial contract was formed during, or shortly following, the discussion
held between Mr Muller and Mr Haswell on 23 September 2016. As Mr Muller had begun
purchasing equipment by 18 October 2016, I am satisfied it occurred by then. It is improbable
that Mr Muller would have been purchasing equipment and sending an invoice for
reimbursement if, by that point, he and Mr Haswell had not struck a deal.
[110] In the material that was initially filed, there was a level of dispute regarding the identity
of the contracting parties. The Respondent’s material states that there was an “interposition” of
third-parties between the Applicant and Respondent, namely “Living in Pictures” until April
2018 and then the partnership “N. Muller & S. Muller” from then on. The Respondent also
asserted that the Applicant ought be estopped from now denying that the Respondent was
contracting with the partnership of N. Muller & S. Muller.
[111] As to the identity of the contracting parties, I find that the contract was between the
Respondent and Mr Muller. While the Respondent’s submissions contend that there were
interposed entities – initially Living in Pictures – none of those entities were discussed on 23
September 2016 or beforehand. There is no evidence of that entity being referred to earlier than
the invoice dated 18 October 2016 and, as stated, I find that a contract had already been arrived
at by then.
[112] The Respondent’s written submissions contend, in substance, an estoppel by
representation to the effect that the contracting parties are (or, more accurately, were altered to
become) Living in Pictures and, later, the partnership of N. Muller & S. Muller. While the
argument was not pressed by counsel for the Respondent, lest there be confusion about the
matter not being addressed, I am not satisfied that any estoppel arises. At its highest, the
contention relies on the delivery of invoices (initially in the name of Living in Pictures) as
constituting a ‘representation’ of the contracting party. Even were that the case (and in the
matter before me, I doubt this) there would need to be detrimental reliance. I consider that the
relevant state of mind for reliance is Mr Haswell’s. It is sufficient to note that he gave no clear
evidence indicating such a reliance. To the contrary, Mr Haswell’s witness statement exhibits
an email exchange between himself and Mr Madden in November 2021. The substance of that
exchange was a failure of a hard-drive controlled by Mr Muller for his work (and the absence
of back-up systems and the request by Mr Muller for the Respondent to “assist” Mr Muller’s
efforts for that material to be recovered). In the email exchange, Mr Haswell described
“Shelton” as a contractor. While that part of the email was not written in formal terms, there
was nonetheless no reference to any other contracting entity.
The contract – express terms
[113] I find from the evidence there were express terms of a contract (Contract) as follows:
a. The Applicant would primarily perform photography, as well as videography and other
marketing tasks, as supplied by the Respondent.
b. The Applicant would be paid at an hourly rate of $39 per hour, plus any GST.
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c. The Applicant would work on a time-structure basis, three days per week on days to be
agreed as needed but expected to be Wednesdays, Thursdays and Fridays.
d. The Applicant would issue invoices for his work, which were to be issued on a
fortnightly basis in accordance with the Respondent’s pay cycle.
e. Except for the days when the Applicant was working at the Respondent, he could work
elsewhere for other clients or work.
f. The parties agree that Applicant would be engaged as a contractor.
g. The Respondent would supply the Applicant for use with a suitable laptop and other
photography equipment on agreement.
h. The Respondent would reimburse the Applicant for specific equipment purchases that
he would use for his work, as agreed.
[114] In relation to the term concerning the supply of the computer and other selected
equipment, I note that the evidence does not disclose any specific discussion about them.
However, as there was an email dated 8 November 2016 to arrange for the laptop, I consider it
highly likely that the parties had discussed those matters previously and agreed that it would be
supplied. The evidence refers to the Respondent supplying a “DSLR camera”. The value of this
item is unclear, although I infer it was modest (and possibly around the value of the computer,
noting Mr Haswell’s complaint that Mr Muller did not use the supplied camera and instead used
his own equipment). The Respondent would not have purchased a camera nor would have
arranged for such a specific computer to be procured without having considered there was a
need for it in the first place. For similar reasons, I consider it also highly likely that the parties
discussed at least in general terms the other items of the equipment Mr Muller indicated he
would require (as reflected in the invoice dated 18 October 2016), and that prior to Mr Muller
purchasing them, he had obtained approval for their reimbursement if purchased.
The contract – implied terms
[115] I find that the following terms were implied into the Contract. These are terms that I am
not satisfied the evidence demonstrates were actually discussed or were expressly agreed upon
but I consider necessary for the reasonable or effective operation of the Contract:
a. The hourly rate was the total amount payable to the Applicant by the Respondent and
no annual leave, sick leave, superannuation or other amounts would be payable.
b. The Applicant would perform the tasks directed by the Respondent and to the standard
expected of the Respondent, as might be advised or directed from time to time.
c. The Applicant would apply his professional skill to the tasks at hand.
d. The Applicant would not delegate his work nor allow another person to perform his
contracted obligations without prior permission.
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e. The Applicant would notify the Respondent if he was, or was likely to be, absent.
f. The Applicant would supply his own equipment for photography and videography, save
for equipment supplied or made available by the Respondent.
g. The Applicant’s expenses would be paid, where approved, and any modest expenditure
required discussion and agreement before the expense was incurred.
h. The Applicant granted the Respondent a bare licence to use any photographic or video
works he created for the purpose that they were created (such as publication on the
Respondent’s website.).
i. Termination of the Contract would be upon either party giving reasonable notice.
[116] While I consider the implied terms stated above are mostly uncontroversial, there are
potential exceptions. I would make the following brief observations.
[117] In relation to the term concerning (non) payment of any amount in addition to the hourly
rate for matters such as leave, it is unclear on the evidence whether it was specifically discussed
or possibly just assumed as an obvious criteria, although given the time that has since elapsed
since that initial conversation, this is not levelled as a criticism. It is for this reason I do not
consider this term was expressly agreed. It would in any case appear to have been obvious to
both parties after the first invoice was issued that, if either party had a different view, it would
have been clear from then. Neither party suggested to the contrary.
[118] In relation to the term regarding the tasks to be performed and the standard at which
they were to be undertaken, I am not satisfied the evidence discloses any specific discussion
about those matters. That said, there was clearly discussion between the parties as to the needs
of the Respondent. Those needs, which I accept were discussed, were content creation for the
Respondent’s website and marketing, primarily being in relation to the Respondent’s business
of selling woodworking tools.
[119] In relation to the term regarding notification for absences, while I am not satisfied such
a term was discussed, I consider such a term is necessary where it was contemplated that work
would be performed on specific days. The Applicant’s evidence asserted he was required to
seek “permission” to be absent. As I noted in my findings, I do not accept there was such a
requirement and, for completeness, I would not imply a term to that effect. If he did not work,
he would not be paid.
[120] In relation to the term for delegation, the Respondent contended that the Applicant was
free to delegate work and the Applicant contended the opposite. The matter is resolved by
reason of the absence of an express term permitting delegation to (or, perhaps more realistically
in the case before me, vicarious performance by) a third person. The law does not permit –
without prior agreement - an agent to assign, delegate or to have performed those obligations
for which personal skill and competence is required.5 I consider that the performance of the
photography and videography work (being the core functions for the Applicant) required
personal performance. There being no prior (express) agreement permitting, it follows that a
term permitting that very activity will not be implied.
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[121] In relation to the term regarding the supply by the Applicant of his own equipment, such
a term necessarily follows from the fact that while the Respondent supplied some limited
equipment it did not appear comprehensive. So far as other equipment was required or the
Applicant preferred to use it, he would supply that himself unless specific requests were made.
[122] In relation to the implied term for reimbursement, the Applicant’s written submissions
contend there was a term that the Applicant “would be” reimbursed for expenses during his
work. I do not consider the evidence reflected that was agreed upon and I do not consider it
commercial – let alone necessary - to imply a term that the Applicant “would” be reimbursed
for items in the absence of the Respondent first being notified before those costs were incurred.
[123] In relation to the term for the licensing of works, this follows from the absence of any
express term dealing with intellectual property rights. While each party gave evidence that they
considered that the Applicant did not retain any “intellectual property rights”, this is a
conclusion or assumption by those parties and did not reflect any discussion, let alone an
express term.
[124] Any photographs or videos created by Mr Muller are “works” within the meaning of the
Copyright Act 1968 (Cth) (Copyright Act). To give a straight-forward example, if Mr Muller
took a photograph – even one he was specifically instructed to take – that photograph is, under
the Copyright Act, an “artistic work” for which Mr Muller is the “author”. As the author, Mr
Muller is also the “owner” of the work unless modified by agreement: Copyright Act, s.35(2)
– (3). While ss.35(4) – (6) of the Copyright Act allows for, in effect, automatic ownership of
copyright by a person who is not the author (e.g. an employer, where there is an employee-
employer relationship, or paintings commissioned for private purposes), I do not consider they
apply unless the Applicant is an employee. Further, an assignment of copyright is of no effect
unless it is in writing and it will not be implied.6 There was no written assignment. By contrast,
a licence need not be in writing and (in the absence of the Applicant being an employee) I
consider it necessary for the operation of the Contract that an implied licence exist such that the
Respondent can use the artistic works authored and owned by the Applicant for the purpose for
which they were created.7
[125] For the term regarding notice upon termination, I consider an implied term of reasonable
notice is a necessary term in circumstances where no express term was arrived at.
The contract – terms not included
[126] There were a number of other terms advanced, primarily by the Applicant in his written
submissions, with many that I do not consider were terms of the Contract. They are:
a. The Applicant’s miscellaneous duties that he was required to perform included:
(i) cleaning duties pursuant to a roster;
(ii) managing company meetings;
(iii) photography duties for other companies for which the Respondent would be paid.
b. the Applicant was required to perform his duties personally and could not delegate tasks;
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c. the Applicant was unable to reject a direction to perform duties or a direction on how
he should perform those duties;
d. all the intellectual rights to the material created by the Applicant remained with the
Respondent;
e. the Applicant was required to present himself as an employee of the Respondent to third
parties and other employees of the Respondent by:
(i) using a company email address and signature;
(ii) wearing a uniform with the Respondent’s branding;
(iii) bring referred as “staff”.
f. the Applicant was required to work exclusively for the Respondent during weekdays;
g. the Applicant was required to comply with the Respondent’s policies and procedures;
h. the Applicant’s performance would be managed by the Respondent;
i. the Applicant would be provided with the equipment needed for his work by the
Respondent; and
j. the Applicant would be reimbursed for expenses incurred during his work.
[127] I have addressed a number of these matters already. Of the list of terms above, I find
that none of them were expressly discussed at the initial meeting(s) – other than as I have set
out above – and could not be an express term of the Contract. I have also addressed some of
these matters above regarding delegation, intellectual property, equipment supply,
reimbursement of expenses, and management of performance (and tasks to be performed)
above.
[128] The “exclusivity” term I consider misplaced – it is not necessary to imply it for the
reasonable operation of the agreement and it was not discussed. Having regard to the express
terms that the Applicant could perform business elsewhere, I do not consider it appropriate to
imply a term inconsistent with an express term. I accept, however, that a consequence of the
requirement for the Applicant to work for the Respondent during the periods agreed (initially
8:00am to 5:00pm, for three days in a week and later becoming five days) necessarily meant
that the Applicant would not be working for anyone else during those periods. He was
contracted to perform work on those days.
[129] For the other terms said to form part of the Contract, I also do not consider them
necessary to be implied into the agreement for its reasonable operation, particularly where they
were not discussed. On those matters, the Contract was – at least initially – silent.
The contractual variation
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[130] I consider now to what extent the contractual terms above were modified or added to
between the period of contractual formation and the variation of the Contract in January 2017
(Variation).
[131] It is uncontroversial, and I find, that the Contract was amended, commencing effective
around January 2017, for Mr Muller to work five days instead of three days. These amendments
were express, made orally. I accept Mr Haswell’s evidence that there was no discussion about
any other aspects and I find there were no further express amendments.
[132] I have considered whether - to adopt the statement of Kiefel CJ, Keane and Edelman JJ
at [42] in Personnel Contracting – there was an “imposition” by the Respondent of its “work
practices” upon Mr Muller that “manifests the employer’s contractual right of control over the
work situation” or whether Mr Muller’s “acceptance of the exercise of power” may show that
the Respondent was “ceded the right to impose such practices”.
[133] This requires consideration of the conduct of the parties between formation of the
Contract and its variation.
[134] I accept there were some work practices suggestive of an increased level of control or
power. They included the Applicant’s use of an email address and the (likely) wearing of a
uniform. The regularity of Mr Muller’s hours and the participation by Mr Muller in staff team
meetings (c.f. 16 December 2016) are similarly suggestive of an increasing level of control.
The meeting minutes of 16 December 2016 describe Mr Muller’s role somewhat more broadly
to include “Media Coordinator”, which was not a task expressly referred to in the Contract (cf.
photography, videography and marketing).
[135] However, when assessed against the evidence as a whole during this period, I do not
consider that the evidence of the parties’ conduct or work practices during this period rises to
such a level that it manifests an assumption of a right of control over Mr Muller by the
Respondent that was sufficiently different from the terms of the Contract originally agreed.
[136] I do not consider that recourse to the post-contractual conduct occurring after the
Variation assists, other than I have set out above. In those circumstances, I do not consider those
matters appropriate to have regard to in characterisation of the Contract or the Variation.
Characterisation of the contract
[137] The circumstances surrounding the entry into the Contract were relied upon by the
parties for different reasons. The Applicant relies upon the fact that Mr Haswell was, in his
email dated 14 September 2016, initially seeking to engage an employee, beginning part-time
on a “time-structured” basis and most likely moving to full-time. I accept that this factor is
suggestive that the relationship being sought by the Respondent was one where the degree of
control he would exercise would reflect the degree of control present in an employer/employee
relationship.
[138] For similar reasons, I consider the contractual requirement to work on fixed days for, in
substance, fixed times conveys a greater sense of control by the Respondent and an indication
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that the Applicant was working in the business of the Respondent, rather than his own business.
Initially, the number of days was three per week and changed to five.
[139] In my view, it is these terms which speak most strongly of an employment relationship,
as they suggested a foundation where – from the Respondent’s perspective – it was paying a
person to be available at set times to perform services supplied by the Respondent from time to
time. In short, the Respondent was obliged to pay for fixed blocks of the Applicant’s time per
week at a flat hourly rate, and it would appear improbable that the Respondent would have
allowed the Applicant to sit around during idle times without being allocated other incidental
work. This suggests that it was likely that in circumstances where the Respondent did not have
core work immediately available to perform, or it had some other pressing priority, it might ask
the Applicant to perform other tasks, such as taking the minutes of the meeting on 16 December
2016. There were hallmarks of this practice, at least the case by the time of the Variation.
[140] Further, the work to be undertaken by the Applicant was also to be performed
personally. There was no express right of delegation and, as set out above, such a term cannot
be implied. These are also matters suggestive of an employment relationship, although the
authorities I referred to regarding the inability to imply a term of delegation were, I note, not
matters concerning an employee relationship. Although I note that, in a practical sense, such
delegation or performance by a third party was unlikely to happen. I say that because the
Applicant was remunerated on what was essentially a fixed-time arrangement. He could only
delegate work he was contracted to perform. If he delegated work, or arranged for someone else
to perform that work for him, he would not be entitled to charge for additional work at the same
time. Any work performed by a third party would, unless paid at a rate less than his own hourly
rate, be remuneration that the Applicant would not receive. For completeness, I also consider
that this is an answer to the Applicant’s evidence about his request in 2019 for his wife to
perform work to enable deadlines to be met. In substance, what the Applicant was requesting
at that time was for additional work to be undertaken, not simply that the existing work that the
Applicant would charge for would be performed by her instead of him.
[141] Those aspects cannot be considered in isolation, however.
[142] The Applicant’s submissions stated that the work performed was as directed by the
Respondent. I consider that proposition is generally correct in what was to be performed and
when. However, and relevantly, it was not the case that the Respondent dictated how the work
was to be undertaken8, other than it remained the case that work needed to be performed to a
requisite standard.
[143] The terms of the Contract (unchanged on Variation) required the Applicant to perform
specialised photography and videography work. I would make the observation that it is well-
known that many photographers can operate as independent contractors or as employees. There
is nothing inherent to the nature of photography work that determinately points one way or the
other. The engagement of a photographer is certainly capable of – and frequently is – based as
an independent contracting relationship but the same can be said of employee photographers.
The mutually known background to the parties recorded that Mr Muller had been operating as
a photographer for approximately 35 years. A significant majority of that period was as an
independent contractor.
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[144] The term of the Contract (unchanged on Variation) that Mr Muller would perform
“marketing” tasks is perhaps closer on the spectrum to traditional employment than the more
specialised profession of a photographer. However, in the context of the parties at the time,
caution needs to be exercised in generalisations. The Respondent at the time was a very small
business, with about five employees. As a small business, it is unsurprising that some tasks
were outsourced simply because the business did not have the present time or expertise to
perform them inhouse. The evidence shows that marketing functions themselves were being
outsourced at the time to a third-party entity. The emails between the parties on 14-15
November 2016 reflects their respective comments on the cost of one of those arrangements.
[145] Notwithstanding that it was Mr Haswell’s initial intention to engage a photographer
inhouse as an employee, in all the circumstances there is nothing in the terms regarding the
photography/videography/marketing work, and the professional skill that Mr Muller would
apply to them, that I consider points strongly in one direction or the other for the characterisation
task.
[146] I consider that the issue of equipment points slightly more in favour of an independent
contracting arrangement. Ordinarily, I would consider the supply of equipment – particularly
high-value, specialist equipment – by the putative employee would be a greater indicator of an
independent contracting arrangement. The cost of some other equipment was reimbursed by the
Respondent but a number of those items nonetheless appeared to remain the property of the
Applicant (albeit, being reimbursed for them). Muting the impact of this factor, however, is that
some of that equipment (such as a computer) was supplied by the Respondent. I do not consider
that the arrangements for reimbursement of (agreed) cost items points strongly in either
direction, given the relatively modest value of those items.
[147] However, the supply of equipment is not itself inconsistent with an employment
relationship. “In many forms of employment, employees provide their own uniform and bring
their own tools to work.”9 As noted, the Respondent was initially looking to engage a
photographer inhouse and the evidence suggests that the equipment that would have likely been
used would be a combination of (lower cost) equipment supplied by the Respondent or, more
likely, the employee photographer using his own equipment and being reimbursed for costs
from time to time.
[148] As to the “mode of remuneration”10, “deduction of income tax”11, and the term for
payment of a flat hourly rate with (any) GST, these features - together with the implied term
that no amounts such as annual leave, sick leave and the like were payable - are suggestive of
an independent contracting relationship. These matters were unchanged upon the Variation.
The amounts received following the issuing of an invoice had no income tax deducted, which
is also a factor suggestive of an independent contracting relationship.12 I do not consider that
the requirement for the Applicant to notify the Respondent of his absence points in either
direction.
[149] On the question of intellectual property, the express terms were silent on those matters.
A consequence of this is that the Applicant retained ownership in the works he created (subject
to the implied licence I have described), which is more strongly suggestive that those works are
assets of the Applicant’s business. While that may be the legal position, however, in reality
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neither party expressly turned their mind upon the question in any discussion between them and
both appeared to operate on a contrary assumption.
[150] At the commencement of the engagement in September 2016, Mr Muller had his own
clients and business. This was a key reason why the parties – at Mr Muller’s initiation – agreed
to describe Mr Muller as a “contractor” and to work initially at three days per week only to
ensure that Mr Muller would be able to continue and preserve his business in that respect. In
terms of the “own business” dichotomy, I also see no reason why the work of the Applicant for
the Respondent, as contemplated by the Contract, would not improve the reputation and
goodwill of Mr Muller’s existing photography business generally. However, it would appear
that the contracted activities of the Applicant were more within the Respondent’s business, than
the Applicant’s business.
[151] Nonetheless, as stated by Gordon J in Personnel Contracting, it should be recognised
that “both employees and contractors can work “for the benefit of” their employers and
principals respectively, and so that, “by itself”, cannot be a sufficient indication that a person is
an employee” (original emphasis).
[152] While the recent High Court authorities make it clear that recourse to the parties’
description or “label” of the arrangement should be approached cautiously – and in many cases
not at all – the case before me is a matter where I consider it appropriate to have regard to the
parties’ own characterisation of the Contract (unchanged upon the Variation). I do so not as a
“tie breaker”13 nor as a determinative factor, but as a factor relevant to the “whole of the
contract” 14 and which, in this case, “can shed light on the objective understanding of the
operative provisions of their contract”.15
[153] Here, the contract is not comprehensive and – indeed – is entirely oral in relation to the
limited express terms that were agreed, and the description given by the parties of their
relationship in this context is not merely a label or descriptive gloss but, in the bargain struck
by the parties before me, states in a short-hand way the very outcome that the parties were
seeking to achieve.
[154] The Respondent was originally recruiting for an employee. However, the bargain of the
parties consciously proceeded in a different direction – at the Applicant’s behest – where they
agreed a “contractor” relationship would ensue. The context for this was that the Applicant was,
at that time, working only as a contractor, he had his own existing business and customers, and
he wanted to preserve and continue them. I consider that this context helps “assist in identifying
the purpose or object of the contract”16 as it was made (and, other than the Variation, remained
unchanged).
[155] The absence of a formal documented agreement lends significance to the parties’ own
characterisation of the arrangement between them in these circumstances and reflects the
purpose or object of the contract they sought to achieve. That object was for the Applicant to
remain a contractor, but while working on fixed days for the Respondent.
[156] When considering the totality of the relationship between the parties having regard to
all the matters above, I conclude that the correct characterisation of the Contract as it was
formed in around 23 September 2016 was that of an independent contracting arrangement. The
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characterisation was not changed by the Variation. Other than the increase of the days to be
worked, I am not satisfied there is evidence that the parties expressly sought to alter to or detract
from the terms of the Contract by the Variation and I am not satisfied from the evidence that
there was a manifestation of control17 that would other change the character of the Control by
those practices, together with the Variation.
[157] It is for this reason that I find that the Applicant is not an employee and, accordingly,
his application must be dismissed.
If the Applicant was an employee
[158] With some element of self-interest, I would briefly echo the observations of Logan J in
Fair Work Ombudsman v Avert Logistics Pty Ltd [2022] FCA 84118, which were to the effect
that the matter before me was a harder one than the matter in Jamsek (or Personnel Contracting)
appeared to be. With that observation, and having regard to the time and effort by the parties in
litigating the matter to date, I would state my conclusions briefly in the event that I am wrong
in relation to my primary conclusion above.
[159] Shortly stated, if Mr Muller was an employee then it is uncontroversial that he was
“dismissed” for the purposes of s.385(a) and s.386 of the Act.
Factual findings regarding the termination
[160] The facts set out above were largely directed by the parties to the question of whether
Mr Muller was a contractor or an employee.
[161] Mr Haswell’s evidence in chief states that he was the decision-maker in relation to
terminating Mr Muller’s contract. Mr Haswell states that he did so for the following reasons:
“(a) The Applicant was resistant to requirements from the Respondent to produce works
with particular requirements, particularly to requests for photographs with more light to
give clear depictions of our products;
(b) The Applicant had repeatedly failed to meet deadlines over an extended period of
time; and
(c) Despite attempts by Mr Madden and myself to manage the two issues above, the
Applicant was either failing to improve or declining further.”
[162] The performance concerns, other than as expressed at the level of generality just stated,
were not articulated. In relation to “lighting” issues regarding Mr Muller’s photography, Mr
Muller denies there were issues with his work. As to the issue of meeting deadlines, Mr Muller
states that the deadlines “forced on me by Mr Madden were not reasonable or achievable.”
[163] In cross-examination, Mr Haswell acknowledged that none of the performance issues
were documented in writing, to his knowledge, and he was not sure whether there was anything
in writing, such as an email, with Mr Madden. Neither party drew my attention to any matter
being raised in writing with Mr Muller.
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[164] As noted above, at least by 2020, Mr Muller’s work was being managed by Mr Madden.
Mr Haswell accepted that “most” performance issues occurring in the twelve months prior to
the termination of Mr Muller’s engagement would have been managed by Mr Madden.
[165] Mr Muller gave evidence that he was being “bullied” at work by Mr Madden. That
evidence was also expressed at a level of generality, and referred to Mr Madden “overloading”
him with work and making unreasonable demands for work to be completed at the same time
as being overly prescriptive in what was required. Mr Muller said Mr Madden was “sabotaging”
his work and was “isolating” him by removing him away from others.
[166] Mr Muller stated that Mr Madden was “haranguing” him in front of staff “on more than
one occasion”. While Mr Muller’s evidence was expressed at a level of generality, he gave three
specific instances of conduct: the first two were alleged instances of (in effect) disparaging
comments about Mr Muller’s religion, made on 13 September 2021 and 31 November 2021.
The third was being “bawled out” in front of staff about his Christmas plans (which Mr Muller
had previously told Mr Madden) on 24 December 2021.
[167] Mr Madden was not called to give evidence and Mr Muller’s counsel invited me to infer
that his evidence would not have assisted the Respondent on these matters. I accept that
submission.
[168] Mr Haswell said in cross-examination that there was a “specific instance” where he
noted there were problems around “partly performance but also partly demeanour with Mr
Muller”. As a result of that, Mr Haswell says he had an informal meeting with Mr Muller –
possibly late October 2021 or early November 2021 – where he says he brought up the issues
around his “performance” and also around his “demeanour” to try and find out if there were
any kind of issues that needed to be resolved. While Mr Haswell made the point that Mr Muller
did not bring up the bullying issues in that conversation, Mr Haswell did not explain what
“performance” issues were discussed. It was put to Mr Haswell that no performance issues were
discussed. While Mr Haswell denied that proposition, so far as there were any issues discussed
I can make no findings about their content (such as they were discussed beyond the highest
level), noting that these were matters not contained in Mr Haswell’s evidence in chief and being
stated for the first time in cross-examination.
[169] Mr Haswell states that he was the sole decision maker for the Respondent in deciding
whether to termination Mr Muller’s contract. While I accept that, I consider it was not a decision
he would have made without having first consulted with Mr Madden.
[170] Mr Haswell also gave evidence, which I accept, that he had decided to terminate Mr
Muller’s engagement in December 2021. Mr Haswell’s evidence contained an advertisement
he posted “to fill the Applicant’s role” after the contract would be terminated. In fact, a contract
was signed with a new employee to that effect on 24 January 2022 before Mr Muller’s
engagement was terminated. Mr Muller says, and I accept, he was unaware of any of those
matters at those times. Mr Haswell states that he did not, at the time, tell Mr Muller about those
matters because Mr Muller was away from work for substantial parts of December 2021 and
January 2022 for reasons relating to Mr Muller’s personal circumstances. Mr Haswell perceived
those circumstances would be exacerbated if he told Mr Muller that his contract was about to
[2022] FWC 1685
34
be terminated. I accept those matters. Mr Haswell also says, and I accept, that he was not aware
of the bullying allegations prior to making his decision and those matters did not form a part of
his decision.
[171] As indicated, Mr Muller was away from work for various periods, including personal
reasons later in January 2022. He returned to work on 9 February 2022, working from home.
[172] On 14 February 2022, he met with Mr Haswell by video conference. The witnesses’
evidence of that meeting is broadly consistent, and Mr Muller was told that a person had been
found to replace Mr Muller’s position. Mr Haswell said that the reasons for the termination was
that Mr Muller had a particular style of shooting photography and the Respondent wanted to
change; he was also told that he had been slow in providing social media work.
[173] There was no letter of termination.
[174] At the meeting on 14 February 2022, Mr Haswell’s evidence was that he said he offered
to pay Mr Muller an “additional two weeks of pay as notice” if Mr Muller completed certain
work in progress.
[175] Shortly before the hearing, the Applicant filed a ‘Note on Remedy’, which set out further
information about his case on remedy. I note at the outset that reinstatement was not sought,
only compensation. Mr Muller observes he successfully mitigated his loss from 30 March 2022
and expects to remain in his employment with his current employer. Mr Muller pressed for
compensation for income lost between the period 14 February 2022 and 29 March 2022, which
he quantified at $9,804 gross. There was no substantive challenge to that calculation.
[176] Turning to the factors in s.387 of the Act, I make the following findings.
Valid reason – s.387(a)
[177] The reason advanced for the dismissal related to performance concerns, and alleged
failure to meet deadlines. As I have noted above, the performance concerns, other than as
expressed at the level of generality stated in Mr Haswell’s witness statement, were not
articulated in the evidence before me. Moreover, Mr Haswell accepted that “most” performance
issues occurring in the twelve months prior to the termination of Mr Muller’s engagement
would have been managed by Mr Madden.
[178] Mr Madden was not called as a witness. It appears that many of the views held by Mr
Haswell were necessarily informed by reports and updates provided to him over time from Mr
Madden. While I accept that the views expressed by Mr Haswell were genuinely held and those
views formed the basis for the dismissal, the evidentiary material before me falls a long way
short of establishing a valid reason was made out.
[2022] FWC 1685
35
Notification – s. 387(b)
[179] The Applicant was informed on 14 February 2022 that his engagement was to be
terminated. The evidence of the reasons provided was also at a high level of generality and it
was not suggested that any specific instances of performance relating to the reasons for
dismissal were discussed.
Opportunity to respond – s. 387(c)
[180] So far as the reasons concerned the capacity of the Applicant (they did not appear to
relate to conduct), there was no meaningful opportunity to respond. In order to respond, the
Applicant would have needed to have been given at least some specific examples of his
performance or lateness of work that underpinned the putative reasons. That detail was not
provided. In addition, the discussion that occurred reflected a decision that had been made
considerably earlier (and had been delayed due to Mr Haswell’s views about Mr Muller’s
personal circumstances at the time).
[181] I would observe that this situation also reflected Mr Haswell’s belief as to the nature of
the legal arrangements between the parties – that of independent contracting parties – which
further explains that Mr Muller was being notified of the termination and it was not going to be
a matter for further discussion. At the time the termination was notified, the position for a
replacement had been advertised, interviewed and appointed. There was no meaningful
opportunity to respond.
Support person – s.387(d)
[182] There was no request for, nor refusal of, a support person. I treat this factor neutrally.
Warning for performance – s.387(e)
[183] The evidentiary material falls considerably short of establishing that Mr Muller was
given adequate warnings about his performance.
Size of the employer – s.387(f) & (g)
[184] The employer was, at the time of the termination, no longer the small business it was in
2016, although it was not a large enterprise with (as best as I could discern), any specialist
human resources managers or expertise. At the time of termination, there were approximately
35 employees. I treat these factors neutrally.
Other matters – s.387(h)
[185] The Applicant invited me to consider the personal and economic impact on the
Applicant by the dismissal, as well as that he had had more than five years of continuous service
with no prior warnings for performance or conduct. I have had regard to those matters.
Conclusion – whether dismissal unfair
[2022] FWC 1685
36
[186] I have made findings in relation to each matter specified in section 387 as relevant.
[187] I must consider and give due weight to each as a fundamental element in determining
whether the termination was harsh, unjust or unreasonable.19
[188] Having considered each of the matters specified in section 387 of the Act, I am satisfied
that the dismissal of the Applicant was harsh, unjust and unreasonable. In short, I am not
satisfied there was a valid reason, there was inadequate procedural fairness involved and I do
not consider that there were any other matters that would dictate a different overall conclusion.
[189] On the basis that I am incorrect about the Applicant not being an employee, I am
therefore satisfied that the Applicant was unfairly dismissed within the meaning of section 385
of the Act.
[190] In relation to remedy, the Applicant does not press for reinstatement. At the time of the
hearing, he had secured alternative work and I am satisfied in all of the circumstances that
reinstatement would not be an appropriate remedy.
[191] Having found that reinstatement is inappropriate, it does not automatically follow that a
payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether
to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary
one … .”20
[192] Where an applicant has suffered financial loss as a result of the dismissal, this may be a
relevant consideration in the exercise of this discretion.21
[193] The Applicant was dismissed on 14 February 2022. In a ‘Note on Remedy’ filed by the
Applicant, that document sets out that he successfully mitigated his loss from 30 March 2022,
which he commenced permanent full-time employment elsewhere on a comparable salary to
what he earned with the Respondent. I accept those matters.
[194] The Applicant further submits, and I accept, that he expects to remain employed with
his new employer.
[195] The Applicant was not given notice (despite my conclusion that he was, contractually,
entitled to “reasonable notice”). He therefore claims by way of compensation 6 weeks’ pay,
based on the period up to 30 March 2022. The Applicant quantified that amount as totalling
$9,804 gross.
[196] There was not any serious challenge to the Applicant’s calculations, just stated, and I
accept them. Were it not for the termination of his engagement, if the requirements of s.387
were to be complied with, I consider it likely that the Applicant would have continued to work
for the Respondent for at least a further 12 weeks. In reaching this conclusion, I have had regard
to (on the Applicant’s evidence) the strained relationship between him and Mr Madden and, on
the Respondent’s account, its concerns.
[197] I am satisfied that the Applicant would have worked, or been entitled to be paid, for the
full six weeks that followed his dismissal on 14 February 2022.
[2022] FWC 1685
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[198] Save for the matter of the Respondent’s offer of further work, which I consider
separately below, I do not consider there is any reason to discount the above amounts further.
There was no misconduct and therefore no reason to discount on account of that factor. I note
also that, as an employee, he would have been entitled to 5 weeks’ notice under s.119 of the
Act given his service and age (the latter being above 45 years).
[199] On the question of mitigation, the Respondent contends that the Applicant was offered
what was, in effect, two weeks’ paid work to complete various jobs. The Applicant did not
accept that work. I have considered whether the amount of six weeks pay, described above,
should be further discounted. I am not satisfied that it should. The two weeks’ work was not a
notice period. The Applicant’s engagement had, at that stage, been terminated. The two weeks’
work on offer was, in substance, a stand-alone two week engagement. Taking that offer would
have involved some distraction from the Applicant’s more important focus of securing
permanent work. The Applicant, to his credit, did so effectively from 30 March 2022, and I
infer he was necessarily taking active steps prior to then. While these matters are always a
question of degree, I am satisfied it was not unreasonable for the Applicant to refuse a short-
term engagement with the entity that had just ended unhappily for him while he ought to have
been (and, I infer, was) focussing on securing permanent alternative work.
[200] If the Applicant was an employee, then I would order, pursuant to s.392(1) of the Act
that the Respondent is to pay to the Applicant $9,804 for the remuneration lost, taxed according
to law.
[201] An order22 giving effect to my decision dismissing the application will be issued
separately.
DEPUTY PRESIDENT
Appearances:
G Lake of Counsel for the Applicant
T Borgeest of Counsel for the Respondent
Hearing details:
2022.
Melbourne (by video link via Microsoft Teams):
June 30.
Printed by authority of the Commonwealth Government Printer
PR743250
OF THE WORK C MMISSION THE SEAL
[2022] FWC 1685
38
1 Exhibit SM-2 to Mr Muller’s first statement.
2 Cited approvingly by the Full Bench in Mohammad Amin (Darius) Souraki Azad v Hammond Park Family Practice Pty Ltd
T/A Jupiter Health Warnbro [2022] FWCFB 66 (Catanzariti VP, Easton DP, McKinnon C).
3 Cited with approval by Ward CJ in Eq (as her Honour then was) in Anthony v Morton [2018] NSWSC 1884 at [398].
4 See also Personnel Contracting, [174] (Gordon J).
5 Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1902] 2 KB 660 at 669 (Collins MR); John McCann &
Co (a firm) v Pow [1975] 1 All ER 129 at 131-132 (Lord Denning MR). Pacific Brands Sport & Leisure Pty Ltd v
Underworks Pty Ltd (2006) 149 FCR 395 at [32] (Finn and Sundberg JJ).
6 Copyright Act, s.196(3).
7 Concrete Pty Ltd v Paramatta Design & Developments Pty Ltd (2006) 299 CLR 577.
8 Jamsek, [69] (Kiefel CJ, Keane and Edelman JJ), and [105] (Gordon and Steward JJ).
9 Personnel Contracting, [175] (Gordon J).
10 Personnel Contracting, [174] (Gordon J), [113] (Gageler and Gleeson JJ); Stevens, at 24 (Mason J).
11 Personnel Contracting, [113] (Gageler and Gleeson JJ); Stevens, at 24 (Mason J) and also at 36-37 (Wilson and Dawson
JJ).
12 Cf, Stevens, op cit, per Mason J at 24 and Wilson and Dawson JJ at 36-37.
13 Cf, Personnel Contracting, [79].
14 Personnel Contracting, [184].
15 Personnel Contracting, [66].
16 Personnel Contracting, [175] (emphasis added).
17 Personnel Contracting, [42].
18 At [34].
19 ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon
Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice
[1999] FCA 1836, [6]–[7].
20 Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter [2014]
FWCFB 7198, [9].
21 Vennix v Mayfield Childcare Ltd [2020] FWCFB 550, [20]; Jeffrey v IBM Australia Ltd [2015] FWCFB 4171, [5]-[7].
22 PR746447
https://www.fwc.gov.au/documents/decisionssigned/html/pr915674.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2014fwcfb7198.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2014fwcfb7198.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2020fwcfb550.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2015fwcfb4171.htm
https://www.fwc.gov.au/documents/awardsandorders/html/pr746447.htm