1
Fair Work Act 2009
s.365 - Application to deal with contraventions involving dismissal
Mr Abhishek Kumar
v
Link Realty International Pty Limited
(C2024/4045)
DEPUTY PRESIDENT ROBERTS SYDNEY, 23 SEPTEMBER 2024
Application to deal with contraventions involving dismissal – employee or independent
contractor – whether applicant dismissed
[1] The Applicant in this matter, Mr. Abhishek Kumar, has filed an application alleging that
he was dismissed by his former employer, Link Realty International Pty Ltd (Respondent) in
contravention of Part 3-1, General Protections, of the Fair Work Act 2009 (Cth) (Act). Mr.
Kumar alleges that his dismissal occurred on 6 June 2024.
[2] The Respondent disputes that the Applicant was dismissed in contravention of Part 3-1,
or at all. They say the Applicant was, at the relevant time, engaged by them as an independent
contractor and not an employee. Accordingly, they say The Applicant was not dismissed within
the meaning of s.386 of the Act because there was no relationship of employment between the
parties. Further and in the alternative, the Respondent submitted that its actions on 6 June 2024
did not amount to a dismissal.
[3] For the Commission to be able to deal with an application of this kind, it must be
established that an applicant has been dismissed. It is not sufficient that a dismissal is merely
alleged to have occurred. A dispute as to whether a dismissal has occurred has been described
as an antecedent dispute going to the question of whether an application has been made. It is,
in the words of the Full Court of the Federal Court of Australia, “a dispute that must be resolved
before the powers conferred by s.368 can be exercised at all.”1
Background and Contentions
[4] The Applicant commenced employment in the Respondent’s real estate business on or
about 3 October 2023. He was at that time engaged as a casual employee. He signed a written
contract of employment with the Respondent. He was paid an agreed hourly rate, including a
casual loading. He was paid fortnightly. His duties primarily involved the inspection of
residential rental properties, the preparation of incoming and outgoing inspection reports
relating to those properties, routine inspections and providing access to rental properties by
third parties. He was allocated work by the Respondent’s scheduling team.
[2024] FWC 2596
DECISION
AUSTRALIA FairWork Commission
[2024] FWC 2596
2
[5] The Applicant alleges that at some point in late 2023 he raised complaints with his
manager, Mr. Knight, about what he said was the non-payment of penalty rates and overtime.
He said that after his complaints, he was treated differently by the Respondent. He said he was
subjected to racial abuse. He said his hours were reduced and another person was engaged to
perform the work he was performing. He said his complaints about his treatment were ignored.
[6] The Applicant said that Mr. Knight offered him another contract in or about March 2024.
The contract refers to the Applicant working as an independent contractor and opening
properties, conducting inspections and preparing reports for $50 per property. The Applicant
said he was told he should sign the contract or he would not receive any further work from the
Respondent. He did not sign. He complained again to Respondent’s management. Another
contract was offered to the Applicant in April 2024. It provided for the Applicant to work as an
independent contractor at inspection rates of $150 per property. The Applicant said he was told
if he did not sign the contract he would be dismissed. He signed the contract. The contract is
dated 9 April 2024 (April contract).
[7] The Applicant continued to work for the Respondent. He submitted an invoice dated 31
May 2024 to the Respondent for his work. It covered work performed by him for the month of
May 2024 and included the Applicant’s Australian Business Number (ABN).
[8] A dispute arose over the payment of the May invoice. On 6 June 2024 Mr. Knight wrote
to the Applicant and said that the invoice would be paid on that day but that he did not “believe
that the ongoing relationship is tenable and (he) would remove (the Applicant) from systems
today.” The Applicant replied by email shortly after saying “I also don't feel comfortable
working with you guys anymore. Please make sure that my invoice is paid in full. I will send
the invoice for the work done till yesterday. Please make efforts to pay it asap. Thanks.”
[9] The Respondent said that the change to contracting arrangements was driven by a
shortage of capacity for the services required. They said they wanted to create relationships
with external parties who could provide the inspection services to meet the growing demand.
The Respondent said the Applicant did not object to working as a contractor but merely asked
to be paid at a higher rate. They said the Applicant in fact volunteered to contract to provide all
of the inspection services they needed and said he would employ others himself to do the work.
According to the Respondent, they declined this offer as they did not think it would meet their
needs.
[10] The Respondent said that there were no changes to the tasks performed by the Applicant
as a contractor from those he performed as a casual employee and no change to the system of
work allocation or the oversight of the Applicant’s work by the Respondent. However, for
reasons set out below, it is not necessary or appropriate to take into account the history of how
the parties’ relationship developed in practice. The Respondent submitted that the change from
an hourly rate as a casual employee to a task-based payment system as an independent
contractor meant that the Applicant earned more for the work he undertook than he would have
earned performing that work as a casual employee.
[11] The Applicant advanced two arguments in response to the Respondent’s contention that
he was not dismissed. First, he said that even though he had signed the April contract which
provided for him to work for the Respondent as an independent contractor, his casual
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employment arrangements continued to subsist alongside the arrangement that had been entered
into through the April contract. Second, the Applicant said that the April contract did not create
a relationship of principal and independent contractor between the parties and that the
relationship under the terms of the contract was that of employer and employee.
[12] The first of these arguments can be quickly dispensed with. Clause 17, General
Provisions, of the April contract provides, relevantly, as follows:
17.1 This contract supersedes any prior discussion, agreement or understanding on
anything connected with the subject matter of this Contract, including but not limited to
any prior employment agreement you had with us.
[13] In my view, having regard to the balance of the terms of the April contract which
regulated the terms on which the Applicant was to work for the Respondent after the contract
was entered into, the Applicant was no longer engaged by the Respondent as a casual employee
under the original contract of employment but was to provide his services in accordance with
the terms of the April contract.
[14] The second argument necessitates a closer analysis of the rights and obligations of the
parties created by the terms of the contract that had been entered into by them in April 2024.
That analysis is to be conducted in accordance with the principles described by the High Court
of Australia in the matters of Construction, Forestry, Maritime, Mining and Energy Union v
Personnel Contracting Pty Ltd2 (Personnel) and ZG Operations Australia Pty Ltd v. Jamsek &
Ors3.
[15] The principles set out by the Court in those decisions have been conveniently
summarised4 by Wigney J in the matter of JMC Pty Limited v Commissioner of Taxation [2022]
FCA 750 as follows:
First, where the rights and duties of the parties are comprehensively committed to a
written contract, the legal rights and obligations established by the contract are decisive
of the character of the relationship provided that the validity of the contract has not
been challenged as a sham, or that the terms of the contract have not been varied,
waived or are subject to an estoppel. The task is to construe and characterise the
contract made between the parties at the time it was entered into.
Second, in order to ascertain the relevant legal rights and obligations, the contract of
employment must be construed in accordance with the established principles of
contractual interpretation. In that respect, regard may be had to the circumstances
surrounding the making of the contract, as well as to events and circumstances external
to the contract which are objective, 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 putative employee applied for and the nature and extent of any tools
or equipment they have to supply for that job may also be relevant. It is, however,
generally not legitimate to use in aid of the construction of a contract anything which
the parties said or did after it was made.
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Third, and flowing from the first two principles, the characterisation of the relationship
between the parties is not affected by circumstances, facts or occurrences arising
between the parties that have no bearing on their legal rights. A “wide-ranging review
of the entire history of the parties’ dealings” is neither necessary nor appropriate. 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.
It follows that the fact that the parties’ subsequent conduct may not have precisely
aligned with their contractual rights and obligations, or the fact that a particular
contractual right may have never been exercised or utilised, will generally be irrelevant
when it comes to characterising the relationship. That is so unless the manner in which
the parties conducted themselves after entering into the contract was such as to establish
that the contract was a sham, or that the contract had been varied, or that certain rights
under the contract were subject to an estoppel.
Fourth, the contractual provisions that may be relevant in determining the nature of the
relationship include, but are not limited to, those that deal with the mode of
remuneration, the provision and maintenance of equipment, the obligation to work, the
hours of work, the provision for holidays, the deduction of income tax, the delegation of
work and the right to exercise direction and control.
Fifth, the characterisation of the relationship as one of service or employment involving
an employer and employee, as opposed to a relationship involving an independent
contractor providing services to a principal, often hinges on two 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. 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. Neither of those considerations are determinative and both
involve questions of degree.
Sixth, a “label” which the parties may have chosen to describe their relationship is not
determinative of the nature of the relationship and will rarely assist the court in
characterising the relationship by reference to the contractual rights and duties of the
parties. The parties’ “legitimate freedom to agree upon the rights and duties which
constitute their relationship” does not “extend to attaching a ‘label’ to describe their
relationship which is inconsistent with the rights and duties otherwise set forth” – to
permit otherwise would elevate the freedom to “a power to alter the operation of statute
law to suit … the interests of the party with the greater bargaining power.
The characterisation of a relationship as being either one of employer and employee,
or one involving the engagement of an independent contractor, is ultimately an
evaluative judgment that takes into account the totality of the parties’ contractual rights
and obligations. The exercise may not necessarily be straightforward because, in some
cases at least, the parties’ contractual rights and obligations may point in different
directions. The evaluative exercise also should not be approached on the basis that there
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is some checklist against which ticks and crosses may be placed so as to produce the
right answer. Some degree of uncertainty is unavoidable, particularly in the case of
many modern-day work or service contracts. (references omitted)
Terms of the Contract
[16] The parties in this case committed the terms of their relationship to writing in the April
contract. The terms are reasonably comprehensive. I have considered the terms of that contract
in their totality. The contract, titled ‘Service Retainer Agreement’, describes the Applicant as
‘Contractor’, and provides that under the terms of the contract he is ‘to provide the service set
out in Schedule 1 and perform the job set out in Schedule 2.’ Schedule 1 describes the service
to be provided as ‘entry inspections, exit inspections, successfully lease properties, new
properties under management.’ There was no schedule 2 in evidence.
[17] Clause 2, Responsibilities, of the April contract provides as follows:
Responsibilities
2.1 Your duties are set out in this Contract;
2.2 During the Contract period you must:
(1) promote our interests and those of our Related Bodies Corporate;
(2) use your best endeavours to protect and promote our reputation and that of
our Related Bodies Corporate;
(3) not act in conflict with our interests and those of our Related Bodies
Corporate;
(4) be honest and diligent and perform the duties assigned to you to the best of
your knowledge and abilities; and
(5) devote the whole of your time, attention and skill during normal business
hours, and at other times as reasonably necessary, to your duties.
2.3 We may direct you to perform or not to perform any part of your duties at any time.
[18] The April contract is for a fixed term of one year commencing on 9 March 20245.
[19] The amounts payable by the Respondent to the Applicant are described in clause 4 as
follows:
4 Retainer Fee
4.1 Your Retainer Fee is payable on Entry Inspections and Exit Inspections, Open
Homes and new properties under management.
4.2 Your Retainer Fee includes all amounts due to you for work performed by you for
this Contract
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4.3 You will receive Retainer Fee of:
Entry Inspection and Exit Inspection $150 ex GST
Open Inspection $150 ex GST
New Management Agreement $100 ex GST of the leasing fee for 2 years
4.4 You will invoice us on every first of month for the jobs completed in the previous
month.
[20] Clause 5 obliges the Applicant to return the Respondent’s property on request or on
termination of the contract, whichever occurs first. Such property is said to include ‘documents,
equipment, telephones, personal digital assistants, software, computer information (wherever
it is stored), keys and access cards.’ The clause also obliges the Applicant to keep such property
in good working order and to ensure the security of such property in his possession, power or
control.
[21] Clause 6, Information technology, provides, amongst other things, that ‘(A)ll electronic
communication systems provided by (the Respondent) are (the Respondent’s) property and may
only be used for authorised purposes in accordance with this Agreement and our policies. This
includes but is not limited to mobile phones, internet, tablet devices and computers.’ It also
provides that the Respondent may monitor, access and record the Applicant’s use of
communications systems, including emails and internet sites, prevent the delivery of emails that
are in breach of company policies or the contract and prohibits the use of such communication
systems by the Applicant for ‘personal commercial purposes.6’
[22] Clause 7 contains the termination provisions and allows for termination on one month’s
notice or with immediate effect in the case of serious misconduct by the Applicant. Where
notice is given, the clause provides that the Respondent may require the Applicant to:
(1) not attend our premises for the purpose of performing your duties, and instead
predominantly remain at your home during your standard hours of work, being
available on call to attend work and perform any duties required by us;
(2) perform duties other than your normal duties, including less senior or significant
duties;
[23] Clause 10 provides:
10 Restraint during the course of the Contract
10.1 During the course of the Contract, you must not, without our prior written consent:
(1) act as an officer or employee of, or as a consultant or adviser to any other
corporation, firm, organisation or person;
(2) take up any other position with any other corporation, firm, or organisation
(whether paid or unpaid);
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(3) hold any shares or securities which create or may create a conflict of interest.
[24] Clause 14, Policies, provides, inter alia, that the Applicant agrees to comply with any
policies and procedures that the Respondent may implement, as varied from time to time by the
Respondent in their discretion.
[25] Clause 16 provides that the Applicant warrants to the Respondent that he has not entered
into, and will not enter into, any agreement in conflict with the contract.
Consideration
[26] A number of the terms referred to above point strongly to the existence of an
employment relationship. First, clause 2.3 expressly confers on the Respondent the contractual
right to direct the performance or non-performance of any part of the duties the Applicant is
required to perform, at any time. By this clause the Respondent has reserved to itself the right
to control and determine what duties that are required under the contract are to be performed
and how and to what extent they are to be performed by the Applicant. Under this clause, such
a right can be exercised by the Respondent at any time. As the scope of the direction is
unconstrained by the term itself, it also permits the Respondent to direct where it is that the
Applicant is to perform his duties.
[27] Mr. Knight gave evidence that there were discussions between himself and the
Applicant at the time of the change from casual employee to the ‘contractor’ arrangement and
that it was understood and accepted from those discussions that the allocation of work by the
Respondent to the Applicant would be done by the Respondent’s scheduling team in the same
way as work was allocated when the Applicant was engaged as a casual employee. From this
evidence I conclude that there was an oral term of the contract that the Respondent would
control the flow and allocation of work to the Applicant in the same way it did when the
Applicant was working as a casual employee.
[28] Should there be any room for doubt as to the extent to which the Applicant is subject to
the direction and control of the Respondent, clause 14 provides that the Applicant is also obliged
to comply with any policies and procedures promulgated by the Respondent. Those policies
and procedures may be varied by the Respondent from time to time in their absolute discretion.
[29] Clause 2.2(5) obliges the Applicant to devote the whole of his time, attention and skill
during normal business hours, and at other times as reasonably necessary, to his duties. The
Respondent has the capacity to call on the Applicant to perform his duties at any time during
normal business hours and even outside those hours, subject to the reasonableness requirement.
In combination with clause 2.3, the Respondent therefore has very substantial control over when
the Applicant performs his work. These are the kinds of obligations that commonly flow from
a contract of service between an employer and an employee.
[30] Second, the Respondent has limited the possibility that the Applicant could work
elsewhere for some other entity whilst discharging his obligations under the contract. Clause
10.1(2) provides that the Applicant must not take up any other position with any other firm,
whether paid or unpaid, during the term of the contract without the Respondent’s prior written
consent. This is reinforced by clause 16 under which the Applicant has warranted not to enter
into any agreement in conflict with the contract. This type of restriction, particularly in
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combination with the requirement for the Applicant to devote himself to the Respondent during
ordinary business hours and beyond, runs counter to the idea that the Applicant is able to operate
independently of the Respondent by working for, or even offering his services to, other entities
whilst ever he is bound by the terms of the contract.
[31] Third, the April contract requires the personal performance by the Applicant of the work
referred to in the contract. There is no provision permitting the delegation of the performance
of that work7. The right to delegate, which has been said to be an important indication of an
independent contractor relationship,8 is not present here.
[32] Fourth, clause 7 specifically authorises the Respondent to direct where, when and what
type of duties the Applicant may perform in circumstances where notice of termination of the
contract has been given by the Respondent.
[33] Fifth, the contract provides that the Applicant must promote the interests of the
Respondent and its related bodies corporate, protect and promote the reputation of those entities
and not to act in a way that is in conflict with the interests of those entities. The Applicant is
plainly not at liberty to engage in commercial activities that conflicts with those of the
Respondent and in fact has a positive duty to promote the interests of the Respondent. He is
also prevented by clauses 6.1 and 6.4 from using the Respondent’s communications systems
for ‘personal commercial purposes.’ These requirements indicate that the Applicant interests
are subordinate to those of the Respondent’s business interests and that he would lack the
common commercial independence of a separately functioning business entity. They indicate
that the Applicant is working in the service of the Respondent’s business rather than his own.
[34] Clause 5 imposes certain obligations on the Applicant in relation to the Respondent’s
property which is in his possession or control without actually obliging the Respondent to
provide such property to the Applicant. Clause 6 refers to information technology resources of
the Respondent which might be supplied to the Applicant, including mobile phones, tablets and
computers. To the extent that these resources are provided, the Respondent has a contractual
right, subject to relevant statutory provisions, to monitor their use, use them for surveillance
purposes and even prevent delivery of emails or access to certain internet sites by the Applicant.
The Applicant is not obliged by these or other clauses to provide equipment of this kind on his
own account as might be expected of someone working as a bona fide independent contractor.
[35] The mode of remuneration provided for by clause 4 is task-based rather than by hourly
rate. Of course, employees do not necessarily have to be paid by a time-based method of
payment. Piecework rates have a long history in industries such as horticulture9 and
commission-based payment systems for example, are not uncommon,10 including in the real
estate sector. The rate set out in the contract for each task is exclusive of GST. Beyond this
there is no mention of the taxation arrangements to apply under the terms of the contract. The
Applicant is required to invoice monthly for his work. These provisions may more closely align
with a relationship of principal and independent contractor than with that of a contract of
service. They are operative terms regulating the rights of the parties, but they are not
determinative.
[36] Mr. Knight gave evidence that it was the Applicant who offered to perform work on an
independent contractor basis using his ABN and even offering to employ other people to
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provide the services. The Applicant denied that this was the case. I prefer the evidence of the
Applicant on this point and conclude that the arrangement was entered into at the initiative of
the Respondent. The Applicant accepted that he had an ABN. He said that he had obtained that
ABN some years ago. There was no basis in the evidence to conclude that the taxation
arrangements were ‘foundational’ as was the case in EFEX Group Pty Ltd v. Bennett11 where
the Court concluded that a trust arrangement had been set up by a contracting party for the very
purpose of the impending commencement of work and the attendant tax benefits of the structure
that had been created12. I do not regard the taxation and remuneration arrangements as being a
sufficient basis to displace the many rights and obligations in the contract that are indicative of
an employment relationship.
[37] Nor does the fact that the April contract describes the Applicant as the ‘contractor’ carry
much weight in the overall analysis. The plurality in Personnel13 said that generally speaking,
the opinion of the parties on a matter of law is irrelevant and that it is erroneous in point of
principle to use the parties’ description of their relationship to resolve uncertainty.
[38] Personnel also stands for the proposition that whilst not determinative, it can be useful
to consider whether someone is conducting their own independent business as opposed to
serving in the business of another as a guide in assessing the true legal character of the
relationship. Here there was very little if any scope for entrepreneurship on the part of the
Applicant. He was thoroughly integrated into the business of the respondent by the terms of the
contract in the same way he was as a casual employee. He could not place his own commercial
interests above those of the Respondent. He was not operating an independent business.
[39] The level of control retained by the Respondent over the Applicant’s work through the
contract was extensive if not complete. They could direct what type of duties were to be
performed and how, when and where they were to be performed. The Applicant was at the
Respondent’s disposal for all ordinary business hours and potentially beyond those hours. He
could not work for anyone else. The Applicant was, in my view, an employee of the Respondent
because of the rights and obligations created by the April contract.
[40] The Respondent contended that the Applicant was not dismissed because he was not
employed. They also argued that in any event, viewed in its proper context, the email of 6 June
2024 did not constitute a dismissal. I have already dealt with the first of these objections and
decided it in the Applicant’s favour. The second objection is also without substance. The
correspondence of 6 June 2024 where the Respondent said that they did not believe the
relationship with the Applicant was tenable and that he would be removed from their systems,
was, on any view, a termination on the initiative of the employer within the meaning of
s.386(1)(a) of the Act. I do not accept as the Respondent contended, that the Applicant was
simply being removed from certain channels of internal communication because of other
difficulties that had arisen in the relationship. The termination was in clear and unequivocal
terms. It ended the employment relationship. It was brought about by the Respondent. The
Respondent’s actions resulted directly and consequentially in the termination of Mr. Kumar’s
employment. It was intended to do so or had that probable result.14
[41] The Applicant was dismissed by the Respondent on 6 June 2024. The Respondent’s
jurisdictional objection to the application is dismissed. The matter will be relisted for
conference on a date to be determined.
[2024] FWC 2596
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DEPUTY PRESIDENT
Appearances:
Mr Abhishek Kumar on his own behalf.
Mr Cameron Knight for the Respondent.
Hearing details:
10:00am AEST on Tuesday, 27 August 2024 via Microsoft Teams Video.
Printed by authority of the Commonwealth Government Printer
PR779465
1 Coles Supply Chain Pty Ltd v. Milford [2020] FCAFC 152 at [76].
2 [2022] HCA 1.
3 [2022] HCA 2.
4 See also Chambers and O’Brien v Broadway Homes Pty Ltd [2022] FWCFB 129 at [74].
5 Clause 3 and Schedule 1 item 2.
6 Clauses 6.1 and 6.4.
7 See Chambers and O’Brien op cit at [75].
8 JMC Pty Ltd v. Commissioner of Taxation [2023] FCAFC 76 at [73].
9 Application by the Australian Workers’ Union [2021] FWCFB 5554.
10 See Chambers and O’Brien op cit at [84].
11 [2024] FCAFC 35.
12 Ibid at [45] and [46].
13 At [66] and [79].
14 See Mohazab v. Dick Smith Electronics Pty Ltd [1995] IRCA 625, 62 IR 200; Khayam v. Navitas English Pty Ltd [2017]
FWCFB 5162; O’Meara v. Stanley Works Pty Ltd PR973462.
O IMMISSION THE SEA
https://www.fwc.gov.au/documents/decisionssigned/html/2022fwcfb129.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2021fwcfb5554.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb5162.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb5162.htm
https://www.fwc.gov.au/documents/decisionssigned/html/pr973462.htm
