DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Paul Barratt-Hassett
v
PERC Group Pty Ltd T/A Perc Tiling
(U2018/3138)

Application for unfair dismissal remedy – employee or independent contractor – whether minimum employment period met.

[1] On 26 March 2018 Mr Paul Barratt-Hassett made an application to the Fair Work Commission pursuant to s.394 of the Fair Work Act 2009 for a remedy in respect of his alleged unfair dismissal by PERC Group Pty Ltd T/A Perc Tiling (Perc Tiling).

[2] In his unfair dismissal application, Mr Barratt-Hassett stated that he commenced employment with Perc Tiling on 20 March 2017 and that his dismissal took effect on 19 March 2018.

[3] On 4 May 2018, Perc Tiling filed an objection to the application on the grounds that it is a small business employer and that Mr Barratt-Hassett had not completed the minimum employment period, including because of periods of absence or leave which are excluded for the purpose of calculating the minimum employment period.

[4] In response, Mr Barratt-Hassett contended that his employment with Perc Tiling commenced at an earlier date than was stated in his application, that being 23 January 2017 rather than 20 March 2017. Perc Tiling on the other hand asserted that Mr Barratt-Hassett was engaged as an independent contractor for the period 23 January to 19 March 2017.

[5] In order to determine whether or not Mr Barratt-Hassett has met the minimum employment period, the nature of the relationship between Mr Barratt-Hassett and Perc Tiling during the period 23 January 2017 and 19 March 2017 (the Relevant Period) must be determined. If Mr Barratt-Hassett was an employee during the Relevant Period, his employment with Perc Tiling has exceeded one year and therefore satisfied the minimum employment period. If he was an independent contractor during the Relevant Period, his employment did not meet the minimum employment period.

[6] The matter was listed for hearing by telephone on 25 June 2018. Mr Barratt-Hassett appeared on his own behalf and Mr C Barron, solicitor, appeared with permission for Perc Tiling.

Relevant legislation

[7] Section 382(a) of the Act provides:

“A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and ...”

[8] The definition of a minimum employment period is defined in s.383 of the Act:

“383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.”

[9] Section 23 of the Act sets out the meaning of ‘small business employer’, which is not repeated here.

Submissions and Evidence

Perc Tiling

[10] Perc Tiling submits that Mr Barratt-Hassett was employed from 20 March 2017 and his employment ended by reason of redundancy on 19 March 2018. It submits that at the relevant time, the business employed fewer than 15 employees, and was therefore a ‘small business employer’ within the meaning of s.23 of the Act. Mr Barratt-Hassett did not dispute that Perc Tiling was a small business employer.

[11] Perc Tiling further submits that during his employment Mr Barratt-Hassett took three weeks of unpaid, unauthorised leave and this period cannot count towards the length of his continuance service.

[12] In support of its contention that Mr Barratt-Hassett provided services as an independent contractor during the Relevant Period, Mr Peter Russ (Director of Perc Tiling) gave oral evidence and provided a statutory declaration 1. Mr Russ stated that:

“Mr Barrett-Hassett's engagement as an Independent Contractor

20. The services Mr Barrett-Hassett provided to the company between 23 January 2017 and 20 March 2017 were provided as an independent contractor and not an employee.

21. Mr Barrett-Hassett advertised his services to the company as an independent contractor.

22. During this time, Mr Barrett-Hassett was very clear with me that he wanted to be engaged to provide services as an independent contractor and not as an employee.

23. Mr Barrett-Hassett represented himself as an all-rounder in the tiling and construction industry, and claimed to contract to several companies and to be able to provide a wide range of services in the industry.

24. Mr Barrett-Hassett wanted to be an independent contractor because he wanted to control how his work was performed and have the flexibility to choose the days he worked. He would boast to the company's employees that being a contractor offered a great lifestyle, as there was a high demand for contractors in our industry.

25. It was not a condition of Mr Barratt-Hassett’s provision of services to the company that he wore a uniform. Mr Barrett-Hassett did not have to wear a uniform during the time he was an independent contractor and I cannot recall if Mr Barratt-Hassett wore a uniform with the company's logo on it, however if he did this would have been his preference.

26. During the time Mr Barrett-Hassett contracted to the company, Mr Barrett-Hassett controlled how his services were performed.

27. During the time Mr Barrett-Hassett contracted to the company, he was entitled to perform services for other companies or work wherever he wanted. I am not aware if Mr Barrett-Hassett performed services for others while he was contracting to our company.

28. During the time Mr Barrett-Hassett contracted to the company, he was responsible for paying his own tax as he was an independent contractor.

29. During the time Mr Barrett-Hassett contracted to the company, he did not receive paid holidays or sick leave.

30. During the time Mr Barrett-Hassett contracted to the company, he would require weekly payment after the provision of his services.

31. To be paid Mr Barrett-Hassett supplied the company with invoices. As per the Australian Taxation Office’s requirements for contractors, these invoices would have his name, ABN and address on them.

32. Mr Barrett-Hassett asked me if for conveyance (sic), he could also use the company's timesheets to record the hours he provided his services. He would provide the company with his invoice and a company timesheet each week.

33. During the time Mr Barrett-Hassett contracted to the company, he would build relationships with the company's existing clients. I'm aware that he represented himself as a contractor to numerous existing clients of our company. In this respect, he promoted his own independent contracting services.

34. Mr Barrett-Hassett was responsible for supplying his own personal protective equipment and other equipment required to perform his services. Tiles, cement and other tiling materials were purchased by the client. It is not the responsibility of contractors to supply these materials.

35. There was a substantial benefit to Mr Barrett-Hassett in contracting to the company. He was able to choose his own hours and work for whoever he wanted. The company would have preferred Mr Barrett-Hassett to be engaged as an employee, so the company had more control over Mr Barrett-Hassett.

36. As a result, the company requested that Mr Barrett-Hassett enter a contract of service with the company, and Mr Barrett-Hassett accepted this on 20 March 2017.”

Mr Barratt-Hassett

[13] Mr Barratt-Hassett contends that he was employed by Perc Tiling for a period in excess of one year. He states that he commenced working for Perc Tiling on 23 January 2017 and was not an independent contractor during the Relevant Period. Rather, the nature of the relationship between himself and Perc Tiling was an employment relationship.

[14] Mr Barratt-Hassett says that he responded to an advertisement on www.seek.com.au for a full-time tiler position in early January 2017. He was offered a position of tilers hand on a full-time basis on a lower wage with the potential to become a tiler with a pay rise once he had proven himself.

[15] Of the relationship between the parties during the Relevant Period, Mr Barratt-Hassett states in his written statement, confirmed during the hearing 2:

“(7) I was referred to and treated as an employee, and from the minute I was offered the job I believed I was in an employment relationship and was treated as such and behaved as such.

(8) All work including hours worked, time and place of work were all controlled and demanded by PERC Tiling, consistent with an employment relationship.

(9) I was given an employee welcome pack, which included;

a) x1 PERC timesheet.

b) x1 employee payroll form.

c) x1 employee personal details form.

Along with a welcome email and instructions to submitting timesheets and getting paid.

(10) PERC Tiling treated me as an employee during my employment from 23^rd of January to 19^th of March; in fact I was bullied by one of my managers at the time of my employment. There were no corrections to my reality of employment position i.e. that his (Brian’s) management actions were conducted in an unreasonable manner.

Meaning that Mr Russ never corrected my assumptions, wording and implications that I was totally in the belief that I was an employee and that Brian was my boss.

Peter could have said, as an independent contractor you are not covered by legislation like employees are, we advice (sic) you to seek legal advice. In fact there was no mention in any way that I was delusional in my demands for a work place intervention.

Furthermore Mr Russ gave reference to its own company policies and the legislation consistent with an employment relationship.

(11) During such time, I was paid for my labour (being a combination of time, skill and effort) in exchange for remuneration.

(12) During such time, I served my employer PERC Tiling in his, the employer’s, business and no one else.

(13) During such time, I served my employer PERC Tiling in a fulltime capacity and was subservient in his decision making and was economically dependent upon PERCs work. I averaged 35 to 45 hours per week; PERC was my primary source of income, my only source of income.

(14) I seeked (sic) the security of a fixed and certain remuneration as agreed upon in the first meeting and had no interest or desire in exposure to the risk of loss in return for the chance of profit.

(15) I never signed nor was I asked to sign an independent contractor’s contract.”

[16] During the hearing Mr Barratt-Hassett was questioned as to his reasons for completing his application with a commencement date of 20 March 2017 if he genuinely considered that his employment commenced on 23 January 2017. His explanation was that he had spoken to different people from the Fair Work Commission and Fair Work Ombudsman and was advised that the dates of his employment period (ie commencing on 20 March 2017) would meet the minimum employment period.

[17] Mr Barratt-Hassett placed emphasis on his evidence that he responded to a SEEK advertisement and when he commenced work he received a ‘welcome pack’ which included a timesheet, employee payroll form and employee personal details form, suggesting that he had accepted employment rather than an independent contract arrangement.

[18] In his oral evidence, Mr Barratt-Hassett denied that he wanted the ‘freedom of a contractor’ and that he enjoyed the flexibility being an independent contractor. He maintained that there was no doubt in his mind that he was given the job as an employee in January 2017. He said that he moved his family to Queensland to take up this position and would not have done so had it not been for the offer of employment.

[19] He gave evidence that on 20 March 2018 he was “approached by Mr Russ to go on to a casual position”. The only changes, he asserted, were that he was given a vehicle to make deliveries in addition to his normal duties, he was no longer required to submit tax invoices, and PERC Tiling started paying tax on his behalf from 20 March 2018. Notwithstanding the issuing of invoices to PERC Tiling, Mr Barratt-Hassett argued that he was told to do so in order for him to get paid each week. He further contended that he submitted an invoice weekly and not after the end of a job.

Consideration

[20] The general law approach to distinguishing between employees and independent contractors was summarised by the Full Bench in Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario (French Accent)³ as follows:

“(1) In determining whether a worker is an employee or an independent contractor the ultimate question is whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part? This question is concerned with the objective character of the relationship. It is answered by considering the terms of the contract and the totality of the relationship.

(2) The nature of the work performed and the manner in which it is performed must always be considered. This will always be relevant to the identification of relevant indicia and the relative weight to be assigned to various indicia and may often be relevant to the construction of ambiguous terms in the contract.

(3) The terms and terminology of the contract are always important. However, the parties cannot alter the true nature of their relationship by putting a different label on it. In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole: the parties cannot deem the relationship between themselves to be something it is not. Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.

(4) Consideration should then be given to the various indicia identified in Stevens v Brodribb Sawmilling Co Pty Ltd and the other authorities as are relevant in the particular context. For ease of reference the following is a list of indicia identified in the authorities:

● Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like.

Control of this sort is indicative of a relationship of employment. The absence of such control or the right to exercise control is indicative of an independent contract. While control of this sort is a significant factor it is not by itself determinative. In particular, the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where the work involves a high degree of skill and expertise. On the other hand, where there is a high level of control over the way in which work is performed and the worker is presented to the world at large as a representative of the business then this weighs significantly in favour of the worker being an employee.

“The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.” “[B]ut in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. That was made clear in Queensland Stations Pty. Ltd v Federal Commissioner of Taxation, a case involving a droving contract in which Dixon J observed that the reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.”

● Whether the worker performs work for others (or has a genuine and practical entitlement to do so).

The right to the exclusive services of the person engaged is characteristic of the employment relationship. On the other hand, working for others (or the genuine and practical entitlement to do so) suggests an independent contract.

● Whether the worker has a separate place of work and or advertises his or her services to the world at large.

● Whether the worker provides and maintains significant tools or equipment.

Where the worker’s investment in capital equipment is substantial and a substantial degree of skill or training is required to use or operate that equipment the worker will be an independent contractor in the absence of overwhelming indications to the contrary.

● Whether the work can be delegated or subcontracted.

If the worker is contractually entitled to delegate the work to others (without reference to the putative employer) then this is a strong indicator that the worker is an independent contractor. This is because a contract of service (as distinct from a contract for services) is personal in nature: it is a contract for the supply of the services of the worker personally.

● Whether the putative employer has the right to suspend or dismiss the person engaged.

● Whether the putative employer presents the worker to the world at large as an emanation of the business.

Typically, this will arise because the worker is required to wear the livery of the putative employer.

● Whether income tax is deducted from remuneration paid to the worker.

● Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks.

Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks. Obviously, in the modern economy this distinction has reduced relevance.

● Whether the worker is provided with paid holidays or sick leave.

● Whether the work involves a profession, trade or distinct calling on the part of the person engaged.

Such persons tend to be engaged as independent contractors rather than as employees.

● Whether the worker creates goodwill or saleable assets in the course of his or her work.

● Whether the worker spends a significant portion of his remuneration on business expenses.

It should be borne in mind that no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.

(5) Where a consideration of the indicia (in the context of the nature of the work performed and the terms of the contract) points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. However, a consideration of the indicia is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The ultimate question remains as stated in (1) above. If, having approached the matter in that way, the relationship remains ambiguous, such that the ultimate question cannot be answered with satisfaction one way or the other, then the parties can remove that ambiguity a term that declares the relationship to have one character or the other.

(6) If the result is still uncertain then the determination should be guided by “matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability” including the “notions” referred in paragraphs [41] and [42] of Hollis v Vabu.” (References omitted)

[21] In Kimber v Western Auger Drilling Pty Ltd  4, the Full Bench observed:

“[41] The courts have developed a multi-factorial approach, in which there is no single decisive criterion to determine whether a contractual relationship is one of employment or one subject to a contract for services. This approach requires the consideration of the various indicia as summarised in French Accent set out above. It is also clear from the decision of the Full Bench of the Federal Court in ACE Insurance Limited v Trifunovski and others, that no one single criterion will necessarily be determinative and that each matter will turn upon the particular circumstances of the case, with the decision maker weighing all the relevant factors.

[22] I adopt the approach in French Accent.

Was Mr Barratt-Hassett an employee or independent contractor during the Relevant Period?

[23] The evidence demonstrates, and I find that:

a. Mr Barratt-Hassett did apply for a position as a permanent Tiler, however this is not the role that he was offered. On his own evidence he was offered work as a tilers hand/labourer as he did not have the experience that Perc Tiling sought to be able to employ him as a Tiler.

b. In order to be paid, Mr Barratt-Hassett provided invoices to Perc Tiling which included his ABN.

c. There is no written contract between the parties that covered the Relevant Period. The only documents evidencing the relationship between the parties were the employee personal details form and employee payroll form contained within a “welcome pack” he received at the beginning of the Relevant Period.

d. Mr Barratt-Hassett was offered and accepted an employment contract which commenced on 20 March 2017.

e. Perc Tiling retained a level of control over the work performed. However, I note that ‘even the most independent of independent contractors is subject to some direction in the performance of his work ...’⁵

f. Mr Barratt-Hassett was able to undertake work for others even though he may not have done so.

g. Mr Barratt-Hassett was not able to transfer or assign the work to another person or company.

h. Mr Barratt-Hassett was provided with the uniform although was not required to wear it.

i. There were no significant tools or equipment necessary to perform the work.

j. No income tax was deducted from the monies paid to Mr Barratt-Hassett, and he was responsible for the payment of such tax during the Relevant Period.

k. No leave was provided to Mr Barratt-Hassett.

l. There was no evidence of the creation of Goodwill or saleable assets.

m. There was no evidence of any requirement (or otherwise) to spend a significant proportion of remuneration on business expenses.

[24] A consideration of the indicia outlined in French Accent in light of the evidence before me does not point overwhelmingly in one direction, i.e. to a relationship of employment or as an independent contractor, so as to yield a clear result.

[25] The ambiguity in the relationship for the Relevant Period arises particularly as a result of the lack of any written contract evidencing the intention of the parties on the one hand, and on the other hand, that there was an offer and acceptance of employment on 20 March 2017. In this regard, had Mr Barratt-Hassett genuinely believed he was employed during the Relevant Period, he no doubt would have raised a concern at that time as to why he was being offered employment when in his view he was already employed.

[26] In circumstances where the relationship is ambiguous, the ultimate question to be answered is “whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf.” 6 This involves considering the terms of the contract and the totality of the relationship.

[27] Having considered the evidence as a whole and taking into account the approach taken in French Accent, I find that on balance Mr Barratt-Hassett was an employee and did not carry on his own business during the Relevant Period. I am satisfied that the totality of the circumstances, when viewed objectively, demonstrates an employment relationship.

[28] Many of Perc Tiling’s contentions were not supported by any material evidence. In particular, there was no evidence to demonstrate that Mr Barratt-Hassett advertised his services as an independent contractor, nor was there any evidence brought to support the assertion that Mr Barratt-Hassett had told other employees that he wanted to be an independent contractor so he could control how his work was performed and have the flexibility to choose the days he worked.

[29] While the provision of invoices tends to suggest the relationship being one of independent contract, it is not a strong indicator in the circumstances of this matter. Mr Barratt-Hassett was remunerated on the basis of the number of hours he worked each week and not at the completion of each task.

[30] The only documents before me evidencing the relationship between the parties during the Relevant Period were the employee details form and employee payroll form that Mr Barratt-Hassett received as part of a ‘welcome pack’. This does not support a finding that Mr Barratt-Hassett was an independent contractor during the Relevant Period. Had there been a written agreement evidencing the relationship between the parties as one of the principal and independent contractor in place for the Relevant Period, I may have come to a different view.

[31] Accordingly, I find that Mr Barratt-Hassett has met the minimum employment period. The application will now be referred for further proceedings, including to determine the jurisdictional objection by Perc Tiling that Mr Barratt-Hassett was dismissed by reason of genuine redundancy.

DEPUTY PRESIDENT

Appearances:

P Barratt-Hassett, on his own behalf.

C Barron, for PERC Group Pty Ltd T/A Perc Tiling.

Hearing details:

2018.

Sydney:

June 25.

Printed by authority of the Commonwealth Government Printer

<PR608827>

 1   Exhibit 5.

 2   Exhibit 1.

3 French Accent [2011] FWAFB 8307, at [30].

 4   [2015] FWCFB 3704.

5 Stevens v Brodribb Sawmilling Co. Pty Ltd (1986) 160 CLR 16 at 37-38.

 6   [2015] FWCFB 3704 at [42].