AB v Free Hearts Free Minds - [2025] FWC 353

[2025] FWC 353

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.365 - Application to deal with contraventions involving dismissal

AB
v

Free Hearts Free Minds

(C2024/8663)

COMMISSIONER REDFORD

MELBOURNE, 21 MARCH 2025

Application to deal with contraventions involving dismissal – jurisdictional objection

On 28 November 2024 Ms AB filed an application pursuant to s 365 of the Fair Work Act 2009 (the FW Act) claiming the termination of her employment with Free Hearts Free Minds (FHFM) occurred in a manner that was in contravention of Part 3-1 of the FW Act.
FHFM claims Ms AB was not its employee, but rather, an independent contractor and thus was not “dismissed” within the meaning of the FW Act. It also argues the Commission does not otherwise have jurisdiction to deal with this matter because Part 3-1 of the FW Act does not apply to it, because of its organisational character and location of origin.
While the Commission has power to attempt to assist the parties to resolve a dispute such as this one, I am not permitted to exercise that power without first resolving the question that has been raised, as to whether Ms AB was dismissed[1]. To be “dismissed” within the meaning of the Act a person must themselves be an “employee” and the Respondent, an “employer”[2].
It is therefore necessary to determine these matters before the Commission can otherwise deal with the dispute.

Free Hearts Free Minds

FHFM is an organisation which primarily provides support to people who live or have lived in a Muslim-majority country who have faced persecution because of their beliefs and / or orientation.
FHFM was registered in California, in the United States of America (the US) on 30 March 2021 as an entity described in that jurisdiction as a “Nonprofit Corporation – CA – Public Benefit”. It was said that it is “based” in the US, but it appears it has a presence in many countries[3].
Costs associated with the conduct of FHFM, such as its on-line infrastructure and the services it provides to people who it describes as “clients” are funded through private donation.
Based on the evidence before me, it appears the primary model of support FHFM provides to its clients are therapy sessions, delivered to them on-line by an appropriately qualified person. Persons who receive these sessions might then be invited to join an on-line community, through which they might receive further ongoing support.
FHFM deny it engages any persons capable of being described as an “employee” in any part of the world, but does engage people to provide services, sometimes for remuneration, on the basis of what it describes as a contracting arrangement. It also engages volunteers.
It was said in evidence that two people based in Australia have been engaged to provided services to FHFM and its clients for remuneration: Ms AB and another person[4]. It appeared from the evidence that the nature of the services provided to FHFM by Ms AB and the other person were the provision of therapy sessions to FHFM clients. As is discussed in more detail below, Ms AB was also engaged to perform management, marketing and fundraising work. This work was undertaken by Ms AB in Australia.
At least one recipient of FHFM support / therapy services was a person based in Australia[5]. Otherwise, the recipients of FHFM therapy sessions provided through FHFM are people based outside of Australia (where those sessions were provided online).

Confidentiality

Both parties told me that the nature of FHFM’s work can expose its personnel to retaliation and danger, and that it is therefore common practice that within the organisation that staff do not use their full names so that their risk of retaliation is reduced. On this basis, both parties sought that persons named in any Decision or Order published in relation to this matter be anonymised. There was consent to these requests by both parties. Pursuant to a Decision[6] I issued in relation to this matter, I made an Order[7] to this effect.

The conduct of the proceeding

The directions I made for the conduct of this proceeding were that FHFM was to file and serve an outline of argument, statements of evidence and any documents it wished to rely on in relation to its jurisdictional objections on or by 17 January 2025 and Ms AB was to do so on or by 24 January 2024. Any materials the FHFM wished to file in reply were to be provided by 28 January 2024.
On 15 January 2024, an email was filed and served by FHFM which referred to its two objections to the application and attached documentary material in support.
Ms AB filed an Outline of Submissions, a Witness Statement and provided documentary material on 26 January 2025 after having been granted a short extension of time to do so.
On 3 February 2025 the Commission received correspondence on behalf of FHFM from solicitors seeking leave to appear and seeking permission to file further material. There was no objection by Ms AB that FHFM be permitted to file and serve additional material. On 6 February 2025 (the day before the hearing in relation to this matter), FHFM filed and served a further Outline of Submissions, a Statement of Evidence and various additional documentary material.
A hearing was conducted via video on 7 February 2025. I granted both parties permission to be represented by a lawyer at the hearing, because I considered it would assist in the more efficient conduct of the matter, especially taking into account several moderately complex issues requiring consideration.
Two people gave evidence at the hearing and were subjected to cross examination – Ms AB and Mr CD.
At the conclusion of the hearing, I advised parties I would be assisted if further written submissions were filed by the parties relating to several particular matters. Both parties filed further written submissions in relation to the matter.

Ms EF

Ms EF is a Director of the FHFM. Ms EF was the person who engaged Ms AB to perform work for FHFM and to whom she directly reported.
While earlier in this proceeding Ms EF engaged in it and with the Commission via email, she was not called by FHFM as a witness in this matter. On 6 February 2025, presumably after discovering on that day through the materials filed by FHFM that it had decided not to call Ms EF as a witness in the proceeding, Ms AB filed an application pursuant to s 590 of the FW Act seeking an order requiring Ms EF to attend the Commission and give evidence at the hearing the next day. In response to my request for FHFM’s views on the application, its solicitors said:
“We regret to advise that we have been unable to secure our client’s instructions in the time we have had available to respond to your email.
To that end we are not in a position to either consent to or oppose the application, save to say that approval of the application and its proximity to the hearing date would pose logistical hurdles at the respondent’s end.”
Undoubtedly, solicitors for FHFM have in this matter been required to navigate logistical challenges in obtaining instructions from its client, perhaps at least in part because its decision makers not located in Australia but are in other time-zones. Despite this, I found it less than satisfactory that the rather cursory response did not address at all whether Ms EF’s evidence would be relevant in this matter. In any event, it appeared to me that the Applicant’s contention – that Ms EF would be able to give direct evidence about the initial engagement and day-to-day work of Ms AB - had merit, and I issued an Order that Ms EF attend the Commission the following day to give evidence at the video hearing.
At 10:33PM on 6 February 2025 my chambers received correspondence from solicitors for FHFM which said:
“We have been instructed that [redacted] will not be in attendance at tomorrow morning’s hearing due to her busy schedule which is not able to accommodate compliance with the Commissioner’s Order as communicated at 4.57pm today.”
At the commencement of the hearing on 7 February 2025, the solicitor for FHFM, Mr Cakic, confirmed Ms EF would not be attending the hearing, despite my order that she do so, and would not be available to attend the Commission any time over the following two weeks due to her schedule.
I was also told it was the Respondent’s preference that Mr CD (Ms EF’s husband) give evidence, who is also a Director of FHFM. Mr CD was also located outside of Australia, somewhere, but was available to give evidence albeit that he would be doing so in the middle of the night.
Despite Ms EF’s failure to comply with my Order, Ms Barry on behalf of Ms AB expressed a desire that the hearing proceed and also indicated there was no objection to the order being set aside. I therefore agreed with FHFM’s request that the order that Ms EF attend the Commission to give evidence be set aside.
In written submissions, Ms AB suggested that FHFM’ failure to call Ms EF as a witness in the proceed made it appropriate for the Commission to draw adverse inferences of the kind referred to of the decision of the High Court in Jones v Dunkel[8]. It said:

“ … it is open for the Commission to conclude that, if [redacted] had given evidence, it would not have benefited the Respondent. It is open for the Commission to conclude that [redacted] evidence would have supported the Applicant’s submission that the Applicant was an employee of the Respondent since at least 9 November 2023”[9]

There is a basis to draw a Jones v Dunkel inference in this matter. Ms EF is the most senior member of FHFM leadership team and was plainly the key person with direct knowledge of the characteristics of the engagement between FHFM and Ms AB. While there was an explanation for her failure to give evidence, it was weak, and undermined further by the fact that her husband, also apparently in another country and time-zone, who is presumably also “busy” was able to present and give evidence at the hearing. Ms EF was engaged in the proceeding earlier, via email exchange with the Commission.
As I explain below, the characterisation of the relationship between Ms AB and FHFM requires an analysis of the true nature of that relationship, through an examination of the various elements associated with the engagement and the work performed. Evidence about those matters is before the Commission and can be considered. Thus, it seems to me an adverse inference, if one is to be drawn against FHFM, is of only limited assistance to Ms AB. Having said this, there may be a controversy in this matter about the extent to which Ms AB was being directed by Ms EF in relation to her work – a concept often described as “control”. There is some evidence before the Commission about this matter, however I do consider it is appropriate to draw an inference adverse to FHFM’s suggestion that Ms AB had complete control over her work, and was not working under the direction of Ms EF, through its failure to call Ms EF as a witness in this proceeding to provide direct evidence about that matter.

Distinguishing between an employee and an independent contractor

If Ms AB is not an employee, her application must be dismissed. The application is brought pursuant to s 365 of the Act, which deals with “dismissal” disputes. The meaning of “dismissal” is set out in s 386 of the Act and provides that a person has been dismissed if their “employment” with their “employer” has been terminated on the employer’s initiative or if they have resigned from their “employment” but were forced to do so because of conduct, or a course of conduct, engage in by their “employer”. If Ms AB was not an “employee” of FHFM there is no “dismissal” and thus no dismissal dispute for the Commission to deal with.
The terms “employee” and an “employer” carry their ordinary meanings[10]. Section 15AA of the Act deals with how to determine the “ordinary meanings” of the terms “employee” and “employer”. Section 15AA of the Act is a new provision, inserted by the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (the amending Act), and commenced operation on 26 August 2024. It does not apply to an application that was already “on foot” before 26 August 2024 but does apply to applications made after 26 August 2024, such as this one, with respect to relationships in existence entered into before 26 August 2024[11].
FHFM submitted that:

“… section 15AA has no application to the present case. The Applicant’s relationship as far as the Executive Director role commenced on 9 November 2023. This date is an uncontroversial fact. Nothing occurred between 26 August 2024 and 8 November 2024 which could be said to have established a new relationship for section 15AA to apply.”[12]

I do not accept this submission. Clause 116 of the amending Act provides explicitly that s 15AA applies on and after the commencement date to a relationship between an individual and a person entered into before commencement that is in existence as at commencement[13].
Section 15AA provides as follows:
(1) For the purposes of this Act, whether an individual is an employee of a person within the ordinary meaning of that expression, or whether a person is an employer of an individual within the ordinary meaning of that expression, is to be determined by ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person.
(2) For the purposes of ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person:
(a) the totality of the relationship between the individual and the person must be considered; and
(b) in considering the totality of the relationship between the individual and the person, regard must be had not only to the terms of the contract governing the relationship, but also to other factors relating to the totality of the relationship including, but not limited to, how the contract is performed in practice.
Note: This section was enacted as a response to the decisions of the High Court of Australia in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2.
(3) Subsections (1) and (2) do not apply to the following provisions of this Act:
(a) Divisions 2A and 2B of Part 1‑3;
(b) Part 3‑1, to the extent that Part 3‑1 applies only because of the operation of section 30G or 30R.
This application is brought pursuant to Part 3-1 of the Act. Accordingly, pursuant to s 15AA(3)(b) of the FW Act, if Part 3-1 only applies by virtue of ss 30G or 30R, subsections (1) and (2) of s 15AA do not apply.
It seems likely that if ss 15AA(1) and (2) do not apply, a determination about whether a person is an “employee” should occur according to the law as it existed without s 15AA[14]. But this is a question for another day. In this matter, I have determined, for reasons outlined below, that Part 3-1 applies pursuant s 14 of the FW Act, even if it may also apply by virtue of s 30G. Because Part 3-1 of the Act applies to this application by virtue of s 14 of the FW Act, and not only because of the operation of ss 30G or 30R I consider s 15AA applies to the question as to whether Ms AB is an employee, and FHFM her employer.
As the note at the foot of s 15AA(2) says, s 15AA was enacted “in response to” the decisions of the High Court of Australia in CFMMEU v Personnel Contracting Pty Ltd (Personnel Contracting)[15] and ZG Operations Australia Pty Ltd v Jamsek (Jamsek)[16]. These decisions had resulted in a change in the approach to distinguishing between an “employee” and an “independent contractor” such that whether the relationship between the parties is one of employment or not turns upon an examination of their legal rights and obligations arising from the contract between them[17]. This meant that where a written contract existed between the parties which was not invalid for some reason, the rights and obligations established by the contract were determinative as to the legal character of the relationship[18]. Even where the parties’ contract was not in writing (or not wholly in writing), the focus remained on the nature of their relationship between the parties as determined by the legal rights and obligations created by their unwritten contract[19], and not a wide-ranging review of the entire history of the parties’ dealings[20].
Prior to these decisions, the more common approach to determining the question as to whether a worker is an “employee”, or an “independent contractor” was often described as the “multifactorial test” which usually involved the identification and analysis of various “indicia” said to be indicative of “employment” or an “independent contract” as the case may be[21].
Taking into account the note at the foot of s 15AA(2)(b) and the requirement that in ascertaining the real substance, practical reality and true nature of the relationship between the parties, regard must be had to the terms of the contract, and other factors relating to the totality of the relationship including, but not limited to, how the contract is performed in practice, it appears to me that s 15AA is intended to reinstate the approach to this question using the “multifactorial test”.
For reasons associated with the passage of the legislation through the Australian Parliament, the Explanatory Memorandum which accompanied the Fair Work Legislation Amendment (Closing Loopholes No. 1) Act 2023 contained the relevant commentary relating to the introduction of s 15AA. It provides as follows[22]:
“972. Part 15 of Schedule 1 would insert a new section 15AA into Part 1-2 of the FW Act. New section 15AA would require that the ordinary meanings of ‘employee’ and ‘employer’ be determined by reference to the real substance, practical reality and true nature of the relationship between the parties. This would require the totality of the relationship between the parties, including not only the terms of the contract governing the relationship but also the manner of performance of the contract, to be considered in characterising a relationship as one of employment or one of principal and contractor.
973. In requiring an inquiry that extends beyond the contractual rights and obligations of the parties, the amendments would overcome the contract-centric approach established by the High Court’s decisions in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 (Personnel Contracting) and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 (Jamsek). In these decisions, a majority of the High Court held that where a comprehensive written contract exists, the question of whether an individual is an employee of a person is to be determined solely with reference to the rights and obligations found in the terms of that contract. In such circumstances, the High Court held, it is not necessary or appropriate to engage in a wide-ranging review of the parties' conduct in performing their obligations under that contract. There are limited exceptions where one can look beyond the terms of the contract, such as where a contract is a sham, or has been varied or rendered unenforceable, or subject to an estoppel.
974. The intention of this Part is to require a ‘multi-factorial’ assessment, as was previously commonly understood to be the correct approach in characterising a relationship as one of employment, or of principal and contractor, for the purposes of the FW Act. There is no exhaustive list of factors that will be relevant to a ‘multi-factorial’ assessment, ensuring a flexible approach that will enable the ordinary meanings of ‘employee’ and ‘employer’ to continue to adapt to changing social conditions, market structures and work arrangements.
…
979. Subsection 15AA(2) would identify matters that must be considered in ascertaining the real substance, practical reality and true nature of the relationship between parties.
980. Paragraph 15AA(2)(a) would first require consideration of the totality of the relationship between the parties. This phrase, drawn from His Honour Justice Mason’s judgment in Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1 (Brodribb) and echoed by the majority in Hollis v Vabu [2001] HCA 44 (Hollis), is intended to indicate that in characterising the relationship, all relevant incidents of the relationship must be considered and no one incident will necessarily be determinative.
981. Paragraph 15AA(2)(b) would provide that in considering the totality of the relationship between the individual and the person, regard must be had not only to the terms of the contract governing the relationship, but also to other factors including, but not limited to, the manner in which the contract is performed. This would make it clear that analysis of the totality of the relationship is not restricted to a consideration of the rights and duties established under the parties’ contract. It must include, among other things, how the contract is performed in practice.
982. The intention is to ensure that the way in which a contract is performed in practice can be considered in characterising the relationship irrespective of whether the performance of the contract has resulted in a contractual variation. This is intended to directly counteract the principle established in Personnel Contracting and Jamsek that where a comprehensive written contract exists, evidence of post-contractual conduct of the parties is not relevant in establishing the existence of an employment relationship or otherwise (except in limited circumstances, including where the contract has been varied by post-contractual conduct).
983. The intention is that subsection 15AA(2) would facilitate the use of a multi-factorial approach when characterising a relationship, even in the face of a comprehensive written contract.
984. Under the multi-factorial approach, guidance for the outcome is provided by various factors or indicia. A considerable number of case authorities, including Brodribb and Hollis, identify factors relevant in the characterisation of a relationship as one of employment or one of contractor and principal. In Brodribb, Mason J noted a prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter. Other relevant matters were said to include, among other things:
• 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;
• the delegation of work by the putative employee.
985. Wilson and Dawson JJ determined that factors suggesting a contract of service (an employment relationship) 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.
986. Indicia which indicate a contract for services (a relationship of principal and contractor) were said to include:
• work involving a profession, trade or distinct calling on the part of the person engaged;
• the provision by the putative employee of their own place of work or their own equipment;
• the creation by the putative employee of goodwill or saleable assets in the course of their work;
• the payment by the putative employee from their remuneration of business expenses of any significant proportion;
• the payment to the putative employee of remuneration without deduction for income tax.
987. Other indicia have arisen over time in the authorities. Courts have often observed that there is no exhaustive list of relevant factors and that they will vary from case to case. So too will the weight to be afforded to particular indicia. This is partly because the test has evolved to adapt to changing social conditions and new work arrangements, and indeed will continue to do so.”

In the application of the “multifactorial test”, prior to the decisions of the High Court in in Personnel Contracting and Jamsek, the Commission often had regard to the decision of a Full Bench in Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario[23] particularly because it contained a useful summary of some of the “indicia” which might be considered to determine whether, using the multifactorial test, a person is an employee or an employer. The summary of indicia outlines factors similar to those identified in the Explanatory Memorandum (referred to above) including the following (by way of summary):

a.The “ultimate question” is whether the worker is a servant of another in that other’s business, or carries on a trade or business of his or her own behalf.
b.The nature of the work performed and the manner in which it is performed must always be considered.
c.The terms and terminology of the contract are always important. However, the parties cannot alter the true nature of the relationship by putting a different label on it.
d.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 is indicative of a relationship of employment, and the absence of such control or the right to exercise control is indicative of an independent contract.
e.Whether the worker performs work for others (or has a genuine and practice entitlement to do so) is characteristic of an employment relationship and working for others (or the genuine and practical entitlement to do so) suggests an independent contract.
f.Whether the worker has a separate place of work and or advertises his or her services to the world at large.
g.Where the worker provides and maintains significant tools or equipment, or is significantly invested in capital equipment requiring a substantial degree of skill or training to use, this may be indicative of an independent contract.
h.If a worker is contractually entitled to delegate the work to others without reference to the putative employer this is a strong indicator the worker is an independent contractor.

If the putative employer has the right to suspend or dismiss the person engaged, this can be an indicator of an employment relationship.

j.If the putative employer presents the worker to the world at large as an emanation of the business, such as a requirement to wear the “livery” of the putative employer, this may be an indication of an employment relationship.
k.Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks.
l.The provision of paid holidays or sick leave can be indicative of an employment relationship.
m.Where 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.
n.A worker that creates goodwill or saleable assets in the course of his or her work may be more likely to be an independent contractor.
o.A worker who spends significant portion of their remuneration on business expenses may be more likely to be an independent contractor.

In relation to the application of the test, this decision cited an earlier comment made by Mummery J in Hall (Inspector of Taxes) v Lorimer[24], that the application 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 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.”
In On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3)[25], Bromberg J observed that in Vabu, the High Court had provided a “focal point” around which relevant indicia can be examined (also referred to as “the ultimate question” above). The focal point is whether the individual is running their own business. Or as Bromberg J put it:

“Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work may be posed and answered as follows:

Viewed as a practical matter:

(a)is the person performing he work as an entrepreneur who owns and operates and business; and
(b)in performing the work, is the person working in and for that person’s business as a representative of that business and not of the business receiving the work.[26]”

I do not consider it necessary for me in this decision to explore in any detail whether the language adopted in s 15AA alters the nuance of the application of the multifactorial test. I consider it appropriate to apply the test to as outlined in the decisions referred to above to Ms AB and FHFM’s relationship and do so below. I will however make one brief observation.
Since the decision in French Accent was delivered by this Commission, and the decisions upon which it is based, including Brodribb and Vabu, the nature of the modern workplace has continued to evolve significantly. It is now very common for employees to work in a remote setting, often from home, with a degree of flexibility and personal control as to how they undertake their work vastly different from a more traditional workplace supervisory setting. The transformation of the modern workplace may in some circumstances impact on the application of the multifactorial test. Taking into account the remote nature of Ms AB’s engagement, I consider it important I have regard to the evolution of the modern workplace, particularly in giving consideration to traditional notions of “control” within an employment relationship. I will say more about this below.

The nature of Ms AB’s work for FHFM in Australia

Ms AB began performing work for FHFM in January 2021. The role she held prior to 9 November 2023 was described as a “Mental Health Therapist” or “Mental Health Facilitator”. It appears this role was to deliver to clients of FHFM the counselling services it offers. Ms AB delivered these services online. She was paid for this work. During the period she was performing this work she had another full-time job and the work she performed from FHFM occurred “out of hours”, at times convenient to her taking into account her other work commitments[27].
Very little further evidence was provided as to the nature of this work. It was described as “casual” and, on the plain meaning of that word, it clearly was. Whether during this period Ms AB was an “employee” of FHFM is unnecessary to determine because the nature of Ms AB’s engagement changed and was significantly different by the time it ended.
On 9 November 2023 a conversation took place between Ms AB and Ms EF resulting in a change to Ms AB’s role. Ms AB said that in this conversation, Ms EF offered, and Ms AB accepted a role titled “Executive Director” with FHFM. Ms AB understood that her role was to “grow the organisation”[28]. From the evidence before me, it appeared this role involved Ms AB liaising with donors or potential donors to FHFM[29], engaging in “marketing activities”[30], attending to its on-line infrastructure (such as website) [31] and onboarding volunteers or people performing work for FHFM[32]. It was an apparently managerial role. This role required Ms AB to work full time for FHFM[33]. Further evidence was given that Ms EF said the following:[34]:

a.Ms EF said, “it is my preference that you are a contractor”.
b.Ms EF said “I would like you to work full time hours, but I can only pay you for three days. Once we receive more funding, we can pay you more”.

In a further exchange, evidenced by copies of text messages provided in evidence, Ms AB and Ms EF discussed how the role would be remunerated. It appears Ms EF’s original position was that Ms AB would be paid $4,500.00 per month, “AUD”. Ms AB queried this amount, and proposed the figure should be $6,550.00. Ms EF appeared to agree to that amount – in a later message referring to “the 6550”.
As stated, Ms AB sent FHFM an invoice each month in respect to the engagement. The invoices outlined the various tasks Ms AB performed as part of her role. There was a reference made by Ms EF to the remuneration being set up as an “automatic deposit” although Mr A said this didn’t happen – that he was responsible for paying Ms AB and did so according to her invoices, not an automatic payment system[35].
The first invoice furnished, on 1 December 2023, referred to the figure of $4,878.00 “AUD” (apparently derived from the higher figure, calculated on a pro-rata basis). The second invoice, relating to December 2023, referred to $6,500 “AUD”. I do not know why this figure was $6,500.00, and not $6,550.00 as had apparently been initially agreed. Ms AB said in her evidence that following these first two months, there was a dispute about her remuneration level and that in the end she was forced to accept a change to it, such that she began invoicing for $4,000.00, “USD”. Subsequent invoices refer to the relevant figures in US dollars.
The invoices do not appear to refer to taxation arrangements, although all carry Ms AB’s ABN number. It appears clear there is no PAYG income tax was remitted on Ms AB’s behalf.
Based on the evidence before me, it seems to me that the structure of the role performed by Ms AB revolved around a weekly meeting she had with Ms EF, during which she received direction as to what work to do, which was then undertaken in an autonomous fashion. In this regard, it appeared the work was undertaken similar to many remote working arrangements, particularly in respect to an employee holding a senior role.
FHFM submitted that the nature of this work was such that Ms AB had “full control” over how it was performed[36], and that the work was “piecemeal”, “offered to the Applicant which she could take or decline”[37], or “project based”[38]. These descriptions seem to me to be mischaracterisations. Ms EF’s communications with Ms AB appear to me to be quite directive, both in tone and content. Ms AB was plainly not entitled to refuse to undertake the work arising from her interactions with Ms EF – she was required to follow her instructions[39]. The work – such as liaising with donors or improving the online infrastructure was not project based. It was part of a broad role. In this regard, as I mentioned above, Ms EF did not give evidence in this proceeding, and to the extent there is a controversy as to the extent to which Ms AB was not working under Ms EF’s direction, I infer that if she had given evidence, it would not have assisted FHFM’s contention that there was an absence of control over the work performed by Ms AB exercised by Ms EF.
I also consider the final exchanges between Ms EF and Ms AB illuminating in this regard. In the email terminating the engagement, Ms EF says FHFM needs an Executive Director who has both the educational expertise and “real world experience in nonprofit management [my emphasis]”. Ms AB’s response suggests the decision to terminate her employment was made because Ms AB was unavailable to meet one week. The further exchanges involve direction from Ms EF to complete a comprehensive handover[40].
It is now not unique that an individual might perform work from a remote location, receiving direction and instruction from someone overseas, left in a sense to their own devices as to how that work is performed in a minute to minute, hour to hour sense. Such an arrangement is not in and of itself determinative of the question as to whether an employment relationship exists.
Some time was spent by both parties addressing the Commission on how this engagement was characterised by the parties. Ms AB appeared to place importance on the assertion that Ms EF used the term “employee” in a conversation with her 8 January 2024. Ms AB was challenged repeatedly in cross examination as to why she did not take issue with or challenge the use of the term “contractor”, or that she was required to furnish invoices to be paid[41]. I did not find either parties’ emphasis on these matters particularly useful. While terms and terminology used by the parties are relevant to the characterisation of the true nature of the relationship, they are not determinative, taking into account the application of s 15AA of the Act[42].

Was Ms AB and employee or a contractor?

I have considered the various indicia associated with Ms AB’s engagement by FHFM in relation to the “ultimate question” or “focal point” – whether Ms AB was carrying out a trade or business on her own behalf[43].
During the period following her engagement as Executive Director, Ms AB said she did not perform work for anyone else. She did explain that in October 2023 she completed work of some kind for her brother-in-law, and invoiced for that work staggered over three months, meaning that period overlapped with the period after she commenced work as Executive Director[44].
It does however appear to be the case that after the date on which she was appointed as the Executive Director, and during the period of this engagement, Ms AB did perform some hypnotherapy sessions for people which did not appear to be part of her duties as the Executive Director, and, on their face, were “private” undertakings. Some (or perhaps all) of the people concerned were former clients of FHFM[45]. However, it was explained by Ms AB that this was unpaid work, and part of her seeking certification in respect to a course of study[46]. I do not consider this work to be indicative of Ms AB conducting her own business or undertaking. She undertook this work as part of an attempt to improve her qualifications.
It was submitted for FHFM that Ms AB bore “financial responsibility and risk”[47]. There appears no basis for this submission. Indeed, it seems to me FHFM would bear responsibility for actions taken in its name, such as actions engaged in by Ms AB as its Executive Director. It also appears clear that the product of Ms AB’s work is “owned” by FHFM – that no saleable asset or goodwill is created by Ms AB in the course of this work, except assets such as its online infrastructure, which remain its property.
It appeared to me that Ms AB was presented to the world at large as the Executive Director of FHFM. A screenshot of the FHFM website was provided in evidence, which showed a profile of Ms AB describing her as FHFM’s “Executive Director”. Her email signature described her as “Executive Director”[48].
Accordingly, there is no evidence supporting the proposition that Ms AB was carrying out a trade or business on her own behalf in respect to her work for FHFM. Her work, such as fundraising activities, the maintenance and improvement of the FHFM infrastructure, her engagement with other FHFM personnel was engaged in solely for the benefit of FHFM and not part of any trade or undertaking being carried on by Ms AB. She presented herself and was presented by FHFM to the world at large, not as an autonomous entity, but as the Executive Director of FHFM.
The remuneration arrangement in respect to Ms AB is more indicative of a contracting arrangement than an employment relationship. However, considering this indicium against the “ultimate question” it must be borne in mind that Ms AB did not furnish invoices displaying her ABN number for remuneration by choice, such as because this suited her own business structure. She furnished invoices because FHFM required her to, and she felt she had no other option[49].
The absence of trappings more consistent with an employment relationship, such as the remittance of tax, the provision of leave entitlements and superannuation could be said to add weight to a conclusion this was an independent contract. I note however that these features of the relationship are also absent largely because FHFM refused to provide them. Ms AB said Ms EF said “we can go through the process of making you an employee, but this would be difficult for me and requires a lot of extra paperwork and steps …”[50]. They are not absent because the true nature of the relationship involved Ms AB carrying on an undertaking on her own behalf. Their absence is more reminiscent of sham, created to cause an impression the arrangement is something different from what it truly is.
It was submitted for FHFM that Ms AB was entitled to delegate or subcontract work[51]. There was no evidence to support this proposition. Taking into account the nature of the communications in evidence between Ms AB and Ms EF, I consider it more likely Ms EF would have taken issue with Ms AB delegating work to another without Ms EF’s approval.
There was no evidence of any significant investment of capital equipment by Ms AB in the engagement. It appears she did use her own computer and associated equipment – I do not consider in these circumstances this weighs heavily in favour of a characterisation of independent contract. FHFM is a charity whose mission Ms AB appears to have been supportive of. Her preparedness to use her own computer and basic equipment is incidental.
I have discussed above the extent to which it can be said FHFM had the right to exercise, control over the manner in which work is performed. Mindful of the nature of modern remote working arrangements that are now not unusual, and the directive nature of Ms EF’s relationship with Ms AB, I consider that it did have the right to exercise control over the manner in which Ms AB performed her work and did so.
While to some extent unusual, the relationship between FHFM and Ms AB had features that are becoming more and more common in an employment relationship, through the increase in remote working arrangements and the use of technology. While at first blush it appears to be an unlikely “employment” relationship taking into account its remote character, the “employer’s” overseas location and the way the parties labelled the relationship, an analysis of its true nature is more indicative of employment than an independent contract. I find Ms AB was an employee of FHFM.
For completeness, I note that the email tendered in evidence sent to Ms AB by Ms EF on 8 November 2024 is undoubtedly evidence of “dismissal”.
Having found Ms AB was an employee of FHFM I find she was “dismissed” within the meaning of s 386 of the FW Act by FHFM on 8 November 2024.

Whether Part 3-1 of the Act applies to FHFM.

Ms AB’s application has been brought pursuant to s 365 of the Act which provides that if it is alleged a person was dismissed in contravention of Part 3-1 of the Act, an application may be brought for the Commission to deal with that dispute. FHFM contends that it is not bound by Part 3-1 of the Act and by implication, that it cannot contravene Part 3-1 of the Act and thus there is no dispute pursuant to s 365 for the Commission to deal with.
The contraventions alleged by Ms AB to have occurred are in respect to s 340 and 359 of the Act. The contravention said to have occurred with respect to s 359 – which prohibits misrepresentations that a person is an independent contractor – does not appear to relate to the alleged dismissal and thus is not part of the dispute the Commission is being asked to deal with.
The contravention alleged to have occurred with respect to s 340 does relate to the dismissal – it is alleged that FHFM took adverse action against Ms AB including by dismissing her, and this was because she exercised a workplace right.

Section 340 of the FW Act prohibits adverse action taken by a person against another person, in particular circumstances.
However, s 342 defines “adverse action” as having been taken by an employer against an employee when the employer dismisses the employee.
Section 339(e) of the FW Act provides that a reference in Part 3-1 to a “person” is a reference to a “constitutionally covered entity”.
A “constitutionally covered entity” is defined in s 338(2) of the FW Act to mean one of either:

a.a constitutional corporation;
b.the Commonwealth;
c.a Commonwealth authority;
d.a body corporate incorporated in a Territory;
e.an organisation.

Accordingly, if FHFM is a “constitutional corporation” it is a “person” capable of contravening s 340 of the FW Act. However, for there to be a dismissal dispute before me in this matter, FHFM must also be an “employer” capable of engaging in adverse action within the meaning of s 342 – namely – the dismissal of its “employee”.
A “constitutional corporation” is defined in s 12 of the FW Act as a corporation to which paragraph 51(xx) of the Constitution applies. Section 51(xx) of the Constitution gives the Commonwealth Parliament power to make laws with respect to “foreign corporations and trading or financial corporations formed within the limits of the Commonwealth”[52].
A foreign corporation, within the meaning of s 51(xx), need not to have been formed within the limits of the Commonwealth or be a trading or financial corporation[53] The types of entities which are encompassed are not narrowly confined. In R v Federal Court of Australia: Ex parte Western Australian National Football Leage Inc[54] Murphy J said:
“For example, foreign corporations may include syndicates or joint ventures, common in European and other legal systems whose law of incorporation is based on principles different from those of Australian States and England. A corporation is an entity with status as an artificial person; this involves it having its own capacities rights and liabilities which are distinct from those of its members (if it has any members).[55]”
FHFM provided in evidence material relating to its registration and incorporation in the State of California, in the US. For the material provided there appears to be a distinction in that jurisdiction between “corporations”, “associations”, “trusts” and “trusts for charitable purposes”. The Certificate of Status issued by the California Secretary of State describes the entity as “Nonprofit corporation – CA – Public Benefit” and a record of a meeting of its Directors which occurred on 30 March 2021 describe it as a “California Nonprofit Public Benefit Corporation”.
The minutes of what appears to have been the first meeting of the Directors of the incorporated entity, which were provided in evidence, record matters including the establishment of a bank account for the “conduct of the business of the Corporation”, the authorisation of the Chief Financial Officer (Ms EF) to certify authorised bank signatories, the establishment of an accounting year and other such matters.
FHFM submitted that its true legal character is more controversial than the nomenclature used to describe it in California, and the use of the term “corporation”. It argued that, had FHFM been established in Australia, it would not have been a constitutional corporation[56].
I cannot accept this submission. I am concerned with whether FHFM is a foreign corporation, within the meaning of s 51(xx) of Constitution, not with the imagined scenario as to how it would be characterised if it was formed in Australia (which it was not). The term should not be narrowly construed. It encompasses a broad range of types of entity, provided they have a distinct “artificial” legal personality. On the basis of the material before me, it appears clear FHFM has, in California, a legal personality distinct from its Directors and the other people associated with it. The use of the term “corporation” with respect to FHFM, used in California, is apt. I consider FHFM is a constitutional corporation within the meaning of s 51(xx) of the Australian Constitution and s 12 of the FW Act because it is a foreign corporation.
However, is FHFM an “employer” and is Ms AB an “employee” for the purposes of s 342 of the Act?
Section 335 provides that the terms “employee” and “employer” have their ordinary meanings. Section 339(a) provides that a reference to an “employer” in Part 3-1 is a reference to a “national system employer” and s 339(b) provides an “employee” is a national system employee.
Section 14 of the Act provides relevantly that a national system employer is a “constitutional corporation” so far as it employs, or usually employs, an individual[57]. Section 13 provides that a national system employee is an individual so far as he or she is employed, or usually employed by a national system employer, except on a vocational placement.
For the reasons explained above, FHFM is a constitutional corporation. The question therefore arises as to whether it “employs, or usually employs an individual” and whether Ms AB is an individual “usually employed” by it.
Whether a constitutional corporation “employs, or usually employs an individual” and whether an employee is employed or “usually employed” depends on the circumstances of the case. As North J said in Australian Meat Industry Employees’ Union v Belandra Pty Ltd[58]:
“Whether a person is usually an employer is a question of fact to be determined in the light of all the circumstances in each case. There is no formula appropriate in all cases which can be used to answer the question. As to a past employment relationship, it may be relevant to know how long ago the person ceased to be an actual employer or to understand why the person ceased to be an actual employer. As to future employment, it may be relevant to know when such employment is to commence or resume, and the circumstances of any delay in commencing or resuming employment[59].”
“Usually employed” does not necessarily mean “actually employed”. As Jessup J said in National Tertiary Education Union v Swinburne University of Technology[60]
“An individual will be a national system employee as defined if he or she is usually employed by a national system employer, even if he or she is not in employment at the time to which the inquiry relates (eg he or she may be between jobs).[61]”
I suspect it likely FHFM will find the proposition that it might “usually employ” an individual to be somewhat challenging, when it claims it does not, and never has “employed” anyone, anywhere in the world. However, to some extent, FHFM’s assertion in this regard is a characterisation – reflecting the word or words it uses to describe legal relationships it has with people who perform work for it, as opposed to their true legal nature. I will say more about this below. It seems to me difficult to resist the conclusion that if Ms AB was an employee of FHFM at the time her engagement was terminated, she was an individual usually employed by FHFM and it, an entity who “usually employs” an individual even if only one individual – Ms AB.
As explained above, I have found that Ms AB was an employee of FHFM, within the meaning of that term as it is now defined in the Act. It therefore follows that FHFM usually employed an individual. Given that it is a constitutional corporation, FHFM meets the definition of a national system employer for the purposes of s 14 of the Act and thus “employer” for the purposes of s 342 of the Act.
For completeness, I note that s 30D of the Act extends the meaning of a national system employer in a referring State, as does s 30G, specifically with respect to Part 3-1. Given that I have already decided FHFM is a national system employer within the meaning of s 14 of the Act, it is not necessary for me to determine whether ss 30D and 30G also cause FHFM to fall within the definition of a “national system employer” by virtue of the connection in this matter between FHFM and a referring State (the State of Victoria). I note that s 30G(2) provides that the section does not limit the operation of ss 338 and 339.
I have also considered whether the arrangement which existed between Ms AB and FHFM had a sufficient connection with Australia. In this regard, I note that not every foreign corporation throughout the world is a national system employer, and an appropriate connection with Australia must be identified[62]. In note further that FHFM is an entity of US origin, apparently operating in many countries across the world. I also note that Ms AB’s work, while carried out in Australia, appeared to sometimes relate to tasks involving people based outside Australia.
The location of the performance of the work is not the determinative factor in the consideration of whether there is a sufficient connection with Australia such that an employer may be characterised as a national system employer (and an employee, a national system employee)[63]. Consideration must be given to the overall employment relationship and the contractual setting which underpinned it[64]. The place the contract was formed is undoubtedly a key consideration[65] albeit the extent to which the place the contract was formed is determinative of the question is not settled[66].
In this matter, there seems to me to be several aspects of the employment relationship, which, with regard to its character, are of connection with Australia.
The contract through which Ms AB was engaged was the product of the discussion she had with Ms EF on 12 November 2023. This was a two-way conversation, about which evidence was only given by one of the participants. On the basis of this evidence, and the documentary material provided (text messages subsequently exchanged between Ms AB and Ms EF) it appears open to me to conclude that Ms EF “offered” Ms AB the job, and Ms AB “accepted it”. To the extent that it is determinative, this means the contract was formed in Australia, where Ms AB accepted it[67].
It is also relevant, albeit not determinative, that the work Ms AB performed occurred in Australia, for the Australian-based part of a US based organisation which was operating, at least to some extent, in Australia. At least one person based in Australia had directly received services from FHFM.
It was said, more so in relation to whether Ms AB was an independent contractor or an employee, that she was paid from a US domiciled bank account. It also appears Ms AB began to send invoices to be paid in which her remuneration was specified in US dollars (although her initial invoices specified Australian dollars, as apparently initially agreed with Ms EF via text messages provided in evidence). It seems to me many employees based in Australia but employed by foreign corporations would be paid from overseas domiciled bank accounts. I do not consider much can be taken from the fact that US dollars are sometimes referred to between the parties, or the FHFM bank account is located in the US.
Having determined that the contract between FHFM and Ms AB was entered into in Australia, and taking into account other aspects of the employment relationship, including that she performed all of her work for FHFM in Australia, I consider there is a sufficient connection with Australia such that it can be said that FHFM is a national system employer for the purposes of the application of Part 3-1 of the FW Act.
I note finally that in its further written submission, FHFM made reference to s 34(3) of the Act. Sections 33 and 34 of the Act are concerned with the power to make regulations for the extension of the operation of the Act up to and beyond the exclusive economic zone and the continental shelf. The specific relevance of these submissions was not made entirely clear. In any event, this machinery is not relevant – the operation of the Act in respect to this matter does not arise through operation of a regulation made pursuant to s 33 or 34 of the FW Act but rather in the manner set out above.

Conclusion

I have found that Part 3-1 of the FW Act applies to FHFM for the reasons set out above. It employed Ms AB, and thus when it terminated her employment, it “dismissed” her for the purposes of the Act. I therefore have before me a dismissal dispute for the purposes of s 386 and intend to deal with this matter by listing it for a conciliation conference in due course.

COMMISSIONER

Appearances:

Ms Genevieve Barry, for the Applicant

Mr Milan Cakic and Mr Christopher Chang, for the Respondent

Hearing details:

2025
Melbourne via MS Teams
February 7

[1] Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152; see also Marie Vic Dawson v Centre for Digestive Diseases Pty Ltd[2025] FWCFB 50

[2] FW Act s 386

[3] Transcript [PN215]

[4] Transcript [PN232]

[5] Transcript [PN219]

[6] PR785417

[7] PR785418

[8] [1959] HCA 8

[9] Applicant’s Closing Submissions, 13 February 2025 [13]

[10] Fair Work Act 2009 s 335

[11] Fair Work Legislation Act 2024 Schedule 1, Part 17, cl 116 - 119

[12] Respondent’s Further Submissions, 13 February 2025 [32]

[13] Fair Work Legislation Act 2024 Schedule 1, Part 17, cl 116(1)(a)

[14] See Explanatory Memorandum, Fair Work Legislation Amendment (Closing Loopholes No. 1) Bill 2023 [991]

[15] [2022] HCA 1

[16] [2022] HCA 2

[17] Gang Ma v Yan Massage Wynnum West Pty Ltd[2024] FWCFB 419 [25]

[18] Ibid [18]; Personnel Contracting [43] – [44]; [59]; [183]

[19] Gung Ma [23]

[20] Ibid [5]; Personnel Contracting [59]

[21] Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario [2011] FWAFC 8307; Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; Hollis v Vabu [2001] HCA 44 (Vabu); Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52

[22] Explanatory Memorandum, Fair Work Legislation Amendment (Closing Loopholes No. 1) Bill 2023

[23] [2011] FWAFC 8307

[24] [1992] 1 WLR 939 [944]

[25] [2011] FCA 366

[26] Ibid [208]

[27] Transcript [PN138]

[28] Transcript [PN179]

[29] See Statement of AB, annexures B, D, E

[30] Statement of Mr A [11]

[31] Ibid

[32] Transcript [PN119]; Statement of AB, annexure A, D, E

[33] Statement of AB [10], annexure I

[34] Ibid [10]

[35] Transcript [PN435] – [PN436]

[36] Respondent’s Further Submissions, 13 February 2025 [35.15]

[37] Witness Statement of Mr CD [12(d)]

[38] Transcript [PN379]

[39] Transcript [PN266] – [PN271]

[40] Statement of AB Exhibit L

[41] Transcript [PN193 – PN209]

[42] French Accent [30]; Curtis v Perth & Fremantle Bottle Exchange Co Ltd [1914] FCA 21, 18 CLR 17

[43] French Accent [18], [20]

[44] Transcript PN122

[45] Transcript [PN124 – PN125]

[46] Transcript [PN315]

[47] Respondent’s Further Submissions, 13 February 2025 [35.16]

[48] Witness Statement of AB, Exhibit J

[49] Transcript [PN194]

[50] Witness Statement of AB [10]

[51] Respondent’s Further Submissions, 13 February 2025 [35.13]

[52] Australian Constitution s 51(xx)

[53] New South Wales v Commonwealth (1990) 169 CLR 482 [504] per Deane J

[54] (1979) 143 CLR 190

[55] Ibid [238] per Murphy J

[56] Respondent’s Outline of Submissions [10]

[57] Fair Work Act 2009 s 14(1)(a)

[58] [2003] FCA 910

[59] Ibid [43] per North J

[60] [2015] FCAFC 98

[61] Ibid [13] per Jessup J

[62] Fair Work Ombudsman v Valuair Limited (No 2) [2014] FCA 759 [68], [72] (Valuair)

[63] Valuair [75]; Holmes v Balance Water Inc No 2 [2015] FCCA 1093 [32]; Doessel Group Pty Ltd v Joanna Pascua[2025] FWCFB 43 [45] (Doessel)

[64] Valuair [75]

[65] Munjoma v Salvation Army (NSW) Property Trust as Trustee for the Social Work[2013] FWC 3377; Doessel [46] – [49]

[66] Doessel [50]

[67] Doessel [47]; see also Gautam Parimoo v Lake Resources N.L[2023] FWC 2543

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