Afsaneh Moradi Latreiee v KDS Health Centre Group Pty Ltd
[2021] FWC 2219
•28 APRIL 2021
| [2021] FWC 2219 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
Section 394 - Application for unfair dismissal remedy
Afsaneh Moradi Latreiee
v
KDS Health Centre Group Pty Ltd
(U2021/340)
| Deputy President Anderson | ADELAIDE, 28 APRIL 2021 |
Application for an unfair dismissal remedy – jurisdiction - general practitioner working under visa subclass – high income threshold – earnings unable to be determined in advance – earnings below high income threshold - whether employee or independent contractor – whether dismissed – indices – not an employee – no jurisdiction – application dismissed
On 13 January 2021 Dr Afsaneh Moradi Latreiee (Dr Moradi or the Applicant) applied to the Commission under section 394 of the Fair Work Act 2009 (FW Act) for an unfair dismissal remedy concerning an alleged dismissal on 23 December 2020. The respondent to the application is KDS Health Centre Group Pty Ltd (KDS or the Respondent).
The application is opposed by KDS which raises three preliminary objections. It says that Dr Moradi is not protected from unfair dismissal because:
· her earnings exceeded the high income threshold;
· she was not an employee at the date of alleged dismissal; and
· she was not dismissed.
Dr Moradi’s application was conciliated on 5 February 2021 but did not resolve.
I issued directions on 25 February 2021.
Materials were filed by Dr Moradi and KDS.
I granted permission to both Dr Moradi and KDS to be represented.[1]
I heard the matter by video conference on 7 April 2021.
Facts
I heard evidence from both Dr Moradi and KDS’s Managing Director Dr Kamal Wellalagodage (Dr Wella) on witness statements filed in their names.[2] Attachment F to the Statement of Dr Moradi was subject to a confidentiality order made on 7 April 2021.
Both Dr Moradi and Dr Wella were conscientious witnesses. On matters of fact, there were few areas of dispute. The most significant is the conversations between themselves leading to an Independent Contractor Agreement being made on 27 December 2019. Those differences are largely matters of recall, not credit. I make findings on that issue in the body of this decision.
The medical practice
Dr Wella operates a general medical practice in suburban Adelaide (Blair Athol).
To administer the clinic, Dr Wella engages other medical practitioners, health professionals and administrative staff. He himself practices in the clinic.
The medical practitioners engaged by Dr Wella generally work as independent contractors from the clinic.
The clinic operates across seven days and provides services into the evenings. It has an established patient clientele from amongst middle eastern and central Asian communities. Doctors that speak relevant foreign languages are of value to the practice.
Dr Moradi’s visa status
Dr Moradi is not an Australian citizen. Her working rights in Australia as a general practitioner exist by virtue of having been granted a working visa subclass 482 (Temporary Skill Shortage) by the Australian Government (Department of Home Affairs) on 15 October 2019.[3]
Dr Moradi attained her medical degree in Iran in 2004. She subsequently worked in Iran and the United States.
In 2018 Dr Moradi decided to move to Australia and work as a doctor.
A precondition to the grant of a 482 visa is that an employment arrangement has been entered into between the visa applicant and a sponsoring employer.
Dr Wella engaged a number of doctors in the Clinic on temporary skill shortage visas.
On 22 July 2018 Dr Wella offered Dr Moradi full time employment in the clinic for an initial period of one year (working nights, weekends and public holidays), conditional on approvals being secured from relevant Australian medical and government authorities.[4] The offer expressed remuneration as:
“calculated on 50% gross billings. The annual income is not fixed for General Practitioners, howsoever according to the last pay slips will be around $98,800.00.”
The limitation on Dr Moradi only working nights, weekends and public holidays was imposed because it was only general practitioners working those times that could support the grant of a temporary skill shortage visa by the Australian Government.
The offer was accepted.
Dr Moradi subsequently applied for a subclass 482 visa and KDS agreed to be her visa sponsor, on the terms of employment agreed with KDS. KDS assisted Dr Moradi to secure approval by the medical board[5] and obtain a provider number from Medicare. General practitioners require a Medicare provider number; the provider number granted to Dr Moradi applied to services delivered whilst working for KDS only.
Dr Moradi’s visa was granted by the Australian Government on 15 October 2019. It was for a four year term (15 October 2019 to 15 October 2023). The sponsor was KDS. The total remuneration and the monetary component of salary were both expressed as “96,724”. A number of “approved work conditions” were terms of the visa. These included:[6]
“This condition means that you must:
· only work in the occupation for which your visa was approved...;
· only work for the employer who nominated the position you are working in (limited exceptions apply)
If you stop working for the employer who nominated you, within 60 days you must do one of the following:
· find another employer who is willing to nominate you
· be granted another type of visa
· make appropriate arrangements to depart Australia.
Your visa permits you to change employers if they have an approved nomination with you identified as the nominee, and the occupation specified in the nomination is the same as the occupation that was approved for the visa.”
The sum of $96,724 was an amount advised by Dr Wella, drawn from a (then) relevant professional source of doctor’s base salaries. That reference point subsequently adjusted the base to $98,800. That latter amount became the base remuneration under Dr Moradi’s first engagement.
Dr Moradi’s first engagement
Dr Moradi commenced work in the clinic as a doctor on 25 November 2019. It is an agreed fact that she did so as an employee.[7]
Both Dr Moradi and Dr Wella gave evidence that there was a written contract to this effect. That contract it was said was forwarded to the Department of Home Affairs for the purpose of securing the visa. It was not produced in evidence.
Dr Moradi’s evidence was that this first employment contract provided a base remuneration of $98,000, plus in addition, 50% of medical fees generated from her services. Dr Wella’s evidence was that the first contract provided a base remuneration of $98,000 or 50% of medical fees generated from her services, which ever was the greater.
For the purposes of this matter I do not need to determine this factual dispute; though on the balance of evidence it is more probable than not (given the events that transpired) that the contract was as expressed by Dr Wella.
The first engagement lasted only two weeks. It is an agreed fact that from about 14 December 2019 Dr Moradi worked on different terms, being those set out in a contract signed by both parties on 27 December 2019.
In dispute is how the second work engagement arose.
Dr Moradi’s second engagement
It is not disputed that upon receiving her first payslip for the week ending 5 December 2019[8] Dr Moradi approached Dr Wella. Dr Moradi questioned the accuracy of the payslip as it only referred to payment of a week of “annual salary” ($98,000) and made no reference to any payment for fees generated.
Dr Moradi’s evidence[9] was that Dr Wella said words to the effect ‘if you want to be paid gross billing fees, we have to change our arrangement to subcontractor’.
Dr Wella’s evidence was that it was Dr Moradi who then said (either in this conversation or in further conversation in the days that followed), that she was aware that other doctors in the practice were employed as contractors and were in receipt of 60% of gross fees, and that Dr Moradi asked if she could be placed on the same arrangement.
I take into account the understandable dulling of memory due to the effluxion of time. I find it more likely than not that Dr Wella did first suggest a contractor relationship rather than Dr Moradi. That is plausible given the question Dr Moradi asked about her payslip, the understanding that Dr Wella had about her first contract (that a percentage of fees was not payable in addition to the base salary), and that Dr Wella (rather than Dr Moradi) would have been more familiar with what others in the practice were being paid given that she had only been there for a week. I do not find that Dr Wella only reluctantly agreed to engage her as a contractor, as he suggested.[10] Whilst I find that Dr Moradi was pleased he agreed, I do not find that Dr Wella came to that position with particular reluctance.
I find that a discussion then occurred between Dr Wella and Dr Moradi on what remuneration under a contractor relationship would look like. Dr Moradi wanted 60% of fees, not 50%. I find that Dr Wella agreed to this. Dr Moradi was pleased that she had secured what she considered a beneficial increase to her remuneration. She texted a fellow doctor in the practice, as follows:[11]
“DR MORADI: Kamal wasn’t in a good mood btw
COLLEAGUE: Why????
DR MORADI: Because he had to change our contract to 60%
COLLEAGUE: I am well and thanks for your kindness.*
DR MORADI: I don’t care
He had to change our contract
COLLEAGUE: Well, he has said though*
DR MORADI: Even with 60%
COLLEAGUE: Well, acted upon what he has said though.*
DR MORADI: I caused it. Of course, I only asked one question.*”
Dr Moradi was unable to explain the context around why she said, “I don’t care”.[12] However, Dr Moradi explained the other portions as being about her approaching Dr Wella concerning her payslip to discuss why she was not receiving 60% of billings. She says that Dr Wella was put into a poor mood as a result of having to pay more. She was texting her colleague with this “good news”.[13]
Dr Wella instructed his practice managers to draft an independent contract agreement relating to Dr Moradi, using a template applicable to other doctors in the practice.
On about 14 December 2019 (a week later) Dr Wella gave Dr Moradi a document entitled “Independent Contractor Agreement” between “Blair Athol Medical Clinic Pty Ltd and KDS Health Group Pty Ltd” and “The Contractor Doctor Dr Afsaneh Moradi Latreiee”. The contract contained seventeen clauses and a schedule. The schedule identified seven matters including that Dr Moradi was named as “The Contractor”. “Fees” were expressed as “60% of Gross Receipts minus GST” plus 60% of certain other fees (medical reports, home visits, conferences, worksite visa and medical examinations). It added “will increase if the gross reaches an agreed/nominated amount”.
Dr Moradi considered the contract over the next fortnight. On 27 December 2019 both Dr Moradi and Dr Wella, on behalf of the practice, signed the Independent Contractor Agreement (the Agreement).
The Agreement relevantly provided:[14]
“The contractor confirms that he or she has accepted the appointment on the terms and conditions set out in the Agreement” and
“The parties acknowledge that in providing the Contract Services the Contractor acts as an independent contractor and not as an employee, partner or agent of the Company…”
An issue arises concerning the term of the Agreement. I deal with this issue in the body of this decision.
From 19 December 2019 Dr Moradi was paid under the terms of the Agreement.
Ending of active work
Dr Moradi continued to work in the practice without incident and on the agreed basis, without change to the Agreement or other working arrangements, until mid-2020.
Around this time Dr Wella made a mandatory report to the medical regulator (Australian Health Practitioner Regulation Agency/ AHPRA) concerning alleged conduct by Dr Moradi. It is not necessary, for the purposes of this jurisdictional decision, to outline the alleged conduct and there is no public interest in doing so.
In about August 2020 AHPRA imposed conditions on Dr Moradi continuing to practice as a general practitioner. Those conditions were not acceptable to Dr Wella or the business. On 11 August 2020, Dr Wella and Dr Moradi met to discuss the matter.
Dr Wella advised Dr Moradi at this meeting that the conditions were not acceptable to the practice and that she could not work in the practice under those conditions. Dr Wella denies that he used words to the effect that her “employment” would be “terminated”. I accept and prefer Dr Wella’s evidence in this regard.
Dr Moradi was thereafter not given permission to provide services at the clinic or to service any of the clinic’s patients. After 11 August 2020 Dr Moradi did not again work at the clinic, secure fees for the practice or receive remuneration (except a small amount for monies remitted by Medicare for prior services).
Correspondence then ensued over the following three months between lawyers for Dr Moradi and lawyers for KDS concerning Dr Moradi’s circumstances.
By letter dated 23 December 2020 lawyers for KDS advised lawyers for Dr Moradi:
“Last Thursday, 17 December 2020, my client informed the Department of Immigration that Dr Moradi was no longer engaged by the Blair Athol Clinic and that, accordingly, he could no longer be her visa sponsor. He is obliged to make this notification.
My client does wish Dr Moradi well for the future but he will not enter into any further discussions with her about her return to the Blair Athol Clinic while the restrictions are in place…”
Dr Moradi filed these proceedings on 13 January 2021 through the agency of her legal practitioner claiming that she had been unfairly dismissed on 23 December 2020.
Submissions
KDS advance a series of preliminary matters contending that Dr Moradi is not protected from unfair dismissal under the FW Act and her application is not otherwise within the Commission’s jurisdiction. It claims:
· her earnings exceeded the high income threshold;
· Dr Moradi was not an employee at the date of alleged dismissal; and
· Dr Moradi was not dismissed.
It is these preliminary matters which are the subject of this decision.
Dr Moradi, in response, contends that she was a person protected from unfair dismissal and that her application invokes the Commission’s jurisdiction. She contends:
her earnings, as defined by the FW Act, did not exceed the high income threshold;
she was an employee at the date of alleged dismissal (23 December 2020); and
she was dismissed by KDS.
Consideration
High income threshold
The Commission only has jurisdiction to hear and determine unfair dismissal applications if the employee is a person “protected from unfair dismissal”. Section 382(b) of the FW Act provides:
“ 382 When a person is protected from unfair dismissal
A person is protected from unfair dismissalat a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i)a modern award covers the person;
(ii)an enterprise agreement applies to the person in relation to the employment;
(iii)the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”
It is not contended by Dr Moradi that a modern award or an enterprise agreement applied to her circumstances. I conclude that no such industrial instrument applied.
Was the sum of Dr Moradi’s annual rate of earnings less than the applicable high income threshold provided for by section 333 of the FW Act and regulations made under the Act ($153,600)?
The evidence of Dr Wella is that in the period 23 December 2019 until 23 December 2020, Dr Moradi was paid a gross sum of $156,666.21 as fees under the terms of the Agreement.[15]
KDS contend that this sum was earnings, and exceeds the high income threshold.
Dr Moradi does not dispute that this sum was received in the period but contends that it was not “earnings” within the meaning of the FW Act.
Section 332 of the FW Act relevantly provides:
“332 Earnings
(1)An employee's earningsinclude:
(a) the employee's wages; and
(a) amounts applied or dealt with in any way on the employee's behalf or as the employee directs; and
(b) the agreed money value of non-monetary benefits; and
(c) amounts or benefits prescribed by the regulations.
(2)However, an employee's earningsdo not include the following:
(a) payments the amount of which cannot be determined in advance;
(b) reimbursements;
(c) contributions to a superannuation fund to the extent that they are contributions to which subsection (4) applies;
(d) amounts prescribed by the regulations.
Note: Some examples of payments covered by paragraph (a) are commissions, incentive-based payments and bonuses, and overtime (unless the overtime is guaranteed).”
It is clearly provided in section 332(2) that earnings does not include payments that cannot be determined in advance.[16]
The evidence is that the whole of the sum of $156,666.21 paid to Dr Moradi was received as fees under the terms of the Agreement based upon item 7 of the Agreement that provided Dr Moradi would receive 60% of gross receipts. Those were receipts of sums remitted by Medicare to the clinic on account of services provided by Dr Moradi to patients of the practice via her Medicare provider number.
In advance of any given payment period it was not possible for either KDS or Dr Moradi to determine in advance what her earnings would be. The number of patients seen and form of services performed regulated the remuneration and were unknown until a patient was seen and an assessment made by Dr Moradi (including at the conclusion of a consultation) of the type of service performed and to be invoiced. There were no minimum number of patients to be seen or minimum level of fees to be remitted.
I do not accept the KDS submission that the amount could be determined in advance because the percentage remitted of 60% of fees was contractually known in advance and did not vary. The contractually required 60% of fees was not the amount of earnings. The amount of earnings was the sum to be received by Dr Moradi. The 60% was a formula to be applied to an unknown conditional circumstance – the amount remitted from Medicare with respect to an unknown and unknowable quantum until services to a patient were performed and completed. In this sense, the amount received, whilst not a commission on sales, had some broad comparability to a percentage based commission. The statutory note to section 332(2) observes that commissions are an example of excluded amounts.
At best, the earnings known in advance was either the sum of $96,742 which Dr Wella had advised the immigration authorities, or $98,800 which Dr Wella had agreed in the first engagement as a salary. I make no finding to this effect however, because the Agreement makes no reference to that sum at all and I do not need to find that it formed any active term of Dr Moradi’s second engagement, irrespective of whether she was an employee or contractor. It ceased to be a relevant matter between Dr Moradi and KDS upon entering into the second engagement (notwithstanding whatever representations KDS had made to the immigration authorities). In any event the sum of $98,800 is below the statutory threshold. Amounts above that threshold, being contingent, were not capable of being determined in advance.[17]
In these circumstances, I conclude that Dr Moradi had earnings less than the statutory threshold in the relevant period as no amount of her earnings could be determined in advance.
Employee or contractor
A person is only protected from unfair dismissal if they were an employee under a contract of employment at the date of alleged dismissal. Employee for these purposes means a national system employee (section 380 FW Act). A national system employee is (section 13) an individual employed by a national system employer.
KDS was a national system employer. However, was Ms Moradi employed by KDS at the date of dismissal?
For the purposes of answering this question, I will consider whether Dr Moradi was an employee during her second period of engagement, and leave aside (until later in this decision) when the second period of engagement may have concluded (if at all) and whether there was an effective date of dismissal.
It is trite to note a variety of relationships exist which result in work being performed. Not all are employment relationships. The common law distinguishes between a contract of service (being an employment relationship) and a contract for services (being a contractor/principal relationship). The prevalence of genuine independent contracting as well as labour hire (or on-hire) alongside direct employment and contractors are features of the modern economy.
A multi-factor test derived from court authorities has been applied by the Commission for determining whether an employment relationship exists and (if so) with whom. A leading case outlining relevant principles is French Accent.[18] The Commission is obliged to consider the totality of the relationship having regard to various indicia that might shed light on the true nature of the relationship.
Also, well-established is that courts look to the real substance of a relationship to determine if an employment relationship exists.[19] Another expression of this principle has been said by a full bench of the Commission to be “what might be described as the commercial authenticity of those arrangements”.[20]
Intention
I take into account the circumstances in which the second engagement came to exist and that an “Independent Contractor Agreement” was reached. Relevant to this is my finding that Dr Moradi wanted to receive 60% of fees rather than a mere base of $98,800, she was pleased when Dr Wella agreed to that proposal and that the agreed mechanism in order to receive 60% of fees was entering into a contractor agreement comparable to that of other doctors in the practice.
This evidence of an intention to enter into an independent contractor relationship weighs towards that conclusion.
Also contextually relevant is that the second engagement came into effect in circumstances where Dr Moradi had, in the period immediately prior, been working as an employee and that neither party orally nor in the Agreement made reference to continuing its employment character. A new Agreement was entered that ended the first employment relationship. Whilst this does not mean that work under a second engagement could not also be that as an employee, the fact that an operating employment relationship was substituted by a separate work arrangement with some materially different terms (including an altered method of remuneration) points to the second work arrangement being intended to serve a different purpose or reflect changed circumstances.
Of further relevance is that Dr Moradi took away the Agreement which had been produced by KDS and considered it before signing it two weeks later. Her conduct was considered. This is evidence of an intention to enter into a relationship on the terms described in the Agreement (an independent contractor relationship) and weighs towards that conclusion.
I have found, on an objective basis, there to have been a mutual intention on the part of Dr Moradi and KDS to operate in a contractor relationship from at least 27 December 2019.
This weighs in favour of a conclusion that Dr Moradi was not an employee during the second period of engagement.
However, whilst this factor points towards an intention to enter into a contractor relationship and whilst the Agreement was titled ‘Independent Contactor Agreement’ and provided terms which expressly referred to Dr Moradi as a contractor and expressly eschewed that she was an employee, this is not determinative. It is well established that whilst the ‘label’ parties give to their relationship is a relevant consideration, the parties cannot deem the relationship to be something which, in substance, it is not.[21]
I now turn to consider the indicia summarised in French Accent to the extent relevant to Dr Moradi’s second period of engagement.
Control
I deal with the issue of control with respect to work performed. The particular nature of work performed is relevant to assessing whether this consideration weighs one way or the other. The working arrangement concerned work by a trained professional providing services via a doctor/patient relationship. It is not commonly the case that consulting services delivered by a professionally qualified doctor in private consulting rooms are controlled by other doctors. Thus, whilst the evidence is that Dr Wella was only infrequently present during the delivery of services (his working hours generally did not overlap with Dr Moradi), it cannot be concluded that that fact alone, in the context of a doctor/patient relationship, is evidence weighing against an employment relationship. Employed doctors working in private consulting rooms would also not commonly be directly observed when seeing a patient, not just doctors operating as contractors.
Control, however, can be evidenced in ways other than direct oversight, for example, by direction, instruction, supervision or accountability. The evidence is that in very early weeks of Dr Moradi’s work (under the first engagement and for a short time under the second engagement) she sought guidance and direction from Dr Wella and other doctors concerning particular procedures and the manner in which the practice wished to have particular services delivered. As Dr Moradi became familiar with both the Australian medical system and the clinic, she reached out less frequently to others and progressively became confident and independent in the delivery of services.
Whilst Dr Wella required accountability in the sense that any issues of concern raised with him would be discussed on a professional basis with Dr Moradi, his interaction over the period of the second engagement, and particularly after its early weeks, was one of professional guidance and mentorship rather than direction or instruction.
The absence of any significant or ongoing direction concerning the manner in which services were to be performed by Dr Moradi is consistent with a contractor relationship. However, in the context of the work of a general practitioner, is not necessarily inconsistent with an employment relationship, and does not weigh heavily against that conclusion.
Dr Wella was formally identified as Dr Moradi’s “supervisor” for the purposes of her medical registration. However, this is not a telling factor given that the designation of a supervisor was required by the medical authorities with respect to a doctor, such as Dr Moradi, who had yet attained the registered status of a “Fellow”. It was a designation for that purpose only, one that could apply to a non-Fellow doctor working as either a contractor or employee.
I now turn to the issue of control in terms of hours and days of work.
Dr Moradi’s days of work and hours of work were controlled. Except on rare occasions, she did not work other than on weeknights, on weekends or on public holidays.
Whilst reflected in the Agreement,[22] these controls on times when Dr Moradi performed work were not however instigated by KDS. They were a product of controls placed on her working visa by the Department of Home Affairs and consequentially Medicare when issuing Dr Moradi a provider number.
Whilst the practice did create a forward roster for doctors to staff the clinic across its operating hours, this was a necessary organisational tool to operate an efficient practice. The evidence is that whilst Dr Moradi provided regular services and this was expected of her by the practice, Dr Moradi could provide advance notice to the practice that she was unavailable or wishing to be absent for a day or a series of days, and that would be accommodated.
The contracted number of weekly working hours was expressed as “38 per week, initially”. Whilst contracting a full time working week of hours is consistent with an employment relationship, the evidence was that this was stipulated (and generally worked) because Dr Moradi needed to work a full time load of hours to maintain eligibility for future medical registration as a “Fellow”.
In these circumstances, I consider the issues of control (control of how, when and how much work was to be performed) to be a neutral consideration.
Entitlement to work for others
The evidence is that Dr Moradi did not work for other general practices, did not work elsewhere as a doctor and did not supplement her work for KDS by working on her own account. She was not operating her own enterprise.
The evidence also is that on one occasion Dr Moradi asked Dr Wella if she could be permitted to work for another general practice, and that Dr Wella advised this was not allowed.
Ordinarily such factors, which resulted in Dr Moradi providing exclusive services to KDS, would weigh in favour of an employment relationship.
However, the circumstances were not ordinary. Context matters. Dr Wella did not deny Dr Moradi permission to work in other practices because of any decision or imposition by KDS. It was a visa condition imposed by the Department of Home Affairs that Dr Moradi only work for the business that sponsored her (KDS). Her visa did not permit Dr Moradi to work at large. Consequentially, her operative Medicare provider number only permitted Dr Moradi to seek remittance for billings with respect to her work for KDS. Dr Wella explained this to Dr Moradi as the reasons for denying her request.
If Dr Moradi was to work in Australia for a separate or second medical practice, she would have been required to secure a second sponsor and be provided a separate Medicare provider number. None of those circumstances existed during the period of her second engagement. None were within the control of KDS.
In these circumstances, the fact that Dr Moradi worked exclusively for KDS and did not operate her own enterprise is a neutral consideration, rather than one that weighs in favour of an employment relationship.
Separate place of work and advertising of services
As Dr Moradi was only permitted by government authorities, for the aforementioned reasons, to work for KDS there were no separate places of work other than the Blair Athol clinic (aside from a very occasional home or facility based consultation for the clinic).
Dr Moradi did not advertise her services, as she was not able to practise beyond the working rights provided by her visa.
In the circumstances, this is a neutral consideration.
Provision and maintenance of tools and equipment
Despite being contractually required to supply her own equipment,[23] Dr Moradi’s evidence was that, aside from using her own stethoscope and otoscope, she used equipment provided by the clinic.
However, a doctor using their own stethoscope or otoscope is not an indication of a doctor operating independently. The evidence before me was that doctors do so for health and hygiene reasons.
Given that Dr Moradi was only permitted by government authorities to work for KDS, it is unremarkable that, apart from these two items, she would use equipment supplied by KDS. KDS was contractually obliged to provide materials,[24] drugs and medical requisites reasonably required, and did so.
In the circumstances of this matter, this is a neutral consideration.
Entitlement to delegate or sub-contract work
Dr Moradi did not delegate or sub-contract her work. There was no contractual entitlement to do so. In practice, if Dr Moradi was unable to see a patient wanting to see Dr Moradi, the practice could (and occasionally did) require that patient see an alternate doctor.
In the particular circumstances where Dr Moradi was not permitted by government authorities to operate a separate business and only permitted to work for KDS it was unremarkable that patients she saw were patients of the clinic and not “her” patients, and thus unable to sub-contract to others.
In the circumstances of this matter, this is a neutral consideration.
Right to suspend or dismiss
Both KDS and Dr Moradi had the right, under the terms of the Agreement, to terminate the work arrangement for cause.[25] KDS had a contractual right to do so for additional specified reasons.[26]
These rights are consistent with an employment relationship but not necessarily inconsistent with a contractor relationship.
In the circumstances of this matter, this is a neutral consideration.
Public presentation
Dr Moradi submits that because the clinic provided her a business card with her name[27] and included her on its web site under the designation “Staff/Doctors”, that points to an employment relationship. I do not agree. Neither the business card nor the web site identified Dr Moradi as anything but a doctor. So designated, a doctor could equally be an employed doctor or a contracted doctor. Either could generically be said to be “staff” for the purpose of public presentation.
In the circumstances, this is a neutral consideration.
Deduction of income tax and GST
Throughout the second engagement no income tax was deducted by KDS from monies paid to Dr Moradi. Payments made were gross amounts. GST was deducted, as required by law.[28] Dr Moradi had the benefit of the full value of sums paid until such time as she was assessed by the taxation authorities on her assessable income. Dr Moradi’s evidence was that she took advice from her accountant on these matters, and placed her tax affairs in their hands.
This arrangement was in stark contrast to the situation under the first engagement where Dr Moradi was provided payslips, and those payslips deduced amounts of taxation required of persons earning income as employees.[29]
This factor weighs in favour of a contractor relationship.
Provision of invoices and periodic payment
Throughout the second engagement Dr Moradi was paid on tax invoice (in contrast to the payslip she received in the first period of engagement). The Agreement required the invoice to be raised in advance of payment. This is what occurred.
In practice, the invoice was raised by the administrative staff of the clinic based upon the relevant remuneration percentage of the value of claims reports submitted to Medicare with respect to services provided by Dr Moradi. The production of invoices in this manner was a convenience to both KDS and Dr Moradi.
Payment on invoice was regular and fortnightly; the same frequency as wage and salary payments under the first period of engagement.
That notwithstanding, the fact of payment on invoice and not otherwise during the second period of engagement weighs in favour of a contractor relationship.
Paid leave
Dr Moradi was not provided paid leave during the second period of engagement. If she was ill, sought a day of recreation or needed to attend to other matters, she notified the practice, in advance where possible, and was then not placed on or removed from the roster. For these periods of absence (which were infrequent), she was not remunerated. Dr Moradi did not accrue leave entitlements.
Paid leave and the accrual of paid leave entitlements is indicative of an employment relationship. Their absence is consistent with a contractor relationship (but not necessarily so if the arrangement happened to be a sham).
Nature of the work
I have had regard to the nature of Dr Moradi’s professional work, as a qualified medical practitioner working in a private practice, in considering whether the largely unsupervised delivery of consulting services to patients, within an overall framework of accountability, weighs one way or the other. I have concluded that, in the circumstances of this matter, it is a neutral consideration.
Creation of goodwill and other saleable assets
Dr Moradi developed a strong rapport with patients, a factor readily acknowledged by Dr Wella. Up to 50% of her patients booked on-line specifically seeking consultation with Dr Moradi. Some who booked by phone similarly did so. In this respect, Dr Moradi’s reputation was enhanced and this established a notional body of goodwill.
However, in circumstances where Dr Moradi was unable, by decision of government authorities, to work outside the practice unless and until she had a different visa sponsor, this goodwill was not a tradeable asset in her hands. It largely remained vested in the practice, and the clinic obtained the benefit of a clientele that came back to the practice to obtain the services of Dr Moradi.
These are factors more consistent with an employment relationship and weigh towards that conclusion, though only slightly in the unusual circumstances of this matter where it was not the employer which imposed conditions precluding the trading of goodwill.
Proportion of remuneration spent on business expenses
There is no evidence before me of the proportion of remuneration Dr Moradi spent on business expenses. Given that she was providing personal services and largely using equipment supplied by KDS, the likely proportion would have been very small and consistent with that of an employee.
Dr Moradi was however required to carry medical indemnity insurance.[30] The evidence was that this was personally paid by her. Whilst this may lend itself towards a contractor relationship, it does not necessarily do so. Whilst employed under the first engagement, Dr Moradi was putting her insurance arrangements in place. Those arrangements followed her as a doctor, wherever and howsoever she practised.
In these circumstances this factor, considered overall, weighs slightly towards an employment relationship but not strongly so.
Other matters – remuneration package
During the second period of engagement, Dr Moradi was not paid by KDS when not providing services.
This factor weighs towards a contractor relationship.
I have found that in early December 2019 Dr Moradi and Dr Wella agreed to alter her remuneration arrangements such that she would be paid 60% of gross receipts, that Dr Moradi had suggested the figure of 60%, and was pleased with the outcome when Dr Wella agreed. Such an arrangement had some obvious advantages for Dr Moradi over the previous salaried arrangement (whether or not it was a base salary plus 50% of receipts, or a base salary or 50%, whichever was the higher). Under the new arrangements, Dr Moradi retained the full cash value of the 60% until such future time as she lodged tax returns. She considered both the higher figure of 60% (rather than 50%) and the non-taxed nature of the remuneration was beneficial to her, as did Dr Wella. Whether in fact it was as beneficial as thought is a separate question – the remuneration package under the second engagement did not include superannuation (at 9.5%, though Dr Moradi had thought it had been 10%), nor paid leave.
Overall, the nature of the remuneration package under the second engagement weighs towards a contractor relationship.
Other matters – restraint
The Agreement governing the second engagement contained a restraint provision.[31] It was titled ‘Future employment/Business activity of the contractor’. The use of the word “employment” in the title is, on the face of it, inconsistent with the designation of “contractor” that follows, though in the body of the clause the phrase “business” or “business activity” is used.
The restraint clause was not limited to future business activity. Clause 9.3.1 provided:
“9.3 Other than activities undertaken by the Practitioner as at the date of this Agreement, or as otherwise required by law, (sic) The Practitioner agrees that, for as long as they remain a contractor/service provider of The Medical Clinic and for the Restraint Period, that they will not:
9.3.1 be concerned in any business carrying on business in, or provide services in, the Restraint Area which competes with any business carried on by, or services provided by, The Medical Clinic at the Termination Date.”
The “restraint area” was defined as the local council area of Port Adelaide or, if not enforceable, a five kilometre radius of the Blair Athol Clinic.
Whilst the restraint clause was not used, and was largely redundant in practice given the restrictions imposed by Dr Moradi’s visa conditions, it nonetheless weighs towards a conclusion of an employment relationship.
Other matters – visa representations
Dr Moradi places emphasis on what she says were representations made by KDS to the immigration authorities concerning her engagement. She says that the relevant visa subclass can only be secured by an employee, that KDS must have made representations to the authorities that it would engage her as its employee, that the visa as granted referred to KDS as her “employer”, that she was only allowed to work “for the employer” who nominated the position, and that only in limited circumstances was she permitted to “change employers”.
I have no evidence of what representations were made by KDS to immigration authorities. Before me only is the grant of visa.[32] That grant does largely specify what Dr Moradi contends.
Whilst I take these matters into consideration there are a number of difficulties in giving them significant weight.
Aside from having no evidence of what representations were made by KDS to immigration authorities, I have no evidence as to whether the subclass of visa granted to Dr Moradi is a subclass where the expression “employment” is used in any wider context (such as permitting work as a contractor) or what the “limited exceptions” to changed arrangements contemplated by the visa may be.
Further, Dr Moradi was initially employed by KDS on an employment relationship. Whether the second engagement was of a different character is a matter for the Commission (and if necessary, the courts) to determine. It cannot be determined with reference to a visa designation by a government authority. Whether KDS or Dr Moradi were in breach of the visa condition or the sponsorship arrangement during the second period of engagement, is not a matter before the Commission and is not a matter on which I express a view.
The terms of Dr Moradi’s visa weigh somewhat in favour of an employment relationship but not heavily so.
Conclusion on employee/contractor
Dr Moradi was clearly employed under a contract of employment during the first (short) period of engagement.
With respect to the second period of engagement, there are factors that tend towards either conclusion and other factors which (in the particular circumstances of this matter where work rights were constrained by visa conditions) are neutral.
I do not consider the Agreement to have been a mere label or subterfuge to avoid obligations. I reject Dr Moradi’s submission that it was a sham. In both form and practice the arrangement was entered for genuine purposes and considered beneficial by both Dr Moradi and KDS.
I take into account that in practice, and certainly through Dr Moradi’s eyes, the work she performed and the manner in which it was performed did not materially vary between the first and second engagements other than a natural increase in confidence and independence as a professional doctor. However, as noted, both the structure, method and quantum of remuneration changed consistent with the new contract that both parties considered beneficial.
Ultimately, this matter must be determined on objective factors, not subjective belief. An evaluative judgement is to be made, having regard to the weighing of relevant considerations. The particular context in which Dr Moradi was permitted by her visa conditions and consequent Medicare provider constraints to practise medicine in Australia reduce the weight to be attached to factors (such as Dr Moradi not operating her own enterprise) that might otherwise, in a more orthodox context, weigh more strongly towards an employment relationship. The mutual intent to work as a contractor coupled with the structure, method and quantum of remuneration arrangements become particularly weighty in that context.
Considered overall, and having conducted the weighing exercise, I conclude that Dr Moradi was not an employee during the second period of engagement.
Was Dr Moradi dismissed?
Not being an employee during the second period of engagement, Dr Moradi was not dismissed within the meaning of the FW Act, whether on the date alleged or otherwise.
However, for the sake of completeness, and in the event I am wrong in the aforementioned conclusion, I deal with the contention by KDS that Dr Moradi was not dismissed on 23 December 2020 because the Agreement came to an end on its own terms on 25 November 2020.
Clause 1.3 of the Agreement provided:
“1.3Appointment is initially for the period of 25/11/2019-25/11/2020 (12 months) with an option to extend upon agreement from both parties.”
However, clause 10.1 of the Agreement provided:
“10.1This contract is for a period of 4 years, if the contractor terminates prior to 4 years the contractor must pay expenses related to observer-ship, supervision and nomination fee in full.”
Aside from these inconsistent terms, the evidence before me on what was said, intended or understood about the term of the arrangement is unclear. Dr Moradi’s visa contemplated a working period of four years in Australia (to 15 October 2023). Dr Moradi considered that she would work for KDS for that period unless something else arose. Dr Wella’s evidence was that he wanted a contractual stipulation of one year in the event that the working relationship with a new doctor from overseas did not work out, but equally he wanted to hold her to a four year term if the arrangement was working out. In this respect, KDS was wanting its cake and eat it too.
It is an established principle that in the absence of clear and unambiguous evidence of a fixed or time limited period of engagement, a conclusion to that effect cannot be drawn.[33] The default position will be that engagement will be ongoing (albeit subject to termination on notice or for cause) in the absence of clear and unambiguous evidence.
The evidence before me is anything but clear and unambiguous. It is unsafe to find that the work arrangement, howsoever characterised, between Dr Moradi and KDS ceased on 25 November 2020 by effluxion of time, and I do not so conclude.
Further, whilst Dr Moradi did not perform services for KDS after 11 August 2020, this was a product of a dispute between her and KDS concerning the response by KDS to the conditions imposed on Dr Moradi by the relevant medical authorities. Those matters were the subject of active communication by their respective legal representatives in the period up to 23 December 2020. Nor had KDS moved to give notice under clause 10.4.3 of the Agreement. In circumstances where the Agreement contemplated no remuneration during periods where no services were provided, the absence of payment of monies by KDS between 11 August 2020 and 23 December 2020 does not point towards a work contract having ended.
For these reasons, I conclude, should it be necessary to do so, that a contract for the provision of services existed between KDS and Dr Moradi as at 23 December 2020 from which she could have been dismissed had she been an employee. I am satisfied that the conduct of KDS, in advising Dr Moradi that it would not provide a facility for her to provide services on the conditions imposed by the medical authorities, and in advising the immigration authorities on or about 17 December 2020 that Dr Moradi was no longer working for KDS, brought the work arrangement to an end.
Conclusion
For the aforementioned reasons, no contract of employment existed between Dr Moradi and KDS during the second period of engagement notwithstanding it being brought to an end by KDS. Not being an employee at the date of alleged dismissal or otherwise (other than during the first period of engagement), Dr Moradi was not dismissed within the meaning of the FW Act.
That being so, the application does not invoke the Commission’s jurisdiction. The application must be dismissed. An order[34] giving effect to this decision is issued in conjunction with its publication.
DEPUTY PRESIDENT
Appearances:
A. Hamdan, with permission, for Dr Moradi Latreiee
B. Duggan and J. Ikonomopoulos, with permission, for KDS Health Centre Group Pty Ltd
Hearing details:
2021.
Adelaide; by video.
7 April.
[1] Directions 25 February 2021 at [7]
[2] A1 Statement of Dr Moradi 26 March 2021; R1 Statement of Dr Wella 12 March 2021; R2 Further Statement of Dr Wella 1 April 2021
[3] A2
[4] A1 Attachments A and B
[5] Australian Health Practitioner Regulation Agency
[6] A2
[7] R2 paragraph 2
[8] A1 Attachment C
[9] A1 paragraph 12
* These sections of text are English translations from Farsi as transcribed from Dr Moraldi’s evidence .at 1:17:11 – 1:29:32 PM
[10] R2 paragraphs 4, 5 and 6
[11] A3
[12] Audio of hearing at 1:19:00
[13] Ibid, at 1:21:00
[14] R1 Attachment A paragraphs 1.2 and 2.6
[15] R1 paragraph 6.1.1
[16] See also Foster v CBI Constructors Pty Ltd[2014] FWCFB 1976
[17] Jenny Craig Weight Loss Centres Pty Ltd v Margolina[2011] FWAFB 9137; Keramidas v Vantage Systems[2018] FWC 1600
[18] Jiang Shen Cai trading as French Accent v Rozario[2011] FWAFB 8307 at [30] (French Accent) applying Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, Roy Morgan Research Pty Ltd v Commissioner of Taxation [1997] 37 ATR 528 and Hollis v Vabu [2001] HCA 44
[19] On call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) (2011) 206 IR 252 at [89]
[20] FP Group Pty Ltd v Tooheys[2013] FWCFB 9605 at [22]
[21] Abdulla v Viewdaze Pty Ltd t/as Malta Travel (2003) 122 IR 215 at [34]
[22] R1 Attachment A Schedule item 3
[23] R1 Attachment A clause 2.3
[24] Ibid clause 3.1.5
[25] Ibid clause 10.3
[26] Ibid clause 10.4
[27] A1 Attachment E
[28] A1 Attachment C
[29] ibid
[30] R1 Attachment A clause 6 and Schedule item 5
[31] Ibid clause 9
[32] A2
[33] Andersen v Umbakumba Community Council (1994) 126 ALR 121, at pp. 125‒126 (von Doussa J).
[34] PR728864
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