Armstrong v JLF Corporation Pty Ltd and ANOR; and; Miller v JLF Corporation Pty Ltd and ANOR

[2018] FCCA 3166

FEDERAL CIRCUIT COURT OF AUSTRALIA

ARMSTRONG v JLF CORPORATION PTY LTD & ANOR
and
MILLER v JLF CORPORATION PTY LTD & ANOR [2018] FCCA 3166

Catchwords:
INDUSTRIAL LAW – EMPLOYMENT LAW – Employment relationship – ascertaining existence and nature of relationship – particular relationships – independent contractor.

Legislation:

Fair Work Act 2009, ss.26(2)(c), 27(1)(c), 27(2)(g), 45, 357(1), 545, 545(5), 550(1)

Industrial Relations Act 1999 (Qld), Ch 2 of Pt 3
Superannuation Guarantee (Administration) Act 1992

ACE Insurance Ltd v Trifunovski & Ors (2011) 84 ATR 561
ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146
Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385
Commissioner of Pay-roll Tax v Mary Kay Cosmetics Pty Ltd [1982] VR 871
Hollis v Vabu Pty Ltd (2001) 207 CLR 21
Humberstone v Northern Timber Mills (1949) 79 CLR 389
Narich Pty Ltd v Commissioner of Pay-roll Tax [1983] 2 NSWLR 597
On Call Interpreters& Translators Agency Pty Ltd v Commissioner of Taxation (No.3) (2011) 214 FCR 82
R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
Sweeney v Boylan Nominees Pty Ltd (2006) 227 ALR 46
Tattsbet Limited v Morrow (2015) 233 FCR 46
Vabu Pty Ltd v Commissioner of Taxation (1996) 33 ATR 537

Applicant: LINDA ARMSTRONG

First Respondent: JLF CORPORATION PTY LTD

Second Respondent: JOHN FITZGERALD

File Number: BRG 596 of 2015

Applicant: JOANNE MILLER

First Respondent: JLF CORPORATION PTY LTD

Second Respondent: JOHN FITZGERALD

File Number: BRG 597 of 2015

Judgment of: Judge Jarrett

Hearing dates: 17 & 18 March 2016

Date of Last Submission: 22 September 2017

Delivered at: Brisbane

Delivered on: 5 November 2018

REPRESENTATION

Counsel for the Applicants in proceedings BRG 596 of 2015 and proceedings BRG 597 of 2015: Mr Hall

Solicitors for the Applicants in proceedings BRG 596 of 2015 and proceedings BRG 597 of 2015: Adams Wilson Lawyers

Counsel for the First and Second Respondents in proceedings BRG 596 of 2015 and proceedings BRG 597 of 2015: Mr Reed

Solicitors for the First and Second Respondents in proceedings BRG 596 of 2015 and proceedings BRG 597 of 2015: Ellem Warren Lawyers

ORDERS

IN PROCEEDINGS BRG 596 of 2015

1. The application filed on 30 June, 2015 is dismissed.

2. The cross-claim in the amended defence filed on 7 March, 2016 is dismissed.

IN PROCEEDINGS BRG 597 of 2015

1. The application filed on 30 June, 2015 is dismissed.

2. The cross-claim in the amended defence filed on 7 March, 2016 is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 596 of 2015

LINDA ARMSTRONG

Applicant

And

JLF CORPORATION PTY LTD

First Respondent

JOHN FITZGERALD

Second Respondent

BRG 597 of 2015

JOANNE MILLER

Applicant

And

JLF CORPORATION PTY LTD

First Respondent

JOHN FITZGERALD

Second Respondent

REASONS FOR JUDGMENT

1. These reasons relate to two separate proceedings, BRG556 of 2015 and BRG597 of 2015.  They were ordered to be heard together because, as will be seen from the facts set out below, they are inextricably linked with each other.  The evidence in one proceeding is to be treated as evidence in the other.  Both applicants were represented by the same solicitors and Counsel and submissions relevant to both applications were made at the same time.

2. In these proceedings, each applicant seeks relief against the respondents pursuant to the Fair Work Act 2009 (Cth). They claim that they were employees of the first respondent but, for the period of their claims, were not remunerated as such. Rather they were treated as independent contractors. They allege that the first respondent is liable to them for the entitlements to which they would otherwise have been entitled if they had been properly recognised as employees. The relevant entitlements arise pursuant to the National Employment Standard set out in the Fair Work Act and under the Clerks Private Sector Award 2010.  They seek orders for compensation for underpayment of annual leave, annual leave loading, superannuation and long service leave. They also seek the imposition of pecuniary penalties upon the first respondent for what they each allege to be conduct that contravened the Fair Work Act.

3. They allege that the first respondent, by the second respondent, misrepresented that they were independent contractors rather than employees, in breach of s.357(1) of the Fair Work Act. They also seek the imposition of a pecuniary penalty for that contravention.

4. The applicants each seek relief against the second respondent on the basis that he was involved in the first respondent’s contraventions for the purposes of s.550(1) of the Fair Work Act.

5. In the event that the applicants are successful in their contention that they were employees at the relevant times, the first respondent has a counterclaim for the repayment of certain money paid on the part of the applicants on the basis that they were contractors.

6. There are many issues in this case, but the seminal issue is whether, at the relevant times, the applicants were employees of the first respondent or independent contractors.  The balance of the applicants’ claims stand or fall on a determination about that issue.

7. For the reasons that follow I have concluded that at the relevant times the applicants were not employees of the first respondent, but rather independent contractors.  Their claims, resting as they do on the proposition that they were employees, must therefore be dismissed.  The first respondent’s counterclaim, too, must be dismissed.

Background

1. JLF is a property development company which was commenced by Mr Fitzgerald in 1981.  The primary business of JLF is buying and selling land, entering into and executing put and call agreements on land, selling house and land packages and finance.

2. Mr Fitzgerald is the sole director and secretary of JLF.  In oral evidence he suggested that he was the only shareholder in that company, but the records kept by the Australian Securities and Investments Commissions indicate that he owns 50% of the shares in JLF.  Whatever is the true position does not matter.  There is no dispute that he had ultimate managerial control of JLF.

3. In cross-examination Mr Fitzgerald described his role in the company as the CEO.  He suggested that he was present in the first respondent’s office about 50% of the time and became involved in day-to-day issues such as staffing matters and management of staff as and when he needed to.  He generally relied on his executive team to attend to those matters.  He described his role as being “generally on more strategic issues that the company deals with”.

4. Ms Armstrong commenced working with JLF on 1 July, 1993.  There is no dispute that at that time she was an employee.  She was employed as a personal assistant to the Legal Manager of JLF, Ms Helen Simmons.  In that role she performed what were described as general administrative duties.  Those duties included performing some “conveyancing work” although she does not elaborate on what that entailed at that time.  When Ms Armstrong was first employed by it, JLF only sold land.  Over time its business expanded to the sale of house and land packages to investors.

5. JLF sought to cover all aspects of a purchase by one of its clients – from signing a contract, having building plans arranged, arranging finance, conducting negotiations with builders and conducting inspections on behalf of clients.   JLF also conducted a call centre.  Agents, on behalf of the first respondent, would invite people to property investment seminars conducted mostly by Mr Fitzgerald.  JLF also had another aspect to its business that would provide financial services to clients and a department that raised funds for “syndications”.

6. In 1997 Ms Armstrong was promoted to manager of the Legal Department.  She took over from Ms Simmons and after her appointment she undertook all of the work previously undertaken by Ms Simmons as well as the work that Ms Armstrong had previously undertaken in her role as personal assistant to Ms Simmons.  Thus, it seems, two roles became one.  She agreed with the proposition put to her by the respondents’ Counsel that she became a salaried employee at that time.

7. When Ms Armstrong became Legal Manager, and until some changes that came about in November, 2001 to which I shall refer shortly, she received a salary which fluctuated over time.  She was provided with a company car that was available to be used by JLF staff during the day but which she got to take home each evening.   At some points she was paid $60,000.00 per annum (inclusive of superannuation).  That seems to be the highest that her salary reached.  Despite the fluctuations in her salary, in June, 2001 the second respondent agreed to “reinstate” her salary to $60,000 per annum.

8. Ms Armstrong was responsible for employing, on behalf of JLF, the applicant in proceedings BRG 597 of 2015, Ms Joanne Miller. Ms Miller commenced employment with JLF in November, 1999.   She was employed as Ms Armstrong’s assistant with Mr Fitzgerald’s approval.

9. Ms Miller performed work in connection with the conveyancing for contracts entered into by JLF and its associated entities.  She assisted with reports for financing and settlement of transactions, minutes for meetings and general administration.  Ms Armstrong was her supervisor.

10. Ms Armstrong and Ms Miller were not required to wear a uniform when they were working for JLF.  Ms Armstrong had a business card provided by JLF which identified her role as Legal Manager of JLF.  She had an email address which included the domain “jlf.com.au”.  She used the first respondent’s stationery.  She had the use of a company car.  Ms Miller also had an email address which included the domain “jlf.com.au”.

11. Ms Armstrong’s duties as Legal Manager included:

    a)executing documents in relation to conveyancing, developments and finance on behalf of JLF and its associated entities under an appointment as an attorney for those entities;

    b)attending all sales and finance meetings and travelling interstate for meetings and training as required;

    c)managing something described in the evidence as “Tenant Gap Cover” the particulars of which are unimportant to this case;

    d)managing the contracts for the sale or acquisition of land on behalf of JLF or its associated entities; and

    e)managing put and call options to which JLF or its associated entities were parties.

12. Ms Armstrong was expected to report to JLF’s in-house lawyer when she encountered any difficulties in respect of the work that she was required to undertake.  But absent any difficulties, she was expected to manage those sales and purchase contracts herself.  She had reporting responsibilities, according to Mr Fitzgerald’s evidence, to a team which included the sales manager and financial controller for JLF.

13. Ms Armstrong’s instructions from John Fitzgerald were usually received by way of email from his personal assistant.  The emails contained her instructions.  She was experienced enough to look after the work for which she was responsible without the need for day to day instructions or supervision from Mr Fitzgerald.  However, there were times when he gave her instructions in person.

14. Ms Armstrong says that she was accountable to Mr Fitzgerald.  Her evidence was that she was required to submit reports to him before going into the executive meetings that she regularly attended.  If Ms Armstrong’s projections regarding property settlements, registrations, and approvals were not correct, or achieved, she was required to provide explanations to Mr Fitzgerald.  However, Mr Fitzgerald did not think that Ms Armstrong was part of the “executive group” nor that she regularly attended executive group meetings.  He thought she might have been part of a management group that managed the day-to-day running of JLF’s business.  Nothing turns on the difference in the evidence between Ms Armstrong and Mr Fitzgerald on this point.

15. During her employment with JLF up to November, 2001, Ms Miller undertook conveyancing duties associated with sale and purchase contracts for JLF, the preparation and provision of reports regarding settlements and finance approvals and the preparation of stock reports.

16. Until November 2001 Ms Armstrong’s and Ms Miller’s usual office hours were from approximately 8.30am to 5.00pm each day with an hour for lunch.

17. By the end of 2001, there were four employees in JLF’s legal Department, the applicants in these proceedings and two others.  Ms Armstrong was then being paid $60,000 per annum, inclusive of superannuation.  That is to say, her superannuation came out of her gross wage of $60,000.  Ms Miller was being paid $35,000 a year inclusive of superannuation.  Ms Miller had set hours of work – 37 ½ hours per week.

18. Up to November, 2001 Ms Armstrong worked under the supervision of others within the JLF group of companies.  She also had direct contact, from time to time with Mr Fitzgerald. 

19. Towards the end of 2001, Mr Fitzgerald organised for JLF’s in-house accountant Dora McBain to analyse the costs to JLF of maintaining its in-house conveyances compared to outsourcing that work.  The conclusion Ms McBain reached was that it would be more cost-effective for JLF to outsource that work.

20. On 26 November, 2001 Mr Fitzgerald had a conversation with Ms Miller and two other people from the legal department.  Ms Armstrong was not present.  I accept Ms Miller’s evidence (it was not seriously challenged) that Mr Fitzgerald told the three employees that he would like them to take a pay cut because “money is tight at the moment and cuts need to be made”.  Mr Fitzgerald made it clear that “I will have to let you go if no agreement can be made”.  To the extent that Mr Fitzgerald suggests that there was no discussion about wage reductions with the members of the legal department, I reject his evidence. 

21. Ms Miller made Ms Armstrong aware of her conversation with Mr Fitzgerald.  Ms Armstrong was seen as the spokesperson for the legal department, being the supervisor of it.  When Ms Armstrong returned to work the next day, she had a meeting with Mr Fitzgerald.  I accept Ms Armstrong’s evidence that she had a conversation with Mr Fitzgerald to the following effect:

    Fitzgerald:The girls have agreed to wage reductions.

    Armstrong:I don’t think that is the case.

22. Ms Armstrong says that the second respondent’s manner changed.  He appeared frustrated and angry.  The conversation continued to the following effect:

    Fitzgerald:I knew you’d do this, I won’t be held to ransom.

    Armstrong:We have such a big workload and take on extra work willingly for no extra remuneration so we are not agreeing to reductions in our salary.

    Fitzgerald:You can all finish up on the Friday then.

    Armstrong:Well thanks for the opportunity to work for you, I have really enjoyed my time with the company and appreciate that I have learnt so much. We have a lot of work in progress at the moment, what are you going to do with it all?

    Fitzgerald: I’ll outsource it. Conveyancing Works can handle the contracts.

    Armstrong:I don’t think you will get the service you require using Conveyancing Works. Would you consider if I stay on to keep doing the company’s Conveyancing matters?

    Fitzgerald:I would be happy for you to do that. You can run it on your own. If you need any help you can organize that.

    Armstrong:If anyone was going to help me I would ask Jo to stay on. I only need one other person.

    Fitzgerald: That’s fine with me.

23. The conversation continued.  Ms Armstrong and Mr Fitzgerald discussed the terms on which Ms Armstrong and Ms Miller would continue to undertake the first respondent’s conveyancing requirements.

24. Ms Armstrong returned to her desk and she made notes that she says reflected what had been discussed, which included the following matters:

    a)“We” would be paid $600 plus GST and outlays per contract settlement.  That fee was to be subject to annual review;

    b)“We” would be paid upon settlement of each particular contract;

    c)the arrangement that Ms Armstrong had with the respondent about the use of a company car would remain undisturbed;

    d)“We” could use office space in the first respondent’s premises and did not have to pay rent for the office space required to do the work;

    e)“We” would have full use of the office equipment;

    f)“We” only had to complete sales and perform no other legal work unless she agreed to a fee to be paid for that additional work.  That meant that she was only doing conveyancing;

    g)any amounts due to her upon the termination of her employment would be paid, including annual and long-service leave entitlements;

    h)Ms Armstrong had the right to employ her own staff;

    i)Ms Armstrong would perform any further work for JLF as a contractor;

    j)if either party wished to cease the arrangement, 3 months’ notice was required to be given; and

    k)Ms Armstrong would assist with any pending acquisitions at the time of the cessation of her employment but at a reduced fee to be negotiated with JLF on a case by case basis. 

25. In cross-examination Ms Armstrong agreed that although she used the term “we” the agreement that she reached with Mr Armstrong related only to herself.  Ms Miller was not party to the conversations or the agreement that she said was reached with Mr Fitzgerald.

26. Mr Fitzgerald’s evidence was that during his discussion with Ms Armstrong he told her that JLF would be outsourcing the conveyancing process and he gave her “the option of tendering for the work”.  He says that he made it clear that “we would be considering other sources as well if her proposal was out of scope. The tender for services was that it should be a fixed price per settlement as we could go out to the market easily to get a law firm to undertake the work on a fixed price per settlement.”  His evidence is also that “At this same meeting Linda came up with a verbal proposal in response to the offer to tender which I recall being that:

    a)Linda would start a business;

    b)Linda's business could employ staff and she would employ Jo;

    c)The business would complete the conveyancing process for JLF on a contract basis;

    d)JLF would pay the business a fixed price per settlement.”

27. I prefer the evidence of Ms Armstrong about this conversation in preference to that of Mr Fitzgerald.  She made notes of the conversation very soon after the conversation took place.  Her recollection is informed by her more-or-less contemporaneous notes.  Mr Fitzgerald made no notes of the conversation.  Moreover, there are significant differences between the versions of conversations.  Nowhere does Mr Fitzgerald suggests that at this meeting Ms Armstrong proposed any particular price for the work that was being proposed.  Nor does he give any evidence about any comparisons that were in fact performed between the price that Ms Armstrong proposed and any others that he had received.  At best, his written evidence suggests that “the offer she made for contracted services was comparatively no less attractive than other outsourcing options that were considered”.  He does not say what they were.  Ms Armstrong’s evidence was that a rate was discussed and agreed at that meeting.  Ms Armstrong’s notes made on the same day immediately after the meeting reflect that.

28. Moreover, the cross-examination of Ms Armstrong confirmed her version of the meeting.  In cross-examination she accepted that she and Mr Fitzgerald had talked about the terms of her ongoing engagement by JLF and that she had a clear understanding that she would perform the work as a contractor.  She understood that she would only be paid for a particular contract of sale if it proceeded to completion.  She accepted in cross-examination that the effecting of settlement in each particular case was a condition of payment in respect of that transaction. 

1. After her conversation with Mr Fitzgerald, Ms Armstrong took up with Ms Miller for the purposes of discussing with her the arrangements that she had discussed with Mr Fitzgerald.  Ms Miller agreed that Ms Armstrong had told her that the work of the Legal Department was to be outsourced but that she had negotiated to perform the work as a contractor for Mr Fitzgerald.  She wanted Ms Miller to work with her.  Ms Miller agreed.

2. Ms Armstrong’s and Ms Miller’s employment with JLF came to an end on Friday, 30 November, 2001.  Both women received their termination pay and a pay slip on 29 November, 2001.  Both women accepted in cross-examination that they were made redundant as an employee, that they were paid out all of their respective entitlements due at that time and that they received a redundancy benefit.

3. On 1 December, 2001 Ms Armstrong drafted up a document to reflect what she and Mr Fitzgerald had discussed.  Mr Fitzgerald asked her to prepare the document.  Ms Miller participated in that as well, although Ms Miller was not a party to the agreement.  Ms Armstrong showed Ms Miller the agreement she had drawn up.  Ms Miller agreed with the terms of the document.  However, at no stage did Ms Miller participate in any negotiations with Mr Fitzgerald about the terms of the agreement.  Both women said in evidence that Ms Armstrong was acting for Ms Miller when it came to negotiating the terms of the agreement.  There is no evidence that either told Mr Fitzgerald of that, however.

4. On 3 December, 2001 Ms Armstrong and Ms Miller returned to the offices of the first respondent.  They sat at the same desks they had occupied in the previous week.  In accordance with the oral agreement struck with Mr Fitzgerald, Ms Armstrong and Ms Miller packed up all files that were not conveyancing related files and gave them to Mr Sean Fitzgerald, a lawyer who worked at the first respondent’s office at Nerang. 

5. Again, in accordance with the oral agreement struck with Mr Fitzgerald, Ms Armstrong and Ms Miller assisted Sean Fitzgerald from time to time with the non-conveyancing related files that were current as at 1 December, 2001.  I accept that initially they were not paid anything extra for that work.  Ms Armstrong also completed some pending acquisitions for fees that were agreed with Mr Fitzgerald.  She was paid $300 per settlement for work that was in progress as of 1 December, 2001. The higher rate of $600 per settlement was agreed between Ms Armstrong and Mr Fitzgerald to only come into effect for new work.

6. From 1 December, 2001 almost all of the work performed by Ms Armstrong and Ms Miller was conveyancing work for JLF or its associated entities.  That was a change from what had occurred up to that point.  They no longer undertook other legal or administrative work, except for a separate fee charged at the rate of $60 per hour. Ms Armstrong’s other day to day work changed substantially as well.  She was no longer required to supervise any of JLF’s employees as she had previously done.  She no longer managed any of JLF’s business or undertaking save for the conveyancing associated with contracts entered into by JLF or its associated entities.  According to Ms Armstrong’s evidence that included work relating to “development management agreements” that were part of each acquisition contract, but the work in relation to those agreements was not expanded upon in her evidence.  The effect of her evidence about these agreements suggests that it did not generate much work for her at all.  It was work, however, that she had performed in her employment prior to 1 December, 2001.

7. Ms Armstrong provided the agreement to Mr Fitzgerald upon her return to work.  It was not immediately signed, but it is uncontroversial that Ms Armstrong, Ms Miller, JLF and Mr Fitzgerald all conducted their relationship on the basis of the arrangement discussed between Ms Armstrong and Mr Fitzgerald in late November, 2001.  Ms Armstrong and Ms Miller both accepted in cross-examination that the agreement was between Ms Armstrong and JLF only.   Ms Miller was not a party to the agreement that Ms Armstrong had with JLF.

8. Ms Armstrong accepted that from 1 December, 2001 (or 3 December, which was the next working day after her redundancy) she started performing work for JLF and the second respondent in accordance with the terms of the agreement she says that she reached with Mr Fitzgerald at their November, 2001 meeting.  Both Ms Armstrong and Ms Miller worked from the first respondent’s head office at Nerang.  They sat at the same desks they occupied before their employment ceased on 29 November, 2001.  Ms Armstrong retained her email address with the domain “jlf.com.au”.  So did Ms Miller.

9. They had full access to the JLF computer network system and database.  They needed access to the systems in order to assist with their work.  The JLF database provided information on all properties that were either sold and settled or available for sale.  Access was essential for the performance of their work.  They could also access the JLF database from home.  

10. Ms Armstrong and Ms Miller each had a Power of Attorney on behalf of JLF.  Ms Armstrong also had a Power of Attorney for a number of other companies of which Mr Fitzgerald was a director.  Being able to execute documents on behalf of JLF or its associated entities enabled Ms Armstrong and Ms Miller to carry out their work more efficiently.  Ms Armstrong explained in her evidence that the main reason she and Ms Miller held powers of attorney was because they were required to sign transfer documents.  Sometimes Mr Fitzgerald was not available without delay and so to avoid any delays in settlements, either Ms Miller or Ms Armstrong could sign the necessary documents.  Ms Armstrong held a Power of Attorney both before and after her redundancy.

11. Between 1 December, 2001 and 7 March, 2002 Ms Armstrong submitted 21 invoices to the first respondent for work performed from time to time during that period.  The invoices were issued in Ms Armstrong’s name.  The first invoice was directed to a company called Maybrook Court Pty Ltd, a company associated with Mr Fitzgerald.  Payments due pursuant to the invoices were made to Ms Armstrong alone.

12. After Ms Armstrong submitted her first ten invoices, she was told by an officer of the first respondent (a person filling in for the respondent’s accountant who was on leave) that she would need to obtain an Australian Business Number to satisfy the accounting and other requirements arising out of the imposition of the goods and services tax.  Ms Armstrong had not included GST on her invoices to that point.  The first ten invoices that Ms Armstrong submitted were amended (by the accountant for the first respondent) so that each was a “tax invoice” for the purposes of the relevant taxation laws and including a component for GST on each invoice.

13. However, Ms Armstrong told the first respondent’s accountant that she would not apply for an Australian Business Number until the written agreement produced by Ms Armstrong was signed.

14. Ms Armstrong and Mr Fitzgerald, on behalf of JLF, signed a written agreement on 8 March, 2002.  Mr Fitzgerald’s evidence is that he did not amend the document that Ms Armstrong had prepared, but that cannot be right because there were some minor variations to the draft that was produced by Ms Armstrong on 1 December, 2001.  For example there was a reduction in the hourly rate for work that might be performed by Ms Armstrong from the $100 per hour that she nominated to $60 per hour.  That change would only have come about at the suggestion of Mr Fitzgerald or someone else from JLF.  In cross-examination she accepted that $60 per hour was an appropriate fee for the work she might have to undertake. 

15. The executed agreement recites that in the course of its business, JLF and its associated companies, buys and sells land and in doing so acts on its own behalf as vendor or purchaser as the case may be.  It recorded that JLF wished to appoint Ms Armstrong to perform secretarial and management services on its behalf.  The agreement provided that:

    a)Ms Armstrong would perform the following functions in respect of “JLF GROUP OF COMPANIES – SALE OF LAND AND HOUSE AND LAND PACKAGES”:

    i)prepare and make available to relevant parties all land contracts and development management agreements;

    ii)open files for each transaction as contracts are signed;

    iii)manage the contract through to settlement;

    iv)liaise with solicitors and financiers involved in each transaction to ensure settlements are affected as required;

    b)in respect of “JLF GROUP OF COMPANIES – ACQUISITIONS” Ms Armstrong would prepare “all documentation as required to effect Contracts/Put and Call Options Agreements required to enable the Company to acquire properties from time to time.  This service did not include after settlement services for undeveloped properties i.e.: managing the subdivisional file and carrying out functions that are necessary to reach the stage of registration (arranging guarantees, lodging plans with Council for sealing, lodging plans for registration etc).”;

    c)Ms Armstrong was to carry out her duties from the first respondent’s offices at Nerang;

    d)Ms Armstrong was entitled to the use of a company motor vehicle for the duration of the agreement;

    e)Ms Armstrong will employ her own staff from time to time;

    f)Ms Armstrong will prepare “unsettled stock report on a weekly basis stating the progress and status of each transaction, estimated settlement date, extensions of time requested”;

    g)Ms Armstrong would be paid different fees depending on the type of transaction involved, or otherwise at an hourly rate of $60 per hour plus GST;

    h)either party might terminate the agreement by providing 3 months’ written notice to the other party; and

    i)the agreement was confidential.

16. Ms Miller was not a party to the agreement.  The December, 2001 oral agreement and the March, 2002 written agreement did not deal with payments to Ms Miller for the work that she was to perform.  Ms Armstrong gave evidence that she understood that she would have to work out “a split” with Ms Miller for her work. 

17. Although the agreement that Ms Armstrong reached with Mr Fitzgerald contemplated that Ms Armstrong will employ her own staff, there is no evidence before me that suggests that Ms Armstrong ever employed Ms Miller.

18. Ms Armstrong and Ms Miller decided to share the remuneration payable under the agreement 35% to Ms Miller and 65% to Ms Armstrong.  That was not discussed with Mr Fitzgerald or anyone else from JLF.  Ms Armstrong agreed in cross-examination that at no time did anyone from JLF enquire of her about the arrangement she had with Ms Miller.

19. Ms Armstrong and Ms Miller applied for an Australian Business Number on 1 March, 2002.  It is of considerable significance, in my view, that notwithstanding that Ms Armstrong and Ms Miller did not discuss forming a partnership, on the application for the Australian Business Number Ms Armstrong (or Ms Miller if she completed the form) ticked the “partnership” box indicating that she and Ms Miller were in a partnership.  Ms Armstrong gave evidence that she and Ms Miller decided that was the best way to describe the arrangement on the application.  Ms Miller’s evidence was to similar effect.

20. Ms Armstrong, or perhaps Ms Armstrong and Ms Miller, commenced to use the name “L & J Secretarial”.  That name was not apparently registered with the Office of Fair Trading or ASIC, but it was not suggested that there was any obligation upon them to register the name.  According to Ms Armstrong’s evidence it was not intended to denote a partnership, but she said that “not too much thought went into it”.  In cross-examination Ms Miller agreed with the proposition that at the time the agreement was signed in March, 2002 or perhaps before, she and Ms Armstrong agreed to operate their arrangement in partnership whereby there would be an income split between the two of them.  However my impression of Ms Miller’s answer was that she did not focus her attention on the use of the word “partnership” by Counsel is much as she was acknowledging that the income received pursuant to the agreement was to be split between his Armstrong and Ms Miller.  However, she was later asked in cross-examination a more direct question to the effect that she and Ms Armstrong had decided to conduct their affairs as a partnership.  She accepted that proposition.

21. I am satisfied that the nature of the relationship between Ms Miller and Ms Armstrong was one of partnership.  They were pursuing a joint endeavour with a view to profit.  The evidence of each of them is inconsistent with the proposition that Ms Armstrong employed Ms Miller.

22. Ms Armstrong and Ms Miller were allocated an Australian Business Number.  The business address recorded for the purposes of the Australian Business Number was specified as 7027 Nerang Southport Road, Nerang – the first respondent’s office in Nerang.  Although, the postal address recorded in the registration was Ms Armstrong’s residential address she said that JLF’s address was the only place the “business” ever operated.  But that was inconsistent with the evidence of Ms Miller who said that she sometimes worked from home and that she could “log-on” to the first respondent’s computer system from home.

23. On about 12 March, 2002 Ms Armstrong and Ms Miller applied for a tax file number for L&J Secretarial.  The main business address, contact number and fax number they included in their application was that of JLF.  She also used her email address with the domain “jlf.com.au” as the contact email address.  On each occasion that Ms Armstrong or Ms Miller needed to identify the nature of the L & J Secretarial business for the purposes of obtaining a tax file number or registering for GST, it was identified as a partnership.  Ms Armstrong’s residential address was identified as the postal address for the business for the purposes of the service of notices on the business.

24. Ms Armstrong issued invoices to JLF or other entities that were operated by Mr Fitzgerald.  The first invoice that was issued under the name “L & J Secretarial” did not contain a reference to an Australian Business Number because it had not been received by then.  The invoices that Ms Armstrong subsequently submitted were in a form that met the first respondent’s requirements – that is to say they had Ms Armstrong’s Australian Business Number and “L & J Secretarial”.

25. Invoices were issued to the entity for which the work performed by Ms Armstrong and Ms Miller was done.  They included Lizarne Investments Pty Ltd, Royalway Path Pty Ltd, JLF Commercial Pty Ltd and Maybrook Pty Ltd.

26. The invoices were paid by JLF into a banking account nominated by Ms Armstrong on a fortnightly basis.  Usually, a single payment was made in respect of each invoice into that bank account.  The bank account was jointly held by Ms Armstrong and Ms Miller.  From that account would firstly be paid any expenses incurred by L & J Secretarial and the remainder of any money would be split in accordance with the agreement that had been reached between Ms Armstrong and Ms Miller.

27. Ms Miller and Ms Armstrong organised between themselves how the work that was required to be done would be undertaken by them.  According to the evidence of each they essentially split up the contract files equally between them.  Ms Miller agreed that she worked at the direction of Ms Armstrong, but essentially they were doing the same work.  Both agreed that neither was required to inform JLF of how the work was being undertaken.  No one from JLF enquired of Ms Miller or Ms Armstrong about how the work was being undertaken or what arrangements were in place between Ms Miller and Ms Armstrong for the sharing of the remuneration. 

28. Ms Miller’s evidence was that the decision she made with Ms Armstrong about partnership, the ABN, tax file number and the purchase of equipment were all decisions taken by she and Ms Armstrong without any input at all from anybody from JLF.

29. In August, 2003 the second respondent required Ms Armstrong and Ms Miller to rent office space from the first respondent if they wished to continue to occupy space in the first respondent’s office in Nerang. 

30. The second respondent proposed that “L & J Secretarial” pay $11,250 per year provided they completed 400 settlements per year.  If they achieved that target, the rent would be discounted in the following year.  

31. Consequently, Ms Armstrong and Ms Miller looked at the cost of rental properties elsewhere.  Ms Armstrong, on her own behalf and on behalf of Ms Miller, responded to Mr Kozik (the first respondent’s employee who was dealing with this issue) and told him that she thought the request for rent was excessive based on other properties for rent in the area.  Ms Armstrong sought to negotiate the terms of the tenancy.  She considered that all electricity, cleaning and extras should be paid by the first respondent given that the only work she and Ms Miller performed was for the first respondent.  There were other matters that she sought to negotiate in respect of the proposed tenancy.

32. After some negotiations over the terms of the tenancy Ms Armstrong says that in August, 2003 she had a conversation with Mr Kozik to the following effect:

    Ms Armstrong:   We may as well work up the road, or from home if we have to pay rent.

    Mr Kozik:John wants you in the office.

    Ms Armstrong:   Fine, we will pay electricity, cleaning, phone and equipment to keep the settlement fee at $600 per settlement.

33. Mr Kozik did not give evidence before me, but Mr Fitzgerald did.  It was put to Mr Fitzgerald that he wanted Ms Armstrong and Ms Miller to work from the first respondent’s offices.  Mr Fitzgerald denied that suggestion.  He gave evidence that he did not have any particular view about where they did their work.  He pointed out that some settlements were carried out by external legal advisers.  Nonetheless, all parties seem to agree that it was more convenient for Ms Armstrong and Ms Miller to be located within JLF’s offices because all the files were located there.  I think it likely that Mr Fitzgerald did have a preference to have Ms Armstrong working from his offices for convenience.  Indeed, there was a term to that effect in the 2002 agreement.  But as the evidence showed, the only plausible reason for desiring Ms Armstrong to work from the JLF offices was the convenience of all concerned – Ms Armstrong and Ms Miller, as well as the other staff of JLF with whom they had to deal.  The evidence shows that they were not supervised by others from JLF, at least on a day-to-day basis and they could keep their own hours.  

34. Eventually the terms of a lease were negotiated and a commercial rent was agreed between JLF and Ms Armstrong.  The negotiations included issues such as telephone connections and cost, computer network access, office furniture, electricity cleaning and “extras required to complete John’s work”.  The email correspondence about these matters demonstrates an arm’s length negotiation.

35. A form of lease was signed between Royalway Pty Ltd as landlord and Linda Armstrong and Joanne Miller trading as L & J Secretarial as tenant to commence on 1 October, 2003.  The lease was for a term of three years and included two options for further three-year terms.

36. The area the subject of the lease was the same position Ms Armstrong and Ms Miller had always worked in.  However, Mr Fitzgerald caused a wall to be erected to separate Ms Armstrong’s and Ms Miller’s area from the rest of the office space.  They had the exclusive use of that area.  There were glass doors installed although there was no other signage to suggest that they were separated from JLF.  Dora McBain’s uncontested evidence was that the area had its own security and could be locked by Ms Armstrong and Ms Miller.

1. It was also a term of the lease that JLF would provide Ms Armstrong and Ms Miller with access to three telephone lines “together with reception support” to answer calls.  Whilst Counsel for the applicants submitted that Ms Armstrong and Ms Miller could only be contacted via JLF’s offices, the evidence shows that was not so.  Each had their own mobile telephone that was not provided by JLF, but which they used for the work they undertook to perform for JLF.

2. Ms Armstrong and Ms Miller purchased a computer each, a printer and a facsimile machine.  They paid their own line rental for the facsimile machine although when they needed to send facsimiles with multiple pages, they mostly used the JLF facsimile machine.  They had access to the main office printer and facsimile machine and would use them if they needed to print bulk items.  They were able to access that equipment without cost. 

3. They were, via their computers, able to access the JLF database to enable them to do their work. 

4. Ms Armstrong and Ms Miller had access to telephones that were part of the office network which were paid for by JLF.  Telephone calls for Ms Armstrong or Ms Miller were taken by and put through by the JLF company receptionist, the same as for all JLF employees.  They were able to use the JLF photocopier.

5. The office furniture used by Ms Armstrong was provided by JLF.  Ms Armstrong bought a desk and chair for Ms Miller’s area.

6. Ms Armstrong exercised the first option in the lease.  There were negotiations about the new lease between Ms Armstrong and Dora McBain on behalf of JLF.  Ms Armstrong sought to negotiate the fee to be paid per settle conveyance to L & J Secretarial and taking space in a new building that was to be constructed next door to JLF’s offices.  There were discussions about L & J Secretarial providing its own stationery.  JLF habitually provided stationery for Ms Armstrong and Ms Miller.

7. In about December, 2008 Ms Armstrong was advised that JLF needed the area in which she and Ms Miller worked to accommodate some employees of JLF, namely the head of accounts, the company solicitor and the acquisitions manager.  Ms Armstrong and Ms Miller were required to move back into the main JLF office.  The lease that Ms Armstrong had entered into was terminated by agreement.  L & J Secretarial stopped paying rent.

8. In cross-examination Ms Armstrong agreed that she accepted the termination of the lease. 

9. When Ms Armstrong and Ms Miller returned to work in January, 2009 they were located in the main JLF office.  They continued to carry on their usual work without any change.

10. In January, 2009 Mr Fitzgerald convened a meeting between Ms Armstrong, Ms Miller and Mr Scott Watson (the company lawyer at the time).  Ms Armstrong’s evidence is that Mr Fitzgerald said “something to the following effect”, “We need to reduce the fee per conveyance to $300 per settlement. If you don’t like it you can leave”.  Ms Armstrong says that Mr Fitzgerald left the office and she and Ms Miller discussed the matter between them.  Her evidence is that they agreed to accept the changes as there wasn’t much work out there and they were glad to have a job.  They both had financial commitments which needed them to have a regular income.  Ms Armstrong agreed in cross examination that she and Ms Miller had weighed up their options and decided that they would agree to that change in terms.

11. From February, 2009 the payment received per settlement was $300 plus GST.  The parties executed a variation to their 2002 agreement reflecting the changes to the fee structure.  Consistently with the original agreement, Ms Miller was not a party to the variation agreement.  The agreement provided that:

    a)Ms Armstrong’s fee per settled conveyance would be reduced to $300 plus GST and $200 plus GST for matters that terminate even after they are made unconditional;

    b)Ms Armstrong was permitted the use of two car parks on the premises;

    c)Ms Armstrong was no longer entitled to the use of the company car; and

    d)Ms Armstrong was no longer required to perform the work relating to put and call options.

12. Ms Armstrong and Ms Miller renegotiated the division of the income derived from the contract between them.  They revised their percentages – 60% to Ms Armstrong and 40% to Ms Miller.

13. Ms Armstrong’s evidence was that the only thing that changed after she was made redundant in 2001 and commenced working pursuant to the new arrangement was that she had to submit an invoice to be paid from JLF. Prior to submitting the invoice to accounts, her evidence was that it had to be checked by JLF staff.  Initially Mr Fitzgerald would do that, however later on it was done by people in the accounts department who were also responsible for payroll for JLF staff.  If the accounts department did not review the invoices, Ms Armstrong said that “our supervisors (employees of JLF), being either Scott Watson, Wayne Hamburger, James Fitzgerald and then Liam McMahon were required to review our invoices prior to payment being made”. 

14. Ms Armstrong says that whenever she spoke to somebody from outside JLF for business purposes she identified herself as “Linda from JLF”.  Significantly, Ms Armstrong’s evidence is that, “This couldn’t be done any other way, as I was performing Conveyancing “in house”.”  Similarly she corresponded with all external parties from her JLF email account and on JLF letterhead.  She signed off her correspondence as “Legal Manager”.  She said that she never signed off using the phrase “Linda from L & J Secretarial”.  There was no “L & J Secretarial” letterhead or email.

15. Ms Armstrong’s evidence was that prior to her redundancy, the ordinary office hours were between 8.30am to 9am, and 5pm. It was a relaxed office in terms of starting times, provided everyone did the work.  After she commenced the new appointment, she says that “the hours were the same”.  The ordinary hours of work were 7.5 hours per day; that is 37.5 hours per week prior to her redundancy.  The agreement signed in 2002, however, provided for no minimum hours of work.

16. Thus, in 2013 Ms Armstrong worked a four-day week at the JLF office as the workload dropped off.  She chose to work from 9am to 4pm with half an hour for lunch.  She was also available when she was at home and on her evidence, she would often perform tasks from home or attend the office as required.

17. Ms Armstrong’s evidence was that all of the work performed by L & J Secretarial was performed by her and Ms Miller and no one else.  They never advertised or marketed their services.  That is not surprising given their evidence about the amount of work that they had and the hours they needed to work, at least up until 2013.

18. According to Ms Armstrong’s evidence, she and Ms Miller carried “out all matters relating to Conveyancing, which included all company sales and acquisitions, liaising with financiers on all matters and seeing all matters through to settlement”.  They were not lawyers and therefore could not “go out on our own working for other companies carrying out conveyancing work”.  Whilst that might have been so, there is no suggestion that they could not have done for other companies what they were doing for JLF.

19. Ms Armstrong said that she needed to be in the office of JLF to carry out her work.  Her evidence was that she could not take the files off site because “they belonged to JLF (unless I had a late settlement, but they were bought back to the office the next day)”.  But I am not satisfied that is so.  She and Ms Miller worked from home on occasions when it suited them.

20. Ms Armstrong gave evidence that she and Ms Miller were required to report to the in-house lawyer employed by JLF weekly.  They were required to provide an update on their “matters”.  Ms Armstrong characterises that as legal oversight of her work.  Between 2009 to 2014, Ms Armstrong reported to Scott Watson, Jeff Hall, Wayne Hamburger, James Fitzgerald and Liam McMahon, some, if not all of them were in-house lawyers for JLF from time to time. 

21. Ms Armstrong and Ms Miller attended mid-year conferences conducted by JLF, at JLF’s expense.  They attended the end of year conference which was held the day or morning before the Christmas party, which they also attended. Although Ms Armstrong’s evidence was that only employees attended these conferences, with the exception of one contractor who also worked from JLF’s office in the construction department, Mr Fitzgerald gave evidence that others attended both the conferences and the parties held by JLF.  The outsiders participated in the “awards” that were given at the end of the year.  I accept Mr Fitzgerald’s evidence about these matters.  I think that Ms Armstrong is mistaken.

22. The evidence is that for about two weeks over the Christmas period, JLF closed its offices and staff took leave.  Ms Armstrong says that she and Ms Miller were also required to take leave at this time just like other employees.  However, in my view that is a mischaracterisation of what occurred.  Whilst JLF closed its offices Ms Armstrong and Ms Miller could schedule their work so that settlement of contracts occurred over the closed period.  In that event they would work from home and attend settlements as needed.  Ms Armstrong could access JLF’s offices if she needed to.  Given that Ms Armstrong nor Ms Miller had any set hours of work or any holiday entitlements I am not satisfied that they were “required to take leave” as they contend. 

23. In about March, 2011 an employee of JLF left.  She was an employee in the construction department who was tasked with assisting another employee with what is described in the evidence as “put and call options”.  Initially Ms Armstrong and Ms Miller were performing that work but it had been removed from their workload by the variation to the contract in 2009.  Ms Armstrong and Ms Miller were asked to take the work on again and she agreed. 

24. In her evidence, Ms Armstrong suggested that this was an example of an occasion “When other staff left JLF, we were required to fill in and absorb their roles if required.”  The suggestion is that the applicants would simply take on more work and do what was asked of them.  However, in my view the suggestion is disingenuous. 

25. Whilst it is the case that the applicants were approached to take on the work that the departing staff member did, there was a process of negotiation leading to an agreement that Ms Armstrong, together with Ms Miller, would undertake that work for an additional agreed fee.  The arrangement was documented by way of a written variation to the 2002 agreement.  The variation provided that Ms Armstrong would be paid a “fortnightly service fee of $1,346.15” in exchange for:

    a)facilitating the due and punctual exercise of JLF’s call options with external land suppliers;

    b)facilitating the due efficient provision of necessary base documentation required by finance brokers and lending institutions;

    c)liaising with custodian construction, Terry Nasser realty, external client solicitors, vendors solicitors and legal representatives in relation to the sale and purchase transactions caused by JLF; and

    d)reporting to JLF in the form agreed in relation to the status of the above duties.

26. The service fee payable according to the varied agreement was fixed irrespective of the amount of work involved from time to time.  It was payable on a fortnightly basis irrespective of the amount of work Ms Armstrong and Ms Miller performed pursuant to the variation.

27. There was another variation to the 2002 agreement that was negotiated between the parties in about September, 2013.  The 2002 agreement provided for L & J Secretarial to charge JLF $60 per hour for services other than conveyancing.   In September 2013 Ms Miller and Mr James Fitzgerald on behalf of JLF agreed that the $60 per hour would be converted to a fortnightly administration fee of $2,346.15.  The fee payable per each settled conveyance remained the same at $300.

28. The relationship between Ms Armstrong, Ms Miller and Mr Fitzgerald and JLF began to sour in September, 2014. 

29. In September 2014 there was a meeting between Mr Fitzgerald, Ms Armstrong and Ms Miller.  Ms Armstrong’s evidence is that there was a conversation to the following effect: 

    John:Ex-staff have left this business thinking they were employees rather than contractors. I have sued one because of this, Gay Sparks. I have a document I will give you both as you are contractors that I will need you to sign. You can get legal advice on it if you like.

    Armstrong:  I will wait to see the document. 

30. Shortly after the meeting with Mr Fitzgerald and later on the same afternoon Ms Armstrong was handed a document entitled Deed of Settlement and Release by Mr Fitzgerald’s secretary. 

31. The Deed provided that JLF employed a number of employees and contractors, and because the distinction was “ill-defined”, it was JLF policy to clearly distinguish between the two. The settlement terms were, amongst other things, that in consideration for JLF maintaining the relationship, the applicants had to acknowledge that they were contractors, agree that they had no employee entitlements, and release JLF from any causes of action arising from the suggestion they might be employees. 

32. Ms Miller and Ms Armstrong obtained legal advice on the Deed.  They decided against signing it.  About a week later, they requested meeting with Mr Fitzgerald.  Ms Armstrong’s evidence is that there was a conversation to the following effect: 

    Armstrong:We have received legal advice and we are not going to sign the waiver. At least for the last 6 years of working for you we could be seen as employees. 

    Fitzgerald:I can’t believe you got legal advice. Now we have a problem. Go and put $50,000.00 into your dickhead lawyers account because that is how much it would cost to fight me. You are both terminated. I won’t be paying you a fucking cent.

    Armstrong: We haven’t asked you for money ...

    Fitzgerald:I can believe you would go to legal advice you fact.

    Armstrong:You obtained legal advice on us instead of not speaking with Jo and myself as to any concerns.

    Fitzgerald:All you have to do is agree you are contractors, sign the waiver and we can carry on as is.

    Armstrong:After how you have reacted, you would just forget this conversation and all would go back to the way it was?

    Fitzgerald:Yes if you sign the waiver. Why don’t you go next door for a coffee and discuss between yourselves what you are going to do. 

33. Ms Miller and Ms Armstrong went to a cafe next door to JLF’s premises.  Mr Fitzgerald turned up about 15 minutes later.  Ms Armstrong’s evidence is that there was a further conversation to the following effect: 

    Fitzgerald:I want you to look me in the eye and tell me you know that this is wrong.  You have no morals. What you are doing is morally wrong.

    Armstrong:I need more time to digest what has gone on. I want to speak with my husband as this impacts on my family.

    Fitzgerald:I understand. 

    Armstrong:We need to go back to the office and finish a few things. We have settlements happening today and the remainder of the week.

    Fitzgerald:I have to leave for a conference but will be back on Friday. Meet me then. I would prefer you not stay in the office until we can sort this out. 

34. Ms Armstrong and Ms Miller vacated JLF’s premises. 

35. Ms Miller and Ms Armstrong continued to assist JLF’s staff for around 2 weeks with queries as to uncompleted work, reporting systems and the like.  Their last day of work was 24 October, 2014. 

The issue

1. Counsel for the respondents accurately summarised the applicants’ case in the following way:

   19. The applications were filed on 30 June 2015. Section 544(a) restricts the court in making an order in relation to a contravention of the civil remedy provision to contraventions which occurred 6 years before the date of the application. Similarly, s.545(5) prohibits the court from making an order in relation to an underpayment that relates to a period that is more than 6 years before the proceedings commenced. The relevant limitation date is therefore 30 June 2009.

   20. On that basis, the principal issue is whether Ms Armstrong and Ms Miller were employees of JLF in the period 30 June 2009 to 8 October 2014. However, the applicants have proceeded on the basis that the nature of their relationships with JLF remained unchanged from December 2001 to the termination of the contracts.

2. I accept that submission.  The applicants did not argue that the nature of their engagement by JLF changed over time.  Rather, their argument was that from 1 December, 2001 they were at all times employees of JLF.

3. The applicants’ case hinges upon them being found to be employees rather than contractors.  If they are found to be contractors, then their misrepresentation case fails because there is no operative misrepresentation.  So too, the other aspects of their claim must fail.

The legal test

1. Notwithstanding that the applicants’ case relies upon them being found to be employees for the purposes of the Fair Work Act, the cases dealing with the question under the common law are relevant. That is because the Act imports into its application the common law understanding of employment: ACE Insurance Ltd v Trifunovski& Ors (2011) 84 ATR 561, at [24] and [26].

2. If there can be said to be a single test for determining whether a person is an employee or an independent contractor, it is that each case must be considered on its own facts.  In the present case, it is necessary to look at the totality of the relationships to determine whether Ms Armstrong and Ms Miller served JLF in JLF’s business or whether Ms Armstrong and Ms Miller carried on a trade or business of their own: Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 33, 39, 41 and 45.

3. Notwithstanding the very broad nature of the approach to the question in issue, a few matters are, however, clear.  First, any attempt by the parties to label their relationship in their contract in one way or another is far from determinative: Sweeney v Boylan Nominees Pty Ltd (2006) 227 ALR 46 at 50; and indeed “a clause designed to prevent the relation receiving the legal complexion which it truly wears would be ineffectual”: R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138 at 151.

4. Second, there is no set list of factors used to determine the nature of the relationship: ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146 per Buchanan J at 162-3. It would be fruitless and apt to mislead to attempt to exhaustively list all of the possible indicia for consideration: Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 per Wilson and Dawson JJ at 37; Mason J at 24. In fact, relevant matters are often variously stated and added to from time to time: Stevens at 36; Hollis at 46. In ACE Insurance Ltd v Trifunovski Perram J summarised the position thus (at [29]):

   ...first, the distinction between an employee and an independent contractor is ‘rooted fundamentally in the difference between a person who serves his employer in his, the employer’s, business, and a person who carries on a trade or business of his own’ (Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 at 39 [40] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ citing Marshall v Whittaker’s Building Supply Co [1963] HCA 26; (1963) 109 CLR 210 at 217 per Windeyer J); secondly, the answers to that question are to be determined by reference to the ‘totality’ of the relationship (Hollis at 33 [24]); thirdly, a number of indicia have accreted over time in the authorities which are thought to throw light to varying degrees on the outcome without being determinative: the terms of the contract; the intention of the parties; whether tax is deducted; whether sub-contracting is permitted; whether uniforms are worn; whether tools are supplied; whether holidays are permitted; the extent of control of, or the right to control, the putative employee whether actual or de jure; whether wages are paid or instead whether there exists a commission structure; what is disclosed in the tax returns; whether one party ‘represents’ the other; for the benefit of whom does the goodwill in the business inure; how ‘business-like’ is the alleged business of the putative employee – are there systems, manuals and invoices; and so on – the list is neither exhaustive nor short: see Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 at 24 per Mason J and 36-37 per Wilson and Dawson JJ, for application see Hollis at 42-45 [48]-[57] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ; Sweeney at 172-173 [30]-[33] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ...

1. Third, post-contract conduct is relevant in ascertaining the true nature of the relationship: ACE Insurance at 168-9; cf. Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385; Narich Pty Ltd v Commissioner of Pay-roll Tax [1983] 2 NSWLR 597; Vabu Pty Ltd v Commissioner of Taxation (1996) 33 ATR 537 at 539.

2. Fourth, in the words of Buchanan J in ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146 (at 151): “The two areas where the distinction [between a contract of service and a contract for services] is important concern the duties and obligations owed by the contracting parties to each other and the duties and obligations that one of them may owe to third parties.” Which of the relevant indicia ought to be applied in any given case will be heavily influenced by the nature of the claim and the focus of the specific dispute: Commissioner of Pay-roll Tax v Mary Kay Cosmetics Pty Ltd [1982] VR 871 at 878-9). As Buchanan J put it in ACE Insurance (at 151):

   [28] … The basic question remains the same in all types of case but when the question at stake concerns third persons outside the contractual relationship the focus of the examination may sometimes produce subtle influences on the outcome.

3. Fifth, in answering the question, “If [the] relationship is ambiguous and is capable of being one or the other, then the parties can remove that ambiguity, by the very agreement itself which they made with one another. The agreement itself then becomes the best material form from which to gather the true legal relationship between them.”: Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 389.

4. One of the factors often considered important is control by the putative employer over the putative employee.  But it is not the exercise of that control which is important, but rather the existence of the right of control.  “The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter's order and directions.”: Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 404.

5. It is important to note that the way in which control will manifest itself will differ from case to case: “[i]t may be found in a right of organisation and allocation of work, as much as in some theoretical right to say how actual work should be done”: ACE Insurance per Buchanan J at 432.

6. Further, as Counsel for the respondents points out:

   26. In the modern context, the level of control exerted by one party over another tends to have diminished importance. Many skilled workers are subject to little direct control and work more or less independently, although the capacity to exert control and give direction will remain in an employment relationship: Stevens v Brodribb Sawmilling Co. Ltd.21 On the other hand, as Buchanan J observed in ACE Insurance Limited v Trifunovski:22 “Frequently there is little real independence in some contracts for services”.

Consideration

1. The applicants argue that control is a significant factor in this case.  They suggest that JLF clearly exercised control over the place where the applicants were to perform their work, when the applicants’ work was to be performed, the designation of the actual work to be performed by the applicants and the manner in which the applicants’ work was carried out.  But the evidence does not bear these matters out. 

2. The place of work was a matter of negotiation between Ms Armstrong and Mr Fitzgerald.   He had a preference for Ms Armstrong to work from his offices on the Gold Coast for reasons of convenience.  Ms Armstrong’s evidence confirmed the convenience for her to be co-located with JLF and the people with whom she had to deal from that organisation.  Moreover, both Ms Armstrong and Ms Miller gave evidence that sometimes they did their work from home.  When they did that was a matter for them.  They did not need permission from anyone from JLF to do that.  These matters point against an employment relationship.

3. To the extent that the applicants’ submissions suggest that the respondents directed the applicants about their hours of work, the evidence demonstrates the contrary.  The applicants could set their own hours.  They were not subject to the same control that Ms McBain gave evidence about concerning employees of JLF.  Their hours of work were determined by themselves.  That they may have chosen to continue to attend their premises at JLF’s offices for similar hours to those they attended before November, 2001 is not significant in this context.  At best, it establishes the amount of time required to complete the work that they had undertaken to perform for JLF from time to time. 

4. The applicants each gave evidence that they discussed between themselves, and no-one else, their working arrangements.  They organised days off or time away between themselves when they needed to.

5. Both applicants gave evidence of reducing the amount of time spent working on JLF’s work from five days per week to four days per week as the work became less voluminous in 2013.  They neither sought nor received JLF’s or Mr Fitzgerald’s permission to do that.  As the respondents submit, the burden of the evidence is that Ms Armstrong and Ms Miller chose when they would attend at JLF’s premises provided that one of them was present at any one time.  These matters pull against a finding that the applicants were employees.

6. The applicants argue that even though there was no express provision in the 2002 agreement specifying their hours of work and that they may not have been contractually required to work between 8.30am and 5pm, Monday to Friday, they were nonetheless employees.  They argue that when they did perform work for JLF, they were “integrated in a manner which was not indicative of a relationship between two independent businesses”.  Further, they argue that the absence of any provision in the 2002 agreement requiring exclusive or full-time service is consistent with, at least, casual employment and “not necessarily indicative of an independent contractor”: On Call Interpreters& Translators Agency Pty Ltd v Commissioner of Taxation (No.3) (2011) 214 FCR 82 at141.

7. However, in my view, this case is quite different to On Call in that here, the applicants could decide when and to some extent where they would carry out their work.  There was no requirement for the applicants to keep anyone at JLF informed of their movements or their days of work.  

8. The only requirement placed upon Ms Armstrong by the contract was to undertake certain types of work for JLF.  There was no requirement to produce a particular result.  She was not required to ensure that the contracts that she was to manage in fact settled.  The obligation was to manage them through to settlement, but one could imagine that there was occasion when contracts did not settle for various reasons.  Ms Armstrong was only paid for each settled contract.

9. I do not think that the designation of the actual work to be performed by the applicants was indicative of control being exerted by the respondents over the applicants in the relevant sense.  JLF needed particular work completed.  The contract specified the nature of that work.  The work, in the main, consisted of managing contracts for the sale or purchase of land through to completion.  The contracts were provided to the applicants by JLF, because, presumably they could come from nowhere else.  And on the occasion that it seems that JLF sent some work to another person to undertake, Ms Armstrong raised that with Ms McBain asserting that she was entitled to do that work.  These matters are neutral to the question at hand.

10. There is no evidence that supports a submission that anyone at JLF directed the applicants as to how to do the work they undertook to do.  There is no evidence that JLF or any person on behalf of JLF sought to direct the applicants as to the manner in which they were to undertake their work.  Ms Armstrong gave evidence that from time to time she would seek instructions from either Mr Fitzgerald or JLF’s in house legal officer if she thought that she needed instructions or guidance about something, but that is an entirely different matter to her being directed about the manner in which she carried out her work.  One could easily imagine in the context of the nature of the work undertaken by Ms Armstrong and Ms Miller that they might need instructions from JLF or Mr Fitzgerald about matters such as extensions of time for settlement dates.

11. Nor is there any evidence that they were instructed on their tasks on a daily basis.  They may well have received instructions for new matters on a daily basis, but that again, is an entirely different matter.  It does not demonstrate control by the putative employer in the relevant sense. The terms of the applicants’ arrangement with JLF were that they were paid upon the achievement of particular results for particular work and the nature of the work to be undertaken required a necessary degree of liaison with JLF employees.  These matters are against the proposition that the applicants were employees.

12. Only one of JLF’s in-house solicitors gave evidence.  The applicants did not call any of the other in-house lawyers they had worked with to give evidence about the nature or the extent of the control that they exercised, or were authorised to exercise over the applicants and their work.  JLF called evidence from Mr Liam McMahon, a lawyer who commenced as an in-house lawyer for JLF in February, 2014.  Mr McMahon’s evidence was that:

    4. On my first day at JLF I was advised that I was to be ultimately responsible for, inter alia, the settlement of lots to which JLF had rights pursuant to various put and call options and referral agreements, to third parties who were clients of JLF.

13. The applicants suggest that this is indicative that the applicants were subject to control by JLF.  To some extent I think that is correct, but it is important to recognise that the roles of each of the applicants and Mr McMahon were different.  He was a lawyer attending to the legal side of the transactions.  The applicants were described by him as “contract managers” . 

14. Mr McMahon’s evidence was:

    6. The Applicants generally did not seek direction from me in relation to their role or any other aspect of their relationship with JLF. They chose when they worked and normally there was only one of them at the office. They went to lunch or the gym without notice to me or any other manager and generally came and went to and from the office as they pleased. If they were to be gone for an extended period of time, for example, if they left at midday or one was not going to be there for an extended period of time, they would normally inform me. The Applicants would never ask for permission or approval for their non-attendance or holidays. For example, on 1 October 2014, the Applicant wrote to me an informed me that she was leaving at 9:52am and would be back after 12pm for an appointment…

    7.  The Applicants generally worked out amongst each other what days they would attend the office without seeking input from JLF…

    8.  The Applicants generally dictated the manner in which their work was performed…

15. That the applicants were subject to some control or direction from Mr McMahon is some evidence supportive of the conclusion that the applicants were employees.

16. Whilst Ms Armstrong was required, by the express terms of the contract, to submit “unsettled stock reports” on a weekly basis “stating the progress and status of each transaction, estimated settlement date [and] extensions of time requested”, that too, does not indicate control in the relevant sense.  At best it is a reporting obligation no doubt designed to assist JLF to understand the progress of its contracts and, as Mr Fitzgerald described, its “cash flow”.  It is, in my view, unremarkable that JLF was, at all times, aware of what projects the applicants were working on and the progress of their work.  This matter is neutral to the question that I have to decide.

17. I accept the respondents’ submission that the level of control indicated on the facts does not suggest that the relationship was that of employer/employee.

18. The applicants submit that the evidence is against the proposition that they were running their own business.  They point out that the applicants did not earn any fees under the trading name L & J Secretarial (or in any other way), which were not paid by JLF under the terms of the contract from time to time.  Nor, the applicants submit, did they have to supply their own administrative resources, including printers, facsimile service, servers and electronic databases.  That, however, is not entirely accurate.   Ms Armstrong’s evidence was that she and Ms Miller did indeed purchase some furniture for their work as well as their computers.  I do not think that being able to connect into JLF’s network and databases is particularly significant.  Whilst they did use JLF stationery, Ms Armstrong explained in her cross-examination that consisted of pens, paper, notebooks and the like.

19. Ms Armstrong and Ms Miller represented to the outside world that they were carrying out their tasks on behalf of JLF.  I accept that the use of JLF letterhead and signature blocks in email correspondence was apt to engender an assumption by readers of that correspondence that they were employees of JLF.  Ms Armstrong also had a JLF business card that described her as the Legal Manager. 

20. Her continued use of a business card was not something that was required by JLF.  According to Ms Armstrong, it was never talked about. She had her business card prior to 2001 and she simply continued to use it.  Her business card remained “on the front desk of JLF reception” for approximately seven years after the agreement was made in 2002.

21. I think it likely that Mr Fitzgerald knew of the way in which Ms Armstrong and Ms Miller represented themselves to the outside world and either did not care or acquiesced in Ms Armstrong continuing her practice.   These matters tend towards a finding that Ms Armstrong and Ms Miller were employees.

22. The applicants argue that they were not generating goodwill for themselves.  They submit that to the extent that goodwill was being generated by the applicants, it was in the name, brand and reputation of JLF.  Whilst I accept that the applicants might not have been generating goodwill for themselves, I do not accept the submission that they were promoting JLF’s business to the public either.  The nature of their work was not to promote anything on behalf of JLF, but rather to attend to administrative type matters.  Allied with this submission is the applicant’s submission that they could not perform the work they were performing for JLF for anyone else.  I do not accept this submission.  It is not surprising that they could not do any work for anyone else given that at least until 2013 (so for some 12 years at least) their work for JLF had kept them more or less fully occupied.  Moreover, in her evidence Ms Armstrong suggested that because she was performing conveyancing services, she needed to do so in-house with an organisation that also had an in-house lawyer.  But there is no evidence that she or Ms Miller could not secure similar work for similar organisations on similar conditions to that which applied under the 2002 agreement.

23. I confess to this issue of the case troubling me somewhat – so much so that I sought further written submissions from the parties about whether the contract between Ms Armstrong and JLF was illegal because she was agreeing to undertake legal work for reward when she was not a lawyer.  Both parties provided written submissions on the point and disavowed any notion that the contract was void for illegality.  In the end, I have concluded that I should accept the applicant’s submissions that they were performing administrative and managerial functions rather than conveyancing services.  Their roles were akin to “contract managers” as described by Mr McMahon in his evidence.

24. The applicants drew my attention to and relied upon a passage from On Call Interpreters at [212]:

    A genuine personal services business will aspire to make profits and not simply be paid remuneration, as is an employee. Such a business will seek to be remunerated not simply for the provision of the labour of the self-employed entrepreneur that provides the personal services, but also for the risks involved in that person being an entrepreneur.

25. Here, the applicants argue that the ownership of business assets, the chance of profit and the risk of loss was essentially JLF’s.  But I disagree.  The applicants were not working for wages, but rather for remuneration fixed according to results that they produced.  From the remuneration produced from their efforts, they had to defray expenses.  The evidence shows that they, and in particular Ms Armstrong, were alive to this.  The evidence demonstrates negotiation over the rent and outgoings to be paid for the premises that the applicants occupied.  No doubt there was negotiation so as to keep the applicants’ expenses low and increase their profitability.   Moreover, Ms Armstrong had the right, pursuant to the agreement, to employ others to do the work and so free herself up for other things.

26. The applicants argue that the holiday arrangements described in the evidence support the proposition that they were employees.  They suggest that they were required to take leave over the Christmas break, as with all of JLF’s employees.  But that was not the evidence.   The agreement between Ms Armstrong and JLF contained no stipulations about holidays.  The applicants’ evidence was that they organised time off between themselves and to suit themselves.  They did not need permission from anyone at JLF to take time off.  As a matter of courtesy, they informed Ms McBain and others that they would be away.  For example, Ms Armstrong took one week off in September 2011 to spend time with her children during school holidays. Ms Armstrong and Ms Miller each worked 3 days per week on an alternating basis in June and July, 2014. I accept the respondents’ submission that this evidence is highly reflective of a level of independence commensurate with engagement as an independent contractor.

27. Insofar as Christmas is concerned, the evidence was that the JLF offices shut down for about two weeks over that period.  If the applicants had settlements to attend to during that period (they did from time to time) they needed to attend to those settlements.  They would work from home if the JLF offices were closed.  Mr Fitzgerald’s evidence was that it was a matter for the applicants if they scheduled settlements to take place over the Christmas break. In my view these matters tend against a finding of employment.

28. The applicants argue that the terms of the 2002 agreement support the applicants’ argument that they are employees.  They argue that because the agreement is made between Ms Armstrong and JLF, rather than with L & J Secretarial it is indicative of an employment relationship, at least with Ms Armstrong.  Further, they point to the nature of the work that is to be performed under the agreement and argue that because the “appointment” was for an undefined period of time, “which is uncommon for contractor relationships” it is indicative of an employee relationship.  I reject that argument because there is no evidence that contracts for undefined periods of time are uncommon “in contractor relationships”.  In any event, the agreement here made provision for its termination.

29. Further, they argue that by clause 1 of the agreement, the parties agreed:

    a)“The above functions will be provided by [the Applicant] to assist [the First Respondent]…[The Applicant’s] functions will be carried out at the [First Respondent’s] office at Nerang...[The Applicant] is granted use of the [First Respondent’s] car as is the current arrangement…”

    and that such a clause is entirely inconsistent with the type of arrangement that is ordinarily entered into with an independent contractor.  I accept that this matter tends toward a relationship of employer and employee.

1. However, there are other matters apparent from the terms of the 2002 agreement that tend against an employment relationship.  First, the agreement provides for Ms Armstrong to be able to delegate her work and employ others to assist her.  That is inconsistent with Ms Armstrong being an employee.  Second, the 2002 agreement and its subsequent variations (save for that in 2009) were agreed with Ms Armstrong only.  She is the only applicant who is a party to the agreement.  She reached an oral agreement with Mr Fitzgerald that she would undertake the conveyancing work for JLF.  The written agreement produced by Ms Armstrong reflected that.  The case has been conducted on the basis that the position of Ms Armstrong and Ms Miller are the same and that they are either both employees or they are both not.  The fact that only Ms Armstrong is a party to the 2002 agreement tends towards a relationship of principal and contactor.

2. So too, does the arrangements between Ms Miller and Ms Armstrong.  They set up a partnership.  According to Ms Miller’s evidence, that is what they decided to do.  Mr Fitzgerald did not know about the arrangements between the applicants for the sharing of the contract remuneration.  The applicants’ evidence was that they kept those arrangements to themselves.  They were renegotiated after the variation to the 2002 agreement in 2011.

3. Ms Armstrong entered into an arrangement where she was paid fixed fees for the production of particular results, whether those results were settlements, put and call option work or a body of ancillary administrative tasks over a period.  She agreed to share her remuneration with Ms Miller who was doing the same work, but who, the applicants negotiated between themselves, should get less than Ms Armstrong.  I accept the respondents’ submissions that the mode of remuneration and the sharing of that remuneration between the applicants points strongly to an independent contractor relationship.  This is not one of the cases where a worker was labelled an independent contractor but remunerated at an hourly rate.

4. The applicants argue that I should see the remuneration that they received under the 2002 agreement as varied from time to time as commission.  But it is not commission, but rather a negotiated fee for the provision of a service that produces a particular result.  It is significant, in my view, that JLF made invoice payments into one account nominated by Ms Armstrong and JLF nor Mr Fitzgerald had any knowledge of or interest in the individual remuneration paid to Ms Armstrong or Ms Miller.  In my view, drawing an analogy between their remuneration and a commission is inapt in the circumstances of this case.

5. Consistently with their contractual arrangement with JLF, Ms Armstrong and Ms Miller provided invoices and charged GST. The evidence shows that they understood that the contractual arrangement required that method of operation and they entered into the necessary arrangements.  The presence of GST collections by the putative contractor can point strongly against the relationship being characterised as one of employment, particularly where the worker’s participation in the GST system reflected her own conscious, well informed intention: Tattsbet Limited v Morrow (2015) 233 FCR 46 at 63-4. But I am not satisfied that the participation in the GST system reflected Ms Armstrong’s own conscious, well informed intention. Her evidence was that the requirement to account for GST was brought to her attention by employees of JLF and she simply complied with their requirements.

6. But as the applicants submit the taxation position is not as powerful an indicator of the nature of the relationship as it might at first glance appear.  In ACE Insurance (2013) 209 FCR 146, at 153 Buchanan J said:

   It is also difficult, in my view, to give much independent weight to arrangements about taxation, or even matters such as insurance cover or superannuation. These are reflections of a view by one party (or both) that the relationship is, or is not, one of employment. For that reason, in my view, those matters are in the same category as declarations by the parties in their contract (from which they often proceed). They may be taken into account but are not conclusive. These matters are less important than the adoption by the parties (where this occurs) of rights and obligations which are fundamentally inconsistent with basic requirements of a contract of employment, such as the ability to delegate the discharge of obligations under a contract to another person, or where there is a lack of control over how work is done.

Conclusion – employee or contractors?

1. In my view, taking into account the totality of the circumstances described above, the relationship between the applicants and JLF was one of principal and contractors.  The 2002 agreement as varied from time to time, was a contract for services and not a contract of service as the applicants contend.

2. Whilst there are matters which tend to push the result towards either conclusion, in my view, the absence of:

   a)set hours of work;

   b)set holiday arrangements,

   c)directions as to how the work undertaken is to be carried out on a day to day basis

   are more consistent with a contact for service than a contract of service. 

3. So too, is the requirement to lease, for a time at least, space within JLF’s premises; the style and circumstances in which remuneration was payable under the agreement; the splitting of the remuneration payable under the agreement between the applicants without reference to JLF and the establishment of a partnership between the applicants for the purpose of performing the work under the agreement.

4. Also of significance, in my view, is the fact that the agreement endured for 13 years and the variations to the contract in 2009, 2011 and 2013 remained consistent with that of a contract for services.

5. Moreover, at the very best for the applicants, the position under the agreement is equivocal and ambiguous.  In those circumstances the free entry by Ms Armstrong, on behalf of herself and Ms Miller, into the written contract for services in 2002 in circumstances where there had been a clear separation between the prior employment and the entry into a new arrangement, where they clearly understood the terms to be that of a contract for services is significant.  As the respondents point out, the contract was drawn up by Ms Armstrong following a process of negotiation with Mr Fitzgerald, not by Mr Fitzgerald.  Ms Armstrong and Ms Miller conducted their operations in accordance with the agreement with JLF and the agreement between themselves. 

6. “If [the] relationship is ambiguous and is capable of being one or the other, then the parties can remove that ambiguity, by the very agreement itself which they made with one another. The agreement itself then becomes the best material form from which to gather the true legal relationship between them.”: Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 389.

7. Here the parties chose to designate their relationship in a particular way and for some 13 years they acted in accordance with that designation.  The agreement here is, in my view, “the best material form from which to gather the true legal relationship between them.”  That designation is as principal and independent contractor.

8. I find that Ms Armstrong and Ms Miller were independent contractors and not employees of JLF for the period 1 November, 2001 to 24 October, 2014.

Other matters

1. Even if I am wrong about my conclusion that I have just expressed, the applicants’ claim based upon s.357(1) of the Fair Work Act cannot succeed. I am satisfied that to the extent that Mr Fitzgerald, on behalf of JLF, represented that the parties’ relationship was that of a contract for services under which Ms Armstrong would perform work as an independent contractor, Mr Fitzgerald has proved that he did not know and was not reckless as to whether the agreement was a contract of employment rather than a contract of services. I reach that conclusion because by her actions in:

   a)offering to conduct the relevant work as a contractor in the November, 2001 meeting with Mr Fitzgerald;

   b)producing the 2002 agreement in the terms in which she did;

   c)conducting her work in accordance with the agreement and the understanding she had reached with Mr Fitzgerald; and 

   d)so conducting herself for some 13 years

2. Mr Armstrong engendered and continued an understanding that the relationship was one of principal and contractor.  In the circumstances it was entirely reasonable for Mr Fitzgerald to think that the parties’ relationship was as they had discussed and agreed.  It is significant that upon becoming disabuse of that, he terminated the agreement.

3. Further, it is necessary to say something about the applicants’ compensation in the event that my primary conclusion is wrong. The first matter to deal with is the limitation point. Section 545(5) of the Fair Work Act provides that a court must not make an order under s.545 in relation to an underpayment that relates to a period that is more than six years before the proceedings concerned commenced. However, in my view, the limitation is not engaged. As Counsel for the applicants points out, an obligation arises upon termination of employment for unpaid annual leave entitlements to be paid to the departing employee. The relevant date, in my view, for limitation purposes is the date upon which the obligation arose. Here that was 24 November, 2014. The application for accrued but unpaid annual leave is within time. In any event, the claims made by the applicants in their amended statements of claim do not extend past 1 January, 2009 (as best as I can tell from the applicants’ pleadings.

4. Counsel for the respondents accurately recorded that the evidence from Ms Armstrong was that she took three weeks off a year, save for the Christmas holiday period.  That is consistent with her evidence to the effect that she took off about two days one week and three days the next week during the period of the school holidays, including the Christmas school holidays but excluding JLF’s Christmas closure.  Half of the Christmas school holiday period is three weeks.  She also took a further one to two weeks off at the Christmas period when JLF’s offices were closed.  I accept Counsel’s submissions that in those circumstances she would have had about four weeks off a year during the relevant period.  They were not unpaid absences in the sense that Ms Armstrong was entitled to be paid according to the 2002 agreement.  She continued to be paid throughout those periods. 

5. Ms Armstrong’s claim does not appear to attempt to take any of these matters into account.  There is no attempt to account for the leave or absences that Ms Armstrong said she had from her “employment” from time to time.  In those circumstances, I accept the respondents’ submissions that Ms Armstrong’s annual leave entitlement was exhausted by the days off that she took.  Ms Armstrong fails to prove her claim.

6. So too, Ms Miller says that she took four to five weeks a year off from 2011 and something like two weeks a year prior to that.  I accept that her annual leave entitlement was also exhausted and otherwise not proved.

7. I find that neither applicant is entitled to an amount by way of underpayment of annual leave.

8. Whilst the applicants’ claim for annual leave does not succeed, their claim for annual leave loading remains.  Annual leave loading by virtue of clause 29.3, sub (a), of the Clerks Private Sector Award 2010 to being paid on the award minimum rate only.  But the applicants do not identify that rate or the employment classification pursuant to which they say their base rate of pay should be calculated.  This claim too fails for want of proof.

9. The applicants plead that they were entitled under the Clerks Private Sector Award 2010 to long service leave entitlements and that JLF contravened s.45 of the Fair Work Act by failing to pay those entitlements on termination. But I accept the respondents’ submissions that those claims cannot succeed either. Entitlement to long service leave derives from Chapter 2 Part 3 of the Industrial Relations Act 1999 (Qld), long service leave being one of the matters which is not dealt with by the Fair Work Act: see ss. 26(2)(c) and 27(1)(c) and (2)(g) of the Fair Work Act. The applicants’ claim in this proceeding is for compensation for breach of s.45 of the Fair Work Act which in turn relies upon a contravention of the Modern Award. There is nothing in the Modern Award that deals with long service leave. This claim is misconceived and must fail.

10. The applicants have a claim for unpaid superannuation contributions.  They plead that even if they are found to be contractors, the respondents remain liable for superannuation payments pursuant to the Superannuation Guarantee (Administration) Act 1992 (Cth).  However, the applicants have no right of action to enforce liabilities arising under that Act. I accept the respondents’ submissions that the right to recover those funds lies with the Deputy Commissioner of Taxation.

11. Finally, each applicant claims that they were entitled to a period of notice of the termination of their employment.  I am satisfied that no notice was given and their claims in that respect are made out.  But the difficulty is working out how much ought to be assessed as payment in lieu of notice or compensation for lack of notice.  The applicants’ calculate their entitlements according to the profit sharing arrangement agreed between them, but about which the respondents knew nothing.  Moreover, the amount used by the applicants in their calculations for their entitlements are not explained.  This aspect of the applicants’ claims fail for want of proof.

Conclusion

1. For the foregoing reasons the applicants fail to prove their case.  I am satisfied that the relationship between them and JLF was not one of employer/employee, but rather was one of principal and independent contractor.

2. Accordingly their claims must be dismissed.  So too, JLF’s cross-claim must be dismissed.

I certify that the preceding one hundred and seventy-five (175) paragraphs are a true copy of the reasons for judgment of Judge Jarrett

Date:  5 November 2018