Christos Papathanasiou v HBS Group Pty Ltd

Case •

[2013] FWC 1112

•

18 APRIL 2013

No judgment structure available for this case.

[2013] FWC 1112

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Christos Papathanasiou
v
HBS Group Pty Ltd
(U2012/12560)

COMMISSIONER GREGORY

MELBOURNE, 18 APRIL 2013

Application for Unfair Dismissal Remedy where the Respondent considers the Applicant an Independent Contractor.

Introduction

[1] This matter concerns an application alleging unfair dismissal and seeking a remedy pursuant to section 394 of the Fair Work Act 2009 (the Act). The Applicant is Mr Christos Papathanasiou, (the Applicant). The Respondent is HBS Group Pty Ltd (the Respondent). The Respondent has, in turn, lodged a jurisdictional objection to the application, namely its relationship with the Applicant was one of principal and independent contractor, rather than employer and employee. Section 382 of the Fair Work Act provides, in part:

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

      (a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period” 1

[2] The initial issue to be determined is accordingly whether the nature of the Applicant’s relationship with the Respondent was as an independent contractor or as an employee. If found to be an independent contractor the application must be dismissed. Mr Gary Pinchen was given leave to appear on behalf of the Applicant. The Respondent was represented by its Managing Director, Mr Nicholas Simpson.

The Evidence and Submissions

[3] The Respondent undertakes restoration and renovation work on old and historic buildings. The Applicant was first engaged by the Respondent to provide carpentry services in January 2009 and subsequently engaged on six separate occasions until August 2012 when he was last engaged.

[4] The Respondent submitted the Applicant was engaged at all times as an independent contractor on a series of different projects at various different locations. The relationship ended on each occasion when the Applicant completed the work he was engaged to carry out on that specific project. On a number of occasions this occurred prior to the entire project being completed.

[5] The Applicant was engaged by the Respondent on the following occasions:

  • 6 January 2009 – 2 February 2009;


  • 14 July 2009 – 28 July 2000;


  • 29 September 2009;


  • 16 March 2010 – 10 August 2010;


  • 22 March 2011 – 12 July 2011; and


  • 11 October 2011 – 21 August 2012;


at locations including Ripponlea, Barwon Park, the Sherrin Stand at Victoria Park, the Melbourne GPO and the Upper West Side. As indicated, these periods of engagement ranged from one day in September 2009 to more than 10 months from October 2011 to August 2012.

[6] The Respondent submitted at no stage was a written contract entered into between the parties but it was agreed the Applicant would receive $45 per hour for all hours worked. Worksheets tendered in the proceedings by the Applicant indicated the actual hours worked in a week varied and he often worked between 40 and 60 hours in a week. He provided an invoice each week based on a calculation equating to payment of $45 per hour for each hour worked in that week. Mr Simpson indicated this amount was arrived at on the basis the minimum rate for a carpenter when the Applicant was first engaged was just over $29 per hour and the figure of $45 was established to take into consideration the various additional allowances that apply for an employee over and above that base rate.

[7] The Respondent did not deduct income tax from the payments made to the Applicant and the Applicant did not receive holiday pay, additional payments on public holidays, paid personal leave or other employee related entitlements, apart from a nine per cent superannuation contribution which commenced being paid in 2011.

[8] As indicated, the Applicant invoiced the Respondent each week using an ABN number on the invoices. He also charged goods and services tax on occasions. His BAS statements also indicate various capital purchases which the Respondent submits are evidence the Applicant was conducting a business whilst working for the Respondent.

[9] The Respondent also submitted the Applicant had flexibility in how the work was carried out. It points to two occasions in December 2011 and July 2012 when he carried out work on materials that were delivered to his home-based workshop. This involved dressing large pieces of timber. The Respondent also submits the Applicant worked for other businesses, although this primarily occurred when the Applicant was not engaged by the Respondent.

[10] Mr Simpson also stated he had a discussion with the Applicant in June 2012 about whether he wished to be employed directly by the Respondent or remain as an independent contractor. Mr Simpson said the Applicant responded by indicating he wanted to continue to be engaged as a contractor and believed he had always been engaged by the Respondent on that basis.

[11] Mr Simpson acknowledged the Respondent had a degree of control over the Applicant in terms of how the work was carried out, but that was common to and consistent with the control it exercised over all the contractors it engaged. It was intended to ensure work was carried out in line with the relevant specifications and requirements for that particular job. The Applicant was also provided with shirts and jumpers that displayed the Respondent’s logo, but this was nothing more than a “goodwill gesture” 2 and not indicative in any way of the nature of the relationship between the parties.

[12] In cross-examination Mr Simpson acknowledged the Applicant did not provide materials to the Respondent and the agreement between the Applicant and the Respondent was essentially for the provision of the Applicant’s labour. He also indicated on occasions the Applicant had performed work other than carpentry, including some labouring work and painting. The Applicant did provide his own handsaw and hammer and chisel, but ladders and access to the different sites would generally be provided by the Respondent. Mr Simpson also indicated in cross-examination he had numerous discussions with the Applicant about the provision of superannuation payments. It was subsequently decided it was appropriate to increase the payments made to the Applicant and for the increase to be paid as a nine per cent superannuation contribution. However, this remained an ongoing issue with the Applicant seeking to have payment of the superannuation contributions backdated from the time he was first engaged.

[13] Mr Simpson also submitted the Applicant was not integrated into the business in the same way as the Respondent’s own employees, and was always considered to be a subcontractor. When his services were no longer required the engagement would come to an end and this occurred on several occasions between January 2009 and August 2012.

[14] The Applicant submits the relationship should be construed as one of employer and employee. It submits the Respondent exercised significant control over how work was performed, including the hours and days worked, and the locations he was required to attend. He worked alongside the Respondent’s employees and was also asked to carry out general labouring tasks that extended beyond his specialist carpentry work. The Respondent provided necessary tools and did not require evidence of insurance cover or Safe Work Method Statements prior to commencing work, as might be expected of an independent contractor. He was employed to provide his labour, namely the specialist carpentry skills he possessed, and did not employ other employees. In addition, the duties he performed were not able to be delegated to others.

[15] The Applicant indicated he was required to submit weekly timesheets and a weekly invoice. The payments made to him were simply based on the actual hours he worked and on most occasions when he was engaged he worked on a full-time basis, often extending over six days a week. However, the Applicant also acknowledged he was paid for the work performed as a sole trader. Invoices were submitted from his ABN to the Respondent and he was responsible for the payment of his own tax. He acknowledges this arrangement is more in common with a relationship of principal and independent contractor, but the payments made reflected an hourly wage rate, based on the number of hours he worked, rather than payment based on completion of project work. He also submits he was subject to the Respondent’s order and directions and had no capacity to act at his own discretion. He was typically assigned tasks during the day by the site foreman, project manager or leading hand. He was required to wear a company uniform and was presented to clients, architects and other contractors he came into contact with as an employee carpenter.

[16] In cross-examination the Applicant acknowledged the BAS statements he submitted to the ATO contained non-capital purchases involving several thousand dollars and he did claim expenses against the income earned. In one period of six months almost $19,000 was incurred in non-capital purchases, involving trading stock and running expenses associated with a business operation. The Applicant indicated these expenses were generally incurred for the purchase of tools and maintaining his home-based workshop.

[17] The Respondent relies on the decision of the Full Bench in the matter of Jiang Shen Cai trading as a French Accent v Michael Anthony Do Rozario 3(French Accent) in support of its submission that the Applicant should be considered to be an independent contractor. It submits the decision summarises the approach to distinguishing between employees and independent contractors and includes reference to the various indicia identified in Stevens v Brodribb Sawmilling Co Pty Ltd4(Brodribb) and other relevant authorities. The Respondent refers, in summary, to the following aspects of the relationship to support its view the Applicant was engaged as an independent contractor:

  • the Applicant had the freedom to work for others if he wished;


  • the Applicant had a separate place of work;


  • the Applicant provided and maintained significant tools and equipment;


  • the Respondent did not deduct income tax from the Applicant’s remuneration;


  • the Applicant was not paid holiday pay or other employee entitlements;


  • the Applicant invoiced the Respondent and charged Goods and Services Tax;


  • the Applicant used an ABN number on the invoices provided to the Respondent;


  • the Applicant was engaged to carry out specialist carpentry work for the Respondent.


[18] The Respondent concluded in its submission:

    “...the Applicant carried out a trade or business using an ABN and claiming expenses to run that trade or business. HBS was only one of the clients from which the Applicant obtained income. The Applicant’s trade or business purchased trading stock and had normal business running expenses. These costs accounted for a large percentage of the income over the last fifteen months.” 5

[19] The Applicant submits the Tribunal must apply the definitive High Court majority decision in Hollis v Vabu 6 in determining this matter. It submits this requires the Commission to consider the totality of the relationship between the parties. It also submits, based on the decision in Brodribb, that an indicia test is required to weigh up the relevant factors that should determine the nature of the relationship between the parties. It submits relevant indicia in the present matter include:

  • the principal’s capacity to control the worker in relation to the time and manner in which the work is carried out;


  • the capacity to delegate work;


  • the capacity to refuse work;


  • the manner in which the engagement commences, whether via quotation of fees and the tendering process, or via a job offer;


  • the matter of payment for the work and taxation;


  • the principles provision of tools and items necessary to complete the work, including insurance and work premises;


  • the relative power of the bargaining parties;


  • the mutuality of obligation between the parties; and


  • the extent to which the worker is incorporated into the organisation.


[20] It also referred to the Full Bench decision in the matter of Abdalla v Viewdaze Pty Ltd 7 (Abdalla) where the Full Bench held the relevant test is:

    “...whether the worker is the servant of another in that other's business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own.” 8

[21] It also referred to the decision in Roy Morgan Research Pty Ltd v Commissioner of Taxation, 9 which found that despite being engaged as independent contractors, market researchers were found to be employees due to indicia indicating, inter alia, the significant degree of control exercised over their work by the Company. The Applicant also referred to the decision in French Accent emphasising, in particular, the view of the Full Bench that parties cannot disguise the true nature of their relationship by putting a different label on it.

Consideration

[22] Section 380 of the Fair Work Act defines “employee” to mean a “national system employee”. 10 Section 13 of the Act defines “national system employee” as an:

    “...individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.” 11

[23] Section 15 in turn provides that:

    “(1) A reference in this Act to an employee with its ordinary meaning:

      (a) includes a reference to a person who is usually such an employee” 12

[24] The effect of these provisions is that resolution of the issue for determination requires the application of common law principles to determine whether the Applicant was an employee or, instead, engaged by the Respondent as an independent contractor.

[25] As the parties submissions have indicated there are well established principles of common law that have been developed to determine whether an individual is an employee or an independent contractor. Both parties referred to the decision in Abdalla in which the Full Bench summarised the legal principles that apply. Those principles were subsequently refined by a Full Bench of Fair Work Australia in the French Accent matter that both parties again made reference to. In that decision the Full Bench highlighted some of the difficulties in seeking to retrospectively categorise relationships as either one of employer and employee or principal and independent contractor. The Full Bench stated, in particular, at paragraph 25 of the decision:

    “The FW Act imposes obligations on employers in relation to their “employees” and confers benefits and rights on “employees” without defining when a worker is an employee as distinct from an independent contractor. The definition of “employee” leaves it to the general law to supply that distinction. The nature of the established general law approach to distinguishing between employees and independent contractors may be seen as contributing to the problem precisely because the nature of the general law test is such that it does not admit a clear answer in every case. Once one adopts the position, as the general law has done, that the distinction is rooted in the objective character of the work relationship two things follow. First, the infinite variety of human affairs means that work relationships present as a spectrum, some of which are clearly relationships of employment and others of which are clearly relationships of independent contract but some of which are less clear cut. Secondly, that character of a work relationship is what it is and cannot be changed simply because the parties agree to label it differently (unless, of course, the relationship is sufficiently ambiguous that a clear determination is not possible, the situation addressed by the Massey Proposition). That is a matter clearly recognised by the courts and tribunals.” 13

[26] The Full Bench then continued to deal at length with the approach to be applied in distinguishing between an employee and an independent contractor. Those conclusions are contained in paragraph 30 of the decision in the following terms:

    “The general law approach to distinguishing between employees and independent contractors may be summarised as follows:

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

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

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

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

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

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

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

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

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

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

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

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

      ● Whether the work can be delegated or subcontracted.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    (6) If the result is still uncertain then the determination should be guided by ‘matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability’ including the ‘notions’ referred to in paragraphs [41] and [42] of Hollis v Vabu.” 14

[27] A key question then in determining whether the Applicant is an employee or independent contractor is whether he can be considered to be “the servant” of the Respondent or whether he carried on a trade or business on his own behalf. A number of the indicia identified from relevant authorities and summarised by the Full Bench in the French Accent decision are clearly relevant in determining the issue in this matter. Accordingly, I now turn to consider the circumstances of the present matter in the context of those various indicia.

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

[28] The evidence indicates the Applicant was a skilled carpenter who exercised a significant degree of ability, expertise and autonomy in performing his work. As such he did not require or receive direct supervision in the manner in which work was performed. However, at the same time the Respondent clearly determined the locations where work was to be performed, which aspect of the projects the Applicant was to be engaged on, and the timeframes in which work was to be carried out. To this extent I am satisfied the ultimate authority and responsibility over the performance of the work, and when and how it was performed and carried out, rested with the Respondent.

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

[29] The Applicant worked with the Respondent on six separate occasions between January 2009 and August 2012. During those periods when not working with the Respondent he did carry out work elsewhere. He also had what appears to be a well equipped home-based workshop. However, there is no evidence the Applicant performed much work elsewhere whilst engaged by the Respondent. In any case it appears he had a limited ability to do so as he was regularly working with the Respondent over six days each week for up to 60 hours a week on occasions. On the last occasion he was engaged for an extended period from October 2011 until late August 2012. Again, this pattern of work over an extended timeframe with one entity is more commonly associated with an employment relationship than with a contract for the provision of services embodied in an independent contracting relationship.

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

[30] The evidence indicates the Applicant did have a home-based workshop and collected tools and other equipment. On two occasions timber was delivered to the workshop by the Respondent to enable the Applicant to carry out some specialised work on that timber. Those circumstances are not commonly associated with a relationship of employer and employee. The evidence accordingly suggests the home-based workshop was a separate place of work, however, at the same time there was little evidence to suggest the Applicant was actively advertising or promoting his services to others whilst engaged by the Respondent.

Whether the worker provides and maintains significant tools or equipment.

[31] As indicated, the Applicant has a workshop at his home which contains an array of tools and equipment. Again, as indicated, on two occasions he carried out work on timber delivered to the home-based workshop. This is clearly an unusual occurrence in an employer/employee relationship and apparently occurred in order to enable the Applicant to carry out some specialised dressing of those particular timbers. The evidence also indicates the Applicant provided his own handsaw and chisel and hammer whilst at work, although other equipment and the provision of access on site was provided by the Respondent. It is not uncommon for employees in the building and construction industry to provide tools and equipment. They generally receive an additional allowance in compensation. The Applicant did not appear to receive a specific tool allowance, although the evidence indicates he was paid over and above the normal rate received by a carpenter in lieu of allowances he might otherwise be entitled to. This arrangement is one more closely associated with a relationship of employer and employee.

Whether the work be delegated or subcontracted.

[32] There is no evidence the Applicant had an ability to delegate or subcontract work to others. The evidence indicates he was engaged because of his particular abilities as a skilled carpenter and the need for those skills in the specialised restoration and renovation work carried out by the Respondent. The fact the Applicant was required to personally perform the work and specifically engaged for the provision of his labour is again an indication he was an employee rather than an independent contractor.

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

[33] The evidence indicates the parties in this matter did not enter into a written contract or other arrangement that determined or regulated their relationship. However, the relationship certainly appeared to be based on an understanding it could be ended at any time when the Applicant’s work on a particular project had been completed and his services no longer required. As already indicated the Applicant was engaged by the Respondent on six separate occasions over a period of more than three and a half years. It was only on the last occasion when any of those engagements lasted for a period of more than six months. The nature of those periodic engagements are more closely associated with a project based independent contractor relationship, although at the same time it is not uncommon for employment in the building and construction industry to be based around particular projects, with employees only required for a specific or defined period of time related to the duration of a particular job.

[34] However, the Applicant’s last engagement from October 2011 until late August 2012 was for a significant length of time. During this time he was asked to carry out work which extended beyond his specialist carpentry skills. This included painting, paving and general labouring. Whilst the intermittent pattern of engagement prior to October 2011 was more akin to a principal/contractor relationship, the extended engagement from October 2011 and the variety of work performed, was more indicative of a relationship of employer and employee.

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

[35] The evidence of both parties indicated the Applicant was provided with shirts and jumpers bearing the Respondent’s logo. The Respondent indicated this was a “goodwill gesture” and the supply of this clothing was not consistent with the nature of the relationship between the Respondent and the Applicant. The Applicant indicated he was required to wear this clothing each day. He also stated he was generally presented to clients, architects and others he came in contact with as one of the Respondent’s employee carpenters and no attempt was made to suggest he was not engaged as an employee.

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

[36] Reference to this particular indicia in the present matter, given the way arrangements between the Applicant and Respondent were structured, clearly points to a relationship of principal and contractor. These arrangements were presumably structured in this way to provide the most favourable taxation treatment for the Applicant.

[37] In summary, the Respondent did not deduct income tax from the payments made to the Applicant. The Applicant invoiced the Respondent each week using an ABN number on the invoices. Goods and services tax was also charged. His BAS statements also indicate various capital purchases, indicating they were made for trading stock and normal business running expenses. The Applicant also acknowledged he was paid for the work performed by the Respondent as a sole trader and responsible for payment of his own taxation.

[38] As indicated, the structure of these arrangements are clearly indicative of the Applicant conducting a business whilst working for the Respondent and much more closely associated with a relationship of principal and independent contractor, rather than employer and employee.

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

[39] The Applicant was simply paid an amount of $45 per hour for each hour worked. The Respondent indicated this amount was set on the basis that the actual amount for a carpenter at the time the Applicant was engaged was $29 per hour and the figure of $45 per hour was established to take into consideration the allowances and other payments that generally apply over and above the ordinary time rate. The Applicant was accordingly not paid by reference to the completion of a particular task or tasks, or on the supply of particular services or materials, but instead simply paid on the basis of a payment of $45 for each hour worked. A payment structure based on hours worked, rather than tasks or projects completed, is again more closely associated with an employment relationship, rather than one based on the provision of services

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

[40] The Applicant did not receive paid holidays or sick leave or any other entitlements normally associated with an employment relationship. As indicated, he was paid an all up rate of $45 per hour for each hour worked. It was subsequently agreed he would receive an increase to be paid in the form of a nine per cent superannuation contribution. This additional payment was apparently introduced from August 2011.

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

[41] The evidence indicates the Applicant was a skilled carpenter and it was those particular skills that were particularly required by the Respondent in the specialist restoration and renovation work on the old and historic buildings that it was engaged in.

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

[42] There is no evidence to indicate the Applicant did anything to create goodwill or other assets that could be sold or passed on to another entity in the context of the work performed before the Respondent.

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

[43] The evidence does indicate that the Applicant expended a proportion of his remuneration on business expenses. This is clearly a characteristic more closely associated with an independent contracting relationship rather than a relationship of employer and employee.

Further Consideration

[44] There are other factors which are also worthy of consideration in regard to the determination of this matter. Firstly, there was no written contract or agreement entered into between the parties at any time which might have assisted in determining the nature of their relationship. Secondly, there was no evidence that the Applicant was required to take out insurance cover or bear responsibility for any legal risk associated with the work carried out, or be responsible for rectification of any defects associated with that work.

Conclusion

[45] It seems the Respondent had a genuine belief the Applicant was engaged as an independent contractor, with his services engaged as required from time to time on the specialist restoration projects it was involved in. Certainly, prior to October 2011 when the relationship was characterised by a series of relatively short term, project-based engagements it might well have been a relationship that was one of principal and independent contractor. It is also evident the Applicant, based on advice received, sought to structure the taxation and associated arrangements as though he was a sole trader conducting a business whilst engaged by the Respondent. As already indicated he likely benefited from the structure of these arrangements through more favourable taxation treatment in a way he would not have been able to if treated as an employee. In that sense in now wanting to construe the relationship as one of employment he could be seen to be seeking “the best of both worlds.”

[46] The fact that the Respondent directed where work was to be carried out is also not fatal to finding an independent contracting relationship existed. The Respondent won various tenders to perform work from time to time and that dictated at which locations this work was carried out and, in large part, within what timeframes. It was acknowledged the Applicant had specialist carpentry skills and once engaged appears to have been provided with both significant autonomy and limited supervision in the actual performance of the work he was engaged to carry out. He also performed specialist work in his home based workshop on two occasions on timber delivered by the Respondent. As indicated, that situation is not something commonly associated with an employment relationship.

[47] However, there are a number of indicators associated with the period of engagement from October 2011 to August 2012, in particular, that suggest an employment relationship existed at least for the period of this engagement. The first of these indicators is the length of the engagement itself and the fact it appears the Applicant worked almost, if not exclusively, for the Respondent during that time, often over six days per week. Whilst it appears he was primarily engaged to carry out specialist carpentry work he was also asked to carry out a range of other tasks, including painting, paving and general labouring work. He was also provided with shirts and jumpers displaying the Respondent’s logo and it appears little, if anything, was done to suggest to the wider world the Applicant was an independent contractor, rather than an employee. During this time the Applicant did not directly receive the range of additional entitlements typically associated with employment such as additional allowances, paid leave, additional payments for work on public holidays or overtime penalty rates. He was, however, paid an hourly rate directly related to each hour worked. The Respondent’s evidence also indicated this rate of $45 per hour was established on the basis that the prevailing rate for an employee carpenter at the time was $29 per hour and the additional payment over and above the amount was provided to cover the additional allowances and other entitlements an employee would normally receive. The Respondent also commenced to provide 9 per cent superannuation contributions in 2011, although this apparently remained an ongoing source of dispute between the parties with the Applicant wanting those payments backdated to 2009 when he was first engaged. Indeed, the failure to reach agreement about the retrospective payment of these contributions appears to have been a significant motivation for this action initiated by the Applicant against the Respondent.

[48] The evidence does indicate the Applicant had a separate home-based workshop with a range of equipment installed. However, it appears he only provided limited tools at work when engaged by the Respondent, with other equipment provided by the Respondent. There is also no evidence the Applicant provided or supplied any of the timber or other materials he worked with whilst engaged by the Respondent. Nor was there any evidence of an ability to delegate or subcontract work to others. There was also no evidence he advertised his services to the wider world or held out any availability to work elsewhere whilst engaged by the Respondent. When he did work elsewhere this seems only to have occurred during those periods when he was not engaged by the Respondent.

[49] As the Full Bench indicated in the French Accent decision the range of relationships at work present as a spectrum. At one end of that spectrum are relationships which are less clear cut in terms of whether principal and contractor or employer and employee. This is one such example. As already indicated aspects of the relationship between the Applicant and the Respondent, particularly those relating to the provision of invoices and the taxation arrangements, point directly to a contract for the provision of services. However, on balance I am satisfied, based on the submissions and evidence, that the proper way to categorise the nature of the relationship, particularly during the extended period of engagement from October 2011 until August 2012 when the Applicant last worked for the Respondent, was that it was one of employment between an employer and an employee. I find accordingly that the Applicant at that time was pursuant to s.382(a) of the Fair Work Act, “...an employee who has completed a period of employment with his or her employer of at least the minimum employment period,” and therefore is a person “protected from unfair dismissal”. 15

[50] In coming to this conclusion I am obviously not making any finding about the merits or otherwise of the Applicant’s unfair dismissal claim. The application will now be listed again to enable that matter to be dealt with and determined.

COMMISSIONER

Appearances:

Mr Gary Pinchen of A Whole New Approach on behalf of the Applicant.

Mr Nicholas Simpson on behalf of the Respondent.

Hearing details:

2012.

Melbourne:

28 November.

 1   Fair Work Act 2009 (Cth) at s.382

 2   Transcript at PN84

 3   [2011] FWAFB 8307

 4 (1986) 160 CLR 16

 5   Exhibit S1 at paragraph 20

 6 (2001) 207 CLR 21

 7   PR927971

 8   Ibid at paragraph 34

 9 (2010) 184 FCR 448

 10   Fair Work Act 2009 (Cth) at s.380

 11   Ibid at s.13

 12   Ibid at s.15

 13  [2011] FWAFB 8307 at paragraph 25

 14   Ibid at paragraph 30

 15   Fair Work Act 2009 (Cth)at s.382

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Citations

Christos Papathanasiou v HBS Group Pty Ltd [2013] FWC 1112

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