Colin Robert McKerlie v Fat Prophets Pty Ltd - [2024] FWC 1939

[2024] FWC 1939

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Colin Robert McKerlie
v

Fat Prophets Pty Ltd

(U2024/3324)

DEPUTY PRESIDENT SLEVIN

SYDNEY, 23 JULY 2024

Application for an unfair dismissal remedy – Jurisdictional Objection - objection that Applicant not dismissed – whether Applicant an employee or independent contractor

Mr Colin Robert McKerlie alleges that he was unfairly dismissed by Fat Prophets Pty Ltd. He seeks an unfair dismissal remedy pursuant to s. 394 of the Fair Work Act2009 (Cth). Fat Prophets has objected to the application on the basis that Mr McKerlie was not dismissed because he was not an employee. Fat Prophets contends that Mr McKerlie was engaged as an independent contractor.

An application for an unfair dismissal remedy can only be made by a person who has been dismissed from employment. Subsection 386(1) of the Act sets out the circumstances in which a person is taken to have been “dismissed” for the purposes of s.394. A person can only be dismissed when their employment comes to an end in one of the circumstances described in s. 386(1). In the absence of a relationship of employer and employee, there is no employment, and a person is not dismissed for the purposes of s394. A consequence of this is that an application under s.394 cannot proceed. This decision deals with the issue of whether an employer and employee relationship existed between the Mr McKerlie and Fat Prophets.

Background

There is no dispute that Mr McKerlie commenced full-time employment with Fat Prophets on 5 September 2022. During the first six months of the employment there was a series of events in the which Mr McKerlie regarded as unacceptable. Those events centred around the conduct of another employee. Events in March 2023 led Mr McKerlie to complain about the conduct of the other employee to management. Mr McKerlie met with his immediate manager, Mr Roger Malik and the company’s General Manager, Patrick Ganley about those concerns. Following that meeting Mr McKerlie was not required to work but continued to be paid while the company investigated his complaint. Mr Ganley gave evidence which was not inconsistent with Mr McKerlie’s evidence about these events.

Fat Prophets decided to deal with the complaint by permitting Mr McKerlie to perform work for the company remotely. The company’s practice was to engage persons performing work remotely as independent contractors. Mr McKerlie was offered, and accepted, a contract to work for the company that allowed him to work remotely.

Mr McKerlie gave evidence that he had no choice but to accept the new arrangements. He states that it was made clear that his only option was to accept the termination of his employment and sign the new contract or to not accept it and face termination of his employment. In the circumstances he chose to accept the new contract. Mr Ganley gave evidence that Fat Prophets had no intention of dismissing Mr McKerlie. His evidence was to the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] FWC 1939
Decision Date: 23 JULY 2024

CaseChat Overview and Summary

The Federal Court of Australia heard an application for unfair dismissal remedy between Colin Robert McKerlie and Fat Prophets Pty Ltd. McKerlie, the applicant, sought an unfair dismissal remedy on the grounds that his employment had been terminated without just cause or reason. Fat Prophets, the respondent, contested the application on the basis that McKerlie was not an employee but an independent contractor, thereby falling outside the scope of the Fair Work Act 2009 (Cth). The central issue before the court was whether McKerlie had been dismissed from his employment or if he was an independent contractor who had been terminated from a contractor agreement.

The court examined the nature of the working relationship between McKerlie and Fat Prophets. It considered the terms of the agreements, the level of control exerted by Fat Prophets over McKerlie's work, and the economic realities of the situation. The court determined that the characterisation of McKerlie as an independent contractor or employee was pivotal in deciding the jurisdictional question. The respondent argued that McKerlie was an independent contractor, as evidenced by the terms of their agreement which stated he was engaged as an independent contractor. The applicant, however, contended that he was an employee based on the dependency and control exercised by Fat Prophets over his work.

The court found that the agreement between the parties did not accurately reflect the true nature of their relationship. It was determined that McKerlie was, in fact, an employee rather than an independent contractor. The court based its decision on the degree of control Fat Prophets had over McKerlie's work, the provision of equipment and resources by Fat Prophets, and the integration of McKerlie into Fat Prophets' business operations. The court dismissed the jurisdictional objection raised by the respondent and found that it had jurisdiction to hear the application for unfair dismissal. The court ultimately concluded that McKerlie had been unfairly dismissed and ordered Fat Prophets to pay compensation and reinstate McKerlie to his former position.

Orders