Darcy Blackwell v Naomi O'Donohue
[2022] FWC 1633
•24 JUNE 2022
| [2022] FWC 1633 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Darcy Blackwell
v
Naomi O’Donohue
(C2021/5321)
| COMMISSIONER YILMAZ | MELBOURNE, 24 JUNE 2022 |
Application to deal with a contravention of the general protections’ provisions involving dismissal – jurisdictional objection – whether employee was dismissed.
Introduction
Ms Darcy Blackwell filed a general protections dispute involving dismissal application under s.365 of the Fair Work Act 2009 (the Act) with the Fair Work Commission (Commission) on 31 August 2021. Ms Blackwell contends that Ms Naomi O’Donoghue contravened the general protections provisions in relation to her workplace rights and her temporary absence. She further contends that her termination of employment is an adverse action, and she is seeking payment of unpaid wages, superannuation and leave entitlements.
Ms O’Donoghue contends that Ms Blackwell was engaged as a contractor by Enright Cleaning Services to specifically perform COVID 19-related cleaning duties for its principal client Metricon Homes in its training centre and display/design showroom Studio M. Ms O’Donoghue held a contract to deliver cleaning services to Metricon Homes, and she contends that Ms Blackwell agreed to deliver cleaning services according to her hours of availability. Ms O’Donoghue further states that at no time was Ms Blackwell engaged as an employee and the relationship was clear from the outset. Ms O’Donoghue states that the contract between Enright Cleaning Services and Metricon Homes ceased on 10 August 2021 and Ms Blackwell was not dismissed.
Ms Blackwell contends that she was not a subcontractor but an employee and was dismissed when she took a period of absence. She alleges contravention of the following sections of the Fair Work Act 2009:
· S.340 Protection of workplace rights
· S.343 Coercion
· S.344 Undue Influence or pressure
· S.352 Temporary absence
Conciliation conferences between the parties took place from October 2021 with a staff conciliator and they came to an end in late December 2021. In addition to the general protections application, Ms Blackwell lodged a complaint with the Fair Work Ombudsman.
On referral to chambers, the parties agreed to further conciliation. At the first of two conferences it was obvious that there were jurisdictional matters to be determined. The Respondent contends that the Applicant was not an employee or dismissed, while the Applicant contends that the relationship was of employer and employee, and she was dismissed. In the course of the conferences, the Applicant’s mother contended that the contractor arrangement was a sham.
I conducted two conferences with the parties with the view of resolving all matters in dispute. Ms O’Donoghue was open to resolving the dispute with Ms Blackwell on a commercial basis despite her being out of work and unwell. No resolution was reached, and the jurisdictional matters remained in dispute throughout the conferences and the hearing.
Ms Blackwell was assisted by and often represented by her mother, who I am advised is a lawyer. Mrs Elisabeth Blackwell did not seek leave to appear.
As the matter was not resolved at conciliation, the parties agreed that the matter of jurisdiction should be determined. A hearing was scheduled for 19 April 2022. Ms Blackwell gave evidence on her own behalf. Her mother Elisabeth submitted a statement and her sister Jaime Blackwell submitted a statement in reply regarding the night of 10 August 2021. Ms O’Donoghue gave evidence and Mr Paul Enright gave evidence on behalf of the Respondent. Ms O’Donoghue also tendered in evidence three statements from individuals concerning her character and one from Metricon Homes which relates to the observation of Ms O’Donoghue’s relationship with Ms Blackwell. A statement from her accountant confirmed that she was aware of Ms Blackwell, however, Ms O’Donoghue was not registered for pay as you go tax and understood invoices for Ms Blackwell’s services were submitted, albeit invoices remained outstanding for the period from September 2020.
Applicant’s submissions
Ms Blackwell submitted a written submission which appeared to have been written by someone other than herself. Having closely observed Ms Blackwell while giving evidence, I was not satisfied that her written submissions were her own. Nevertheless, her written submissions make the following allegations:
· The contract for services between the parties is a sham;
· There was no contract between the parties either in written form or otherwise;
· The Respondent encouraged her to seek employment in the interior design industry;
· That she never intended to conduct her own business;
· The Respondent induced her to obtain an ABN and generate invoices;
· That the Respondent took advantage of her because of her age and mental health disability.
Ms Blackwell’s written submissions refer to various indicia which she submits shows that the relationship was not of subcontractor and contractor, but that she was an employee.
Ms Blackwell submits that she commenced working for Naomi O’Donoghue as a cleaner in February 2020. She states that Ms O’Donoghue is the mother of her two twin friends, and they met at her friend’s home at the end of 2019 where she informed Ms O’Donoghue that she was looking for work as the café where she was working were to cease her shifts because of the pandemic. She states that Ms O’Donoghue invited her to work with her as a cleaner at Metricon Homes. Ms Blackwell alleges that she found the offer attractive as she wanted to pursue a career in interior design and the opportunity would help in that direction.
Ms Blackwell described her training by Ms O’Donoghue when she commenced at the Metricon training centre and Studio M. She states that the equipment was provided either at the location or by Ms O’Donoghue. After the initial training period, Ms Blackwell worked on her own and communicated with Ms O’Donoghue about her shifts either by phone or by text. Initially, payments of $20 per hour were paid by cash and subsequent payments were made directly into her bank account.
Ms Blackwell states that after a period of seven months she was asked to obtain an ABN. She states that she did not know what an ABN was, so she was talked through the process, but the text message transcript shows Ms Blackwell applying on her own with text questions to Ms O’Donoghue.[1] She maintains that she did not know what an ABN was, but trusted Ms O’Donoghue. She further states that she was told by text that if she did not have an ABN she would have to pay back half her earnings to Ms O’Donoghue. She admits to looking at the websites provided by Ms O’Donoghue regarding ABNs.
At or on around the same time (September 2020), Ms Blackwell states that she brought in her laptop and Ms O’Donoghue showed her how to do invoices. She states that while they were doing this together “it was mostly Naomi doing it.”[2]
In around July 2021, Ms Blackwell’s mother contacted Ms O’Donoghue about the invoices having seen them on her daughter’s laptop. It is submitted that Ms O’Donoghue texted Ms Blackwell telling her to stop her mother threatening her. Ms Blackwell submits that she did not answer Ms O’Donoghue’s texts regarding work as she considered them threatening. Further, she states that she attended work on 11 August 2021 but saw Ms O’Donoghue’s vehicle at the site so she left and texted her stating that seeing her vehicle made her anxious and she could not work. She states that it was after this that she received a text message terminating her employment.
Respondent’s submissions
Ms O’Donoghue states that Ms Darcy Blackwell was engaged as a contract cleaner from 10 February 2020, she knew this to be the case and they discussed the matter on many occasions.
The work for Metricon Homes was not guaranteed and while Ms O’Donoghue’s contract was for a maximum of 42 hours per week the effect of the pandemic meant that hours and the contract could be cancelled at any moment. She states that she has never engaged employees and Ms Blackwell understood her engagement was not as an employee. She states that she offered Ms Blackwell the contract opportunity so that she could get a foot in the door at Metricon despite her own future work being uncertain.
Due to concerns with risk of infection of the COVID-19 virus, Metricon Homes required that contractor equipment and tools not be brought into the buildings and Ms O’Donoghue was responsible for the supply of chemicals, cloths, and other products consistent with DHHS standards.
Ms O’Donoghue states that Ms Blackwell chose the hours to work to suit her university studies and her personal health. She states that after the initial training Ms Blackwell was capable and competently performed her contract work without direct supervision or detailed instruction. In fact, she repeated that when Ms Blackwell asked advice about a challenge, she was encouraged to find her own solution and capably did so. She consistently used the words “what would you do it’s your business”.
Ms O’Donoghue states that she understood Ms Blackwell’s mental health issues as she too had a similar condition and noted their discussions that working gave her a sense of normalcy, so Ms Blackwell was welcome to take as many hours that she wanted. Ms O’Donoghue states that she wanted to assist Ms Blackwell as she considered her an honest and hardworking individual and the work personally benefitted her confidence and outlook.
Ms O’Donoghue states that the day prior to her contract ending with Metricon she spoke to Ms Blackwell about finalising her invoices so that she too could finalise her tax obligations. She states that as she made payments to a sole trader, she had to declare the payments to the Australian Tax Office. Ms O’Donoghue states that on conclusion of her contract, Ms Blackwell had an option to transfer her services to the new cleaning company, wait for any work Ms O’Donoghue may obtain in the future or pursue work directly with Metricon consistent with Ms Blackwell’s discussions with Metricon staff. She states that on promoting Ms Blackwell’s interests in interior design and having met the Metricon management, she was encouraged to apply for the position of assistant design consultant.
Ms O’Donoghue gave evidence that she was informed on 3 August 2021 that her contract which expired in July would not be renewed but managed to arrange continued hours from Metricon without a contract till the end of the month, so that her contractors could find alternative work.[3]
Mr Paul Enright gave evidence that he had witnessed discussions between Ms O’Donoghue and Ms Blackwell and at no time were there any discussions that she was an employee. He stated that he recalled discussions about the invoices and that without an ABN, a greater sum of tax was payable. He states that Ms Blackwell was not advised that she had to repay half of her income to Ms O’Donoghue. He gave evidence that discussions around contracting provided tax responsibilities but also opportunities to claim business related expenses.
After Ms Blackwell refused to communicate with Ms O’Donoghue, Mr Enright states that he advised Ms O’Donoghue that she had a duty to inform Metricon Homes that her contractor was not communicating with her due to a dispute, as this may potentially impose a security risk for her client. He states that he understands that Metricon cancelled Ms Blackwell’s security pass when they were informed that she no longer communicated with Ms O’Donoghue.
Both Ms O’Donoghue and Mr Enright described Mrs Elisabeth Blackwell’s phone calls with them as threatening. They both gave evidence that they concealed the initial call from Ms Blackwell, but on the second occasion, Ms O’Donoghue texted Ms Blackwell that they needed to discuss her mother’s threats. Ms O’Donoghue contends that the text she received from Ms Blackwell’s phone on 11 August 2021, was written by her mother and that she took steps to block Mrs Blackwell from communicating with her. She states that should Ms Blackwell have been concerned about her arrangements, she could have and should have communicated with her at any point since their working arrangements commenced in early 2020.
The relevant statutory provisions
Ms Blackwell lodged a general protections involving dismissal dispute with the Commission pursuant to s.365 of the Act. Section 365 applications concern dismissal disputes. Relevantly, the provision provides:
“Application for the FWC to deal with a dismissal dispute
If:
(a) a person has been dismissed; and
(b) the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;
the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.
Section 365 requires that the person that alleges the dismissal is a contravention of the Act must be “dismissed”. The Act further defines dismissed. The relevant provision is s.386:
“Meaning of dismissed
(1) A person has been dismissed if:
(a)the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b)the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(2) However, a person has not been dismissed if:
(a)the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or
(b)the person was an employee:
(i) to whom a training arrangement applied; and
(ii)whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(c) the person was demoted in employment but:
(i)the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii)he or she remains employed with the employer that effected the demotion.
(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.
It is in dispute that the arrangement between Ms Blackwell and Ms O’Donoghue was of an employment relationship. To be dismissed requires an employment relationship and not of a contractor and subcontractor. Ms Blackwell does not contend that she was forced to resign, but rather that Ms O’Donoghue dismissed her employment.
Section 365 requires that should an application be made, it must be by a person that is dismissed and the person alleges the dismissal is in contravention of the Act. While conferences were conducted by agreement with both parties, the next step of issuing a certificate cannot occur unless the Commission has the authority to do so. Section 368 provides that should an application be made pursuant to s.365, the Commission shall conduct a private conference and if it is satisfied that all reasonable attempts to settle the dispute have been, or are likely to be unsuccessful, then it must issue a certificate. A certificate cannot be issued if the application was not made pursuant to s.365 of the Act.
The Federal Court in Coles Supply Chain[4] considered the interpretation of s.366 in respect to the date of dismissal, and in doing so made clear that the terms of s.365 contains two criteria expressed in objective terms. The decision is relevant in respect of the requirement to determine whether the application was validly made- in this instance, that Ms Blackwell was dismissed and secondly that she alleges that her dismissal was in contravention of the Act. The question of whether Ms Blackwell was dismissed is a jurisdictional question for this Commission.
Consideration
During her witness evidence Ms Blackwell experienced extreme technology issues, quite bizarrely when her witness evidence was examined or she was asked questions. However, despite this, she provided extensive witness evidence. I found Ms Blackwell’s witness evidence unconvincing, there were inconsistencies while she was questioned, she hesitated to respond and her responses were inconsistent with key aspects of her written statements. She stated that she was advised that she was a casual when initially offered employment, but then could not recall if the discussion with Ms O’Donoghue had occurred. She stated that she was asked for an ABN in 2021 and obtained one on 5 August 2021, while the evidence shows otherwise, and she then amended her oral evidence to reflect 2020. She further stated that she assumed that Ms O’Donoghue paid her tax, however, her responses on the point of her rate of pay and whether she herself paid tax were elusive and difficult to obtain clear and direct responses. It became obvious that she was unfamiliar with her tendered written evidence, and she subsequently admitted that her mother prepared her statements and attachments. However, in her closing statement sent to my chambers on 19 April 2022, (which she states was produced with the assistance of her sister) she states that a work friend of her mother’s helped with her statement. I further observe the ominous statements and tone about Ms O’Donoghue on a personal level, an example being a reference to Ms O’Donoghue’s partner, which is uncharacteristic of the working relationship demonstrated in the 99 pages of telephone text transcript, or the witness evidence exhibited.
Ms Blackwell stated in response to questions about her prior employment in a café and a bakery that she did not pay tax as she was below the tax-free threshold. Her responses on these key aspects of her evidence was that she relied on her mother’s advice to guide her through such critical decisions and while she strongly argues that she made her own decisions and was capable of doing so, the evidence suggests that a number of her decisions particularly in regard to these proceedings, her payment or non payment of tax and her departing relationships with employers were highly influenced.[5] I am not satisfied that the case argued, is her case, as the written statements are evidently not her own. The language in the emails and written statements were inconsistent with the language used by Ms Blackwell but there is greater consistency with the language in Mrs Elizabeth Blackwell’s statement. I observe that despite the close and obvious supportive relationship between Ms Blackwell and Ms O’Donoghue, that Ms O’Donoghue’s name was incorrectly spelled in all of the documents tendered, this I find peculiar given the context of their relationship over 17 months.
On the matter of tax, Ms Blackwell gave evidence that she did not meet the tax-free threshold it appears until the 2020/21 financial year. There was no clear response regarding her tax affairs in prior years, but clearly an assumption that no tax return was required is not plausible. Whether Ms Blackwell did not complete a tax return or it was convenient to contend that she was naïve and required her mother’s intervention both positions are concerning. I am not satisfied from the evidence that a clear position was articulated.
It is further disturbing that Ms O’Donoghue reminded and encouraged Ms Blackwell to engage with her mother from very early in their arrangement, to disclose details of the relationship to ensure no conflict arises, given the information on Ms Blackwell’s past litigation. At no point during the proceedings did Ms Blackwell provide evidence if her mother was aware, and I observe that Mrs Elizabeth Blackwell provided no evidence on this issue either. While Ms Blackwell states that there were times her relationship with her mother was strained, the evidence shows this was not the case over the whole 17 month arrangement. However, as both mother and daughter allegedly assessed that there was no tax return to be made in the 2019/2020 financial year, then one would reasonably expect that it was known to both mother and daughter that the arrangement was of contractor and not employee.
Unfortunately for Ms Blackwell, there is a history of disputation with her two prior employers with her mother representing her in legal action, this history has repeated itself in this matter.
Ms Blackwell denies that she disclosed her prior litigation history, however I prefer the evidence of Ms O’Donoghue that Ms Blackwell informed her of her past challenges with employers while in Ms O’Donoghue’s home. I accept that Ms O’Donoghue’s intentions were genuine to help Ms Blackwell. Despite these good intentions she finds herself in litigation.
Among the documents tendered by Ms Blackwell was a letter from a psychologist which appears to represent the school Ms Blackwell attended. The letter is undated and speaks of how she can be assisted in the classroom. Ms Blackwell gave evidence that she was diagnosed with a learning disability when she was about 10 years old. I asked her about why the letter was tendered and of its significance. The was no clarity in terms of when the document was produced nor its direct relevance to these proceedings. She stated it related to her primary school years, but then on prompting by her sister while she was giving evidence she stated it was during her high school years. I understand that she contends that she suffers anxiety and her early learning challenges have been challenges for her. I do also note that Ms O’Donoghue acknowledges Ms Blackwell’s mental health as they had intimate discussions over their relationship as they shared the same challenges. This was evident in the text messages. However, there is nothing in the evidence to suggest to me that Ms Blackwell was not capable of understanding the working relationship, or that she was induced into a contractor arrangement.
Contractor or employee?
The arrangement between Ms Blackwell and Ms O’Donoghue was not captured in writing, which is unfortunate to both parties. Both rely on their witness evidence and evidence of invoices, emails and texts between them. As the contract is not in writing I rely on the conduct of the parties to ascertain what they most likely have agreed and whether Ms Blackwell was engaged to work in Ms O’Donoghue’s business.
Ms Blackwell did register for an ABN but says that she did not know what it meant and that she trusted Ms O’Donoghue. Among the transcript of text messages Ms O’Donoghue reminded Ms Blackwell to obtain the ABN on 29 July 2020. It states that she is unable to lodge her own tax return until then. One such email tendered by Ms Blackwell dated 29 July 2020 is from Ms O’Donoghue:
“Hey Chicken,
I have attached a link for you to register for your ABN
Don’t get sucked in to registering a business name.
You don’t have to have it & it cost money!
Go to;
mum would probably be the best person to help you with this.
I got bamboozled into registering a business name & GST and I didn’t have to.
You just need the ABN.
Let me know if you need help.”
The email link plainly explains that an ABN identifies your business and allows identification to other businesses, avoidance of pay as you go tax, entitles claims for GST credits and entitles the person to an Australian domain name. Importantly the website states, “Not everyone needs an ABN. To get one you need to be running a business or other enterprise.” Ms Blackwell states that she read the material sent to her. The website further provides details and links to the process to apply etc including information on other tax responsibilities.
The text message transcript shows that Ms Blackwell completed her ABN registration on her own but asked various questions of Ms O’Donoghue via text. It is telling that she asked Ms O’Donoghue if she was correct to record her home address as her business address, rather than Metricon Homes business address. I note that Ms Blackwell sent through her confirmation from business Victoria of her ABN to Ms O’Donoghue on 5 August 2020.
Ms Blackwell further tendered in evidence the email containing 34 invoices to Ms O’Donoghue on 14 September 2020. Each of the invoices identify Darcy Blackwell with a registered ABN number, her address and phone number, states the period covered by the invoice for covid cleaning, numbers the invoice and identifies Enright Cleaning Services as the recipient for the amount due to be paid.
Transcript of select text messages between Ms O’Donoghue and Ms Blackwell were tendered. They show Ms Blackwell being trained on what is required at the Metricon Learning Centre (LLC) or Studio M site in February and early March 2020. This period shows a limited number of shifts. The relationship throughout was friendly- pet names were used between both, and they helped each other out, even sharing personal items such as toilet paper, honey and such. Once Ms Blackwell concluded her training, hours were offered and Ms Blackwell also asked for hours. From the texts it is apparent that available hours were dependent on Metricon’s use of the learning centre and Studio M, including the impact of lockdowns. The evidence showed that both, plus another contractor covered for each other to meet Metricon’s cleaning requirements.
On 11 September 2020, Ms O’Donoghue suggested to Ms Blackwell to bring in her laptop to work on her invoices, Ms Blackwell responds “okay great.”[6]. This is evident of a cooperative arrangement between them both. Despite Ms Blackwell claiming that she was clueless and taken advantage of on these matters, she does admit that Ms O’Donoghue would teach her how to run her own business.[7]
When Mrs Blackwell contacted Ms O’Donoghue and Mr Enright, she informed them that her daughter was an employee and they had underpaid her. On receiving this call, Ms O’Donoghue checked again with her accountant, advisers and a lawyer and while she was confident that the relationship was not of employer and employee, she was advised that after 12 months of the arrangement she should have offered Ms Blackwell an opportunity to convert to casual employment. There is no evidence of the basis of this advice. In an email to Ms Blackwell on 11 August 2021, after forming the view that Mrs Blackwell was using her daughter’s phone, Ms O’Donoghue emails the following: “As it’s been made plain to me that we are no longer in open communication together, I am emailing to you to let you know where things currently stand”.[8] The email asks Ms Blackwell to tender the balance of the invoices to finalise outstanding payments. In addition to this email, further correspondence of the same day provides:
“Dear Darcy
I did not realise that I had to engage you as an employee after working for twelve months as a contractor
I have now received legal advice that tells me this is the case
As you know, I’m in the process of sorting out the Contracting side of our business relationship just now
I’m currently waiting for the (6) invoices I need to process to tidy up that side of the work
In the meantime, as I now know I need to pay you as an employee, I will start work on calculating the amounts owing to you on that basis
I am seeking some assistance in this area to make sure everything is covered for you
I’ll be in touch shortly
Thanks Darcy”[9]
Neither email of 11 August 2021 is threatening, the second email confirms the advice given to Ms O’Donoghue, and despite its inaccuracy she agrees to resolve the matter accordingly. This correspondence was the fundamental reason for Ms O’Donoghue’s attempts to resolve the dispute, which both mother and daughter rejected in favour of a jurisdictional argument.
Based on the evidence, I do not accept that Ms Blackwell was clueless or genuinely believed that she was a casual employee at the time she initially accepted hours from Ms O’Donohue. There is no evidence that she prepared her tax return, in fact she avoided the direct question while giving witness evidence. I also do not accept that she did not read the material sent to her from the link, nor on the website during her efforts to register for an ABN. I found Ms Blackwell to be competent, but unreliable in her witness evidence.
I have formed the view that Ms Blackwell knew that she was agreeing to engage as a contractor and not as an employee. The arrangement with Ms O’Donoghue served her interests by earning a reasonable income for the flexible hours she required, she learnt new skills and had the opportunity to make an impression on Metricon Homes, with whom she was hopeful would lead to support during her studies and offer future employment.
Despite the intention of the parties, the question remains whether Ms Blackwell was a contractor or employee. Relevant to this consideration I find that:
· There was an agreement to enter a contractor relationship, it was a verbal contract;
· I do not consider that Ms Blackwell was induced nor so naïve so not to comprehend the agreed arrangement which was not characterised as an employment relationship;
· While performing the work according to the hours for services available by Metricon, Ms Blackwell performed the work autonomously and in the manner she saw fit, providing she complied with DHHS cleaning requirements;
· The hours of work were of her own choosing based on her availability;
· She was well aware of the imminent conclusion of the arrangement, and the uncertain time frame at a moment’s notice;
· Ms Blackwell exercised control over the activities she performed, this was evident as she gained confidence in the workplace; she took initiative to perform further tasks; and
· I am not satisfied that Ms O’Donoghue had a right to control the activities of Ms Blackwell, except for the compliance with DHHS cleaning requirements. Metricon instilled the requirement to comply with DHHS cleaning requirements and all cleaners that entered the premises agreed to comply.
The High Court in Personnel Contracting[10] considered the decision of the majority Bench (Kiefel CJ, Keane and Edelman JJ) in Rossato and in rejecting the reasoning that one is to consider all of the circumstances of the employment including disparity in bargaining power, it agreed with them that ‘“[o]n one view”, the resolution of the question whether a person engaged to work for another is an employee or an independent contractor “may depend upon the extent to which it can be shown that one party acts in the business of, and under the control and direction of, the other.’
I do not find that Ms Blackwell worked in Ms O’Donoghue’s business. According to Ms Blackwell’s evidence there was no uniform. There is no evidence to suggest that Metricon Homes understood Ms Blackwell or the other contractor to be Ms O’Donoghue’s employees. I am satisfied that Ms Blackwell was aware of and agreed to the arrangement which provided her with personal benefits. While the evidence shows that Ms O’Donoghue acted as Ms Blackwell’s mentor and initially as trainer, as Ms Blackwell gained confidence, her independence as a contractor in her own right developed.
Was the arrangement a sham?
The applicant alleges the arrangement is a sham. For it to be a sham it is to be “a mere piece of machinery” to serve another purpose other than that of constituting the whole arrangement”[11]
No evidence of any purpose other than the agreed arrangement was tendered in proceedings. Ms Blackwell contends the arrangement is a sham by alleging that she did not nor had any intention of running her own business and further, that she was induced to enter the arrangement.
In terms of what constitutes a sham the High Court said:
“‘sham’ is an expression which has a well-understood legal meaning. It refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences.”[12]
No evidence supports the allegation that the parties entered the legal relationship without the apparent consequences. Ms O’Donoghue understood the legal consequences of the arrangement and reported her payments in her BAS statements, the remaining matter which is unclear is whether Ms Blackwell disclosed her income through tax returns. However, there is no reason attributable to the Respondent for Ms Blackwell avoiding her tax obligations if in fact she had. No possible reasons for a sham arrangement have been identified.
Was Ms Blackwell dismissed?
It is important to understand the sequence of events leading to Ms Blackwell’s argument that she was “sacked”. Ms O’Donoghue’s contract concluded on 1 July 2021. In June Ms Blackwell was invited with her mother to have a discussion about a possible future with Metricon given the impending termination of the contract. Ms Blackwell advised that her relationship with her mother was not on good terms at that time.[13] The relevant text messages followed:
“2021-06-09 23:44:26 from Naomi Enright:
I miss you so fucking much!!!! Soooo much to tell you Ok so I need to talk to you about my/your contract. If it’s possible I would like to sit down with you and your Mum to discuss your future at Metricon. My contract ends on 1st July this year. If they don’t renew my contract, which they may not, you need to take advantage of the fact that they have offered you work. I just think this is a discussion that we should have with your mother involved. You have an incredible opportunity with an incredible team leader and I just think you would be mad to pass it up.. Xx
…
2021-06-11 07:12:35 to Naomi Enright:
Miss you too hunny !! I have so much to tell you aswell haah, Things are pretty bad with mum atm so I’m hoping things will settle down soon and hopefully we can all get together and have a chat about my future and stuff. I hope lockdown is going good for you !!”
On 6 July 2021 Ms Blackwell was discharged from hospital. Mrs Blackwell submits that her daughter gave her the laptop to submit her daughter’s university assignments and prepare her tax return, which she says would be the first time she would be required to lodge a tax return.
On 17 July 2021 Mrs Blackwell states that she noticed the invoices so she called Ms O’Donoghue. It is in dispute whether the phone call was threatening, but a phone call to Ms O’Donoghue’s business partner also occurred on the same day, which is also in dispute whether the conversation was threatening. An examination of the text messages at the time still demonstrates a close and supportive relationship, Ms Blackwell appeared unaware of the distress caused from her mother’s call to Ms O’Donoghue.
After formal advice by Metricon that the contract would not be renewed, Ms O’Donoghue informed Ms Blackwell.[14] On 7 August 2021, Ms O’Donoghue asked Ms Blackwell whether she wanted to meet at Metricon to complete the outstanding invoices. Ms Blackwell did not respond until the afternoon of 8 August 2021. On 9 August 2021, they discuss working hours for the week but do not finalise outstanding invoices. On 10 August 2021, Ms O’Donoghue stated “we need to talk about your mother ringing me and threatening me”.
Ms Blackwell ignored this text, which is uncharacteristic of her prior behaviour and close relationship with Ms O’Donoghue. Ms Blackwell contends that she ignored the texts because they were threatening. She did not describe all the texts as threatening, she stated she was concerned with the text about jeopardising her Metricon opportunity, but it remained unclear from the evidence which text specifically she considered threatening. The relevant text messages were as follows:
“2021-08-10 08:25:59 from Naomi Enright:
We need to talk about your mother ringing me and threatening me
Naomi Enright 2021-08-10 09:14:30 from Naomi Enright - Read
Can you please ring me so we can sort this out between you and I I don’t want this to jeopardise any future that you have with Metricon or interior design. If you are not happy to talk to me please let me know to so I can engage a lawyer.
…
2021-08-10 10:21:16 from Naomi Enright
If you are or have been unhappy with the conditions or your pay you have the responsibility to approach me about it first this has absolutely nothing to do with your mother your contract is with me as an adult. You knew what you were getting into because you got your ABN and you’ve already invoiced me you are a sub contract are not employed. Your mother is confused.
…
2021-08-10 10:21:33 from Naomi Enright:
Please contact me as soon as possible Darcy this needs to be sorted out today.”
Due to the close working relationship and the difficult relationship Ms Blackwell had with her own mother, it is unclear why those texts would have been considered threatening. The following are the final texts at the conclusion of the relationship:
“2021-08-10 16:21:10 from Naomi Enright:
I genuinely cared about you and your future I can’t believe that you would turn this around to use a legal loophole to try and bankrupt me. I took one because you needed help how do I gave you that help. You should’ve come to me if you had a problem Darcy.I suppose I will see you in court.
…
2021-08-11 09:49:44 to Naomi Enright:
Your text messages yesterday have made me feel threatened and uncomfortable. Mitch assured me that you would not be at work today. On that basis I resolved to come into work. When I arrived at work today I saw your car and it has caused me a great deal of anxiety such that I am unable to work today.
…
2021-08-11 09:53:50 from Naomi Enright:
No problem. Your services are no longer required. Mitchell is not a representative of Enright constructions and any contact through my contractors should have gone through me. Darcy has been locked out of the building and her card has been cancelled. Metricon are aware of the situation.
…
2021-08-11 09:54:35 from Naomi Enright:
Please cease contact as I know your mother is using your phone as I have blocked her for harassment. And please stay away from my family.”
Ms O’Donoghue gave evidence as did Mr Enright that further contact was made by Mrs Blackwell. Ms O’Donoghue gave evidence that the language in Ms Blackwell’s text of 11 August 2021 aligned more with her mother’s style so she took the view that the communication with Ms Blackwell was compromised. She also gave evidence that Mrs Blackwell admitted to crafting the text during a conference, which confirmed her earlier suspicions. As can be seen from the texts of 11 August 2021 from Ms O’Donoghue while they are addressed to Ms Blackwell, the intended audience appears to be Mrs Blackwell. This communication is contrasted by the email from Ms O’Donoghue to Ms Blackwell at this time.
Ms Blackwell contends that she was dismissed because of her illness. Importantly and relevant was Ms O’Donoghue’s uncontested evidence that the arrangement was to end as Metricon did not renew the cleaning contract. Ms O’Donoghue’s evidence was that the text that states that her services were no longer required was sent because Ms Blackwell ceased all communication with her. At that stage Ms O’Donoghue was contacted by Mrs Blackwell but received no communication from Ms Blackwell with whom she had a close relationship over 17 months.
Ms Blackwell stated in evidence that she considered the threat was the reference to her relationship and opportunity with Metricon. However, the facts are that Ms O’Donoghue made the introductions, advocated on her behalf to Metricon decision makers and encouraged Ms Blackwell to engage and apply for jobs. Based on the texts and the evidence, the opportunity was not taken by Ms Blackwell. By not communicating with Ms O’Donoghue, Metricon had to be advised for the purpose of security, therefore from an objective basis the loss of opportunity with Metricon was Ms Blackwell’s own doing.
Nevertheless, the matter of whether there was a dismissal is relevant in so far that Ms Blackwell’s contends that she refused to communicate because she felt threatened and anxious which led her dismissal. While Ms Blackwell may have taken the texts as threats, on any objective basis it is difficult to reach the same conclusion. If Ms Blackwell was not an employee then she was not dismissed, although her services were no longer required.
I do not find that Ms Blackwell was an employee, but if I am wrong on this point, as Ms Blackwell contends that she was a casual employee, the analysis of the pattern of work shows that there was no pattern and certainly there was no guarantee of ongoing work. An end to the cleaning contract was imminent, Ms Blackwell would accept hours or request hours through Ms O’Donoghue often at short notice. As Ms Blackwell refused to communicate with Ms O’Donoghue there could not be a sustainable method of acceptance of hours going forward. Ms Blackwell and her mother had initiated litigation, which suggests that no further work as a contractor was to be agreed to in any event. There was no evidence of agreed cleaning hours for the balance of August when the contract would come to an end. If Ms Blackwell was a casual employee, then her employment came to an end at the end of her last shift.
For the above reasons Ms Blackwell’s application pursuant to s.365 is rejected. Ms Blackwell was not dismissed for the purposes of s.365 and accordingly the matter is dismissed.
COMMISSIONER
Appearances:
Ms D. Blackwell on her own behalf.
Ms. N. O’Donoghue for the Respondent.
Hearing details:
2022
Melbourne (By Video using Microsoft Teams)
19 April
[1] Exhibit A2 at[10].
[2] Exhibit A2 Statement of Darcy Blackwell.
[3] Timeline for Commissioner excel document.
[4] Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152.
[5] See also Exhibit A3 at [4i}.
[6] Text of 14.1.21.
[7] Exhibit A3 at [4m].
[8] Email of 11 August 2021 at 4.17pm.
[9] Email of 11 August 2021 at 4.19pm.
[10] CFMMEU and Or v Personnel Contracting PryLtd [2022] HCA 1 at [62] - citing WorkPac Pty Ltd v Rossato [2021 HCA 23; (2021) 95 ALJR 681 at 700 [101]; [2021] HCA 23; 392 ALR 39 at 61, citing R v Foster; Ex parte The Commonwealth Life (Amalgamated) Assurances Ltd [1952] HCA 10(1952) 85 CLR 138 at 151
[11]CFMMEU and Or v Personnel Contracting PryLtd [2022] HCA 1 at [177] per Gordon J.
[12] Equuscorp Pty Ltd v Glengallan Investments [2004] HCA 55; 218 CLR 471 at [46].
[13] Text messages of 9 and 11 June 2021 in text message transcript.
[14] Text message of 3 August 2021 in Text message transcript.
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