Darren Cooper v Creative Cuisine (Aust) Pty Ltd

[2020] FWC 6247

[2020] FWC 6247

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Darren Cooper
v
Creative Cuisine (Aust) Pty Ltd
(U2020/6806)

DEPUTY PRESIDENT LAKE BRISBANE, 27 NOVEMBER 2020

Application for an unfair dismissal remedy – Jurisdictional objection – High income threshold – Employee or Independent Contractor – Jurisdiction objection upheld – Applicant found to be an independent contractor – Application dismissed.

Background

[1] On 29 April 2020, Mr Darren Cooper (the Applicant) lodged an application pursuant to s 394 of the Fair Work Act 2009 (the Act) in which he asserts that the termination of his employment with Creative Cuisine (Aust) Pty Ltd (the Respondent) on 5 May 2020 was unfair.

[2] The Respondent has raised two jurisdictional objections to the Applicant’s application proceeding on the basis that the Applicant was not a person protected from unfair dismissal at the time of his termination with the Respondent. The Respondent objects to the application on the basis that the Applicant is not an employee and that the Applicant earned more than the high income threshold.

[3] In response, the Applicant asserts that he was not a contractor, rather an employee of the Respondent. He also states that the Director of the Respondent business, Mr Rodger Graf, owns another business, Nutritious Cuisine. The Applicant asserts that as he was employed by both Creative Cuisine and Nutritious Cuisine, his income should be determined on the amount received by each business separately, rather than being considered together, which he believes would fall below the high income threshold.

[4] Both the Applicant and the Respondent agreed for the matter to be determined on the papers. The Applicant and Respondent filed submissions that were to be relied upon in relation to the jurisdictional objections.

[5] The jurisdictional objection of whether the Applicant was an employee will be determined first. For the reasons that follow, I am not satisfied that the Applicant was an employee. Because of this, there is not need to determine whether the Applicant fell below the high income threshold.

Jurisdictional Objection: Employee or Independent Contractor

Legislative Framework

[6] Before considering the merits of the application, the Fair Work Commission must decide whether the person was protected from unfair dismissal, as per s 396(b) of the Act.

[7] The definition of when a person is protected from unfair dismissal is found in s 382 of the Act and provides as follows:

“382 When a person is protected from unfair dismissal

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; and…” [emphasis added]

[8] The meaning of “employee” in that provision is provided for in s 380 of the Act, as a “national system employee”; which is defined by s 13 of the Act to mean “…an individual so far as he or she is employed, or usually employed…by a national system employer…”. Section 14(a) of the Act defines “national system employer” as relevantly “a constitutional corporation, so far as it employs, or usually employs, an individual…”.

[9] In this instance, the Respondent was a constitutional corporation satisfying the meaning of a national system employer. It must now be determined, as raised by the Respondent in their jurisdictional objection, whether the Applicant satisfies the meaning of a national system employee of the Respondent, as opposed to an independent contractor.

Independent Contractor Principles

[10] There is no single test to determine whether a relationship is one of employment. Commissioner Cambridge in Joshua Kooger v Foodora Australia Pty Ltd 1, helpfully summarises succinct statements of relevant legal principles:

“[64] The correct approach to a determination of whether a person has been engaged as an employee or a contractor involves issues of both fact and law. The particular factual circumstances of the relationship under examination need to be subjected to the legal principles that have been established as relevant to the proper characterisation that is to be provided to that relationship.

The Multifactorial Tests and the Overall Objective

[65] In this case, Counsel for the respective Parties concurred with the identified distillation of the relevant legal principles that have developed from a considerable body of case law commencing, in general terms, from the High Court Judgement in the case of Stevens v Brodribb Sawmilling Co Pty Ltd 2 (Brodribb), and including, inter alia, Hollis v Vabu3 (Vabu), and, in respect to Decisions of this Commission, relevantly noting Abdalla v Viewdaze4 (Abdalla), and Cai (t/a French Accent) v Do Rozario5 (French Accent).

[66] In broad terms, the relevant legal principles have been described as the adoption of a multifactorial approach involving consideration of various factors including a number of identified indicia, with no single factor being decisive, and an overriding requirement for examination of the totality of the relationship between the Parties so as to ultimately provide a sound basis upon which to determine whether the relationship was one of employment or independent contractor. Further, the fundamental determination is frequently described as the application of an integration test as may be identified in the following extract from the Vabu Judgement which quotes from the Judgement of Windeyer J in Marshall v Whittaker’s Building Supply Co:

“… 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.” 6

[67] The multifactorial approach, as it is described, has been most helpfully summarised by the Full Bench of Fair Work Australia at paragraph [30] in the French Accent Decision and consideration in this instance has been undertaken in accordance with the structured approach that is set out in subparagraphs (1) to (6) of paragraph [30] of the French Accent Decision. It is unnecessary to repeat the full terms of subparagraphs (1) to (6). However, the following extract from subparagraph (5) provides a particularly insightful summary of the task that must be performed in order to properly determine the question of whether the relationship under examination is one of employment or independent contractor:

“[11]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.” 7

[10] Commissioner Simpson helpfully elaborates on the relevant criteria in Peel v Aster Home Nursing Service Pty Ltd: 8

[7] The Full Bench decision in Kimber v Western Auger Drilling Pty Ltd 9 provides the factors/indicia this Commission needs to consider in assessing whether an Applicant was an employee or an independent contractor during the relevant period of employment. The Full Bench endorsed the general approach to distinguishing employees and independent contractors provided in Jiang Shen Cai T/A French Accent v Michael Anthony Do Rozario which 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.

(footnotes omitted)

[8] The Full Bench in Kimber further provided;

“The courts have developed a multi-factorial approach, in which there is no single decisive criterion to determine whether a contractual relationship is one of employment or one subject to a contract for services. This approach requires the consideration of the various indicia as summarised in French Accent set out above. It is also clear from the decision of the Full Bench of the Federal Court in ACE Insurance Limited v Trifunovski 10 and others, that no one single criterion will necessarily be determinative and that each matter will turn upon the particular circumstances of the case, with the decision maker weighing all the relevant factors.”11

[9] The ultimate question for the Commission as stated in Abdalla v Viewdaze Pty Ltd t/a Malta Travel 12 and endorsed in French Accent;

“… will always be 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 punitive (sic) worker could be said to be conducting a business of his or her own. This question is answered by considering the terms of the contract and the totality of the relationship.”

Weight of Factors

[11] While the case law provides a myriad of criteria against which to assess the nature of the relationship, it is important not to address the criteria mechanically or with a predetermined weight: 13

“This 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 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.”

[12] The criteria are not exhaustive and making a determination all relevant features of the relationship must be taken into account: 14

“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.”

Consideration

[13] I will now consider the indicia set out in the multifactorial approach. There are no rules as to the weight given to the indicia in the decision making process. 15 It is a guide and the ultimate questions comes down to whether the worker is acting for another or acting on their behalf.16

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.

[14] The nature of the work performed by the Applicant is consultancy services for the Respondent. The Applicant was engaged to develop sales for the products produced by the Respondent, of which Mr Graf is the Director.

[15] The Applicant submitted that “Mr Graf did exercise, or have the right to exercise, control over the manner in which work was performed, the location and the hours of work e.t.c”. The Applicant further submitted that he did have the option to “work from a separate place of work…however Mr. Graf preferred that I operated from his premises in Salisbury.”

[16] In response, the Respondent submitted “As in any work environment instruction and planning is passed to the relevant people to action their tasks, this is not uncommon or only related to an employee/employer relationship.”

[17] Ultimately, the nature of a consulting relationship is one of the provision of a unique service. Where a party is providing their specialist opinion, there is some limitation on the scope of direction that can be given. One could be directed to perform a certain objective, to say, increase sales, but a practical limitation exists around the level of detail one could give; the putative employer only has a degree of understanding of what the other parties role entails in knowing how practically to direct them. The Respondent engaged the Applicant to provide such services and there is no evidence that indicates the Respondent controlled the manner in which the work was performed. Stevens v Brodribb makes it clear that where expertise or skill is inherent, then a lack of control is not as indicative – this has been given due consideration. 17

[18] Given the limited scope to control the manner in which the work is performed and the degree of flexibility in where the work was performed indicate that the relationship was not an employment relationship.

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

[19] The Applicant submitted that he was “solely working for Mr. Graf from 17 October 2018”. It is unclear from this statement as to whether the Applicant refers the work from the Respondent company, Creative Cuisine (Aust) Pty Ltd, or also work from Nutritious Cuisine, in which Mr Graf is also the Director. This in itself highlights that the relationship was far from a traditional employee relationship.

[20] The Respondent submitted that “Darren cooper consultants was working for Creative Cuisine pty ltd, Nutritious cuisine pty ltd, and any other party that Darren cooper consultants had dealings with during this time.” The Respondent attached an unsigned contract which indicated that there were some alternate dealings with a third entity. The Applicant in his statutory declaration stated that the Respondent attached confidential contracts “most of which relate to contracts prior to any dealing with his business.” The inference that could be taken is that “some” dealing with other business was engaged. However, it is not relevant whether other engagements actually occurred, it was sufficient they were open to the Applicant. It is not material the Applicant worked around 40 hours, which, while it may practically limited his capacity to engage in other work, does not legally preclude him from doing so.

[21] The contract does limit the Applicant’s ability to engage in work that would create a conflict of interest, but does not limit the ability of the Applicant generally.

[22] It is clear that the Applicant operated through a company, Darren Cooper Consultants. This company performed work for both Creative Cuisine and Nutritious Cuisine. Through this company, the Applicant was working for the two companies of Mr. Graf, one of which is the Respondent. It is clear from the characterisation of the relationship that the Applicant had the capacity to engage in work for other companies. The Respondent was not exclusively providing services to the Respondent and this is indicative of an independent contractor relationship.

[23] It is clear that the Applicant performed work for both businesses and was paid separately for his work to each.

[24] The above is indicative of an independent contractor relationship.

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

[25] This factor was not of significant import, but it can be said that the Applicant could at times work from the location of his choosing and did have his own business cards. His email signature does also state “Managing Director” which can indicate he is not strictly an employee.

[26] Despite the above, I consider this factor neutral. On the facts of this case, this factor is not of pivotal importance to characterising the employment relationship.

Whether the worker provides and maintains significant tools or equipment

[27] The Applicant submitted that “Mr. Graf owned all tools and equipment relating to his business”. This aligns with Respondent’s statement that “Darren cooper was issued with a company owned laptop…”

[28] This is indicative of an employer-employee relationship.

Whether the work can be delegated or subcontracted

[29] From the construction of the Applicant’s business, it appears clear that he provided consulting services. It is not clear whether he engaged a subcontractor or delegated work, but the option appears to be open to him – indeed, the business name is “Darren Cooper Consultants” which appears to contemplate other consultants.

[30] This point was not agitated, nor was any substantive information provided and therefore I consider this factor neutral.

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

[31] Clause 2 of the contract between the Applicant and the Respondent provides a basis for either party to bring the relation to an end by giving 6 months written notice.

[32] The language of elective termination indicates a contractor relationship, which can be brought to an end by the Respondent without any consideration of severance entitlements. This vests the Respondent with a power to terminate the relationship in a manner distinct from terminating an employee relationship.

[33] This is indicative of an independent contractor arrangement.

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

[34] The Applicant submitted that Mr Graf issued him with company uniforms and business cards. The Applicant further submitted that has his own personal business cards, but they were not used in relation to the Respondent business.

[35] The Applicant had his own ABN, his own email address and dispatched invoices which were headed “Darren Cooper Consultants”. Payment was not made to the Applicant directly. These criteria are less concerned with the world at large and have been factored accordingly.

[36] Presenting as an emanation of the business is indictive of an employee relationship.

Whether income tax is deducted from remuneration paid to the worker

[37] It is clear that the Applicant was paid as a consultant, with an invoice to be provided as per the contract. There was no deduction for income tax and the Respondent paid GST on the services rendered.

[38] This indicates an independent contractor relationship.

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

[39] The following is an extract from the Contract made between the Applicant and the Respondent.

“c. The contractor will invoice the company on a weekly basis for all services undertaken at the following scale:

1. Cost of consultancy services per week is $3,125 plus GST. The contractor will produce a tax invoice for the company on a weekly basis, which will be paid within 72 hours of issue. No credit terms are available. This fee is based on a 48 week per annum basis taking in to consideration public holidays and annual leave. Any further time taken will be at the contractor’s expense.

[40] From the evidence provided, the Applicant provides a tax invoice to the Respondent after the completion of tasks on a weekly basis. The tax invoices are billed to the Respondent from the Applicant, on a Darren Cooper Consultant banner head. I note that the figure was regular and in response to hours performed and this is taken into account.

Whether the worker is provided with paid holidays or sick leave

[41] The relevant extract of the contract between the Applicant and the Respondent is as follows:

“The company shall not be not be responsible for any PAYG Superannuation, Sickness or Leave entitlements of the contractor as stated above.”

[42] As the Applicant is not provided with sickness or leave entitlements, this is indicative of a contractor relationship.

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

[43] Consultancy, by its very definition, is hard to confine as it is an exercise of requesting an opinion of a party of which cannot be restricted or directed. As you are requesting advice from a consultant, it is hard to exhibit a level of control in the first instance.

[44] Additionally, the work of the Applicant as a consultant, is an established profession, which is an indicator of a contractor. This is in contrast to work that does not involve a profession, trade or distinct call on the part of the employee.

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

[45] This was not put forward by either party.

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

[46] The Applicant submitted that he was responsible for his own expenses, such as motor vehicle expenses. A reimbursement would indicate an employee relationship.

Conclusion

[47] The contract allows for the provision of services and is couched in language of an independent contractor; this is not an attempt to recharacterise the relationship, but is reflective of its true nature.

[48] It seems clear on the contract provided and the way in which payment was made, that the Applicant used a corporate vehicle, Darren Cooper Consultants, to engage in business with both business of Mr. Graf. He was remunerated in the form of invoices, GST was paid on his fees and no entitlements were accrued. These factors were of primary significance and were weighted with some significance. The picture painted, as a whole, is one indicative of an independent contractor relationship: the Applicant was clearly carrying on a trade or business of his own.

[49] I am satisfied that the Applicant was not an employee of the Respondent. Therefore, the Applicant was not a person protected from unfair dismissal and accordingly the Commission does not have jurisdiction to consider the Applicant’s unfair dismissal application.

[50] The application is dismissed. I Order so.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR724750>

 1   Joshua Klooger v Foodora Australia Pty Ltd[2018] FWC 6836.

 2   Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16.

 3   Hollis v Vabu Pty Ltd t/a Crisis Couriers [2001] HCA 44, 106IR 80.

 4   Abdalla v Viewdaze Pty Ltd (2003) 122IR 215.

 5   Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario[2011] FWAFB 8307; (2011) 215 IR 235 (French Accent).

 6   Hollis v Vabu Pty Ltd t/a Crisis Couriers [2001] HCA 44, 40.

 7   Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario[2011] FWAFB 8307, 30.

 8   Peel v Aster Home Nursing Service Pty Ltd [2020] FWC 4782, [7]-[9] (Commissioner Simpson).

 9   [2015] FWCFB 3704.

 10 [2013] FCAFC 3.

 11 Ibid at [41].

 12 (2003) 122 IR 215.

 13   Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation [2010] FCAFC 52 [31], 184 FCR 448, quoting Hall (Inspector of Taxes) v Lorimer[1992] 1 WLR 939 at 944.

 14   Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario[2011] FWAFB 8307 [30]; (2011) 215 IR 235.

 15 Sammartino v Mayne Nickless Express t/a Wards Skyroad [2000] 98 IR 168, [58].

 16   Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1, 37.

 17   Kimber v Western Auger Drilling Pty Ltd [2015] FWCFB 3704, quoting Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario[2011] FWAFB 8307; (2011) 215 IR 235.