Dina Elizabeth Collison v Morrissey Group Pty Ltd
[2023] FWC 3027
•21 NOVEMBER 2023
| [2023] FWC 3027 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Dina Elizabeth Collison
v
Morrissey Group Pty Ltd
(U2023/6139)
| DEPUTY PRESIDENT LAKE | BRISBANE, 21 NOVEMBER 2023 |
Application for an unfair dismissal remedy – jurisdictional objection raised – no dismissal – independent contractor – minimum employment period not met – application dismissed.
Ms Dina Collison (the Applicant) brought an application to the Fair Work Commission (the Commission) seeking a remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) stating she was unfairly dismissed from Morrissey Group Pty Ltd (the Respondent).
The Respondent raised a jurisdictional objection that the Applicant was not dismissed within the definition of s.386 of the Act as she was an independent contractor. For the Applicant to be eligible to make a claim under s.394 of the Act, the Applicant will need to establish that she was dismissed in accordance with the definition in s.386 of the Act.
Directions were issued and a hearing was held on 18 October 2023. The Applicant was self-represented, and Mr Fei (Ricky) Yuan appeared for the Respondent.
Background
The Applicant commenced with the Respondent on 9 November 2022 and claims that she was dismissed on 30 June 2023. The Applicant was engaged with the Respondent for 8 months. Ms Collison did not provide an estimate of the business size in her Form F2 application.
The Respondent states that there was a significant turnover in staff because of a change in company structure from the last Director and could not hire anyone as the company had a requirement to pass an audit prior to operating. The Applicant was engaged to ensure that the Respondent would pass the audit from the Australian Skills Quality Authority to hire staff in the future. The Applicant also undertook other administrative tasks such as enrolment of students in courses.
The Applicant received a payment of $2,475 per week which was reflective in the tax invoices. There was no written agreement between the parties.
Is the Applicant an employee or an independent contractor?
Section 386 of the Act provides:
(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.
(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.
(emphasis added)
The definition of an employer is determined in its plain and ordinary meaning.[1] The High Court of Australia in Jamsek and Personnel Contracting determined the case of whether a person is an employee or contractor.[2] The characterisation of the relationship is to be determined by reference only to the parties’ legal rights and obligations.
Where a comprehensive written contract is in place, this will be the primary source of the parties’ legal rights and obligations, and it will be decisive in characterising the relationship. This will apply unless the contract is a sham, varied after it was made, or post agreement conduct or context which demonstrates that a term is legally ineffective.[3]
Where no comprehensive written contract is in place, the High Court stated in Jamsek that the “multifactorial” test remains appropriate in identifying the applicable legal rights and obligations which is not derived from the post contract conduct.[4] Therefore, a multifactorial approach is to be adopted. In reliance on a considerable body of case law developed, general legal principles are applied to specific circumstances.[5] Multiple indicia are to be considered, though none alone are determinative. Analysis of the totality of the relationship between the parties is required to determine whether the relationship was one of an employee or independent contractor.
The often-cited passage penned by Windeyer J in Marshall v Whittaker’s Building Supply Co[6] later quoted by the High Court of Australia in Hollis v Vabu reads:
“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’.”[7]
In Roy Morgan Research Pty Ltd v Commissioner of Taxation, the Full Court of the Federal Court quoted with approval the following passage from Hall (Inspector of Taxes) v Lorimer:
“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”.[8]
The Full Bench of the Commission adopted this passage in Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario, and summarised the general approach to distinguish between employees and independent contractors 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[9]: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own[10] 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.[11]
(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.[12]
(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.[13] 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:[14] the parties cannot deem the relationship between themselves to be something it is not.[15] Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.[16]
(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.[17] 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.[18]
“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.”[19] “[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.”[20]
· 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[21] and or advertises his or her services to the world at large.
· Whether the worker provides and maintains significant tools or equipment.[22]
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. [23]
· Whether the work can be delegated or subcontracted.[24]
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.[25] 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.[26]
· Whether the putative employer presents the worker to the world at large as an emanation of the business.[27]
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.
· Whether the worker is provided with paid holidays or sick leave.[28]
· 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.[29]
(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.”[30]
There is no written contract in place between the parties. As a result, the multifactorial test will be considered in determining whether the Applicant is an employee or independent contractor. It must be noted that the factors should not be approached as a checklist, but viewed as a whole, with some factors weighing more heavily than others and what the overall effect of the culmination of factors are in determining the existence of an employment relationship.
On a preliminary view, the Applicant was presented to others as an emanation of the business as a CEO/Managing Director of the business and would receive instructions from the former Director and Mr Yuan.
The Applicant worked remotely working Monday to Friday from 8am to 4pm and was consistently paid. The Applicant was paid by a periodic salary rather than a completion of tasks which indicated that Applicant was not running a business on her own. The Respondent also provided the Applicant a laptop in order to perform her role remotely meaning she did not provide or maintain any equipment.
On the limited evidence presented before me, I find that an employment relationship is more prevalent than an independent contracting arrangement which would make the Applicant eligible to lodge an application if she meets the minimum employment period.
Does the Applicant meet the minimum employment period?
Section 382 of the Act provides that a person is protected from unfair dismissal if they have completed a period of employment of at least the minimum employment period.
Section 383 of the Act defines the “minimum employment period” as follows:
383 Meaning of minimum employment period
The minimum employment period is:
(a)if the employer is not a small business employer—6 months ending at the earlier of the following times:
(i)the time when the person is given notice of the dismissal;
(ii)immediately before the dismissal; or
(b) if the employer is a small business employer—one year ending at that time
The number of employees were not provided by either party. Upon an email sent by my Chambers on 20 October 2023, Mr Yuan confirmed that there were no staff at the time of the Applicant’s dismissal. Ms Collison replied stating that there were 5 café/restaurants associated with the Respondent. However, no definitive number, their association or a list of names were provided.
Mr Yuan was particularly evasive in providing the Commission with how many employees were engaged in the business. At the time of the dismissal, it appeared that there was at least one person that was assisting with Mr Yuan in operating the business. However, it appeared with the limited evidence before me that the Respondent did not appear to have more than 15 employees considering the situation the business was in at the time Ms Collison was engaged. As a result, I find that the Respondent is a small business employer.
In the circumstances of this matter, I am satisfied the Applicant has not completed the required minimum employment period as the business has less than 15 employees and the Applicant had worked less than 12 months. Therefore, her application has no reasonable prospects of success.
“587 Dismissing applications
(1) Without limiting when the FWC may dismiss an application, the FWC may dismiss an application if:
(a) the application is not made in accordance with this Act; or
(b) the application is frivolous or vexatious; or
(c) the application has no reasonable prospects of success.
Note: For another power of the FWC to dismiss an application for a remedy for unfair dismissal made under Division 5 of Part 3 2, see section 399A.
(2) Despite paragraphs (1)(b) and (c), the FWC must not dismiss an application under section 365 or 773 on the ground that the application:
(a) is frivolous or vexatious; or
(b) has no reasonable prospects of success.
(3) The FWC may dismiss an application:
(a) on its own initiative; or
(b) on application.”
Having regard to the circumstances of this matter I am satisfied that as the Applicant has not completed the required minimum employment period under the Act, her application has no reasonable prospect of success. As such, the application is dismissed under s.587(1)(c) of the Act. I Order accordingly.
DEPUTY PRESIDENT
[1] Fair Work Act 2009 (Cth) s.12.
[2] Asim Nawaz v Raiser Pacific Pty Ltd [2022] FWC 1189 at [50]-[51] citing Jamsek v ZG Operations Pty Ltd [2022] HCA 2 ('Jamsek’); CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 (‘Personnel Contracting’).
[3] Jamsek per Kiefel CJ, Keane and Edelman JJ at [40]-[62], Personnel Contracting per Gordon J at [172]-[178]:
[4] Personnel Contracting per Kiefel CJ, Keane and Edelman JJ at [33]-[34], [47], [61], per Gordon J at [174], [186]-[189].
[5] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; Hollis v Vabu Pty Ltd (2001) 207 CLR 21; Abdalla v Viewdaze Pty Ltd (2003) 122IR 215; Roy Morgan Research Pty Ltd v Commissioner of Taxation (2010) 184 FCR 448; Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario [2011] FWAFB 8307.
[6] Whittaker’s Building Supply Co (1963) 109 CLR 210, 217.
[7] Hollis v Vabu Pty Ltd (2001) 207 CLR 21 [40].
[8] Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939; endorsed in Roy Morgan Research Pty Ltd v Commissioner of Taxation (2010) 184 FCR 448.
[9] Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210, 217 per Windeyer J approved by the majority in Hollis v Vabu (2001) 207 CLR 21 [40]; Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16.
[10] Hollis v Vabu (2001) 207 CLR 21 [47] and [58].
[11] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
[12] Ibid.
[13] The parties cannot create something which has every feature of a rooster but call it a duck and insist that everyone else recognise it as a duck”: Re Porter (1989) 34 IR 179, 184 per Gray J; Massey v Crown Life Insurance [1978] 2 All ER 576, 579 per Lord Denning approved by the Privy Council in AMP v Chaplin (1978) 18 ALR 385, 389.
[14] AMP v Chaplin (1978) 18 ALR 385, 389.
[15] Hollis v Vabu (2001) 207 CLR 21 [58].
[16] AMP v Chaplin (1978) 18 ALR 385, 394.
[17] Zuijs v Wirth Bros. Pty Ltd (1955) 93 CLR 561, 571.
[18] Hollis v Vabu (2001) 207 CLR 21.
[19] Humberstone v Northern Timber Mills (1949) 79 CLR 389, 404 per Dixon J.
[20] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 36.
[21] Ibid.
[22] Ibid 24.
[23] Hollis v Vabu (2001) 207 CLR 21 [47] and [58].
[24] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 24.
[25] Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 539; AMP v Chaplin (1978) 18 ALR 385, 389.
[26] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 24.
[27] Hollis v Vabu (2001) 207 CLR 21 [39].
[28] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 24.
[29] Massey v Crown Life Insurance [1978] 2 All ER 576, 579 per Lord Denning.
[30] Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario[2011] FWAFB 8307 [30].
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