Dr Clare Anne McGrory v Australian Digital Health Agency
[2024] FWC 1366
•24 MAY 2024
| [2024] FWC 1366 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Dr Clare Anne McGrory
v
Australian Digital Health Agency; HiTech Group Australia Limited
(C2023/7645)
| COMMISSIONER MCKINNON | SYDNEY, 24 MAY 2024 |
Application to deal with contraventions involving dismissal – whether dismissed – not an employee – application dismissed
Dr Clare McGrory worked for the Australian Digital Health Agency (ADHA) for 9 days from 6 to 15 November 2023. She was engaged to perform the work under a labour hire agreement between Dr McGrory and HiTech Group Australia Limited (HiTech).
On 6 December 2023, Dr McGrory applied in time under s.365 of the Fair Work Act 2009 (the Act) for the Commission to deal with a general protections dispute involving dismissal. Dr McGrory alleges that she was dismissed by ADHA. Although HiTech is also named as a respondent to the application, Dr McGrory does not allege that she was dismissed by HiTech.
ADHA and HiTech object to the application on jurisdictional grounds. ADHA submits that Dr McGrory was not, and could not have been, dismissed on the basis that she was not an employee of ADHA. HiTech Group objects to the application for the same reason. Although it makes a separate alternative submission to the effect that Dr McGrory was not an employee of HiTech, the case is not brought by Dr McGrory on that basis and the question is not necessary to decide.
This decision is about whether Dr McGrory was dismissed by ADHA. My finding is that because Dr McGrory was not an employee of ADHA, she cannot have been dismissed by ADHA.
My reasons are set out below. The result is that the jurisdictional objection is upheld and the application will be dismissed.
Legal framework
Section 386 of the Act sets out the circumstances in which a person is taken to have been “dismissed” for the purposes of section 365. That section provides, relevantly, as follows:
“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.”
As is apparent from the words of section 386, a person is only “dismissed” if their employment comes to an end in one of the circumstances described in (a) or (b) above. Each of those circumstances depends on the existence of an employment relationship.
Dr McGrory alleges that she was dismissed by ADHA for the purposes of section 386(1)(a). The difficulty is that there is no evidence of any contract or relationship of employment between Dr McGrory and ADHA. The relevant contract was between Dr McGrory and HiTech. HiTech had a separate contract with ADHA for the performance of work by Dr McGrory.
Consideration
The approach to determining whether a person is an employee was set out by the High Court in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd[1] (Personnel Contracting) and ZG Operations Pty Ltd & Anor and Jamsek & Ors[2] (Jamsek). Usefully, relevant principles were summarised by Wigney J in JMC Pty Limited v Commissioner of Taxation[3]. Shortly stated, they are these:
- First, where the rights and duties of the parties are comprehensively committed to a written contract, the legal rights and obligations established by the contract are decisive of the character of the relationship provided that the validity of the contract has not been challenged as a sham, or that the terms of the contract have not been varied, waived or are subject to an estoppel. The task is to construe and characterise the contract made between the parties at the time it was entered into.
- Second, in order to ascertain the relevant legal rights and obligations, the contract of employment must be construed in accordance with the established principles of contractual interpretation. In that respect, regard may be had to the circumstances surrounding the making of the contract, as well as to events and circumstances external to the contract which are objective, known to the parties at the time of contracting and which assist in identifying the purpose or object of the contract. The nature of the specific job that the putative employee applied for and the nature and extent of any tools or equipment they have to supply for that job may also be relevant. It is, however, generally not legitimate to use in aid of the construction of a contract anything which the parties said or did after it was made.
- Third, and flowing from the first two principles, the characterisation of the relationship between the parties is not affected by circumstances, facts or occurrences arising between the parties that have no bearing on their legal rights. A “wide-ranging review of the entire history of the parties’ dealings” is neither necessary nor appropriate. For a “matter to bear upon the ultimate characterisation of a relationship, it must be concerned with the rights and duties established by the parties’ contract, and not simply an aspect of how the parties’ relationship has come to play out in practice but bearing no necessary connection to the contractual obligations of the parties”. The fact that the parties’ subsequent conduct may not have precisely aligned with their contractual rights and obligations, or the fact that a particular contractual right may have never been exercised or utilised, will generally be irrelevant when it comes to characterising the relationship. That is unless the manner in which the parties conducted themselves after entering into the contract was such as to establish that the contract was a sham, or that the contract had been varied, or that certain rights under the contract were subject to an estoppel.
- Fourth, the contractual provisions that may be relevant in determining the nature of the relationship include, but are not limited to, those that deal with the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work, the provision for holidays, the deduction of income tax, the delegation of work and the right to exercise direction and control.
- Fifth, the characterisation of the relationship as one of service or employment involving an employer and employee, as opposed to a relationship involving an independent contractor providing services to a principal, often hinges on two considerations, although neither are determinative and both involve questions of degree. The considerations are:
- the extent to which the putative employer has the right to control how, where and when the putative employee performs the work, and
- the extent to which the putative employee can be seen to work in his or her own business, as distinct from the business of the putative employer – the so-called “own business/employer’s business” dichotomy.
- Sixth, a “label” which the parties may have chosen to describe their relationship is not determinative of the nature of the relationship and will rarely assist the court in characterising the relationship by reference to the contractual rights and duties of the parties. The parties’ “legitimate freedom to agree upon the rights and duties which constitute their relationship” does not “extend to attaching a ‘label’ to describe their relationship which is inconsistent with the rights and duties otherwise set forth” – to permit otherwise would elevate the freedom to “a power to alter the operation of statute law to suit … the interests of the party with the greater bargaining power”. The characterisation of a relationship as being either one of employer and employee, or one involving the engagement of an independent contractor, is ultimately an evaluative judgment that takes into account the totality of the parties’ contractual rights and obligations. The exercise may not necessarily be straightforward because, in some cases at least, the parties’ contractual rights and obligations may point in different directions. The evaluative exercise also should not be approached on the basis that there is some checklist against which ticks and crosses may be placed so as to produce the right answer. Some degree of uncertainty is unavoidable, particularly in the case of many modern-day work or service contracts.
The Master Agreement and Work Order
ADHA uses what is known as the “Australian Government Digital Marketplace”, through which digital products and services are obtained by Australian Government agencies from different suppliers. All suppliers of services to the Digital Marketplace must accept the terms of a “Master Agreement” in order to sell services through the “Digital Marketplace Panel”. At the time the contract was entered into between HiTech and Dr McGrory, HiTech was a supplier to the Digital Marketplace.
On 25 October 2023, HiTech and Dr McGrory entered into a “contract for the provision of services” to HiTech’s client, ADHA. There is no challenge to the validity of the contract, for example because it was a sham, or was subsequently varied, waived or is subject to an estoppel.
The contract between them described Dr McGrory as Subcontractor to HiTech, engaged to “carry out the Work” of Statistician. It described the relationship between Dr McGrory and HiTech as “that of independent contractor” and disavowed any relationship of partnership, principal and agent or employer and employee. The contract was terminable on notice at any time by HiTech for any reason, but by Dr McGrory only with HiTech’s consent, on terms acceptable to HiTech and on no less than 30 days’ notice.
Under the contract with HiTech, Dr McGrory was required to:
Carry out her work in a conscientious, expeditious and ethical fashion,
Warrant that she was competent and had the necessary skills to perform the work,
Not assign the contract to another or engage any other person to carry out the work without the written consent of HiTech,
Keep her rate of remuneration and HiTech’s fees confidential,
Indemnify HiTech against liability for loss, damage or injury caused by her,
Conform with all legislative and regulatory requirements as applied to her work at her own cost and expense,
Refrain from performing work or negotiating for the performance of work with ADHA without HiTech’s prior written approval for a period of 12 months,
Accept that any title to work undertaken for ADHA vested solely in ADHA,
Protect confidential information acquired by virtue of the Agreement in the manner specified, and
10.Complete and provide HiTech with an approved time sheet signed by a duly authorised officer of ADHA each week.
Under the contract between HiTech and Dr McGrory, HiTech:
Had the right to assign its rights and obligations under the contract at any time,
Was required to make payments to Dr McGrory at the rate specified in the contract after deducting for taxation and other remuneration ‘on costs’ including superannuation, and
Agreed to pay Dr McGrory the agreed remuneration after receiving her time sheet each week.
On 26 October 2023, ADHA and HiTech entered into a “Digital Marketplace Work Order” under the auspices of the Master Agreement for the provision of the services of a Statistician (Health Data).
The Work Order was to commence on 6 November 2023 and expire on 30 June 2024, with an initial term of 8 months and the option to extend twice in 6 monthly increments on the giving of at least 30 days’ notice. Under the Work Order, Dr McGrory was named as the sole “specified personnel” for the purposes of the Master Agreement. This meant that HiTech could only use Dr McGrory to provide the services required under the Work Order and could not “replace, reduce or supplement” her without ADHA’s prior approval. It was also not permitted to subcontract any part of the contract “deliverables” without ADHA’s consent.
The Work Order required HiTech to ensure Dr McGrory’s compliance with ADHA’s Statement of Requirements as well as various agency and regulatory requirements, including ensuring that she acted in accordance with the Australian Public Service (APS) Values and Code of Conduct.
The Work Order provided for HiTech to be paid a “Contract Price” specified in the form of hourly and daily rates. Hours of work were capped at 7.5 hours per day, and 37.5 hours per week, with “core hours of work” from 8.30am to 5.00pm. The Work Order further provided for payment of overtime worked by Dr McGrory under whichever of the AHDA Employment Determination or a relevant modern award applied. Otherwise, the Contract Price was the sole and exclusive payment by ADHA to HiTech for costs associated with the provision of services under the Work Order.
HiTech was required to invoice ADHA for the services provided by Dr McGrory, together with timesheets and “work effort recording” as evidence to support the claim for payment under the Work Order. Intellectual property rights in relation to the work produced by Dr McGrory vested on ADHA upon creation. HiTech was required to obtain and provide a confidentiality undertaking from Dr McGrory to ADHA before she commenced work. HiTech was also required to obtain and maintain liability, indemnity and worker’s compensation insurance as appropriate for the work to be performed, and to provide any necessary training to Dr McGrory to enable her to meet the standards of the Work Order.
There is no evidence of any other contract between the parties in relation to the work performed for ADHA by Dr McGrory. Specifically, there is no evidence of any contract between Dr McGrory and ADHA.
Dr McGrory had a written contract for services with HiTech Group. That contract comprehensively set out the rights and duties of the parties in writing and applied to the work Dr McGrory performed for ADHA.
Conclusion
On the facts, I find that Dr McGrory was not an employee of ADHA. It follows that she could not have been ‘dismissed’ by ADHA.
The application (C2023/7645) is dismissed.
COMMISSIONER
Appearances:
C McGrory on her own behalf.
B Edghill of Sparke Helmore Lawyers for the ADHA.
M Robinson of Citation Legal for HiTech Group.
Hearing details:
2024.
Sydney (by video):
April 11.
[1] [2022] HCA 1.
[2] [2022] HCA 2.
[3] [2022] FCA 750.
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