Hayley Smith v Kohli Traders Pty Ltd - [2025] FWC 304

[2025] FWC 304

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Hayley Smith
v

Kohli Traders Pty Ltd

(U2024/11979)

COMMISSIONER CRAWFORD

SYDNEY, 5 FEBRUARY 2025

Unfair dismissal application – jurisdictional objection alleging not employee and no dismissal – engagement started before s.15AA inserted and continued after it commenced operating – separate assessments required – jurisdictional objection upheld – application dismissed.

BACKGROUND

Kohli Traders Pty Ltd (Kohli Traders) operates a care services business for people with disability in New South Wales. Hayley Smith commenced performing work for Kohli Traders on 13 January 2023. Ms Smith filed an unfair dismissal application on 8 October 2024 which alleges she was dismissed by Kohli Traders on 3 October 2024. On 21 October 2024, Kohli Traders filed an employer response form which argued Ms Smith is not eligible to make an unfair dismissal application because she was an independent contractor and not an employee of Kohli Traders. Kohli Traders also argued its relationship with Ms Smith has not ended and hence that Ms Smith has not been dismissed. This decision concerns whether Ms Smith was an employee or an independent contractor, and whether she was dismissed by Kohli Traders.

I issued directions for the filing of material and listed a determinative conference via video on 28 January 2025. Ms Smith represented herself. Mani Kohli (Director) represented Kohli Traders.

MATERIAL FILED

Kohli Traders

Mr Kohli filed a statement with several documents attached on 23 December 2024. I marked the material filed by Mr Kohli Exhibit R1.[1] Mr Kohli was not required for cross-examination.

The uncontested evidence relied upon by Mr Kohli includes:

· An Independent Contractor Agreement (ICA) between Kohli Traders and Ms Smith dated 11 January 2023. The terms of the ICA include that Ms Smith was free to engage in other business activities when not performing work under the ICA, payment under the ICA was at the rate of $45 per hour inclusive of GST, Ms Smith was required to submit invoices to receive payments under the ICA, Ms Smith was required to provide her own equipment, and Ms Smith was required to source her own insurances.

· A list of invoices issued by Ms Smith to Kohli Traders for work performed from November 2023 to October 2024.

· A copy of two invoices issued by Ms Smith to Kohli Traders on 6 October 2024.

· An email from Ms Smith to Mr Kohli dated 23 May 2024 where Ms Smith gives notice of increases to her weekend and public holiday rates effective 10 June 2024.

· Several emails from Ms Smith to Mr Kohli where Ms Smith refers to being engaged as an independent contractor.

· Several emails concerning the breakdown of the relationship between Ms Smith and Kohli Traders.

I have reviewed and considered all the evidence relied upon by Kohli Traders.

Mr Kohli made oral submissions at the end of the determinative conference which I have considered.

Ms Smith

Ms Smith filed an email…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2025] FWC 304
Decision Date: 5 FEBRUARY 2025

CaseChat Overview and Summary

The matter before the Fair Work Commission was an unfair dismissal application filed by Hayley Smith against Kohli Traders Pty Ltd. Smith alleged that she was dismissed by Kohli Traders on 3 October 2024. Kohli Traders responded by arguing that Smith was not an employee but an independent contractor and that her engagement with the company had not been terminated. The central issues the Commission had to decide were whether Smith was an employee or an independent contractor under the Fair Work Act 2009 and whether she was dismissed by Kohli Traders.

The Commission first considered the relationship between Smith and Kohli Traders for the period from 13 January 2023 to 25 August 2024, using the High Court precedent established in Personnel Contracting and Jamsek. The Commission found that the Independent Contractor Agreement (ICA) between Smith and Kohli Traders was a comprehensive written document that reflected an independent contracting relationship. Smith was free to engage in other business activities, submit invoices for payment, source her own equipment, and obtain her own insurance. Smith's unilateral increase of her rates for weekend work further supported the finding that she was an independent contractor. The Commission rejected Smith's argument that the ICA was a "sham," finding that there was no evidence of any intention to create a false representation of their relationship.

The Commission then assessed the relationship from 26 August 2024 to around 3 October 2024, applying the new s.15AA of the Fair Work Act, which requires consideration of the real substance, practical reality, and true nature of the relationship. Despite Kohli Traders' attempts to exercise control over the tasks Smith was required to perform, the Commission found that the post-contractual performance of the contract remained consistent with an independent contracting relationship. Smith continued to issue invoices, refer to the independent contracting arrangement in her communications with Kohli Traders, and perform other work in the same industry. Therefore, the Commission concluded that Smith was an independent contractor during this period as well.

Since Smith was an independent contractor and not an employee of Kohli Traders, the Commission found that it lacked jurisdiction to continue dealing with Smith's unfair dismissal application. Consequently, Smith's application was dismissed.

The Fair Work Commission dismissed Smith's unfair dismissal application on the grounds that she was an independent contractor and not an employee of Kohli Traders, and therefore, not eligible for protection under the Fair Work Act.

Orders