DECISION

Fair Work Act 2009
s.394—Unfair dismissal

John Young
v
Sutherland Shire Realty Pty Ltd
(U2019/2407)

DEPUTY PRESIDENT BOYCE

SYDNEY, 30 MARCH 2020

Application for an unfair dismissal remedy — real estate industry — jurisdictional objection — whether relationship between parties is that of principal and contractor or employer and employee — where applicant was a director of a corporate entity with an ABN — where applicant was paid on invoices issued by his corporate entity — where applicant claimed GST and obtained GST credits — where applicant filed taxation returns and claimed business expense deductions of more than 50 percent of income — where applicant declared that he was not an employee in taxation returns — legal indicia weighed to determine whether applicant an independent contractor — jurisdictional objection upheld — application dismissed

Introduction

[1] On 4 March 2019, Mr John Young (Applicant) lodged an application for unfair dismissal with the Fair Work Commission (Commission). The Applicant alleges that he was unfairly dismissed from his employment with Sutherland Shire Realty Pty Ltd (Respondent) on 18 February 2019.

[2] On 18 March 2019, the Respondent lodged a response to the Applicant’s claim, in which the Respondent denied that the Applicant was unfairly dismissed. The substance of that denial was a jurisdictional objection, being that the relationship between the Respondent and the Applicant was that of principal and independent contractor. In other words, the Respondent asserts that the Applicant was not an employee of the Respondent, and is therefore not a person protected from unfair dismissal under Part 3-2 of the Fair Work Act 2009 (Act). 1

[3] On 4 October 2019, I held a hearing in Sydney regarding the Respondent’s jurisdictional objection. In attendance were Mr Kenneth Yardy (Solicitor, Yardy Legal), who appeared with permission for the Applicant, and Mr Dean Groundwater (Solicitor, WMD Law) who appeared with permission for the Respondent.

[4] Having considered the submissions of the parties, and the evidence provided prior to and during the hearing, I have determined to dismiss the application on the basis that the Applicant was not an employee of the Respondent. My reasons for this decision follow.

Permission to appear

[5] Both the Applicant and the Respondent sought to be legally represented at the hearing. Neither party opposed the other being legally represented. I granted the parties permission to be legally represented generally in this matter. I did so having had regard to the criteria set out in s.596 of the Act, specifically noting that this matter pertains to a jurisdictional objection (which is, by its nature, inherently complex). 2

Relevant law

[6] Section 382 of the Act qualifies what persons are protected from an unfair dismissal:

“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…

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: [2020] FWC 701
Decision Date: 30 MARCH 2020

CaseChat Overview and Summary

John Young, a director of a corporate entity, sought an unfair dismissal remedy against Sutherland Shire Realty Pty Ltd, a real estate company. The dispute arose from Young's contention that his engagement with the company constituted an employer-employee relationship, rather than a principal-contractor relationship. Young argued that he was entitled to protections under the Fair Work Act 2009 (Cth). Sutherland Shire Realty contended that Young was an independent contractor and not an employee, challenging the jurisdiction of the Fair Work Commission to hear the matter.

The central legal issues revolved around the characterisation of the relationship between Young and Sutherland Shire Realty. The court had to assess whether the criteria established in the legal tests for determining employment status indicated an employer-employee relationship or if Young was an independent contractor. Factors such as control over the work, the right to delegate tasks, financial risk, and the degree of economic dependence were considered. Additionally, the court examined whether Young's conduct and declarations in tax returns and other documents aligned with the legal definitions of an independent contractor.

The court found that Young's relationship with Sutherland Shire Realty was that of an independent contractor, not an employee. This conclusion was based on the extensive control Young had over his work, the absence of significant economic dependence on Sutherland Shire Realty, and his self-declaration as a non-employee for tax purposes. The court emphasised that Young's ability to claim GST credits, file tax returns, and claim business expense deductions, along with the fact that he was paid through invoices issued by his corporate entity, all pointed towards an independent contractor relationship. Therefore, the jurisdictional objection was upheld, and Young's application for an unfair dismissal remedy was dismissed.

Orders