Karen Bailey v Spangaro (No 1) Pty Ltd

[2019] FWC 4359

[2019] FWC 4359

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Karen Bailey
v
Spangaro (No 1) Pty Ltd
(U2019/1404)

DEPUTY PRESIDENT BEAUMONT PERTH, 30 JULY 2019

Unfair dismissal - jurisdictional objection - whether worker was an independent contractor or an employee - jurisdictional objection upheld - application dismissed.

[1] On 11 February 2019, Ms Karen Bailey (Ms Bailey) made an application to the Fair Work Commission (the Commission) for a remedy in respect of her dismissal from Spangaro (No 1) Pty Ltd (Spangaro).

[2] A preliminary issue in this matter is whether Ms Bailey was an employee of Spangaro. If she was then the Commission can proceed to determine her application. If she was not, then the application would be beyond the jurisdiction of the Commission and would have to be dismissed.

[3] In short, I am satisfied that the evidence supports a conclusion that the arrangement between Spangaro and Ms Bailey was an independent contracting arrangement. On balance, the totality of the evidence concerning the various indicia points to Ms Bailey conducting a business of her own and not being a servant of Spangaro. Therefore, the application is dismissed. My reasons for this decision follow.

Background

[4] Ms Bailey gave evidence that in January 2015 she began looking for a job due to a downturn in her husband’s earthmoving business, Grading Services Australia Pty Ltd (GSA). 1 Her role in GSA was to look after the administration side of the business, and she was one of its directors.2 Ms Bailey worked between five to 10 hours a week on the administration side of this business.

[5] Ms Bailey responded to an advert in the local Geraldton newspaper for a part-time Hotel Manager. Mr John Spangaro, the proprietor of the Como Apartments, an accommodation facility in Geraldton, interviewed her. She was later informed that the job was hers. 3

[6] Como Apartments Geraldton has two properties in Geraldton. One consists of eight apartments on Fitzgerald Street, and the other, three apartments on James Street. 4 There is no office at either property and only the Fitzgerald Street property has large lockable cupboards in which the guest laundry is kept along with all the cleaning and administration supplies.

[7] Ms Bailey stated that she did not ask to be an independent contractor but as she needed the job, and the management work was very mobile (there was no office at the Apartments), she took the job. 5 Ms Bailey said that Mr Spangaro informed her that she required an ‘ABN’ to enable her to be paid. Ms Bailey mentioned to Mr Spangaro that she had a family business, GSA, and that had an ABN.6 According to Ms Bailey, Mr Spangaro was said to have informed her ‘that would be fine’.7

[8] Mr Spangaro gave evidence that when interviewing Ms Bailey he explained the position was a contract position. 8 He said that she expressed to him that this was not a problem as she and her husband owned an earthmoving business and she would work through that.9 When he mentioned that there was no office, Ms Bailey was said to have informed him that this was not a problem as she had a home office where she would prefer to work.10

[9] Mr Spangaro stated he asked Ms Bailey whether there was an issue with distance, as she lived at a distance from the Como Apartments (a 2-hour round trip). 11 Mr Spangaro gave evidence that Ms Bailey stated that it would not be an issue as she was in Geraldton several times a week, and also explained that she had good friends in town who could step in if she was unavailable.12

[10] A letter of engagement was emailed to Ms Bailey, and she stated that she signed the document on 15 January 2015 (Letter of Engagement). 13 Ms Bailey’s evidence was that GSA never entered into any contract with Como Apartments; it was, according to Ms Baily, just a related entity with an ABN and bank account that received the monies from Spangaro.14 When cross examined about payment arrangements, Ms Bailey’s evidence was that the monies received from Spangaro went into the GSA account and were treated as GSA monies for the purpose of tax.

[11] Regarding payment, Mr Spangaro stated that he explained to Ms Bailey that management services would be calculated at 10% of the value of invoices raised in the month, irrespective of when they were actually paid. 15 In addition, she would be required to schedule cleaning but was not required to perform any cleaning; she could do so if she so chose.16 Mr Spangaro’s evidence was that there were two cleaning unit rates that applied – one for a standard clean while a guest was in occupancy and the other when the guest departed.17

[12] The Letter of Engagement set out the following:

…I confirm the following as the basis of this Management Agreement (Agreement) between Como Apartments – Geraldton (Como) and Karen Bailey (Karen)/(Manager).

This Agreement outlines the terms under which Como will engage the services of Karen to oversee the operations of Como. In this role Karen will be acting as a virtual Manager. (Manager)

….

1. Brief Scope of Coverage

The Manager will perform the following functions.

a) Receive and respond to enquiries for accommodation.

b) Raise the appropriate Como documentation to process the enquiry through to the departure of a guest, as required by Como practice.

c) Determine the payment arrangements with the guest at the time of confirming the reservation…

d) Provide a watching role over the conduct of Guests and take appropriate action for any that are not conducting themselves in accordance with the conditions of the Guest Registration Form.

e) Provide attendance on site for any trades that are engaged to perform work. Access times are to be decided by the Karen based on unit occupancies and times suitable to Karen…

f) To grow the business to improve both turnover and occupancy. The minimum target occupancy rate is 75%.

g) To oversee the cleaning of units. The cleaning can be carried out by either Karen or any other person she elects to perform the work. In the event an other person is engaged to perform the work they will do so as a contractor and will submit their invoices monthly to Karen who will approve them and pass them onto Como for direct payment.

h) To email copies of all Guest invoices and credit card payment chits to Como in Melbourne, as they are raised.

2. Payments.

a) Karen is a self employed independent contractor. As such it is a requirement that any invoice presented for payment carries the appropriate ABN.

b) The payment is primarily commission based based [sic]. The commission payment is based on 10% of the gross invoice value for a calendar month. This is paid monthly around the end of the same month as the invoicing. This payment is made irrespective of the date the invoices cover, as the expectation is the Manager will be providing ongoing attendance and service to the guests associated with the invoicing during the invoiced periods The payment is not dependent on whether the invoice is paid or not.

c) In the event of a booking cancellation or credit allowed after an invoice has been raised, the invoice amount, less any cancellations [sic] fees charged, will be removed from the performance based calculation for the month….

d) Cleaning is to be invoice separately at the end of the month and will be paid close to the end of the same month. In the event another person is carrying out the work, then this person will submit the invoices to the Manager for approval and then pass them through to Como for direct payment. The other person must be an independent contractor with his/her own ABN. The cleaning invoice preparation is to follow the format provided by Como….

3. Purchases.

Purchases can be made in one of the following ways.

a) Where we have an established account, e.g. Midwest Chemicals.

b) If you use your personal credit card. It will be your choice as to when you require this to the [sic] recompensed straight away or at the end of the month.

c) If you have selected an item to purchase, then you can phone the Como (John) from the point of purchase (of if it is more practical Como can phone the supplier) and Como will use John’s credit card to make the purchase, e.g for a replacement TV.

4. Sundry Manager’s Duties.

The following sundry duties form part of the normal Managers [sic] function.

a) Take out and retrieve rubbish bins.

b) Ensure the stairs and walkways outside the units at the Fitzgerald St are kept presentable. (The garden is maintained by a separate contractor).

c) Periodically check the BBQ gas bottle. If close to empty replace with the spare in the cupboard. Refill the empty bottle. Periodically check the fat catcher under the BBQ and empty as needed. Ditto for James St (3 BBQ’s).

d) For both Fitzgerald St and James St check all mailboxes and empty.

e) Deliver and retrieve laundry. Store retrieved laundry. Add $10 p.w. to your cleaning invoice. Alternatively this payment can be directed to another person, e.g. Debbie, if you allocate this task to her.

5. Cleaning.

a) The Manger is responsible for the cleaning of all units to a high standard. The actual cleaning can be carried out by the Manger or another person under the supervision of the Manager, as determined by the Manager.

b) The cost of cleaning will be calculated at set rates as follows;[sic]

i. for a standard weekly clean $35.

ii. for an exit clean $50

iii. any special cleaning will be calculated at $25 per hour.

6. To be Provided by Como.

The following items and documents will be loaned to the Manager by Como, who will be responsible for their safekeeping and return.

a) An AppleMac computer….

b) A Brother JL3045 NC colour printer.

c) A Brother MFC- L2703DW multi function machine.

d) An ANZ INGONITO EFTPOS machine with accessories.

Note: Como will pay for consumable materials for b), c) & d).

e) Various folders including documents therein.

•  Enquiries and Confirmations.

•  Registration Forms

•  Invoices & Chits

•  Various documents.

•  Lists and loose pages of past clients and contacts.

Note:

i. The above contain confidential information such as Guest credit card details and are to be kept in a secure manner.

ii. The information is to be retained and if it becomes excessive discuss with Como how they are to be handled. Nothing is to be destroyed without prior approval of Como …

[13] Ms Bailey said that as there was no on-site office at the Apartments, she worked from home or on the go (answering the phone wherever she may be, for example, whilst shopping, driving, cleaning, at sporting events or dining in a café). 18 She stated that she was on call 24 hours, seven days a week.19 Some guests would arrive late so she would have the phone next to her bed in the event they needed assistance retrieving the key for their apartment from the on-site safe.20

[14] With respect to phone calls for the Como Apartments, Mr Spangaro tendered into evidence an analysis of the calls to the Como Apartments for the period in which Ms Bailey worked (Exhibit R5). Mr Spangaro explained that the source of the analysis were Optus invoices over the period and that he had made some presumptions concerning whether the call was answered by a person or went to voicemail. For the year 2018, June through to December, Exhibit R5 showed that there were and average of 1.7 incoming calls per day over a seven-month period.

[15] When taking holidays, Ms Bailey said that Mr Spangaro had to authorise the leave as he would transfer the Apartment’s mobile phone number to his mobile phone number. During that time Mr Spangaro would run the business from Melbourne. Mr Spangaro disputed that Ms Bailey was required to seek authorisation for leave. He gave evidence that Ms Bailey informed him when she would be away via email to enable to the phone to be transferred to him (Exhibit R4).

[16] As far as equipment was concerned, Ms Bailey stated that she was provided with office equipment to use at home including a computer, printer, eftpos machine, and various files containing paperwork for the Apartments. 21 A wifi dongle was provided for internet access, which was paid for by Como Apartments.22 If equipment was required, Ms Bailey would make the purchase and then would be reimbursed by the Apartments.

[17] Mr Spangaro gave evidence that the Como Apartments’ computer was programmed with the Apartments’ propriety documentation and was linked to two other computers in Melbourne. 23 It was explained to Ms Bailey that the computer would contain the prior history of contacts, correspondence and invoicing.24 Similarly the phone was set up to respond to a 1300 number which automatically diverted to the Como Apartments’ supplied mobile.25

[18] Ms Bailey was required to ensure that cleaning of the Como Apartments occurred, and to manage the Apartment regarding reservations. Ms Bailey said that she was required to invoice the cleaning with GSA’s name and ABN as well as her name. 26 For the management of the Como Apartments, Ms Bailey stated that invoices were raised by the bookkeeper.27 She confirmed that all monies paid were paid into GSA’s bank account.28

[19] Management of the Apartments included liaising with guests, responding to email and phone enquiries, taking credit card payments, taking care of maintenance issues, organising and dealing with tradespersons, checking the properties to ensure all were in order, setting up and daily monitoring of websites, collecting supplies, and supervising the other cleaner. 29

[20] The hours of work, said Mr Spangaro, were not set, and Ms Bailey was informed that the time involved was flexible and for her to determine, so long as she ensured Como Apartments was operating efficiently and client needs were being met. 30

[21] Ms Bailey was provided with Como Apartment business cards with her name on, and emails were generated or received to an ‘office’ or ‘manager’ email account which included her email signature. 31

[22] The cleaning aspect of the work was not supervised as Mr Spangaro was in Melbourne. 32 However, according to Ms Bailey, Mr Spangaro oversaw and supervised much of the management side as he was copied into invoices and receipt emails and received all the end of the month documentation.33 Mr Spangaro or the bookkeeper would ask Ms Bailey to ‘ok various accounts’ before they paid them.34

[23] Ms Bailey said that due to the ‘24/7 nature of the management side’, she was unable to work anywhere else as she needed to be available to answer calls, emails, and enquiries as they came in. 35

[24] Mr Spangaro stated that correspondence between him and Ms Bailey indicated that she was contracting out her responsibilities. 36 By way of example he pointed to references in correspondence that referred to ‘Deb is the only person in town with keys whilst I’m away…’ and ‘whilst I’m away as my other two friends with key’. In another email, Mr Spangaro was provided with a name and contact who would manage the facility.37

[25] In 2018, Ms Bailey became cognisant of the law that governs how to employ, and not to employ people. 38 She said that she phoned the Fair Work Ombudsman on three occasions to get a better understanding of this.39 After doing so, she entered into email correspondence with Mr Spangaro and raised the issue of underpayment under the Hospitality Industry (General Award) 2010, for a supervisor, guest services.40

[26] On 1 November 2018, Ms Bailey emailed the bookkeeper for Como Apartments and Mr Spangaro. Ms Bailey wrote:

… John – I believe it’s time we revue (sic) the rates of pay as it’s been 4 years now.

The current rate of pay for a casual hotel/serviced apt cleaner (supervisor) on the award is $29.28 p/h. On top of this they receive 9.5% super. Also, they don’t have to pay worker comp or public liability insurance as I do, not do they ay GST (which I pay on every dollar from both cleaning and commission I receive from you) …

[27] Following Ms Baily’s raising of the issue concerning her rate of pay, she received the following email from Mr Spangaro on 11 December 2018 in response:

… I have sought information form the ATO and that opened several areas that I have not previously considered previously and if we are to be fully compliant we need to revisit both the wording of the contracts and how things work in practice. The results of this review will apply to both yourself and Debbie, albeit with some differences. Let us concentrate on you first.

One of the matters was the invoicing with who actually raises the invoices and the GST statement on the invoice has been changed.

I have tackled the contract review a couple of times, getting so far before I decided that I need to make changes. Anyway, it is a work in progress.

To give you an insight into what I am trying to incorporated into the contract I have attached a summary KEY CONTRACT REQUIREMENT Issue A… 41

[28] The attachment to the email dated 11 December 2018, set out what was referred to as ‘Key Element of a Contract’. The document consisted of eight elements as follows:

1. Details of the contract or agreement determine status of the contractor. Have the following requirements been met?

2. A contractor runs their own business and can sub-contract or delegate the work to others if not required to do the work personally.

3. Payment is based on a quoted price for an agreed or predetermined result providing

a. The basis of the contract’s job is to complete a specific task or project

b. The contractor provides a quote for the specific task or project. Can be composed of quoted amount, prices per item, or on a time rate per hour. Or all methods.

c. Payment is made only when the work has reached an agreed result.

4. The contractor is responsible for providing most of the tools, equipment, materials and other assets necessary to carry out the work. The contractor does not receive an allowance or reimbursement for the cost of tools, equipment or other assets…

5. Commercial risk.

a. The contractor takes any legal risk and is responsible for any defects in their work.

b. The contractor has to rectify any defect at own cost.

6. The contractor can decide the way the work is done and are free to exercise their discreting [sic] in completing the work, subject to meeting the specified requirement in the contract or agreement.

7. The contactor is operating as an independent operator and is free to accept or refuse additional work at Como and/or elsewhere,

8. Cleaning. Specifically to the task of cleaning, in addition to the above the contractor must also provide tier [sic] own cleaning products …

[29] This was followed by an email which attached a new agreement, and a request from Mr Spangaro that Ms Bailey sign the new agreement backdated to her commencement date. 42 It was noted that rates of pay would be revised effective from 1 November.

[30] On 14 December 2018, Ms Bailey emailed Mr Spangaro informing him that she did not agree to backdating the document. 43 It is from this point, said Ms Bailey, the relationship with Mr Spangaro severely soured.44 By 22 January 2019, the relationship ended when Mr Spangaro informed Ms Bailey that her services were no longer required.45

Submissions of Ms Bailey

[31] In short, Ms Bailey submitted she:

a) did not advertise or promote her availability to perform cleaning or hotel management services to the public;

b) was unable to delegate her cleaning work to anyone but a cleaner that was directly paid and controlled by Como Apartments;

c) did not have her own customer base, business premise or insurances for cleaning and hotel management work;

d) had fixed hourly rates for cleaning and did not negotiate those rates;

e) was provided with business cards with her name on them;

f) was provided with equipment and was not required to provide her own;

g) was supervised by Mr Spangaro who constantly gave direction on the way Como Apartments was to be managed and serviced;

h) did not use her own equipment for the purposes of performing the duties;

i) was unable to work anywhere else;

j) was not making a profit;

k) was expected to be on call 24 hours a day, seven days a week; and

l) had hours of work that were constantly changing and dependent on guest occupancy.

[32] Ms Bailey submitted that although she may be an entrepreneur that owns and operates a business, namely her earthmoving business, GSA, this business was in no way connected to hotel management or cleaning services. GSA built roads and owned earthmoving equipment. GSA advertised earthmoving services, not cleaning services.

Submissions of Spangaro

[33] Mr Spangaro submitted that while Ms Bailey purported that she did not have her own business premises and provided no equipment, she did provide office facilities, as the Como Apartments did not provide a premise from which she could work.

[34] There was minimal control exercised over Ms Bailey, according to Mr Spangaro. A limited number of calls had been made to her, and emails were not many in number. In some cases, emails and phone calls made were in response to enquiries Ms Bailey had made.

[35] There was no limitation in the contractual documentation that restricted her from promoting herself or seeking to undertake other activities.

Legal principles

[36] The basis for the jurisdictional objection arises from s 382. Relevantly that section provides:

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;…

[37] To determine whether Ms Bailey was an employee or an independent contractor the Commission applies well-established common law principles. 46 There is, however, an appreciable difficulty in attempting to categorise a relationship as one of employee or independent contractor. This difficulty was acknowledged by the Full Bench when it stated the following in the decision of Jiang Shen Cai T/A French Accent v Michael Anthony Do Rozario (Jiang Shen Cai):

…The nature of the established general law approach to distinguishing between employees and independent contractors may be seen as contributing to the problem precisely because the nature of the general law test is such that it does not admit a clear answer in every case. Once one adopts the position, as the general law has done, that the distinction is rooted in the objective character of the work relationship two things follow. First, the infinite variety of human affairs means that work relationships present as a spectrum, some of which are clearly relationships of employment and others of which are clearly relationships of independent contract but some of which are less clear cut. Secondly, that character of a work relationship is what it is and cannot be changed simply because the parties agree to label it differently (unless, of course, the relationship is sufficiently ambiguous that a clear determination is not possible, the situation addressed by the Massey proposition). That is a matter clearly recognised by the courts and tribunals. 47

[38] In Kimber v Western Auger Drilling Pty Ltd (Kimber), 48 the Full Bench addressed the factors to consider in assessing whether an applicant was an employee or an independent contractor during the relevant period.49 It endorsed the general approach to distinguishing employees and independent contractors provided in Jiang Shen Cai:

(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. 50

[39] The ultimate question to be answered then 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’. 51 To summarise, the determination of the ultimate question will inevitably require a ‘consideration of the nature of the work performed, the terms of the contract, and the so-called indicia must always be directed to the ultimate question’.52

Consideration

[40] The material filed by both parties clearly placed the Commission on notice that there was a question of whether Ms Bailey was an employee of Spangaro or an independent contractor. Adopting the approach of the Full Bench in Jiang Shen Cai, I have considered the various indicia traversed in that decision.

Was Ms Bailey conducting a business of her own?

[41] Ms Bailey responded to an advertised position of ‘Virtual Manager’. It was not the case that Ms Bailey was purporting to run her own managerial or cleaning services business. However, she was maintaining her own home office, determining her own working hours and the duration of such hours, determining whether she did, or did not provide cleaning services, and was working under limited, if not no supervision at times. Further, she did not require authorisation to take a leave of absence, could determine whether to work while absent from the regional centre, and could delegate, in part, some of her functions whilst away; noting of course that Ms Bailey was required to utilise set processes for reservations and billing. Ultimately, Ms Bailey could determine the amount of time she invested in providing the services.

[42] The evidence was such that there appeared to be significant autonomy regarding when, how, and where the managerial and administrative services were provided. Further, while Ms Bailey gave evidence of performing cleaning at 9am, there did not appear to be a contractual requirement to commence cleaning at a specified time. Timing was, of course, dependent on Apartment utilisation.

[43] Yet, it is undeniable that Spangaro provided office equipment, required compliance with its set reservation and billing process, presented Ms Bailey as the face of its business, and there appeared to be no contractual right to delegate the managerial or administrative work concerning reservation and billing process. There was no evidence before the Commission that Ms Bailey was advertising her services and while Ms Baily pointed to payments being under that which otherwise would be provided if an employee, there was no evidence concerning profit and loss.

[44] While Ms Bailey gave evidence that she was on-call 24 hours a day, for seven days a week, and this negated an opportunity to undertake work for others, the evidence did not support such a finding. Ms Bailey herself remarked that while she may be an entrepreneur that owns and operates a business, her earthmoving business, GSA, it was in no way connected to hotel management or cleaning services. However, it was the case that while working for Spangaro she was involved in another business of her own.

[45] On balance I am persuaded that when viewed practically, Ms Bailey was providing managerial and cleaning services as her own business. There was nothing that precluded her from providing a similar service to others, and while GSA itself clearly provided construction services, Ms Bailey’s contribution to that business was not as a construction or road worker, but rather in an administrative capacity.

The nature of the work performed and the manner in which it is performed

[46] Ms Bailey worked in both an administrative capacity and by providing cleaning services. In her administrative capacity she was responsible for answering enquiries from potential guests of the Como Apartments whether by phone or online, taking bookings and payments, ensuring that the Apartments were of a particular standard with regard to cleanliness, that guests conducted themselves in the appropriate manner, onforwarding guest invoices to Mr Spangaro, and providing attendance on site for any trades engaged to perform work. Concerning the last aspect of the work, Ms Bailey was responsible for coordinating both cleaning services and trade attendance to ensure access times were suitable for both her and Apartment occupancies.

[47] Regarding the provision of cleaning services, this was not something that Ms Bailey was obliged to provide herself. She was able, should she choose, to delegate the work to another. While Ms Bailey gave evidence that the only person, she could delegate cleaning work to was a person referred to as ‘Debbie’, evidence given by Mr Spangaro did not support this assertion, and the Letter of Engagement included no such limitation.

[48] In addition to the above-mentioned work, Ms Bailey was tasked with rubbish removal, ensuring the units were presentable, periodically checking the BBQ and replacing it if required and checking and emptying mailboxes. While Ms Bailey was to deliver and store laundry, she was able to delegate this work to another person and could charge an additional $10 to a cleaning invoice for such work.

[49] Part of the Ms Bailey’s remit was to improve the occupancy rates (noting that a monetary bonus was provided for particular occupancy rates). Further, in effect, Ms Bailey asserted that she was the face of the Como Apartments with business cards, emails and contacts with guest reflecting this.

[50] Mr Spangaro spoke of engaging Ms Bailey because of her business acumen, observing she had vast experience in the accommodation industry. He noted that Ms Bailey had studied both commerce and a graduate certificate in law which, while not qualifications he initially sought, he considered them a bonus.

[51] However, I am unable to find that the work performed required a special skill or qualification. In some respects, Ms Bailey was managing the Como Apartments on behalf of Spangaro and had to have a good understanding of running a small business – whether troubleshooting a repair, taking a booking for an apartment, scheduling cleaning, or arranging for payment. But it is not the case that Ms Bailey required a special skill or qualification to do that with which she was tasked.

The terms of the contract

[52] The Letter of Engagement expressed, in no uncertain terms, that Ms Bailey was engaged as an independent contractor, was required to furnish invoices, and possess an ABN. Further, regarding the provision of cleaning services, it was stipulated again that cleaning was to be invoiced separately with invoices submitted to the Manager for approval and that the person providing the service must be an independent contractor with his/her own ABN.

[53] Ms Bailey observed, correctly, that the Letter of Engagement spoke of a contractual relationship between her and Como Apartments rather than GSA and Como Apartments. The ‘Management Agreement’, as referred to in the Letter of Engagement, stated the agreement was between Como Apartments and ‘Karen Bailey’, and, outlined the terms under which Como Apartments would engage the services of ‘Karen’ to oversee the operations of Como, acting as a Virtual Manager.

[54] The management or administrative component of the work attracted a commission-based payment scheme of a flat 10% of the gross invoice value for a calendar month. Additional payments were made if certain rates of occupancy were achieved.

[55] From the evidence presented by both Ms Bailey and Mr Spangaro, I accept that Ms Bailey fully understood the terms of the Letter of Engagement before entering into the contractual arrangement, and the construction of the Letter of Engagement lends itself to the finding that it embodies a contract for services.

Indicia of employment relationship

Exercise of control

[56] The evidence shows that for the most part, Ms Bailey was able to determine her working hours and when she worked. While the evidence shows that she did receive phone calls at various times of the day and evening, there was no evidence to suggest that Spangaro informed her of the number of hours she was required to work, or the when such hours were to be worked. Further, it is not apparent that Ms Bailey was compelled to always answer the phone. Clearly, calls could go through to voicemail and Ms Bailey could respond to them at a time which suited her.

[57] Ms Bailey gave evidence that at times she answered Como Apartment phone calls while shopping or driving her car. It was evident that some of the work performed could be conducted while Ms Bailey was doing other things in a personal capacity. Further, Ms Bailey could choose to work whilst outside of home location, say while she was away for the weekend, or alternatively, could work from her home office. Ms Bailey was able to work at times that suited her, and as far as the administrative side of the work was concerned, she was able to work from any location, being a ‘Virtual Manager’.

[58] If away from the regional centre, Ms Bailey was able to determine who to provide the keys to the Como Apartments to, and to arrange for someone to undertake the ‘meet and greet’ process for guests. 53 In her evidence Ms Bailey said that it was usually a friend who she did not pay, or the person who performed cleaning work, ‘Deb’, that performed that managerial/administrative work.

[59] When it came to the cleaning work, if Ms Bailey had usually scheduled herself to perform the work, it sat with her to arrange for the Apartments to be cleaned in her absence. By email dated 22 July 2016, Mr Spangaro asked Ms Bailey what the arrangements were for cleaning while she was away. He asked, ‘[D]o you have an arrangement with Debbie that you pay for this attendance if she steps in while you are away? What is the best way to manage this?’ (Exhibit R3 G 21).

[60] Ms Bailey’s evidence was that Mr Spangaro exerted control over most tasks she actioned as he was copied into all email correspondence. However, I do not consider that in all circumstances it can be accepted that the copying of a person to an email constitutes a right to exercise control. The evidence in this matter indicates that Ms Bailey had significant autonomy regarding how she went about the work tasked to her, and the copying of Mr Spangaro to emails appeared to be for informing him of what was occurring. It is observed that Mr Spangaro was located interstate and had appeared to have made limited contact with Ms Bailey regarding her performance of the work, place of work and hours of work.

[61] The Letter of Engagement set out the functions of the Manager and provided detail on the processes to be adopting regarding enquiries, bookings and payment arrangements. This is understandable given the use of various websites utilised for advertising of the accommodation, and the need to have a process that was transferrable and consistent between those that utilised it. While the Letter of Engagement set out the functions of the Manager, it was plain that there was significant autonomy for the Manager to determine how the work was done.

Did Ms Bailey work for others (or have a genuine and practical entitlement to do so)?

[62] Ms Bailey submitted that though she may be an entrepreneur that owns and operates a business, her earthmoving business, GSA, this was in no way connected to hotel management or cleaning services. Be that as it may, while working for Spangaro, Ms Bailey maintained a directorship of GSA, and appeared to provide administrative services to the same. The Letter of Engagement demanded no exclusivity of Ms Bailey’s services. The evidence at hearing was consistent with this.

Did Ms Bailey have a separate place of work and/or advertise her services to the world at large?

[63] Ms Bailey worked from home and the other places noted in this decision, when performing the administrative / managerial tasks. She maintained a home office, which appeared to have been established for her work with GSA before taking on the contract with Spangaro. Nevertheless, the evidence showed that the administrative work for Spangaro was undertaken at a separate place of work. There was no evidence to suggest that Ms Bailey advertised the services that she provided to Spangaro to others.

Did Ms Bailey provide or maintain significant tools or equipment?

[64] The Letter of Engagement set out the equipment that Spangaro would provide; predominately, IT equipment. Ms Bailey’s evidence was that internet accessibility was also supplied. While Ms Bailey observed that she provided no cleaning equipment or tools, and that all office equipment was provided, Mr Spangaro submitted that Ms Bailey did provide a work location in the form of a home office. This was not disputed by Ms Bailey.

Could the work can be delegated or subcontracted?

[65] I am satisfied that the cleaning services aspect of the work was able to be delegated or subcontracted. Further, the evidence shows that on occasion, Ms Bailey delegated some functions regarding the managerial or administrative aspect of the work. For example, the meeting and greeting of guests, or having someone available to troubleshoot issues with guest keys, in her absence. The Letter of Engagement gave a contractual right to delegate or subcontract some of the work. This included the laundry and cleaning services. However, there was no evidence that the majority of the managerial / administrative aspect of the work could be delegated.

Did Spangaro retain a right to suspend or dismiss the person engaged?

[66] The Letter of Engagement set out a right to terminate the agreement by either party with the giving of four weeks’ notice. However, the evidence does not support a conclusion that Ms Bailey could be dismissed or suspended.

Did Spangaro present Ms Bailey to the world at large as an emanation of the business

[67] In giving her evidence Ms Bailey referred to her name being on the Como Apartments email correspondence, business cards, and that with regard to liaising with guests and trades, she was the face of the Como Apartments. I find that Ms Bailey was presented to the world at large as an emanation of the business.

Was income tax deducted from remuneration paid to Ms Bailey?

[68] No income tax was deducted. It was Ms Bailey’s evidence that she assumed responsibility for this through GSA.

Did Ms Bailey receive a periodic wage or salary by reference to completion of tasks?

[69] Ms Bailey received commission based on 10% of the gross invoice value for the calendar month for the managerial / administrative work. Regarding the provision of cleaning services, payment was made by reference to set pricing for a standard weekly clean and exit clean, with special cleaning attracting an hourly rate. With regard to the managerial and administrative component of the work, I am persuaded that while the commission fluctuated dependent on the gross invoice value for a month, in effect Ms Bailey received a periodic salary that varied in amount for the management/administrative role.

Did Ms Bailey receive paid annual leave or personal leave?

[70] Ms Bailey determined when she would be absent from the workplace, the duration of the absence and who would provide coverage for her, in her absence. There was no evidence that showed she received paid annual or personal leave.

Did Ms Bailey’s work involve a profession, trade or distinct calling?

[71] As set out above, while not undervaluing the work performed by Ms Bailey, it cannot be said that it required a particular skill or qualification.

Did Ms Bailey create goodwill or saleable assets in the course of her work?

[72] I do not accept that Ms Bailey created any goodwill or saleable asset in the course of her work. While some guests may have returned to utilise the Como Apartments because of the customer service received, or perhaps because they were presentable, clean and maintained, this is not evidence to show that Ms Bailey created such goodwill. Further there is no evidence that saleable assets were created during the course of her work.

Did Ms Bailey spend a significant proportion of her remuneration on business expenses?

[73] It is not clear from the evidence whether Ms Bailey spent a significant proportion of her remuneration on business expenses. I observe Ms Bailey’s evidence that she was reimbursed for purchases such as those to do with cleaning, and that office equipment was provided. However, expenditure on travel and the maintenance of a home office was not traversed. Therefore, I am not positioned to make a finding in this respect based on the evidence before me.

Conclusion

[74] The indicia discussed above are not exhaustive. They need to be weighed according to their importance in the circumstances being considered.

[75] It was evident that equipment and tools were provided to Ms Bailey, and that there was a requirement that she have an ‘ABN’. Ms Bailey was presented as the face of the Como Apartments, and was required to perform certain functions (including the use of set processes for reservations and billing). There are some elements of control within the operations of Spangaro that are more consistent with employment.

[76] I have considered the terms of the Letter of Engagement, the invoicing and taxation arrangements all of which are indicative of a relationship of a contract for service. Further, while there was no contractual imperative for Ms Bailey to take out her own insurance, her email to Mr Spangaro dated 1 November 2018, noted that she paid workers compensation and public liability insurance premiums. In addition, Ms Bailey’s evidence was that she paid GST.

[77] The autonomy, flexibility and non-exclusive nature of some of the commitments are strongly indicative of an independent contractual relationship. Such that when having regard to the totality of the relationship, as a practical matter, on balance I am satisfied that Ms Bailey was conducting a business of her own within the meaning and contemplation of the authorities traversed, and was not an employee within the meaning of the Act. Just as Ms Bailey appeared to provide administrative services to GSA, she did so for Spangaro.

[78] As I have found that Ms Bailey was not an employee, she was not protected from unfair dismissal and there is no jurisdiction to deal with this present application.

[79] An order dismissing the application is being issued in conjunction with this decision. 54 

DEPUTY PRESIDENT

Appearances:

K Bailey for the Applicant

J Spangaro for the Respondent

Hearing details:

By Phone, 25 June 2019

Printed by authority of the Commonwealth Government Printer

<PR709627>

 1   Witness Statement of Karen Rebecca Bailey (Bailey Statement) [1].

 2 Ibid [2].

 3   Ibid [4]-[6].

 4 Ibid [9].

 5 Ibid [6].

 6   Ibid.

 7   Ibid.

 8   Witness Statement of John Spangaro (Spangaro Statement) [5].

 9 Ibid [5].

 10   Ibid.

 11   Ibid.

 12   Ibid.

 13 Bailey Statement [7].

 14   Ibid.

 15 Spangaro Statement [5].

 16   Ibid.

 17   Ibid.

 18 Bailey Statement [11].

 19   Ibid.

 20   Ibid.

 21 Bailey Statement [12].

 22   Ibid.

 23 Spangaro Statement [5].

 24   Ibid.

 25   Ibid.

 26 Bailey Statement [17].

 27   Ibid.

 28 Ibid [20].

 29 Ibid [23].

 30 Spangaro Statement [5].

 31 Bailey Statement [22].

 32 Ibid [26].

 33   Ibid.

 34   Ibid.

 35 Ibid [27].

 36 Spangaro Statement [5].

 37   Ibid.

 38 Bailey Statement [30].

 39 Ibid [31].

 40 Ibid [32].

 41 Exhibit A3 KB 11.

 42 Bailey Statement [32].

 43   Ibid.

 44   Ibid.

 45 Ibid [33].

 46   Jiang Shen Cai T/A French Accent v Michael Anthony Do Rozario [2011] FWAFB 8307 [25].

 47   Ibid.

 48   [2015] FWCFB 3704.

 49   [2015] FWC 38 [10].

 50   [2011] FWAFB 8307.

 51   Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215 222; Jiang Shen Cai T/A French Accent v Michael Anthony Do Rozario [2011] FWAFB 8307 [18].

 52   Jiang Shen Cai T/A French Accent v Michael Anthony Do Rozario [2011] FWAFB 8307 [20].

 53   Exhibit R1 A 10 and A 2.

 54   PR710846.