Karen Lesley Jeske v Noosa Confidential Pty Ltd
[2024] FWC 1572
•17 JUNE 2024
| [2024] FWC 1572 |
| FAIR WORK COMMISSION |
| EX TEMPORE DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Karen Lesley Jeske
v
Noosa Confidential Pty Ltd
(U2024/857)
| DEPUTY PRESIDENT DOBSON | BRISBANE, 17 JUNE 2024 |
Application for relief from unfair dismissal – jurisdictional objection - whether Applicant an employee or independent contractor – jurisdictional objection upheld
On 25 January 2024, Ms Karen Jeske (Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that she had been unfairly dismissed from her employment with Noosa Confidential Pty Ltd (Respondent). The Applicant seeks reinstatement and compensation.
Before proceeding to consider the merits of this case, I heard the parties on the jurisdictional objection. Having heard the parties, I now proceed to give these reasons for my decision ex tempore.
This published decision reflects the decision I gave ex tempore on 17 June 2024 with more fulsome reasons, corrections for grammatical, syntactical and any other insignificant errors, as foreshadowed in its delivery.
When can the Commission order a remedy for unfair dismissal?
Section 390 of the FW Act provides that the Commission may order a remedy if:
(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and
(b) the Applicant has been unfairly dismissed.
Both limbs must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed.
When is a person protected from unfair dismissal?
Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:
(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; and
(b) one or more of the following apply:
(i)a modern award covers the person;
(ii)an enterprise agreement applies to the person in relation to the employment;
(iii)the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.
When has a person been unfairly dismissed?
Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Section 386 of the Act sets out the circumstances in which a person is taken to have been “dismissed” for the purposes of s.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 terms of s.386(1) above, a person can only be dismissed when their employment comes to an end in the circumstances described. In the absence of a relationship of employer and employee, a person cannot be dismissed within the meaning of s.386 and an application under s.365 can proceed no further. This decision deals with the issue of whether an employer and employee relationship existed between the Applicant and the Respondent.
Background
Some of the background is uncontested and can be briefly summarised.
The relationship between the Applicant and the Respondent commenced on or around January 2014 and an Agreement commenced on or around 20 November 2017. The relationship ended on or around 7 February 2024.
The Respondent provides a “premium Residential Rehabilitation facility where a maximum of 4 clients with substance abuse issues, addiction, depression, anxiety and/or post traumatic stress disorder stay onsite at any one time for a minimum of 4 weeks….. Often extended beyond 4 weeks.”[1] And “….clients are promised discrete, on-on-one care, rigorous case management, a team of expert medical and health professionals and tailored solutions to identify and successfully treat the underlying cause of their condition/s.”[2]
The parties entered into a Services Agreement on 20 November 17.[3] The Applicant performed work pursuant to that contract. The Applicant performed work as a Psychologist performing “Creative Arts Therapy” and “Somatic Experiencing.” [4] The Applicant performed work on the residential programs onsite where those programs were conducted and the patients staying. She performed work called ‘after-care’ work for ongoing support and maintenance usually by phone, zoom or at the Applicants private business premises Chi Hub.[5]
On 4 January 2024, the relationship came to an end when the Respondent notified the Applicant in writing that the relationship would be brought to an end. On 24 January 2024, the Respondent issued a letter informing that the Agreement was being terminated on 14 days notice being 7 February 2024 pursuant to clause 16.1 of the Services Agreement.
The hearing
There being contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.
After taking into account the views of the Applicant and the Respondent and whether a hearing would be the most effective and efficient way to resolve the matter, I considered it appropriate to hold a determinative conference for the matter (s.399 of the FW Act).
Permission to appear
The Respondent sought to be represented before the Commission by a lawyer.
Relevantly, section 596(1) of the FW Act provides that a party may be represented in a matter before the Commission by a lawyer or paid agent only with the permission of the Commission.
Section 596(2) provides that the Commission may grant permission for a person to be represented by a lawyer or paid agent in a matter before the Commission only if:
(a) it would enable the matter to be deal with more efficiently, taking into account the complexity of the matter; or
(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or
(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.
The decision to grant permission is not merely a procedural step but one which requires consideration in accordance with s.596 of the FW Act.[6] The decision to grant permission is a two-step process. First it must be determined if one of the requirements in s.596(2) have been met. Secondly, if the requirement has been met, it is a discretionary decision as to whether permission is granted.[7]
On the question of representation, the Applicant submitted that:
· The Respondent should not be granted permission to be represented by a lawyer or paid agent at hearing due to unfairness.
· The Respondent has already deployed sufficient legal expertise in preparing submissions, before providing notice to the Applicant that they intended to be represented. The Applicant provided its objection to leave once notice that the Respondent intended to be represented was tendered.[8]
· The Respondent’s termination of the Applicant caused her significant financial hardship, which prevents her from being able to afford representation. Allowing the Respondent to be represented at hearing would widen the unfairness and power imbalance.[9]
· The Respondent is well abled to assist the Commission in its prosecution by its director Ms Pettina Stanghon, and the Applicant is concerned that it seeks legal representation as a preface to a punitive application for a costs order.
On the question of representation, the Respondent submitted that:
· Due to the matter involving a jurisdictional objection, it is necessary for the Commission to determine complex matters of law. Legal representation may assist in the efficiency of determining the jurisdictional issue.[10]
· The Respondent is a small business employer with less than 15 employees and has no specialist human resources staff, and is unable to effectively represent itself.
Having considered those matters, I determined that:
· allowing the Respondent to be represented by a lawyer would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter and that complexity in part includes that the Applicant is self represented; and
· it would be unfair not to allow the Respondent to be represented because the Respondent is unable to represent itself effectively.
I therefore decided to exercise my discretion to grant permission for the Respondent to be represented and this was conveyed to the parties on 26th April 2024.
Accordingly, at the hearing on 17 June 2024, the Applicant was self-represented and aided by a support person from a HR Consulting business and the Respondent was [represented by Mr Brendan Leighton from New Era Lawyers and Miss Ella Smith from New Era Lawyers acted as instructing.
Witnesses
The Applicant gave evidence on her own behalf.
The following witnesses gave evidence on behalf of the Respondent:
· Ms Pettina Stanghon, director of the Respondent; and
· Ms Kristianne Paul, Operations Manager of the Respondent. (Ms Paul’s evidence was uncontested and was admitted into evidence during the hearing).
Evidence and Submissions
The Applicant filed submissions in the Commission on 14 April and 10 May 2024. The Respondent filed submissions in the Commission on 8 April, 22 April, 24 May and 16 June 2024.
Applicant’s Submissions
The Applicant submitted that the relationship between her and the Respondent was one of an Employee/Employer relationship and further submitted that the contract of services was a sham contract. The Applicant submitted that she was contracted for her labour, rather than her services.
The Applicant stated that the nature of the Respondent’s operations demonstrated that she was an employee, specifically in relation to the ‘heavy case management approach to all clients’[11]. The Applicant stated that the Respondent’s Sales Manager hands over clients to Ms Stanghon as Director of the Respondent. Ms Stanghon would then actively take the role of how the “pieces and services” of the Respondent’s offering together.
The Applicant stated that she undertook two different types of work for the Respondent, being the in-residence, initial psychotherapy direct client services (Residential Care) and sessions conducted after the client is discharged from the services (After Care). The Applicant stated that she considered the Residential Care aspect to be the basis of the employment relationship, whereas the After Care work was a distinct offering separate to the Respondent’s Residential Care program. The Applicant stated that After Care appointments were ‘pencilled into’ her diary by the Respondent’s administrator and that she would change the appointment day/time according to both her and the client’s availability.
The Applicant stated in response to the Respondent’s submissions that she considered the Services Agreement to be invalid or ineffective. The Applicant stated that she had been engaged and working in the Respondent’s business in the same capacity since early March 2014 and that the clauses in the Services Agreement did not reflect how the Applicant operated in the period leading up to November 2016 and therefore how she would operate after November 2016.
The Applicant stated that in the months before November 2016, that Ms Stanghon had sent out a questionnaire to all workers, asking, inter alia, whether they viewed themselves as an employee or independent contractor. The Applicant stated that to the best of her recollection, that despite having been invoicing the Respondent for the Appointments, that she considered herself an employee. The Applicant stated that the new terms of engagement offered by the Respondent at the date of the Services Agreement had been framed to protect the Respondent and its Staff legally due to the nature of their work and that the Respondent would assume the risk of any legal action.
The Applicant received an email from the Respondent to indicate that to continue her contractor status, that she would need to become a Family Trust or a Company and to invoice the Respondent as such. The Applicant stated that she acquiesced to the pressure and established a Family Trust and had delayed the state date from July 2016 to November 2016.
The Applicant stated that she was aware of another Psychotherapist who had her work end with the Respondent after not creating a Family Trust or Company. The Applicant stated that another psychotherapist was asked to discontinue working at other mental health programs if she sought to continue working for the Respondent.
The Applicant stated that she was certain that as far back as March 2014, that if she had ever made a request or placed a requirement on the Respondent to be an employee for the purposes of performing residential psychotherapy, that it would have been declined and her work with the Respondent would have ceased. She stated that for this reason, she felt pressured and intimidated and ‘went along with’ the independent contractor requirement for so long and that she genuinely knew there was no other option.
The Applicant stated that she did not have control over when, where or how she provided the Services under the Service contract. The Applicant stated that it was a result of heavy case management which included instructions such as “you need to go hard on <person> today, Karen” and other such directions, that she knew what was meant from those directions.
The Applicant stated that she was required to complete a report form in each session as a summary and record of every session and that she had signed an agreement which stipulated that if she did not complete these forms she would not be paid at all. The Applicant stated that on occasions, she had not uploaded a report for some reason or another and would not have been paid until she did so.
The Applicant stated that she had not ever delegated or subcontracted her services and nor did she ask to as it was “very clear” that she would not be permitted to do so. The Applicant stated that it was not an accepted practice.
The Applicant stated that she was not free to choose to accept or refuse referrals to her from the Respondent. The Applicant stated that the Respondent would decide which clients would be referred to her and that on any given day she was working on the premises, she was allocated therapy sessions with the clients onsite. The Applicant stated that there were a handful of occasions where she would have refused to work with a client had it been a genuine option. The Applicant stated that she was confident that had she refused to work with a client, it would have been the end of her tenure at the Respondent.
The Applicant stated that she was not permitted to deliver psychotherapy sessions at any other location than at the Respondent’s Residence, and that any request she had made had been rejected. The Applicant stated that only once had she delivered therapy external to the location when she had a broken leg. The Applicant stated the performed After Care appointments either virtually, or from other locations, including at her own location.
The Applicant stated that she had nominated three days that she was available to the Respondent for onsite appointments, and that there was little flexibility to change these nominated days. After Care appointments had been conducted outside of these days.
The Applicant stated that she provided all her own equipment for any arts or craft activities used in therapy. The Applicant stated that she had her own insurance and was not provided a uniform, with the exception of being directed to wear white shirts.
Respondent’s Submissions
The Respondent submitted that the Services Agreement set out the following relevant clauses:
“(a) by clause 3, the contract commenced on 20 November 2017 and continued until terminated in accordance with clause 16;
(b) by clause 4.1, and Item 8 of the Schedule, the Applicant was to provide creative arts therapy and somatic experiencing services (“the Services”);
(c) by clause 4.4, the Applicant was entitled to exercise her independent discretion as to the most appropriate and effective manner of performing the Services;
(d) by clause 4.5 and clause 15.5, the Applicant was entitled to delegate, substitute, or subcontract all or part of the Services to a third-party, provided the Respondent’s written approval was first obtained, and in which case the Applicant was liable for the costs and all necessary equipment reasonably required for the performance of the Services;
(e) by clause 5.6, the Applicant was free to trade, operate and provide other services to any other person in the conduct of her business as she thought fit, provided it did not interfere with the performance of her Services under the contract;
(f) by clause 6.1 and Item 10 of the Schedule, the Applicant was to be paid a fixed sum of $90.00 per unit of Services delivered under the Contract, subject to the Applicant first tendering a tax invoice for the provision of those services that conformed with clause 6.2 of the contract;
(g) by clause 8.1, the Applicant was responsible for the payment of all relevant taxes and superannuation expenses arising in respect of the contract;
(h) by clause 8.4, the Applicant warranted that she had her own ABN;
(i) by clause 8.5, the Respondent would pay the Applicant GST associated with the supply of the Services, provided the Applicant submitted a valid tax invoice in respect of the relevant Services;
(j) by clause 9.2 and Item 7 of the Schedule the Applicant was to provide at her own expense all plant, equipment, tools labour, travel costs and any other things necessary to provide the Services;
(k) by clause 10.1, the Applicant was entitled to retain all right, title and interest in the intellectual property contained within her own materials used in connection with the services, provided those materials are declared prior to the commencement of the contract;
(l) by clause 13.1, the Applicant was required to take out and maintain her own policies of public and product liability, employer’s liability, and professional indemnity insurance;
(m) by clause 15.1, the parties acknowledged and agreed that the Applicant was carrying out the Services under the contract as an independent contractor, and nothing in the contract was intended to create an employment relationship;
(n) by clause 15.2, the Applicant was liable for any debts and obligations incurred in respect of the provision of the Services;
(o) by clause 16.1, the Respondent was entitled to terminate the contract, for any reason whatsoever, by giving no less than 14 days’ notice to the Applicant to such effect.1”
The Respondent submitted that it terminated the Services Agreement with termination to take effect 14 days thereafter as per clause 16.1 of the contract.
The Respondent submitted that the Applicant was an independent contractor by reason of the following:
“(a) The rights and duties of the parties are comprehensively committed to writing in the Services Agreement. There is no indication that the parties conducted themselves other than in accordance with the terms of the contract. In circumstances where that contract is not a sham, it is decisive of the character of the parties’ relationship.
(b) The relevant provisions of the Services Agreement as extracted in paragraph 1 of these submissions are all demonstrative of an independent contractor relationship. The parties went to the extent of expressly denying the existence of an employment relationship existing between them. Whilst not determinative, the rights and duties that the parties agreed be bound by in the Services Agreement are not in any way inconsistent with this statement as to the proper characterisation of their legal relationship.
(c) The Applicant was entitled to, and in fact did, control how she delivered the Services (without any direct oversight by the Respondent), where she delivered the Services (including at various locations that were not owned or controlled by the Respondent), as well as when she delivered the Services (she was able to nominate the referrals she wished to accept and the days on which she worked to suit her personal schedule).32
(d) This “major signifier”33 points clearly to the existence of an independent contractor relationship.
(e) The Applicant was not paid a wage or salary and was instead paid at an hourly rate for the delivery of each of the Services upon presentation of a valid tax invoice, which invoices included a sum for GST.34
(f) The Applicant did not work solely for the Respondent. She had her own business, a separate place of work, and her own private clients.35 She has various websites for her business in which her services are advertised to the world at large.36
(g) The Applicant provided and maintained her own equipment. Some of her therapy sessions required equipment such as craft items or clay. It was her professional choice to use this equipment and she was financially responsible for it. The Respondent did not provide the Applicant with any equipment.37
(h) The Applicant was not prohibited from delegating or subcontract her work to other people to complete.38
(i) The Applicant was entitled to maintain ownership of her intellectual property in the course materials she had developed as part of her therapy sessions.39
(j) The Applicant wore clothing of her choice and was not supplied business cards by the Respondent.40
(k) The Applicant was responsible for her own tax and superannuation affairs.41
(l) The Applicant did not receive paid holiday or sick leave. She was not required to request leave but would advise the Respondent in advance of time off so that the Respondent could organise someone to take over her therapy sessions.42
(m) The Services supplied by the Applicant involved a distinct calling on her part. She was required to have counselling qualifications and was responsible for maintaining those qualifications. The Applicant was also required to hold her own professional indemnity insurance.43
(n) The Applicant was personally responsible to her patients for the work she carried on in her capacity as a therapist.”
Consideration
Deputy President Roberts helpfully set out the relevant law which I will follow here.[12] The Fair Work Act regulates many aspects of workplace relationships and interactions in great detail. It leaves the fundamental issue of who is an employee to the common law.[13]
The High Court has relatively recently considered that question in the decisions of CFMMEU v. Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Pty Ltd and Jamsek [2022] HCA 2. The principles set out by the Court in those decisions have been conveniently distilled[14] by Wigney J in the matter of JMC Pty Limited v Commissioner of Taxation [2022] FCA 750 as follows:
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: Personnel Contracting at [43], [44], [47], [59] (Kiefel CJ, Keane and Edelman JJ), [172] (Gordon J, Steward J relevantly agreeing at [203]). The task is to construe and characterise the contract made between the parties at the time it was entered into: Personnel Contracting at [174] (Gordon J).
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: Personnel Contracting at [60] (Kiefel CJ, Keane and Edelman JJ), [124] (Gageler and Gleeson JJ), [173] (Gordon J). 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: Personnel Contracting at [174]-[175] (Gordon J); Jamsek at [61] (Kiefel CJ, Keane and Edelman JJ), referring to Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352. 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: Personnel Contracting at [175] (Gordon J). 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: Personnel Contracting at [176] (Gordon J).
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: Personnel Contracting at [44] (Kiefel CJ, Keane and Edelman JJ), [173]-[178] (Gordon J); Jamsek at [109] (Gordon and Steward JJ). A “wide-ranging review of the entire history of the parties’ dealings” is neither necessary nor appropriate: Personnel Contracting at [59] (Kiefel CJ, Keane and Edelman JJ); see also [185]-[189] (Gordon J). 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”: Personnel Contracting at [61] (Kiefel CJ, Keane and Edelman JJ) (emphasis added).
It follows that 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 so 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: Personnel Contracting at [113] (Gageler and Gleeson JJ); [174] (Gordon J), referring to Brodribb at 24 (Mason J); see also 36-37 (Wilson and Dawson JJ).
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. The first consideration is the extent to which the putative employer has the right to control how, where and when the putative employee performs the work: Personnel Contracting at [73]-[74] (Kiefel CJ, Keane and Edelman JJ); [113] (Gageler and Gleeson JJ); see also Brodribb at 24 (Mason J) and 36-37 (Wilson and Dawson JJ). The second is 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: Personnel Contracting at [36]- [39] (Kiefel CJ, Keane and Edelman JJ); [113] (Gageler and Gleeson JJ); cf [180]-[183] (Gordon J). Neither of those considerations are determinative and both involve questions of degree.
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: Personnel Contracting at [63]- [66] (Kiefel CJ, Keane and Edelman JJ); [127] (Gageler and Gleeson JJ); [184] (Gordon J). 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”: Personnel Contracting at [58] (Kiefel CJ, Keane and Edelman JJ).
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.
In this case the parties committed the terms of their relationship to writing. The terms were contained in the Services Agreement.[15] There was some evidence about the nature of the relationship prior to the signing of the documents. In this respect I accept the evidence of the parties that there was no change in the day to day practicalities of the relationship other than to continue to perform the work in accordance with what was set out in the services agreement. This is consistent with submissions by the parties and as given in evidence during cross examination.
Whilst there are a number of instances where the Applicant protests that certain indicia are performed in a particular way, in each case upon closer examination it is my view that the indicia are in practical terms supportive of an independent contractor relationship.
Control
The capacity for the Respondent to direct and control the work of the Applicant was in my view central to the Respondent’s business of providing care services to its clients. In Personnel Keifel CJ, Keane and Edelman JJ concluded:
….In referring Mr McCourt to Hanssen, Construct was exercising, and commercialising, its right to control the work that Mr McCourt would do and how he would do it. The marketability of Construct’s services as a labour-hire agency turned on its ability to supply compliant labour; without that subservience, that labour would be of no use to Construct’s clients. That right of control was therefore the key asset of Construct’s business. Its significance was not diminished by the circumstance that the minutiae of Mr McCourt’s performance of daily tasks were at the direction of Hanssen. Indeed, the right of control held by Construct over Mr McCourt explains why there was no need for any contractual relationship between Mr McCourt and Hanssen in order to support Hanssen’s ability to issue day-to-day directions to Mr McCourt.[16]
In considering that example in Personnel, the Applicant submitted in her evidence that the Respondent held regular case management meetings in which the Applicant was told how to treat patients including when she needed to take a harder approach with them. I heard the evidence of the Respondent in this respect who described some patients having a number of professionals involved in their therapy eg exercise physiologists, psychotherapists and the like, and that the purpose of these case management meetings was to ensure all parties were working together in the best interests of the patient. Further, the Respondent gave evidence that she could not tell the Applicant how to treat a patient in closed doors. Like Personnel, the Respondent provided certain assurances to its clients and it was not unreasonable for the Respondent to exercise a high level of control to ensure that the assurances provided were honoured at a high level. For example, in terms of providing timely, high quality services.
It is clear though that minutiae of how that work was performed was in the hands of the Applicant. This is particularly the case where the risk and the insurance for the wellbeing of the patient lies with the Applicant. The Applicant gave her own evidence that she was required to have her own insurance and professional accreditation. In consideration of all of these factors I accept that the Applicant is responsible for the clinical treatment and outcomes of her patients and that there was no control over her in this respect Applicant concedes that on her own evidence she admits that “after care appointments were “pencilled into” my diary and I would change the appointment day/time according to both mine and client’s availability.”[17] This in effect demonstrates that the Applicant did have control over when this work was done. I do not accept that After care work and residential care can be separated for the purposes of where and how that work was conducted as it pertains the Applicant’s control of her work. I accept simply that residential work does need to occur where the patient is in residence, this is a common sense outcome and the after-care work has more flexibility as to where it is conducted and in that sense the Applicant has had control as to where that occurred with some performed at her home by phone or video or some in her private offices at Chi Hub which are premises not in any way associated with the Respondent.
In this present matter the Applicant claimed she had little control over what work she accepted or performed,[18] however when reading on into the Applicant’s submissions and further in cross examination the Applicant conceded that she had never been told verbally or in writing that she could not do so. She was unable to give an example where she was unable to do.
Other examples are:
a) In respect of controlling when she worked, the Applicant made submissions that she advised the Respondent when she was available for work at 3 days a week,[19] in cross examination the Applicant acknowledged that she had changed that to 2 days a work at the Respondent’s residential facility and 1 day a week from her home with the other two days of work a week being private work she performed for other clients.
b) In respect of being able to delegate work to others, in cross examination the Respondent gave a number of examples naming two other contractors who were able to delegate work to other contractors when they would not be available.
c) The Applicant accepted that income tax was not deducted from her pay and she charged her client for GST in invoices that were sometimes issued weekly and sometimes monthly at the Applicant’s discretion when she had time to attend to uploading the required reports that accompany the invoices. I accept she was paid for completing results which might be also linked to time. Given the Applicant had worked for the Respondent for such a significant time, I don’t accept that such a situation was not accepted by the Applicant as there were actions that could have been taken to dispute this situation if it were a sham arrangement.
d) The Applicant gave evidence that she did not receive sick leave, annual leave, payment for public holidays etc She claimed she recently sought public holiday payments at Christmas 2023 however there was no evidence before the commission of this and the Respondent denied any knowledge or that any such payment had been made.
e) The services contract contained a provision that the Applicant was responsible for providing her own equipment and tools.[20] In the Applicant’s own evidence she acknowledges paying for any art material required for use in therapy she provided.[21]
f) On the Applicant’s own evidence she performed work for others around 25% of her time,[22] and this was further confirmed in cross examination.
g) The Applicant gave evidence that her field was a specialist field of work requiring significant qualifications and experience. It required ongoing monitoring and training. The Respondent gave evidence in cross examination that it assisted all contractors with training to ensure they could provide the highest quality of services to their clients. It is my view that the work performed by the Applicant involves a profession with a distinct calling on her part.
Was the contract a Sham?
The Applicant submitted that the Respondent had misrepresented the true nature of the relationship and was engaging in a “sham arrangement.” I do not think the evidence in this matter goes so far as to show that the validity of the contract itself could be successfully challenged on that basis. Nor was it argued cogently, supported by any relevant evidence, that the legal effect of the written terms was affected by a variation, waiver or estoppel. I turn then to consider the nature of the legal rights and duties created by the written terms to determine the true character of the relationship between the parties.
I consider that the terms of the Service Agreement create the relevant rights and duties that bound both parties for the purpose of characterising the relationship between them. I have considered those terms in their totality.
The Services Agreement describe the Applicant as an independent contractor. On the basis of the submissions and evidence before me, there is no evidence to support or conclude that the arrangement which has been in place is a sham. I accept the evidence of the Respondent given in cross examination that in 2017, she sought advice from her accountant as to how she should be engaging staff in her business. She conducted a survey of her staff and then met with them one on one. The outcome was that some staff became employees and some continued as contractors but with the new contracts put in place for which the Applicant in this matter is presently bound by. This is a legitimate process for an employer to ensure that employees or contractors are engaged correctly in accordance with the law, and I accept that this was the purpose for which the Respondent offered the Services Agreement to the Applicant. The Applicant considered that Services Agreement and signed it. There is no evidence of a lack of capacity, and I accept that the Applicant is a well-educated and intelligent professional. She understood what she was signing, she had been working within its terms for some years prior and she continued to work within its terms up until the time it was terminated in early 2024.
“Own business/employer’s business” dichotomy
It was accepted by the plurality in Personnel that although not determinative, the question of whether someone is conducting their own independent business as opposed to serving in the business of another could be a useful framework to guide the characterisation of the relationship.[23] The Applicant in this matter did demonstrate she conducts her own business ‘Make Sense’ which was as contemplated in Personnel. The Applicant gave evidence as to the nature of her business and that she was growing the business in the days she was not performing work for the Respondent. The services she provides in this business are around the same fields of expertise for which she performs work for the Respondent. I accept that to be the case.
The evidence before the Commission was that the Applicant’s business Make Sense did perform work for other parties and that she used her office at Chi Hub to deliver these services. There was no evidence before the Commission that the Respondent took any action to stop or minimise the Applicant’s efforts in this respect. This is further indicative of the independent contractor relationship pursuant to Personnel.
Clause 9.2 of the Agreement provides that the Contractor is responsible for providing any equipment, including safety equipment, tools and resources. Additionally, the Applicant is responsible for travel costs for which they would be reimbursed at a cost of 66 cents per km where clients were to be transported to appointments or events. These are factors which in the overall assessment, points to the relationship as being one of principal and independent contractor.
Clause 2.7 of the Services Agreement provides that it can only be varied by agreement in writing. There was no evidence put before the Commission that any such variation had occurred.
Clause 4.5 of the Services Agreement provides that the Applicant can delegate substitute or subcontract all or part of the services therein. Clause 8 of the Services Agreement makes it clear that taxes, superannuation, workers compensation and insurance premiums are the responsibility of the Applicant.
As to remuneration, the Services Agreement provides (at Item 10 of the Schedule) that the Applicant was to be paid a fee for completion of certain services, which appear to have been measured in time and paid upon completion and the uploading of a relevant report substantiating the work performed. The Services Agreement demonstrates that the fees are negotiated with the Respondent and the Applicant. I take this to mean that ultimately, the rates applying to the Applicant at the point of engagement set out in the Service Agreement were determined by the Respondent, presumably after some negotiation with third parties, and passed on to the Applicant.
The Services Agreement obliges the Applicant to submit weekly reports to the Respondent’s systems for processing. I note that at times the Applicant could only do this monthly and that she was then paid accordingly. This is an administrative requirement justified in such an arrangement.
Whilst the plurality in Personnel cautioned that not all contractors are entrepreneurs,[24] the utility of the “own business/employer’s business” dichotomy was nonetheless accepted. I am of the view that the contractual arrangements taken as a whole leave plenty of scope for entrepreneurship on the part of the Applicant and this is supported by the Applicant’s own evidence of the business she is building through her business Make Sense which has included assignments overseas.
The determination as to whether a person is an employee or independent contractor is a question of law. I do not find that the Services Contract was a Sham contract for all of the reasons set out. Having taken into account the various rights and obligations that the parties created for themselves by their contractual arrangements, I am of the view that the relationship between the Applicant and Respondent in this case was one of Principal and independent contractor.
The Respondent’s jurisdictional objection is upheld. The Applicant’s unfair dismissal application is dismissed.
DEPUTY PRESIDENT
Appearances:
Ms Jeske for herself.
Mr Leighton for the Respondent.
Hearing details:
In Person
Brisbane
17 June 2024
[1] DCB p.12.
[2] Ibid.
[3] DCB p.107-120D.
[4] DCB p. 120A.
[5] DCB p.18.
[6] Warrell v Fair Work Australia [2013] FCA 291 (Warrell).
[7] Ibid.
[8] Stephen Fitzgerald v Woolworths Limited[2017] FWCFB 2797.
[9] Warrell at 27.
[10] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v UGL Resources Pty Limited (Project Aurora)[2012] FWA 2966
[11] Page 12 DCB
[12] Ms Jessica Tidmarsh v Aspire 2 Life Pty Ltd [2024] FWC 289.
[13] There are some minor statutory amendments to the common law, none of which are presently relevant or in issue. See Gordon J in Personnel at [161].
[14] See also Chambers and O’Brien v Broadway Homes Pty Ltd [2022] FWCFB 129 at [74].
[15] DCB p. 107-120D.
[16] At [76].
[17] DBC p. 13.
[18] DCB p. 13.
[19] DCB p. 18.
[20] DCB p.78, cl. 9.2-9.3.
[21] DCB p. 20.
[22] DCB p.20.
[23]Personnel op cit at [35].
[24] At [39].
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