Keith Symondson v Farmanco Management Consultants Pty Ltd as trustee for the Farmanco Unit Trust - [2025] FWC 1087

[2025] FWC 1087

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.365 - Application to deal with contraventions involving dismissal

Keith Symondson
v

Farmanco Management Consultants Pty Ltd as trustee for the Farmanco Unit Trust

(C2024/4034)

DEPUTY PRESIDENT WRIGHT

SYDNEY, 16 APRIL 2025

Application to deal with contraventions involving dismissal – jurisdictional objection –whether applicant was an employee–applicant found to be an employee - jurisdictional objection dismissed.

Introduction and outcome

Mr Keith Symondson has made an application to the Fair Work Commission (Commission) under s.365 of the Fair Work Act 2009 (Cth) (FW Act) for the Commission to deal with a dispute arising out of allegations that he was dismissed from his employment with Farmanco Management Consultants Pty Ltd as trustee for the Farmanco Unit Trust (Farmanco) in contravention of Part 3-1 of the FW Act.

After initially participating in conciliation on 25 July 2024, Farmanco objected to the application on the ground that Mr Symondson was not an employee and therefore was not dismissed from his employment.

Before dealing with the dispute under s.368, I must be satisfied that Mr Symondson was employed by Farmanco and was dismissed from his employment.

In summary, I have found that Mr Symondson was employed by Farmanco and was dismissed from his employment on 24 May 2024 within the meaning of s.365 of the FW Act.

The application was filed on 13 June 2024 and as such is within the timeframe required by s.366(1)(a) of the FW Act.

Directions and hearing

Directions were issued by my Chambers on 18 October 2024. The matter was listed for hearing on 17 December 2024.

At the hearing, Mr Symondson was represented by Mr Al Asadi, Lawyer. Farmanco was represented by Mr Beaton, Lawyer. I granted permission to both parties to be legally represented pursuant to s.596(2) of the FW Act as I was satisfied that it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter.

Mr Symondson gave evidence on his own behalf and was cross-examined by Mr Beaton. Ms Charlotte Eve Kent also gave evidence on behalf of Mr Symondson.

The Commission issued an order requiring Mr Laurence Carslake, the Chair of the Board of Farmanco to attend the hearing and provide evidence at the request of Mr Symondson.

Mr Robert Sands gave evidence on behalf of Farmanco and was cross-examined by Mr Al Asadi.

Farmanco filed submissions and evidence on 8 November 2024 and 9 December 2024. Mr Symondson filed submissions and evidence on 29 November 2024. I have considered the submissions made by the parties and all of the evidence before me in my determination of this matter and the conclusions I have reached.

Factual background

Farmanco is in the business of providing consultancy services to large-scale family and corporate farming operations to help them control costs and maximise profitability.[1] Consultants employed by Farmanco provide a number of different services including management consultancy, agronomy services, grain marketing, bookkeeping, precision agronomy, and research and development work. Farmanco also sells several publications, including The Pestbook, The Profit Series and newsletters including Farmanco Facts and the Grain Marketing newsletter.[2]

Mr Sands became a Principal of Farmanco in 1993. At that time there were three other Principals. Mr Sands has occupied several leadership positions within Farmanco since that time. The last position he held was the Chair, from 2015 to 2020.[3]

In around 2016, the Principals of Farmanco were undertaking all of the management duties. Farmanco decided to engage a Business Analyst to undertake a review of the business to provide advice on how Farmanco could achieve its business goals and best market and utilise Farmanco’s intellectual property to grow the business. One of the suggestions from the review was to appoint a Chief Executive Officer (CEO) as it would be more beneficial to have the Principals use their time to grow the business and leverage the intellectual property and leave the management of the business to a CEO. The Principals agreed with this proposal and began advertising for the position of a CEO.[4]

Mr Symondson applied for the role of CEO with Farmanco after seeing it advertised on seek.com. Mr Symondson was invited to attend an initial interview with Farmanco’s Board of Directors (Board) on 28 April 2016.[5]

Mr Symondson said that during his first interview for the CEO position and over the course of the discussions with Mr Eric Nankivell, the acting CEO at the time, he told the Board and Mr Nankivell that one of the main reasons he was looking to be employed by Farmanco was so he could also become a unitholder. Mr Nankivell replied to the effect that Farmanco’s organisation was structured to allow senior staff to buy into the business, and this was something that Mr Symondson would be able to achieve during his employment as CEO, if he was the successful applicant.[6]

After a second interview and several subsequent discussions with Mr Nankivell, Mr Symondson received a letter of offer and contract of employment from Farmanco on or around 26 May 2016. Mr Symondson said that while the salary and benefits offered by Farmanco were considerably less than that provided by his previous employer, he accepted the offer of employment as he was keen to grow Farmanco’s company, and benefit through a future equity position.[7]

Employment Contract

Mr Symondson commenced employment with Farmanco, as the CEO, on 8 August 2016. Farmanco had never previously had a full-time CEO and Mr Symondson was the first full-time person in this role. Mr Nankivell had previously occupied the position of CEO on a part-time basis as well as being a Principal and developing his own client base simultaneously.[8]

The contract of employment (Employment Contract) comprised of an undated letter of offer which was signed by Mr Symondson under a sentence which stated:

Please sign if you are happy with the terms and conditions outlined and return.[9]

The Employment Contract included the following terms:

·     Mr Symondson would be paid annual remuneration of $212,100 comprising salary of $180,000, superannuation of $17,100 and car allowance of $15,000.
·     Mr Symondson was required to base himself out of the Mundaring office which would be his primary office.
·     Mr Symondson was required to work variable hours and country travel would be required at times.
·     Mr Symondson was entitled to statutory annual leave, sick and bereavement conditions.
·     Mr Symondson was required to keep timesheets.
·     Mr Symondson’s direct report was the Chairman of the Board and his formal report was to the Farmanco Board.
·     Mr Symondson’s employment was subject to a six month probationary period.
·     A performance review would be undertaken by the Board at the end of the first five months and yearly thereafter on 30 June each year.
·     Confidentiality regarding personal financial information of Farmanco clients must be respected at all times.
·     Any data or processes remain the property of Farmanco.
·     Mr Symondson must not act in conflict with Farmanco’s interests.
·     Mr Symondson must obtain prior written permission before taking up any public or private board positions.
·     Mr Symondson was required to provide exclusive service to Farmanco and devote his entire time and attention to the CEO role.
·     Mr Symondson could not undertake any secondary employment without written permission.
·     Mr Symondson would be subject to a restraint of trade clause for a period of 12 months on completion of his employment.
·     Mr Symondson was required to give three months notice of termination of this employment.
·     Key Performance Indicators under the headings Human Resources, Consultant Corporate time, Cost control, Growth and Marketing of Farmanco.
·     Roles and Responsibilities under the headings Human Resources, Finance, Marketing of Farmanco profile and General.[10]

Becoming a Principal

From his first year in the business, Mr Symondson followed up with Mr Sands on the steps required for him to be able to buy-in as a unit holder in the business, as had been discussed with Mr Nankivell during the hiring process, and these conversations continued over the next three years.[11]

By 2019, the revenues and profits of Farmanco had grown and many of the consultants were earning more than Mr Symondson was. Mr Symondson said he understood from his conversations with Mr Sands in or around August 2019 that for him to become a unit holder in the business, he would have to buy his share and pay for it over a 6-year period.[12]

Mr Sands said that in around 23 September 2019, Mr Symondson proposed to the Board that he be made a principal of Farmanco. Mr Symondson said that he wanted equity in the business, as he felt that he had been contributing to its growth and that he had other opportunities to pursue if he was not going to be made a Principal. Mr Symondson stated that he wanted to become a Principal so that he could receive a share of the profits and be paid more than he was earning as an employee with no profit share.[13]

Mr Sands said that Mr Symondson’s salary had not changed significantly since his commencement as CEO, and the Board was concerned that he would leave Farmanco. The Board discussed that if Mr Symondson was appointed as a Principal and entitled to a share of the profit, this may be motivation for him to improve and create more profits for the business.[14]

Mr Sands said that the Board agreed to make Mr Symondson a Principal, and appointed Mr Symondson as a Principal at a Principals’ meeting on 15 October 2019. Mr Sands said that the Board offered Mr Symondson a profit share for undertaking the roles that he had performed while he was employed as CEO and that he would receive a further share of the profits for his ‘profit centre’.[15]

Mr Sands explained that each Principal had their own ‘profit centre’ which was essentially the area of the business they were responsible for managing and growing. Mr Symondson was told by the Board that the extra split of the profit would be dependent on how well he ran his ‘profit centre’. However, it was made clear to Mr Symondson that he had the potential to earn significantly more than he would have earned if he remained an employee.[16]

Mr Sands explained that part of becoming a Principal at Farmanco is to agree to a ‘buy-in’ amount, which is an investment amount that comes off the profit share of the Principal for a set period of time until they have repaid the amount. Mr Symondson’s buy-in was $280,858, to be repaid over 6 years.[17]

During a Board meeting held on 13 November 2019, which Mr Sands attended with the Board, Mr Symondson and Mr Eric Nankivell, concerns were discussed with Mr Symondson about whether he would be able to generate enough profits to repay the buy-in within 6 years. Mr Symondson stated that he was very confident in his ability and that he was willing to pay some of the buy-in using his own personal funds. The Board accepted this offer. Mr Symondson personally funded $175,000 of the buy-in with $105,858 to come from the extra profits generated through his ‘profit centre’ which consisted of the Employee Consultants, Products and Projects.[18]

Mr Sands said that in around January 2020, he had face to face meetings with Mr Symondson about him becoming a Principal. Mr Sands discussed with Mr Symondson that he would receive drawings instead of a salary and would be responsible for paying his own tax and superannuation. At a Board meeting on 12 February 2020, Mr Symondson agreed to accept the appointment as a Principal of Farmanco.[19]

Mr Sands said once it was determined and agreed that Mr Symondson was to become a Principal, Ms Eve Kent, who was then responsible for payroll, finalised Mr Symondson’s employment and removed him from the payroll system given he would no longer be receiving a salary and would be taking drawings instead. Mr Sands said that Farmanco did not issue a termination of employment letter to Mr Symondson in 2020 because it was clear he was moving from an employee to a Principal of Farmanco, with day to day management of Farmanco and fulfilling the duties of CEO.[20]

Mr Symondson said he became a unit holder in addition to his role as the CEO of Farmanco and that he was never informed by any representative of Farmanco that his position as the CEO would cease or be affected in any way by buying into the business. He continued to work in the same CEO role with the same duties and responsibilities provided in the Employment Contract, as well as taking on the responsibilities of a unit holder in the business.[21]

Mr Symondson said that the other Principals did not manage the day-to-day operations of Farmanco, but engaged in activities that enhanced their client base so they could find more clients to offer the services and products of Farmanco to and earn profits. Mr Symondson said that he was the only unit holder who was not permitted to develop a client base.[22]

Mr Symondson said that prior to becoming a Principal, he was paid a salary. After becoming a Principal, the terminology was changed from ‘salary’ to ‘drawings’. The drawings Mr Symondson was entitled to every year in his role as CEO was equivalent to his then annual wage package of $204,000. Mr Symondson was paid the same compensation and he was able to draw earnings as a Principal, but always in an amount that was equivalent to his annual salary because he still fulfilled his duties as CEO after he became a unit holder. Mr Symondson continued to be paid on a fortnightly basis at the same rate, although the payments were made to his family trust bank account rather than through his personal account. If there were any profits at the end of the year that were over and above the amounts Mr Symondson had drawn, those profits that he was entitled to as unitholder would be put against his buy-in amount, thereby slowly paying it off. Mr Symondson said that while the cost of living had risen considerably, his take-home pay had barely changed over eight years of working with Farmanco and he was also struggling to find money to pay his share of the buy-in.[23]

Buy-In Agreement

Mr Symondson signed ‘The Agreement to Purchase Units for Keith Symondson as trustee for The Symondson Family Trust’ (the Buy-In Agreement) in November 2019. It provided that eleven named owners who are equal owners of units the Farmanco Unit Trust which trades as Farmanco Management Consultants Pty Ltd agree to the Symondson Family Trust acquiring a share in the Farmanco Unit Trust. The buy in amount was $280,858 payable over a maximum period of six years.[24]

Mr Symondson’s understanding is that the Buy-In Agreement set out the terms, obligations and conditions between Farmanco and Mr Symondson when Mr Symondson bought into Farmanco’s business.[25]

The Buy-In Agreement relevantly provided:
While Keith is employed as the CEO of Farmanco he will receive drawings equivalent to his current wage package of $204,000. Any changes to this package will be through negotiation with the board and will need to be signed off by the Principals.
While Keith is employed as the CEO he cannot be a member of the Board.
All his vehicle expenses including the lease payments, and phone plan will be recorded against CEO class.
Any product or project expenses, including travel and accommodation where it is directly related to products or projects will be recorded in the corporate class against the relevant product or project. Any other costs will be recorded against the CEO class and will be audited by the Financial Manager and the Chair of the Farmanco Board.
The profit to be allocated to the Keith Symondson Trust Unitholder Loan Account will be based on the proportion determined by the units the trust holds divided by the total units held by all the Unit Holders in the Farmanco Unit Trust multiplied by the profit/loss from all Consultant Employees and Consultant Contractors, plus the profit/loss from the sale of products less all their direct costs, plus the income from corporate projects less their direct costs. This calculation of profit will remain in force until the Unit Holders agree to any changes.
The Unit Holder Loan Account will be maintained above the minimum limit as decided by the principal group. The current minimum is $80,000.
Keith as a principal will abide by the Principal code of conduct and the Unit Holders Deed.[26]

Unit Holders and Shareholders Deed

Mr Sands said that the Unit Holders and Shareholders Deed (the Deed) is the agreement that dictates the terms and conditions for the principal-ship. Mr Sands said that the intention and purpose of the Deed is that the Board would employ good people and if these employees became profitable and had reached a certain profit target then Farmanco wanted to have the option to offer them equity in the business, so that the business could retain quality people over time.[27] Mr Symondson said that he understood that the Deed set out the general terms and conditions, including Farmanco’s charter and code of conduct, that all unit holders of Farmanco must abide by.[28]

Clause 16.1(b) in the Deed states that nothing in the Deed makes a Principal an employee of another unit holder. Mr Sands said that the purpose of this was to hold a Principal to a higher standard than an employee and that a Principal was expected to look after the business and become a role model for the employees. There would be higher expectations as to how a Principal would handle themselves and the level of integrity expected of them. Farmanco had a Code of Conduct for Principals. As such, Mr Sands said once an employee became a Principal, then their employment ceased and a new standard of behaviour applied to them.[29]

The Deed provides that the Unit Holders have agreed that:

· the Business and the affairs of the Trust will be conducted in accordance with the terms and conditions of the Deed; and
· the relationship of the Unit Holders and their respective rights and obligations as Unit Holders of the Trust and Shareholders will be governed by the terms and conditions of the Deed.[30]

Clause 2.1 of the Deed provides:

Subject to the express terms of this Deed and in relation to this Deed only, the Unit Holders acknowledge and agree to apply the general principles in clause 2.2 to their relationship for so long as they may be:
(a)a Unit Holder of the Trust; or
(b)a Unit Holder of the Trust in a position to influence any decision made by any nominee Director of such Unit Holder.[31]

Clause 2.2 of the Deed provides:

The general principles (in no particular order) are that:
(a)the parties will use their best endeavours to foster the development and profitable operation of the Business and ensure the Trust is managed to maximise the profits of the Trust and the return on Unit Holders' funds;
(b)clear accountability between the parties will be maintained to ensure the ongoing success of the relationship and the Business;

(c)the parties will do all acts or omissions in relation to the Business or their obligations under this Deed, whether required by this Deed or otherwise, in good faith in the best interests of the Trust and without delay or diversion;

(d)the parties will constantly work together to establish goals, values and objectives that will result in a relationship benefiting all parties and the Business;
(e)the relationship will promote good faith, co-operation, openness and collaboration, characterised by the sharing of information, joint planning and co- operative problem solving;
(f)the relationship will promote flexibility in all dealings between the parties, and between the parties and Third Parties as appropriate;
(g)the relationship will encourage a pro-active approach from the parties to ensure the development of the Business;

(h)the parties will be solutions oriented in their approach to all developments and issues in relation to the Business; and

(i)the parties will ensure sufficient skilled resources are available to provide efficient Business operations.[32]

Clause 2.3 of the Deed provides:
Without limiting clauses 2.1 and 2.2, the Unit Holders acknowledge and agree that their objectives entering in to this Deed are to:
(a)use their respective business skills, know-how, experience and expertise to manage and conduct the Business;
(b)outline the decision-making procedures for the Trustee; and
(c)ensure the Business is managed to maximise the value of the Trust.[33]

Clause 4.2 of the Deed provides:

Each Principal will work full time in the Business or otherwise as directed by the Trustee. No Principal will take extended leave (more than 8 weeks) from the Business without the majority consent of the other Principals, which shall not be unreasonably withheld.[34]

Clause 4.4 provides that the Unitholders will elect Principals, by Ordinary Resolution, to be members of the Board. Clause 4.5 of the Deed makes provision for four Principals to be elected to the Board with varying terms depending upon the number of votes received. Clause 4.6 of the Deed provides that the elected board members will elect the Chair and Deputy Chair.[35] Clause 6.1 of the Deed provides that the Board shall be responsible for the overall direction and control of the management of the Trustee and the formulation of the policies to be applied in the conduct of the Business in accordance with the broad principles expressed in the Deed including the Board Charter.[36] Clause 7.2 of the Deed provides for a number of decisions to be made by Special Resolution of the Board including making or terminating a contract or arrangement between the Trustee and a Unit Holder or Related Party of a Unit Holder (clause 7.2(n)) and the removal or appointment of any Principal or Unit Holder except where a Principal suffers Total and Permanent Disablement or ceases to be an employee of the Trustee (clause 7.2(w)).[37]

The Board Charter, which is Annexure C of the Deed relevantly provides under the heading ‘Members’:

· A chairperson who can manage the board agenda, encourage debate and work in harmony with the CEO and CFO
· The Chair's role is to harness the skills, qualities and resources of the Board and to guarantee that issues of personality and style do not interfere with the Board's work. The chair has a role in the CEO's development, evaluation and in succession planning.[38]

Under the heading ‘Operations’, the Board Charter relevantly provides:

·     Minutes will not be sent to employees but the board will from time to time issue reports to the whole of the Farmanco team. Communication on operational matters to the Management, Agronomy, Marketing and Administration Teams will be via the CEO.
…
·     Some time at each meeting will be set aside for frank and open discussion between board members without the CEO and CFO being present
·     There will be a clear distinction between the roles of the Chair, the CEO, and the CFO[39]

The Farmanco Principals’ Code of Conduct is Annexure D to the Deed. It provides:

·     All Principals are to ensure they do not miss more than one Principals meeting each year.
·     Principals are to treat each other with mutual respect, honesty and integrity.
·     Principals are not to denigrate the Farmanco name or carry out any activity which brings the Farmanco name into disrepute.
·     Principals are to declare any businesses that they are involved in and any potential conflicts of interest.
·     Principals are not to conduct any business outside of Farmanco, which could be competing with any Farmanco existing or proposed areas of work or services, unless specifically agreed by Special Resolution by remaining Principals.
·     Principals are to set a good example to employees in their work ethic, attitude to corporate responsibilities and their support of Farmanco Professional Development Sessions.
·     Principals must have read all background information prior to the Principals meeting.
·     Principals are to do everything in their power to support and promote the Farmanco Name.
·     Principals are to put the good of the Farmanco business ahead of their own personal interests.
·     Principals are to view Corporate Work as important work being conducted for the most important client they have and charge this time and record the details of this work with a high degree of accuracy.
·     Any Principal that is unhappy with any aspect of the Farmanco Business should put these concerns in writing to the Board and not discuss any of these issues outside of Farmanco or with any of the Employees of Farmanco.
·     Any Principals who are in breach of any aspects of this code of conduct will be provided with a written warning and given a chance to remedy the breach. If the Principal continues to breach the code of conduct a special meeting of the Principals group will be called and a special resolution will be put for a decision to remove the Principal from their position in Farmanco and their unit to be repurchased.[40]

Roles, responsibilities and duties

Mr Symondson said that the purpose of the CEO role was to manage Farmanco’s business and day-to-day operations. Mr Symondson reported to the Board and the Principals. The Chair and the Board directed and monitored Mr Symondson’s work.[41]

Mr Symondson said that he typically undertook the following work duties and tasks when he performed work as CEO:

(a)Managed the day-to-day operations of Farmanco and its associated companies (Primary Financial Services (PFS), Farmanco Research and Aglytica);
(b)Oversaw the administrative function and, together with the finance manager, the finance team;
(c)Undertook HR functions, including recruitment, performance management and disciplinary actions;
(d)Mentored and supported the employee consultants together with the Principals;
(e)Developed the company’s 5-year strategic plan and delivered agreed activities together with the Board;
(f)Reported all operational matters and strategic progress to the Board on a monthly basis and the Principals on a quarterly basis;
(g)Developed the marketing plan for Farmanco and Aglytica, and supported the development of marketing materials for the company and its products and services, including training of an admin team member to become the marketing manager;
(h)Supported PFS in compliance meetings;

Developed and commercialised the intellectual property of the company;

(j)Supported the finance manager on the development of individuals’ budgets and roll up to an annual financial budget;
(k)Developed new services, including bookkeeping, precision agronomy, projects, and new products, such as the digitalisation of Farmanco’s paper based publications;
(l)Developed Farmanco’s intern program to provide support to the management consultants during their review season;
(m)Developed business cases for new services and products;
(n)Worked with third party software companies on the digitisation of Farmanco’s products, including identifying suppliers, scoping work and managing deliverables;
(o)Developed the internal processes and procedures of the company;
(p)Developed induction training and conduct training with all new employees;
(q)Supported the implementation of new systems and processes, including the move to cloud-based systems;
(r)Provided articles for Farmanco Facts and for use in marketing activities;
(s)Managed relationships with third parties to obtain externally funded projects; this included the formation of a joint venture with three of Farmanco’s competitors to develop proposals for Australia wide projects;
(t)Worked with the Board and third parties, including accountants and specialised lawyers on the design of a new company structure;
(u)Managed external contractors, including IT, telecoms, external HR support, accountants and lawyers;

Checked all external contracts for services and provided feedback to the Board on any potential risks;

(w)Developed risk mitigation plans for key areas of potential concern including data security and working with third parties of IT system pen testing;

Managed sponsorships of third parties including grower groups and the Grower Group Alliance (GGA);

(y)Managed the IT function, initially by himself and then managing an external contractor; and
(z)Undertook any other tasks that the Chair, Board or Principals designated as being required to be undertaken by the CEO.[42]

Mr Symondson said that as part of his work for Farmanco, he initially led and was responsible for approximately 30 staff which grew to approximately 45 people over his eight year tenure. In addition to this, Mr Symondson also mentored employee consultants, along with their assigned Principal mentors to support them in increasing their client base and profitability, so that in future they might be invited to become unit holders in the business.[43]

Mr Symondson said that his role, duties and responsibilities and his reporting lines remained unchanged after he became a unit holder. Mr Symondson said that the Board continued to monitor his work through monthly Board meetings for which he provided briefing documentation. Each of those meetings with the Board ran for 4-5 hours. Mr Symondson also met once every quarter with the Principals to brief them on the operations of the business. Each of the Principals meetings ran for at least half a day. Mr Symondson said that the members of the Board and the Principals wanted to have control over the minutiae of the operations of the business and Mr Symondson would be directed to provide details of this.[44]

Mr Symondson said that he was also called to other formal and informal meetings by individual members of the Board, as well as the whole Board, on an ad hoc basis when required.

He was also called to attend extensive conversations with the Board members outside of meetings, especially with the Chair. He provided monthly written updates to the Principals alongside the regular quarterly update meetings. Mr Symondson said that the Principals also had direct access to both the Finance Manager and himself for any financial questions that they had through the course of the year. Mr Symondson said the monthly meetings with the Board and the quarterly meetings with the Principals were opportunities for the Board and Principals to direct and scrutinise every major financial and operational decision he made in the daily operations of Farmanco’s business.[45]

Mr Symondson said that while Mr Sands was the Chair, Mr Sands and Mr Symondson both worked in Farmanco’s head office in Mundaring and Mr Symondson spoke to Mr Sands on a daily basis. This included Mr Symondson consulting Mr Sands, seeking direction from Mr Sands, and Mr Symondson reporting his activities to Mr Sands. In effect, Mr Sands was Mr Symondson’s immediate line manager because Mr Symondson spoke to Mr Sands daily for everything regarding his role.[46]

Mr Symondson said there were no other senior management staff in Farmanco and that everyone who was not a Principal in the company reported to Mr Symondson. Mr Symondson said that none of the Principals wanted to take on a management role because taking a significant role in managing any of the operations of Farmanco would jeopardise the time they spent on activities that they could bill their own clients for to increase their personal profits.[47]

In or around mid-2020, Mr Laurence Carslake replaced Mr Sands as Chair of Farmanco. Mr Symondson said that he had calls with Mr Carslake several times a week. Mr Carslake typically worked from home or at client sites and rarely attended the office.[48]

Control and direction of work

Mr Symondson explained that MsKent was initially the Finance Manager and that Ms Kent resigned in early 2023. Farmanco did not have a Finance Manager for a six month period. Mr Symondson explained that during this time, he was expected by the Board to take on the reporting and briefing duties and responsibilities of the Finance Manager to the Board although he had no background in financial management or accounting.[49]

Mr Symondson said that the Board resisted his suggestions to develop a management team, and he was expected by the Board to cover all management duties as well as the role of Finance Manager, a role that he was unqualified for, in the six months that there had no Finance Manager in place.[50]

Mr Symondson said that in or around August 2023, the Board hired Ms Jennifer Chen as a full-time Finance Manager, however Ms Chen became overwhelmed by the volume of work so Farmanco hired a second financial person to support her.[51]

Mr Symondson said that at each meeting with the Board, he kept detailed notes of all actions that were allocated to him and the Finance Manager. Progress on these actions were detailed in the Minutes of the Board meetings, in tasks in MS Teams, in the briefing document for each Board meeting and the PowerPoint presentation given at every meeting. He also prepared a summary of those detailed notes for presentation to the Principals every quarter, and the Principals received a copy of the detailed Board meetings within two weeks of each month’s Board meeting.[52]

Power to approve purchases and expenses

Mr Symondson said that as the CEO, his power and authority to approve expenses was limited. If an expenditure was not in the annual budget, signed off by the Board and the Principals, or if the expenditure was linked to major costs such as the purchase of cars or the employment of new staff, the expenditure needed to be signed off by the Board.[53]

In cases of more strategic expenditure, the expenditure needed to be signed off by the Principals. There was a CEO cost centre for personal expenditure, but the personal expenditure was related to the business such as parking when attending meetings. Mr Symondson said that he paid for expenses with his personal credit card and would be reimbursed the expenses he incurred on a fortnightly basis on the provision of copies of receipts, provided through the expense module in Farmanco’s XeroMe platform. These processes and procedures did not change when Mr Symondson became a unitholder.[54]

Accountability

Mr Symondson said that as the CEO, he was subject to the provisions of Farmanco’s Code of Conduct, and all policies and procedures, including performance management and disciplinary processes. When Mr Symondson became a unit holder and continued in his role as CEO, he was still subject to the same Code of Conduct that applied to all staff, as well as the Principal’s Code of Conduct. Mr Symondson said that from the time he was first hired as CEO and throughout the time he became both CEO and a unitholder, he had formal annual performance reviews with the Chair of the Board and the Deputy Chair. However, in the last two years of working with Farmanco, Mr Carslake did not carry out a formal performance review with Mr Symondson although Mr Symondson mentioned it on several occasions.[55]

Delegation of duties

Mr Symondson said that there was little to no one to delegate his responsibilities to. The only person who he was able to delegate some responsibilities to was Ms Kent, who was the only other senior staff member with the skills to take on some of his work. The Board directed Mr Symondson to delegate some work to Ms Kent.[56]

Mr Symondson said that there was no one who could stand in his shoes and act with the same accountability, power or authority as him because none of the Principals wanted to spend time managing the day-to-day operations of the company when their time could be used finding, servicing and billing clients to enable higher individual profits for themselves.[57]

Mr Symondson said when he went on holiday, all decisions about operations were made by the Chair of the Board. When he returned from holiday, it would usually take him 3-4 weeks to catch up on the work and decisions that had piled up because the Chair had not been able to do the work while he was away, primarily because they prioritised their own client work or they did not have the required skill set.[58]

Mr Symondson said that he could only delegate work to others or outsource work if such delegation were approved by the Board. For example, for his first four years working at Farmanco, he performed the majority of IT related work, until he was authorised by the Board to outsource this work to a third party. Mr Symondson said that when he asked the Principals to take on some additional responsibilities, they would occasionally take on the work, but would then often stop without explanation or informing him of their decision to not follow through.[59]

Requirement to submit timesheets and hours of work

Mr Symondson said that from the time he was first hired as CEO to after the time he became both CEO and a unit holder, he was required to keep detailed daily timesheets that covered a minimum of 38 hours work per work. These timesheets were amalgamated along with the time sheets for all the staff members and the amalgamated time sheets were presented at the monthly Board meetings.[60]

Mr Symondson said that in his employment contract as CEO, he was expected to work 38 hours per week. However, he was generally working at least 50-55 hours per week because of the many tasks and duties he had to fulfil. Despite the increasing hours, Mr Symondson was unable to charge Farmanco more for his work. Mr Symondson said that his wage package remained unchanged five years after signing the Deed.[61]

Work location

From the time Mr Symondson was first hired as CEO and after the time he became both CEO and a unit holder, he was primarily based out of the Mundaring office, pursuant to the direction in the Employment Contract. Three years after Mr Symondson became both CEO and unit holder, he started to divide his time working from both the Mundaring and Mt Lawley offices. This is because one of Farmanco’s subsidiaries, Aglytica, was based out of Mt Lawley and Mr Symondson had been appointed as the Managing Director of Aglytica in addition to his work as the CEO of Farmanco.[62]

No other employment

During the whole time Mr Symondson worked for Farmanco, he was required to provide exclusive service to Farmanco and its subsidiaries, including Aglytica. Mr Symondson was not allowed to undertake any secondary employment outside of Farmanco without written permission from the Board and this included not being able to take on any public or private board positions without written agreement.[63]

Leave

Mr Symondson said he was allowed to take holidays, but the Board expected his holidays to be a maximum of four weeks each year and this did not change when he became a unit holder. In cases of holidays longer than one day, Mr Symondson would discuss this with the Chair who would take on some of his duties during his absence. Mr Symondson also planned any holidays around Board meetings, so that he would have time to complete the briefing document pack prior to the meeting. Mr Symondson said even after becoming a unit holder he still continued to submit requests for holidays to Mr Sands initially, and then to Mr Carslake when Mr Carslake became the Chair. Mr Symondson said he did not take any sick leave during his eight years of service with Farmanco. This was not because Mr Symondson was never sick, but because Mr Symondson was expected to be available at all times.[64]

Promoted business of Farmanco

Mr Symondson said that as CEO, including when he also became a unit holder, he continued to do the work of a CEO to promote the business of Farmanco, including undertaking the following:

(a) Mr Symondson built the Projects team, the Precision Agronomy Business, the Bookkeeping team and the software development parts of the business.

(b)   Mr Symondson ran the social media and company website with a staff member whom he later trained to become the marketing manager. Mr Symondson also built parts of the company websites.
(c)    Mr Symondson formed a joint venture with three of the Farmanco’s competitors to bid for a large five million dollar project with the Grains Research and Development Corporation over five years.
(d)   Mr Symondson formed relationships with funding bodies and partners to get additional research and development project work.
(e)    Mr Symondson wrote and reviewed numerous articles for the company newsletter to raise Farmanco’s profile in areas such as agricultural technology. In each of these articles, Mr Symondson was referred to as the CEO of Farmanco.
(f)     Mr Symondson attended field days on behalf of Farmanco and was involved in those shows setting up and taking down exhibition stands.[65]

Mr Symondson said that in contrast, the other Principals worked to develop their own consultancy clients using the intellectual property and manpower of Farmanco but had limited involvement in the promotion of Farmanco’s business and some were often reluctant to participate in activities to improve the overall value of the company, even when paid to do it.[66]

Presented and referred to as an employee

Mr Symondson said he continued to be referred to as CEO on all external correspondence of Farmanco. When Mr Symondson also became a unit holder, he continued to perform the work of CEO to promote the business of Farmanco. Mr Symondson was required to wear Farmanco’s uniform that bore the name and logo of Farmanco. The uniform was purchased by Farmanco and when Mr Symondson was terminated, he returned the uniform as directed.[67]

Tools and equipment

Mr Symondson said everything that he used to work in his role as a CEO, such as laptop, car, and phone, were all provided by Farmanco and ownership of those were retained by Farmanco. This remained unchanged when Mr Symondson became a unit holder.[68]

Mr Symondson said the insurances necessary and required by law to cover the work that he carried for Farmanco were all paid for by Farmanco including public liability insurance and professional liability insurance.[69]

Dismissal

Mr Symondson was on leave when he was contacted by Mr Carslake on 24 May 2024 who advised that he wanted to meet Mr Symondson as soon as possible. Mr Carslake advised Mr Symondson that the business was not happy and that it was time for Mr Symondson to move on and make a change.[70]

Mr Carslake subsequently confirmed the termination of Mr Symondson’s position of CEO by email on about 31 May 2024 and that Farmanco would continue to provide Mr Symondson’s CEO fee taken as standard drawings for the next three months from 25 May 2024 to 25 August 2024.[71] Mr Symondson is still a unit holder of Farmanco. Mr Symondson said he received payments until around 16 July 2024, following which time Farmanco ceased making payments without providing a reason for this.[72]

Legislation

The application has been brought under s.365 of the FW Act which provides:
365 Application for the FWC to deal with a dismissal dispute
If:
(a) a person has been dismissed; and
(b) the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;
the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.

Section 365 is in Part 3-1 of the FW Act. Section 335 provides that in relation to Part 3-1, ‘employee’ and ‘employer’ have their ordinary meanings.

The issue between the parties which the Commission has been asked to determine is whether Mr Symondson was an employee of Farmanco.

Submissions

Farmanco

Farmanco submitted that from the date that Mr Symondson signed the Deed, Mr Symondson transitioned to becoming a Principal and ceased his employment. Once the employment relationship was finalised, Mr Symondson was removed from the payroll system and no longer received employee benefits, such as annual leave and personal leave. Mr Symondson received drawings from the profit share of the business, rather than salary. Mr Symondson was not an employee at the time he was removed as a Principal and had not been for several years, and therefore did not have the ability to make a General Protections Claim.

Farmanco submitted that there is no enduring or relevant written contract dealing with the Mr Symondson’s alleged employment or engagement as a contractor. There is only an expired employment agreement and the Deed which determines the terms and conditions of engagement for Mr Symondson as a Principal.

Farmanco submitted that while Mr Symondson had a contract of employment upon commencement, this contract was terminated, varied or waived once he became a Principal.

Farmanco submitted that the only written agreements that previously existed for Mr Symondson was the employment contract he received upon commencement as CEO in 2016 (which had been varied, waived or terminated by verbal agreement and/or by conduct) and the Deed which clearly outlined his position and obligations as a Principal.

Farmanco submitted that there does not exist any written agreement which clearly states that Mr Symondson would continue to be an employee. Instead, there were verbal discussions between the parties in which Mr Symondson agreed he would cease being an employee and that his existing contract of employment would cease to be in effect.

Farmanco submitted that the parties in this matter, including Mr Symondson, are both ‘sophisticated and informed parties’, and as such if Mr Symondson truly believed he was an employee, he would have queried why the structure of his pay and conditions changed upon becoming a Principal. Further, the drawings Mr Symondson received as a Principal which in essence replaced his previous salary, were not subject to payroll tax and instead paid via a trust.

Farmanco submitted that the Deed required Mr Symondson (and all other Principals under the Deed) to work full time in the business, and the duties provided to him were determined by his ‘profit centres’ which were the allocation of the projects/collections of work. It was determined by Farmanco’s Board that Mr Symondson would continue to undertake the duties of CEO given his ‘profit centre’ included the management of the employees. Farmanco submitted that at his appointment, by verbal agreement it was understood that Mr Symondson would cease to be an employee.

Farmanco submitted that there is nothing in the Deed which provides Farmanco with any control over Mr Symondson, as is expected in a contract of employment.

Farmanco submitted that the Deed constituted the entire agreement between the parties from the time that Mr Symondson was appointed as a Principal and it was understood that the Employment Contract would be terminated or cease to apply. The Deed outlines clearly the rights and duties of the parties and does not stipulate that any employment relationship exists between the parties. There are no other duties that Mr Symondson undertook other than those duties specified under the Deed.

Farmanco submitted that the Employment Contract ceased to apply once Mr Symondson was appointed as a Principal. This was demonstrated by the subsequent conduct of the parties after the Deed came into effect. Once the Deed was signed Mr Symondson:

a.   was removed from the payroll system;
b.   no longer received any payslips;
c.   no longer accrued any type of leave entitlement;
d.   was paid drawings instead of a salary;
e.   had no payroll tax withheld from the payments being made to him; and
f.    no longer was under the control of the Farmanco or had to seek any type of approval from Farmanco, such as making annual leave requests for time off.

Farmanco submitted these changes that came into effect after Mr Symondson was appointed as a Principal demonstrate that the parties acknowledged that the Employment Contract no longer was in effect. A primary aspect of the Employment Contract was the clear list of duties stipulated in this contract and the set remuneration Mr Symondson would receive. Once Mr Symondson was a Principal, he no longer was bound to these specific duties or KPIs and instead was required to undertake his duties as a Principal and was entitled to receive a share of the profit he created for the business.

Farmanco submitted that based on the authorities, the Commission should:

(a) Focus on the verbal agreement between Mr Symondson and Farmanco’s Board of Directors (to the extent that any oral contract is relevant to this case) that his employment with Farmanco would cease upon becoming a Principal;
(b) Construe the relationship as one that did not constitute an employment relationship at the time Mr Symondson was removed as Principal. The previous relationship of employee/employer that Mr Symondson commenced in, which ceased, should have no impact on the relationship that existed at the time he was removed.

Farmanco submitted that the following terms were agreed when Mr Symondson became a Principal:

a.   Mr Symondson would cease being an employee, and as such be removed from the payroll system, and would cease receiving a salary;
b.   Mr Symondson would receive drawings based on an agreed allowance for him to conduct his duties as CEO;
c.   Mr Symondson would be entitled to receive a share of the profit, determined based on how well financially his ‘profit centres’ did; and
d.   That the terms and conditions of this were outlined in the Deed which specifically only created a relationship of Mr Symondson being a Principal, and not an employee, as specified in clause 16.1(b) which states:
The Unit Holders agree that: nothing in this Deed will constitute or be construed to constitute a Unit Holder as the Principal, agent, employee or representative of the other Unit Holder.

Farmanco submitted that Mr Symondson was being paid significantly more as a Principal than as an employee, and became a Principal at his own request. Mr Symondson received the opportunity to share in the profits of the business by becoming a Principal, and therefore had significantly increased potential to receive higher remuneration. Mr Symondson’s request to be made a Principal was so that he could be rewarded for the effort and work he put into the various projects or ‘profit centres’ that he was responsible for. Mr Symondson also received additional tax benefits as a Principal as he had the ability to structure his payments to be more beneficial to him.

Farmanco submitted that it was the clear intention of the parties to form a new relationship where Mr Symondson was no longer an employee. Mr Symondson was paid a higher amount than he would have been paid as an employee and received the opportunity to participate in the profit share scheme.

Farmanco submitted that Mr Symondson agreed to the terms of the Deed and never received payslips, or leave entitlements that he had been receiving up until the time he became a Principal. While the relationship between the parties initially commenced as that of an employment relationship, it eventually evolved, at Mr Symondson’s initiative. A key consideration in characterising the relationship as one of service or employment is the extent to which the putative employer has the right to control how, where and when the putative employee performs work.

Farmanco submitted that Mr Symondson had the right to determine how, when and where his work was performed and had the right to control those decisions. Even at the time he was notified of his removal as Principal, Mr Symondson was not actively available in the workplace and instead was on ‘leave’.

Farmanco submitted that another key consideration in characterising a relationship as one of service or employment is the extent to which the putative employee can be seen to work in his or her business, as distinct from the business of the putative employer.

Farmanco submitted that Mr Symondson through his participation in the profit scheme and the buy-in agreement was not providing services to the business but rather working in ‘his own’ business, given he received direct payments from the financial outputs he created for Farmanco.

Mr Symondson

Mr Symondson submitted that there are three written contracts that need to be examined when assessing the relationship between Farmanco and Mr Symondson being:

(a)The Employment Contract;
(b)The Buy-In Agreement; and
(c)The Deed.

Mr Symondson submitted that the Employment Contract was not terminated by either Mr Symondson or Farmanco at any point between Mr Symondson’s commencement of employment and Mr Symondson’s dismissal on 24 May 2024.

Mr Symondson pointed to the following evidence to submit the contract remained on foot:

·     Mr Symondson’s evidence that he was not told by anyone that the Employment Contract would cease or be terminated when he became a Principal and he did not sign or agree to anything that stated that the Employment Contract would cease or be terminated.
·     Mr Carslake’s attempts to honour the three month notice period in the Employment Contract.
·     Mr Symondson’s evidence and Ms Kent’s evidence that when Mr Symondson became a unit holder, Mr Symondson continued to work in his employed position as the CEO of Farmanco with his duties and responsibilities being unchanged.

Mr Symondson submitted that the only conclusion to draw in the absence of a clear and obvious termination or variation of the Employment Contract prior to 24 May 2024 is that the Employment Contract was active and in full force.

Mr Symondson relied upon the following statements in the Buy-In Agreement:

(a) While Keith is employed as the CEO of Farmanco he will receive drawings equivalent to his current wage package of $204,000; and
(b) While Keith is employed as the CEO he cannot be a member of the Board.

Mr Symondson submitted that the Buy-In Agreement and the Employment Contract existed at the same time and the above statements are evidence of this. Mr Symondson submitted that additionally, the Buy-In Agreement does not state that Mr Symondson would be retained in any other engagement other than as an employee of Farmanco.

Mr Symondson submitted that the Deed generally governs the business and the affairs of the Trust and the general relationship of the unit holders, not the specific relationship between Mr Symondson and Farmanco which was unique and not like the relationships between the other Principals and Farmanco.

Mr Symondson submitted that the unit holder relationship that exists by virtue of the terms of the Buy-In Agreement and the Deed does not preclude, restrict or terminate the existing employment relationship.

Mr Symondson’s claim is that the Employment Contract, the Buy-In Agreement and the

Deed represent the rights and duties of the parties comprehensively and decisively point to a legal relationship of an employee and employer whereby the employee also retains unit holding interests in the employer entity. Consequently, the totality of the relationship between the parties does not need to be examined.

Mr Symondson submitted that if the Commission finds that the totality of the relationship should be examined to determine all the rights and obligations of the parties, this examination will also undeniably point to an employee-employer relationship that exists between the parties. In this regard, Mr Symondson relied on the following matters:

Mr Symondson undertook a wide range of duties and responsibilities as the CEO of Farmanco that remained unchanged throughout his employment tenure and until his termination on 24 May 2024. These do not resemble the duties and responsibilities of an independent contractor because they are rooted in Farmanco’s everyday management and operations of its business.
Mr Symondson reported to the Chair and Principals of Farmanco throughout his engagement until his dismissal on 24 May 2024.
Mr Symondson was largely not able to delegate his duties to others.
Mr Symondson exclusively worked for Farmanco.
Mr Symondson continued to be paid during his annual leave absences from work after he became a unit holder.
Mr Symondson was still required to make requests for annual leave when he wanted time off.
Mr Symondson had very limited power to approve and authorise expenses.
Mr Symondson was reimbursed by Farmanco for all personal expenses.
Mr Symondson worked well above the standard working hours expected of him of 38 hours per week. Mr Symondson was paid the same amount without consideration of the additional hours he worked.
Mr Symondson’s remuneration did not change after he became a unit holder because he was paid the same amount as he was paid pursuant to his Employment Contract. The only change to Mr Symondson’s remuneration was that it was classified as pay from drawings rather than salary.
Mr Symondson’s work was solely in the promotion of Farmanco’s business rather than his own business.
Mr Symondson undertook numerous tasks and projects that promoted Farmanco’s business and undertook nothing to promote his own business because his role was entrenched as a representative of Farmanco rather than himself.
Mr Symondson was required to wear the Farmanco branded uniform which shows that Mr Symondson was a representative of Farmanco rather than operating his own entity.
Everything Mr Symondson used to work in his CEO role, including the laptop computer, vehicle and mobile phone, were owned and provided by Farmanco.
The payments promised by Farmanco in relation to Mr Symondson’s employment with Farmanco were consistent with the terms of the Employment Contract.

Farmanco – in reply

Farmanco submitted that it is incorrect that Mr Symondson was not told by anyone that the Employment Contract would cease or be terminated when he became a Principal. Farmanco submitted that Mr Symondson was told that the Employment Contract would end, and that Mr Symondson understood that he was not an employee of Farmanco thereafter and often discussed ‘returning to being an employee’.

Farmanco submitted that it is incorrect that Mr Symondson was paid a fixed salary and submitted that the amounts drawn by Mr Symondson fluctuated in accordance with Mr Symondson’s share of profits from the business. During Mr Symondson’s tenure as a Principal, he made various total drawings of the following amounts:

Financial Year Total Drawings

2020/21 216,479.98

2021/22 234,287.98

2022/23 298,793.93

2023/24 255,579.94

Farmanco noted that it did not pay payroll tax on Mr Symondson’s drawings and that Mr Symondson enjoyed the benefits of his ‘CEO fee’ being drawn as gross amounts (not subject to any PAYG tax) via a trust at all times while he was a Principal of Farmanco. If it were the case that Mr Symondson was an employee and received a “fixed salary”, there are likely to be significant tax consequences that would flow from this characterisation.

Farmanco submitted that Mr Symondson was not required to make requests for annual leave. Mr Symondson ceased to have any entitlement to annual leave (which was paid out via a reduction to the buy-in value), and was not ‘required’ to make any such request. Farmanco submitted that Mr Symondson took it upon himself to submit ‘Leave Request’ forms, rather than any direction from Farmanco to do so. The ‘Leave Request’ form was not required to be submitted for approval and Mr Symondson took time away from Farmanco as and when he elected to do so.

Consideration

Whether an individual is an employee of a person or whether a person is an employer of an individual for the purposes of the FW Act is to be determined in accordance with s.15AA of the Act. Section 15AA provides that these matters are to be determined by ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person.

Mr Symondson and Farmanco correctly submitted that as the termination occurred on 24 May 2024 and the application was made on 13 June 2024, s.15AA does not apply as this provision was inserted into the FW Act by the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth) and commenced on 26 August 2024.

Consequently, the correct approach in determining the matter is that set out in the High Court decisions of Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (CFMMEU)[73] and ZG Operations Australia Pty Ltd v Jamsek (Jamsek).[74]

These cases held that where the parties’ relationship was comprehensively committed to a written contract, the validity of which was not challenged as a sham, and the terms of which were not varied, waived or the subject of an estoppel - the question of whether a person was an employee or an independent contractor was to be resolved solely by a consideration of the terms of the contract and not by reference to performance of the contract.[75]

Where the terms of the relationship between the parties has not been committed comprehensively to a written agreement, the characterisation of a relationship as being either one of employment or one of principal and independent contractor is to be determined by reference to “the totality of the relationship between the parties”.[76] In examining the totality of the relationship between the parties, relevant matters include whether the putative employee’s work was so subordinate to the employer’s business that it can be seen to have been performed as an employee of that business rather than as part of an independent enterprise[77] and the existence of a right of control by a putative employer over the activities of the putative employee.[78]

Other matters which may be relevant in determining the nature of the relationship include 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 and the delegation of work.[79]

Were the terms of the relationship between Mr Symondson and Farmanco committed comprehensively to a written agreement?

Mr Symondson’s evidence is that one of the main reasons he was looking to be employed by Farmanco was so he could also become a unit holder. He followed up with Mr Sands on the steps required to be able to buy-in as a unit holder in the business, as had been discussed with Mr Nankivell during the hiring process, and these conversations continued over the next three years. The Principals agreed to make Mr Symondson an offer to be a Principal on or around 15 October 2019 and Mr Symondson signed the Buy-In Agreement in November 2019. This offer by the Principals was prompted by an email from Mr Sands to the other three directors advising that Mr Carslake and Mr Sands were concerned that Mr Symondson would leave if Farmanco did not offer him a Principal position ‘this financial year or at the very latest next financial year.’ Mr Sands’ email indicated that Mr Symondson ‘made it clear that it wasn’t so much about the money but being seen by the principals as being more of an equal and that because he would have skin in the game more incentive to work the long hours he has been working.’

There is no evidence which establishes that in seeking to become a Principal, Mr Symondson wanted to relinquish his status as an employee of Farmanco. However it appears that as far as Farmanco was concerned, a person could not continue to be an employee if they became a Principal. It is not clear why this was a requirement of Farmanco generally and why Farmanco specifically required this of Mr Symondson. Mr Sands’ evidence was that he spent some time with Mr Symondson discussing how the profit for his profit centre would be calculated and how much he could earn as a Principal, and how being a Principal and receiving drawings was more advantageous than receiving a salary as an employee.

I accept Mr Sands’ evidence that he had these discussions with Mr Symondson and that Mr Sands was approaching these discussions on behalf of Farmanco on the basis that Farmanco expected that Mr Symondson would cease being an employee when he became a unit holder. Mr Symondson did not dispute that the discussions took place but seemed to attribute little significance to Mr Sands’ advice about the changes to his leave, taxation and leave arrangements at the time. It is unclear whether Mr Symondson understood that these changes were occurring because he would no longer be regarded as an employee of Farmanco once be became a unit holder.

There appears to be no dispute between the parties that when Mr Symondson became a unit holder through his family trust, he ceased receiving a salary from which PAYG tax was deducted and received gross income as drawings. There also appears to be no dispute that at that time, Mr Symondson’s annual leave was paid out as a credit towards the purchase price of the unit holding and that he became responsible for paying his own tax and superannuation. I note that in email correspondence to Mr Carslake dated 1 October 2023, Mr Symondson referred to ‘making the change from being an employee to being a Principal’ and ‘giving up a number of employee rights’. This shows that by 1 October 2023, Mr Symondson did not regard himself as being an employee of Farmanco, however it is unclear whether he held that view when he became a unit holder in November 2019. This lack of certainty is not assisted by there being no written confirmation by Mr Symondson and Farmanco that the Employment Contract was terminated by mutual agreement once Mr Symondson became a unit holder.[80]

Having regard to all of the evidence in the case, I believe that when Farmanco offered Mr Symondson a unit holding which involved changing Mr Symondson’s mode of remuneration and arrangements with respect to leave, superannuation and taxation, it was indicating to Mr Symondson that the arrangement was conditional on Mr Symondson agreeing to terminate the Employment Contract. I accept that Mr Symondson may not have appreciated this but in accepting the unit holding, I find that Mr Symondson agreed to terminate the Employment Contract.

In this respect there are some similarities between Mr Symondson’s circumstances and those of the respondents in Jamsek as both cases involved an employment relationship which the other party to the contract claimed had ceased and been replaced by a different legal relationship. The respondents in Jamsek were Mr Jamsek and Mr Whitby who were engaged as truck drivers by the predecessors of ZG Operations Australia Pty Ltd (the company) from 1977 to 2017. They were initially engaged as employees and drove trucks provided by their employer. In late 1985 or early 1986, the company said it would no longer employ Mr Jamsek and Mr Whitby, and would continue to use their services only if they purchased their trucks and entered into contracts to carry goods for the company. In this regard, the High Court stated,

Given that the genesis of the contract was the company’s refusal to continue to employ the respondents as drivers, and the respondents’ evident acceptance of that refusal, it is difficult to see how there could be any doubt that the respondents were thereafter no longer employees of the company.[81]

In Mr Symondson’s case there is no suggestion that Farmanco no longer wished to employ Mr Symondson prior to the negotiations about Mr Symondson becoming a unit holder. However, once those negotiations were occurring, it became clear that Farmanco required Mr Symondson to agree to the termination of the Employment Contract as a condition of becoming a unit holder. In the case of Jamsek, there was an explicit agreement, confirmed in writing, that Mr Jamsek and Mr Whitby were to cease being employees and commence providing services as independent contractors. The High Court found that the character of the relationship between the parties in this case was to be determined by reference to the rights and duties created by the written agreement which comprehensively regulated that relationship.[82]

In Mr Symondson’s case, the Deed and Buy-In agreement recorded the unit holding arrangements. In relation to Mr Symondson’s obligations as CEO, the Buy-In Agreement referred to Mr Symondson being ‘employed’ as a CEO and that unlike other Principals, he was not eligible to be elected to the Board while employed as CEO. The Deed referred to there being a clear distinction between the roles of the Chair, the CEO, and the CFO but did not elaborate as to what that distinction was. The Deed required each Principal to work full time in the Business or otherwise as directed by the Trustee but did not refer specifically to Mr Symondson’s obligations when performing that work.

Mr Symondson gave detailed evidence about his duties and obligations as a CEO. These duties and obligations were consistent with the terms of his Employment Contract which listed Mr Symondson’s KPIs and duties as involving Human Resources, Finance and Marketing. There is no suggestion in the evidence filed by Farmanco that Mr Symondson’s duties as CEO changed after he became a unit holder.

Farmanco submitted that a primary aspect of the employment contract was the clear list of duties stipulated in this contract and the set remuneration Mr Symondson would receive. Farmanco submitted that once Mr Symondson was a Principal, he no longer was bound to these

specific duties or KPIs and instead was required to undertake his duties as a Principal and was entitled to receive a share of the profit he created for the business. There is no evidence to support this submission.

Farmanco also referred to the reasons for Mr Symondson’s termination in its submissions although Farmanco did not file any evidence in relation to this matter. Farmanco claimed that after an external business review was conducted in March 2024 it became apparent that there were serious misstatements and/or oversights in the accounts by Mr Symondson despite this being a significant part of his responsibility as the CEO and as a Principal. The Deed and Buy-In Agreement do not refer to Mr Symondson being responsible for finance matters, although this is a matter that is referred to in Mr Symondson’s Employment Contract. It is therefore incorrect for Farmanco to claim that once Mr Symondson was a Principal, he was no longer bound to the specific duties or KPIs in his Employment Contract given it was a matter referred to in Farmanco’s submissions as a reason for Mr Symondson’s termination.

Further, Mr Symondson’s circumstances are in contrast to the applicant in Mark Feldschuh v Strong Room Technology Pty Ltd,[83] a decision of this Commission that Farmanco relied upon in this matter. In that case, the applicant was a director of the respondent pursuant to a formal ‘Non-Executive Director Agreement’ signed by the applicant and respondent. Schedule 1 of the Agreement specified the duties of the applicant. Commissioner Connolly concluded that Schedule 1 of the Agreement outlined the principal activities the applicant was engaged to perform and that any other duties that the applicant may have been engaged in were either duties required of him in the performance of his role as a director of the company, as provided and specified in the written agreement; duties that were also required of all other directors; or activities engaged in at his own initiative that were not requested or required of him.[84] The Commissioner took this finding into account in concluding that the Agreement described the whole nature of the relationship between the parties and that the rights and duties of the parties were comprehensively committed to the written agreement.[85]

In Mr Symondson’s case, the Deed does not refer to any specific duties at all. Most of the duties which Mr Symondson was undertaking could not be said to be duties that were also required of all other directors or activities engaged in at his own initiative that were not requested or required of him. In the circumstances, I am not satisfied that the Deed and the Buy-In Agreement describe the whole nature of the relationship between the parties and that the rights and duties of the parties have been comprehensively committed to the Deed and the Buy-In Agreement.

Having reached this conclusion, I am now required to determine the rights and duties of the parties. Farmanco referred me to a decision in Gang Ma v Yan Massage Wynnum West Pty Ltd (Gang Ma)[86] in which the Full Bench stated, after reviewing recent authorities including EFEX Group Pty Ltd v Bennett:[87]
[25] Whether the relationship between the parties is one of employment or not turns upon an examination of their legal rights and obligations. Those rights and obligations might either be set out in a written contract or, alternatively, must be ascertained from evidence of the terms that were agreed orally or which can be inferred from evidence as to the circumstances of the making of the contract and the course of dealing between the parties. Conduct that has no connection to the contractual obligations of the parties must be disregarded.
[26] Once the terms of the contract have been ascertained, it is necessary to characterise the relationship created by the contract. Two considerations will often be critical in the task of characterisation: the extent to which the putative employer has the right to control how, when and where the putative employee performs the work; and the extent to which the putative employee can be seen to be working in their own business as distinct from the putative employer’s business. The way that the contractual terms address the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work, the provision for holidays, the delegation of work, and where the right to exercise direction and control resides may also be relevant to whether the relationship is one of employer and employee.[88]

Having regard to this decision, I am required to ascertain the terms of the contract between Mr Symondson and Farmanco and then determine the nature of the contractual relationship.

What were the terms of the contract between Mr Symondson and Farmanco?

I accept Farmanco’s submission that the following terms were agreed when Mr Symondson became a Principal:

a.Mr Symondson would be removed from the payroll system, and would cease receiving a salary;
b.Mr Symondson would receive drawings based on an agreed allowance for him to conduct his duties as CEO; and
c.Mr Symondson would be entitled to receive a share of the profit, determined based on how well financially his ‘profit centres’ did.

In addition, I find that at the time that Mr Symondson became a Principal, the parties agreed, as demonstrated by their conduct, that Mr Symondson would continue to perform all of the duties and obligations of the CEO position which he had undertaken since he started working for Farmanco. These duties and obligations involved the management of Farmanco’s business and day-to-day operations including human resources and marketing; development of new services, business cases for new services and products, and internal processes and procedures; management of external contractors; oversight of administrative and finance functions; and management of relationships with third parties. I make these findings based on Mr Symondson’s unchallenged evidence about these matters and Mr Sands’ evidence that when Mr Symondson moved from an employee to a Principal of Farmanco, he would continue to have day to day management of Farmanco and fulfil the duties of CEO.

I have already found that the parties agreed that the Employment Contract would be terminated. I also find that the parties agreed to be bound by the terms of the Buy-In Agreement and the Deed.

I do not accept Farmanco’s submission that the terms and conditions of the Deed only created a relationship of Mr Symondson being a Principal, and not an employee, as specified in clause 16.1(b) which provides that nothing in the Deed will constitute or be construed to constitute a Unit Holder as the Principal, agent, employee or representative of the other Unit Holder. I accept Mr Symondson’s submission that clause 16.1(b) does not preclude or restrict a employment relationship because Mr Symondson alleged that he was employed by Farmanco and not any of the unit holders under the Trust.

In conclusion, I find that the terms of the contract between Mr Symondson and Farmanco were part written and partly oral. The written aspects of the contract were the Buy-In Agreement and the Deed. The oral aspects of the contract comprised of Mr Symondson’s duties and obligations towards Farmanco while performing the role of CEO.

What was the nature of the relationship created by the contract?

The nature of the relationship is to be characterised by reference to:

·     the extent to which the putative employer has the right to control how, when and where the putative employee performs the work;
·     the extent to which the putative employee can be seen to be working in their own business as distinct from the putative employer’s business; and
·     the way that the contractual terms address the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work, the provision for holidays, the delegation of work, and where the right to exercise direction and control resides.[89]

I deal with each of these considerations below.

Control

In relation to control, the Full Bench in Gang Ma said:

Consistent with the focus on legal rights and obligations required by Personnel Contracting and Jamsek, the analysis must involve consideration of whether there was a contractual right of control rather than merely the exercise of control in practice. In the absence of a comprehensive written contract, it is necessary to examine whether the existence of a right of control may be inferred from the conduct of the parties. If, in practice, the putative employer assumes the detailed direction and control of the worker in the daily performance of his or her work and the worker tacitly accepts a position of subordination to authority and to orders and instructions as to the manner in which they carry out their duties, that may provide a basis for inferring that the contractual agreement involved submission to direction by the employer.[90]

[footnotes omitted]

The Deed governs the conduct of the business of Farmanco which includes the election of a Board and the decision making powers that the Board and Principals have in relation to the business. As the CEO, Mr Symondson was obliged to implement any decisions of the Board and the Principals which pertained to the day to day management of Farmanco. The nature of Mr Symondson’s obligations towards Farmanco pursuant to the contractual arrangements were such that he was expected to be available to perform work during usual business hours. Although Mr Symondson may have had some flexibility as to when he performed tasks that did not require interaction with other persons, he had a wide range of obligations which required him to be available to deal with other persons. These obligations included advising Principals, supervising staff, performing HR functions and managing contractors.

Mr Symondson’s evidence was that the Board monitored his work through monthly Board meetings for which he provided briefing documentation and that he also met every quarter with the Principals to brief them on the operations of the business. Mr Symondson said that he was also called to other formal and informal meetings by individual members of the Board, as well as the whole Board, on an ad hoc basis when required. The minutes of these meetings which were in evidence show that Mr Symondson was an active participant in these meetings. He was also called to attend extensive conversations with the Board members outside of meetings, especially with the Chair. He provided monthly written updates to the Principals alongside the regular quarterly update meetings. Mr Symondson said that the Principals also had direct access to both the Finance Manager and himself for any financial questions that they had through the course of the year. Mr Symondson said that while Mr Sands was the Chair, he was effectively Mr Symondson’s immediate line manager because Mr Symondson spoke to Mr Sands daily in relation to all matters regarding his role. When Mr Carslake became Chair, Mr Symondson had calls with Mr Carslake several times a week.

Mr Symondson exercised a degree of autonomy in undertaking his duties that would be expected for a senior employee such as a CEO. However, his contractual obligations to attend Board and Principal meetings, provide briefings to these meetings and implement the decisions made in these meetings indicate that Mr Symondson had limited discretion to opt out of Farmanco’s decision making processes and the implementation of those decisions, which in my view, were central to his role as CEO charged with the day to day running of Farmanco’s business.

Taking into account the high degree of accountability which Mr Symondson had towards the Board and other Principals, the nature of his duties and requirement to be available during usual business hours and to attend all Board and Principal meetings, I find that Farmanco exercised control over the work performed by Mr Symondson in accordance with the contract between them and that this was consistent with an employment relationship between Mr Symondson and Farmanco.

Whether Mr Symondson was working in his own business or Farmanco’s business

Apart from the fact that Mr Symondson was receiving profits through the unit holding arrangement, there is no evidence that Mr Symondson was working in his own business. The evidence overwhelmingly establishes that Mr Symondson was working in Farmanco’s business.

In this regard, there is undisputed evidence that Mr Symondson exclusively worked for Farmanco and its related companies, that Mr Symondson undertook numerous tasks and projects that promoted Farmanco’s business and that he wore the Farmanco branded uniform. All of the duties undertaken by Mr Symondson as CEO of Farmanco except in a limited way, those that related to Mr Symondson’s own ‘profit centre,’ were undertaken for the purpose of advancing Farmanco’s business interests and not Mr Symondson’s personal business interests.

Taking these matters into account, I find that in working as the CEO of Farmanco, Mr Symondson was working in Farmanco’s business and not his own business.

Other matters

The matters which weigh against a finding that an employment relationship existed between Mr Symondson and Farmanco are that when he became a Principal, Farmanco stopped paying Mr Symondson a salary and superannuation, and ceased accruing leave entitlements for Mr Symondson. From that time, Mr Symondson received drawings through his family trust and became responsible for paying his own tax.

The matters which weigh in favour of a finding that an employment relationship existed are that Mr Symondson was required to perform work during normal business hours for a minimum of 38 hours per week, Mr Symondson was reimbursed by Farmanco for all personal expenses, Farmanco owned and provided all equipment that Mr Symondson used in the CEO role, including the laptop computer, vehicle and mobile phone, and Mr Symondson performed work from Farmanco’s premises. In relation to leave, there was a dispute between the parties about whether Mr Symondson was required to apply for annual leave once he became a Principal of Farmanco. Although there may not have been a requirement for Mr Symondson to formally seek permission to take leave, I accept that due to the nature of Mr Symondson’s duties and obligations, he could not be absent from the workplace without notifying the Chair or another Director. Further, I accept Mr Symondson’s evidence that it was necessary for him to organise leave arrangements around Board and Principal meetings.

Findings about the nature of the relationship created by the contract

I have considered the totality of the relationship between the parties, including whether Mr Symondson was working in his own business or Farmanco’s business and the degree of control, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work, the provision for holidays and the deduction of income tax.

Although I have found that the mode of remuneration, the provision for holidays and the deduction of income tax are matters which weigh against a finding there was an employment relationship, I find that the totality of the relationship between the parties including that Mr Symondson was working in Farmanco’s business, the degree of control, the provision and maintenance of equipment, the obligation to work and the hours of work, establish that Mr Symondson was an employee of Farmanco for the purpose of the FW Act.

The evidence establishes that on 24 May 2024, Farmanco terminated Mr Symondson’s employment as CEO and that this was confirmed by email on or about 30 May 2024. Accordingly, I find that Mr Symondson was an employee of Farmanco and that he was dismissed within the meaning of s.365 of the FW Act.

Conclusion

The jurisdictional objection raised by Farmanco is dismissed and I order accordingly.

The matter will shortly be listed for Conference so that the Commission can deal with the matter as required by s.368 of the FW Act.

DEPUTY PRESIDENT

Appearances:

Mr A. Al Asadi, legal representative from MKI Legal, for the Applicant

Mr H. Beaton, legal representative from Mills Oakley Lawyers, for the Respondent

Hearing details:

2024
17 December
Via Microsoft Teams

[1] Witness Statement of Keith Symondson dated 29 November 2024 [5], Digital Hearing Book (DHB) 97

[2] Ibid [6], DHB 97

[3] Witness Statement of Robert Sands dated 8 November 2024 [2], DHB 349

[4] Ibid [3]-[6], DHB 349

[5] Witness Statement of Keith Symondson dated 29 November 2024 [7]-[8], DHB 97

[6] Ibid [9], DHB 97-98

[7] Ibid [10]-[12], DHB 98

[8] Ibid [13]-[14], DHB 98

[9] DHB 122

[10] DHB 121-122

[11] Witness Statement of Keith Symondson dated 29 November 2024 [15], DHB 98

[12] Ibid [16]-[17], DHB 98

[13] Witness Statement of Robert Sands dated 8 November 2024 [11]-[12], DHB 350

[14] Witness Statement of Robert Sands dated 8 November 2024 [15]-[18], DHB 351

[15] Ibid [20]-[21], DHB 352

[16] Ibid [22], DHB 352

[17] Ibid [23], DHB 352

[18] Ibid [24], DHB 352

[19] Ibid [40], DHB 355

[20] Ibid [42]-[43], DHB 355

[21] Witness Statement of Keith Symondson dated 29 November 2024 [22]-[24], DHB 99-100

[22] Ibid [28], DHB 100

[23] Ibid [31]-[36], DHB 100-101

[24] DHB 126-127

[25] Witness Statement of Keith Symondson dated 29 November 2024 [21], DHB 99

[26] DHB 128

[27] Witness Statement of Robert Sands dated 8 November 2024 [25]-[27], DHB 352-353

[28] Witness Statement of Keith Symondson dated 29 November 2024 [21], DHB 99

[29] Witness Statement of Robert Sands dated 8 November 2024 [29], DHB 353

[30] DHB 138

[31] DHB 140

[32] DHB 140-141

[33] DHB 141

[34] Ibid

[35] Ibid

[36] DHB 143

[37] DHB 144-145

[38] DHB 163

[39] DHB 163-164

[40] DHB 168

[41] Witness Statement of Keith Symondson dated 29 November 2024 [37]-[38], DHB 101

[42] Ibid [39], DHB 101-103

[43] Ibid [40], DHB 103

[44] Ibid [41]-[46], DHB 103-104

[45] Ibid [50]-[54], DHB 104-104

[46] Ibid [45], DHB 105

[47] Ibid [56]-[57], DHB 105

[48] Ibid [58], DHB 105

[49] Ibid [59]-[60], DHB 105

[50] Ibid [63], DHB 106

[51] Ibid [62], DHB 106

[52] Ibid [64], DHB 106

[53] Ibid [65]-[66], DHB 106

[54] Ibid [66]-[69], DHB 106-107

[55] Ibid [70]-[73], DHB 107

[56] Ibid [75], DHB 107

[57] Ibid [79], DHB 108

[58] Ibid [80], DHB 108

[59] Ibid [81]-[82], DHB 108

[60] Ibid [83], DHB 108-109

[61] Ibid [87]-[93], DHB 109

[62] Ibid [94]-[95], DHB 110

[63] Ibid [97]-[98], DHB 110

[64] Ibid [100]-[103], DHB 111

[65] Ibid [105], DHB 112

[66] Ibid [106], DHB 112

[67] Ibid [107]-[116], DHB 112-113

[68] Ibid [117], DHB 113

[69] Ibid [119], DHB 114

[70] Ibid [136]-[137], DHB 116-117

[71] Ibid [143], DHB 119

[72] Ibid [146], DHB 119

[73] [2022] HCA 1

[74] [2022] HCA 2

[75] CFMMEU [2022] HCA 1, [43]; ZG Operations [2022] HCA 2, [8]

[76] CFMMEU [2022] HCA 1, [34]; Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 29; Hollis v Vabu Pty Ltd (2001) 207 CLR 21, 33 [24].

[77] CFMMEU [2022] HCA 1, [39].

[78] CFMMEU [2022] HCA 1, [42]; Hollis v Vabu Pty Ltd (2001) 207 CLR 21, 41-45 [47]-[57].

[79] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 24.

[80] DHB 62-62

[81] Ibid, [61].

[82] Ibid, [8].

[83] [2024] FWC 216; Upheld on appeal in [2024] FWCFB 254

[84] [2024] FWC 216, [68]

[85] Ibid, [87]

[86] [2024] FWCFB 419

[87] [2024] FCAFC 35; (2024) 330 IR 171

[88] Ibid, [25]-[26]

[89] Ibid, 26]

[90] Ibid, [43]

Printed by authority of the Commonwealth Government Printer

Financial Year	Total Drawings
2020/21	216,479.98
2021/22	234,287.98
2022/23	298,793.93
2023/24	255,579.94