Kristina Lapaeva v Tech Holdings WA Pty Ltd
[2023] FWC 1368
•21 JUNE 2023
| [2023] FWC 1368 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Kristina Lapaeva
v
Tech Holdings WA Pty Ltd
(U2023/1523)
| DEPUTY PRESIDENT BEAUMONT | PERTH, 21 JUNE 2023 |
Application for an unfair dismissal remedy
Ms Kristina Lapaeva (the Applicant) has applied under s 394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy. She submits that her employment was terminated on 3 February 2023 by Tech Holdings WA Pty Ltd (the Respondent), a company that has as its director, the Applicant’s husband, Mr Himanshu Gautam.
The Respondent has objected to the Applicant’s unfair dismissal application on two matters of jurisdiction:
a) it submits that the Applicant was not an employee of the Respondent, and therefore is not protected by the unfair dismissal regime of the Act; [1] and
b) even if the Fair Work Commission (the Commission) were to find that the Applicant was an employee of the Respondent for the purpose of the unfair dismissal regime of the Act, it submits that the Applicant is not protected from unfair dismissal because her annual rate of earnings exceeded the high income threshold.
In respect of the first jurisdictional objection, the Respondent submitted that it had terminated the employment of the Applicant on 16 November 2015, and that on the Applicant’s re-employment she was employed by REMSAFE Pty Ltd (Remsafe), holding the position of a director.[2] Whilst a director of Remsafe, the Respondent purports that the Applicant also provided accounting services as a ‘trainee’ to gain experience.[3]
For the reasons that follow, I have concluded that the Respondent did not employ the Applicant. Accordingly, the Commission does not have jurisdiction to determine the merits of the Applicant’s application that her dismissal was unfair, and therefore her application is dismissed. In light of conclusion reached, it has proved unnecessary to consider the issue of the high income threshold.
Background
Before traversing the evidence of the Applicant and the Respondent, a few points are worth mentioning:
a) the Respondent was previously called Avidsys Pty Ltd. In 2021, Avidsys Pty Ltd changed its name to Tech Holdings (WA) Pty Ltd, with the ABN and ACN remaining the same;
b) the Applicant is, or was, a director of Remsafe, a wholly owned subsidiary of the Respondent; and
c) the Applicant is married to Mr Gautam, but they have separated, and proceedings are underway in the Family Court of Western Australia, relating to their property settlement.
The broader context and events leading to the conclusion of the employment are as follows.
The Applicant’s evidence
The Applicant said she was first employed by the Respondent, then known as Avidsys Pty Ltd, in 2012 on a casual basis.[4] In 2015, the Applicant moved to a part time status.[5]
In 2015, the Applicant’s relationship with Mr Gautam broke down for the first time and the Applicant’s employment was terminated in November 2015.[6] However, the Applicant and Mr Gautam reconciled their personal relationship and in early 2016, the Respondent re-employed the Applicant.[7]
According to the Applicant, she was a director of Remsafe and was the finance manager of the Respondent providing accounting services.[8]
The Applicant pointed to the following evidence to support her contention that the Respondent was her employer:
a) from 2015 until the date of her dismissal, her salary had been paid to her from the bank account of the Respondent;
b) the Applicant did not receive payslips from Remsafe, only from the Respondent;
c) each year when she filed her tax return, her income came from Respondent; and
d) her annual leave entitlements accrued in the Respondent’s records and not in the records of Remsafe.
The Applicant said that as the finance manager, she worked with the accountants to register for JobKeeper during the COVID-19 pandemic.[9] The Applicant said that the Respondent claimed JobKeeper for employees, including herself, and that Remsafe did not claim JobKeeper payments for her – but did for other employees.[10]
The Applicant said that on 28 November 2022 she received a document titled ‘Board Instruction’ from Mr Michael Lane at Remsafe.[11] The Applicant said that the document advised that her finance role would be outsourced.[12] A further document was received by the Applicant from Mr Lane on 22 December 2022, again stating that her role was going to be outsourced.[13]
According to the Applicant, further changes followed, with a letter from Mr Lane of 6 January 2023 informing her that her employment conditions were to be amended and that going forward she would only be a director and her annual income would be $50,000.00 inclusive of superannuation. The effective date of the change was backdated to 22 December 2022.[14]
The Applicant submitted that on 3 February 2023 the Respondent denied her employment and that conduct in addition to the behaviour of the Respondent and Remsafe was, in her view, a constructive dismissal of her employment with the Respondent.[15]
In summary, the Applicant states that she is no longer an employee of the Respondent, effective 3 February 2023, and holds only the position of being a non-executive director of Remsafe.[16] The Applicant notes that she has not been paid anything since December 2022 for her non-executive director role.[17]
The Respondent’s evidence
Mr Gautam gave evidence that the Applicant had initially been engaged and paid through the Respondent as an employee, to assist her in building up her Australian work credentials.[18] In 2015, the Applicant’s employment with the Respondent was terminated.[19]
However, Mr Gautam said that the business started a new strategy and in December 2016, the Applicant was added to the Gautam family trust as a primary beneficiary. Mr Gautam said that the Applicant continued her support in building the business with him as a trainee/bookkeeper.[20]
In 2019, Mr Gautam spoke of an acquisition of RCR Tomlinson, noting that the Applicant was employed by Remsafe as a ‘director’ from 1 July 2019 with remuneration set at $200,000.00 per annum. Mr Gautam said that the Applicant provided bookkeeping services for Remsafe and the Respondent as a trainee to gain experience. At hearing, Mr Gautam gave evidence that the Applicant had requested a ‘proper employment contract’, and therefore she was provided one from Remsafe (the Remsafe employment contract).
The parties to the Remsafe employment contract were the Applicant and Remsafe. The employment contract, which was signed by Mr Gautam on 14 June 2019 and the Applicant on 13 June 2019, expressed the following:
a) position: director or such other position as may be required from time to time;
b) type of employment: full-time;
c) commencement date: 1 July 2019;
d) ordinary rate of pay: $182,648.40 (gross) per annum;
e) superannuation contribution: $17,351.60 (gross) per annum;
f) total remuneration $200,000.00 (gross) per annum; and
g) notice: 1 month notice period.
In October 2020, the Applicant and Mr Gautam were said to have separated. In the following year, in the latter part, Mr Gautam said that there was the failure of one of the Group’s businesses and the remainder were restructured by the Board.[21] Mr Gautam said that he was not involved in that process regarding decisions pertaining to the Applicant due to a family court undertaking and a conflict of interest.
Whilst Mr Gautam initially held out that the Respondent was a holding company with no employees, when questioned in cross examination about the point and shown the termination letter of Sarah Frost, Mr Gautam conceded that the Respondent had employed two employees.
Mr Gautam said that the Applicant sent him a letter of resignation on 24 February 2023, which he replied that he was not in the position to receive it as she was not an employee of the Respondent.
When asked in cross examination why it was that the Respondent paid and issued payslips to the Applicant, Mr Gautam gave evidence that he was not aware of those arrangements and that the Applicant had managed payroll and the financial side of the business with support from external accountants.
In respect to the Respondent having claimed JobKeeper for several employees, Mr Gautam said that it was the Applicant and the accounting experts who were doing the JobKeeper claims and that he relied upon their judgment.
In cross examination, Mr Gautam was taken to an email that the Applicant had sent to him on 3 February 2020 which stated:
Ansh,
As discussed, can you please APPROVE IN WRITINGS my salary from 01012020 are 200k including super (100k for Avidsys and 100k for Remsafe) payable from Avidsys AC.
Need to do it before 5pm today as I need to pay monthly salary tonight, what include Sarah’s and Jack’s salaries.[22]
In response, Mr Gautam wrote:
Approved, as suggested below, with cash payment from Remsafe and on accruals for AvidSys.[23]
Mr Gautam was asked why he was corresponding with the Applicant over her salary some seven to eight months after the Remsafe employment contract had been signed. Mr Gautam’s evidence was that it was not correct to say that the Applicant did not receive her salary under the contract until 2020 and noted that the Applicant had wanted to know the breakdown (presumedly of the salary). On this point, Mr Gautam added that $100,000.00 would be for Remsafe and $100,000.00 for Avidsys – with a back charge – that being an accounting principle. According to Mr Gautam, the discussion was not on salary or an increase to the salary, but rather was clarification from where the funds were going to flow.
The Applicant’s submissions
The Applicant asserts:
a) she is a director of Remsafe and at the relevant time earned $100,000.00 per annum for that role and she remains a director of Remsafe, but has not been paid her director’s fee since November 2022; and
b) she was the finance manager for the Respondent, ‘Avidsys’.
The Applicant submitted that her email footer has at all material times stated her title to be ‘Finance Manager’ for Avidsys.[24] Furthermore, her evidence (an email dated 26 August 2019)[25] shows that she liaised with external accountants in her role as finance manager for matters relating to Avidsys Pty Ltd.
The Applicant noted that until recently, she held full access to XERO for the Respondent
to allow her to fulfil her duties as finance manager for the Respondent.[26] The Applicant highlighted in the top left hand corner of the document evincing her XERO access, it showed that the XERO account is for the Respondent and it shows all the roles the Applicant had permissions for within XERO. Furthermore, the permissions in XERO were set up on 11 February 2018 and had not been changed since.[27]
The Applicant added that PAYG summaries listed the Respondent as her employer since as early as 2016 onwards. A letter from the Australian Taxation Office on 14 November 2018 confirmed that Avidsys was making contributions to her superannuation throughout 2015 and 2016, including the quarter ending on 31 March 2016 (i.e. January 2016 to 31 March 2016). There was a signed Tax File Declaration dated 1 February 2016 that confirmed the Applicant’s employment with the Respondent (then Avidsys Pty Ltd). Payslips issued to the Applicant up until November 2022 cited the Respondent as the employer. Furthermore, there was an email that instructed the Applicant to undertake tasks for the Respondent as late as November 2022.
Given that Remsafe was not acquired until 2018, and the Applicant’s employment recommenced with the Respondent in 2016 (some 2 years earlier), the Applicant argued that it simply cannot be maintained that she was employed as finance manager by any other entity. The Applicant added that her employment had not at any time been transferred from the Respondent to any other entity and that she had at all times continued to be paid as finance manager by the Respondent.
Whilst the Applicant acknowledged that she was appointed a director of Remsafe when it was acquired, she pressed that this had no bearing on her appointment as a finance manager with the Respondent, the two roles having been kept separate as clearly evidenced by the documentation she relied upon.
The Respondent’s submissions
The Respondent contends that as an employee of Remsafe, the Applicant was notified in writing on 7 November 2022 that the accounts services she provided to Remsafe were no longer required.[28] The Respondent submits that further notification was provided again on 22 December 2022.[29] According to the Respondent, a change of conditions form was issued on 6 January 2023 detailing the cessation of the account services provider, albeit the Applicant was retained as a Remsafe director. The Respondent says that the Applicant did not return the form and the offer has since been removed due to an investigation of a breach of director’s duties currently in progress.[30]
Consideration
For present purposes, it is necessary to focus on whether or not the Applicant was an employee of the Respondent. The analysis begins having regard to the fact that Part 3-2 of Chapter 3 of the Act covers the unfair dismissal of national system employees. Where the term employee is used in Part 3-2, it means a ‘national system employee,[31] which is in turn defined by s 13 of the Act as ‘an individual so far as he or she is employed...by a national system employer...’.
The Respondent raised the jurisdictional objection that the Applicant had named the incorrect employer and that the Applicant was not its former employee. Briefly stated, the strength of the evidence necessary to establish a fact on the balance of probabilities may vary according to the nature of what it is sought to be proved, but the standard of proof never changes. It was the Respondent’s responsibility to establish on the evidence that on the balance of probabilities it was not the Applicant’s employer.
It is accepted that the process of construction of a contract, so as to identify the parties to it, requires consideration of not only the text of the document, but also the surrounding circumstances known to the parties at the time the contract was entered and the purpose and object of the transaction. This, in turn, presupposes knowledge of the genesis of the transaction, the background, and the context in which the parties are operating.
In Chambers v Broadway Homes Pty Ltd,[32] the Full Bench considered the principles concerning the proper approach to be taken to identifying the parties to a contract. In this respect the Full Bench referred to the judgment in Tregidga v Pasma Holdings Pty Ltd (Tregidga),[33] where the Federal Court expressed that the identification of the parties to a contract requires an objective assessment of all the relevant surrounding circumstances.[34] Expanding upon that principle, Reeves J quoted the judgment in Air Tahiti Nui Pty Ltd v McKenzie:[35]
The identity of the contracting party is to be determined looking at the matter objectively, examining and construing any relevant documents in the factual matrix in which they were created and ascertaining between whom the parties objectively intended to contract.[36]
In Tregidga, the Court said that in respect of a contract that is not wholly in writing,[37] there is intermediate Court of Appeal authority that, in making the abovementioned objective assessment, regard may be had to post-contractual conduct.[38]
The starting point in this case is the circumstance applicable to the engagement of the Applicant to work as a finance manager prior to the execution of the Remsafe employment contract in 2019. The evidence discloses that there was not a written contract in place. Furthermore, the Applicant’s evidence shows, and the Respondent did not disagree, that Remsafe was not acquired until 2018, and the Applicant’s employment had recommenced with the Respondent in 2016 (some 2 years earlier). Insofar as it is relevant, prior to the execution of the Remsafe employment contract, the Applicant was not employed by Remsafe as a finance manager at that time.
However, there is no question that a contract was made by the Applicant and Remsafe in 2019 pursuant to the Remsafe employment contract. That contract provided for the Applicant to be a director of Remsafe and to perform such other positions as may be required from time to time. The Applicant concedes, appropriately in my view, that she signed the Remsafe employment contract, and the Respondent submits that the contract was provided on the Applicant’s request. Whilst the Applicant considered herself to have been employed by the Respondent prior to signing the Remsafe employment contract, once the offer of employment with Remsafe was accepted and work under that contract had commenced, the Applicant’s employment relationship, in addition to her employment contract, was with Remsafe.
The Applicant pressed that her employment had not at any time been transferred from the Respondent to any other entity and she had at all times continued to be paid as finance manager by the Respondent. Whilst acknowledging that she was appointed a director of Remsafe when it was acquired, the Applicant argued that this had no bearing on her finance manager role with the Respondent, the two roles having been kept separate. The Applicant pressed that her remuneration for the finance manager role with the Respondent was $100,000.00 and her remuneration for her role as director of Remsafe was an additional $100,000.00. However, this assertion sits contrary to the express terms of the Remsafe employment contract, which provides a salary of $200,000.00 per annum for the position of director or such other position as may be required from time to time, on a full-time basis.
The Applicant has challenged the efficacy of the employment contract arguing that the conduct of the parties does not accord with the Remsafe employment contract, and the preferred view is that she was an employee of the Respondent. In this respect, the Applicant draws support from evidence of the conduct between the parties after entering the Remsafe employment contract.
There have been several judgments of late that have considered the fundamental principles regarding the construction of a contract in circumstances where the issue is whether a person is an employee or independent contractor. Whilst that issue does not arise in the current circumstances, those same judgments establish principles regarding the construction of contracts which are apposite. In JMC Pty Ltd v Commissioner of Taxation,[39] Wigney J summarised the principles arising from the judgements in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd[40] and ZG Operations Pty Ltd v Jamsek.[41] Below are those principles relevant to the current case:
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 (NSW) (1982) 149 CLR 337 at 352; 56 ALJR 459; 41 ALR 367. 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.
It is evident that the written contract may not be decisive as to the legal rights and obligations established by the contract in circumstances where the validity of the contract has been challenged as a sham or where the terms of the contract have been varied, waived or are subject to an estoppel.
The Applicant submitted that the Remsafe employment contract represents a sham arrangement for several reasons. Those reasons are set out at paragraphs [28] to [33] of this decision, and, in addition, include:
a) no written evidence of any notice was given to the Applicant in 2019 regarding a transfer of employment;
b) leave accruals were not paid out by the Respondent in 2019 and were not transferred to Remsafe; and
c) at all material times the Respondent has held out that the Applicant was an employee of the Respondent.
The Applicant further submitted that whilst the Remsafe employment contract provided for fortnightly salary payments, she received her salary monthly and the Remsafe employment contract did not mention that the role of director was only one of her roles.
The judgment in Sharrment Pty Ltd v Official trustee in Bankruptcy[42] is oft relied upon to define what constitutes a sham at law. In Sharrment, Lockhart J quoted the following passage of Diplock LJ in Snook v London & West Riding Investments Ltd:[43]
I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the ‘sham’ which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. But one thing, I think, is clear in legal principle, morality and the authorities...that for acts or documents to be a ‘sham’, with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to crate the legal rights and obligations which they give the appearance of creating.[44]
Regarding the Applicant’s assertion that the Remsafe employment contract was a sham, I do not think it can be assumed that the Applicant is arguing that viewed objectively, the parties had a common intention that they would not create binding legal rights and obligations according to the contractual terms. That is, the Applicant does not suggest that she colluded with Remsafe to give a false impression regarding the contractual rights between the parties.
The Applicant has essentially argued that the Remsafe employment contract has been vitiated in light of the parties’ conduct prior to, and post, the execution of the contract. However, there is no suggestion that the Applicant entered into the Remsafe employment contract as a result of a misrepresentation or misleading conduct by the Respondent or that the Applicant entered into the contract as a result of a serious mistake about its contents or subject matter. As observed, the Applicant concedes that she signed the Remsafe employment contract.
In respect of conduct after the Applicant accepted the position with Remsafe, there are no factors that vitiate the efficacy of the Remsafe employment contract.
Turning first to the Applicant’s proposition she was not an employee of Remsafe and was an employee of the Respondent, because notice was not provided to her in 2019 regarding a transfer of employment. The contention cannot be sustained in light of the terms of the Remsafe employment contract. The Remsafe employment contract is unambiguous in its terms that Remsafe is the Applicant’s employer. The evidence before me does not support a finding that the Applicant was unaware of these contractual terms or that her agreement to them was involuntarily secured.
The Applicant further identifies that it failed to describe her position title as finance manager, referring only to the position title of director. It appears odd that the Applicant was provided with an employment contract for the position of a ‘director’ of Remsafe; generally, one would anticipate the payment of director fees rather than a salary and in circumstances where the Applicant was not a managing director, the issue arises whether the Applicant was an employee at all. However, the Remsafe employment contract provides for the Applicant to be a director of Remsafe and to perform such other positions as may be required from time to time. The contract clearly contemplates that the remuneration provided under it compensates for the performance of duties other than those associated with her directorial responsibilities.
Turning to the issue of remuneration, the Applicant referred to having not been paid a salary for periods within the employment relationship. While this may or may not have been the case, it does not assist the Applicant with the argument that the Respondent was her employer. Furthermore, whilst the Applicant may have been paid her salary at monthly intervals instead of fortnightly, this purported variation to the contractual term has no bearing on the identification of the correct employer. Whilst trite, it is further observed that it was the Applicant who purportedly had responsibility for payroll.
The Applicant contended that the Respondent held out the Applicant as its employee. While this factor may, in some circumstances, support a finding regarding the identification of the correct employer, the argument does not advance the Applicant’s argument on this occasion. The Applicant purports to have been the finance manager for the Respondent and refers to emails where she is held out as the same. Nonetheless, the evidence suggests that the Applicant had a level of autonomy in her role such that it was at all times open to the Applicant to determine the content of her signature clause and in fact her position title, of ‘Finance Manager’ of ‘AvidSys’.[45]
Mr Gautam said the Applicant managed payroll and the financial side of the business with support from external accountants. The evidence shows that the Applicant corresponded with the accounting firm ‘amhr’ in August 2019, in respect of the engagement of the firm of accountants.[46] Furthermore, by email correspondence dated 28 July 2020, the Applicant further liaised with the accounting firm ‘amhr’, the emails stated:
Tuesday, 28 July 2020 2:46 PM
Hi Kristina,
It was good to speak with you today.
As discussed, please see the links which go into further detail on the PAYG withholding rules and Personal Services Income below:….
I’m unsure about the payroll position of the two companies for which we do work (Remsafe and Avidsys), however from previous discussions it appears to me that Remsafe and Avidsys will be grouped together…so it shouldn’t matter from that perspective which entity makes the payment of $85k to you. I’m unaware of any worker’s comp insurance issues with regards to the payment of Personal Services Income to you from either Remsafe or Avidsys.
Unless you advise me of any such issues, then, based on our conversation, we will show the $85,000 as Personal Service Income in your tax return from Remsafe (the entity for which you provided your services).
Lastly, in order to complete your personal tax return and accountant’s letter, can you please supply me with the following:…·Confirmation you would like us to proceed with he [sic] $85,000 income payment as per the above…
Tuesday, 28 July 2020 5:30 PM
Hi Kegan,
Likewise, it was nice to speak with you today.
I am fine to record 85k as Personal Service Income. Will we record as a director fee paid in Remsafe financials for FY19/20? Do I need to pay super from 85k?
….
Kristana Lapaeva[47]
Prior to the abovementioned correspondence, the Applicant had emailed Kegan Cameron from ‘amhr’ on 14 April 2022 time stamped 5:44 PM asking:
Hi Kegan,
Can you please advise, how I can reconcile director fee of $85,000 paid from Remsafe bank AC on 31/03/2020, as I am an employee of Avidsys and director of Remsafe (Avidsys owns Remsafe)?
Do I need to pay PAYG?
…
Kristina Lapaeva[48]
Mr Gautam was asked in cross examination why it was that the Respondent paid and issued payslips to the Applicant. His evidence was that he was unaware of the arrangements and, as identified, the Applicant had managed the financial side of the business with support from external accountants. Mr Gautam’s evidence is made all the more plausible when one considers the aforementioned emails and the email from the Applicant to Mr Gautam dated 3 February 2020 time stamped 1:41 PM titled ‘My Pay from 01012020’, which reads:
Ansh,
As discussed, can you please APPROVE IN WRITINGS my salary from 01012020 are 200k including super (100k for Avidsys and 100k for Remsafe) payable from Avidsys AC.
Need to do it before 5pm today as I need to pay monthly salary tonight, what include Sarah’s and Jack’s salaries. (italics my emphasis)[49]
Whilst the Applicant relies upon a contention that the Respondent paid her salary and therefore this factor, in culmination with others, indicates it was her employer, it is evident that it was the Applicant who directed that the payment of her salary was to come from ‘Avidsys AC’ and sought Mr Gautam’s consent to the same.
Mr Gautam responded to the Applicant’s email dated 3 February 2020, by email on that same date in the following terms:
Approved, as suggested below, with cash payment from Remsafe and on accrual for AvidSys.[50]
Mr Gautam explained, in respect of the email, that he gave the instruction to the Applicant that payment from the Respondent to Remsafe was to be made for work done, as remuneration to the Applicant.
The Applicant refers to the Respondent making JobKeeper claims in respect to her employment and signing off on such claims. However, the Applicant acknowledged that she worked with accountants to register the business for JobKeeper during the COVID-19 pandemic and whilst she is correct that Mr Gautam signed off on the JobKeeper claims, Mr Gautam’s evidence is that he relied upon the judgment of the Applicant and the accountants engaged to complete the content of the claims. In light of the aforementioned direct evidence regarding the Applicant’s involvement in the financial management of the business, I consider Mr Gautam has provided a more plausible account on this point.
The Applicant referred to the Respondent having paid her salary prior to her acceptance of the Remsafe employment contract and thereafter, in addition to her superannuation contributions having been paid by the Respondent, payslips being issued from the Respondent, her income for the purpose of her tax return coming from the Respondent and her annual leave entitlements sitting within the Respondent’s records. After considering and weighing these factors, it is glaringly obvious that as the purported finance manager of the business the Applicant appears to have influenced, if not decided, the business account from which such payments would be made in liaison with an external accounting firm. This was the case up until around 2 December 2022, at which time the Executive General Manager of Remsafe, Mr Lane, who was appointed in late November 2022, outsourced the Remsafe business finance and accounts.[51]
By letter dated 22 December 2022, Mr Lane wrote to the Applicant stating:
Dear Kristina,
I am grateful for the accounting services you have provided to date for REMSAFE, you work is very much appreciated.
As part of the “business re-alignment” process I am implementing for REMSAFE, I am outsourcing the business finances/accounts role to an external provider, Andre Jansz. This change is also in-line with the consolidation of all accounting requirements being outsourced for the Group.
Therefore, the accounting services you provide to REMSAFE are no longer required as from today.
You are required to complete the following tasks today:
·Schedule payment to employees for the next pay run
·Transfer the XERO “Account Holder” privileges to me
·Prepare handover notes for Andre Jansz and email to me
·Notify me with this is complete, today.
I will arrange a handover meeting for you, Andre and me to meet in the office next week for a detailed handover of all aspect of the REMSAFE accounts. You are required to attend in person and cooperate fully with the process.[52]
The Applicant confirmed that on 28 November 2022, she received a document titled ‘Board Instruction’ from Mr Lane at Remsafe.[53] The Applicant said that the document advised that her finance role would be outsourced.[54] A further document was received by the Applicant from Mr Lane on 22 December 2022 (as set out above), again stating that her role with Remsafe was going to be outsourced.[55]
Further changes followed, with a letter from Mr Lane of 6 January 2023 informing the Applicant that her employment conditions were to be amended and that going forward she would only be a director and her annual income would be $50,000.00 inclusive of superannuation. The effective date of the change was backdated to 22 December 2022.[56] The letter of 6 January 2023 stated:
You are employed by REMSAFE Pty Ltd (the Company) as a Director and you were assigned work, providing accounting services to the business as a Trainee. The accounting services have been outsourced and you no longer are a service provider to the Company for this work. (Refer to letter “Outsourced Centralised Accounting Services for the Group” dated Monday 7th November 2022).
Change of Conditions
The Company confirms the changes to your conditions put into effect on Thursday 22nd December 2022 (Refer to letter “Cessation of Accounting Services Provided to REMSAFE” dated Thursday 22nd December 2022). Renumeration changes in effect from that date where you will receive a monthly Directors Fee only.This will be paid monthly, within a week at the end of the month that services were rendered at a prorate rate of $50,000 gross per annum less income tax and superannuation.
You are to act continuously as a Company Director as required in good faith.[57]
The letter of 6 January 2023 from Remsafe to the Applicant, was, in part, self-serving in respect to its reference to the Applicant having previously assumed the position of ‘trainee’. It is evident from the conduct of the parties prior to 22 December 2022 that the Applicant held the position of finance manager, and that the Respondent was reliant upon the Applicant and accountants instructed by the Applicant to address the financial matters of both the business and of the Applicant’s and Mr Gautam’s personal tax situations. While Mr Gautam also sought to downplay the Applicant’s role as a trainee, he also gave evidence that the Applicant managed payroll and the financial side of the business with support from external accountants. This part of Mr Gautam’s evidence regarding the Applicant’s management of finances is consistent with the provision of emails detailed in this decision.
Where the employment contract is in writing, post contractual conduct is generally irrelevant.[58] This is so unless the manner in which the parties conducted themselves after entering into the contact was such to establish that the contract was a sham, or that the contract had been varied.[59] In this case, the post contractual conduct relied upon by the Applicant does not advance her argument that she was an employee of the Respondent. I have not found that the Remsafe employment contract to be a sham and am unpersuaded that the contract has been varied in respect of the contracting parties.
The Respondent made the rather inelegant submission that the evidence submitted by the Applicant to portray her employment as being with the Respondent, was created by the Applicant. Whilst not accepting that the Applicant has ‘created’ the evidence upon which she relies, such that it is fabricated or disingenuous, the evidence nevertheless points to the Applicant having held a position where she provided direction in respect of payroll and to external accountants. The Applicant had signed the Remsafe employment contract and was cognisant of who her employer was. The factors that the Applicant now relies upon to indicate the Respondent was her employer, are factors over which the Applicant exercised a level of control, if not, influence. Those factors, or post contractual conduct, do not detract from the conclusion that on any objective level the intent of the parties to the Remsafe employment contract was that Remsafe was the Applicant’s employer.
Conclusion
For the reasons set out above, and as already noted, I have concluded that the Respondent did not employ the Applicant. Accordingly, the Commission does not have jurisdiction to determine the merits of the Applicant’s unfair dismissal application and therefore her application is dismissed. An Order[60] issues concurrently with this decision.
DEPUTY PRESIDENT
Appearances:
J Lattimore for the Applicant
M Lane for the Respondent
Hearing details:
2023.
Perth (by telephone):
17 May.
[1] Form F3 – Employer Response to unfair dismissal application [2.2] (Form F3).
[2] Ibid.
[3] Ibid.
[4] Witness Statement of Kristina Lapaeva (Lapaeva Statement); Digital Hearing Book Part 2, 2 (DHB Part 2).
[5] Lapaeva Statement (n 4); DHB Part 2 (n 4) 2.
[6] Lapaeva Statement (n 4); DHB Part 2 (n 4) 2.
[7] Lapaeva Statement (n 4); DHB Part 2 (n 4) 2.
[8] Lapaeva Statement (n 4); DHB Part 2 (n 4) 2.
[9] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[10] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[11] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[12] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[13] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[14] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[15] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[16] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[17] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[18] Witness Statement of Himanshu Gautam (Gautam Statement); DHB Part 2 (n 4) 7.
[19] Gautam Statement (n 18); DHB Part 2 (n 4) 7.
[20] Gautam Statement (n 18); DHB Part 2 (n 4) 7.
[21] Gautam Statement (n 18); DHB Part 2 (n 4) 7.
[22] Digital Hearing Book Part 1, 131 (DHB Part 1).
[23] Ibid.
[24] Ibid 22.
[25] Ibid.
[26] Ibid 24.
[27] Ibid.
[28] Form F3 (n 1) [2.2].
[29] Ibid.
[30] Ibid.
[31] Fair Work Act 2009 (Cth) s 380.
[32] (2022) 317 IR 205.
[33] [2021] FCA 721 (Tregidga).
[34] (2009) 77 NSWLR 299.
[35] Ibid [28].
[36] Tregidga (n 33) [45], quoting ibid.
[37] Cf BH Australia Constructions Pty Ltd v Kapeller (2019) 100 NSWLR 367.
[38] See Tomko v Palasty [2007] NSWCA 258, [67]–[68] (Einstein J, Mason P agreeing).
[39] (2022) 114 ATR 795, 800–2 [16]–[27] (JMC). These principles were also adopted by Goodman J in Secretary, Attorney-General’s Department v O’Dwyer (2022) 318 IR 216, 223 [27].
[40] (2022) 96 ALJR 89 (Personnel Contracting).
[41] (2022) 96 ALJR 144.
[42] (1988) 18 FCR 449 (Sharrment).
[43] [1967] 2 QB 786.
[44] Sharrment (n 42) 453–4.
[45] DHB Part 1 (n 22) 22.
[46] Ibid.
[47] Ibid 47
[48] Ibid 47–8.
[49] Ibid 36.
[50] DHB Part 1 (n 22) 131.
[51] Ibid 132.
[52] Ibid 133.
[53] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[54] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[55] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[56] Lapaeva Statement (n 4); DHB Part 2 (n 4) 3.
[57] DHB Part 1 (n 22) 134.
[58] See Personnel Contracting (n 40); JMC (n 39); Deliveroo Australia Pty Ltd v Franco (2022) 317 IR 253.
[59] JMC (n 39) 800 [20].
[60] PR762982.
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