Lisa Dale v Energetic Cleaning Services Pty Ltd
[2023] FWC 2644
•2 NOVEMBER 2023
| [2023] FWC 2644 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Lisa Dale
v
Energetic Cleaning Services Pty Ltd
(C2023/4173)
| DEPUTY PRESIDENT LAKE | BRISBANE, 2 NOVEMBER 2023 |
Application to deal with contraventions involving dismissal – jurisdictional objection raised – applicant not dismissed – independent contractor – applicant found to be employee – forced resignation – jurisdictional objection upheld – application dismissed.
Ms Lisa Dale (the Applicant) lodged a general protections application involving dismissal to the Fair Work Commission (the Commission) on 14 July 2023. The Applicant claimed that adverse action was taken against her by Energetic Cleaning Services Pty Ltd (the Respondent) under ss.340, 343, 344, 351 and 358 of the Fair Work Act 2009 (Cth) (the Act). The Respondent raised jurisdictional objection that the Applicant was not dismissed within the definition of s386 of the Act.
Background
The Applicant commenced her role as a Bookkeeper with the Respondent on 14 May 2022 working two days a week. The Applicant was then engaged as a bookkeeper five days a week from Monday to Friday between 8:30am to 4:30pm from 21 November 2022. There is contention surrounding whether the Applicant was engaged as an independent contractor or employee as there was no written contract in place.
The Applicant states that she was dismissed from her role with the Respondent on 12 July 2023 when she had found that her role was advertised on Seek. The Applicant stated that she could no longer work with the Respondent because she had been bullied, and if the matter was not resolved, the bullying would have continued.
The Respondent submitted that the Seek advertisement was a response to the Applicant stating she could not work with the General Manager, Mr Tony Incoll on 11 July 2023 as they needed to prepare a replacement to fill the Applicant’s role if she decided to no longer work for the Respondent.
Is the Applicant an employee or an independent contractor?
Section 386 of the Act provides:
(1) A person has been dismissed if:
(a) the person's employment with his or her employer has been terminated on the employer's initiative;
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(emphasis added)
The definition of an employer is determined in its plain and ordinary meaning.[1] The High Court of Australia in Jamsek and Personnel Contracting determined the case of whether a person is an employee or contractor.[2] The characterisation of the relationship is to be determined by reference only to the parties’ legal rights and obligations.
Where a comprehensive written contract is in place, this will be the primary source of the parties’ legal rights and obligations, and it will be decisive in characterising the relationship. This will apply unless the contract is a sham, varied after it was made, or post agreement conduct or context which demonstrates that a term is legally ineffective.[3]
Where no comprehensive written contract is in place, the High Court stated in Jamsek that the “multifactorial” test remains appropriate in identifying the applicable legal rights and obligations which is not derived from the post contract conduct.[4] Therefore, a multifactorial approach is to be adopted. In reliance on a considerable body of case law developed, general legal principles are applied to specific circumstances.[5] Multiple indicia are to be considered, though none alone are determinative. Analysis of the totality of the relationship between the parties is required to determine whether the relationship was one of an employee or independent contractor.
The often-cited passage penned by Windeyer J in Marshall v Whittaker’s Building Supply Co[6] later quoted by the High Court of Australia in Hollis v Vabu reads:
“the distinction between an employee and an independent contractor is ‘rooted fundamentally in the difference between a person who serves his employer in his, the employer’s business, and a person who carries on a trade or business of his own’.”[7]
In Roy Morgan Research Pty Ltd v Commissioner of Taxation, the Full Court of the Federal Court quoted with approval the following passage from Hall (Inspector of Taxes) v Lorimer:
“The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another”.[8]
The Full Bench of the Commission adopted this passage in Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario, and summarised the general approach to distinguish between employees and independent contractors as follows:
“(1) In determining whether a worker is an employee or an independent contractor the ultimate question is whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf[9]: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own[10] of which the work in question forms part? This question is concerned with the objective character of the relationship. It is answered by considering the terms of the contract and the totality of the relationship.[11]
(2) The nature of the work performed and the manner in which it is performed must always be considered. This will always be relevant to the identification of relevant indicia and the relative weight to be assigned to various indicia and may often be relevant to the construction of ambiguous terms in the contract.[12]
(3) The terms and terminology of the contract are always important. However, the parties cannot alter the true nature of their relationship by putting a different label on it.[13] In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole:[14] the parties cannot deem the relationship between themselves to be something it is not.[15] Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.[16]
(4) Consideration should then be given to the various indicia identified in Stevens v Brodribb Sawmilling Co Pty Ltd and the other authorities as are relevant in the particular context. For ease of reference the following is a list of indicia identified in the authorities:
· Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like.
Control of this sort is indicative of a relationship of employment. The absence of such control or the right to exercise control is indicative of an independent contract. While control of this sort is a significant factor it is not by itself determinative. In particular, the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where the work involves a high degree of skill and expertise.[17] On the other hand, where there is a high level of control over the way in which work is performed and the worker is presented to the world at large as a representative of the business then this weighs significantly in favour of the worker being an employee.[18]
“The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.”[19] “[B]ut in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. That was made clear in Queensland Stations Pty. Ltd v Federal Commissioner of Taxation, a case involving a droving contract in which Dixon J observed that the reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.”[20]
· Whether the worker performs work for others (or has a genuine and practical entitlement to do so).
The right to the exclusive services of the person engaged is characteristic of the employment relationship. On the other hand, working for others (or the genuine and practical entitlement to do so) suggests an independent contract.
· Whether the worker has a separate place of work[21] and or advertises his or her services to the world at large.
· Whether the worker provides and maintains significant tools or equipment.[22]
Where the worker’s investment in capital equipment is substantial and a substantial degree of skill or training is required to use or operate that equipment the worker will be an independent contractor in the absence of overwhelming indications to the contrary. [23]
· Whether the work can be delegated or subcontracted.[24]
If the worker is contractually entitled to delegate the work to others (without reference to the putative employer) then this is a strong indicator that the worker is an independent contractor.[25] This is because a contract of service (as distinct from a contract for services) is personal in nature: it is a contract for the supply of the services of the worker personally.
· Whether the putative employer has the right to suspend or dismiss the person engaged.[26]
· Whether the putative employer presents the worker to the world at large as an emanation of the business.[27]
Typically, this will arise because the worker is required to wear the livery of the putative employer.
· Whether income tax is deducted from remuneration paid to the worker.
· Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks.
Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks. Obviously, in the modern economy this distinction has reduced relevance.
· Whether the worker is provided with paid holidays or sick leave.[28]
· Whether the work involves a profession, trade or distinct calling on the part of the person engaged.
Such persons tend to be engaged as independent contractors rather than as employees.
· Whether the worker creates goodwill or saleable assets in the course of his or her work.
· Whether the worker spends a significant portion of his remuneration on business expenses.
It should be borne in mind that no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.
(5) Where a consideration of the indicia (in the context of the nature of the work performed and the terms of the contract) points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. However, a consideration of the indicia is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed
picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The ultimate question remains as stated in (1) above. If, having approached the matter in that way, the relationship remains ambiguous, such that the ultimate question cannot be answered with satisfaction one way or the other, then the parties can remove that ambiguity a term that declares the relationship to have one character or the other.[29]
(6) If the result is still uncertain then the determination should be guided by “matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability” including the “notions” referred to in paragraphs [41] and [42] of Hollis v Vabu.”[30]
There is no written contract in place between the parties. As a result, the multifactorial test will be considered in determining whether the Applicant is an employee or independent contractor. It must be noted that the factors should not be approached as a checklist, but viewed as a whole, with some factors weighing more heavily than others and what the overall effect of the culmination of factors are in determining the existence of an employment relationship.
There are more factors which are favourable towards finding an employment relationship rather than an independent contracting arrangement.
Initially, the Applicant had control of her employment as she was able to provide services to other entities while working for the Respondent. The Applicant had worked in another company 3 days a week while working 2 days for the Respondent. However, the Applicant had increased her workload with the Respondent by working from 8:30am to 4:30pm Monday to Friday each week and received a consistent income from the Respondent.
No evidence was established that the Applicant where she conducted her own business, had a separate place of work or advertises her services to the world at large, provided or maintained her own tools or equipment or that she could or delegate or subcontract the work assigned to her.
The Applicant was paid through submitting invoices every fortnight for the hours that she worked.[31] Invoicing does not necessarily mean that a person is an independent contractor. The question surrounds whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks. The Applicant is not paid to the completion of tasks, but for her hours worked which indicates an employment relationship.
The difference in the rate of pay between an independent contractor and an employee does not weigh up in consideration of determining the existence of an employment relationship. The Respondent appears to provide a much higher rate to pay the independent contractor in consideration of the entitlements which the Respondent may be required to pay if the Applicant was an employee.
I am not satisfied on the above factors that the Applicant was an independent contractor, and an employment relationship exists between the Applicant and Respondent.
Was the Applicant dismissed?
The Full Bench of this Commission in ABB Engineering Construction Pty Limited v Doumit (ABB) said, in relation to determining whether the ending of an employment relationship is a voluntary or forced resignation:
“Often it will only be a narrow line that distinguishes conduct that leaves an employee no real choice but to resign employment, from conduct that cannot be held to cause a resultant resignation to be a termination at the initiative of the employer. But narrow though it be, it is important that that line be closely drawn and rigorously observed. Otherwise, the remedy against unfair termination of employment at the initiative of the employer may be too readily invoked in circumstances where it is the discretion of a resigning employee, rather than that of the employer, that gives rise to the termination.
The remedies provided in the Act are directed to the provision of remedies against unlawful termination of employment. Where it is the immediate action of the employee that causes the employment relationship to cease, it is necessary to ensure that the employer's conduct, said to have been the principal contributing factor in the resultant termination of employment, is weighed objectively.
The employer's conduct may be shown to be a sufficiently operative factor in the resignation for it to be tantamount to a reason for dismissal. In such circumstances, a resignation may fairly readily be conceived to be a termination at the initiative of the employer. The validity of any associated reason for the termination by resignation is tested. Where the conduct of the employer is ambiguous, and the bearing it has on the decision to resign is based largely on the perceptions and subjective response of the employee made unilaterally, considerable caution should be exercised in treating the resignation as other than voluntary.”[32]
(emphasis added)
In Pawel v Australian Industrial Relations Commission,[33] the Full Bench noted:
“Mere "causation" or "motivation” will not satisfy the requirement that the termination be at the initiative of the employer.”
Furthermore, Senior Deputy President Richards in Hastie v Impress Australia Pty Ltd[34] said:
“The employer’s conduct (when it is not evidenced was intended to bring about the resignation directly) must be conduct that is in some way or in some manner oppressive or repugnant in the ordinary course, and/or else so impacted on the volition of the employee such that the resignation was a reasonable response to that conduct in all the circumstances.”
I am not satisfied that there was a forced resignation where the Applicant had no option but to resign. The Applicant stated that she could no longer work with the Respondent because she had been bullied, and if the matter was not resolved, the bullying would have continued. In instances of alleged bullying, the Fair Work Commission has the Anti-Bullying jurisdiction which could have been an attempt to resolve the issue before the Applicant had resigned from her role.
I find that there was no termination at the initiative of the employer. The Seek advertisement did not indicate that the Applicant was being dismissed but was used to find a new employee had the Applicant chosen to resign.
The Applicant indicated to the Respondent that she ‘could not work with him [Mr Incoll] anymore sorry’ on 11 July 2023 at 6.55am.
The Respondent stated in response that the Applicant would be able to work from home some days and have Mr Incoll on the road certain days while the Applicant was in the office. Furthermore, the Respondent had noted for Mr Incoll not to ‘liaise with [the Applicant] socially, but anything to do with work, the Applicant will need to find a way to be professional and support [Mr Incoll]’ like her other coworkers.
The Applicant went into the next day and took her belongings on the basis that she, ‘knew [she] no longer had a job’. However, there was no oral or written evidence which indicated the employer’s initiative of terminating the Applicant’s employment. Mere dissatisfaction with the employer’s response is not termination at the initiative of the employer. It was when the Applicant had taken her belongings and left the employment, that the Applicant had resigned and repudiated the employment relationship.
Conclusion
In consideration of Jamsek and Personnel Contracting, and the factors set out above, an employment relationship exists between the Applicant and Respondent.
However, the Applicant was not dismissed as she resigned from her employment on 12 July 2023. The employer had put steps in place in addressing the Applicant’s concerns on this day which the Applicant was not satisfied with. The Applicant is not dismissed in accordance with s.386 of the Act.
The objection is upheld, and the application is dismissed. I order accordingly.
DEPUTY PRESIDENT
[1] Fair Work Act 2009 (Cth) s.12.
[2] Asim Nawaz v Raiser Pacific Pty Ltd [2022] FWC 1189 at [50]-[51] citing Jamsek v ZG Operations Pty Ltd [2022] HCA 2 ('Jamsek’); CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 (‘Personnel Contracting’).
[3] Jamsek per Kiefel CJ, Keane and Edelman JJ at [40]-[62], Personnel Contracting per Gordon J at [172]-[178]:
[4] Personnel Contracting per Kiefel CJ, Keane and Edelman JJ at [33]-[34], [47], [61], per Gordon J at [174], [186]-[189].
[5] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; Hollis v Vabu Pty Ltd (2001) 207 CLR 21; Abdalla v Viewdaze Pty Ltd (2003) 122IR 215; Roy Morgan Research Pty Ltd v Commissioner of Taxation (2010) 184 FCR 448; Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario [2011] FWAFB 8307.
[6] Whittaker’s Building Supply Co (1963) 109 CLR 210, 217.
[7] Hollis v Vabu Pty Ltd (2001) 207 CLR 21 [40].
[8] Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939; endorsed in Roy Morgan Research Pty Ltd v Commissioner of Taxation (2010) 184 FCR 448.
[9] Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210, 217 per Windeyer J approved by the majority in Hollis v Vabu (2001) 207 CLR 21 [40]; Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16.
[10] Hollis v Vabu (2001) 207 CLR 21 [47] and [58].
[11] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
[12] Ibid.
[13] The parties cannot create something which has every feature of a rooster but call it a duck and insist that everyone else recognise it as a duck”: Re Porter (1989) 34 IR 179, 184 per Gray J; Massey v Crown Life Insurance [1978] 2 All ER 576, 579 per Lord Denning approved by the Privy Council in AMP v Chaplin (1978) 18 ALR 385, 389.
[14] AMP v Chaplin (1978) 18 ALR 385, 389.
[15] Hollis v Vabu (2001) 207 CLR 21 [58].
[16] AMP v Chaplin (1978) 18 ALR 385, 394.
[17] Zuijs v Wirth Bros. Pty Ltd (1955) 93 CLR 561, 571.
[18] Hollis v Vabu (2001) 207 CLR 21.
[19] Humberstone v Northern Timber Mills (1949) 79 CLR 389, 404 per Dixon J.
[20] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 36.
[21] Ibid.
[22] Ibid 24.
[23] Hollis v Vabu (2001) 207 CLR 21 [47] and [58].
[24] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 24.
[25] Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 539; AMP v Chaplin (1978) 18 ALR 385, 389.
[26] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 24.
[27] Hollis v Vabu (2001) 207 CLR 21 [39].
[28] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 24.
[29] Massey v Crown Life Insurance [1978] 2 All ER 576, 579 per Lord Denning.
[30] Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario[2011] FWAFB 8307 [30].
[31] Ibid.
[32] (1996) PRN6999.
[33] (1999) FCA 1660 at 58 (Pawel J).
[34] [2008] AIRC 102 at [48].
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