[2021] FWC 1002

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Christopher Grindal
v
CGA Accounting Pty Ltd T/A CGA Accounting
(U2020/5292)

COMMISSIONER HUNT

BRISBANE, 24 FEBRUARY 2021

Application for an unfair dismissal remedy – whether applicant employee or independent contractor – whether applicant met high income threshold – whether employed on a fixed term basis which ended due to the effluxion of time – applicant independent contractor – application dismissed.

[1] On 21 April 2020, Mr Christopher Grindal made an application for unfair dismissal remedy against CGA Accounting Pty Ltd T/A CGA Accounting (CGA/the Respondent). While the nature of Mr Grindal’s engagement is disputed, he commenced performing work for the Respondent on 15 January 2019 and the period of work ended on 2 April 2020. Mr Grindal stated that he was engaged under an “employment package” of $165,000 plus $33,000 bonus.

[2] On 22 May 2020, the Respondent filed both a Form F3 Employer Response and a Form F4 Outline of Jurisdictional Objections in response to the application. The Respondent objected to the application on the following grounds:

• Mr Grindal was not an employee of the Respondent;

• in the alternative, he earned more than the high income threshold;

• in the alternative, he was employed on a fixed term basis commencing 14 January 2019 and terminating on 20 January 2020, and it ended due to the effluxion of time.

[3] The matter proceeded to conciliation on 2 June 2020, but did not resolve. Mr Grindal was directed to file submissions in response to the jurisdictional objections that he was not an employee of the Respondent, that he was not dismissed, and that he earned more than the high income threshold at the time he alleged he was dismissed. He filed a response on 29 June 2020.

[4] The matter was then allocated to me for consideration. I issued directions for filing of material by the Respondent in support of its jurisdictional objections and further material from Mr Grindal in response. The matter was set down for a telephone hearing on the jurisdictional objections on 11 August 2020.

[5] In the course of the matter Mr Grindal applied for orders of production of certain documents, and for the attendance of Ms Jennifer Dobbie, formerly the Operations Manager of Accounting for the Respondent. I granted the order for Ms Dobbie to attend the telephone hearing and give evidence.

[6] Upon reviewing Mr Grindal’s filed material, I directed Mr Grindal to file and serve copies of his personal income tax assessment for the 2018/2019 financial year, together with all company financial records of Bluebirds Chest Pty Ltd ATF the Janus Trust since its inception. Mr Grindal did so prior to the telephone hearing.

[7] At the hearing Mr Grindal represented himself. Mr Troy Spence of Counsel was granted permission to represent the Respondent, instructed by Mr John Herbert of Morgan Conley Solicitors. Mr Grindal gave evidence on his own behalf. Mr Alistair Bell, Director of the Respondent gave evidence for the Respondent. Ms Dobbie also gave evidence.

Relevant law

[8] Section 382 of the Fair Work Act 2009 (the Act) provides when a person is protected from unfair dismissal and includes the following:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”

[9] Section 380 provides that for the purposes of Part 3-2 of the Act, dealing with unfair dismissal, an employee means a national system employee, which term is defined by s.13 to mean an individual employed by a national system employer, with the meaning of that term elaborated on in s.14 of the Act.

Independent Contractor Principles

[10] In considering the application, I must first determine whether Mr Grindal was an employee of the Respondent. As noted, Mr Grindal contends he was an employee, and the Respondent contends he was an independent contractor providing services to the Respondent.

[11] There is no single test to determine whether a relationship is one of employment. In Joshua Kooger v Foodora Australia Pty Ltd, 1 Cambridge C considered and summarised the relevant legal principals as established in a long line of Commission decisions:

“[64] The correct approach to a determination of whether a person has been engaged as an employee or a contractor involves issues of both fact and law. The particular factual circumstances of the relationship under examination need to be subjected to the legal principles that have been established as relevant to the proper characterisation that is to be provided to that relationship.

The Multifactorial Tests and the Overall Objective

[65] In this case, Counsel for the respective Parties concurred with the identified distillation of the relevant legal principles that have developed from a considerable body of case law commencing, in general terms, from the High Court Judgement in the case of Stevens v Brodribb Sawmilling Co Pty Ltd 2 (Brodribb), and including, inter alia, Hollis v Vabu3 (Vabu), and, in respect to Decisions of this Commission, relevantly noting Abdalla v Viewdaze4 (Abdalla), and Cai (t/a French Accent) v Do Rozario5 (French Accent).

[66] In broad terms, the relevant legal principles have been described as the adoption of a multifactorial approach involving consideration of various factors including a number of identified indicia, with no single factor being decisive, and an overriding requirement for examination of the totality of the relationship between the Parties so as to ultimately provide a sound basis upon which to determine whether the relationship was one of employment or independent contractor. Further, the fundamental determination is frequently described as the application of an integration test as may be identified in the following extract from the Vabu Judgement which quotes from the Judgement of Windeyer J in Marshall v Whittaker’s Building Supply Co:

“… 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.” 6

[67] The multifactorial approach, as it is described, has been most helpfully summarised by the Full Bench of Fair Work Australia at paragraph [30] in the French Accent Decision and consideration in this instance has been undertaken in accordance with the structured approach that is set out in subparagraphs (1) to (6) of paragraph [30] of the French Accent Decision. It is unnecessary to repeat the full terms of subparagraphs (1) to (6). However, the following extract from subparagraph (5) provides a particularly insightful summary of the task that must be performed in order to properly determine the question of whether the relationship under examination is one of employment or independent contractor:

“[11] 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.” 7

[10] In Peel v Aster Home Nursing Service Pty Ltd, 8 Simpson C expanded on and applied the indicia with reference to the established caselaw:

“[7] The Full Bench decision in Kimber v Western Auger Drilling Pty Ltd 9 provides the factors/indicia this Commission needs to consider in assessing whether an Applicant was an employee or an independent contractor during the relevant period of employment. The Full Bench endorsed the general approach to distinguishing employees and independent contractors provided in Jiang Shen Cai T/A French Accent v Michael Anthony Do Rozario which 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: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part? This question is concerned with the objective character of the relationship. It is answered by considering the terms of the contract and the totality of the relationship.

(2) The nature of the work performed and the manner in which it is performed must always be considered. This will always be relevant to the identification of relevant indicia and the relative weight to be assigned to various indicia and may often be relevant to the construction of ambiguous terms in the contract.

(3) The terms and terminology of the contract are always important. However, the parties cannot alter the true nature of their relationship by putting a different label on it. In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole: the parties cannot deem the relationship between themselves to be something it is not. Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.

(4) Consideration should then be given to the various indicia identified in Stevens v Brodribb Sawmilling Co Pty Ltd and the other authorities as are relevant in the particular context. For ease of reference the following is a list of indicia identified in the authorities:

Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like.

Control of this sort is indicative of a relationship of employment. The absence of such control or the right to exercise control is indicative of an independent contract. While control of this sort is a significant factor it is not by itself determinative. In particular, the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where the work involves a high degree of skill and expertise. On the other hand, where there is a high level of control over the way in which work is performed and the worker is presented to the world at large as a representative of the business then this weighs significantly in favour of the worker being an employee.

“The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.”“[B]ut in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. That was made clear in Queensland Stations Pty. Ltd v Federal Commissioner of Taxation, a case involving a droving contract in which Dixon J observed that the reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.”

Whether the worker performs work for others (or has a genuine and practical entitlement to do so).

The right to the exclusive services of the person engaged is characteristic of the employment relationship. On the other hand, working for others (or the genuine and practical entitlement to do so) suggests an independent contract.

Whether the worker has a separate place of work and or advertises his or her services to the world at large.

Whether the worker provides and maintains significant tools or equipment.

Where the worker’s investment in capital equipment is substantial and a substantial degree of skill or training is required to use or operate that equipment the worker will be an independent contractor in the absence of overwhelming indications to the contrary.

Whether the work can be delegated or subcontracted.

If the worker is contractually entitled to delegate the work to others (without reference to the putative employer) then this is a strong indicator that the worker is an independent contractor. This is because a contract of service (as distinct from a contract for services) is personal in nature: it is a contract for the supply of the services of the worker personally.

Whether the putative employer has the right to suspend or dismiss the person engaged.

Whether the putative employer presents the worker to the world at large as an emanation of the business.

Typically, this will arise because the worker is required to wear the livery of the putative employer.

Whether income tax is deducted from remuneration paid to the worker.

Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks.

Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks. Obviously, in the modern economy this distinction has reduced relevance.

Whether the worker is provided with paid holidays or sick leave.

Whether the work involves a profession, trade or distinct calling on the part of the person engaged.

Such persons tend to be engaged as independent contractors rather than as employees.

Whether the worker creates goodwill or saleable assets in the course of his or her work.

Whether the worker spends a significant portion of his remuneration on business expenses.

It should be borne in mind that no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.

(5) Where a consideration of the indicia (in the context of the nature of the work performed and the terms of the contract) points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. However, a consideration of the indicia is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The ultimate question remains as stated in (1) above. If, having approached the matter in that way, the relationship remains ambiguous, such that the ultimate question cannot be answered with satisfaction one way or the other, then the parties can remove that ambiguity a term that declares the relationship to have one character or the other.

(6) If the result is still uncertain then the determination should be guided by “matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability” including the “notions” referred to in paragraphs [41] and [42] of Hollis v Vabu.

[8] The Full Bench in Kimber further provided;

“The courts have developed a multi-factorial approach, in which there is no single decisive criterion to determine whether a contractual relationship is one of employment or one subject to a contract for services. This approach requires the consideration of the various indicia as summarised in French Accent set out above. It is also clear from the decision of the Full Bench of the Federal Court in ACE Insurance Limited v Trifunovski 10 and others, that no one single criterion will necessarily be determinative and that each matter will turn upon the particular circumstances of the case, with the decision maker weighing all the relevant factors.”11

[9] The ultimate question for the Commission as stated in Abdalla v Viewdaze Pty Ltd t/a Malta Travel 12 and endorsed in French Accent;

“… will always be whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is whether, viewed as a practical matter, the punitive (sic) worker could be said to be conducting a business of his or her own. This question is answered by considering the terms of the contract and the totality of the relationship.”

[11] While the case law provides a myriad of criteria against which to assess the nature of the relationship, it is important not to address the criteria mechanically or with a predetermined weight: 13

“This 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 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.”

[12] The criteria are not exhaustive, and making a determination all relevant features of the relationship must be taken into account: 14

“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.”

High Income Threshold

[13] Should I find that Mr Grindal was an employee of the Respondent, I must consider whether he was a person protected from unfair dismissal, requiring consideration of the factors set out in s.382 of the Act. Relevantly, I must consider whether Mr Grindal was covered by an Award, enterprise agreement, and/or whether Mr Grindal earned less than the high income threshold at the time of his dismissal.

[14] Section 333 of the Act provides that the high income threshold is the amount prescribed by, or worked out in the manner prescribed in the regulations. Regulation 2.13 of the Fair Work Regulations 2009 (FW Regs) provides that as of 1 July 2019 the figure was $148,700. The figure increases annually on 1 July of each year, meaning the $148,700 figure is that which Mr Grindal’s earnings must be tested against.

[15] Section 332 of the Act defines earnings and reads as follows:

“Earnings

(1) An employee’s earnings include:

(a) the employee’s wages; and

(b) amounts applied or dealt with in any way on the employee's behalf or as the employee directs; and

(d) amounts or benefits prescribed by the regulations.

(2) However, an employee's earnings do not include the following:

(a) payments the amount of which cannot be determined in advance;

(b) reimbursements;

(d) amounts prescribed by the regulations.

Note: Some examples of payments covered by paragraph (a) are commissions, incentive-based payments and bonuses, and overtime (unless the overtime is guaranteed).

(3) Non-monetary benefits are benefits other than an entitlement to a payment of money:

(a) to which the employee is entitled in return for the performance of work; and

(b) for which a reasonable money value has been agreed by the employee and the employer;

but does not include a benefit prescribed by the regulations.

(4) This subsection applies to contributions that the employer makes to a superannuation fund to the extent that one or more of the following applies:

(a) the employer would have been liable to pay superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 in relation to the person if the amounts had not been so contributed;

(b) the employer is required to contribute to the fund for the employee's benefit in relation to a defined benefit interest (within the meaning of section 291-175 of the Income Tax Assessment Act 1997 ) of the employee;

(c) the employer is required to contribute to the fund for the employee's benefit under a law of the Commonwealth, a State or a Territory.”

[16] Regulation 3.05 explains how to work out amounts for the purposes of assessing whether the high income threshold applies in relation to a dismissal, and includes Reg 3.05(6) that provides for circumstances where a non-monetary benefit that has not been for an agreed amount may be included for the purposes of the unfair dismissal jurisdiction.

[17] Reg 3.05(6) reads as follows:

“When a person is protected from unfair dismissal--high income threshold

…..

Benefits other than payment of money

(6) If:

(a) the person is entitled to receive, or has received, a benefit in accordance with an agreement between the person and the person's employer; and

(b) the benefit is not an entitlement to a payment of money and is not a non-monetary benefit within the meaning of subsection 332(3) of the Act; and

(i) it should consider the benefit for the purpose of assessing whether the high income threshold applies to a person at the time of the dismissal; and

(ii) a reasonable money value of the benefit has not been agreed by the person and the employer; and

(iii) the FWC can estimate a real or notional money value of the benefit;

the real or notional money value of the benefit estimated by the FWC is an amount for subparagraph 382(b)(iii) of the Act.”

Respondent’s evidence and submissions

Evidence of Mr Alistair Bell

[18] Mr Bell is a Director of the Respondent. He stated that the Respondent operates principally in the accounting and financial services industry. Mr Bell is a qualified finance broker; he is not an accountant.

[19] In 2018, Mr Bell was a Director of Innovatus Australia Pty Ltd ATF the Innovatus Trust (Innovatus). The Respondent was in the process of acquiring Innovatus. At that time, Ms Dobbie held the position of Operations Manager of the Respondent. It is Mr Bell’s evidence that at that time the Respondent outsourced its human resources function to an organisation called HappyHR. Ms Dobbie provided instructions to HappyHR.

[20] Mr Bell stated that he was responsible for recruiting Mr Grindal. He stated that Mr Grindal was to be engaged as an independent contractor at Mr Grindal’s request. Mr Bell’s evidence is that written terms were intended to be drawn up to reflect the independent contractor arrangement.

[21] Mr Bell said that the contract entered into reflected an agreement between the parties that Mr Grindal was to be engaged for a fixed one-year period only for the period between 14 January 2019 and 14 January 2020. This period was to assess his suitability for the organisation.

[22] The contract reads as an employment agreement, including terms for paid leave. On the Respondent’s evidence, it was not created until September 2019, some nine months after Mr Grindal commenced.

[23] Mr Bell said that he had conducted an investigation of the circumstances of the creation of the contract, and from that investigation he understood that the designation of Mr Grindal as an employee, and his engagement by CGA Group Services Pty Ltd (as opposed to the correct name of the Respondent), were both errors which occurred as a consequence of the incorrect use of the employment contract template for this purpose, where the correct document which should have been used was an independent contractor agreement. Mr Bell said that he believed this error occurred as a consequence of a lack of attention from Ms Dobbie, and limitations in the operation of the HappyHR platform.

[24] Mr Bell said he was aware from his dealings with HappyHR that the HappyHR contracts are executed electronically, whereby the worker does not physically sign the document, but indicates acceptance of its terms via a webform, a record of which is kept by HappyHR.

[25] Annexed to Mr Bell’s statement was a copy of the HappyHR spreadsheet of the Respondent’s workers, including a field that recorded acceptance of the contract (the ‘create’ date). On that document, the entries relevant to Mr Grindal show that the create date for Mr Grindal was 13 September 2019 at 5:46pm.

[26] Mr Bell said that notwithstanding that an offer was made to engage Mr Grindal on the basis of an employee, Mr Grindal maintained that it was his preference to accept the role of Managing Partner on the basis of being an independent contractor.

[27] Mr Bell said that Mr Grindal indicated that he had incorporated Bluebirds Chest Pty Ltd ATF the Janus Trust (Bluebirds) as a service entity to allow him to provide services as a contractor, and Mr Grindal wished to utilise it in respect of his engagement with the Respondent. Mr Bell said that Mr Grindal had made that request to Ms Dobbie orally, which was reported to and approved by Mr Bell. Mr Bell said he understood that Mr Grindal sought to structure the arrangement to allow him to take advantage of favourable tax circumstances, including for other contract work which the Respondent permitted him to perform from time to time. No evidence was offered as to other work Mr Grindal was permitted to perform.

[28] Mr Bell provided as evidence emails between Mr Grindal and Ms Dobbie discussing the structuring of Mr Grindal’s remuneration. On 18 January 2019, Ms Dobbie wrote the following email to Mr Grindal:

“Hi Christopher,

Per our previous conversation with Alistair in relation to your salary let me know how you would like this structured and payment details so I can organise processing.

Thanks
Jenni

Jennifer Dobbie
GROUP OPERATIONS MANAGER”

[29] The same day, Mr Grindal replied:

“Jenni,

I have some structuring thoughts being finalised currently, which essentially involve payment to a corporate trustee/trust structure for internal processing/allocation.

Essentially it would operate as a service trust/entity, that will employee myself, which will provide any/all superannuation (and comply with relevant SGC requirements).

If that is agreeable, I can arrange for regular invoicing (from the corporate entity/trust) to your required entity, to satisfy the relevant requirements.

Your thoughts are appreciated.

Christopher

CHRISTOPHER GRINDAL
Managing Partner”

[30] Ms Dobbie wrote again on 20 January 2019:

“Hi Christopher,

I am aligned with this, just need Alistair to confirm his alignment and we can ratify at the stakeholder meeting on Wednesday.

Thanks
Jen

Jennifer Dobbie
GROUP OPERATIONS MANAGER”

[31] Mr Grindal replied:

“Jenni

Thankyou. It should also assist in mitigating payroll tax obligations if structured carefully as this entity is near threshold and when grouping considered the threshold exceeded (most likely group above $1.1m total wages and superannuation.)

CHRISTOPHER GRINDAL
Managing Partner”

[32] Mr Bell said he approved Mr Grindal’s request, subject to the following conditions:

• the engagement of Bluebirds would continue only for a one-year period from 20 January 2019 to 14 January 2020;

• the engagement of Bluebirds would need to occur by the Respondent in accordance with the Respondent’s usual contract arrangements with third-party service providers; and

• as Mr Grindal was an independent contractor, the amounts paid to Bluebirds would not include an amount attributable to superannuation, as payment of superannuation would become the responsibility of Bluebirds.

[33] Mr Bell said that in accordance with that arrangement, for accounting purposes:

• between January 2019 and July 2019, Bluebirds issued invoices to Innovatus; and

• between July 2019 and March 2020, Bluebirds began issuing invoices to the Respondent.

[34] Annexed to Mr Bell’s statement were copies of the invoices issued by Bluebirds to Innovatus and the Respondent. Mr Bell also provided a summary of payments made by the Respondent to Bluebirds.

[35] The first invoice is headed “TAX INVOICE” with an invoice number: INV-0001. It is made by Janus Trust and it is for “Professional Services” for the period 15 January 2019 to 18 January 2019. The quantity is 0.80 representing four days of work. The unit price is $3,490.39, with GST nominated at 10%. The total amount invoiced is $2,792.31, including an amount of $253.85 as GST.

[36] The invoice nominates the amount as having been paid. It also states:

“Due Date: 25 January 2019

Please contact us immediately should there be any issues regarding payments or if you need any further assistance.”

[37] The banking details were provided with a payment slip nominating the “customer” as Innovatus Australia Pty Ltd ATF The Innovatus Australia Trust.

[38] Similar invoices were annexed to Mr Bell’s statement. The invoices demonstrate payments were made typically in the amount of $3,490.38 weekly, including an amount of $317.31 in GST. This amount multiplied by 52 equals approximately $181,500 which is an amount of $165,000 plus 10% GST. The amount paid weekly was consistent, and the description was “Professional Services.”

[39] Mr Bell said that it was the Respondent’s intention that Mr Grindal’s role would be consistent with the type of engagement, the duties, and the expectations of an independent contractor, and further said that he understood this was also Mr Grindal’s intention based on their discussions with him. Mr Bell said that this was a continuation of the nature of Mr Grindal’s previous engagement with Innovatus, as well as the manner in which the previous Managing Partner of the Respondent had been engaged.

[40] Mr Bell said that Mr Grindal was given significant autonomy in the fulfilment of his duties, and was expected to periodically report back to the Respondent's board in order to keep some degree of oversight as to his fulfilment of the responsibilities of the contract allocated to him. Mr Grindal was permitted to work remotely and was expected to perform his work as and when suited him, so long as tasks were performed to a satisfactory standard and in accordance with necessary timeframes.

[41] Mr Bell said Mr Grindal was provided with a laptop computer and mobile phone by the Respondent, which was the Respondent’s usual practise with any persons who accesses the Respondent’s internal systems. He said it was in order to ensure that the Respondent was able to keep records of access to internal systems and contact with clients and stakeholders and to ensure that appropriate measures were in place to secure any access to the Respondent’s systems.

[42] Mr Bell’s evidence was that Mr Grindal was expected to travel using his own motor vehicle, as necessary in order to fulfil his obligations to the Respondent. While some degree of travel was necessary, given Mr Grindal’s supervisory senior managerial role, the degree of travel was minimal and was largely performed remotely. Mr Bell said that where Mr Grindal was required to travel, he did so with a view to liaising with and soliciting potential clients, and by so doing, was generating goodwill for himself, and was expected to then leverage that goodwill by referring clients to the Respondent, where appropriate.

[43] Mr Bell said that in his view, based on the tasks and responsibilities allocated to Mr Grindal, he did not believe that he would ever need to travel more than 200km per week for business purposes. Mr Bell said that Mr Grindal’s position description reflected the remote nature of his duties, and did not contemplate travel as an element of the role.

[44] Mr Bell said that he had made enquiries of staff within the Respondent, and had been advised that during the entirety of Mr Grindal’s tenure, he did not make a single application for reimbursement for travel expenses.

Termination of the engagement

[45] Mr Bell said it became apparent throughout the course of Mr Grindal’s engagement that his performance was unsatisfactory and that he was failing to achieve key profitability measures for the Respondent's business. Mr Bell said that in order to provide Mr Grindal with sufficient opportunity to rectify those concerns and improve his performance, and to give the Respondent sufficient time to assess whether it would be appropriate to renew its agreement with Bluebirds, he elected to allow Mr Grindal’s engagement to continue until the expiry of the agreement on 14 January 2020.

[46] Mr Bell said that in the period leading up to and shortly after the expiry of the agreement, he held extensive talks with the Respondent’s board about Mr Grindal’s performance and organising a potential replacement in the role. Mr Bell said that during this period it became apparent that despite their concerns, the development of the COVID-19 pandemic made the prospect of replacing Mr Grindal substantially more difficult than anticipated, and accordingly, caused a delay in the decision-making process regarding Mr Grindal’s renewal or replacement.

[47] Mr Bell said he wrote to Mr Grindal on 2 April 2020 to notify him that the Respondent had elected not to renew his engagement with the Respondent. A copy of the letter of termination of engagement was annexed to Mr Bell’s statement and is as follows:

“RE: Contract Termination

Christopher,

I have taken the opportunity to consider the future of the business over the last weeks in light of the ever changing trading environment in which we find ourselves.

In considering the condition of the business I have reviewed the contract you entered into with CGA Group Services Ply Ltd which is now expired.

I have decided in the circumstances not to renew or extend the Contract the effect of which is that you are hereby provided with one week's notice of the termination of your contract.

To allow you to seek alternate work I have decided to pay you in lieu of your obligation to attend the workplace.

I will immediately require that you return the work mobile, computer and charger, keys for all offices and swipe cards, all Company Property and client files of any accounting business within the CGA Group, including Innovatus.

This means you will not have any access to the office, Practice Ignition, XPM, Green Xero, Xero, and any CRM systems, Karbon, emails and server from the time you are provided with this correspondence.

To be clear the restraint provided in the contract will apply to clients and employees, but I will not apply it to you finding and engaging in alternate employment.

In relation the BMW X5 if you feel unable to continue with your vendor finance arrangements with CGA Consulting Ply Ltd you should return the vehicle to myself by Wednesday, 8 April 2020. There is presently one payment outstanding on the motor vehicle which will need to be attended to as part of your departure from the business.

I wish you the best in your future and thank you for your contribution to CGA.

Regards,
Alistair Bell”

[48] In evidence given at the hearing, Mr Bell stated that he recalled having a conversation with Ms Dobbie relevant to Mr Grindal’s engagement. He stated that as a result of these proceedings he discovered the emails between Ms Dobbie and Mr Grindal between 18 and 20 January 2019. Where Mr Grindal’s evidence is that he could not have sent those emails as it was from a CGA email address, and he did not have a CGA email address at that time, Mr Bell’s evidence is that there were two email addresses for Mr Grindal; one Innovatus and one CGA. Following the hearing, Mr Bell provided metadata of the emails sent.

[49] He noted that the purported employment contract’s properties demonstrate that Ms Dobbie drafted it on 16 September 2019. He stated that as far as he is aware, the contract was never uploaded to the HappyHR portal.

Respondent’s submissions

[50] The Respondent submitted that Mr Grindal was formerly an independent contractor engaged by Innovatus, being a service entity for Innovatus Australia, a business formally acquired by the Respondent in mid-2019. In the process of acquiring Innovatus in late December 2018, the Respondent said it agreed to enter into an independent contract arrangement with Mr Grindal commencing on 14 January 2019.

[51] The Respondent submitted that on Mr Grindal’s insistence, the services to be performed in the course of his role would be provided by Bluebirds, with Bluebirds in turn engaging Mr Grindal to perform those services.

[52] The Respondent said it agreed to Mr Grindal’s proposal subject to the conditions that the engagement of Bluebirds would continue only for a one-year period; the engagement of Bluebirds would need to occur by the Respondent in accordance with the Respondent’s usual contract arrangements with third party service providers. The amounts paid to Bluebirds would not include an amount attributable to superannuation, as payment of superannuation would become the responsibility of Bluebirds. The Respondent said that Mr Grindal agreed to that arrangement, and Bluebirds began issuing invoices to the Respondent on a regular basis for work performed in relation to Mr Grindal’s role. The Respondent submitted that Mr Grindal concedes in his submissions that Bluebirds was responsible for payment of tax, GST and superannuation.

[53] In order to formalise this arrangement between the Respondent and Mr Grindal, the Respondent prepared a written contract of engagement for a fixed term engagement, commencing 14 January 2019 and terminating on 14 January 2020. The contract specified remuneration of $165,000. The Respondent said that procedural errors resulted in that document incorrectly reflecting Mr Grindal as an employee employed by CGA Group Services Pty Ltd, which was not the intention of the parties.

[54] The Respondent submitted that Mr Grindal was provided with a contract of engagement which specified the terms and conditions of his engagement, notwithstanding errors as to the nature of that engagement. Although Mr Grindal disputes whether the contract was binding on the parties, he fails to provide a copy of the asserted contract agreed on 21 December 2018 nor an explanation for why Bluebirds continued to issue invoices to the Respondent for a further period of some four months.

[55] It was submitted that, when examined carefully, it is evident that throughout the period of Mr Grindal’s engagement, his engagement satisfies the indicia of an independent contractor. In the course of his engagement Mr Grindal had a high degree of autonomy in performing his role, and was expected to meet KPIs and report to the Respondent’s board to keep the organisation apprised of his activities. Mr Grindal operated flexibly, largely from his home or from locations away from the Respondent’s offices.

[56] The Respondent noted that whether Mr Grindal performed work for others was not a matter within the Respondent’s direct knowledge. However, Mr Grindal was permitted and entitled to perform work for any other organisation.

High Income Threshold

[57] The Respondent submitted that should the Commission determine that Mr Grindal was an employee, he would be ineligible for protection from unfair dismissal on the basis his annual earnings exceeded the high income threshold.

[58] The Respondent argued that the evidence holding the most probative evidence of Mr Grindal’s payment arrangements remains the invoices issued by Bluebirds. The Respondent said that notwithstanding an early period of time whereby Mr Grindal was issuing invoices to Innovatus, Bluebirds issued regular invoices to the Respondent from 5 July 2019 onwards, and those invoices demonstrate that, for services provided by Mr Grindal, Bluebirds has been paid the sum of $196,507.54 over the period between 29 March 2019 and 30 March 2020. The Respondent said that amount is principally constituted of weekly payments of $3,490.38.

[59] The Respondent submitted that based on the invoices, Mr Grindal’s earnings should in fact be calculated as:

(a) $196,507.54 if the entirety of the payments made to Mr Grindal are to be considered, and no compelling reason has been advanced by Mr Grindal as to why they should not; or

(b) in the alternative, weekly payments of $3,490.38 made to Mr Grindal multiplied by 52 weeks resulting in annual earnings of $181,449.76.

[60] The Respondent argued that, calculated by either method, Mr Grindal was paid well in excess of the high income threshold, and in fact higher in practice than the $165,000 Mr Grindal claimed to be entitled to receive.

[61] The Respondent submitted that given Mr Grindal had inflated the amount paid by 10% on account of GST, if that was removed and he was instead paid 9.5% superannuation, it would still amount to an uplift, being the small difference between 9.5% and 10%.

[62] The Respondent submitted on that basis it would not be appropriate to make any reductions from the amounts paid to Mr Grindal, and the full amount should be considered for those purposes. The Respondent argued that these amounts paid pursuant to invoices do not include any contributions to a superannuation fund to the extent that they are contributions to which s.332(4) of the Act applies, and therefore no reduction is appropriate for superannuation purposes.

[63] The Respondent conceded that it had a company policy regarding travel. It said, however, that Mr Grindal had calculated his entitlement under that policy on a different and incorrect basis.

[64] The Respondent said that the excess travel reimbursement is only available for kilometres on account of travel in excess of 200km per week. The Respondent submitted that Mr Grindal had calculated an entitlement based on kilometres travelled between 0 and 200, rather than 201km onwards, and then submitted that (having conceded that a reduction is appropriate for a ‘private portion’ of travel) he should be credited as having undertaken 60km of travel each week.

[65] The Respondent submitted that as the reimbursement is only enlivened after an employee has travelled 200km already, in order for those calculations to be correct, Mr Grindal would in fact need to show that he travelled at least 260km per week.

[66] The Respondent argued that Mr Grindal’s own submissions constituted an admission that he had 140km less each week than is required to even enliven this reimbursement, and that it remained Mr Grindal’s burden to prove that he travelled sufficient distance to receive an entitlement, and it is insufficient to allege an entitlement to be paid for that degree of travel, particularly in circumstances where this entitlement is now being claimed for the first time.

[67] The Respondent further submitted that the travel policy is a reimbursement and not an automatic entitlement. The Respondent said that it understood Mr Grindal’s construction of how the reimbursement interacts with his remuneration as that the reimbursement should be considered as part of Mr Grindal’s base package and therefore reduce the value of that package for the purposes of calculating earnings.

[68] The Respondent submitted that by this construction, Mr Grindal would therefore be paid the same amount each year, which Mr Grindal claimed was $165,000, irrespective of whether he travelled zero or 500km per week, and for each kilometre in respect of which a reimbursement is due his salary would reduce by $0.70 but then be replenished by $0.70 in the form of the travel reimbursement. The Respondent argued that reimbursements by their very nature are paid retrospectively upon proof of entitlement being presented, and are paid in addition to a worker's usual remuneration, not deducted from their remuneration.

[69] In that case, even assuming Mr Grindal’s stated package of $165,000 per annum is correct, which the Respondent denies for the reasons set out above, Mr Grindal is unable to rely on his claimed calculations regarding the travel reimbursement and therefore remains above the high income threshold.

[70] In its closing submissions, the Respondent referred to the decision of McKenna C in Adrian Read v Universal Store Pty Ltd TIA Universal Store (Universal Store) 15(Read), in which McKenna C considered the proposition of work-related expenses for use of a private vehicle and mobile telephone for work being ‘offset’ against the applicant’s ‘true’ income. Relevantly, McKenna C set out the following:

“[25] The applicant’s evidence indicated he received a “car and phone allowance” until 2009, at which time the allowance was discontinued with advice from the respondent’s general manager to the applicant that he “would be financially better off receiving a gross payment of a higher salary and making the deductions for work related expenses through his own tax return.” From that time, the applicant did not receive a separate allowance, but instead received an increase in his base wages. It is not contested that the applicant used his own vehicle and mobile telephone for work-related purposes and that he incurred expenses thereto. In this respect, the respondent’s general manager, Stephen Harris, confirmed the applicant was required “as part of the agreement” to use his vehicle for business purposes. Mr Harris’s evidence also confirmed the applicant was required to use his personal mobile telephone for work purposes, but only until early 2010 - when the respondent provided him with a mobile telephone. It is not clear how much by way of an “allowance” the applicant formerly received, or the means by which it was paid, with the applicant submitting only that he used to receive a “contribution”. It was also unclear what “higher salary” the applicant received from 2009 instead of the payment of an allowance, with the increase arising as part of a general, annual review. The higher wages came into effect around April 2009, and were back-paid to around January or February 2009.

[26] Given the body of cases in which the private/business use of employer-provided benefits such as cars has been considered in ascertaining the value of various applicants’ overall remuneration, there is, on one view of it, a certain symmetry to the contentions advanced by the applicant concerning the work-related expenses for using his private vehicle and mobile telephone having an offsetting effect on his “true income” from the respondent. That is, in cases where there has been issue about an unfair dismissal applicant’s overall remuneration in the context of salary caps concerning such applications, consideration has often been given to the private versus business money value to the employee of employer-provided cars and the like. In a reverse of the usual position that has arisen for consideration in such cases, the applicant used his own vehicle and mobile telephone for the business benefit of the respondent, and the applicant bore those expenses personally - save as to claiming them as work-related deductions in his income tax return. The applicant submits that his earnings should be reduced concomitantly by the amount of such work-related expenses, in the amount claimed (or claimable) to the ATO.

[27] Notwithstanding the position advanced by the applicant, I am inclined to accept Mr Moore’s submission that the deductions for work-related expenses claimed or claimable in the applicant’s income tax return do not appear relevantly to arise in ascertaining the applicant’s earnings for the purposes of the Act, even though they reduce his taxable income (relevantly as it concerns the income from his employment with the respondent less work-related deductions). That is, s.332(1)(a) of the Act refers specifically to “the employee’s wages”, which here were $115,605. The expenses/deductions to which the applicant has referred are not identified in the matters which are not included in an employee’s earnings under s.332(2). In this respect, I doubt income tax deductions/refunds from the ATO for work-related expenses would be considered to be “reimbursements” within the meaning of s.332(2)(b)). The Act defines the meaning of earnings and the applicant’s earnings, as wages, were above the high income threshold. If the applicant’s contentions were accepted, there could be differential outcomes in terms of whether the high income threshold had been exceeded for employees who had identical wages above the high income threshold. For example, if employee “A” chose to have a very expensive personal vehicle and employee “B” had a far less expensive personal vehicle, which they each used for identical amounts of work-related travel commitments for the same employer, employee “A” may have claims for work-related deductions that far-exceed those of employee “B” when matters such as insurance and leasing costs were taken into account. The applicant’s earnings from his employment with the respondent and the work-related expenses claimable as deductions in an income tax return made to the ATO seem to be discrete matters.”

[71] The Respondent argued that Mr Grindal relied on reimbursements that he did not receive to offset his annual earnings, but had not provided any evidence to support that he was entitled to any reimbursement and/or that he followed any policy requirements to seek reimbursement. Accordingly, the Respondent submitted that Mr Grindal’s income exceeded the high income threshold and should be dismissed on that basis.

Award coverage

[72] The Respondent addressed Mr Grindal’s contention that he was covered by the Banking, Finance and Insurance Award 2020 (the Award), although noted that he had adduced no evidence and had not advanced any arguments in favour of why his putative employment was covered by the Award.

[73] The Respondent conceded that the Award covered the Respondent, but that should Mr Grindal be found to be an employee, he was excluded from coverage of the Award because of the nature or seniority of the role of his position as Managing Partner.

[74] The Respondent submitted that while the contract stipulated that Mr Grindal’s classification under the Award is Managing Partner, this was not determinative of the Award covering Mr Grindal.

[75] The Respondent cited the decision of Gay C in McMillan and Norman v Northern Project Contracting TIA NPC, 16 (McMillan) referring to the following consideration regarding contractual terms that purport to confer Modem Award coverage of a relevant employee:

“[10] The Act makes clear when a person is protected from unfair dismissal, and it is, if, at the relevant time, the person has completed a period of employment with their employer of the minimum employment period, and, relevant to this case, whether one or more of the following circumstances apply. The first is a modem award covers the person, the second is an enterprise agreement applies to the person, and the third is the sum of the person's annual rate of earnings, with a reference to the Regulations.

…

[12] I deal with the point then of whether a modern award covers Mr Norman or Mr McMillan. This issue is clouded to some extent by the fact that the men, in what I regard as an entirely understandable way, rely on their contracts, which have been admitted into evidence. The contract of employment is exhibit SCI in Mr Clark's affidavit, which is exhibit NPl, and the contract of employment declares that the “Mining Award 2010” (the correct title being the Mining Industry Award 2010 [MA0000l 1]) (the Award) has application. That is at clause 6.1 of Mr Norman's contract, and I think the other contract is identical in so providing.

[13] From the point of view of the applicants, there is particular disappointment to hear that that is not so and, moreover, that the contract having said so, cannot go to make it so. I hope that is capable of understanding. In this case an error was made by whoever provided these contracts and there was a reference to the Award.

[14] The fact that the contract of employment says that does not make it so; because the Award and its coverage are not determined by the contract but rather determined by the legislation, and it is the case that section 48 of the Act sets out how it is that the award coverage has effect. I am going to read that section; it is very short:

“A modem award covers an employee, employer, organisation or outworker entity if the award is expressed to cover the employee, employer, organisation or outworker entity.””

[76] The Respondent submitted that there is no dispute between the parties that Mr Grindal’s role as a Managing Partner was very senior and that he gave specialised advice by virtue of the services he provided. The Respondent submitted that the highest classification in the Award is Level 6, which the Award describes as follows:

“A Level 6 position typically performs a middle managerial role primarily to control the conduct of a part of the employer’s business and in which decisions are regularly made and responsibility accepted on matters relating to the administration and conduct of the part of the business. Those responsible for managing more than 10 people must be classified at this level provided that this level 6 classification does not cover classes of employees:

(a) who, because of the nature or seniority of their role, were not traditionally covered at all by awards; or

(b) who perform work that is not of a similar nature to work that has previously been regulated at all by awards.

Indicative job list—branch manager, human resources or fraudulent relations manager, financial planner, information technology specialist, relationship manager, senior analyst, subject matter manager, divisional manager.”

[77] The Respondent also referred to the decision of Lee C in David Faulder v Lanteri Partners Financial Management Pty Ltd TIA Lanteri Partners Group 17(Lanteri) and specifically its consideration of whether the applicant, a senior portfolio manager who held the third most senior role in the company after the managing director and CEO, was covered by the then Banking, Finance and Insurance Award 2010. Lee C found:

“[15] The Applicant referred me to the coverage clause contained in the modem award at Clause 4, suggesting that he is clearly covered by the award. The coverage clause in clause 4 pertains to the coverage of the award in respect of the industry that it covers. On that point, as I have already alluded to, there is agreement between the parties that the award covers employers including the type of employer that the Respondent is. That does not satisfy the test as to whether or not the Applicant is covered.”

[78] The Respondent went on to cite paragraph 37 onwards of Lanteri which read:

“[37] If the Applicant is covered by this award or was covered by this award when he was employed, he can only be covered by Level 5 and/or Level 6. On a plain reading of the modem award it does not appear that the position that he held fits within the managerial role. He did not manage people at either a Level 5 or a Level 6. It is also clear in terms of the evidence that it is not possible to characterise the role of the Applicant as a middle managerial role, which is what the relevant instrument asks us to do. There is a query as to whether or not the role of the Applicant could be held to fit within level SA which is described as:

“A position as a specialised role possibly supported by one or two junior staff members requiring formal qualifications and / or specialised vocational training.”

[38] On this, in terms of an interpretation one needs to consider the indicative job list that is part of the Level 5 position. That is, in applying the relevant authorities one should not take a narrow and pedantic approach to considering the applicability of this instrument but look at the instrument as a whole. In doing so I do not find that the Applicant's role, as has been evidenced before the Tribunal in the written submissions and in the evidence before me fits comfortably within that list, which includes roles such as human resources consultant, senior learning and development officer, and so on.

[39] On all of the evidence the Applicant held a very senior, specialist and advisory role of enormous responsibility for many millions of dollars' in funds and how they were invested. I have referred already in particular to the Respondent's submission on that point. Having considered all of the evidence I prefer the Respondent's characterisation of the role and its relationship to the classification structure as they have set it out, largely in paragraphs 10 to 18 of their written submissions. I should state that I do not accept that there is a consistency with the decision in Jenny Craig Weight Loss Centres Pty Ltd v Margolina, as that tends to rely on the supervisory or managerial focus.

[40] In terms of the ultimate consideration one must consider the "principal purpose test" and, as I alluded to at the outset of this decision, I indicated that I agree that it was appropriate to apply that test as part of the consideration. It is not disputed by the Applicant that the principal purpose of the role was, as was put by the Respondent in their closing submissions, to make money autonomously. He did this by making decisions about investing substantial quantities of money, buying and selling shares on a daily basis. As such the Applicant was operating at a highly professional level and operating at a very high level in the organisation.

[41] He directly reported to the Managing Director. He met with clients at any time and at any place. It was uncontested that when the Managing Director was overseas the applicant reported to no one, and on his own admission he was the second most important person in the business. This was put as the principal purpose of the role and cannot be overlooked in a consideration as to whether or not the modem award applies. The principal purpose in my view does not at all find a place within the classification structure of the modem award, particularly when one considers the history of the development of that award that I have alluded to.”

[79] The Respondent submitted that the facts and principles applied in Lanteri are apposite in this matter. The Respondent cited Mr Grindal’s evidence under cross-examination was that he held a very senior role, that he gave specialised advice in the role and that he met with clients at any time and at any place, and for those reasons was not covered by the Award, and therefore not protected from unfair dismissal in accordance with s.382(b) of the Act.

Mr Grindal’s evidence and submissions

Employer identity

[80] Mr Grindal stated that the Respondent engaged ROC Consulting in 2018 to source an individual to manage their Innovatus accounting business. ROC Consulting made approaches to him in November 2018 in relation to the role which was described as Managing Director/Partner for the accounting division, CGA.Emails were producedconfirming the preliminary interview on 10 December 2018, and a second email from ROC Consulting confirming Mr Grindal had secured the role with CGA. Mr Grindal said he relocated to Brisbane on the basis of the employment commencing January 2019.

[81] Mr Grindal stated that the Respondent utilised a service company arrangement to pay its employees, with all payments being made from the accounting business. Innovatus Australia utilised Innovatus Services Pty Ltd for this purpose. All employees were provided with business cards and digital email signatures noting their role/title and the business being Innovatus Australia. Mr Grindal said he was provided with business cards and digital email signatures, which noted Managing Partner (Innovatus Australia) and Managing Partner (CGA Accounting).

[82] Mr Grindal said the Respondent requested that he attend to his own superannuation and salary packaging, including any motor vehicle use. He stated that the Respondent required him to organise this through a separate company for his exclusive use. Mr Grindal stated that this is the same way the Respondent went about “employing” others in the business, and he named nine individuals. He stated that all of those individuals, despite the contracting payment made to them, were entitled to and received paid leave entitlements, including redundancy and notice payments. One of these individuals was Ms Dobbie.

[83] In July 2019, Innovatus Australia was acquired by CGA Accounting Pty Ltd with all existing arrangements transferred to CGA Accounting Pty Ltd.

Independent contractor objection

[84] Mr Grindal refuted the Respondent’s objection that he was an independent contractor. He submitted that on review of the indicators set out in the legislation and case law, he was an employee, and under the control and direction of Innovatus Australia and CGA Accounting, with any existing obligations under Innovatus Australia transferred to CGA Accounting in July 2019. He provided submissions and evidence in relation to the indicia as follows.

Degree of control over how work is performed

[85] Mr Grindal said he was employed in a senior role and was required to review and direct all other employees. In the role of Managing Partner, he was required to meet with the Operations Manager of the Respondent, Ms Dobbie, on at least a weekly basis. He was required to provide regular reporting and critical business information to enable Ms Dobbie and Mr Bell to run the group.

Hours of work

[86] Mr Grindal said he was required to work standard hours Monday to Friday, and said it was implied that overtime outside of usual business hours was an expectation. He stated that it was usual for him to work 50 hours per week, including working on weekends.

Expectation of work

[87] Mr Grindal said he was employed in the role of Managing Partner, and not for a specific task. He described it as wide ranging and it included all aspects of both managing a business and undertaking supervisory work for the employees. Mr Grindal said he was required to be the tax agent nominee for the Innovatus Australia business and utilise their tax agent licence for the Respondent’s business.

Risk

[88] Mr Grindal said he bore no financial risk in his role, as the Respondent held the professional indemnity policy covering the business and the tax agent licence holders. He said he was paid on a regular and recurring basis not aligned to work or tasks being completed.

Superannuation

[89] Mr Grindal said he was entitled to compulsory superannuation from the Respondent, which is acknowledged in communications between him and the Respondent.

Tools and equipment

[90] Mr Grindal said the Respondent provided him with a corporate laptop and mobile phone, and he was required to use his own vehicle for work-related travel. The Respondent provided him with offices to work from, and all items necessary to undertake his work.

Tax

[91] Mr Grindal said that the Respondent made a payment to him on a gross basis, with the service company to undertake tax and GST obligations. He said that this was similar to the service company arrangements with Innovatus Services.

Method of payment

[92] Mr Grindal said the Respondent made a payment to him on a weekly basis by electronic transfer not aligned to the receipt of a tax invoice, which was consistent with the service company arrangement noted previously.

Leave

[93] Mr Grindal said he was advised of entitlement to annual leave and personal leave during the course of employment, and accrual of these obligations was maintained. He said that the purported contract offered by the Respondent indicated leave entitlements.

80/20 rule

[94] Mr Grindal said his sole source of income was from the Respondent, thus negating any independence of him undertaking other work.

High Income Threshold objection

[95] Mr Grindal submitted that earnings are defined by s.332 of the Act and include wages, amounts dealt with on the employees’ behalf and the agreed value of any non-monetary benefits. Excluded from earnings are payments that cannot be determined in advance (commissions and bonuses), reimbursements and compulsory contributions to superannuation.

[96] Mr Grindal said that the Respondent entered into an employment arrangement with him on 21 December 2018, on the following basis:

(a) base Salary of $165,000 including superannuation, motor vehicle and other benefits; and

(b) a performance bonus of $33,000 which was additional subject to KPIs being achieved.

[97] Mr Grindal submitted that the bonus amount of $33,000 could be excluded from the earnings calculation as it was subject to performance criteria being met.

[98] Mr Grindal said that the base salary of $165,000 was provided inclusive of compulsory superannuation contributions, which are excluded from earnings. This is an amount of $14,315 which is to be deducted from the $165,000 amount, representing 9.5% compulsory superannuation.

[99] Mr Grindal submitted that his base salary included an amount towards the work-related use of his motor vehicle, with company policy providing that employees are able to seek reimbursement for amounts of travel exceeding 200km per week. Mr Grindal said reimbursement was to be made at $0.70 per kilometre.

[100] Mr Grindal said he was required to travel between the offices of CGA Accounting, located at North Lakes, Brendale, Brisbane City and Springwood in addition to work-related travel when required to meet with clients. Mr Grindal said that an amount of $6,720 should be excluded from the earnings calculation, representing the reimbursement of motor vehicle use, which he calculated as 200km x 48 weeks x $0.70 per kilometre.

[101] Mr Grindal said that should a contention be made that a private portion exists, consideration should be had for reasonable travel to be incurred on a regular basis between the offices and clients, and that an amount of travel of at least 60km week (being 60km x 48 weeks x $0.70 per kilometre) would be sufficient to reduce the base salary package below the high income threshold. Mr Grindal’s calculations are below:

• a base remuneration package of $165,000;

• less compulsory superannuation $14,315;

• less motor vehicle usage of $6,720 (or in the alternative $2,016);

• leaving total earnings of $143,965 (or in the alternative $148,669).

[102] He submitted this was under the high income threshold of $148,700.

[103] In the alternative, Mr Grindal submitted that his employment may have been covered by the Award. In his final submissions in reply, Mr Grindal said he had previously consulted with the Fair Work Ombudsman and requested a determination as to award coverage, and received a reply that it remains a matter for the Fair Work Commission to determine, if a dispute occurs. Mr Grindal said that the Award contemplates the minimum pay and conditions for employees in the banking, finance and insurance industry, and the Respondent is directly involved in the finance industry, with a financial services business as articulated via their social media and confirmed in their evidence before the Commission.

Fixed term contract of employment

[104] Mr Grindal contended that no fixed term contract was entered into, and disputed the validity of the fixed term contract noting:

(a) The contract noted agreement on 13 September 2019, however he did not electronically sign (nor manually sign) the contract;

(b) The contract referred to a different commencement date than what occurred;

(d) The contract contained material terms that are different to that agreed during the recruitment process, including the payment of bonuses and the fixed term nature of the role; and

(e) The contract contained inconsistencies in Schedule 1 – Employment details, including:

(i) Item 1 (setting out the date agreed for the employment contract) was inconsistent;

(ii) Item 3 (setting out the location of employment as the offices in Brisbane CBD) was incorrect, and that the primary location on commencement was at Brendale and North Lakes, with attendance at the City and Springwood offices in addition;

(iii) Item 6 and Item 7 (detailing no commission structure and company bonuses were payable) were incorrect as a bonus/commission structure of $33,000 was applicable; and

(iv) Item 11 (detailing no vehicle allowance was applicable) was incorrect as it was a requirement that all employees were not entitled to reimbursement of motor vehicle travel unless exceeded 200km per week.

[105] Mr Grindal said he was sourced through ROC Consulting in November and December 2018. ROC Consulting is a business specializing in full-time and part-time employment matching with candidates and employers. Mr Grindal said that subsequent to confirmation of his employment, ROC Consulting was paid a fee of $13,200 plus $1,320 being 8.8% of the total remuneration package ($165,000) that their fees are levied upon.

[106] Mr Grindal said that his employment commencement date was 15 January 2019, however this was adjusted to 11 January 2019 by the Respondent. He said that he commenced on a full-time basis, and had he been aware of a fixed term contract, he would have commenced negotiations during December 2019 or January 2020 to ensure a renewal occurred or sought alternate employment.

Material produced by Mr Grindal pursuant to my direction

[107] On 7 August 2020, Mr Grindal filed and served the following materials pursuant to my direction:

1. Personal Income Tax Assessment 2018/2019.

2. Company financial records of Bluebirds Chest Pty Ltd ATF Janus Trust since inception (24 January 2019), including:

a. 2019 Profit and Loss Report

b. 2019 Balance Sheet

c. 2019 Trust Tax Return

d. Activity Statement – March 2019

e. Activity Statement – June 2019

f. Activity Statement – September 2019

g. Activity Statement – December 2019

h. Activity Statement – March 2020

[108] Mr Grindal’s personal tax assessment for the financial year 2018/2019 demonstrates a taxable income of $22,827.00. It is evident that an entity had remitted the amount of $10,716 as PAYG withholding tax for Mr Grindal. As I understand it, Mr Grindal did that through Bluebirds Chest Pty Ltd or through the Janus Trust.

[109] Having earned such a modest amount, the tax payable on $22,827.00 was only $879.13, and having had an entity remit $10,716 on account of taxation, together with some “low income” tax offsets, Mr Grindal received a tax refund of $10,716.

[110] In the two years prior, Mr Grindal’s declared taxable income was approximately $45,000 each year.

[111] The Janus Trust tax return for the 2018/2019 financial year describes the main business activity as “Accounting Service.” The income earned is declared as $81,397.00. It should be noted that it commenced in January 2019, representing approximately half of a full financial year. Interest expenses and depreciation were claimed, together with “other expenses.”

[112] An activity statement for the Janus Trust for the period January 2020 to March 2020 was filed. The statement demonstrates that $4,125 in GST was owed by the Janus Trust to the ATO, while an amount of $11,342 in GST was claimed by the Janus Trust. Sales were declared at $41,250.

[113] The statement declares that $2,312 was withheld as PAYG tax, presumably for Mr Grindal, while salary, wages and other payments equalled $6,500.

[114] The statement provided a refund amount of $4,950.

[115] The activity statement for the Janus Trust for the period April 2020 to June 2020 was filed. The statement demonstrates that $4,410 in GST was owed by the Janus Trust to the ATO, while an amount of $14,027 in GST was claimed by the Janus Trust. Sales were declared at $44,103.

[116] The statement declares that zero was withheld as PAYG tax, while no salary, wages and other payments were made. The statement provided a refund amount of $9,617.00.

[117] The Profit and Loss statement for the Janus Trust for the 2018/2019 financial year is as follows:

“Revenue
Other revenue	139
Professional Fees	75,519
Professional Fees (Reimbursement)	5,739
Total income	81,397
Gross profit	81,397
Operating Expenses
Consulting & Accounting	699
Depreciation (SBE)	3,460
Employment costs	70,499
General expenses	5,739
Interest expense	1,000
Total operating expenses	81,397
Net profit	0”

[118] It should be noted that the Janus Trust had approximately $1m in assets which I understand is from a sale of a business in Far North Queensland. The funds are evident in the balance sheet. The acronym SBE relevant to the depreciation claimed means “small business enterprise.”

[119] During the hearing, Mr Grindal explained that the Janus Trust did not register for PAYG taxation. He stated that he would remunerate himself as director fees, with no withholding tax. He stated that the trust did not make any payments to him in June 2019. In the 2020 financial year only $500 was paid to him.

Evidence of Ms Jennifer Dobbie

[120] Ms Dobbie gave oral evidence at the hearing after having been ordered to attend and give evidence at the request of Mr Grindal.

[121] Ms Dobbie was the Respondent’s Group Operations Manager, but no longer works for the Respondent. She stated that she oversaw the Innovatus operation and looked after the human resources function.

[122] She agreed that people who worked for the Respondent and Innovatus requested annual leave from her. Mr Grindal sought leave from either her or Mr Bell. She agreed that people working for the Respondent are paid annual leave and paid for public holidays.

[123] She stated that at the time of sourcing Mr Grindal, and using the services of ROC Consulting, there was no discussion as to whether the role would be performed by an employee or an independent contractor. The Managing Partner would be required to manage the team and supervise the work of the team. The Managing Partner reported to the Board, Mr Bell and Ms Dobbie.

[124] Ms Dobbie recalled that the offer was $165,000 inclusive of superannuation. She stated that the start date was planned for January 2019. It was put back a bit because Mr Grindal had, regrettably, been involved in a car accident on his way from Townsville to Brisbane.

[125] Ms Dobbie stated that nobody within the business was employed directly.

[126] The tools provided to perform the work included a mobile phone and laptop. These were provided to Mr Grindal in January 2019. An Innovatus email address for Mr Grindal would have been established in January 2019. She cannot recall when a CGA email address for Mr Grindal would have been created.

[127] Relevant to the emails sent in mid-January 2019 as to the structure of the relationship, she stated that she could recall sending the email to Mr Grindal dated 18 January 2019. She can’t recall the response she received from Mr Grindal.

[128] Ms Dobbie stated that she had an expectation that Mr Grindal would spend time between the various Respondent locations including Brendale, Brisbane CBD, Springwood and North Lakes. She expected he would be in the office between 9:00am and 5:00pm. She can recall creating a travel policy, having held a discussion with senior people in the business. If travel was not excessive, the person would need to cover that within their package. She considered the radius to be around 50km to 60km.

[129] Ms Dobbie stated that Mr Grindal was discovered by the external recruiter while she was on leave, and then he commenced. She stated that she created an employment contract, but was then asked to create an independent contractor agreement. She cannot recall if it was issued. Where Mr Grindal stated that he never saw the contract, nor the one said to have been generated in September 2019, Ms Dobbie stated she never gave it to him in September 2019.

[130] In answering questions put by the Respondent, Ms Dobbie stated that Mr Grindal was mainly located in the Brendale office. He was quite autonomous in the work he performed. As a senior manager it was expected he would simply get the work done.

[131] Ms Dobbie stated that she never directed him about his hours of work. She never supervised his accounting work. She stated that she was not aware of any unsatisfactory work performance.

Consideration

Was Mr Grindal an employee or a contractor?

[132] Mr Grindal has suggested to the Commission that he could not have sent the emails at [29] and [31] of this decision on account of him not having a CGA email address at that point in time. It is not clear to me if he is suggesting that perhaps it has been fraudulently created by the Respondent for the purposes of these proceedings.

[133] On the balance of probabilities, and having regard to the metadata supplied, I consider that Mr Grindal did send the emails, even if the emails now reflect a CGA email address. Mr Bell’s evidence is that he had to pull those emails from archiving, and I consider it very likely that it simply evidences it has come from a CGA account, when in all likelihood it was sent by Mr Grindal from his Innovatus email account which had been established at that time. If the Innovatus email no longer exists, it is reasonable to assume the email now demonstrates the CGA account.

[134] The content of the emails replicate what it is Mr Grindal exactly set about doing; establishing a “service entity or trust.” Mr Grindal is a sophisticated and experienced accountant. He is not a naïve, young and inexperienced new entrant to the workforce, being asked to engage in sham contracting.

[135] I consider that Mr Grindal was party to and orchestrated his engagement through a corporate entity within about one week of commencing, because he considered it was in his best interests to do so. I am of the firm view that he was well-versed in doing so, as his past income tax assessments demonstrate modest amounts payable to him as an individual. Mr Grindal’s own evidence is that having established the trust, he decided alone, how much to pay himself in the form of director’s fees. Sometimes that amount per quarter was nil.

[136] In establishing the payment through his own corporate entity, Mr Grindal relieved the Respondent of potentially slipping over the $1m mark in payroll, which is clear from his email might have meant the Respondent would be exposed to paying payroll tax. By being paid as a contractor and not an employee, Mr Grindal was relieved of paying personal taxation at a marginal tax rate of 37 cents for every dollar earned in excess of $90,000.

[137] As a sophisticated and experienced accountant, Mr Grindal would have known that his $165,000 package included an amount of superannuation that would have been required by an employer to paid into an employee’s superannuation account. Mr Grindal did not ensure or insist that this should happen.

[138] Having regard to the clear and unambiguous arrangement that was put in train by Mr Grindal at his suggestion, and willingly agreed to by the Respondent, this weighs heavily on my determination as to whether Mr Grindal was an employee or a contractor. I will consider, in turn, the relevant criteria that is typically considered in such matters.

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

[139] The evidence at hearing was that Mr Grindal was not directed to work from home and in fact worked remotely. He was not directed to work particular hours of work. Mr Grindal’s evidence is that he was required to attend the Respondent’s office locations on a “regular basis.”

[140] I have no doubt that as Managing Partner, entrusted to supervise the accounting work of other accountants, Mr Grindal was required to regularly physically attend the various offices. He was required to do more than show his face; he was tasked with supervising the work of others. It seems that this needed to be done, for most part, in person.

[141] Being expected to attend 9:00am to 5:00pm on most days is not an unreasonable requirement of a person receiving a sizeable weekly and annual payment. There is no evidence to suggest that Mr Grindal was scrutinized over his exact start and finishing times by Ms Dobbie or Mr Bell.

[142] I consider that this criterion weighs in favour of a finding of a contracting relationship as there was no evidence of scrutiny of hours of work or clear directions as to which offices Mr Grindal must work from on particular days of the week or hours of the day. He exercised a reasonable amount of autonomy as one would expect from somebody in a senior role.

Whether the worker performs work for others (or has a genuine and practical entitlement to do so) and whether the worker has a separate place of work and or advertises his or her services to the world at large

[143] The Respondent submitted that Mr Grindal was entitled to perform work for others during his engagement. Mr Grindal denies that he was able to perform work for others during his engagement by the Respondent and submitted that a condition of his engagement was that he did not perform work for others.

[144] Mr Grindal did not have a separate workplace or advertise services to the world at large. Receiving a sizeable weekly payment for the performance of, on Mr Grindal’s account, 50 hours per week, is not unexpected. If Mr Grindal had time in his day and week beyond those where he was performing work for the Respondent, it will never be clear, as it seems that Mr Grindal did not, at any time, take the opportunity to exercise such right or, if he considered that he was not permitted to do so, make any request to do so.

[145] I consider this criterion to be a neutral factor in my determination.

Whether the worker provides and maintains significant tools or equipment

[146] Mr Grindal was provided with a corporate laptop and phone and used his own vehicle for travel. Mr Grindal had access to offices provided by the Respondent.

[147] I do not consider there is any indication that Mr Grindal provided or maintained his own tools or equipment. It is not clear, however, if Mr Grindal claimed expenses through the Janus Trust on account of his vehicle expenses. Without knowing this information, I consider this criterion weighs in favour of a finding of an employment relationship.

Whether the work can be delegated or subcontracted

[148] There is no indication Mr Grindal was able to delegate or subcontract his work, and I suspect it would not have been permitted, given the skills and experience that Mr Grindal brought with him to the role.

[149] I consider that this criterion weighs in favour of a finding of an employment relationship.

Whether the putative employer has the right to suspend or dismiss the person engaged

[150] It is clear that the Respondent summarily ended the arrangement. It did so by writing directly to Mr Grindal, and not writing to the corporate entity which Mr Grindal owned and operated. It was an unsophisticated communication to Mr Grindal.

[151] I consider that this criterion weighs in favour of a finding of an employment relationship.

Whether the putative employer presents the worker to the world at large as an emanation of the busines

[152] Mr Grindal did not and was not required to wear a uniform as part of his work. He did, however utilise the Respondent’s branding in email signatures and held himself as an employee of the Respondent. This is what I would expect from somebody in the role Mr Grindal held.

[153] I consider this criterion to be a neutral factor in my determination.

Whether income tax is deducted from remuneration paid to the worker

[154] I find that at Mr Grindal’s insistence, the payment arrangement was devised where Mr Grindal would establish a corporate entity for the Respondent to pay into. Accordingly, income tax was not remitted in the same way it would be for an employed person.

[155] I consider that this criterion weighs in favour of a finding of a contracting relationship

Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks

[156] Mr Grindal was paid pursuant to automatically generated invoices. The payments made to him were paid on a consistent schedule, and not for the completion of specific tasks – rather, they were for general work completed, which varied depending on what was specifically required. The payment was for the time Mr Grindal worked.

[157] I consider that this criterion weighs in favour of a finding of an employment relationship.

Whether the worker is provided with paid holidays or sick leave

[158] Mr Grindal argued he was entitled to paid holidays and sick leave, but the Respondent denied this and stated that, if he was, he did not apply for or take any. It is clear that Mr Grindal was paid for periods which included public holidays. He invoiced for a full week and was paid for the full week when public holidays occurred.

[159] At the conclusion of the working relationship, and one week after filing this application, Mr Grindal requested payment of 4.4658 weeks of annual leave to be paid to him. If any paid annual leave was taken by him over the 15 month period of the arrangement, it must not have been many hours or days. Further, the letter sent by Mr Grindal on 28 April 2020 requesting payment of annual leave nominates an amount inclusive of GST with the following explanation:

‘*amounts include GST as payable to the agreed employment entity.”

[160] I consider it absurd for Mr Grindal to be requesting the payment of annual leave (and other paid entitlements such as notice and redundancy pay) while at the same time inflating the amount he says that is owed on account of GST to be paid to the “agreed employment entity.” Employees don’t charge their employers GST. I consider that it is foolish for a person with an application before the Commission asserting that an employment relationship exists to write to their former putative employer demanding payment of entitlements and seeking to charge GST on those amounts.

[161] I consider that where the Respondent permitted Mr Grindal (and others) to receive a full payment even when a public holiday fell due, or if he was permitted to take some days off as “annual leave,” this was done so because of the generosity of the Respondent, and it seems to me, customer and practice. I accept Mr Grindal’s evidence that others were paid out annual leave and other “employee-type” entitlements on termination. It does not correlate, however, that the payment is because they were employees. The evidence before the Commission is that many of these contracting type arrangements have been put in place; presumably by accounting professionals for their benefit. It is expected they might know the risks involved in putting together such arrangement. Payment of leave was, I consider, a bonus but not a right.

[162] I consider this criterion to be a neutral factor in my determination.

Whether the work involves a profession, trade or distinct calling on the part of the person engaged

[163] Mr Grindal is a skilled and experienced accountant. He is not required to be told how to perform the work. I accept that he was supervising the work of others. I do not consider the Respondent engaged in any form of coercion or sham contracting.

[164] I consider that this criterion weighs in favour of a finding of a contracting relationship.

Whether the worker creates goodwill or saleable assets in the course of his or her work

[165] The Respondent argued that Mr Grindal generated goodwill in his interactions with clients, as evidenced by Mr Grindal’s admission that he contacted two former clients who he referred to the Respondent after the termination of the Bluebirds contract.

[166] I consider this criterion to be a neutral factor in my determination as there is insufficient information before me.

Whether the worker spends a significant portion of his remuneration on business expenses

[167] There is no indication that Mr Grindal expended a significant portion of his remuneration on business expenses. In fact, the services provided were professional services where no materials were required.

[168] I consider this criterion to be a neutral factor in my determination.

Correspondence between the parties

[169] Curiously, on 14 July 2020, the solicitors for the Respondent wrote to Mr Grindal as follows in open correspondence:

“Dear Christopher,

RE: BREACH OF CONTRACT OF EMPLOYMENT

We are the Solicitors for CGA Group Services Pty Ltd. You were previously employed by our client under a contract of employment which was entered into on 13 September 2019 and ending 20 January 2020.

Your contract was not renewed.

Pursuant to the contract of employment you were not to solicit any customers from our client without obtaining the consent of our client and paying 1.5 times the fees payable to our client. (see clause 16)

We note you are aware of your obligations in this respect as they were discussed with our client’s Mr Bell and was the subject of correspondence between yourself and our office relating to you ceasing to contact clients.

Notwithstanding our client has obtained evidence that you have taken its client [name] and [name] who were quoted the amount $36,000 (excluding GST) for a series of compliance work to be undertaken by our client.

The client contact was made available as part of your employment arrangements and whilst you had an obligation of fidelity to our client.

Your conduct is in breach of your contractual and common law obligations of employment and as a result our client has suffered loss and damages which on the calculation under the contract amounts to $54,000 (excluding GST).

Our client hereby demands payment of the amount of $54,000 (plus GST) be paid within 7 days of this correspondence.

Payment can be made to the Morgan Conley Solicitors Pty Ltd Law Practice Trust Account. The details of which are: [redacted]

Yours faithfully

Joel Pitman
MORGAN CONLEY
Legal Director”

Conclusion

[170] Mr Grindal is sophisticated, experienced and well-versed in the requirements and obligations of an employer to its employees. It includes, of course, payment for work performed, deduction of taxation and remittance of such payment to the Australian Taxation Office before a nett amount is paid to an employee.

[171] Further, it includes consideration as to whether an industrial instrument applies, or whether the terms are covered in common law arrangements.

[172] Superannuation is payable for employees, other than for a very limited group of employees (such as young workers or those not meeting the monthly threshold payment). The superannuation payment is not made to the employee; it is deposited into an employee’s superannuation account.

[173] At Mr Grindal’s initiative, none of the above things occurred. Mr Grindal went about setting up a corporate entity, requiring the full amount of $165,000 to be paid to the entity he created. He never insisted that the amount of $14,315 be paid into a nominated superannuation account. He took care of all of his earnings and did with them what he wished. Further, he charged the Respondent GST and claimed GST for his corporate entity’s expenses.

[174] None of the above occurred at the insistence of the Respondent. It was not a take it or leave it deal for Mr Grindal. Having heard how the Respondent seemingly doesn’t employ employees, it would have been attractive for Mr Grindal’s suggestion to have been implemented. The Respondent would not have had to “bother” with the usual obligations of employers such as remitting taxation, making payments to superannuation funds and the like. This is par for the course for most of corporate Australia. The Respondent may wish to consider whether it is acting lawfully for more junior individuals.

[175] I consider Mr Grindal to have inappropriately brought this application. He has, on one hand effectively informed the Australian Taxation Office that the payments made to the corporate entity for the Janus Trust are for the provision of professional services by way of contracting services, and along the way, claimed various deductions and expenses simply not available to employees. On the other hand, he implores the Commission to find that he has been an employee all along. He cannot, in good conscience, have it both ways.

[176] As I said earlier, employees do not charge their employers GST. It might be understandable if an unconscionable principal threatens a vulnerable worker, say, a cleaner, that they cannot perform the work unless they become a contractor with an ABN and charge GST to the principal. In that case, the Commission might weigh up the imbalance of power and understand the circumstances of how that arrangement came about. In the matter before me, Mr Grindal expertly set up his corporate entity and used it to house his approximate $1m asset, together with receiving payments for the services performed for the Respondent.

[177] I consider it would be unconscionable to declare, having regard to all of the circumstances of the arrangement, Mr Grindal to have been an employee of the Respondent. Even where he has relied on the terms of the purported employment agreement, I understand that it was supposedly created in September 2019, well after the services had commenced, and it was never actually agreed between the parties. Nobody understands its relevance.

[178] The letter sent by the Respondent’s legal representative on 14 July 2020 at [169] to Mr Grindal is, in my view, demonstrative of some incompetence of the firm. It repeatedly refers to Mr Grindal as having been an employee of the Respondent. In written submissions explaining the letter, it was submitted that it was appropriate for the Respondent to have corresponded with Mr Grindal advising of particular covenants that the Respondent will seek to enforce against Mr Grindal if it is determined that he is an employee.

[179] The letter does no such thing. There is no such caveat. It purports to explain the relationship as that of one of employer and employee, and demands payment from him as a natural person. Understandably, Mr Grindal did not make the payment. It is extremely unfortunate this heavy-handed letter was sent to Mr Grindal, and while attempting to represent the Respondent’s interests in this matter in arguing before the Commission that Mr Grindal was not an employee, the representative effectively set the Respondent back many paces. It is, with respect, an embarrassing letter sent at an advanced stage of litigation.

[180] Having considered all of the matters set out above, on balance, I am satisfied that Mr Grindal was engaged by the Respondent as an independent contractor and not as an employee. It is not an examination of how many items I consider favour an independent contractor relationship over an employment relationship. I confirm that I have considered the totality of the relationship.

[181] Accordingly, is it not necessary for me to consider the remaining jurisdictional objections. Mr Grindal is not a person protected from unfair dismissal and is unable to pursue his application. An order dismissing the application will be issued with this decision.

[182] For completeness, however, in the event I am wrong in determining Mr Grindal is not an employee, I make the following observations.

Was Mr Grindal covered by the Award?

[183] I agree that the Award covers the Respondent, however the work performed by Mr Grindal far exceeds the highest classification within the Award. I consider that he would be far more senior than a Level 6 employee. If it were necessary, I would not find that Mr Grindal was covered by the Award.

High Income Threshold

[184] In analysing the amount paid to Mr Grindal, I would have no hesitation in reducing the amount of $165,000 by $14,315, being the amount that would otherwise have been paid into Mr Grindal’s superannuation account. This is then an amount of $150,685.

[185] There never was any clarity between the parties as to an amount which might be otherwise a car allowance. Typically, parties declare a certain sum as constituting a car allowance; for example, $15,000 per annum. A car allowance is typically paid to cover all kilometres travelled by an employee, both private and for business travel. It is then an easier exercise to undertake to understand how much of the car allowance should be counted as earnings. For example, if the salary was $135,000 and the car allowance was $15,000, the starting point for earnings is $135,000, and then it is the proportion of $15,000 constituting personal travel that is then added to the $135,000.

[186] Mr Grindal clearly undertook business travel when he travelled between the Respondent’s offices in the same day. I consider that would constitute business travel, as the trip from home to the first office would constitute personal travel, but once a second destination was required, I consider that would be properly classified as business travel. The trip home from the last office attended each day would be properly classified as personal travel.

[187] With the amount of $150,685 being $1,985 in excess of the threshold of $148,700, if kilometres travelled for business purposes were removed, and calculated at the rate of $0.70 per kilometres, it would take approximately 2,836 kilometres to have been travelled for business purposes for Mr Grindal’s earnings to fall below $148,700. Over 48 weeks, as Mr Grindal has suggested, that is an amount of approximately 59 kilometres per week.

[188] I have determined that it is not necessary for me to decide this issue. If it had been, further evidence and submissions would be required to definitively determine the issue.

Fixed term contract of employment

[189] There is significant dispute over whether Mr Grindal was employed on a fixed term contract. The Respondent claims that he was; Mr Grindal strenuously denies signing the contract or working under said contract. Notwithstanding this, it is clear that the Respondent prepared a contract for a fixed term commencing 14 January 2019 and terminating on 14 January 2020. Mr Grindal continued to perform work for the Respondent until his employment was terminated on 2 April 2020.

[190] In Ramsey v Annesley College [2013] SASC 72 (Ramsey), Blue J considered whether there was an ongoing employment contract where an employee was employed on a fixed term contract but continued to work for the employer after the finish date of that contract.

[191] In that matter, the plaintiff, Ms Ramsey, was employed by Annesley College as Head of Boarding from 2003 under formal employment contracts executed in 2002 and 2005. In mid-2009, there were discussions concerning a further three- or five-year contract after expiration of her current contract in January 2010. The discussions were confirmed, to an extent, by letters from Annesley to Ms Ramsey. There was discussion about preparation of a formal contract but no formal contract was prepared or signed. Ms Ramsey continued to be employed by Annesley beyond the 31 January 2010 expiration of the 2005 contract. Ms Ramsey was later dismissed for serious misconduct. Annesley argued that an implied contract came into existence subsequent to the employment contract coming to an end on 31 January 2010.

[192] In Ramsey, Blue J considered whether an implied employment contract could be created by the conduct of the parties and found (footnotes omitted):

“178. The 2005 Contract was expressed to continue (unless earlier terminated) until 31 January 2010. In the period approaching 31 January 2010, neither party acted on the basis that Ms Ramsey's employment was to end on 31 January 2010. On the contrary, all of the communications between the parties proceeded on the basis that, unless one of the parties took a concrete step to terminate the employment relationship, it would continue beyond 31 January 2010.

179. Likewise, from 1 February to 19 March 2010, both parties acted on the basis that Ms Ramsey continued to be employed by Annesley. She continued to be paid her salary and superannuation. Arrangements for her return from sick leave were discussed.

180. The conduct of the parties was inconsistent with Ms Ramsey's employment ceasing on 31 January 2010. The parties acted as if the terms of the 2005 Contract continued to govern their relationship, notwithstanding the effluxion of time.

[193] Ramsey went on to consider the cases of Bullock v Wimmera Fellmongery and Woolscouring Co Ltd (1879) 5 VLR (L) 362 and

“181. In Bullock v Wimmera Fellmongery and Woolscouring Co Ltd, the parties entered into a contract for a fixed term of one year appointing the plaintiff as manager and accountant of the defendant company at an agreed annual salary with a house rent-free. At the expiration of 12 months, the plaintiff continued to act as manager and accountant and continued to be paid and to reside in the house rent-free. Stawell CJ and Barry J held that an implied contract arose on the same conditions as the original contract.”

[194] Blue J further considered the case of Brambles Limited v Andar Transport Pty Ltd [2002] VSCA 150 (footnotes omitted):

“182. In Brambles Limited v Andar Transport Pty Ltd, Brambles and Andar entered into an agreement in 1990 for Andar to provide a linen delivery and collection service for Brambles for three years. Upon the expiry of the term of the contract in April 1993, the parties continued to act in accordance with its terms. Andar continued to perform delivery and collection services and Brambles continued to pay for them. The Court of Appeal of the Victorian Supreme Court held that an implied contract (implied from the conduct of the parties) came into effect in April 1993. Its terms were the same as the 1990 Contract, except as to the period of the contract. Winneke P, Charles and Batt JJA held:

The question whether an implied or tacit agreement to continue dealing on the same terms save that the agreement should be terminable on reasonable notice is to be inferred is … an evidentiary or factual question. On the facts we have set out earlier we consider such an inference should be drawn here. The evidence, fairly sparse though it is, warrants the finding that after 3 April 1993 the parties proceeded as though still governed by the terms of the original agreement (save that, since it had already expired, either could terminate the substitute agreement on reasonable notice) rather than a finding that they impliedly agreed merely that Andar should collect and deliver the laundry and that Brambles should pay it a reasonable sum for that or a finding that the parties made a series of individual implied agreements, six days a week, for that work to be done for a reasonable sum. In other words, after 3 April 1993 the parties operated under a standing agreement under which all the procedures and, importantly, their remuneration were exactly the same as they had been under the written agreement. The parties intended that that should be so.”

[195] Blue J concluded that the parties had entered into a contract around January or February 2010 on terms identical to the terms of the earlier 2005 contract, except that there was no fixed period of employment such as three or five years. 18 Blue J considered that the contract arose from the parties’ conduct which was consistent with the terms of the 2005 contract continuing to govern their relationship and was inconsistent with Ms Ramsey’s employment ceasing on 31 January 2010.19

[196] In the present case, the contract the Respondent purported to cover Mr Grindal expired in January 2020. The Respondent relied on the effluxion of the fixed term contract as the grounds for dismissal but did not dismiss Mr Grindal until April 2020.

[197] Consistent with the above case law, I consider that even if Mr Grindal was covered by the fixed-term contract, the fact he continued to perform work after the expiry of that contract would give rise to a new contract on the same terms as the previous contract, save except that there was no fixed period of engagement. The Respondent could therefore not rely on the expiry of the contract and did in fact dismiss Mr Grindal. If required, I would not uphold the Respondent’s jurisdictional objection on this issue.

COMMISSIONER

Appearances:

Grindal C, Applicant.
Spence T, Counsel for the Respondent, instructed by Herbert J.

Hearing details:

11 August 2020, by Telephone.

Printed by authority of the Commonwealth Government Printer

1 Joshua Klooger v Foodora Australia Pty Ltd[2018] FWC 6836.

2 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16.

3 Hollis v Vabu Pty Ltd t/a Crisis Couriers [2001] HCA 44, 106IR 80.

4 Abdalla v Viewdaze Pty Ltd (2003) 122IR 215.

5 Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario[2011] FWAFB 8307; (2011) 215 IR 235 (French Accent).

6 Hollis v Vabu Pty Ltd t/a Crisis Couriers [2001] HCA 44, 40.

7 Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario[2011] FWAFB 8307, 30.

8 Peel v Aster Home Nursing Service Pty Ltd [2020] FWC 4782, [7]-[9] (Commissioner Simpson).

9 [2015] FWCFB 3704.

10 [2013] FCAFC 3.

11 Ibid at [41].

12 (2003) 122 IR 215.

13 Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation [2010] FCAFC 52 [31], 184 FCR 448, quoting Hall (Inspector of Taxes) v Lorimer[1992] 1 WLR 939 at 944.

14 Jiang Shen Cai trading as French Accent v Michael Anthony Do Rozario[2011] FWAFB 8307 [30]; (2011) 215 IR 235.

15 Adrian Read v Universal Store Pty Ltd T/A Universal Store[2010] FWA 5772.

16 [2012] FWA 7049.

17 [2012] FWA4801.

18 Ramsey v Annesley College [2013] SASC 72 at [183].

19 Ibid at [186].

Mr Christopher Grindal v CGA Accounting Pty Ltd T/A CGA Accounting

[2021] FWC 1002

24 FEBRUARY 2021

DECISION

Independent Contractor Principles

Award coverage