Mr Maxwell Coulthard v Redei Enterprises Pty Ltd, Redei Services Pty Ltd

[2024] FWC 1454

[2024] FWC 1454

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.365 - Application to deal with contraventions involving dismissal

Mr Maxwell Coulthard
v

Redei Enterprises Pty Ltd, Redei Services Pty Ltd

(C2023/7784)

COMMISSIONER CONNOLLY MELBOURNE, 7 JUNE 2024

Application to deal with contraventions involving dismissal – jurisdictional objections raised – application for an extension of time – whether the applicant was dismissed – whether employment relationship exists – extension of time granted – applicant found to be an employee of the respondent - jurisdictional objections dismissed – matter to proceed.

Background

1. On 12 December 2023, Mr Maxwell Coulthard (the Applicant) lodged a general protections application against Redei Enterprises Pty Ltd (the Respondent or Redei) under s.365 of the Fair Work Act 2009 (the Act) alleging that on 6 December 2023, he was dismissed in contravention of the general protection provisions of the Act.

1. On 5 January 2024, the Respondent filed a Form F8A Employer Response and raised a jurisdictional objection, asserting that Mr Coulthard had not been dismissed. The Respondent contended that Mr Coulthard was not an employee, but an independent contractor of another company and company director and could not have been dismissed. In the alternative, and in addition, the Respondent further asserted that the application should not proceed as it was not made within the required time frame. 

1. As a result of the decision in Coles Supply Chain Pty Ltd v Milford,[1] I am required to determine the jurisdictional objections, whether the Applicant was dismissed and the out of time issue, before I can exercise powers under s.368 of the Act to deal with the dispute about whether the dismissal was in contravention of the general protections provision.

1. On 19 January 2024, Directions were issued for the filing of material in respect of the jurisdictional objections, and a Hearing was scheduled for 4 March 2024. 

1. In summary, I have found that at the time of his dismissal, Mr Coulthard’s relationship with Redei was one of employee and employer within the meaning of s.386 of the Act and further, that exceptional circumstances exist to warrant granting an extension of time to allow his application to proceed. 

1. The basis of this finding and the Order made by the Commission are set out in this decision.

Relevant Law

1. Section 365 of the Act provides:

“365 Application for the FWC to deal with a dismissal dispute

If:

(a)   a person has been dismissed; and

(b)   the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;

the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.”

1. Section 366 of the Act requires that a s.365 Application must be made within 21days of the alleged dismissal taking effect, or some further period as allowed by the FWC under subsection (2).  Section 366(2) provides as follows:

(2) The FWC may allow a further period if the FWC is satisfied that there are exceptional circumstances, taking into account:

(a) the reason for the delay; and

(b) any action taken by the person to dispute the dismissal; and

(c) prejudice to the employer (including prejudice caused by the delay); and

(d) the merits of the application; and

(e) fairness as between the person and other persons in a like position.”

1. Section 386 of the Act provides the meaning of dismissed:

“386 Meaning of dismissed

(1)   A person has been dismissed if:

(a)   the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b)   the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”

1. The question of whether a person is an employee is the subject of two recent decisions of the High Court:

• CFMEU v Personnel Contracting Pty Ltd [2022] HCA 1; and

• ZG Operations v Jamsek [2022] HCA 2

1. As a result of the decisions in Personnel and Jamsek, the consideration of whether someone is an employer has been revisited.  A Full Bench of the Commission has considered these principals in Chambers v Broadway Homes Pty Ltd [2022] FWCFB 129, in a case regarding ‘independent contractors’ and employees in the real estate industry.  In Nawaz v Rasier Pacific Pty Ltd[2022] FWC 1189, Commissioner Hampton (as he was then) summarised the principles to be applied following the High Court[2].  To the extent they are relevant to the facts of this, these can be summarised as follows:[3]

·   Characterisation of the relationship is to be determined by reference only to the parties’ legal rights and obligations.

·   Where a comprehensive written contract is in place, this will be the primary source of the parties’ legal rights and obligations, unless it is a sham, has been varied after it was made, or post agreement conduct, or context demonstrates that a term was legal ineffective.

·   Relative bargaining power of the parties is not relevant.

·   The multifactorial approach remains appropriate, but it is to be applied by reference to the parties’ legal rights and obligation and not to post contract conduct.

·   All the relevant factors require consideration, but two factors in particular assist in assessing the ultimate question of whether the person was an employee, being:

a. The degree of control exercisable by the purported employer; and

b. Whether a person was contracted to work in the business or enterprise of the purported employer or whether they were conducting their own business (although the second part of the question is subsidiary).

·   The labels applied by the parties are irrelevant as proper characterisation is a matter for the courts or the Commission.

·   In relation to factors that were previously relevant, these are subsidiary to the consideration of the written agreement, but:

a. The manner in which the relationship is worked in practice may be relevant for certain purposes, such as to find contractual terms where they cannot otherwise be ascertained or to determine the nature of any variation to agreed terms.

b. It is permissible to have regard to objective events, circumstances and things external to the contract.

·   Conduct and expectations of the parties after entering into the contract are not generally relevant.

1. In JMC Pty Limited v Commissioner of Taxation [2022] FCA 750, Wigney J similarly distilled these principles, concluding:[4]

“The characterisation of a relationship as being either one of employer or employee, or one involving the engagement of an independent contractor, is ultimately an evaluative judgement that takes into account the totality of the parties’ contractual rights and obligations. The exercise may not necessarily be straightforward because, in some cases at least, the parties’ contractual rights and obligations may point in different directions.  The evaluative exercise should not be approached on the basis that there is some checklist against which ticks and crosses may be placed so as to produce the right answer.  Some degree of uncertainty is unavoidable, particularly in the case of many modern-day work or service contracts.”

1. The majority of the High Court in Personnel, citing R v Forster (CLR) at [151[, made clear that:

“Subject to statute, under common law the parties are free to agree upon the rights and obligations by which they are to be bound.  But the determination of the character of the relationship constituted by those rights and obligations is a matter for the court.”[5]

Procedural Matters

1. A Hearing was conducted in Melbourne, on 4 March 2024, commencing at 10:00 AM. Both the Applicant and the Respondent sought leave to be represented pursuant to s.596 of the Act, and permission was granted. The Applicant was represented by Mr Tony Pick (Solicitor) and the Respondent was represented by Mr James Ryan (Solicitor).

1. A court book, containing all materials filed by the parties was compiled and distributed to the parties prior to the Hearing. I received the entirety of the court book into evidence, subject to appropriate weight being given to the evidence that was tainted by opinion, irrelevance or hearsay.

Background

1. Much of the background to this application was uncontested and can be briefly summarised as follows.

1. The Applicant is one of three (3) co-founders and directors of the Redei Group of Companies which comprises a number of wholly owned subsidiaries, including among others:

·   Redei Innovations Pty Ltd,

·   Redei EcoPower Pty Ltd,

·   Redei Solutions Pty Ltd,

·   Redei Services Pty Ltd (Redei Services), and

·   Redei Enterprises Pty Ltd. 

1. Redei Enterprises Pty Ltd is the parent company of the group and is the Respondent in this matter.

1. On or about July 2019, the Applicant, the other co-founders and directors of the Respondent (Mr Daniel Jung and Mr David Treanor) each agreed that the Applicant would perform the role of General Manager, Redei Services and that all 3 directors would be engaged as General Managers of at least one of Redei’s divisions or subsidiaries, according to their skills and experience. 

1. The Applicant was engaged as General Manager for Redei Services Pty Ltd.  As General Manager for Redei Services he also performed duties as Managing Director for Redei Enterprises. His responsibilities included Human Resources, Business Strategy, Legal and Finance duties for the group. No written contract was prepared to document the rights and obligations of the parties to the relationship. It is not in dispute that the Applicant played a key role within the Respondent’s business and corporate entities and that his responsibilities included recruiting staff, preparing, reviewing and applying human resource, legal, financial, accounting and employment policies, systems and procedures.

1. Redei Enterprises Pty Ltd and its subsidiaries were formed by the Applicant and the other co-founders as a ‘start up’ enterprise seeking to establish itself and grow in the Engineering, Procurement, Construction and Lithium Battery manufacturing industries. 

1. As a ‘start up’, the Directors sought tax advice from their accountant, Mr Peder Whelan, on how best to structure their new enterprise.  As the Director with experience and responsibility for legal, accounting and financial matters the Applicant sought this advice and advised that it would be beneficial for Redei to establish a separate financial and payroll entity to protect the intellectual property within Redei Innovations. Further, that to help manage cash flow and reduce risk the Directors could use this entity to engage themselves as independent consultants providing services as General Managers to the Respondent.

1. In approximately June 2019, the 3 Directors agreed to this recommendation and Redei Services Pty Ltd was established for this purpose.  It was also agreed that each of the Directors would cause their personal or corporate trustee to contract and invoice Redei Services for the provision of their consultation services to the Redei Group of Companies, Redei Enterprises (the Respondent).  

1. Along with his wife, the Applicant is a co-founder and director of his own company, VJC Strategic Investments (VJC).  The Applicant used VJC as a company through which he provided his services as a General Manger and Managing Director to Redei Enterprises. The Applicant performed his services for Redei and issued regular invoices to Redei Services Pty Ltd for his services between July 2019 and November 2023.

1. Between 2022 and May 2023, attempts were made to record a formal written General Mangers Agreement between the Applicant, the other Director’s/General Managers, and Redei.  No formal written agreement was finalised.       

1. On 13 November 2023, the Respondent wrote to the Applicant advising a decision had been made to end the business contracting relationship between Redei and VJC and that going forward VJC’s services would no longer be required by Redei.  On 15 November 2023, the Respondent sent an email to its employees titled “Organisational Change” advising the Applicant would be stepping back from his “day to day operational duties within the business.”

The Respondent’s Position

1. The Respondent has prepared written submissions and witness statements from Mr Daniel Jung, Mr David Treanor and Mr Peder Whelan, all of whom gave sworn evidence in proceedings.  The Respondent’s position is that the Applicant was not dismissed as he was not an employee of the Respondent, but an independent contractor; that the Applicant was engaged as a contractor by Redei Services, not Redei Enterprises; and that the Applicant has not filed his application within the required time and should be dismissed for want of exceptional circumstances. 

1. Advancing its position that the Applicant was not an employee but an independent contractor, the Respondent contends that the Applicant’s responsibilities included Human Resources, Legal and Finance duties.  They submit it was the Applicant who sought advice from his personal and Redei Enterprises accountant, Mr Whelan, on the engagement of the founding Directors providing General Manager’s services through independent consulting agreements. 

1. On this basis, the Respondent’s asserts that the Applicant intended to enter a legal independent contractor relationship in approximately July 2019 and that the conduct of the Applicant and Redei Enterprises after this time supports this conclusion. They submit the contracting agreement reached between the parties is partly in writing; in the form of invoices, emails and a draft General Managers Agreement; partly oral, as it was a product of the discussion between directors at their July 2019 Board meeting and partly implied by the conduct of the parties at law over the course of more than 3 years. The Respondent contends that this indicated it was their common intention that the legal relationship between them would be one of principal and contractor. 

1. There is no suggestion that the contact was a sham and the Respondent accepts that the Commission’s task is an objective inquiry, not a subjective assessment of what the parties thought.[6] They accept the High Court authorities in Personnel and Jamsek are relevant and that as there was not a signed written independent contractors agreement between the parties, although attempts were made to execute one, the “totality of the relationship” must be considered in line with the multi-factorial test established by the authorities.[7]

1. In this regard, the Respondent’s evidence is that this is not a case where the Respondent both had the right to exercise a significant degree of control over the Applicant’s work and did in fact exercise this control.  Rather, it is the Respondent’s case that the Applicant entered a contract as an independent contractor through VJC with the Respondent to provide consulting services, which included performing duties as a General Manager. Further, that the Applicant had freedom as to when, where and how he performed these duties. It is asserted that he was free to delegate VJC’s work to others as he saw fit, and that there was no prohibition on VJC or the Applicant providing services to any other person.  Moreover, that the Applicant did not receive any payment for superannuation entitlements, leave entitlements or pay income tax, and that on a fortnightly basis he invoiced the Respondent for ‘consulting services’ through VJC, plus GST. 

1. It is the Respondent’s evidence that as the General Manager, the Applicant was responsible for Human Resources and Legal matters, including payroll.  They argue that in performing this role he arranged for the payment of superannuation, payslips, leave, and income tax deductions for other employees.  This included his fellow co-founding director and General Manager, Mr Jung, when it was resolved he would no longer be an independent contractor and become an employee. 

1. The Respondent submits that at no stage did the Applicant make any claim to, or provisions for, these entitlements. This is because, the Respondent argues, the Applicant was aware it was not the intention of the parties for their relationship to be one of employee and employer. Stating that he was aware who the parties to their contract where, and on what terms they were engaged.

1. On behalf of the Respondent, Mr Jung and Mr Treanor gave supporting evidence to this effect from their perspective as the Applicant’s co-founders, co-directors and fellow General Managers at the time of the formation of the contract. They submit they all made a strategic decision at the July 2019 Board meeting that they would be engaged by Redei as independent consultants through their own companies.  The sworn evidence of both is that they made this decision in part relying on the guidance of the Applicant along with his previous practice, and that as the Director responsible for legal affairs he had sought professional advice from their accountant.

1. Mr Whelan’s, the accountant, evidence is that he provided the Applicant advice on establishing independent contractor relationships through which each of the founding directors of Redei could be engaged and remunerated for their services in a way that assisted the enterprise in its establishment regarding tax, cash flow, and risk.  His evidence is that in his professional experience such engagements are ones of independent contacts, not employment.

1. Mr Whelan’s evidence also supports the evidence given by Mr Jung and Mr Treanor. It is his oral evidence that the Applicant was aware of his status as an independent contractor and that he communicated this to him on more than one occasion.  This included during his preparation of the 2020 financial statements for Redei Services when the Applicant suggested the inclusion of the following terms:

“The Directors are not paid employees of Redei Services.  They are independent contractors that bill the company each fortnight for their services on the basis of payment to be made when funds are available…”[8]

1. The Respondent submits, the fact that the parties made attempts to document their relationship in the written General Managers Agreement is further evidence of the parties’ understanding that they were, and intended to be, independent contractors.  Further, that contextual circumstances at the time of the making of the contract, along with the subsequent conduct of the parties in its performance between 2019 and 2023, make it clear what they intended their relationship to be and was.

1. The Respondent asserts it was the independent contractor relationship between Redei Enterprises and VJC that was terminated by the Respondent on 13 November 2023 following investigations and considerations by the Respondent’s Board into complaints against the Applicant.  The Respondent’s position is that the Applicant was aware his contract and any legal relationship between himself, and the Respondent was with Redei Services. In support of this position, they submit the Applicant’s company invoiced Redei Services for payment and in November 2023 lodged a Workers Compensation claim identifying Redei Services as his employer.

1. On this basis, the Respondent opposes any variation to amend the application to join Redei Services and maintains the application against the Respondent should be dismissed. 

1. Mr Jung provided evidence in support of the Respondent’s decision to terminate the Applicant’s contract.  He submits that on or about 12 September 2023 an employee of Redei Services made serious complaints against the Applicant about an incident that occurred on 20 August 2023.  On 20 September 2023, an independent investigator was engaged to investigate the complaint and Mr Jung and Mr Treanor met with the Applicant to inform him of the investigation. 

1. On 17 October 2023, the Applicant was asked to attend the office for training and asked by his co-directors not to speak to the person who had made a complaint against him.  The Applicant failed to follow this direction.  On 25 October 2023, the Applicant made Mr Jung aware he had received a complaint against Mr Treanor by another employee of Redei Services, Ms Olivia Loos.  As the Applicant was under investigation, Mr Jung asked him to pass on Ms Loos’ complaint so it could be properly considered and investigated.  On 30 October 2024, the Applicant failed to follow this instruction.

1. On 6 November 2024, a meeting was convened to address the complaints and the Applicant was found to have breached discrimination and harassment legislation as well as Redei’s policies and procedures.  Consequently, the Applicant was issued with a first and final warning.  On 13 November 2023, following several instances of bad behaviour and failing to follow instructions, Mr Jung sent a letter via email to VJC (to the Applicant’s attention) providing notice of termination of the business relationship for cause, with immediate effect. 

1. It is Mr Jung’s evidence, supported by that of Mr Treanor, that the Applicant and VJC were aware of the reasons for this decision and its effect on 13 November 2023.  On this basis, it is the Respondent’s position that as the Applicant’s general protections application was lodged on 12 December 2023, being 29 days after the termination, his application is out of time and should be dismissed.  

1. With regard to any exceptional circumstances to warrant an extension of time to allow the application to proceed, it is the Respondent’s position that no such circumstances exist. Their submissions are that the Applicant has not provided any valid reason for the delay, other than a misunderstanding of the law, his employing entity and that as an experienced person responsible for HR, who was legally represented at the time of making his application, this cannot be accepted.  Further, that the Applicant’s own evidence is that he became aware of his termination on at least 15 November 2023, and on this basis his application remains out of time. 

1. It is not disputed that the Applicant made attempts to dispute his termination post dismissal and alleged he was an employee of Redei Services.  The Respondent submits it did not receive any first application and a diligent Applicant would have ensured this was the case.   Adding, that the Applicant could have filed an application in the alternative against Redei Services, and that his application is without merit for the following reasons.  Primarily because he was not an employee.  Further, that even if he was found to be an employee he does not have a complaint he was able to make for the purposes of s.341 of the Act. That he has not particularised any complaint or inquiry he is able to make for the purposes of this section and that the reasons for his termination were lawful.

The Applicant’s Position

1. The Applicant has prepared written submissions and filed witness statements from Mr Maxwell Coulthard, Ms Olivia Loos and Ms Jess Denver.  The evidence of Ms Loos and Ms Denver that they worked with Mr Coulthard in his position of General Manager and Managing Director and raised concerns towards the end of his time at Redei is not disputed and accepted by the Respondent.  Ms Loos and Ms Denver were not required to appear.  Mr Coulthard gave sworn evidence in the proceedings.

1. The Applicant’s position and evidence can be summarised as follows.

1. Firstly, that he was an employee.  The Applicant argues that he was, at law, an employee of the Respondent and that he has provided exclusive services to Redei Enterprise in the roles of General Manager (Redei Services) and Managing Director (Redei Enterprises) since July 2019.  To the extend relevant, Mr Coulthard’s evidence is supported by that of Ms Loos and Ms Denver.  Mr Coulthard submits that he worked extensively and exclusively for the Respondent over this time in senior roles with significant business critical responsibilities, including staffing, legal compliance, finance, services and human resources. 

1. Further, that the Respondent had a right to, and in fact did, exercise a significant degree of control over how he performed his work.  This included taking direct disciplinary action against him, issuing directions, and terminating his employment in a public manner for not following instructions and allegedly acting in a manner inconsistent with the Respondent’s policies and expectations. The Applicant states that during his employment he was presented to be an extension of the Respondent and that this included using corporate livery and branding in all internal and external communications and presentations.

1. The Applicant accepts that he was paid by invoices and did not receive pay slips or superannuation, pay income tax, or accrue leave.  However, he submits that he was paid in a regular and systematic amount that he could not unilaterally vary.  He accepts that this was his only source of income, and the invoicing system was used and agreed to by him through VJC as a strategic business decision to assist managing cash flow and risk.

1. Mr Coulthard’s evidence is that there was a distinction between the work he performed as a director for any one of the Respondent’s corporate entities and his role as Group Managing Director or General Manager of Redei Enterprises.  He submits that his director’s duties were unpaid and intermittent.  Further, he maintains that the only thing VJC provided to the Respondent was himself.  At no time did he delegate or contract work to another entity, or seek to do so, and that for all intents and purposes he considered himself to be fully committed and accountable to perform work exclusively for the Respondent, which he did.  His evidence is that he was not aware of the technical or legal distinction between an employee or an independent contractor. He accepts that he freely entered the relationship with Redei but had no reason to consider these issues and was content with the relationship and considered himself an independent consultant.

1. Secondly, the Applicant intends he was employed by Redei Enterprises Pty Ltd.  The Applicant argues that notwithstanding the fact he was paid by Redei Services, the internal arrangements within the Redei Group meant that his real employer was Redei Enterprises (who terminated his employment).  Supporting this submission, his evidence is that there was never any real distinction between the entities within the Redei Enterprises Group of Companies.   He submits that for all intents and purposes they were one in the same and that he, Mr Treanor and Mr Jung were directors of all Redei Group companies.  Further, the fact that the term Redei Enterprises was generally used in emails and formal correspondence by all the directors reflects the reality that the individual companies were treated as one. 

1. The Applicant submits that up until the time of his dismissal, he had been invoicing Redei Services for the work and service he had been performing for the Redei Enterprises Group of Companies, without distinction.  It is on this basis and understanding of who his employer was that he identified Redei Enterprises as his employer in both s.365 applications made in the Commission (C2023/7582 being the first application and this being the second application).  Further, that should the Commission not find he was an employee of Redei Enterprises Pty Ltd, considering his genuine confusion, the Commission should exercise its discretion under s.586 of the Act, consistent with the authority in Djula v Centurion Transport[2015] FWCFB 2371, to amend his application to include Redei Services Pty Ltd as a second Respondent. 

1. Thirdly, that the Applicant’s employment was terminated on 6 December 2023 and his application lodged on 12 December 2023, is clearly within time.  In support of this position, Mr Coulthard submits he became aware of his termination when shown a group email to all staff sent on 15 November 2023 announcing his departure.  That he was not provided with any payment in lieu of notice, meaning his dismissal took effect 3 weeks later - on 6 December 2023, consistent with the statutory requirements of s.117 of the Act. This was 6 days after the dismissal took effect, meaning his application is within time.

1. In further support of his application, the Applicant submits that not only did he take steps to dispute his termination prior to the decision being made, but he continued this action post dismissal.  This included seeking legal advice and assistance with a related shareholder dispute as well as in relation to his dismissal.  From 20 November 2023, multiple letters were sent on his behalf to this effect.   On 4 December 2023, the first general protections application was filed with the Commission, which was subsequently withdrawn prior to service after consideration of information from the Commission general protections team that if the dismissal took effect on 6 December 2023, the Application may be premature. The present application was filed on 12 December 2023. 

1. On 17 November 2023, the Applicant also lodged a workers compensation claim for stress and bullying.  He states that throughout this time he was supporting his wife in her treatment for cancer.  These reasons, along with the lack of clarity of his employing entity and termination, he submits are a combination of exceptional circumstances that warrant the granting of an extension of time for his application to be considered, should the Commission not be satisfied his termination date was 6 December 2023.

1. Regarding his termination and his exercise of workplace rights, Mr Coulthard submits that he was subjected to a fundamentally flawed and procedurally unfair investigation into allegations the Respondent knew to be baseless.  That he complained about the investigation to the Respondent, its lack of clarity, and that the absence of specific allegations against him denied him an opportunity to respond prior to being subjected to disciplinary action.  Also, that he complained about his treatment in relation to complaints made by Ms Loos against another director, Mr Treanor, and that these complaints led the Respondent to terminate his employment.  Mr Coulthard’s evidence is that he did not receive the letter from Mr Jung notifying him of the termination decision until after he was shown an email to all staff.  On the 13 November 2023. he became aware he could no longer access the Redei Bank accounts and on 21 November 2023, found he was denied access to its software systems.  He maintains that he was terminated without proper process, without notice and that his outstanding wages and entitlements remain unpaid. 

Consideration - Questions to be determined.

1. There are three questions to the determined by the Commission in this matter.  Firstly, it must be established if Mr Coulthard was an employee within the meaning of the Act.  If he is not an employee, he cannot have been dismissed within the meaning of the Act and his application must be dismissed.

1. Secondly, if Mr Coulthard is an employee it remains to be determined if he was an employee of Redei Enterprises, or Redei Services as submitted by Respondent. If it is found that he is an employee of Redei Services, the Applicant has sought an amendment pursuant to s. 586 of the Act to his application to join Redei Services to the application, which is contested by the Respondent.

1. Thirdly, whether the date of Mr Coulthard’s termination was either 13 November 2023 or 6 December 2023. If it is determined that the termination occurred on 13 November 2023, whether are not exceptional circumstances exist to warrant the Commission granting an extension of time to allow the application to proceed.

1. In considering these questions, I have had regard to the decision of the Full Bench in Herc v Hays Specialist Recruitment (Australia) Pty Limited, where the proper sequence for the consideration of jurisdictional questions was set out.  In particular, the authority of the Full Bench as set out at [17] as follows:

“While it may be necessary to assume that an applicant is an employee for the purposes of determining whether an application for an unfair dismissal remedy is made outside the required time, and if necessary, whether a further period should be granted for the application to be made, such assumptions cannot be made with respect to other jurisdictional objections. Where time is extended or an application is made within time, and an objection as to whether the applicant is an employee is raised, that objection must be dealt with before consideration can be given to other objections such as whether the person was dismissed, high income threshold or genuine redundancy.”[9]

1. Proceeding on this basis, I have considered the questions to be determined by the Commission in the order below.  Firstly, what was the date of Mr Coulthard’s termination and whether there should be an extension of time.  Second, whether Mr Coulthard was an employee.  Finally, was he an employee of the Respondent.

When was Mr Coulthard Dismissed?

1. It is well settled that a dismissal does not take effect until it is communicated in clear and unequivocal terms to an employee.[10]  Where there is no written notice of termination the employer’s intention as to the date of termination has to be inferred from what has occurred.[11]  Whether the employment relationship has been terminated is a question of fact.[12] 

1. On 19 October 2023, the Applicant was advised of the findings of an investigation report into complaints made against him and advised he would be subject to disciplinary action.  On 6 November 2023, he was provided with a first and final warning and directed to undertake lawful and reasonable actions, including apologising to the complainant, participating in discrimination and harassment training, and performing his work from home.  This warning letter also advised him that:

“Failure to complete the above within the agreed timeframes may result in further disciplinary action (up to and including termination) …”[13]

1. In this instance, the Respondent’s intention to terminate its relationship was clearly communicated in writing on 13 November 2023 in the following terms:[14]

“Dear Max,

I hope this message finds you well.

The board has recently decided to terminate our business relationship with VJC Strategic Investments Pty Ltd, effective immediately.  This decision was made by the majority of the Board of Directors after careful consideration and in light of our evolving business needs. 

We want to express our best wishes for your future endeavours, and we genuinely hope that you will continue to achieve great success.

To ensure a seamless transition, we request your assistance in closing any outstanding matters.  We will provide you an exit checklist and the necessary closing documentation shortly, which should help in this process.

…

We sincerely appreciate your contributions to our partnership, and we send you our warmest regards for your future endeavours…”

1. Mr Coulthard’s evidence is that on the same day he was locked out of access to the company bank accounts. 

1. Mr Coulthard submits that he was blindsided by this termination decision, that he was excluded from the Board meeting held on the 13 November 2023 where this decision was made and not provided an opportunity to be properly heard.  His evidence is that he did not see this email, or any follow-up email sent the next day, only becoming aware of his termination on the 15 November 2023 when shown an email to all staff sent from Mr Jung that included the following words:

“As of November 13, 2023, Max Coulthard, one of our directors and co-founders, will take a step back from his day-to-day operational duties within the business.”[15]

1. His oral evidence and that included in his F8 form indicate that he was aware of this termination from 15 November 2023.  In addition, I have no doubt Mr Coulthard accessed his email between 13 and 15 November 2023, evidenced by him sending an email to Mr Jung on 14 November 2023, attaching his response to his first and final warning.[16] 

1. My assessment of the evidence is that the Respondent clearly intended to bring its relationship with Mr Coulthard to an end with immediate effect on 13 November 2023 and that a reasonable person would have understood this to be the case having regard to the background and communications between the parties.  Having heard and considered the evidence of Mr Coulthard, Mr Jung and Mr Treanor about these communications, I prefer the evidence of the latter, that it was clearly communicated to the Applicant, and he understood his relationship with Redei was being terminated on 13 November 2023.

1. Whilst, it may be said that the terms of the termination letter admit some doubt as to what relationship was being ended and did not specify the contracting relationship, employment relationship or relationship as a director, I am satisfied that the letter, in combination with the account of the Respondent, remove any remaining doubt.  While the Applicant may have been confused as to the status of his contractual relationship on 13 November 2023, I am not satisfied that he lacked any clarity these relations were ending.

1. The Applicant’s later contention that in the absence of clarity he understood the effective day of his termination to be at the end of the statutory notice period following his termination date, being 6 December 2023, is misplaced.  While he consistently recorded this as his termination date in both general protection applications (the first application filed on 4 December 2023 and the present application), the existence of a deficiency in his notice of termination (or payment in lieu) does not invalidate the effectiveness of a notice of termination which is otherwise clearly communicated and intended to bring the relationship to an end. 

1. In Metropolitan Fire and Emergency Services Board v Duggan, the Full Bench considered the interaction between s.117 and the phrase ‘notice of the dismissal’ in s.383(a)(i) and said:

“[32] In summary, it is clear in our view that if an employer terminates the employment of an employee without giving notice, or payment in lieu thereof, in accordance with an obligation owed by the employer under a contract, award, enterprise agreement or s.117 of the Act, the result is that the employer has acted unlawfully and/or wrongfully and the employee will have one or more causes of action available to him or her under the contract, award, enterprise agreement and/or the Act to remedy the deficiency in the notice.  However, an unlawful or wrongful dismissal does not invalidate or render void the termination of the employment relationship….”

[33] Accordingly, a notice of termination which does not comply with s.117 of the Act may be effective to bring about the termination of the employment relationship and may constitute "notice of the dismissal” within the meaning of s.383(a)(i) of the Act.  Construing the Act in this way is consistent with the purpose of the relevant provisions, as set out above.”[17]

1. The Respondent’s position is that Mr Coulthard’s service was terminated without notice for cause in clearly communicated written terms on 13 November 2023.  Based on the above, I am satisfied this is the case and that 13 November 2023 is date that the Applicant’s termination took effect.

1. As this Application was not filed until 12 December 2023, and is outside the required timeframe, I now consider whether exceptional circumstance exist to justify the granting of an extension of time.  

Do exceptional circumstances exist to grant the Applicant an extension of time?

1. Section 366(2) of the Act states that the Commission may allow a further period for an applicant to make a general protections application if the Commission is satisfied that there are “exceptional circumstances”, taking into account the following six criteria:

“(a) the reason for the delay; and

(b) whether the person first became aware of the dismissal after it had taken effect; and

(c) any action taken by the person to dispute the dismissal; and

(d) prejudice to the employer (including prejudice caused by the delay); and

(e) the merits of the application; and

(f) fairness as between the person and other persons in a similar position.”

1. The test of “exceptional circumstances” establishes a “high hurdle” for an Applicant.[18]

1. Both the Applicant and the Respondent provided submissions on the extension of time issue in their written material and in proceedings. 

1. I have considered the provisions of s.366 of the Act in the context of the accepted authority in the decision in Nulty v Blue Star Group Pty Ltd [19] and have found the day which Mr Coulthard’s termination took effect to be 13 November 2023.  I have set out my consideration of each of the above factors, insofar as they are relevant below.

(a) the reason for the delay

1. The Applicant submits that the delay in his application is relatively short, and there are legitimate and exceptional reasons for this.  These include the following:

·   His confusion as to the status of his relationship with the Employer, as one of employment or independent contractor,

·   A lack of clarity in the termination letter and notice of dismissal,

·   Advice he received from the Commission general protections team that his initial application, filed on 4 December 2023, may be premature if his termination date was 6 December 2023, and

·   That he was under significant personal stress because of what was occurring at work as well as supporting his wife through cancer treatment. 

1. The Applicant’s evidence supports these submissions.  Having found that the Applicant was aware the date of his dismissal took effect on 13 November 2023 and that this was clearly communicated to him, I do not accept that his confusion as to the communication of his dismissal, or any advice he may have received from the Commission regarding the date of its effect, are valid reasons for the delay.

1. However, I am satisfied that there was legitimate confusion in the mind of the Applicant as to the status of his relationship with the Respondent. Particularly, I have had regard to the Applicant’s evidence in the weeks leading up to 13 November 2023. He was, amongst other things, subjected to allegations of misconduct, a first and final warning, directed to undertake training, to work from home and warned a failure to comply with these directions could result in his termination.  Each of these actions indicate a clear expression of control by the Respondent over the Applicant and are not commonly associated with the relationship of principal and contractor. 

1. On this basis, I am satisfied that a reasonable person objectively viewing the circumstances of the Applicant at the time of his dismissal could have considered him to be an employee.  Accordingly, I am satisfied it is legitimate for Mr Coulthard to suggest he was confused as to the status of his relationship and that this confusion was a valid factor contributing to the delay.

1. The Applicant has also produced evidence of the stress and pressure he was facing at work, demonstrated through a Workcover claim, and in support of his wife’s circumstances. This is not disputed. 

1. In Pottenger v Department of Caffeine,[20] the Deputy President observed that the Act does not specify what reason for delay might tell in favour of granting an extension, however, previous decisions of the Commission have referred to an acceptable[21] or reasonable explanation.[22]  It is not the case that the Applicant “needs to provide” an acceptable, reasonable or for that matter credible explanation.

1. An acceptable explanation for the entirety of the delay is not required to make a finding of exceptional circumstances. However, in considering and taking into account the reason for the delay in accordance with s.366 of the Act, it is relevant to have regard to whether the Applicant has provided an acceptable explanation for the entirety or any part of the delay. The correct approach to be taken was explained by the Full Bench in Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd t/as Richmond Oysters:[23]

“[38] As we have mentioned, the assessment of whether exceptional circumstances exist requires a consideration of all the relevant circumstances. No one factor (such as the reason for the delay) need be found to be exceptional in order to enliven the discretion to extend time. This is so because even though no one factor may be exceptional, in combination with other factors the circumstances may be such as to be regarded as exceptional.”

1. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Each circumstance of the ending of a job and its impact will be different and need to be considered on its own merits.  In the present case, I do not consider the alleged confusion as to Mr Coulthard’s termination date is a valid or exceptional reason for the delay. 

1. Mr Coulthard has also claimed he was being subjected to stress and pressure at the time his relationship with the Respondent ceased.  It is well accepted that facing the reality of being dismissed from employment can have significant impact on an individual and that the significance or otherwise of these impacts, which can include stress, hardship and depressions will be different in the case of each individual and their circumstances[24].  Rarely however, will these circumstances be considered exceptional or uncommon as they are commonly experienced by other employees confronted with losing their job.

1. In the present case, in the days following the cessation of his relationship with the Respondent, the Applicant was also confronted with an attempt to remove him from the board of the Respondent via a shareholder meeting as well as a dispute regarding his chosen legal representative.  A compounding factor confronting the Applicant in this case was also the stress and pressure of the reality of supporting his wife facing cancer treatment. 

1. Viewed separately, all these factors may not necessarily be uncommon. When considered together however, along with the Applicant’s confusion and stress, I am satisfied this combination of circumstances are exceptional and not commonly confronted by employees facing dismissal.  

1. I have also had regard to the length of the delay. While relatively small, I am not satisfied that this period, weighs in favour of the Applicant.  Ultimately however, I have been satisfied Mr Coulthard was confronted with a combination of factors that, when considered together, were exceptional, rare, and uncommon.  Therefore, I am satisfied the Applicant has provided a credible reason for the delay in filing the application and that this factor weighs in favour of granting an extension of time.

(b) whether the person first became aware of the dismissal after it had taken effect

1. Mr Coulthard’s evidence is that it was clear to him that his relationship with the Respondent ceased on 15 November 2023.  Based on the evidence before me, I have concluded that he became aware of his dismissal on 13 November 2023, being the day it took effect.  Therefore, there is nothing before the Commission in this matter to draw me to the conclusion that this factor should be weighed in favour of the Applicant.

(c) any action taken by the person to dispute the dismissal

1. There is no dispute that the Applicant took action to dispute the ending of his relationship with the Respondent soon after it took effect and indicated he may contest his dismissal.  From 20 November 2023, a series of letters were sent on his behalf to this effect.  This factor weighs in favour of the granting of an extension of time. 

(d) prejudice to the employer (including prejudice caused by the delay) and (f) fairness as between the person and other persons in a similar position

1. Neither the Applicant nor the Respondent made submissions on the question of fairness to other persons in similar positions to Mr Coulthard.  Prejudice to the employer will weigh against granting an extension of time.[25] The Applicant submits that the Respondent has suffered minimal prejudice and will suffer minimal prejudice, given the delay is relatively short and the Applicant is still one of its Directors and Shareholders.

1. The “mere absence of prejudice to the employer is an insufficient basis to grant an extension of time”.[26]

1. A long delay gives rise “to a general presumption of prejudice”.[27]

1. It is the onus of the employer to produce evidence to demonstrate prejudice. It is then up to the employee to show that the facts do not amount to prejudice.[28]  The Respondent has not made any submissions on this factor. 

1. On this basis, I am unable to identify any prejudice or fairness issues and consider these factors as neutral to the granting of an extension of time. 

(e) the merits of the application

1. The merits of an application are relevant; however, the assessment of the merits for the present purposes is limited to, in effect, a preliminary consideration.[29]  Further, the primary consideration is whether the Applicant has an arguable case.[30]

1. The Applicant’s position is that his application has merit and that his evidence and submissions support a sufficient prima facie case of unlawful adverse action within the provisions of s.341(1).  Whilst they accept there are a series of contested facts made out in material filed, it is not for the Commission to make conclusive findings on these issues at the jurisdictional stage. 

1. The Respondent’s position is that the Application is without merit for the reasons identified within the jurisdictional objections.  Further, that the Applicant has failed to explain the nature of his workplace complaint or inquiry to satisfy the requirements of s.341 to be considered.

1. The substantive merits of this application have not been fully tested and as identified by the Full Bench of the Commission in Kyvelos v Champion Socks Pty Ltd, the Commission “should not embark on a detailed consideration of the substantive case” for determining whether to grant an extension of time to an Applicant to lodge their application. [31]

1. On this basis, I am satisfied the Applicant has presented an arguable case that in seeking to complain about the investigation into his conduct and his treatment in comparison to another Director, he has presented evidence of an exercise of rights protected by the general protections provisions.  Considering the Respondent’s submissions, it is also clear to me that the Applicant’s case is not without its difficulties.  However, for the present purposes I conclude that the merits of this case to be a neutral factor.

1. Having considered each of the factors referred to in s.366(3)(a) to (e) of the Act, I have been persuaded that, on balance, there are exceptional circumstances warranting the exercise of my discretion to allow a further period within which a general protections application may be lodged by the Applicant.

1. Accordingly, I so order that the Applicant’s request for an extension of time to lodge his application is granted.

1. This being the case, I now consider each of the other jurisdictional objections presented by the Respondent. 

Was Mr Coulthard an Employee?

1. In this case, the contract entered between the parties has not been committed to writing, being partly oral, partly in writing, and partly implied.  In so far as it was oral, it was formed based on the oral agreement reached by the Board of Directors that the Applicant would be engaged to provide General Manager services through his independent company, VJC.  The detailed services to be provided and other rights and obligations of the parties were not articulated. However, it was clearly understood that the Applicant was to provide services as a General Manger to Redei Services, focusing on legal, human resources, financial operations, and business affairs to entities across the Respondent’s Group of companies. It is asserted that it was the Applicant himself who would be providing this service, applying his accumulated skills, experience, and expertise for the benefit of Redei Enterprises.  That these services were to be provided with diligence and professionalism and finally, in return for his services, payment would be received fortnightly or otherwise accrue. 

1. In so far as it was in writing, the Applicant regularly emailed invoices on behalf of VJC to be paid for consultancy services.  Between 2022 and May 2023, attempts were also made to execute a written General Manager, Redei Services contract agreement between the Applicant and the Respondent.  The parties could never agree on a final version and a document was not signed or executed.  However, the evidence suggests that the parties genuinely engaged in a discussion of terms, which I consider uncontroversial as to what would be expected in a standard independent contractor agreement, this includes the following:[32]

   “Introduction

   A.    The Principal wishes to engage the Contractor to perform the Services and the Contractor wishes to be engaged by the Principal to provide the Services on the terms and conditions set out in this Agreement.

   B.     The Contractor shall be principally responsible for the delivery of the Services.

C.     The Contractor and the Key Person agree that the Key Person shall be principally responsible for the delivery of the Services.”

1. Despite the many versions of the draft contract presented only one presented by the Applicant set out in any detail a description of the services to be provided. This is provided at Schedule 2.[33]

1. The Appendix 1[34] to Schedule 2 sets out in some detail the draft proposed duties and responsibilities of the Applicant. Among these include:

“1. Organisational Structure

Classification	Band 5
Reports to (position)	Board of Directors, REDEI Enterprises Pty Limited
Function	General Manager, Services (Legal, Human Resources (P&C) & Finance
Division	REDEI Services Pty Limited ABN 15 634 169 547
Location	8/80 Monash Drive, Dandenong South, 3175, Victoria, Australia
Prepared by (name & date)	Manager People & Culture, Wendy Bell (1 December 2022)
Approved bY (sic)	Board of Directors
Approved People & Culture

2. Purpose of Position

The General Manager is responsible for REDEI’s Legal, Human Resources and Financial operations and business affairs including organisational administration, finance, human resources, legal and systems management to ensure the efficient running of the organisation and the effective delivery of services to meet REDEI’s strategic goals and objectives. 

In addition, the General Manager Services will supervise the Manager Finance, Marketing, People & Culture and the Executive Administrative Assistant. The General Manager will have a direct reporting line to the Senior Leadership Team and Board of Directors.”

1. The Appendix also outlines the “3. Accountabilities/Responsibilities”, “4. Capabilities Definition”, “5. Span of Control” and “6. Key Performance Indicators (KPI)”.

1. I have considered the various draft General Managers Agreements presented and, given the agreement was never finalised and the reasons for this are contested by the parties, conclude that they can be afforded little weight in my considerations of the rights and obligations of the parties to the contract.  The significance of the document is further diminished due to its provisions, in my view, being contradictory.  For the Respondent, the document’s consistently present an intention of the parties to enter an independent contractor relationship. For the Applicant, notwithstanding the above, the various duties and responsibilities set out in the draft “Position Description: General Manager, REDEI Services”, indicate a significant level of integration within the Respondent’s business and numerous duties associated more with those of an employee, rather than an independent contractor.

1. In so far as the contract was implied, the Respondent submits it was implied by the conduct of the parties and by law.  The pattern of conduct is that the Applicant provided the services of a General Manager and routinely invoiced the Respondent for these services. The Respondent accepted the Applicant’s services on this basis and expected it be provided with skill and diligence, in return for payment or accrual of payment owing. 

1. I consider that the partly oral, partly written and partly implied terms of the agreement create the relevant rights and duties that bound the parties for the purpose of characterising the legal relationship between them.  I have considered these terms in their totality, consistent with the accepted authority of EFEX Group Pty Ltd v Bennett, that: 

   “…where there is no written contract, the identification of the parties’ contractual rights “must proceed somewhat differently but the fundamental task in the same: the parties’ contractual rights and obligations are to be ascertained and characterised”; and the focus is on the ascertainment of the legal rights and obligations of the contracting parties, “rather than how they behaved in the performance of the contract”.”[35]

1. The oral Director’s agreement, invoices and draft General Managers Agreement describe the Applicant as an independent contractor.  There is no evidence of the directors discussing entering into an employment relationship, the invoices refer to ‘consultancy fees’ and the draft General Managers Agreement makes no reference to a relationship of employer and employee.

1. In oral evidence, Mr Coulthard acknowledged and accepted that at the time of the formation of the group the directors agreed that it was in the best strategic interest of the new entity if he and the other two Directors were engaged as something other than employees. He accepts that this arrangement included the risk that, on occasion, he may not be in receipt of payments if the entity could not make all its payments. 

1. Mr Coulthard also accepted and his submissions support that he was the Director and General Manager with responsibility for HR, finance, and legal matters.  Also, that he sought guidance from his personal accountant and the Respondent’s accountant on the corporate structure and provided a recommendation that the engagement of General Managers be done through independent companies through which the Directors would contract their services and invoice for payment.   Mr Coulthard’s company was VJC. His evidence is that for all purposes he was VJC, and that in contracting VJC, the Respondent was engaging him directly in service. 

1. Further, his evidence is that his work was fully integrated into that of the Respondent.  This is supported by the uncontested evidence of Ms Loos and Ms Denver to the extent it is relevant. That he wore company uniforms, is described as a General Manager Services in the Company organisational chart, used company livery and signature blocks and did not either sub-contract any of the work he was responsible for performing or enter a contract with any other party to provide those services.  For over 4 years he worked extensively, diligently, and exclusively for the Respondent.

1. When pressed on whether he was an employee or not and what his understanding of the difference between an employee and independent contractor was, I found Mr Coulthard’s evidence unconvincing.  His position is that he was not a technical or legal person and that he never really turned his mind to this question until after his dismissal.  Further, that if anything he considered himself an independent consultant.

1. As established by the plurality in Personnel however, generally speaking, the opinion of the parties on a matter of law is irrelevant and it is erroneous in point of principle to use the parties description of their relationship to resolve uncertainty.[36]  On this basis, I consider it of little or no weight in my overall analysis that the parties’ use of the terms independent consultant or independent contractor in this matter.  I also give limited weight to other terms given weight by the Respondent such as taxation and superannuation.  In Deliveroo Australia Pty Ltd v Franco, the Full Bench described these items as “merely consequential upon the labelling adopted in the agreement.”[37]  In this case, the Bench cited with approval the decision of the Full Court of the Federal Court in ACE Insurance Ltd v Trifunovski,[38] where it said:

“It is also difficult, in my view, to give much independent weight to arrangements about taxation, or even matters such as insurance cover or superannuation.  These are reflections of a view of one party (or both) that the relationship is, or is not, one of employment.  For that reason, in my view, those matters are in the same category as declarations by the parties in their contract (from which they often proceed).  They may be taken into account but are not conclusive. [39]

1. In Bennett, a similar case, considering an individual (Mr Bennett) contracting and regularly invoicing EFEX Group for sales services through a family trust established for the specific purpose of the contract, the Full Court of the Federal Court discounted this conclusion because in that case:[40]

“…the taxation arrangements were a consequence of the terms of the contract from the outset.  They formed part of the earliest pre-contractual discussions. They went directly to contract formation, and can properly be seen to be a design feature of the contract as a core term or condition, albeit not reduced to writing. They were not just manifestations of opinion, nor set up later for incidental financial advantage…”

1. In Bennett, the Full Court granted EFEX’s appeal to a first instance decision of the Court which upheld a finding of the Commission that Mr Bennett was an employee.  Importantly, in addition to the above factors, the Full Court also considered the degree of control exercised, Mr Bennett’s relative “free reign” provided he met his sales targets, that he provided his own vehicle, mobile phone, and that he paid clients expenses from his trust with no right to reimbursement from, or contribution from EFEX, in determining his relationship was not one of employment.[41]

1. In the present case, the parties are not in agreement as to what was being contemplated regarding taxation and GST at the time the contract was made.  Mr Treanor and Mr Jung concur that their express intention was to reduce tax, manage cash flow and minimise risk.  Mr Coulthard’s evidence is that his intention was on accounting expediency, cash flow management and asset protection and that the invoicing system and use of independent companies facilitated this. 

1. There is no dispute that Mr Coulthard held a senior role, performed significant work, and made valuable contribution to the Respondent in his time there.  Nor is there any suggestion he had a “free reign”; could, or did, come and go as he pleased; received payment for sales or results achieved; or that he used payments made into VJC to pay for business costs, client expenses of any other purpose besides providing an income for himself.

1. The Commission’s role is to consider the nature of the legal rights and duties created by the agreement between the parties to determine the true character of their relationship.  While all the relevant factors require consideration, two factors in particular assist in assessing the ultimate question of whether the person was an employee, being the degree of control exercisable by the purported employer; and whether a person was contracted to work in the business or enterprise of the purported employer or whether they were conducting their own business (although the second part of the question is subsidiary).[42] 

1. There are various terms of the agreement between the parties that create obligations that are consistent with the notion that the Applicant was operating an independent business in this matter.  These include the use of his personal company, VJC, for invoices and payment of invoices issued for consultancy services in addition to further terms included in the draft General Managers agreement.  I have taken these into account, but they are not conclusive, and for the reasons set out above, I consider to be of little weight.

1. There are also other key provisions to this Agreement that point to the Applicant serving in and being integrated into the business of the Respondent.  The Applicant was a General Manger, and performed General Managers duties daily and was perceived by other employees, and externally, to be integral to the Respondents business.  It is not in dispute that the Applicant branded and presented himself in emails and livery as part of the Respondent and not VJC.  The significance of the Applicant’s role within the business is supported by the evidence of Ms Loos and Ms Denver.  On this basis, I am more convinced by the evidence of Mr Coulthard that he was VJC and that his service was integrated into, part of and subservient to that of the Respondent.

1. As to remuneration, it is not contested that the Applicant was paid by regular and systematic invoices, through VJC. While this may be the case, I do not consider this evidence so compelling that it supports a conclusion that the Applicant was operating a separate and independent business in the form of VJC.

1. The plurality in Personnel commented at [39]:

“While the “central question” is always whether or not a person is an employee, and while the “own business/employer’s business” dichotomy may not be perfect so as to be of universal application for the reason that not all contractors are entrepreneurs, the dichotomy usefully focuses attention upon those aspects of the relationship generally defined by the contract which bear more directly upon whether the putative employee’s work was so subordinate to the employer’s business that it can be seen to have been performed as an employee of that business rather than as part of an independent enterprise.”

1. Reflecting on the comments of Gordon J in Personnel regarding the nuances of modern working relationships and what a more suitable question might be in cases like EFEX, which is similar to this matter, the Full Court in that decision noted:[43]

“…The better question may be to ask whether, by the terms of the contract, the person contracted to work in the business or enterprise of the purported employer, so as to maintain the correct focus.  This is, if the contract does not lead to the conclusion that the person was working in the business of the asserted employer, then the person will not be an employee.”

1. I have considered the terms and duties of the parties’ agreement in the light of these authorities and I am of the view that the contractual arrangements taken as a whole leave little, if any, scope for entrepreneurship on behalf of the Applicant. 

1. These matters, taken in combination with the control that the Respondent reserved for itself relating to the Applicant’s service, discussed below, lead me to the view that in the overall context of this agreement and the rights and duties created therein, the Applicant did not operate an independent business on his own but was integrated into the business of the Respondent in a way in which an employee would be.  While this is not in itself sufficient to conclude that the relationship is one of employment, it is an important consideration.  

1. It is not disputed that the Applicant served the Respondent extensively and exclusively for almost 4 years.  The Respondent maintains the Applicant was free to contract with other parties and that whether he chose not to is not a consequence of their prohibition. Further, they submit that he was free to delegate work and did so by assigning work to other employees of the Respondent. There is nothing extraordinary in a General Manager delegating work to another employee.  This is not the same as the Applicant engaging a subcontractor to perform work on behalf of VJC for the Applicant.  It is not suggested that this was the case. 

1. The further terms of the agreement that support the notion that the Applicant was not subject to the control of the Respondent and free to conduct his own independent business are scarce.  The written agreement references to this independence, but I have discounted these for the reasons indicated above. 

1. I have considered the terms of the oral agreement between the parties at the time the contact was made.  In this regard, I favour the Applicant’s evidence, that the terms of the agreement between the parties were that he would perform work as a General Manager providing services to the Respondent by applying his skills, experience, and expertise in the areas of human resources, legal and finance to the benefit of the company.  That he was expected to provide these services with diligence and professionalism and in return he would be paid fortnightly for invoices submitted by him through his independent company, VJC.  Objectively viewed, I consider that these terms of the contract suggest an element of control that the Respondent retained over the Applicant to expect the services promised to be provided. 

1. With regard to the regular and systematic invoicing system that was established, I consider that this was done to facilitate the above agreement and was not a core term or condition of the contract between the parties of the type identified by the Full Court in Bennett.[44]  Furthermore, unlike in that case, I do not consider the distinguishing evidence of the Applicant being engaged in the business of the Respondent and the elements of control reserved and exercised by the Respondent over the Applicant in this matter should be outweighed by a invoicing  system the directors and business owners agree was put in place to manage cash flow to ensure staff and creditors were paid first before General Managers and Directors. 

1. Evidence of the implied terms of the control in the conduct of the parties is also inconclusive for much of the time.  However, from the time the Respondent decided to commence an independent investigation into the Applicant’s conduct and ‘alleged breach of workplace policies’, this is no longer the case. 

1. From the commencement of that investigation, the Respondent directly exercised the control in the contract it had reserved for itself over the Applicant. It did this by requiring him to comply with lawful and reasonable directions, directing him to attend work from home and directing him not to talk to the complainant.  Furthermore, the Respondent warned the Applicant that he will be terminated if he failed to comply with these directions. I am satisfied that each of these directions are consistent with those given by an employer to an employee in the context of a disciplinary investigation and not with the interaction of principal and contractor, or Board and Board Director.

1. The determination of whether a person is an employee or independent contractor is a question of law.  Having considered the various rights and obligations that the parties created for themselves by their contractual arrangements in this matter, I am of the view that the relationship between the Applicant and the Respondent in this case is one of employee and employer.

1. In reaching this conclusion, I have considered the evidence of Mr Whelan and the advice he provided to the Applicant and the Respondent regarding their contracting status and corporate affairs.  I note however, Mr Whelan accepted in evidence he is not an expert in law or industrial relations and that his evidence is disputed by that of the Applicant.  Further, on my observations of the oral evidence of both these witnesses in proceedings, I favour the evidence of the Applicant, that the advice he received from Mr Whelan was limited to corporate structures, company registrations and accounting matters and not related to the terms of the engagement of the directors as General Managers or technical legal distinctions between contractors and employees. 

Was Mr Coulthard an employee of Redei Services or the Redei Enterprises?

1. The Respondent’s position is that it is common ground that Redei Services is a legal entity within the Respondent’s Group.   That it was Redei Services that employed staff on behalf of the Respondent and if any employment relationship existed it would have been with Redei Services.  The Respondent submits this fact was well known to the Applicant and that the evidence supports this conclusion, pointing to the Applicant identifying Redei Services as his employer in his Workcover Claim filed in November 2023 and correspondence sent on his behalf by his solicitors. Furthermore, that throughout the term of his engagement the Applicant addressed fortnightly invoices to Redei Services for payment. 

1. Mr Coulthard’s evidence is that there was no distinction drawn between Redei Services and the corporate Group, Redei Enterprises.  That the reality of his relationship was that he was engaged to perform his duties on behalf of Redei Enterprises (the Respondent). While he invoiced Redei Services and may have referred to them as his employer in applications, this does not impact on the reality that his employer was Redei Enterprises. 

1. In his evidence, Mr Treanor accepted that emails and letters were usually sent on behalf of Redei Enterprises and no real distinction between the various entities within the group were drawn because it was well understood by the Directors that they were performing work for the Redei Enterprise Group, and who they were engaged by – Redei Services.  Further, he accepted that the Directors prepared one set of consolidated accounts and viewed the groups entities in their totality. My assessment of Mr Treanor’s evidence is that it supports that of the Applicant in that there was no real distinction drawn between the entities and that work was performed interchangeably for entities within the Group.

1. The principles to be applied in the identification of the employer of an employee where there are two or move possible employers are well settled.[45]  I have applied these principles to the facts of this case, and considering the totality of the circumstances of the relationship between the parties, their subsequent conduct and the evidence of what was agreed. On balance, I am satisfied the Applicant was an employee of the Respondent.

1. I note that it was the directors of Redei Enterprises, not Redei Services, who agreed that the General Managers would be engaged as contractors. Furthermore, Redei Enterprises is consistently branded across the evidence presented in the form of emails, correspondence and signature blocks of the Respondent.  The letter terminating Mr Coulthard’s engagement is signed off from Redei Enterprises.  The exit checklist letter from Mr Treanor to the Applicant is signed and sent on behalf of Redei Enterprises. Similarly, the emails from Mr Jung providing him with direction and warnings are signed by Redei Enterprises.  Finally, the minutes of the board meeting purportedly terminating the engagement of VJC is an Executive Management Meeting of Redei Enterprises and makes no reference to terminating a contract between Redei Services and the Applicant.  Rather, the minutes record the Board Resolution as:

   “After extensive discussion, the Board decided to remove Max Coulthard as a director via a shareholder meeting and cancel the services provided by VJC Strategic Investments.  This decision was made considering the repeated failure to comply with lawful instructions and the risk posed to the organisation.” [46]

1. In an alternative to this finding, the Applicant requests the Commission exercise its discretion to amend its application to list the Redei Services as a second Respondent to the application pursuant to s.586 of the Act.  For completeness, I have also considered this request. 

1. The Applicant contends the facts of this case are analogous to those where the Commission has exercised its discretionary power to allow amendments where there is genuine confusion as to the identity of the true employer as set out in Djula v Centurion Transport.[47]  In the present case, I am satisfied that the evidence set out above supports the exercise of my discretion to amend the application on this basis.  Furthermore, I am satisfied that the amendment will not cause any material prejudice to the employer and that the amendment does not add any new cause of action or fundamentally change the nature of the Applicant’s claim.

Conclusion

1. Having regard to all the circumstances of this case, I have considered each of the objections identified by the Respondent.  As I have identified above however, I have been satisfied that, on balance, the Applicant was an employee of the Respondent, was dismissed in accordance with s.386 of the Act and that while his application was not filed within time, exceptional circumstances exist to justify an extension of time to allow the application to proceed.

1. Accordingly, the Respondent’s jurisdictional objections are dismissed, and the Applicant’s matter will be listed for conference pursuant to s.368 of the Act by my Chambers.

1. An Order reflecting this decision will be issued separately.[48]

COMMISSIONER

Appearances:

Mr T Pick on behalf of the Applicant.
Mr j Ryan on behalf of the Respondent.

Hearing details:

2024.
Melbourne.
March 4.

[1] [2020] FCAFC 152.

[2] Nawaz v Rasier Pacific Pty Ltd[2022] FWC 1189 at [51].

[3] Ibid.

[4] JMC Pty Limited v Commissioner of Taxation [2022] FCA 750 at [27].

[5] CFMEU v Personnel Contracting Pty Ltd [2022] HCA 1 at [64].

[6] Respondent’s Submissions at [12], Court Book page 625.

[7] Ibid, Court Book pages 626 – 628.

[8] Witness Statement of Pedar Whelan at [8], Court Book page 632.

[9] [2022] FWCFB 234 at [17] (Catanzariti VP, Asbury DP, Lake DP).

[10] Burns v Aboriginal Legal Service of Western Australia (Inc) Print T3496, Mihajlovic v Lifeline MacAthur [2013] FWC     9804.

[11] Ibid at [9].

[12] Metropolitan Fire and Emergency Services Board v Duggan[2017] FWCFB 4878 at [32].

[13] Witness Statement of Maxwell Coulthard, Annexure MRC 30, Court Book page 395.

[14] Ibid, Annexure MRC 32, Court Book page 403.

[15] Ibid, Annexure MRC 35, Court Book page 425.

[16] Ibid, Annexure MRC 33, Court Book page 405.

[17] [2017] FWCFB 4878 at [32] – [33].

[18] Lombardo v Commonwealth of Australia as represented by the Department of Education, Employment and Workplace Relations[2014] FWCFB 2288 at [21].

[19] [2011] FWAFB 975.

[20] [2018] FWC 3403.

[21] Ibid at [31], citing Blake v Menzies Aviation (Ground Services) Pty Ltd[2016] FWC 1974 at [9].

[22] Ibid, citing Roberts v Greystanes Disability Services[2018] FWC 64 at [16].

[23] [2018] FWCFB 3288 at [35] – [45].

[24] See Roe, C in Rose v BMD Constructions Pty Ltd[2011] FWA 673.

[25] Ibid.

[26] Ibid.

[27] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at [556].

[28] Jervis v Coffey Engineering Group Pty Limited (unreported, AIRCFB, Marsh SDP, Duncan SDP, Harrison C, 3 February 2003) PR927201 at [16].

[29] Kyvelos v Champion Socks Pty Ltd, AIRCFB Print T2421, 10 November 2000 at [14].

[30] See Craig Thomson v Linx Cargo Care Pty Ltd T/A Linx Port Services [2022] FWCFB 40 at [32] – [34].

[31] AIRC 10 November 2000 at [14]; See also Collier v Saltwater Freshwater Arts Alliance Aboriginal Corporation[2016] FWC 2899 at [38].

[32] Witness Statement of Maxwell Coulthard, Annexure MRC 5, Court Book page 76.

[33] Witness Statement of Maxwell Coulthard, Annexure MRC 5, Court Book page 104.

[34] Witness Statement of Maxwell Coulthard, Annexure MRC 4, Court Book pages [63] – [71].

[35] [2024] FCAFC 35 at [8}, citing Kennett J in Chiodo at [8] – [9].

[36] Gordon J in Personnel at [66] and [79].

[37] [2022] FWCFB 156 at [41].

[38] [2013] FCAFC 3.

[39] Ibid at [37], per Buchanan J, with whom Lander and Robertson JJ agreed.

[40] Bennett at [45].

[41] Ibid at [40] – [46].

[42] Nawaz v Rasier Pacific Pty Ltd[2022] FWC 1189 at [51].

[43] Bennett at [14].

[44] Ibid at [45].

[45] See Re C&T Transport Services Pty Ltd [2004] FCA 1148 at [20].

[46] Witness Statement of Maxwell Coulthard, Annexure MRC 31, Court Book pages 396 – 400.

[47] [2015] FWCFB 2371.

[48] PR775809.

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