Mr Ronald Weller v Do My Solar Pty Ltd T/A Do My Solar

[2013] FWC 324

[2013] FWC 324

FAIR WORK COMMISSION

DECISION

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

Mr Ronald Weller
v
Do My Solar Pty Ltd T/A Do My Solar
(U2012/12433)

COMMISSIONER STANTON NEWCASTLE, 16 JANUARY 2013

Application for an unfair dismissal remedy - jurisdictional objection - whether an employee or independent contractor - jurisdictional objection dismissed

[1] The respondent in this matter, Do My Solar Pty Ltd, objects to the application for unfair dismissal remedy filed by Mr Ronald Weller (the applicant). That objection was set out in the respondent's Form F4 Objection to Application for Unfair Dismissal Remedy lodged on 24 October 2012:

i) The applicant was employed by the respondent from 5 March to 14 August 2012, a period of only five months.

ii) In relation to an earlier period of engagement commencing early to mid September 2011 through to 4 March 2012, the applicant was engaged as a contractor.

[1] The basis for the respondent’s jurisdictional objection lies with s.382 of the Fair Work Act 2009 (the Act) which states:

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) ...

[1] The respondent is a national system employer. It is not a small business employer. 1

[2] The respondent asserts the applicant was not a national system employee under the Act between on or around 16 September 2011 to 4 March 2012 and the relationship at the relevant time was one of principal/contractor and not employer and employee. Accordingly, the respondent contends the applicant is barred from seeking a remedy for unfair dismissal as he had only worked for five months and not the minimum six month period required by the Act. He was therefore not a person protected from unfair dismissal under s.382 of the Act.

[3] The applicant contends that he was engaged by the respondent as an employee and not a bona fide contractor between September 2011 and 4 March 2012 when that “contract” was terminated by the respondent. Rather, the applicant contends he was employed by the respondent for some 11 months in total and accordingly there was no jurisdictional bar to his application as he met the minimum employment period requirements of the Act.

[4] The applicant lodged his application on 16 August 2012. On 20 August 2012, Conciliator Ellis advised the applicant he had not been employed by the respondent for the minimum employment period required under the Act. Conciliator Ellis subsequently wrote to the applicant and confirmed his view that on the papers submitted Fair Work Australia (FWA) had no jurisdiction to deal with the application. The applicant was subsequently given 14 days to advise FWA if he wished to proceed with his application.

[5] On 28 August 2012, the applicant advised Conciliator Ellis by email that he had sought legal advice regarding the minimum employment period issue and had decided to press his application. My Chambers received the application on 14 September 2012.

[6] On 18 September 2012, my Associate sent a copy of the application to the respondent's Managing Director, Mr Brendan Twist. That correspondence also contained a copy of Conciliator Ellis' correspondence to the applicant concerning the minimum employment period, his response and the F3 Employer Response Form. Mr Twist's office subsequently requested that future correspondence be sent to the respondent's accountant, Ms Michele Philips.

[7] On 20 September 2012, Directions were issued for the determination of the jurisdictional issue, with the applicant to file an outline of submissions and all witness statements to be relied upon by 4 October 2012 and the respondent by 18 October 2012.

[8] The applicant filed his materials on 2 October 2012. However, the respondent failed to comply with the Directions. My Associate contacted the respondent on 19 October 2012 concerning its non-compliance. The respondent's representative apologised and stated the relevant materials would be filed by the close of business on 22 October 2012. The parties were advised the Directions had been formally varied to accommodate the respondent's apparent difficulties.

[9] On 24 October 2012, the respondent lodged the Form F4 Objection to Application referred to in paragraph 1 above, but no submissions or witness statements. The respondent was directed to serve a copy of its F4 response on the applicant.

[10] On 26 October 2012, the respondent was further directed to serve a copy of its F4 response on the applicant. Further requests were also made urging the respondent to file materials in support of its contention that the applicant was engaged as a contractor from September 2011 to March 2012. The respondent subsequently indicated it would file materials addressing the contractor issue on 29 October 2012. However, no materials were filed. Further Directions were issued on 1 November 2012 requiring the respondent to file materials in support of their case by noon, Monday, 5 November 2012.

[11] The matter was set down for hearing of the jurisdictional issue on 6 November 2012. At the outset, Ms Philips submitted Mr Twist had been overseas and busy upon his return. She apologised to both the applicant and the Tribunal for the respondent's non-compliance with Directions. Ms Philips also submitted she was under-prepared for the arbitration as the respondent's human resources officer had suddenly taken ill that day. There was no application made to adjourn proceedings.

[12] Given the paucity of the respondent's filed materials, the parties agreed that proceedings should take the form of a conference hearing. Both the applicant and the respondent's representative, Ms Philips, gave sworn evidence during the course of the conference hearing.

[13] The applicant bears the onus of establishing that he was an employee between September 2011 and 4 March 2012. Neither the applicant nor the respondent were able to tender any documents that govern the “relationship” of the parties during this period.

[14] The question as to whether or not a person is an employee or an independent contractor was considered in Hollis v Vabu Pty Ltd 2 where the High Court arrived at the conclusion that the ultimate question is whether or not the worker could be said to be conducting a business of his or her own. The High Court held that the substantial basis of the relationship had to be considered, not just the label attached to it by the parties.

[15] In Abdulla v Viewdaze Pty Ltd t/as Malta Travel 3 the Full Bench drew on the principles set out in Hollis v Vabu to establish the indicia to determine whether a worker is an employee. The conference hearing was conducted against the indicia determined by the Full Bench decision:

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

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

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.

Whether the work can be delegated or subcontracted.

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.

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.

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.

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.

The Evidence

[16] The evidence of the applicant and Ms Philips in relation to the various indicia determined by the Full Bench in Abdulla v Viewdaze can be conveniently summarised as follows:

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

[1] In material filed on 2 October 2012, the applicant stated his working hours set by the respondent comprised the following:

Monday 9.00 a.m. to 6.00 p.m.

Sales meeting 9.00 a.m. to 11.00 a.m.

Appointments 12.00 p.m. to 6.00 p.m.

Tuesday Appointments 11.00 a.m. to 8.00 p.m.

Wednesday Appointments 10.00 a.m. to 8.00 p.m.

Thursday Appointments 9.00 a.m. to 6.00 p.m.

Friday Appointments 9.00 a.m. to 3.00 p.m.

Saturday Worked one week in four.

Appointments 9.00 a.m. to 4.00 p.m.

[2] The applicant's evidence was that once an appointment had been made by the respondent's telemarketers, “You would get into serious trouble if you couldn’t do that day’s run if it (an appointment) had already been made”. 4 In that regard, Ms Philips stated the respondent's sales objective was to arrange appointments when both the husband and wife were available to attend the appointment. It was therefore difficult to change an appointment once it had been made.5

[3] The applicant contended the respondent controlled his hours of work in the following respects:

• He was normally required to commence his first appointment at 12.00 pm. He was advised of the precise time and location of that appointment by the respondent the night before. In the event his first appointment was at, say 3.00 pm, “... we would just stay at home if it was the first one, and then head to the 3 o’clock appointment”. 6



• There were severe reprimands if you were late for appointments or you could not make a particular appointment.



• In the event an appointment was a two hour drive from home and was set down for 9.00 am, “... we had to allow that two hours to get there ...”. 7

[4] Ms Philips was unsure of the degree of control exercised by the respondent 8 as she was not involved in making appointments. However, she explained the applicant’s appointments were arranged by a team of telemarketers.9 Moreover, if on a given day there were no appointments scheduled for say 5.00 pm, “he would go home”.10

[5] Ms Philips also observed the applicant would not work “from nine to five if the customer was not available until 10 o’clock”. 11 The applicant's hours of work were varied to suit the availability of customers.12 Ms Philips conceded that when the applicant’s first appointment was at say 10.00 am and his last at 6.00 pm he would undertake other appointments where arranged between those hours.13

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

[1] In response to a question concerning whether the applicant “was able to work for other organisations?”, Ms Philips stated, “I don’t honestly know. I don’t think so”. 14 It was the applicant’s evidence that he could not work for other clients:15

A, I didn’t have the time because of the hours I had to work and B, because yes I couldn’t work - the field I was in I couldn’t talk to people ... 16

[2] The applicant admitted that he had taken steps to set up a business over December 2011 and January 2012 because he was unhappy working for the respondent. He registered a business name and sent an expression of interest to a supplier. However, the entity did not trade. 17

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

[1] There was no evidence to support the proposition that the applicant advertised his services to the world at large or had a separate place of work. 18

1) Whether the worker provides and maintains significant tools or equipment.

[1] It was the applicant’s evidence that he provided no significant tools of trade or equipment. Ms Philips contended he would have needed to use a tape measure, an item not supplied by the respondent. 19 In that regard the applicant also remarked during the course of his evidence, “... I never used a tape measure in the 12 months I worked for them”.20

1) Whether the work can be delegated or subcontracted.

[1] Both the applicant and Ms Philips confirmed he was unable to delegate or subcontract his work to another party. 21

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

[1] It was Ms Philips’ evidence that during the period 16 September 2011 to 5 March 2012, the respondent had the right to suspend the applicant. 22 Ms Philips later stated, “If he was on an ABN he could be terminated at any time”.23

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

[1] The applicant stated a probationary period applied to his “engagement” with the respondent commencing 16 September 2011. At that time he did not have a “logo” shirt but was required to comply with the respondent's dress code and wear “black pants, black shoes and a neat and tidy shirt”. 24 The applicant contended that following the completion of the probationary period, the respondent supplied him with three “logo” shirts.25

[2] In relation to the applicant's evidence concerning the supply of shirts, Ms Philips was aware that a number of logo shirts had been purchased but was unsure how many and who had received them. 26 However, she contended, “Our reps don’t wear them now”.27

[3] The applicant was adamant the respondent had given him three shirts. In that regard, the respondent had reimbursed him the embroidery cost of applying the logo to the shirts. 28

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

[1] The applicant referred to his filed materials which included a signed copy of the respondent's General Employment Application Form dated 16 September 2011 and noted that whilst he had supplied an ABN number, he was not registered for GST at that time because he “earned” less than the then $75000 threshold. 29 It was the evidence of Ms Philips and the applicant that no income tax was deducted from the applicant’s remuneration.30 The applicant also confirmed he arranged his own taxation affairs.31

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

[1] The applicant was remunerated for sales by commission, which was paid weekly. While Ms Philips contended the respondent's contractors were required to submit weekly invoices, 32 it was the applicant's evidence that he "didn't invoice them a single invoice".33

[2] It was the applicant’s evidence that he received a fixed sum each week which was essentially “an advance on commission”. 34 He also received a fuel allowance.35 Ms Philips confirmed those arrangements. However, she noted there were occasions when the applicant had received advances against jobs that had not been completed or had been cancelled.36

[3] The applicant stated he regarded his remuneration as a “wage” rather than “an advance on commission.” 37 Ms Philips stated the applicant was “paid on results”.38 His remuneration was commission based and was treated by the respondent as an advance against commissions. The amount would be reduced in the event there was insufficient commission available. Ms Philips further stated she would advise the applicant’s manager if his remuneration was to drop. “He would probably get two weeks’ notice that he had to build up his sales or... he would be dismissed”.39

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

[1] It was Ms Philips evidence that the respondent did not pay the applicant annual leave or sick leave. 40 With reference to sick leave, annual leave and public holiday entitlements, it was the applicant’s understanding that he had no entitlements to such benefits as a commission agent.41 It was his view that the respondent required him to supply an ABN “so they wouldn’t have to pay me... annual leave and sick pay”.42

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

[1] It was the applicant’s evidence that no special skills were required for the position. He simply applied for the position and when interviewed he was told “Training starts on Monday. Be there”. 43 The training required by the respondent was “basically trained you as to how they wanted the sale to take place”.44 The applicant agreed the position was “a straight sales position”.45

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

[1] There was no evidence before the Tribunal that the applicant created any goodwill or saleable assets in the course of his work with the respondent. 46

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

[1] The applicant contended his business expenses were negligible. 47 He was required to purchase fuel for his vehicle which was offset by the respondent’s payment of a motor vehicle/fuel allowance.48 When pressed by Ms Philips, the applicant agreed he was required to purchase express post envelopes from time to time to return sales contracts. However, he was reimbursed for such purchases.49

[2] During the course of the arbitration, the respondent undertook to file some additional materials sought by the Tribunal concerning invoice arrangements for the respondent's commission-only sales representatives. Those materials were filed on 22 November 2012. The applicant filed his submission in reply on 29 November 2012.

Consideration and Finding

[3] Based on the indicia determined by the Full Bench in Abdulla v Viewdaze, I find that the respondent had day-to-day control over the work performed by the applicant during the period from in or around 16 September 2011 until 4 April 2012.

[4] The applicant had no power to delegate, nor was he conducting his own business. By implication and fact, the applicant was required to work solely for the respondent. He generated no goodwill.

[5] While the provision of an ABN is indicia of the relationship being one of independent contractor, it is not by itself determinative of the nature of the relationship between the parties. He did not invoice the respondent.

[6] The payment of a car/fuel allowance to offset the applicant's motor vehicle costs associated with soliciting sales for the respondent is indicative of an employment relationship.

[7] There was no arrangement for the applicant to perform a specific task or job which was to be performed for an agreed total figure which is indicative of an independent contract arrangement.

[8] On the evidence before me, the overwhelming conclusion is that the substantive nature of the relationship, when it is examined, is that of an employer and employee.

[9] There is no basis for any conclusion that the relationship is unclear, uncertain or ambiguous. It follows that when he was “dismissed” on 4 April 2012, prior to entering a contract of employment with the respondent, the applicant was an employee, rather than an independent contractor of the respondent. There is no evidence the applicant was conducting a business on his own behalf. It also follows that the jurisdictional objection raised by the respondent must be dismissed.

[10] I propose to invite the respondent to participate in a further conciliation conference during the week commencing Tuesday, 28 January 2012. The respondent should advise my Chambers by 4.00pm on Tuesday, 22 January 2012 if it wishes to participate. If not, I direct the matter be remitted to the Commission's Unfair Dismissals Team for reallocation and programming in accordance with the usual protocols.

COMMISSIONER

Appearances:

The applicant was self represented.

For the respondent, Ms M Philips.

Hearing details:

2012

Newcastle

November 15

Final written submissions:

For the respondent, 22 November 2012.

For the applicant, 29 November 2012.

 1   Transcript at PN54

 2 [2001] HCA 44

 3 (2003) 122 IR 215

 4   Ibid PN555

 5   Ibid PN559

 6   Ibid PN 274

 7   Ibid PN280

 8   Ibid PN284

 9   Ibid PN290

 10   Ibid PN260

 11   Ibid PN258

 12   Ibid PN543

 13   Ibid PN544

 14   Ibid PN296

 15   Ibid PN300

 16   Ibid PN302

 17   Ibid PN308-312

 18   Ibid PN316 and 318

 19   Ibid PN324

 20   Ibid PN326

 21   Ibid PN330 and 334

 22   Ibid PN335-338

 23   Ibid PN365

 24   Ibid PN375

 25   Ibid PN373 and 377

 26   Ibid PN381

 27   Ibid PN379

 28   Ibid PN387

 29   Ibid PN157-173

 30   Ibid PN393 and 395

 31   Ibid PN396

 32   Ibid PN204

 33   Ibid PN200

 34   Ibid PN402

 35   Ibid PN423

 36   Ibid PN445

 37   Ibid PN531

 38   Ibid PN593

 39   Ibid PN564

 40   Ibid PN453

 41   Ibid PN459 and 469

 42   Ibid PN176

 43   Ibid PN475

 44   Ibid PN488

 45   Ibid PN488

 46   Ibid PN496

 47   Ibid PN617

 48   Ibid PN504-506

 49   Ibid PN511

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