Mr Timothy Burdett v GDM Projects Pty Ltd
[2022] FWC 2814
•24 OCTOBER 2022
| [2022] FWC 2814 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Timothy Burdett
v
GDM Projects Pty Ltd
(U2022/7743)
Mr Drew Read
v
GDM Projects Pty Ltd
(U2022/7745)
| COMMISSIONER HUNT | BRISBANE, 24 OCTOBER 2022 |
Applications for unfair dismissal remedy – applicants contend they are employees, not independent contractors – s.587(1)(c) application made by Respondent to dismiss applications – applicants insist on having their matter heard – discretion to dismiss not exercised.
On 22 July 2022, Mr Timothy Burdett and Mr Drew Read (collectively, the Applicants) made applications to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) alleging that they had been dismissed from GDM Projects Pty Ltd (the Respondent) and that their dismissals were harsh, unjust or unreasonable.
The Applicants nominated 1 July 2022 as the date of their dismissal. In each of the Form F3 – Employer Responses completed by the Respondent, it is accepted that Mr Burdett and Mr Read were asked to cease providing their services to the Respondent on 1 July 2022. Accordingly, the applications have been made within the 21-day time limit prescribed by the Act.
The Applicants were initially represented by a paid agent, Mr Tim Dive of Workplace Advisory Specialists Pty Ltd. The Respondent was initially represented by Mr Nicholas Taylor of Emanate Legal.
In its Form F3 response to each of the applications, the Respondent raised a jurisdictional objection on the basis that Mr Burdett and Mr Read were independent contractors providing services for the Respondent pursuant to an Independent Contractor’s Agreement, and as such were not employees protected from unfair dismissal under s.382 of the Act.
Both applications were the subject of conciliations with the matters unable to be resolved. The matters were allocated to my Chambers for consideration. On 30 August 2022, I wrote to the parties proposing that the applications be heard jointly due to the similar circumstances of Mr Burdett and Mr Read’s applications, and the fact they are represented by the same paid agent. The parties agreed to the matters being determined jointly.
On 30 August 2022, I issued directions for filing of material by the parties in both matters for determination of the jurisdictional objection and the substantive merits application. I also listed the matter for joint mention and conference on 6 September 2022 and joint hearing on 20 October 2022. Included in the correspondence was the following:
“The Commissioner advises that during the conference scheduled for 6 September 2022, parties should expect to discuss the recent Full Bench decision of Deliveroo Australia Pty Ltd v Diego Franco [2022] FWCFB 156, (Deliveroo), which appears to be relevant to the jurisdictional objection submitted for both matters”.
At the telephone conference on 6 September 2022, the Applicants were granted leave to be represented by Mr Dive. The Respondent was granted leave to be represented by Mr Cameron Niven, Senior Lawyer of NB Employment Law.
I discussed the above Deliveroo case with the parties, together with the following two recent High Court decisions:
· CFMMEU v Personnel Contracting Pty Ltd[1] (Personnel Contracting); and
· ZG Operations Australia Pty Ltd v Jamsek[2] (Jamsek).
I informed the Applicants that the nature of the written contractual terms they had each entered into with the Respondent would represent a very high hurdle for them to overcome to satisfy the Commission that they should be found to have been employees of the Respondent, and not independent contractors.
The Applicants insist that the Commission lift the veil on the relationship and examine all aspects of it, commonly known as consideration of the multifactorial test. This is despite the above authorities confirming that such examination is not permitted where there is a wholly written and comprehensive contract which is not a sham or otherwise ineffective, and where the rights and obligations of the parties are regulated by the contract, finding other than an employment relationship.
I repeated to the Applicants during the telephone conference the high likelihood of their applications being dismissed based on the written contractual terms entered into by them. If it became necessary to examine all aspects of the relationship between each of them and the Respondent, the Applicants might each have difficulties reconciling what they have previously stated to the Australian Taxation Office (ATO) and what they are purporting to the Commission.
The Applicants each confirmed that they claimed JobKeeper as sole traders throughout 2020, having informed the ATO that their business enterprises had suffered greater than 30% loss of income as a result of the COVID-19 pandemic.
Following the conference, I ordered for the Applicants’ taxation records of recent years to be produced. The records were filed on 20 September 2022. As an example, Mr Burdett’s taxation return for the 2020 financial year records the following:
Description of main business or professional activity:
Concreting Services Business income and expenses: Non-primary production $60,412
Motor vehicle expenses: $4,653
All other expenses: $4,017
In respect of personal services income, Mr Burdett declared to the ATO that he satisfied the ‘results test’. The ATO website states the following in respect of the ‘results test’:
“If you’ve worked out that your income includes PSI, your next step is to work through the results test. This test is about the nature of your agreement to perform the work, including the basis on which you are paid.
To pass the results test in an income year, you need to meet the following three conditions:
· Paid to produce a specific result
· Required to provide the equipment or tools
· Required to fix mistakes at your own costs
If you pass the test, your business is a personal services business (PSB) for that income year and the PSI rules don’t apply.”
Mr Read’s taxation return for the 2021 financial year records business income as $78,834, including $7,500 in Jobkeeper payments, and business expenses of $28,828. The business expenses he claimed are as follows:
Non-primary production
Depreciation expenses: $7,036
Motor vehicle expenses: $12,540
All other expenses: $9,252
He declared his net business income as $50,006. He declared in the same taxation return that he was carrying on a business and the aggregated turnover for the year was less than $10 million. He received a net small business tax offset of $874.35.
On 26 September 2022, Mr Dive notified Chambers and the Respondent that he has ceased to act for Applicants.
Section 587 of the Act provides as follows:
“587 Dismissing applications
(1) Without limiting when the FWC may dismiss an application, the FWC may dismiss an application if:
(a) the application is not made in accordance with this Act; or
(b) the application is frivolous or vexatious; or
(c) the application has no reasonable prospects of success.
Note: For another power of the FWC to dismiss an application for a remedy for unfair dismissal made under Division 5 of Part 3 2, see section 399A.
(2) Despite paragraphs (1)(b) and (c), the FWC must not dismiss an application under section 365 or 773 on the ground that the application:
(a) is frivolous or vexatious; or
(b) has no reasonable prospects of success.
(3) The FWC may dismiss an application:
(a) on its own initiative; or
(b) on application.”
In written evidence and submissions, the Applicants contended that despite the relevant authorities, the Commission should consider the multifactorial test to determine that they are each employees of the Respondent. They say that they are not interested in the pursuit of employee entitlements, only determination of their unfair dismissal applications. That submission is, of course, nonsensical given if the Commission so finds that each of the Applicants are employees, entitlements could flow.
The Applicants further sought to rely on the advice they were given by their former representative that they will be found to be employees in dogged pursuit of their claim.
The Applicants’ evidence is that they repeatedly requested to be made employees and this was refused by the Respondent. The Applicants seem to think that this assists with their assertion that they are employees. The stark reality is that it does not and provides further support to the Respondent’s position that they are not employees.
The Applicants ‘want their day in court’. The hearing has been re-listed as an in-person hearing on 28 October 2022. In spite of the preliminary assessment that I have provided of their very weak chances of succeeding, the Applicants insist the hearing go ahead. This is so, even where the Respondent has foreshadowed a costs application in the event the applications are dismissed.
My preliminary view is that the applications have no reasonable prospects of success. However, s.587 of the Act affords the Commission discretion to dismiss an application by use of the word ‘may’ and not ‘must’.
Given the Applicants’ urging to have the hearing occur later this week, I have decided to dismiss the Respondent’s s.587(1)(c) application. The Applicants are aware that if their own applications are dismissed and the Respondent makes a cost application, their insistence to have the matters determined, rather than withdraw their applications will be appropriately considered at that time.
The Applicants are advised to seek advice between now and the date of the hearing. I have advised the Applicants that in the event it is necessary to consider the multifactorial test, it strikes me as unconscionable to have claimed tens of thousands of dollars in business expenses per annum (in the case of Mr Read) and a small business allowance, while arguing before this Commission that an employment relationship existed.
COMMISSIONER
[1] [2022] HCA 1.
[2] [2022] HCA 2.
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