Rachael Turnbull v SC Coaching

[2013] FWC 6382

[2013] FWC 6382

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Rachael Turnbull
v
SC Coaching
(U2013/7794)

SENIOR DEPUTY PRESIDENT DRAKE SYDNEY, 2 SEPTEMBER 2013

Application for relief from unfair dismissal.

[1] This decision arises from an unfair dismissal application lodged pursuant to section 394 of the Fair Work Act 2009 (the Act) by Miss Rachael Turnbull.

[2] Mr Causley raised a jurisdictional objection to the application. He submitted that the applicant was not an employee but was rather an independent contractor and therefore excluded from the operation of the Act.

[3] Mr Causley set out in his response the grounds on which he relied for his objection. These are set out below:

“1. Rachael Turnbull was never an employee.

2. She chose to work as an independent contractor under ABN 47757890328 and no Tax or Super was deducted from payments made to her. She invoiced me on regular intervals.

3. Rachael Turnbull chose the contracting role when first coaching with me.

4. She was free to work at other places and has done so under her own banner with self advertising and website promotion even while working on contracts for me.

5. Her contracts with Saint Ignatius College were her major contract and the majority of her work over the past 6 months.

6. Had not held a contract with SC Coaching for over 2 months previous to 4th February 2012.

7. Clients that were introduced to her and promoted to her to (sic) through my business were taken mid way through last year under her own business which was advertised and promoted so.

8. Client poaching would have been a direct breach of fidelity for any employee.

9. I have advertisements of her personal business that would be the breach of any employer employee relationship.

10. Her website advertises for coaches and is to promote her own personal business. Nowhere was it ever mentioned by her that she was coaching under me.

11. Average contact hours consisted of 3 hours per week until 4th March 2013 this year.

12. Her hours were controlled totally by her and were a direct result of what she had organised.

13. The Fair Work Commission has no jurisdiction in this case.”

[4] Mr Causley gave oral evidence, provided submissions and a bundle of documents 1 attached to those submissions.

[5] Miss Turnbull provided a written statement 2 and gave oral evidence. She cross-examined Mr Causley.

[6] A discussion of the principles applicable in an application of this kind is set out below.

“......In Abdalla v Viewdaze Pty Ltd t/a Malta Travel 3 (Abdalla) a Full Bench of the Australian Industrial Relations Commission discussed the legal principles applicable to a determination of whether or not a person is an employee or an independent contractor. These principles were further considered by a Full Bench of Fair Work Australia in Jiang Shen Cai trading as French Accent v Do Rozario.4

‘(1) In determining whether a worker is an employee or an independent contractor the ultimate question is whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part? This question is concerned with the objective character of the relationship. It is answered by considering the terms of the contract and the totality of the relationship.

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

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

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

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

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

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

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

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

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

Whether the worker provides and maintains significant tools or equipment.

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

Whether the work can be delegated or subcontracted.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[7] The Full Bench highlighted the difficulty in categorising all employment relationships into either employee or independent contractor arrangements :

“The FW Act imposes obligations on employers in relation to their “employees” and confers benefits and rights on “employees” without defining when a worker is an employee as distinct from an independent contractor. The definition of “employee” leaves it to the general law to supply that distinction. The nature of the established general law approach to distinguishing between employees and independent contractors may be seen as contributing to the problem precisely because the nature of the general law test is such that it does not admit a clear answer in every case. Once one adopts the position, as the general law has done, that the distinction is rooted in the objective character of the work relationship two things follow. First, the infinite variety of human affairs means that work relationships present as a spectrum, some of which are clearly relationships of employment and others of which are clearly relationships of independent contract but some of which are less clear cut. Secondly, that character of a work relationship is what it is and cannot be changed simply because the parties agree to label it differently (unless, of course, the relationship is sufficiently ambiguous that a clear determination is not possible, the situation addressed by the Massey proposition). That is a matter clearly recognised by the courts and tribunals.”  

[7] Having considered the evidence and submissions of the parties, I am satisfied that Miss Turnbull carried on a business of her own as a tennis coach and in that capacity provided services to Mr Causley and his clients including Riverview College. The facts relevant to the applicant’s arrangements on which I relied for this determination are summarised below.

● On occasion Miss Turnbull subcontracted work provided by Mr Causley to other coaches.
● Miss Turnbull promoted herself as a tennis coach separately from any arrangement with Mr Causley.
● Miss Turnbull was able to work elsewhere whenever she wished so long as she met her commitments at Riverview College arising out of her arrangement with Mr Causley.
● Miss Turnbull presented invoices to Mr Causley for work done and he paid her in accordance with the invoices presented.
● Mr Causley did not pay any superannuation levy in relation to Miss Turnbull.
● Miss Turnbull paid her own tax.
● Miss Turnbull had on occasion been paid by Riverview College on presentation of an invoice directly from her rather than through Mr Causley.
● Although Miss Turnbull sometimes wore T-shirts with the respondent’s logo on them when performing her duties, I am not satisfied that that is a determinative. I am persuaded that these T-shirts were worn on some occasions when performing Riverview College duties and that wearing them was equally compatible with being an employee or independent contractor performing that work.

[8] For these reasons the jurisdictional objection of the respondent is allowed and the application of Miss Turnbull is dismissed.

SENIOR DEPUTY PRESIDENT

 1   Exhibits Causley 1 and Causley 2

 2   Exhibit Turnbull 3

 3   Lawler VP, Hamilton DP, Bacon C - [PR927971]

 4   Lawler VP, O’Callaghan SDP, McKenna C - [PR517359]

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