Roberts and Secretary, Department of Jobs and Small Business

Roberts and Secretary, Department of Jobs and Small Business [2019] AATA 64 (22 January 2019)
Division:GENERAL DIVISION
File Number: 2018/3203
Re:Phillip Raymond Roberts
APPLICANT

Secretary, Department of Jobs and Small BusinessAnd
RESPONDENT

DECISION
Tribunal:Senior Member D R Davies
Date:22 January 2019
Place:Brisbane

The Tribunal sets aside the decision under review and Mr Roberts’ claim for an advance under the Fair Entitlements Guarantee Act 2012 (Cth) is remitted to the Respondent to be assessed in accordance with the Tribunal’s findings.
.....................[Sgd]...................................................
Senior Member D R Davies
CATCHWORDS
EMPLOYMENT ENTITLEMENTS – Claim for an advance under Fair Entitlements Guarantee Act 2012 – Whether Applicant an employee or a independent contractor – Unpaid remuneration due to insolvency event – Reasonable steps before the insolvency event – Decision under review set aside
LEGISLATION
Fair Entitlements Guarantee Act 2012 (Cth)
CASES
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) [2011] FCA 366
Tabone and Secretary Department of Employment [2018] AATA 2138
Hollis v Vabu (2001) 207 CLR 21
Marshall v Whittakers Building Supply Company Pty Ltd (1963) 109 CLR 210
SECONDARY MATERIALS
Explanatory Memorandum to the Fair Entitlements Guarantee Bill 2012
REASONS FOR DECISION
Senior Member D R Davies
22 January 2019
INTRODUCTION

The Applicant, Mr Roberts, seeks the review of a decision of the Respondent, the Secretary, Department of Jobs and Small Business, that he was not eligible for an advance under the Fair Entitlements Guarantee Act 2012 (Cth) (FEG Act).
The issue is whether Mr Roberts was an employee of Ignite Homes Pty Ltd (Ignite) and was eligible for an advance under the FEG Act.
BACKGROUND
The FEG Act provides for the Commonwealth to make payments owed to employees if their employer becomes insolvent. The Commonwealth advances the entitlements of the employees to the employees and then seeks to recover the advances from the insolvent employer.
On 2 March 2015, Mr Roberts entered into an agreement with Ignite to be a contractor of Ignite (First Agreement).[1]
[1] Exhibit 1 Tribunal Documents, T6 pp117-123.
On 18 March 2016 Mr Roberts entered into a new agreement with Ignite which superseded the First Agreement and commenced on 1 April 2016 (Second Agreement).[2]
[2] Exhibit 1 Tribunal Documents, T6 pp124-130.
Mr Roberts asserts that on 22 March 2017 the Second Agreement with Ignite was terminated by Ignite without prior notice.[3]
[3] Exhibit 1 Tribunal Documents, T6 p101.
On 27 March 2017 Mr Roberts submitted a complaint to the Queensland Building and Construction Commission (QBCC) against Ignite for a failure to pay money which was owed to him by Ignite.[4]
[4] Exhibit 1 Tribunal Documents, T6 pp141-3.
On 6 April 2017 Mr Roberts filed an Application for minor civil dispute to the Queensland Civil and Administrative Tribunal (QCAT) claiming payment of service fees of $6,072.00 and commissions of $7,150.00.[5]
[5] Exhibit 1 Tribunal Documents, T6 pp144-7.
On 19 May 2017 Administrators were appointed to Ignite and on 23 June 2017 Liquidators were appointed.[6]
[6] Exhibit 1 Tribunal Documents, T29 p447.
On 25 May 2017 Mr Roberts submitted to the Administrators of Ignite Form 535 Corporations Act 2001 (Cth) Formal Proof of Debt or Claim.[7] This form set out the particulars of the outstanding debt which Mr Roberts claimed was owed to him by Ignite. On 28 September 2017, Mr Roberts completed a claim form for an advance under the FEG Act.[8]
[7] Exhibit 1 Tribunal Documents, T30 p457.
[8] Exhibit 1 Tribunal Documents, T6.
On 9 November 2017 a delegate of the Respondent made a decision under subsection 15(1) of the FEG Act that Mr Roberts was not eligible for an advance under the FEG Act (Initial Decision).[9]
[9] Exhibit 1 Tribunal Documents, T11.
The delegate decided that Mr Roberts was not an employee of Ignite and was instead a contractor. Accordingly the delegate concluded that Mr Roberts was not eligible for an advance under the FEG Act which is a payment scheme solely for former employees of an insolvent employer.
On 17 January 2018 Mr Roberts applied for internal review of the Initial Decision under subsection 38(1) of the FEG Act.[10] Mr Roberts contended that he was an employee of Ignite and not a contractor.
[10] Exhibit 1 Tribunal Documents, T12.
On 8 June 2018 a delegate of the Respondent made a decision under section 39(1) of the FEG Act to affirm the Initial Decision[11] and determined that Mr Roberts was not an employee of Ignite and that he did not take reasonable steps prior to the insolvency event to be paid employment entitlement debts or to be treated as an employee before his contract was terminated. Accordingly, the delegate determined that Mr Roberts did not satisfy subsection 10(1)(f) of the FEG Act and that he was ineligible for FEG assistance by virtue of that section.[12]
[11] Exhibit 1 Tribunal Documents, T27.
[12] Exhibit 1 Tribunal Documents, T27 p432.
ISSUES
Mr Roberts contends that he was an employee of Ignite and the Respondent contends that he was an independent contractor. The issues in contention in this Application are therefore:
(a)Whether Mr Roberts was an employee of Ignite for the purposes of the conditions of eligibility for an advance under section 10 of the FEG Act; and
(b)Whether Mr Roberts took reasonable steps prior to the insolvency event to be paid employment entitlement debts as required by paragraph 10(1)(f) of the FEG Act.
LEGISLATION
The relevant provisions of the FEG Act are in section 10, which sets out the conditions of eligibility for an advance.
Relevantly:
·Paragraph 10(1)(a) requires the person’s employment to have ceased.
·Paragraph 10(1)(c) requires the end of employment to be due to the insolvency of the employer or within six months before the appointment of an insolvency practitioner for the employer.
·Paragraph 10(1)(d) requires that the person is owed one or more debts attributable to employment entitlements.
·Paragraph 10(1)(f) requires that if the person was owed any of the debts before the insolvency event happened, the person took reasonable steps before that event to be paid those debts.
Paragraph 10(1)(h) also requires an effective claim to be made in accordance with section 14. Relevantly, section 14 requires the claim to be made in the form approved by the Secretary and within 12 months of the insolvency event of the employer.
Whilst section 5 of the FEG Act defines “employer” as “including former employer”, “employee” or “employment” are not defined within the FEG Act.
Paragraph 4 of the Explanatory Memorandum to the Fair Entitlements Guarantee Bill 2012 states:
“For the purposes of the scheme, the term “employee” refers to an employee at common law and does not include contractors.”
Accordingly, it is necessary to assess whether the person is an employee at common law for the purposes of consideration of the person’s entitlement for an advance under the FEG Act.
EMPLOYEE AT COMMON LAW
The traditional approach to the characterisation of an employer/employee relationship was to apply a control test. In Stevens v Brodribb Sawmilling Co Pty Ltd[13] (Stevens v Brodribb), Mason J, with whom Brennan J (at 47) and Deane J (at 49) relevantly agreed, addressed the factor of control and the issue of characterisation generally, as follows (at 24):
“A prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter. It has been held, however, that the importance of control lies not so much in actual exercise, although clearly that is relevant, as in the right of the employer to exercise it…
But, the existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment. The approach of this court has been to regard it merely as one of a number of indicia which must be considered in the determination of that question… Other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and the provision for holidays, the deduction of income tax and the delegation of work by the putative employee.”
[13] (1986) 160 CLR 16.
Mason J went on to state (at 29):
“Control is not now regarded as the only relevant factor. Rather, it is the totality of the relationship between the parties which must be considered.”
In Stevens v Brodribb in their joint judgment, Wilson and Dawson JJ said:[14]
“The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance.”
[14] (1986) 160 CLR 16 [27].
In On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3)[15] (On Call Interpreters), Bromberg J said (at para 204):
“Despite the earlier preoccupation of the law with a degree of control exercised by the putative employer as defining an employment relationship, the modern approach is multi-factorial. As the majority said in Hollis[16] it is,
“the totality of the relationship which is to be considered.””
[15] [2011] FCA 366.
[16] Hollis v Vabu (2001) 207 CLR 21 [24].
Bromberg J went on to state (at para 207):
“In the pursuit of greater simplicity and clarity it is of assistance that the majority in Hollis whilst applying a multi-factorial approach, provided a focal point around which relevant indicia can be examined. That focal point has been elsewhere expressed as the “ultimate question” posed by the totality approach…”
As Wilson and Dawson JJ in Stevens v Brodribb observed at 35:
“The “ultimate question” was posed by Windeyer J in Marshall v Whittakers Building Supply Company Pty Ltd (1963) 109 CLR 210 at 217, in a passage which the majority in Hollis strongly endorsed at [40]. The majority in Hollis (citing Windeyer J) said, the distinction between an employee and an independent contractor is “rooted fundamentally” in the fact that when personal services are provided to another business, an independent contractor provides those services whilst working in and for his or her own business, whereas an employee provides personal services whilst working in the employer’s business: at [40]. Unless the work is being provided by an independent contractor as a representative of that entrepreneur’s own business and not as a manifestation of the business receiving the work, the person providing the work is an employee: Hollis at [39], [40], [47] and [57]…”
As stated by Bromberg J stated in On Call Interpreters (at paragraphs 208 and 209):
“Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work, may be posed and answered as follows:
Viewed as a “practical matter”:
(i) is the person performing the work an entrepreneur who owns and operates a business; and
(ii) in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?
If the answer to that question is yes, in the performance of the particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee.
The question which this approach poses appears to be the central question in the application of the totality test. The question provides the focal point around which the indicia thrown up by the totality test may be examined. The central question has two elements. The first is whether the person has a business. The second is whether the work or the economic activity being performed is being performed in and for the business of that person.”
The relevant factors or indicia to be considered in determining whether a person is an employee or a contractor were summarised by the Tribunal in the recent decision Tabone and Secretary Department of Employment[17] as follows (at paragraph 5):
[17] [2018] AATA 2138.
“The totality of the relevant relationship needs to be examined with a variety of indicators to be weighed and assessed including:
(i)     The terms of the relevant contract;
(ii)    The mode of remuneration and in particular whether remuneration was to be paid for a completed job or hours worked;
(iii)    Deduction of amounts on account of income tax;
(iv)   Attendance to the basic steps usually associated with setting up a business such as obtaining an ABN and insurance;
(v)    The putative employer’s degree of control or right to exercise control over the work to be done, the organisation and allocation of work, the manner in which the work is to be performed and the place and hours of work;
(vi)   Any entitlement or power to delegate work to others;
(vii)     Any actual work or entitlement to work for others;
(viii)    Advertising of services to others;
(ix)   Any exclusive service obligations;
(x)    Whether the worker is presented to the public as part of the putative employer’s organisation or a representative of it;
(xi)   Rights to paid holidays, superannuation and sick leave;
(xii)     Whether the worker has a separate workplace;
(xiii)    Whether the worker provides and maintains significant resources or equipment; and
(xiv)   Whether the worker is required to bear all expenses and indemnify the putative employer against any losses.”
FACTS
The evidence before the Tribunal is contained in the Exhibits before the Tribunal which are admitted by the parties including the Respondent’s Statement of Facts, Issues and Contentions (Exhibit 3) and Mr Roberts’ submissions (Exhibits 4 and 5). Mr Roberts also appeared before the Tribunal and gave evidence and answered questions of the Tribunal and Mr Holcombe who appeared on behalf of the Respondent. Mr Roberts impressed me as a truthful witness and was prepared to concede in response to questions that some statements which he had made in emails in dealings with various parties in relation to the matter either overstated or did not correctly state the position.
Terms of the contracts
As previously mentioned, Mr Roberts entered into two contracts with Ignite. The recitals to both agreements state: [18]
“The Company has requested the Contractor to provide services to the company.”
“The Contractor has agreed to provide the Services to the Company upon and subject to the following terms and conditions.”
[18] Exhibit 1 Tribunal Documents, T6 p117 and p124.
The Second Agreement is expressed to supersede the First Agreement and continues until terminated.[19] Relevant provisions of the First and Second Agreements (the Agreements) are as follows:
[19] Exhibit 1 Tribunal Documents, T6 p125 clauses 2 and 4.
(a)Clause 2 requires the Contractor to provide the Services at the Premises or such other place or places which the Company may from time to time authorise or direct. Schedule 2 provides that the Premises are a specified display home and the head office at Springwood.
(b)Clause 3 provides for remuneration of the Contractor. Whilst this clause in the First Agreement refers to payment of a Contractor’s Fee for the Services in accordance with Schedule 1, the Second Agreement omits that provision although Schedule 1 in both Agreements provides for the payment of a service fee upon receipt of a tax invoice as follows:
(i)First Agreement - $1,100.00 including GST weekly; and
(ii)Second Agreement - $2,400.00 excluding GST fortnightly.
(c)Clause 3 of the Agreements also provides for the payment of travel expenses as provided in Schedule 3. In his evidence, Mr Roberts said that he does not recall having claimed for any travel expenses and the reason for the increase in his fee in the Second Agreement was partly to cover his expenses and that is why he did not claim expenses. Clause 3 also provides for payment of commission in accordance with Schedule 5. Under the Second Agreement, the commission payment was to be $2,000.00 excluding GST paid on receipt of a tax invoice and was payable upon receipt of the deposit for a Building Contract.
(d)Clause 5 sets out various warranties and indemnities which are given by the Contractor including, in sub-clause 5(4) that the Contractor “indemnifies the Company from and against any costs, damages, loss or liability of any kind… however suffered or incurred by the Company by virtue of the provision of the Services or any breach of this Agreement by the Contractor”.
(e)Clause 6 sets out various confidentiality obligations which are imposed on the Contractor.
(f)Clause 7 states that “the Contractor’s relationship with the Company is that of independent contractor” and that nothing in the Agreement is to be construed “as creating the relationship of employer and employee.”
(g)Schedule 3 outlines the Services to be provided by the Contractor including:
·Creating service agreements to new marketing contacts with those agreements to be countersigned by the manager, Brendon Ferns.
·Presenting the company’s house and land packages to marketing contacts for purposes of closing investment property sales.
·Working out of the display home six days a fortnight on a rotational basis with another staff member.
·Overseeing sales staff and reporting back to management.
·Maintaining an ongoing relationship with new and past clients and recording activities with clients onto Base CRM.
Mr Roberts said in his evidence to the Tribunal that he had had his own business as a food manufacturer’s agent for about 20 years before he got into the property business as a business development manager for a home building company. After some time in that role, in about 2012, he had started up his own business as a property marketer called Asset Property and Finance. He said that this had not gone very well and he had heard through a friend that Ignite was looking for a business development manager and he was interested in the position as he had been virtually unemployed for about a year and he needed a job. He said that in his initial interview with Mr Brendon Ferns (Mr Ferns) the Business Development Manager of Ignite, he was told that the role was Business Development Manager and Ignite was looking for someone to manage their sales and marketing business mainly through a network of selling agents. Mr Ferns said that his own role as Business Development Manager was to be more managerial and he operated out of Ignite’s display home in Bundaberg. He said that they were looking for a Business Development Manager for the Brisbane office. Mr Roberts said that he had thought he would be engaged as an employee but that Mr Ferns said that they would only engage him as a contractor and that he would need an ABN. Mr Roberts said that he did not query this at the time as he was in need of a job and he accepted this arrangement.
Mr Roberts in his evidence to the Tribunal conceded that assertions which he had made in various emails to officers of the Respondent that he had been forced into signing the contracts[20] were incorrect.
[20] Exhibit 1 Tribunal Documents, T12 p181; T15 p191.
In relation to the Second Agreement, Mr Roberts also conceded that contrary to what he had stated in an email to the Respondent on 5 June 2018[21] that whilst he felt he was really an employee, that Ignite had not insisted that he sign the new contractor agreement but that he had the feeling that if he had not signed it as a contractor, he would not have had a job.
[21] Exhibit 1 Tribunal Documents, T25 p419.
Mr Roberts said that both Agreements were prepared by Ignite and presented to him by Mr Ferns to be signed. He said that the reference to Asset Property and Finance which is crossed out as the contractor in the First Agreement was to his old business. He said that he had obtained the ABN which he held in his own name in 2012 although he said that he did not have any recollection of having used his personal ABN for any business he was operating in his own right prior to entering into the Agreements with Ignite.
Work performed

Mr Roberts in his written submission to the Tribunal[22] and in his oral evidence said that he was engaged by Ignite as Business Development Manager in a full time role. He said that he was personally required to perform the work and was required to work specific hours in Ignite’s office or at the display home. He said that he was not involved with any other business and until shortly before he was terminated in March 2017 the only income he received was from Ignite. He said that the company had full control over the work he was to perform and he was required to submit regular reports to Mr Ferns. Ignite provided all of the equipment and materials for him to perform the work, other than his mobile phone which was his own. He was required to supervise staff and was involved in the recruitment of sales staff. Ignite provided him with business cards which showed that he was the Business Development Manager of Ignite with contact details at Ignite. He had a company email address which was used for his work. His signoff on emails was as Business Development Manager of Ignite. He said that he attended company training sessions and that Ignite promoted him externally as its Business Development Manager.
[22] Exhibit 4 Applicant’s Submissions and Supporting Documents dated 9 August 2018.
Mr Roberts said in his evidence that as Business Development Manager he had three main roles:
1) To sell houses to clients who visited Ignite’s display homes;
2) To manage and expand a team of selling agents who sold houses mainly to investors;
3) He was responsible for acquiring land on behalf of Ignite.
Mr Roberts said that he reported to Mr Ferns and would receive instructions from Mr Ferns when he came to Brisbane from Bundaberg which was at least fortnightly for two to three days at a time. He also sometimes had meetings with the owner of the business Anthony Schaenzel although he did not report to him on a day to day basis.
Under the Second Agreement, Mr Roberts’ remuneration was determined based on a fixed fortnightly fee for his services plus travel expenses and commissions. Pursuant to Clause 3 and Schedule 1 of the Agreements Mr Roberts issued Ignite with tax invoices which were paid up until shortly before his termination in March 2017. The tax invoices submitted by Mr Roberts were in his own name and included his ABN, with descriptions such as “Contractor Fees” and “Referral Fees” along with remittance information.[23]
[23] Exhibit 1 Tribunal Documents, T6 pp131-136.
The payment of invoices by Ignite did not include any deduction for income tax.[24] The Respondent in paragraph 33 of its Statement of Facts, Issues and Contentions[25] refers to a Tax File Number declaration completed by Mr Roberts on 29 September 2017 but notes that Part B which is completed by the payer or employer is not completed. I note that this was done after Mr Roberts was terminated in March 2017 and after Ignite went into administration and then liquidation.
[24] Exhibit 1 Tribunal Documents, T6 pp131-136.
[25] Exhibit 3 Respondent’s Statement of Facts, Issues and Contentions dated 31 October 2018.
The 2015-16 tax return completed by Mr Roberts states that his total income for the year was derived by him as a sole trader under the ABN 62 259 914 194.[26]
[26] Exhibit 1 Tribunal Documents, T17.
Mr Roberts said in his evidence that prior to commencing with Ignite and under his business Asset Property and Finance he had agreements with two home builders for a commission based fee if he referred clients to them. He said that he had told Mr Ferns about this in his initial interview and Mr Ferns had said to him that as he would be paying his wage, that those arrangements were to cease and any leads were to be referred to Ignite. Mr Roberts said that once he commenced with Ignite he did not have any referral or other contact with builders other than through Ignite until Ignite breached the Second Agreement by not paying commission which was due to him in December 2016 and then in March 2017 by not paying his service fee.
Mr Roberts said that he worked at the display home on a rostered basis with one of his sales assistants. He said that he did not take any statutory holidays apart from Christmas Day, Boxing Day and Good Friday. He said that in the two year period he was with Ignite he did not take any other holidays. He said that if he had wanted to take holidays he would have requested it but that he had no need to. He said that his weekly or fortnightly service fee included provision for working on statutory holidays.
Contrary to what he had stated in an email to Ignite’s lawyers on 23 March 2016,[27] Mr Roberts acknowledged that when he entered into the Agreements he had not ensured that they were exclusive agreements nor that he had the ability to derive income from sources other than Ignite. I note that neither of the Agreements contain terms that they are exclusive agreements.
[27] Exhibit 1 Tribunal Documents, T18 p248.
Mr Roberts said that in late 2016 he formed the view that Ignite was in financial trouble and that he had made up his mind to leave but decided to stay on until his outstanding commissions were paid. He was also expecting some further commissions for some sales which were due to settle in March 2019. He said that because of his concerns about Ignite’s financial viability in late 2016, he referred the son of a friend to Toro Homes which was a house building business operated by his niece and nephew. He said that this was the only person he had referred to Ignite. He said that Toro Homes subsequently paid him a fee of $4,000.00 for that referral pursuant to an arrangement which he had made with Toro Homes at that time. He said that in early 2017 his niece asked him to introduce her to some land developers to assist the business of Toro Homes. Mr Roberts said that he would, but as he was still at Ignite, he would need to differentiate himself from his role with Ignite by having an involvement with Toro Homes. He said that subsequent to this he became “Business Development for Toro Homes”. This is how he is described in the signoff of some emails including one of 3 March 2017 to Sorano Studios.[28]
[28] Exhibit 1 Tribunal Documents, T23 p327.
Mr Roberts said that on 22 March 2017 he was requested to attend a meeting with Mr Ferns at Ignite’s office. As well as Mr Ferns, Mr Edwards a lawyer with Rostron Carlyle and another person were present. Mr Roberts said that Mr Ferns asked him about Toro Homes and accused him of diverting Ignite clients to Toro Homes. Mr Roberts said that he denied doing this and explained his family relationship with Toro Homes. He said that Mr Ferns then said that on that basis they were terminating his Agreement. The following day Mr Edwards sent Mr Roberts the email[29] in which it notes that at the meeting the previous day he had been terminated under clauses 2 and 4 of the Agreement. It further stated that they had “ascertained that Mr Roberts had been answering his mobile phone as “Phil Roberts, Toro Homes”. It also asserted that Mr Roberts had used client details and other information in breach of the confidentiality provisions of the Agreement.
[29] Exhibit 1 Tribunal Documents, T23 p332.
In his evidence to the Tribunal, Mr Roberts denied having answered his mobile phone as “Phil Roberts, Toro Homes”.
Subsequently Mr Roberts on 27 March 2017 submitted a complaint to the QBCC against Ignite for failure to pay him.[30] Then on 6 April 2017 he submitted an Application for minor civil dispute to QCAT for failure to pay service fees and commission owed to him.[31]
[30] Exhibit 1 Tribunal Documents, T6 pp141-143.
[31] Exhibit 1 Tribunal Documents, T6 pp144-147.
Mr Roberts in his evidence to the Tribunal acknowledged that he had changed his position on whether he was an independent contractor when he became aware of the provisions of the FEG Act and that he had then looked into it and became convinced that he was really an employee.
RELEVANT FACTORS
I will now consider the factors relevant to the assessment of whether Mr Roberts was an employee or an independent contractor.
Terms of contracts
As previously mentioned, the Agreements are expressed to be contracts for services and specifically provide that the relationship between Ignite and Mr Roberts is that of independent contractor. The Agreements are entered into by Mr Roberts personally and refer to his personal ABN. The Agreements also provide for Mr Roberts to indemnify Ignite against costs, damaged, loss or liability incurred by Ignite as a result of the provision of the Services or any breach of the Agreement. Those provisions suggest that the relationship is that of independent contractor.
Mode of remuneration
Mr Roberts’ remuneration was for a fixed weekly or fortnightly rate. He was required to submit tax invoices for payment which he did, referring to his ABN and adding GST to the fee. He also submitted invoices for commissions from time to time but did not submit invoices for expenses. However, it is clear that his remuneration was at a weekly or fortnightly rate and was not for a completed job nor for hours worked at an hourly rate. Those factors suggest that it was in the nature of an employee relationship.
Deduction of income tax
There was no deduction made by Ignite for income tax upon payment of the invoices submitted by Mr Roberts. It is also apparent that Mr Roberts submitted his income tax returns on the basis that he was a sole trader and paid tax on that basis. Those factors suggest that it was an independent contractor relationship.
Steps associated with setting up a business
Mr Roberts had obtained his personal ABN in 2012 although he says that until he entered into the contract with Ignite he had not used the ABN to operate a business. I am satisfied that he did not have an existing business using this ABN at the time that he entered into the Agreements with Ignite. Whilst the use of the ABN suggests an independent contractor relationship, I am satisfied that the provision of the services under the Agreement was not part of a previously existing business operated by Mr Roberts.
Putative employer’s control
It is apparent that Ignite controlled or had the right to exercise control over the work which Mr Roberts was required to undertake. He was Ignite’s Business Development Manager. He reported to Mr Ferns and provided regular written reports on his work. He was required to work specific hours at the display home under a roster with other sales staff which was approved. The work he was to perform was specified in the Agreements. He was required to oversee sales staff. He was responsible for the recruitment of sales staff subject to the approval of Mr Ferns. I consider that those matters suggest an employee relationship.
Entitlement to delegate work
Clause 2(2) of the Agreement provides that Mr Roberts must provide the Services. Clause 9(2) of the Agreement provides that any rights or obligations under the Agreement cannot be assigned or transferred without the other party’s permissions. Mr Roberts did not delegate his work to anyone else. Those matters suggest an employee relationship.
Actual work or entitlement to work for others
Mr Roberts said that during his initial interview it was made clear to him by Mr Ferns that existing arrangements which he had with two builders were to cease and that all referrals were to be directed to Ignite. He said that he did not undertake any work for anyone other than Ignite until early 2017 when he referred the son of a friend to Toro Homes which was operated by his niece and nephew. He also assisted Toro Homes with contacts with land developers. He received a commission payment of $4,000.00 from Toro Homes for that referral. He had an email address at Toro Homes and an email signoff as “Phil Roberts – Business Development”. He said that he did that because he had decided to leave Ignite because he had not been paid outstanding commissions and he felt Ignite was in financial difficulty. Subsequently, he was terminated by Ignite because it considered that his dealing with Toro Homes was a breach of the Second Agreement. I am satisfied that apart from the matters involving Toro Homes in early 2017 which was shortly before he was terminated in March 2017, Mr Roberts did not undertake any actual work for any other party during the two years that he was engaged by Ignite. I am also satisfied that he did not have an entitlement to work for others and that this is evidenced by the instruction given to him by Mr Ferns in the initial interview to cease relationships with other builders and by Ignite terminating the Second Agreement when it became aware of what happened with Toro Homes. I consider that those matters suggest an employee relationship.
Advertising of services to others
Apart from the matter involving Toro Homes to which I have referred, there is no evidence that Mr Roberts advertised or promoted his services to anyone else during the period of his engagement by Ignite. Because of the circumstances surrounding this and that it occurred only a short while before he was terminated, I do not consider that this suggests that Mr Roberts was operating an independent business of which the provision of Services to Ignite was a part.
Exclusive service obligations
As the Respondent notes in its Statement of Facts, Issue and Contentions,[32] there is no clause in the Agreements that explicitly prevents Mr Roberts from providing services to another party. However, as I have previously mentioned, I am satisfied on the evidence that at the time Mr Roberts entered into the Agreements it was made clear to him that he was to sever relationships with other builders and was to only work for Ignite. I consider that this suggests an employee relationship.
Whether the worker is presented to the public as part of the putative employer’s organisation or a representative of it
[32] Exhibit 3 Respondent’s Statement of Facts, Issues and Contentions dated 3 October 2018, [52].
The evidence is that Mr Roberts was presented by Ignite as its Business Development Manager. He was provided with an Ignite email address and business cards describing him as Business Development Manager.[33] He was required to work from Ignite’s business premises. I consider that Mr Roberts was presented to the public as Ignite’s Business Development Manager and was presented as part of Ignite’s organisation for a period of two years, which is a lengthy period. I consider that these matters suggest an employee relationship.
[33] Exhibit 4 Applicant’s Submissions and Supporting Documents dated 9 August 2018.
Rights to paid holidays, superannuation and sick leave
The Agreements between Mr Roberts and Ignite made no provision for paid holidays, superannuation or sick leave. In his evidence Mr Roberts said that the only statutory holidays he took were Christmas Day, Boxing Day and Good Friday and that his weekly and fortnightly service fee allowed for working other statutory holidays. He said that whilst if he wanted to take holidays he would have asked for them, he did not. He did not do so as he did not need to. Ignite did not pay any superannuation for him.[34] These matters suggest an independent contractor relationship.
[34] Exhibit 6 Applicant’s Submissions and Supporting Documents dated 6 December 2018.
Whether the worker has a separate workplace
Clause 2(2) of Schedule 2 of the Agreements required that Mr Roberts was to provide the services at Ignite’s display homes or its head office. Mr Roberts in his submissions[35] and in his evidence states that his services required were required to be performed at Ignite’s premises and that he did not have a separate workplace. I consider that this suggests an employment relationship.
[35] Exhibit 4 Applicant’s Submissions and Supporting Documents dated 9 August 2018.
Provision of resources or equipment
Mr Roberts in his submissions[36] and in his evidence states that Ignite provided all of the equipment and material to perform the work. The Respondent in its Statement of Facts Issues and Contentions[37] refers to Mr Roberts having claimed in his tax returns motor vehicle expenses and costs of managing tax affairs as being indicative that he maintained resources and equipment as a contractor. I do not consider that incurring expenses of that nature are indicative of an independent contractor relationship. I consider that Ignite provided Mr Roberts with all of the equipment and material to perform the work and that this indicates an employee relationship.
[36] Exhibit 4 Applicant’s Submissions and Supporting Documents dated 9 August 2018.
[37] Exhibit 2 Respondent’s Statement of Issues dated 3 August 2018.
Whether worker required to bear expenses and indemnify the putative employer against losses
Clause 3 and Schedule 4 of the Agreements allowed Mr Roberts to claim for certain expenses including travel expenses. Mr Roberts said in his evidence that he did not claim any expenses and that the increase in the Service Fee in the Second Agreement was to cover expenses. As previously noted, Clause 5 of the Agreements provides that Mr Roberts indemnifies Ignite against loss or liability which it incurs as a result of the provision of the services or a breach of the Agreement. Those matters suggest an independent contractor relationship.
CONCLUSION
The cases to which I have referred require the totality of the relationship of the parties to be considered. In particular in On Call Interpreters Bromberg J states: [38]
“Unless the work has been provided by an independent contractor as a representative of the entrepreneur’s own business and not as a manifestation of the business receiving the work, the person providing the work is an employee.”
And also (at 208):
“Viewed as a ‘practical matter’
(i) is the person performing the work an entrepreneur who owns and operates a business; and
(ii) in performing the work is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?
If the answer to that question is yes, in the performance of that particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee.”
[38] On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) [2011] FCA 366 [207].
In the present case I am satisfied that in performing the work for Ignite, Mr Roberts was not operating his own business and was not a representative of his own business but was performing it for Ignite and as part of the business of Ignite.
I find that having regard to the totality of the relationship, the relationship between Ignite and Mr Roberts was that of employer and employee.
I find that for the purposes of Section 10 of the FEG Act, Mr Roberts was an employee of Ignite at the time his employment ended on 22 March 2017.
I will now consider the other conditions of Section 10 of the FEG Act.
As administrators were appointed to Ignite on 19 May 2017 and liquidators were appointed on 23 June 2017, I find that an insolvency event has happened to Ignite and that this occurred less than six months after the end of Mr Roberts’ employment in March 2017.
At the time Mr Roberts’ employment ended, Ignite owned him debts for fees and commissions and he lodged a proof of debt dated 25 May 2017 for those debts with the Administrators of Ignite.[39] Accordingly, I find that Mr Roberts is owed one or more debts wholly or partly attributable to all or part of one or more employment entitlements and that he has taken reasonable steps to prove those debts in the winding up of Ignite.
[39] Exhibit 1 Tribunal Documents, T30 pp445-457.
Paragraph 10(1)(f) FEG Act
As Mr Roberts was owed those debts before the insolvency event happened to Ignite, it is necessary to consider whether in accordance with paragraph 10(1)(f) of the FEG Act he took reasonable steps before that event to be paid those debts. The evidence is that in February and March 2017, Mr Roberts sent a number of emails to Ignite requesting payment of the outstanding invoices.[40] On 6 April 2017 Mr Roberts submitted an Application for a minor civil dispute to QCAT for a failure by Ignite to pay service fees and commission.[41]
[40] Exhibit 1 Tribunal Documents, T19 and T20.
[41] Exhibit 1 Tribunal Documents, T6 p141.

I note that in the decision under review, the delegate of the Respondent states:[42]
“You have asserted that you wanted to be engaged as an employee when you commenced with the company and approximately 12 months later, however there is no evidence that you took any steps to be treated as an employee or sought to be recognised by the company as an employee before your contract was terminated. Furthermore, the evidence shows that you took steps as a contractor to secure unpaid invoices after your contract was terminated, such as lodging a complaint with QCAT and QBCC.”
Accordingly, the delegate did not consider that paragraph 10(1)(f) of the FEG Act had been satisfied.
[42] Exhibit 1 Tribunal Documents, T27 p432.
As I have found that the relationship between Ignite and Mr Roberts was that of employer and employee, it follows that the outstanding debts arising from that relationship are debts attributable to employment entitlements. As the insolvency event of Ignite occurred less than two months after the termination of Mr Roberts’ employment, I consider that the steps which Mr Roberts took of pursuing Ignite by email for payment and initiation of an Application to QCAT were reasonable steps for him to have taken, even though the Application to QCAT may have not been properly founded.
Accordingly I find that Mr Roberts took reasonable steps before the insolvency event to be paid those debts in accordance with paragraph 10(1)(f) of the FEG Act.
It follows that the application for review is successful. The decision under review is set aside. Mr Roberts’ claim for an advance under the FEG Act is remitted to the Respondent to be assessed in accordance with my findings.

I certify that the preceding 77 (seventy -seven) paragraphs are a true copy of the reasons for the decision herein of Senior Member D R Davies

.......................[Sgd].................................................
Associate
Dated: 22 January 2019

Date of hearing: 19 December 2018

Applicant: In person

Advocate for the Respondent: Mr Holcombe

Solicitors for the Respondent: HWL Ebsworth Lawyers

[2019] AATA 64

22 January 2019

Key Legal Topics

Areas of Law

Employment Law

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Date of hearing:	19 December 2018
Applicant:	In person
Advocate for the Respondent:	Mr Holcombe
Solicitors for the Respondent:	HWL Ebsworth Lawyers