Steven Pattison v Amovita Enterprises Pty Ltd

[2023] FWC 2589

[2023] FWC 2589

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Steven Pattison
v

Amovita Enterprises Pty Ltd

(U2023/5469)

DEPUTY PRESIDENT LAKE BRISBANE, 20 NOVEMBER 2023

Application for an unfair dismissal remedy – jurisdictional objection raised – no dismissal – independent contractor – jurisdictional objection upheld – application dismissed.

1. Mr Steven Pattison (the Applicant) brought an application to the Fair Work Commission (the Commission) seeking a remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) stating he was unfairly dismissed from Amovita Enterprises Pty Ltd (the Respondent).

1. The Respondent raised a jurisdictional objection that the Applicant was not dismissed within the definition of s.386 of the Act as he was an independent contractor. For the Applicant to be eligible to make a claim under s.394 of the Act, the Applicant will need to establish that he was dismissed in accordance with the definition in s.386 of the Act.

1. Directions were issued and a hearing was held on 5 September 2023. The Applicant was self-represented, and Ms Bianca Mendelson of Counsel appeared on behalf of the Respondent.

Permission to Appear

1. I have granted permission for the Respondent to be represented under s.596 of the Act. I note that the Applicant had raised contentions regarding unfairness regarding the Respondent being represented.

1. The Applicant made his contentions to the Jamsek principles of determining the characterisation of employee or independent contracting raising complex legal issues including variation and sham contracting, along with his request of an Order to Attend. I find that the Commission granting permission would enable myself to deal with the matter more efficiently given the number of complex issues raised and will further assist by narrowing down  the issues allowing fairness for both parties.

Background

1. The Applicant had known Ms Tracey Harris (Director of the Respondent) in a professional capacity since 2013. The Applicant states that Ms Harris had coached him through getting his own ABN number and started to explore with him about commencing his own business.

1. The Applicant was engaged with the Respondent on 1 February 2022. The Applicant signed and witnessed the document titled ‘Independent Contractor Agreement’ dated 19 January 2023.

Is the Applicant an employee or an independent contractor?

1. Section 386(1) of the Act relevantly provides that 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 term ‘employer’ indicates that in order to be eligible to make a dismissal claim, such as an unfair dismissal claim, that the person making an application must be an employee.

1. The High Court of Australia in Jamsek and Personnel Contracting determined the case of whether a person is an employee or contractor.[1] The characterisation of the relationship is to be determined by reference only to the parties’ legal rights and obligations.

1. Where a comprehensive written contract is in place, this will be the primary source of the parties’ legal rights and obligations, and it will be decisive in characterising the relationship. This will apply unless the contract is a sham, varied after it was made, or post agreement conduct or context demonstrates that a term is legally ineffective.[2]

1. In NSW Trains v James [2022] FWCFB 55 at [148], the Full Bench explains the effect of Jamsek and Personnel Contracting in detail.

In the majority judgment in each decision, Kiefel CJ, Keane and Edelman JJ held that where the parties have comprehensively committed the terms of their relationship to a written contract the validity of which is not in dispute, the rights and obligations established by the contract should be decisive of the character of the relationship (as well as its legal terms). Absent a suggestion that the written contract has been varied, or that there has been conduct giving rise to an estoppel or waiver, a wide-ranging review of the parties’ subsequent conduct is unnecessary and inappropriate. However, the majority judgment in Personnel Contracting recognised that ‘there may be cases where subsequent agreement or conduct effects a variation to the terms of the original contract or gives rise to an estoppel or waiver.’

1. The Applicant filed an application for the Commission to order Ms Leonard’s attendance which would assist in determining the Applicant’s employment status. In his application, he states that Ms Leonard was present regarding all ‘employment-based conversations’ along with ‘discussion pertaining to contract, delegation of work, decision about leaving planning and types of duties undertaken’.[3]

1. The Order to Attend was rejected as the Applicant had entered into a written contract with the Respondent. The Applicant did not establish a variation to terms of the original contract which would give rise to an estoppel or waiver, nor was there any written documentation regarding a variation of the contract by the Applicant.

1. In considering NSW Trains v James, approving the Order to Attend would lead to a wide-ranging review of the parties’ subsequent conduct which the Full Bench noted to be unnecessary and inappropriate.

1. The Applicant has lodged an application to the Fair Work Ombudsman stating that he entered into a sham contracting arrangement. The Applicant states that Jamsek does not apply because he was in a sham contracting arrangement.

1. “Sham” refers to steps which take the form of a legally effective transaction but which the parties should not have the apparent or any legal consequences. This is a question of the intentions of the parties when entering into the contract.[4]

1. In Khaym v Navitas English Pty Ltd, a Full Bench of the Commission provided a summary of recognised categories by which the law excuses parties from the performance of a contract.

   -     the employee entered into the contract as a result of misrepresentation or misleading conduct by the employer.

   -     the employee entered into the contract as a result of a serious mistake about its contents or subject matter.

   -     there has been unconscionable conduct associated with the making of the contract, which may relevantly include that the employer took advantage of a disability affecting the employee such as lack of education, lack of information, lack of independent advice or illiteracy.

   -     the employment contract was entered into by the employee under duress or coercion (which might include the types of coercion prohibited in ss 343(1)(a), 348 and 355) resulting from illegitimate pressure on the part of the employer.

   -     the employee lacked the legal capacity to make the contract; or

   - the contract was a sham in the sense that it was not intended by the parties to give legal effect to its apparent terms or in the broader sense dealt with in Pt 3-1 Div 6 of the FW Act.”[5]

1. I do not accept that Mr Pattison was unaware of the terms of the arrangement at the time of entering into the contract. Mr Pattison had signed a contract on 19 January 2022 which was titled an ‘Independent Contractor Agreement’ (the Agreement).

1. Clause 2.7 of the Agreement states:

‘The Contractor understands the nature of the professional relationship between the Contractor and the Company. Nothing in this Agreement is to be construed as constituting an Employee, Director or partner relationship with the Company. This Agreement does not constitute the relationship of employer and employee between the Contractor and the Company.'

1. Other clauses in the Agreement indicate the relationship being an independent contractor relationship which include (but is not limited to):

1. must provide invoices under clause 4.5 and 4.6.

2. must undertake his own tax and superannuation under clause 4.9.

3. must provide equipment under clause 5.1.

4. must maintain insurance under clauses 6.2 and 6.3.

5. the right to subcontract subject to the Respondent’s consent under clause 2.8.

1. The Applicant noted in an email on 19 January 2022:

“I have reviewed all the documents. I have also signed them as well. Contract is easily to follow and I was able to understand”

1. There are no indications of Mr Pattison being disadvantaged in entering in the contract. Mr Pattison has extensive history in care roles starting from 2009. Mr Pattison has entered into the contracting arrangement as part of his business Inner You Development. In the Applicant’s evidence, he acknowledged that he wanted to start a business with Ms Tracey Harris’ (Director of the Respondent) assistance. There was no indication that the Applicant was not aware of the terms of the contract when he stated it was ‘easy to follow and was able to understand.’

1. Furthermore, Mr Pattison holds a Master of Criminology and a Bachelor of Community Welfare/Bachelor of Social Science. He is also currently enrolled in a Bachelor of Laws degree. I am satisfied that Mr Pattison’s experience and his tertiary qualifications including his current studies of law indicate a level of sufficient comprehension to read and understand the contract he was entering into.

1. In terms of whether the contract itself was executed properly is not one for the Commission to determine but one that should be dealt with in the appropriate jurisdiction. I am not satisfied that this factor should deprive me from determining the existence of an employment relationship apart from the comprehensive written contract as established in Jamsek and Personnel Contracting.

Conclusion

1. The Applicant raises issues surrounding taxation and the correct payment from his contracting arrangement. These issues should be dealt with in the appropriate jurisdiction.

1. The Applicant does not have jurisdiction to lodge an unfair dismissal claim under s.394 of the Act as he is an independent contractor and therefore cannot be dismissed under s.386 of the Act.

1. I Order that the Application be dismissed. I Order accordingly.

DEPUTY PRESIDENT

Appearances:

S. Pattison appearing self-represented as the Applicant.
B. Mendelson appearing as Counsel for the Respondent.

Hearing details:

5 September 2023.
Hearing via Microsoft Teams.
Brisbane.

[1]  Asim Nawaz v Raiser Pacific Pty Ltd [2022] FWC 1189 at [50]-[51] citing Jamsek v ZG Operations Pty Ltd [2022] HCA 2 ('Jamsek’); CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 (‘Personnel Contracting’).

[2] Jamsek per Kiefel CJ, Keane and Edelman JJ at [40]-[62], Personnel Contracting per Gordon J at [172]-[178]:

[3] Applicant’s Form F51 Application.

[4] Deliveroo Australia Pty Ltd v Franco [2022] FWCFB 156.

[5] [2017] FWCFB 5162 at 75.

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