Stuart v Toni

Case [2021] FCCA 1520

Federal Circuit Court of Australia

Stuart v Toni [2021] FCCA 1520

File number(s): BRG 231 of 2019
Judgment of: JUDGE JARRETT
Date of judgment: 5 July 2021
Catchwords:

EMPLOYMENT LAW – Employment relationship – ascertaining existence and nature of relationship – particular relationships – independent contractor.

INDUSTRIAL LAW – Commonwealth – workplace relationships – employment status – employee or independent contractor.

INDUSTRIAL LAW – Commonwealth – workplace rights and responsibilities – general protections – sham arrangements.
Legislation:

Clerks Private Sector Award 2010

Fair Work Act 2009 (Cth), ss. 11, 335, 340, 342(1), 351, 351(1), 351(2), 352, 357, 357(1), 361(1), 368, 536(1), 550(1)
Cases cited:

ACE Insurance Ltd v Trifunovski& Ors (2011) 200 FCR 532

ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146

Allan v Condamine Catchment Natural Resource Management Corporation Ltd & Ors (2015) 302 FLR 121

Andrade v Goodyear and Dunlop Tyres (Aust) Pty Ltd [2018] FCCA 634

Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526

Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385

Commissioner of Pay-roll Tax v Mary Kay Cosmetics Pty Ltd [1982] VR 871

Construction, Forestry, Mining & Energy Union v Rio Tinto Coal Australia Pty Ltd (2014) 232 FCR 560

Dafallah v Fair Work Commission [2014] FCA 328

Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union [2018] FCA 934

Hollis v Vabu Pty Ltd (2001) 207 CLR 21

Humberstone v Northern Timber Mills (1949) 79 CLR 389

Jamsek v ZG Operations Australia Pty Ltd (2020) 279 FCR 114

Knight v Visionstream Australia Pty Ltd [2017] FCA 1513

Mann v S and PLS Pty Ltd [2020] FCCA 636

McIlwain v Ramsey Food Packaging Pty Ltd (No 4) (2006) 158 IR 181

Narich Pty Ltd v Commissioner of Pay-roll Tax [1983] 2 NSWLR 597

R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138

Shea v TruEnergy Services Pty Ltd (No 1) (2012) 204 FCR 456

Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16

Sweeney v Boylan Nominees Pty Ltd (2006) 227 ALR 46

Vabu Pty Ltd v Commissioner of Taxation (1996) 33 ATR 537
Number of paragraphs: 161
Date of last submission/s: 25 June 2020
Date of hearing: 25 June 2020
Place: Brisbane
Counsel for the Applicant: Mr Rawlings
Solicitor for the Applicant: Legal Aid Queensland
The First Respondent: Self-represented
The Second Respondent: Self-represented
The Third Respondent: Self-represented

ORDERS

BRG 231 of 2019
BETWEEN:

JESSICA STUART

Applicant
AND:

JOHN TONI

First Respondent

LUKE FARRELL

Second Respondent

BRITTANY SALYER

Third Respondent

order made by:

JUDGE JARRETT

DATE OF ORDER:

5 July 2021

THE COURT DECLARES THAT:

1.The first respondent contravened 351(1) of the Fair Work Act 2009 (Cth) by taking adverse action against the applicant, namely dismissing her from her employment on or about 10 October, 2018 because of her pregnancy.

2.The first respondent contravened s.357(1) of the Fair Work Act 2009 (Cth) on 28 February, 2018 by representing to the applicant that the contract…

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AGLC
Stuart v Toni [2021] FCCA 1520
Case
[2021] FCCA 1520
Decision Date

CaseChat Overview and Summary

This case concerned a dispute brought by the applicant against the first, second, and third respondents. The applicant claimed to have been an employee, while the respondents asserted she was an independent contractor. The core of the dispute revolved around the nature of the applicant's engagement with the business operated by the first respondent, Gold Coast Business Management.

The legal issues before the court were whether the applicant was an employee or an independent contractor, and consequently, whether she had been unfairly dismissed and if there had been contraventions of the Fair Work Act. The court also had to consider preliminary arguments regarding its jurisdiction to hear claims against the second and third respondents, given they were not named in the certificate issued by the Fair Work Commission.

Jarrett J found that the applicant was indeed an employee, not an independent contractor, despite the existence of written agreements that purported to classify her as such. The court noted that some terms within these agreements were meaningless, such as references to a non-existent Policy Document. The judge applied the principles for determining the employment relationship, considering the substance of the arrangement rather than its form. The court also confirmed its jurisdiction to hear the claims against all respondents.

Ultimately, the court made declarations and ordered compensation for both economic and non-economic loss against the first respondent, totalling $8,020. Further submissions were to be heard regarding compensation against the second and third respondents, and the matter was adjourned for a penalty hearing concerning contraventions of the Fair Work Act.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The first respondent gave limited evidence-in-chief by way of affidavit. He was cross-examined. So too, the third respondent. The second respondent led no evidence-in-chief and was not cross-examined. He preferred to exercise and maintain his claim to penalty privilege.Background and findings of fact The applicant is about 25 years of age. In early February, 2018, she was a single mother with a young son of day care age. She had not had a full time job for some time and the employment she then held was returning her insufficient income to sustain herself and her son. She wished to earn more and for that purpose she set about obtaining another source of income. On about 13 February, 2018 the applicant found an advertisement on the website “Seek”. It advertised what was described as a sales position with a business called Gold Coast Business Management. It is not in dispute that the first respondent, John Irian Toni, operates the business called Gold Coast Business Management as a sole trader. The first respondent is an Indonesian citizen and English is not his first language. He says that the business has “no employees and engages the services of less than ten contractors at any one time”. His evidence was that he was not involved in the applicant’s engagement, appointment, the provision of services by her or the termination of her engagement with his business. The first respondent gave evidence about the second respondent, Luke Farrell. Mr Farrell was described by the first respondent as his boyfriend and domestic partner. He was not part of the business as such but acted as the first respondent’s agent in matters concerning the business. To the first respondent’s knowledge, the second respondent gave direction to the third respondent from time to time. In cross-examination the first respondent confirmed that the third respondent was the manager of the business and her role was to assist the first respondent to run the business. Although he described the second respondent as his delegate in the operation of the business, in cross-examination he said that the second respondent only helped him out from time to time. He did, however, have authority to decide whether a worker’s services could be dispensed with. He confirmed that the third respondent also had delegated authority to engage workers and to terminate the provision of their services. The nature of the first respondent’s business is not discussed in detail in the evidence. However, it appears that he operates a number of “on-line directories”. I assume that to mean that they are a listings of various businesses that pay a fee to be listed in the directory and that when an on-line search is conducted for a particular business service, the listing in the first respondent’s directory might appear in the search results. To help a business decide if a listing in the directory is a worthwhile investment, businesses are offered free listing for a short period of time, after which they are invited to sign up to the full-fee service.

Evidence

Evidence Before The Court

The respondents deny the applicant’s claims and argue that the applicant was engaged as an independent contractor and for that reason alone her claim must fail. They also argue that, on a factual level, the claim must fail because the conduct about which the applicant now claims did not occur.The evidence The applicant gave her evidence-in-chief on affidavit. She was cross-examined by the second respondent. The third respondent asked her a question as well. The first respondent did not cross-examine the applicant. The first respondent gave limited evidence-in-chief by way of affidavit. He was cross-examined. So too, the third respondent. The second respondent led no evidence-in-chief and was not cross-examined. He preferred to exercise and maintain his claim to penalty privilege.Background and findings of fact The applicant is about 25 years of age. In early February, 2018, she was a single mother with a young son of day care age. She had not had a full time job for some time and the employment she then held was returning her insufficient income to sustain herself and her son. She wished to earn more and for that purpose she set about obtaining another source of income. On about 13 February, 2018 the applicant found an advertisement on the website “Seek”. It advertised what was described as a sales position with a business called Gold Coast Business Management. It is not in dispute that the first respondent, John Irian Toni, operates the business called Gold Coast Business Management as a sole trader. The first respondent is an Indonesian citizen and English is not his first language. He says that the business has “no employees and engages the services of less than ten contractors at any one time”. His evidence was that he was not involved in the applicant’s engagement, appointment, the provision of services by her or the termination of her engagement with his business. The first respondent gave evidence about the second respondent, Luke Farrell. Mr Farrell was described by the first respondent as his boyfriend and domestic partner. He was not part of the business as such but acted as the first respondent’s agent in matters concerning the business. To the first respondent’s knowledge, the second respondent gave direction to the third respondent from time to time. In cross-examination the first respondent confirmed that the third respondent was the manager of the business and her role was to assist the first respondent to run the business. Although he described the second respondent as his delegate in the operation of the business, in cross-examination he said that the second respondent only helped him out from time to time. He did, however, have authority to decide whether a worker’s services could be dispensed with. He confirmed that the third respondent also had delegated authority to engage workers and to terminate the provision of their services. The nature of the first respondent’s business is not discussed in detail in the evidence. However, it appears that he operates a number of “on-line directories”. I assume that to mean that they are a listings of various businesses that pay a fee to be listed in the directory and that when an on-line search is conducted for a particular business service, the listing in the first respondent’s directory might appear in the search results. To help a business decide if a listing in the directory is a worthwhile investment, businesses are offered free listing for a short period of time, after which they are invited to sign up to the full-fee service.

Decision

Reasons for decision

Bearing in mind the warning posed by Mortimer J in Dafallah that the Court should be careful not to undermine the operation of the unfair dismissal provisions and the limits Parliament has placed on them, in my view an order for compensation for non-economic loss in the sum of $2,500 is appropriate in this case.Conclusion For the reasons set out above, I will make the declarations as I have foreshadowed above and orders for compensation, being $5,520 for economic loss and $2,500 for non-economic loss. There will be judgment against the first respondent for $8,020. I will hear the parties further as to whether the orders for compensation should be made against the second and third respondents. The application should otherwise be adjourned for a penalty hearing so as to fix the penalties to be imposed upon the first, second and third respondents for their contraventions of the Fair Work Act.

Ratio Decidendi

Legal Principle Established

The applicant did not end up sending the second invoice that the second respondent had requested. However, she was paid $257.00, which she understood was because of the under payment issue.ConsiderationA Preliminary Matter The second respondent argued that the application against the second and third respondents was incompetent because neither of them were named in the certificate issued by the Fair Work Commission pursuant to s.368 of the Act. Only the first respondent (using the business name Gold Coast Business Management) is named in the certificate. However that is not fatal to the applicant’s application against the second and third respondents: Shea v TruEnergy Services Pty Ltd (No 1) (2012) 204 FCR 456 at [70]-[75], [77] and [91]; Allan v Condamine Catchment Natural Resource Management Corporation Ltd & Ors (2015) 302 FLR 121 at [7] – [8]; Knight v Visionstream Australia Pty Ltd [2017] FCA 1513 at [33]; Andrade v Goodyear and Dunlop Tyres (Aust) Pty Ltd [2018] FCCA 634 at [147]; Mann v S and PLS Pty Ltd [2020] FCCA 636 at [58]. The Court has jurisdiction to hear the claim against each of the first, second and third respondents. The Contracts The applicant contends that she was an employee of the first respondent. The respondents contend that she was an independent contractor and that she was engaged under two separate agreements to that effect. The evidence demonstrates that the applicant was first engaged under a contract that commenced on 28 February, 2018. That contract was not for any specified period of time but I am satisfied that it came to an end on 28 August, 2018 when the applicant and the respondent entered into a second contract for the period 28 August, 2018 to 30 September, 2018. I am satisfied that when she entered into that agreement, she did so on the basis that the third respondent said to her that at the end of that contract and upon the return of the worker whose position she was covering, she would return to her original role as a lead generator. Contrary to the respondents’ submissions, the applicant’s position as a debt collector did not finish on 10 October, 2018 because her contract had expired and her services were no longer required. The second contract expired on 30 September, 2018. Notwithstanding that, the applicant continued to be engaged by the first respondent. The engagement was not pursuant to either the first or second contracts because both had come to an end. It was, in my view, an engagement at will which could be determined by either party. Before proceeding further, it is necessary to make some observations about the written contracts. They are in the same terms as each other, save for some differences concerning dates and the rate of remuneration. Those matters aside, there is no substantial difference between the terms of each agreement. Some of the terms of the agreement are meaningless. For example, clause 7 of the agreement refers to a Policy Document and the “Contractor acknowledges the Policy Document forms part of this Agreement. The Contractor is bound by, and must comply with the terms of the Policy Document.” By clause 7.2, “the Contractor warrants to the Business it has read and understood the terms of the Policy Document prior to entering into this Agreement.” As I have already recorded, in her cross examination the third respondent acknowledged that there was no Policy Document as referred to in the contracts.