Teah Gallagher-Jones v Little Star Cleaning Pty Ltd

[2020] FWC 1068

[2020] FWC 1068

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Teah Gallagher-Jones
v
Little Star Cleaning Pty Ltd
(U2019/13242)

DEPUTY PRESIDENT LAKE BRISBANE, 26 FEBRUARY 2020

Application for an unfair dismissal remedy – jurisdictional objection – whether applicant met minimum employment period – whether respondent is small business employer– respondent is small business employer – minimum employment period not met – jurisdictional objection upheld – application dismissed.

[1] On 27^th November 2019, Ms Teah Gallagher Jones (Applicant) made an application pursuant to s.394 of the Fair Work Act 2009 (the Act) for an Unfair Dismissal remedy in respect to her termination from Little Star Cleaning Pty Ltd (Respondent) on 8 November 2019.

[2] The Respondent objected to the application on the basis that the Respondent is a Small Business employer and the Applicant had not completed the minimum employment period. In subsequent correspondence, the Respondent has also objected to the application on the basis that the dismissal was a case of genuine redundancy. In the event that the objection in respect of the minimum employment period is not successful it may be necessary for the Commission to consider the Respondent’s objection in this respect.

[3] It is not disputed that the Applicant was employed by the Respondent from 18 March 2019 until her termination on the 8November 2019. A period of 7 ½ months.

[4] The heart of the dispute relevant to the jurisdictional objection is whether the Respondent is a small business employer for the purposes of the minimum employment period. It is not in dispute that the Respondent only has 2 persons called “employees”. What is in dispute is whether a large number of other persons involved in the Respondent’s business undertaking are independent contractors or employees. If the Respondent’s assertions are substantiated, then the Respondent employs fewer than 15 persons and therefore the minimum employment period necessary for the Applicant to bring a claim of unfair dismissal would be twelve months. In which case the Applicant would not have served the minimum employment period and her application would fail for want of jurisdiction.

[5] The Respondent inresponse to the application indicated that they wished to have the jurisdictional issue resolved prior to any conciliation efforts. Vice President Catanzariti issued directions on the 6 December 2019 to the Applicant to provide a statement within 7 days to support her claim that she had served the minimum employment period. The matter was allocated to myself on the 16 December 2019.

[6] I conducted a conference in relation to thejurisdictional objection by telephone on 24 January 2020. Both parties were self-represented at the conference.

[7] At the conference the parties agreed that the most efficient way for the Commission to determine the matter was to make a decision on the papers based upon each of their submissions. In the course of considering the matter, I identified some further information that I required in order to properly inform myself. I made orders pursuant to s.590 of the Act requiring the production of various documents and the further information was provided by both parties.

[8] I was then able to make the necessary determination on whether the cleaners should be characterised as independent contractors or employees. If classified as employees, the Applicant would then be able to prosecute her unfair dismissal claim. If I determine that the cleaners were not employees, then the Respondent would properly be identified as a Small Business and the Applicant would fail in making the jurisdictional hurdle.

[9] In order to determine whether the Respondent is a Small Business it is necessary to determine whether the number of employees total, as the Respondent asserts, only the 4 office staff or whether, as the Applicant asserts, either 15 or greater with the inclusion of the actual Cleaners.

[10] The Applicant asserts that the cleaners should properly be characterised as employees and the Respondent contends that the Cleaners are independent contractors.

Legislative Framework

[11] Section 396 of the Act mandates that the Commission must decide certain matters before considering the merits of an application for an unfair dismissal remedy. One of those matters is whether the person making the application was protected from unfair dismissal.

[12] Section 382 of the Act sets out when a person is protected from unfair dismissal. Relevantly to this matter, s.382 provides:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and...”

[13] The minimum employment period is defined by s.383 of the Act, as follows:

“383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.”

Evidence and Submissions

Applicant evidence

[14] The Applicant submitted a limited number of documents in response to the directions from Vice President Catanzariti and subsequently in respect to my orders. The Applicant relies upon two statutory declarations; one of Ericson Gustavo da Costa and the second of Fernanda Carolina Hoffmann. The Applicant has also supplied the Commission with a number of screenshots of conversations occurring in the messaging app, WhatsApp and in the Respondent’s scheduling system “GeoOP”.

[15] In relation to the WhatsApp chat messages, the Applicant has included the following commentary:

“Pictures attached are screenshots of all teams who worked for Little Star Cleaning.

These seems are changed if a team leader were to leave or be let go from Little Star Cleaning.

All teams are named with the Team Leaders name only. Assistants are different everyday.

My colleague was asked to set up the teams every night ready for the next day. She would add the assistant into the group chat which is named with the with the team leaders name always.

We were instructed to send teams of 4-6 cleaners to a Bond clean many times. All teams usually sent in teams of 2 but NEVER 1)

Our office has a group with myself, Josiane, Charles, my colleague Kelen and the main cleaning “trainer” Luana.

There is also a group named “Little Star Cleaning” this group was filled with Brazilian students only who were available to work for Charles whenever we needed them.” (errors in original)

[16] There then follows a number of pages of different groups chats that appear to have been set up for the different teams as described by the Applicant in her commentary.

[17] In relation to the last group referred to by the Applicant in her commentary extracted above, there is a screenshot of two particular messages to which the Applicant has added some additional commentary:

“GROUP: Little Star Cleaning (all participants who are available to work for Little Star)

Charles will message in this group to ask for someone to work when we are at high demand.

We were always told in the office to never turn down a Bond Clean If our schedule is full or not as we will always be able to find someone to work.”

[18] The Applicant has also supplied screenshots of a number of job advertisements that appear to have been made by the Respondent. Each of the advertisements calls for interest in cleaning work. None of the advertisements captured by the Applicant appear to be seeking interest in office work, being the work undertaken by the Applicant.

[19] The only witness evidence given in the matter, at least by way of formal statements, is that of Ms Hoffmann and Mr da Costa. It appears that Ms Hoffmann and Mr da Costa are in a relationship with one another and, it is fair to say from the content of their statements, did not have a particularly pleasurable experience whilst performing work (whether as an employee or independent contractor) for the Respondent.

[20] The statements of the witnesses are in largely the same terms, and in many respects identical. Because of this, and the very obvious animosity that Ms Hoffmann and Mr da Costa both display towards the Respondent, I have had to approach their evidence with caution. However, the actual facts of this matter are largely not in dispute. It is the legal characterisation, or the legal consequences attaching to those facts, that is in dispute. Because of this, I have found the evidence of Ms Hoffmann and Mr da Costa helpful, but I note that I have placed no weight on statements of opinion of Ms Hoffmann or Mr da Costa.

[21] The salient points of Ms Hoffmann and Mr da Costa’s evidence are:

•  No experience was required in order to gain work with the Respondent;

•  An ABN was required;

•  While work levels would fluctuate there would be at least 20 hours of work a week;

•  There was two engagement options – either a team leader or assistant;

•  Team leaders have to have a car and buy equipment and products and would be paid $36 per hour which was $21 per hour for the team leader and $15 for the Assistant;

•  The team leader would be responsible for transferring the $15 to the Assistant;

•  Assistants perform the same work as a team leader and get paid $15 per hour but do not have to have their own car, equipment and products;

•  Cleaning teams were allocated by the Respondent using WhatsApp and the schedule was provided to teams via the GeOP system;

•  There was no choice in which jobs to attend and the teams could not decide how to perform various tasks – the teams following the Respondent’s instruction and directions;

•  Teams wore the Respondent’s clothing, for which the paid a bond for each t-shirt.

Respondent Evidence

[22] The Respondent has also filed limited material in relation to the objection. Most of the Respondent’s material attempts to address a potential objection in respect of genuine redundancy and the notice period payable to the Applicant. Neither of those matters is the subject of this decision and, if necessary, it may be necessary to determine this matter at a later time.

[23] The relevant parts of the Respondent’s submissions are:

“5) [the Applicant] is using chat groups from the app WhatsApp to point that everyone included in those chat groups are our employees.

a. WhatsApp chat groups are for easier communication. If there are, in example, 20 people in a chat group that is sued only as a pool of cleaner contractors that are looking for jobs/work under their ABN, it does not mean these people are our employees.

b. Any contractor that would get in touch with our business looking for cleaning jobs with ABN could be added in this chat group, if they wanted to. This chat group was an easier way for our contractors and for our business to find anyone available to accept jobs.

c. Our contractors or our business would often send messages in this chat group, such as: “Anyone available for a job tomorrow?”, “I need an assistant to perform cleaning tomorrow, anyone?”. The cleaner contractors in the chat group with interest/available, would offer to go.

d. Our contractors use their own car, equipment/products and have the freedom to choose/take other cleaner contractors with them to perform the jobs. These extra contractors are paid by the contractor that is taking/subcontracting them, not by our business.

6) [the Applicant] is using a statement from a former carpet cleaner contractor that got upset with our business because we stopped giving them jobs.

a. Gustavo and Fernanda are a couple that work together and used to provide carpet cleaning and bond cleaning for our business using their own carpet cleaning machine and their own products/equipment/car.

b. In around Oct 2019 they sent unpolite messages to our business because we stopped giving them work. Fernanda also came to our office very upset and demanding explanation. [The Applicant] and another employee that was also dismissed from our office team, saw everything and contacted Gustavo and Fernanda after the dismissals to get statements from these former contractors to be used in their unfair dismissal applications.

c. Gustavo and Fernanda would provide mainly carpet cleaning services under their ABN for our business and other clients of their own. They would also perform bond cleans at times but mainly carpet cleaning and very sporadic. A few years back, in around 2015, Gustavo was providing our business his services as clear contractor for a few months. In 2019 Gustavo and Fernanda started providing us services but now mainly as carpet/bond cleaner contractor with own machinery/car, as explained.

7) Our business subcontracts independent cleaners under ABN to provide cleaning services, carpet cleaning service, car washing services. Charles and Josiane are the only 2 employees in our office (Charles being the Director). There were 3 employees total + director working in our office when [the Applicant] was dismissed and now 1 employee only + director.”

[24] In respect to my orders, the Respondent has filed two unsigned documents, both headed “Independent Contract Agreement”. They are largely the same. Both documents indicate that the Respondent is “the Customer” and the purported independent contractor is “the Contractor”. Some of the salient clauses of the agreements are extracted as follows:

“BACKGROUND

A. The Customer is of the opinion that the Contractor has the necessary qualifications, experience and abilities to provide services to the Customer.

B. The Contractor is agreeable to providing such services to the Customer on the terms and conditions set out in this Agreement.

IN CONSIDERATION OF the matter described above and of the mutual benefits and obligations set forth in this Agreement, the receipt and sufficiency of which consideration is hereby acknowledged, the Customer and the Contractor (the Parties) agree as follows:

Services Provided:

1. The Customer hereby agrees to engage the Contractor to provide the Customer with services consisting of:

House Cleaning.

2. The Services will also include any other tasks, which the Parties may agree on. The Contractor hereby agrees to provide such services to the Customer.

Term of Agreement:

3. The term of this Agreement (the “Term”) will begin on the date of this Agreement and will remain in full force and effect indefinitely until terminated as provided in this Agreement.

4. In the event that either Parties wish to terminate this Agreement, that Party will not be required to provide notice to the other Party.

Compensation:

5. The compensation will be agreed per house and payable on a weekly basis in AUD (Australian Dollars), while this Agreement is in force. The Customer must receive an invoice from the Contractor to provide payment for the service.

6. The Contractor is responsible for paying any Superannuation Guarantee contributions that may be required in relation to the work performed by the Contractor or by the employees of the Contractor under this Agreement.

…

Non-Competition:

9. Other than with the express written consent of the Customer, which will not be unreasonably withheld, the Contractor will not, during the continuance of this Agreement or within five (5) years after the termination of this Agreement, be directly or indirectly involved to divert or attempt to diver from the Customer any business the Customer has enjoyed, solicited, or attempted to solicit from other individuals or corporations.

…

Capacity/Independent Contractor:

11. In providing the Services under this Agreement it is expressly agreed that the Contractor is acting as an independent contractor and not as an employee. The Contractor and the Customer acknowledge that this Agreement does not create a partnership or joint venture between them, and it is exclusively a contract for service.

Damages to vehicles/Equipment/Extra costs and Responsibilities:

12. Damages to any item while performing the services to be covered by the Contractor.

13. Contractor must guarantee the quality of the service provided, subjective of being requested to return to where the service was performed to amend errors as per the Customer needs. In case the Contractor is not able to attend the Customer request, the Customer can hire a different service provider to amend the errors and can deduct the costs from the invoice received from the Contractor that was supposed to amend the faulty items. If a client is not satisfied with the service provided by the Contractor and decides not to pay for the service, the Customer has the right to don’t pay the Contractor as well.

14. In case the Contractor is instructed by the Customer to collect any amount of money at the address where the service was provided, the Contractor must keep the money collected safe at all times and take full responsibility in case of any loss until the money is delivered in full to the Customer in hands. The amount delivered is subjective to posterior confirmation from the Customer after checking the contents/amount left by the Contractor against the amount initial instructed to be collected.” (errors in original)

[25] The second “Independent Contractor Agreement” is similar to the first, with the addition of some clauses and variations to others, relevantly being:

“Provision of Extras

7. The Customer will not be responsible to provide the cleaner any tools and products. The Contractor agrees to have all that is needed in order to provide the Services: its own cleaning equipment, products and vehicle and agrees to cover all costs to perform the job. Workcover insurance should be also the Contractor’s responsibility.

…

14. The Contractor must guarantee the quality of the service provided, subjective of being requested to return to where the service was performed to amend errors as per the Customer needs. In case the Contractor is not able to attend the Customer request, the Customer can hire a different service provider to amend the errors and can deduct the costs from the invoice received from the Contractor that was supposed to amend the faulty items. If services provided from the Contractor are not satisfactory to the Customer, resulting in loss of jobs, clients or loss of funds to the Customer, the Customer has the right to NOT pay the Contractor since funds for service were not received / or any loss was generated from the unsatisfactory service, in example: a final client not accepting to pay for bad service provided from the Contractor that was representing the Customer.

…

16. If necessary, the Customer can provide to the Contractor a BASIC instruction of the Cleaning Standard expected by the final results are of the Contractor’s full responsibility. The Contractor should be aware that the basic instruction/training consists of basic instructions of the minimum cleaning standards expected and suggestions of products to use, etc but the Contractor should learn and improve on its own and use its own experience/abilities to deliver the final result that is expected for each specific task. The Contractor is full responsible for the quality of service provided and responsible for delivering a service that will make the final client satisfied, subject to risks of amending invoice in case of complains from the final client (in example: final client refuses to pay for a bad service or requests as discount). The Contractor is aware that the JOB DESCRIPTION for each job should always be read and followed to avoid complains, as it contains details for each job. JOB DESCPRIPTION should always be checked/read because new instructions may be added for a specific day.” (errors in original)

[26] Despite my order asking for information specifying the difference between any contracts none has been forthcoming from the Respondent. It is not clear why there are differences between the two contracts or whether one is more current than the other.

Consideration

[27] The issue in dispute in this matter is, in my view, one of the most complicated legal, and often factual, issues that arises in employment law. Whether a person is in truth an employee or an independent contractor is subject to a complicated test developed over decades of considered judicial and academic opinion. The application of that test is further complicated by, and depends on, the evidence adduced and the true characterisation of that evidence. It is not uncommon that parties establish and continue in a relationship with each other on a common understanding or misunderstanding as to the true legal characterisation of their relationship. In a case considering this complicated issue, Justice Buchanan of the Federal Court has stated:  1

…it is increasingly necessary that parties conduct themselves (in their relations with regulatory agencies, and not just each other) in accordance with a correct appreciation of the nature of their relationship, not just as it may suit them (or one of them).

[28] This matter is further complicated in that the issue for determination is not what is the true legal characterisation of the relationship between the Applicant and this Respondent. That is not in dispute; the Applicant was an employee and the Respondent was her employer. This dispute concerns the true legal characterisation of the relationship that exists between the Respondent and numerous third parties, each of whom are a stranger to this dispute. The parties in this matter are unrepresented. I do not say that as a criticism of either party but simply as a means of identifying why it is that the task of the Commission is more complicated again because of the way in which the parties have developed their cases.

[29] In considering the parties’ material and my decision, I have given serious consideration to whether or not I am required to hold a further conference or conduct a further hearing in relation to the matter pursuant to s.397 of the Act. Neither party has contended that I must do so but that fact does not overcome the obligation that arises as a result of s.397 of the Act. 2 I have determined that I am not required to hold a further conference or hearing for the following reasons:

•  The issue in dispute is whether the Respondent is a small business employer or not;

•  While that issue is primarily a question of fact, the specific issue in dispute between the parties is whether various people performing “work” for the Respondent are employees or contractors;

•  That issue is ultimately a determination of the true legal character of their relationship; 3

•  Determination of that issue is not one to which the obligation in s.397 of the Act attaches;

•  A conference has been held with the parties where the parties were able to express their views and make submissions;

•  Further documentation has been provided to the Commission after the initial conference; and

•  The determination of the real issue in dispute is not to be resolved by differing version of events or assessments of credibility.

[30] As to the relevant principles applicable in determining the true legal nature of a particular relationship, a useful summary is contained in a recent decision by Deputy President Cross in Chan v Advanced Health Invest Pty Ltd T/A Mastery Dental Clinic. 4 In that matter, Deputy President Cross stated:

“In Jiang Shen Cai trading as French Accent v Rozario (“French Accent”), a Full Bench summarised the accepted approach to distinguishing between employees and independent contractors as follows (at [29] and [30]):

The nature of the general law approach to distinguishing between employees and independent contractors is such that a summary of that approach that is faithful to the court authorities has a continuing utility in this jurisdiction. The apparent tension in the summary in Abdalla highlighted in this appeal, together with the emphasis on the proper approach to a consideration of the indicia provided by the decision of Full Court of the Federal Court in Roy Morgan, makes it desirable to recast the summary in Abdalla, albeit we do not see that summary as wrong.

The general law approach to distinguishing between employees and independent contractors may be summarised as follows:

(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.” [Footnotes omitted]

Consideration - Multi factorial analysis

The control indicia

[31] It is not in dispute between the parties that work is allocated through the use of various apps. The witness evidence is to the effect that it is the Respondent that determines who works where and that the cleaners have no say in what work they accept. The statements of the Applicant made in amongst her material are similar to this evidence, although differ in an important respect.

[32] The Applicant’s evidence is that “[W]e were always told in the office to never turn down a Bond Clean if your schedule is full or not as we will always be able to find someone to work”. What that statement is evidence of is that it may be the Respondent’s very strong preference that people accept work when offered and failing to accept work may be a matter that affects future offers of work but that is different to the Respondent actually controlling and allocating the work that is done. It is my finding, on the material before me, that while it might be the Respondent’s preference that work be accepted when offered, the Respondent does not control the work done and it is a matter for the various cleaners to accept or reject offers of work.

[33] In addition, the evidence of the witnesses is that they were unable to decide how to perform tasks and had to follow the Respondent’s instructions and directions. This is consistent with the wording of the second contract relied upon by the Respondent set out above. Clause 16 of that agreement contains and acknowledge that there is a “job description” for each job, which should be read and, implicitly, followed. In isolation that would indicate a level of control exerted by the Respondent over the work of the cleaners.

[34] However, that is to be counterbalanced against the remainder of the clause which states that “basic instructions” are provided and they set a minimum cleaning standard. But, the clause continues that the Contractor should learn and improve their own processes to deliver the final result that is expected. The “job description” referred to does not, on the face of the agreement, appear to be required but rather should be followed “to avoid complaints”. This does not indicate a high level of control exerted by the Respondent.

[35] This is an important factor and based upon the material tendered I am inclined to accept the argument of the Respondent that they make work available and the cleaners have free agency to accept or not take up the opportunities and that whilst the Respondent sets minimum standard and guidance on how to avoid complaints the decision on what to do, and how to achieve the end result is ultimately for the Contractor to decide.

[36] Overall, I weigh this factor as positive in the direction of the cleaners being independent contractors.

Performing work for others

[37] The evidence in respect of this is limited. The main evidence is the terms of the contract itself. Neither form of the contract expressly allows or prohibits undertaking work for others. The agreements do contain a non-compete clause, which would prevent the putative independent contractor from soliciting the Respondent’s business away from it, but this kind of provision is not unusual in independent contracting arrangements. Having said that, it is also not unusual in contracts of employment.

[38] The only evidence which can be relied upon on this matter is that at least two of the cleaners provided their services (under their ABN) to the Respondent and their own clients. While this does not account for all the cleaners, it is indicative of the type of relationship adopted and of the degree of control exerted by the Respondent.

[39] This indicates a genuine and practical entitlement to perform work for others and I weight this as a factor in favour of classification as an independent contractor.

[40] The nature of on-site cleaning work is that the place of work is determined by where the premises to be cleaned are located. While on one view this might be seen as a factor in favour of an independent contracting relationship I think it is more accurately a reflection of the nature of the work and the industry itself rather than evidence as to the true legal characterisation of the relationship. In my opinion, this factor is a neutral consideration.

Provision of Equipment

[41] The uncontested evidence presented was that the Cleaner was to provide their own equipment and products. The second contract explicitly reflects that this is the case. This factor weighs in favour of the cleaners being contractors.

Delegation

[42] It has been said, rather forcefully in my view, that:  5

“The requirement for personal service has the effect that a contract which truly permits discharge in another fashion or by another person, is not a contract of employment.”

[43] The contracts in evidence before me do not explicitly provide for delegation of the work to be undertaken pursuant to the contracts but does imply that this is the case. Each of the contracts provides that the contractor is responsible for their own superannuation guarantee contributions, and the contributions of employees of the contractor. The contractual terms between the parties contemplates that it may not be the contractor that discharges the work under the contract but may employee others to do so.

[44] The evidence also discloses that team leaders would be paid an amount to pay the team leader for the hours they have worked, but also an amount to be passed on to each Assistant. The legal niceties of such an arrangement aside, looking strictly from the perspective of the ability to delegate, it appears that delegation is permissible under the contracts.

[45] This factor weighs in favour of the true relationship being that of an independent contractor.

Suspension or dismissal

[46] The Respondent had the ability to no longer offer work or remove the individual from the system and App thereby effectively terminating the person from the arrangement. This could be regarded as the ability to remove the offer of work. This is not quite the same as dismissal or suspension but in a practical sense does have the same impact.

[47] The contracts both provide for the ability to terminate the agreement without notice. This is a factor that indicates, perhaps slightly, in favour of the true relationship being that of an independent contractor.

Emanation

[48] The cleaners were required to wear a t-shirt that was branded and therefore would be identifiable as from the Respondent. They paid a bond for the t-shirt and had a requirement to wear it whilst they worked. Therefore, this would assure the clients that the cleaners were from the Respondent that they had contracted to undertake the work. In my view, this is a good indicator that the persons are not conducting a business of their own and in truth working in the business of the Respondent. This is a factor in favour of the true characterisation of the relationship being that of employment.

Taxation arrangement

[49] The respondent did not deduct taxation of any kind from the invoice that they paid to cleaners. No superannuation payments were deducted. The contracts both provide for an obligation on the contractor to make superannuation payments in respect of any employees that they may have. There is no evidence that this in fact occurs.

[50] I do not consider that this is a particularly strong factor either way because it is a matter that may very well be consistent with the parties not correctly appreciating the true nature of their relationship more than anything. I consider this to be a neutral consideration in this matter.

Remuneration

[51] The payment was invoice based upon the amount that had been quoted for the work at a rate per hour. This factor would indicate a contractual relationship.

Leave arrangements

[52] There is no evidence from either party that any holiday pay or sick leave was provided. In the circumstances it would seem to be clear that the Respondent did not pay any annual leave or sick leave. This factor weighs in favour of the relationship being that of an independent contractor.

Profession or Trade

[53] The activities the cleaners undertook were not those that could be regarded as a trade or that of a profession. Because of this, and consistent with the authorities, I consider that this weighs in favour of the relationship being in the nature of employment.

Goodwill

[54] There was not any evidence or suggestion that the cleaners generated any goodwill for themselves. Rather, they were part of building the brand and reputation of the Little Star company. I consider this weighs in favour of the relationship being in the nature of employment.

Business Expense

[55] The evidence led by the respondent and validated in the statutory declaration was that the cleaners did pay for their own equipment products and travel expenses to and from the place of work. This weighs in favour of the Cleaners being contractors.

Contractor or Employee

[56] On balance, and on the material before Commission, I consider that the relevant relationships are that of an independent contractor.

[57] I wish to note that the material discloses a number of issues to these relationships that, on the limited material I have, are questionable. It should be born in mind that the Respondent is dealing with a large group of potentially vulnerable people and that the terms of the engagement utilised by the Respondent are, on one view, heavily in favour of the Respondent. Because of the view that I have taken in order to determine this dispute before me I do not consider it appropriate that I take further action other than to make this passing comment. It is for other bodies, if appropriate, to potentially consider these issues in future.

Conclusion

[58] For the reasons above, I am satisfied that at the time of the Applicant’s dismissal, the Respondent employed fewer than 15 employees and is, therefore, a small business employer. The Applicant must have completed the minimum employment period of one year. The Applicant has not completed the minimum employment period of one year.

[59] Consequently, at the time of her dismissal, the Applicant was not a person protected from unfair dismissal. The application is dismissed.

DEPUTY PRESIDENT

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 1   ACE Insurance Limited v Trifunovski [2013] FCAFC 3, per Buchanan J at [32].

 2   For example see Shields v The Trustee for the Jell Discretionary Trust [2015] FWCFB 2945 at [25].

 3   ACE Insurance Limited v Trifunovski [2013] FCAFC 3, per Buchanan J at [32].

 4   [2019] FWC 7824.

 5   ACE Insurance Limited v Trifunovski [2013] FCAFC 3, per Buchanan J at [25].