s.365 - General protections

Application to deal with contraventions involving dismissal

• [1] In August 2024, MTP Services Pty Ltd purported to enter into an agreement with Gamma Plus Pty Ltd and Doo Hong ("Agreement"). The Agreement was titled "Labour Hire Agreement". According to the terms of the Agreement, Gamma Plus was to provide Mr Hong to perform services for one of MTP's clients.

• [2] Mr Hong began working for MTP's client on 19 August 2024. Over the following few months, Mr Hong raised a number of concerns with MTP. These included whether he was entitled to be paid overtime for hours spent working for MTP's client, whether he was entitled to work for MTP's client remotely, and a claim that the air travel required for him to attend work in person had caused him an ear injury.

• [3] On 10 October 2024, MTP's client informed Mr Hong that it had decided to terminate his engagement. As a result of that decision, MTP terminated the Agreement on 14 October 2024.

• [4] On 31 October 2024, Mr Hong commenced proceedings in the Commission under section 365 of the Fair Work Act 2009. He alleged that in raising his concerns with MTP he had exercised a workplace right[1]; that he was dismissed as a result of doing so; and that this constituted adverse action[2] in contravention of section 340. He also claimed that MTP dismissed him on the basis of a temporary absence due to illness or injury, in contravention of section 352.

• [5] MTP denies that it breached any of the provisions of the Act in its dealings with Mr Hong. But more particularly for present purposes, it contends that Mr Hong was not its employee, and that as a result the termination of Mr Hong's services was not a dismissal. On that basis, it has raised a jurisdictional objection to the Commission dealing with the matter.
• [6] This decision relates to that jurisdictional objection.

• [7] I have determined to uphold MTP's objection. These are my reasons.

• [8] Section 365 provides that if a person "has been dismissed" and they, or an industrial association on their behalf, allege that the dismissal contravened Part 3-1 of the Act, they may apply to the Commission to deal with the dispute. Given the language of the section, a person must have been dismissed for it to apply.
• [9] Section 386 provides the meaning of "dismissed" for the purposes of the Act.[3] That section is relevantly in these terms:

(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.

• [10] From the language of the section, a person who is not in an employment relationship cannot be dismissed within the meaning of section 386.[4] That is, only an employee can be dismissed for the purposes of the Act.[5]

• [11] In Part 3-1 of the Act, the term "employee" has its "ordinary meaning".[6] Section 15AA sets out how the Commission is to determine whether a person is an employee within the "ordinary meaning" of the term.[7] That is, the Commission must ascertain "the real substance, practical reality and true nature of the relationship" between the parties. In doing so, the Commission must consider the totality of the relationship between them, and in that respect the Commission must have regard not only to the terms of the contract governing the relationship, but also to other factors relating to the totality of the relationship including, but not limited to, how the contract is performed in practice.

• [12] There is only one question I need to answer to determine MTP's objection: Was Mr Hong an employee of MTP? If the answer to that question is no, he cannot have been dismissed, and so was not entitled to commence proceedings under section 365.
• [13] MTP relied principally on the terms of the Agreement. On its face, the Agreement created a tripartite relationship between MPT, Gamma Plus and Mr Hong. The terms of the Agreement included the following (noting that Gamma Plus is defined as the "Payroll Company" and Mr Hong as the "Services Provider"):

D. The Services Provider has an arrangement with the Payroll Company:

(a) [to] assist the Services Provider to provide the Services to MTP Services in connection with the Principal Agreement; or

(b) to supply the Services Provider to MTP Services in connection with the Principal Agreement; and

(c) whereby the Payroll Company will receive the payments from MTP that the Services Provider is entitled to under clause 5 and distribute the components of such payments in accordance with the Payroll Company's agreement with the Services Provider.

2.1 The Payroll Company is independent of MTP Services.

2.2 The Services Provider is an independent contractor to MTP Services.

2.3 By reason of 2.1 and 2.2, nothing in this contract creates or shall be construed to create, as between MTP Services and any of the other parties, a relationship of:

2.4 The Services Provider is an employee, some other agent of, or has some other arrangement with the Payroll Company that relates to the matters outlined in Recital D."

• [14] In essence, MTP submitted that the terms of the Agreement speak for themselves. That is, they demonstrate that the parties intended to, and did in fact, create an independent contractor relationship between MTP and Mr Hong.

• [15] Mr Hong submitted that the Agreement was "invalid". His submissions can be distilled into two contentions. First, he argued that there are inconsistencies on the face of the document as to when it was supposedly signed by the parties. Factually, that is correct. The Agreement was signed electronically. One page of the document bears signatures of Noel Thilakan of MTP and of Mr Hong, with the date 16 August 2024. At the end of the document there is a page headed "Dropbox Sign Audit trail" which records that the Agreement was signed by MTP on 16 August 2024, by Mr Hong on 17 August 2024 and by Gamma Plus on 19 August 2024.

• [16] Mr Hong's second contention was that despite that "audit trail", the Agreement had never been executed for or on behalf of Gamma Plus. Again, that is factually correct.

• [17] But despite being factually correct, neither of Mr Hong's contentions assist him. This is because the involvement of Gamma Plus in the arrangement was a fiction created and maintained by him.

• [18] Mr Hong gave evidence at the hearing that MTP had asked him to provide his services through a company. He had nominated Gamma Plus as the "Payroll Company" despite having no existing relationship with it. Rather, it is a company that employed him "a long time ago".[8] As I understood Mr Hong's evidence, he put Gamma Plus forward as the "Payroll Company" simply because he knew its name and ABN. Mr Hong accepted that Gamma Plus had no involvement at all in the arrangements contemplated by the Agreement.

• [19] To the extent that Mr Hong sought to rely on apparent anomalies on the face of the Agreement as to when it was executed, and the fact that it had not been signed by Gamma Plus, he was seeking to profit from his own deception. (I can reasonably infer from the evidence that Mr Hong represented to MTP that Gamma Plus had executed the Agreement.)

• [20] Mr Hong then did more to maintain the fiction. He issued invoices to MTP in the name of Gamma Plus. He accepted that he represented to MTP that the invoices came from Gamma Plus. At the hearing he stated "I think I did the wrong [thing], but that's what I did."[9]

• [21] Mr Hong asserted that he had read but did not understand the effect of the Agreement. He claimed that he understood that he would become an employee of MTP. His conduct, though, puts the lie to these contentions. In purporting to provide his services through Gamma Plus, and issuing invoices in the name of that company, Mr Hong deliberately sought to create the appearance of the tripartite relationship anticipated by the Agreement.

• [22] Mr Hong did not seem to appreciate the significance of his subterfuge. To the contrary, he sought to lay responsibility on MTP by claiming that it ought to have done more to look into Gamma Plus and establish its credentials. That is, MTP was at fault for not having done more to uncover his ruse. The submission need only be articulated to be revealed as meritless.

• [23] The Agreement expressly provided for the creation of an independent contractor relationship between MTP and Mr Hong. It expressly stated that nothing in its terms would create an employment relationship between the parties. There is no probative evidence that the parties were in any doubt that these provisions were to be given their full effect. To the contrary, the parties conducted themselves in accordance with the terms of the Agreement.

• [24] Mr Hong led no evidence to convince me that at any stage was he in an employment relationship with MTP.

• [25] Having regard to all of the evidence, and in particular Mr Hong's conduct, I am satisfied that "the real substance, practical reality and true nature of the relationship" between MTP and Mr Hong was not one of employment. The absence of an employment relationship means that Mr Hong was not (because he could not have been) dismissed by MTP for the purposes of the Act. He was not entitled to make the application under section 365. The only appropriate order is that the proceedings be dismissed.

[1] Within the meaning of s 341

[2] Within the meaning of s 342

[3] The Dictionary in the Act, contained at Part 1-2 Division 2, provides that the meaning of "dismissed" is to be found in section 386

[4] John Grass v NSW Chinese Tennis Association Inc [2021] FWCFB 3443 at [12]

[5] John Grass v NSW Chinese Tennis Association Inc [2021] FWCFB 3443 at [11]

[6] Section 335

[7] Section 15AA was inserted into the Act by the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024. It commenced on 26 August 2024. Under the transitional provisions, it applies to a relationship between an individual and a person entered into before commencement that is in existence as at commencement: clause 116 of Part 17, Division 2 of Schedule 1 to the Act. As the Agreement was created before, and continued to apply as at, 26 August 2024, section 15AA applies for the purposes of determining the relationship between Mr Hong and MTP.

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