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[2021] FWC 2815
General information, not legal advice.
Fair Work Commission
2021-05-21
Original judgment source is linked above.
s.365 - General protections
Application to deal with contraventions involving dismissal.
[1] On 17 May 2021 at the conclusion of the hearing scheduled to deal with a jurisdictional objection raised by Mr Christopher Shannon (Respondent) in relation to the application, I announced my decision to dismiss the objection which contended that Ms Erin Shay (Applicant) had not been 'dismissed' as she had been engaged as an independent contractor and not an employee. These are my reasons for dismissing the objection.
[2] On 14 December 2020, the Applicant applied under s.365 of the Fair Work Act 2009 (Cth) (Act) for the Commission to deal with a general protections dispute involving a dismissal. The application concerns an allegation that adverse action (the Applicant's 'dismissal' on 23 November 2020) was taken by the Respondent, in contravention of s.340 of the Act.
[3] Although the Applicant had originally identified Shannon Entertainment as the respondent to the application, during a directions hearing conducted by telephone on 6 April 2021 I granted the Applicant's application to amend her application and directed that the name of the respondent in the Applicant's F8 application be substituted with Mr Christopher Shannon.
[4] There is a dispute about whether the relationship between the Applicant and the Respondent was one of employment or of principal and contractor.
[5] The Applicant contends that she was employed under a contract of employment with the Respondent. The Respondent contends that the Applicant was engaged as an independent contractor under a contract for services.
[6] It is not in dispute that the relationship was terminated by the Respondent with effect on 23 November 2020. The Applicant was notified of the termination by a text message from the Respondent on 23 November 2020.
[7] If the relationship was one of principal and contractor, the ending of that relationship on 23 November 2020 means that the Applicant was not dismissed and so adverse action in the form of dismissal as alleged by the Applicant could not have been taken. A separate cause of action alleging adverse action in the form of the termination of the contract for services in contravention of s.340 of the Act would be available to the Applicant, but could not be pursued through this application.
[8] The application was listed for a hearing on 17 May 2021 to determine the Respondent's objection.
[9] The Applicant appeared at the hearing but the Respondent did not. Before the hearing commenced, my Associate was advised by the Respondent that he would not be attending the hearing. The Respondent was given every opportunity to attend the hearing to prosecute his objection to the application but made a deliberate decision not to attend. He did not seek an adjournment or otherwise suggest he was unable to attend. He did not request to attend by telephone or by other electronic means. In the result, I determined that there was no warrant for any further delay and I proceeded in the absence of the Respondent.
[10] The Applicant commenced working for the Respondent on or about 30 July 2018.[1]
[11] According to the Applicant, the Respondent's business was concerned with hosting games at different venues across Victoria.[2]
[12] There was no written contract between the parties. The Applicant's evidence was that she came to learn of the position with the Respondent whilst she was performing in a band with the Respondent's then Area Manager, Mr Luciano Feltrin.[3] Mr Feltrin described the role as 'hosting work' which required the Applicant to attend a venue and set up and host a game, and the game in operation at the time was "Pick A Box".
[13] Relevantly her evidence, recorded in transcript appears below:
What did Mr Feltrin tell you about the role?---That it was hosting work, that it was a two-hour shift at a location - at a venue, you would wear a uniform. The game that was in - that they were operating at the time was the pick a box game. He said, you know, you come in and spend two hours where you set up the boxes, hand out raffle tickets to hotel patrons, and do a draw every, I think it was, 15 minutes for that pick a box one. They come up and approach and you, chit chat, and do what you do, and let them have a good time, they pick a box, and it will have a voucher, and then you give them the voucher and they go to cashiers to cash it in from the venue. And you do that on repeat eight rounds and that it's just enticing to buy it, saying that it was, you know, fun work and it was regular work, and he enjoyed it and it was a - it meant a constant income whilst you were short.[4]
[14] On or about mid July 2018, the Applicant attended the RSL club at Darebin where she was introduced to the Respondent by Mr Feltrin.[5] During this initial discussion, the Respondent described the work to the Applicant.
[15] The Applicant's evidence was that the Respondent advised her that the duration of a shift was two hours and indicated that "you [the Applicant] can work as much or as little as you want. As many shifts if you [the Applicant] wanted to take on".[6] The Applicant says that at the end of this initial discussion, the Respondent offered her an employment engagement[7] and proceeded to discuss the terms and conditions of engagement.[8] The Applicant said that the Respondent advised her that she would be paid $60 per hour and that she was required to render an invoice upon which she would receive payment from the Respondent.[9] There was nothing in the engagement process which resembled a negotiation. The Applicant's evidence was that there ". . . wasn't even a discussion or a negotiation or anything of that kind. It was just, he said this is - yes, 'It's this rate for the per hour for the work and you send me an invoice and then we pay upon invoice'.[10]
[16] On 13 July 2018, the Applicant was forwarded an email from Mr David Perry, Assistant to the Respondent, attached to which was a document titled "Pick-A-Box Promo" with instructions on how to operate the "Pick-A-Box" game such as how to set up the game and host the game including how to circulate tickets to patrons, when to draw tickets and when to make announcements. The Applicant says she was required to follow these instructions and did as instructed.[11] The Applicant also gave evidence that she was similarly required to follow a set of instructions when hosting other games such as Budget Busters and Money Ball.[12]
[17] The Applicant says she was required to complete a running sheet recording the name of each person whose raffle ticket was drawn and what prize they won and at the completion of each shift, the Applicant was required to take a photo of the running sheet and forward it to the Respondent.[13]
[18] The Respondent provided the Applicant with two shirts with the Shannon Entertainment logo and with her first name also embroidered on each shirt. The Applicant was instructed by the Respondent to wear this shirt to each shift, along with black pants and black shoes.[14]
[19] The Applicant worked at venues that were assigned to her by the Respondent. Some venues at which she worked were in regional Victoria primarily in Shepperton and Seymour. The Applicant's evidence was that she was required to use her own vehicle to travel to and from the different venues and was reimbursed (by including a higher amount in the fees rendered in the invoice) for travel time and costs associated with travelling to regional venues.[15]
[20] The Applicant says that aside from the use of her vehicle for travel, the Respondent provided the equipment required for each shift. The Applicant made the following comments in the following exchange recorded in transcript:
What sort of equipment was required to be used for this?---So, Christopher Shannon provided me with all the equipment I needed to every shift depending on which - obviously which game it was, I had to provide all the materials to operate the game.
So, if you look at the photograph that you gave me, the first one which has you standing in front of the table and there seems to be a display board behind you, to the right-hand of the photo, which would be the left-hand of you facing this way, there's a device in which contained a number of coloured balls?---Yes.
What other equipment?---So, there was the - so, the pull up banner he provided, but they were left at the venue, so all the venues he would just buy them and leave them there.
Assuming that that was an ongoing - - -?---It was - yes, correct. Yes, so, he provided that ball machine, the raffle tickets, and they were Shannon Entertainment branded raffle tickets that I would hand out. He provided me a hard copy of the running sheet that I had to use to fill out, so, I would get photocopies at the venue usually when I was starting to run out. And that's - the satchel, I had a satchel that I had to take to every shift, which he's also - is in his possession or it is now, which would contain the - had the Pick a Box Promo, similar thing if anybody wanted - was interested in, you know, having that at their venue if there was a venue runner there. It had the terms and conditions of the game that I was playing in it as well, and some pens.
Was there any equipment that you had to provide?---Myself. But, no, no, nothing physical that I needed to operate that I provided my own.
[21] The Applicant gave evidence that she was required to notify the Respondent if she was to be absent from work. The Applicant says she was unable to delegate or subcontract her work to another party. Relevantly her evidence, recorded in transcript appears below:
On a particular shift, let's assume you were due to do a shift at Darebin, could you subcontract the work?---No. If - - -
Could you have your husband, Simon, do the shift instead of you?---No. No, it had to be somebody - I'd have to - I'd essentially just call David or Christopher Shannon and say, 'I need this shift covered, I can't work it', and they would find one of their workers that obviously new the game that would fill my position. I couldn't just pick anyone.
[22] It is apparent, on the material filed by the Respondent, that the Applicant rendered invoices to the Respondent under the name "Christopher Shannon" with ABN number "93 773 448 912" and that payments were made to the Applicant in response to these invoices. The Applicant could not recall whether the Respondent had supplied her with his ABN number, however, the Applicant gave evidence that she had been invoicing that ABN from the beginning and at no point did the Respondent advise the Applicant that the abovementioned ABN was incorrect.[16]
[23] The Applicant had an ABN prior to working for the Respondent. The Applicant says this ABN was used for performing music in a band. The Applicant gave evidence that she did not regard the work she performed for the Respondent as part of her business and she did not use it as a platform to promote her music business. The Applicant made the following comments in evidence:
Did you have an ABN before that - - -?---Yes, I did.
What did you use that for or what do you - - -?---It's for playing music in my band.
So, do you have a business as such?---Just myself, just me really and my band, yes. No, but not a - so, just I have, you know, people who might call me up and say, 'Hey, do you want to do a gig?' and I said, 'Yes', and I go and do the gig and that's what I use my ABN for.
Did you regard what you did for Mr Shannon as part of your business?---Not in terms of promoting my business and what I do in music. I mean, like, obviously in terms of just using an ABN - - -
I've seen it, that's all?---It's in a pretty terrible form at the moment, but, yes, sure.
But that's - on my looking at it, it seeks to promote you as an artist?---Yes.
I couldn't see anything there which was promoting you as an entertainer for Shannon Entertainment?---No, there's - because, yes, the work that I do for my music is nothing to do with the work I do for Mr Shannon, or did do for Mr Shannon.
[24] I consider the Applicant to be a truthful witness. She gave her evidence mainly in response to my questions, to the best of her recollection, without hesitation or any apparent embellishment or gloss. I accept the Applicant's evidence. The Respondent was given an opportunity to file materials in response to the Applicant's material filed by her but did not do so save for a letter from his accountant dated 27 April 2021 asserting that the Applicant was a subcontractor and that she was engaged by Shannon Entertainment Pty Ltd as trustee for CS Trading Trust. No document to support the assertion was produced. The Respondent also relied on some invoices and an earlier letter from his accountant which he had filed. The accountant was not called to give evidence, but the invoices produced contradict the assertion in the 27 April 2021 letter in that they are clearly directed to the Respondent, by the ABN held by him and not to Shannon Entertainment Pty Ltd. The Respondent was able to attend the hearing to cross-examine the Applicant and put these matters to her, but he chose not to do so.
[25] There are now well-established case law principles developed by the courts to determine whether an individual is an employee. The courts have developed a multi-factorial approach, in which there is no single decisive criterion, to determine whether a contractual relationship is one of employment or one subject to a contract for services.[17] That approach is usually applied in two areas where the distinction is important: first in disputes about the duties and obligations owed by the contracting parties to each other; secondly in disputes about whether one party is liable to a third party for injury caused by the other party in the performance of the contract.[18] The usual premise for the application of this approach is the existence of a contract whereby one person is engaged and paid by another for the provision of work or services, thus requiring the contract to be properly characterised in order to determine the parties' rights and obligations. The various criteria or indicia about which have account is under this multi-factorial approach, were comprehensively listed in Jiang Shen Cai trading as French Accent v Do Rozario[19], and have to a significant degree been shaped by that employee/independent contractor dichotomy.
[26] In French Accent, a Full Bench of the then Fair Work Australia helpfully summarised the general law approach to distinguishing between employees and contractors 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:
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."
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.
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.
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.
Typically, this will arise because the worker is required to wear the livery of the putative employer.
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.
Such persons tend to be engaged as independent contractors rather than as employees.
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.[20]
[27] Importantly, the proper approach to ascertaining whether the contractual relationship is one of employment or of principal and contractor requires an examination beyond the mere consensual label attached to the relationship by the parties, or by one party, and therefore requires one to look at relationship the parties have actually brought into existence. Mere labels coloured by perfunctory devices such as invoices for 'services' rendered often do not show the whole picture and so one must look beneath them to the real substance of the relationship. This point was recently emphasised by Ross J and Hatcher VP in Amita Gupta v Portier Pacific Pty Ltd; Uber Australia Pty Ltd[21] in which the plurality observed:
[40] More recent decisions of the Federal Court Full Court have elucidated this principle in the context of the identification of whether an employment relationship exists. In ACE Insurance Limited v Trifunovski, Buchanan J (with whom Lander and Robertson JJ agreed) said that "the nature of the relationship may be legitimately examined by reference to the actual way in which work was carried out". In Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd, North and Bromberg JJ (with whom Barker J relevantly agreed) said that: "...appellate courts in Australia and the United Kingdom have been particularly alert, when determining whether a relationship is one of employment, to ensure that form and presentation do not distract the court from identifying the substance of what has been truly agreed. It has been repeatedly emphasised that courts should focus on the real substance, practical reality or true nature of the relationship in question..." And in WorkPac Pty Ltd v Skene the Full Court said "The conduct of the parties to the employment relationship and the real substance, practical reality and true nature of that relationship will need to be assessed.[22] [Footnotes omitted]
[28] I turn now to consider the indicia earlier discussed to the extent relevant to the Applicant's period of engagement by the Respondent.
[29] The Applicant, on the evidence, appears to not have had practical control over the way in which she wanted to conduct the services she provided. The Respondent had control of "when and where" the Applicant worked, and "how" the work was to be undertaken.
[30] The Applicant was provided with a set of specific instructions on how to set up and host each game and was required to comply with these instructions. She was told where to go, when to commence and when to finish. This was all determined by the Respondent. She was not free to depart from the instructions developed by the Respondent.
[31] While the Applicant had control over whether she would accept work and how many shifts she wanted to work, she was required to notify the Respondent if she was to be absent from work once she accepted it. She was not free to reschedule the work or the time at which the work was to be undertaken. This is consistent with casual employment.
[32] The Applicant did not have capacity to fix her own rate of pay; the Respondent determined the rate of pay from the outset. There was no evidence to suggest otherwise.
[33] In these circumstances, I consider the issue of control and the matters discussed above, to weigh in favour of an employment relationship.
[34] There is no material before me which suggests that the Applicant was prevented from working for others. But in the scheme of the overall relationship and the nature of the work, this too is consistent with casual employment.
[35] In practice, however, the Applicant did not work for others. Since the commencement of the engagement on or about 30 July 2018, the Applicant only worked for the Respondent. In this period, however, her business continued to operate, and she performed music gigs from time to time.
[36] In the circumstances this factor is essentially neutral.
[37] It is clear from the evidence that the Applicant provided no tools of trade or equipment in performing the work. As the transcript reveals, the Respondent provided the Applicant with all the equipment necessary to host each game at each venue.
[38] The Applicant was only required to use her own vehicle to travel to the venues. That is to travel to and from work. This puts the Applicant in the same position as any other employee who, usually, must make their way to work at their own expense. The Respondent paid a higher fee when travel to regional venues was required to offset the Applicant's motor vehicle costs associated with the travel.
[39] These factors are indicative of an employment relationship.
[40] The Applicant confirmed she was unable to delegate or subcontract the work she performed to another party. There was no evidence to suggest otherwise.
[41] This factor also weighs in favour of an employment relationship.
[42] At the commencement of her work with the Respondent, the Applicant was provided with two shirts with the Respondent's logo.
[43] The Applicant was required to wear the branded shirt whilst she was performing work at the various venues which illustrated to the world that she was attached to or connected or associated with the Respondent.
[44] The uniform worn by the Applicant while performing work clearly suggests that she was from and part of "Shannon Entertainment" which is also suggestive of a level of integration of the Applicant into the Respondent's organisation.
[45] This factor weighs in favour of a conclusion of an employment relationship.
[46] The Applicant was required to deal with her own taxation affairs, and the Respondent did not deduct income tax from the payments made to her.[23] This is in contrast to arrangements applying to employees and therefore, weighs against the existence of an employment relationship.
[47] The Applicant had her own ABN and rendered invoices to the Respondent which were headed "Erin Shay". This weighs against an employment relationship. However, I accept the Applicant's evidence that her ABN was primarily used for her music business and she did not regard the work she performed for the Respondent as part of her business. She did not agree to this mode of payment as much as acquiesced to it given the way in which the Respondent wanted things done. He told the Applicant that this is the "rate for the per hour for the work and you send me an invoice and then we pay upon invoice".[24] In the circumstances I ascribe little weight to the invoicing arrangement.
[48] In addition, the Applicant was not paid for the completion of a task but rather paid a fixed rate of $60 on an hourly basis. Again, this is consistent with casual employment and in the circumstances weighs in favour of an employment relationship.
[49] It was the Applicant's evidence that she did not accrue the usual concomitants of employment such as annual leave or sick leave.
[50] While the Applicant was able to advise her unavailability for work and to take leave of absence, she was not entitled to paid annual or sick leave.
[51] It was also the Applicant's evidence that the Respondent did not make any superannuation contributions on behalf of or for the benefit of the Applicant.
[52] These matters would usually weigh towards a contractor relationship, but the absence of paid leave entitlements is also consistent with casual employment. As to superannuation contributions, Commonwealth superannuation legislation does not compel contributions to be made on behalf of employees. A charge is imposed when contributions are not made. Absent a contractual or industrial instrument entitlement, there is no general obligation to make contributions. In the circumstances the absence of superannuation contributions is not a materially weighty factor. Overall, these matters are neutral in the circumstances.
[53] The work did not involve a profession, trade or special calling. It involved relatively simple tasks to be performed in accordance with the Respondent's written instructions. I consider this consideration also weighs in favour of a finding that an employment relationship existed.
Proportion of remuneration spent on business expenses and exposure to losses
[54] There is no evidence that any proportion of remuneration the Applicant received was spent on business expenses. She did not conduct a business. When she accepted work, which was regularly, she attended work as directed and performed work as directed. There was no paraphernalia advertising her services, but plenty advertising Shannon Entertainment. She was engaged in the Respondent's business,
[55] The Applicant gave evidence that she bore no risks associated with the work; each venue took the risk in respect of all the prizes other than the jackpot prize. The Respondent bore the risk of the jackpot prize.[25]
[56] Given that the Applicant bore no risk with respect to the prizes and largely used equipment supplied by the Respondent and the venue, the only expenses incurred were those associated with travel to metropolitan venues.
[57] These matters also favour an employment relationship.
[58] It seems to me to be the case that the relevant indicators of an employment relationship are present in this case. The overwhelming weight of the relevant indicia point towards an employment relationship. This is also consistent with the substance of the relationship, as one of employment, notwithstanding the invoicing arrangement and the acquiescence to that practice by the Applicant. In my view and for the reasons given earlier, the Applicant was an employee at the time the relationship between the Applicant and the Respondent ended. She was not an independent contractor.
[59] I am satisfied that the relationship was one of employment and not principal and contractor, and in those circumstances, because there is no dispute that the relationship came to an end at the initiative of the Respondent, the Applicant has been dismissed and as she alleges the dismissal was in contravention of s.340 of the Act, she is a person entitled to bring an application under s.365 of the Act. The Respondent's jurisdictional objection must be dismissed.
[60] I order as follows:
The Respondent's jurisdictional objection is dismissed; and
The application in C2020/9005 is remitted to the General Protections National Practice Leader to be further dealt with in accordance with the Act.
[15] Transcript PN107-109 and PN127-PN131
[17] Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 at 24 per Mason J
[18] ACE Insurance Limited v Trifunovski [2013] FCAFC 3; (2013) 209 FCR 146 at [26]- [27] per Buchanan J
Printed by authority of the Commonwealth Government Printer
Erin Shay
Christopher Shannon [2021] FWC 2815
(1986) 160 CLR 16
(2013) 209 FCR 146