Termination of employment - jurisdiction - whether employment relationship existed with labour hire agency - Workplace Relations Act 1996, s 643.

[1] This matter concerns an application for relief made under s.643 of the Workplace Relations Act 1996 ("the Act"), by Ms Jacinta Arcadia ("Ms Arcadia"), concerning the alleged termination of her employment by Accenture Australia ("Accenture") on 25 October 2007. The application alleges that the employer is Accenture Australia, but notes that an agency was involved in the employment, Diversiti Pty Ltd, ("Diversiti") a company apparently owned by Chandler MacLeod. The applicant subsequently indicated that she only wished to proceed against Accenture Australia.

[2] On 23 November 2007 Accenture filed a Notice of Motion to Dismiss the Application for Want of Jurisdiction. The Notice alleges that the applicant is unable to bring a claim under s.643 because she is not an employee whose employment has been terminated by Accenture and there has never been an employment relationship between her and Accenture. Accenture objected to conciliation before the Notice of Motion was dealt with by the Commission. The Notice of Motion was heard in Melbourne on 16 January 2008.

[3] On 22 October 2007 Ms Arcadia signed a document with a Diversiti letterhead entitled "Conditions of Assignment Under Non-Incorporated Independent Contractor Agreement." The signature clause states "Accepted subject to terms and conditions of Non-Incorporated Independent Contractor Agreement." Ms Arcadia's signature appears above the words "Contractor Signature." The document is also signed on behalf of Diversiti. Attached to the document is an 8 page document entitled "Non-Incorporated Independent Contractor Agreement." The Conditions of Assignment document specifies the client details as Accenture, the contractor as Ms Arcadia and the services as Executive Assistant on the Telstra AO Project.

[4] Ms Arcadia asserted that she applied to Diversiti specifically in relation to the role with Accenture. She said that she was given a job description for the Accenture Australia Executive Assistant role and was selected for that role. On commencing work on 18 October 2007 she completed an induction and computer orientation with Accenture at Accenture's workplace. Ms Arcadia alleges that her engagement was terminated on 25 October 2007 with effect from 26 October 2007.

[5] Section 643 of the Act entitles an employee whose employment has been terminated by the employer to make an application for relief in respect of the termination of that employment. By virtue of her application, Ms Arcadia asserts that she was employed by Accenture and her employment with Accenture was terminated by Accenture. Accenture's Notice of Motion contests the existence and termination of any contract of employment between it and Ms Arcadia. The issue for determination is whether any employment relationship existed between Ms Arcadia and Accenture, and if so, was it terminated by Accenture.

[6] An employment contract is formed by the offer and acceptance of a contract of service in which all of the essential ingredients of a valid contract are present. The contract must include consideration, the parties must have a continuing and mutual obligation to perform their respective sides of the bargain and there must be intention to create legal relations.

[7] In a typical labour hire situation, a tripartite arrangement is made whereby an agency enters into an agreement with a worker to hire out the services of the worker to a host. In general, the absence of any contract between the worker and the host will lead to a finding that the worker is not an employee of the host. [1] Although the concept of joint employment has some recognition in US Labour Law, it has not been adopted by any Australian Court.[2]

[8] The principles to be applied in relation to this question arise from cases which identify the essential ingredients of an employment contract, distinguish between the relationship of employee and independent contractor and consider these matters in the context of a labour hire arrangement.

[9] A critical consideration is whether a contract of employment was mutually intended to be established between the worker and the host. [3] This in turn depends on an objective consideration of the subject matter of the relevant agreement, the status of the parties thereto, their relationship to one another and other surrounding circumstances.[4] Because of the need for consideration of the details of the arrangements, it is not possible to apply any rules of general application. In Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, Gaudron, McHugh, Hayne and Callinan JJ said at [25]:

"Because the inquiry about this last aspect may take account of the subject-matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances, not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, it would be wrong to do so. Because the search for the "intention to create contractual relations" requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word "intention" is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties." (Footnotes omitted)

[10] It has also been said that the task involves the need for "characterisation of the essence of the relationship" under scrutiny, [5] "the obtaining of the overall picture by the accumulation of detail"[6] as distinct from "the mechanical exercise of running through items on a checklist".[7] After acknowledging the general position that the interposition of a labour hire agency between its clients and the workers does not result in an employment relationship, Merkel J. in Damevski v Giudice and Others (2003) 133 FCR 438 said at [174]:

"[174] However, the present case differs in significant respects from those cases. In those cases, in general, the hiring agency interviewed and selected the workers, and determined their remuneration, without reference to the client. Usually, a client requesting a worker with particular skills was provided with one, who may or may not have been "on the books" of the hiring agency at the time the order was placed. The workers of such hiring agencies were usually meant to keep the agency informed of their availability to work, and in many cases were not to agree to undertake work for the client which had not been arranged or directed by the hiring agency. Equipment was either supplied by the worker themselves, or by the hiring agency, except for specialist safety equipment which the client often supplied. Dismissal of a worker was only able to be effected by the hiring agency. The client can only advise the hiring agency that the particular worker is no longer required by it. Had AICA/MLC acted as a labour hiring agency for Damevski to contract his services to other cleaning companies, as suggested in the chart and in the information pack, then the decisions in the above cases may have been applicable to this situation. However, that did not eventuate in the present case."

[11] It is therefore necessary to undertake an objective assessment of the overall circumstances in order to characterise the essence of the relationship and determine the mutual intention of the parties.

[12] Neither party led any oral evidence in the matter before me. However both parties tendered certain documents relating to the engagement and made submissions as to the significance of that documentation. As noted above, the only written agreement to which Ms Arcadia is a party is the Non-Incorporated Independent Contractor Agreement between herself and Diversiti.

• An assignment may be offered by Diversiti and accepted by the contractor, although neither is under any obligation to do so. [8]

• On acceptance of an assignment, the contractor is engaged as an independent contractor. [9]

• The contractor is not at any time in a partnership or joint venture with, or an employee, servant or agent of Diversiti or the client. [10]

• On acceptance of an assignment, the contractor will perform the services detailed at Item 3 of the conditions of assignment. [11]

• Diversiti may terminate the assignment for cause prior to the completion date immediately by notice in circumstances which include where the contractor fails to perform the services to the satisfaction of the client. [12]

[14] Other documents provided to the Commission include:

• An email from Farheen Mehdi, the HR Rep-Telstra AO Unit for Accenture providing a link to Accenture policies,

• A copy of the Accenture Occupational Health and Safety Policy,

• An invoice whereby Accenture paid Diversiti for Ms Arcadia's services.

[15] Accenture asserts that there are no indicia of employment, and specifically:

• No employment contract between Ms Arcadia and Accenture.

• No salary paid by Accenture to Ms Arcadia for her services.

• Accenture paid Diversiti for Ms Arcadia's services.

• PAYG and superannuation charges were deducted by Diversiti.

• There was no agreement for Accenture to provide paid annual leave or sick leave to Ms Arcadia.

[16] Ms Arcadia submitted that for all intents and purposes she applied for and obtained work for Accenture by applying for employment with reference to a specific Accenture job description. It appears that Ms Arcadia's engagement was terminated after she refused to clean a dirty cup for an Accenture Executive. Ms Arcadia alleges that her termination was caused jointly by Diversiti and two Accenture Executives and that Diversiti threatened her with making no payments if she did not sign a termination letter.

[17] I have considered all of the material relied on by the parties and conclude that Diversiti and Ms Arcadia made a labour hire arrangement whereby Ms Arcadia would supply services to Accenture. None of the circumstances created an employment relationship between Accenture and Ms Arcadia. I do not consider that it is significant that Ms Arcadia performed work at Accenture's premises, worked on Accenture equipment, reported to Accenture employees and worked alongside Accenture employees. Those circumstances are consistent with the express terms of the agreement between Diversiti and Ms Arcadia.

[18] Labour hire arrangements of this type are common in industry and have generally been held to create no employment relationship between a client and a worker. [13] Where the documentation signed by the parties is clear as to the nature of the respective relationships and consistent with practices adopted by the parties it is appropriate to give those terms their full effect.

[19] I find that there was no employment relationship between Accenture and Ms Arcadia and there could be no termination of employment such as to enable Ms Arcadia to make an application against Accenture for relief under s.643 of the Act. The application is therefore dismissed.

[1] Creighton and Stewart, Labour Law (Fourth edition) The Federation Press, 2005 p.282.

[2] Morgan v Kittochside (2002) 117 IR 152 at [73].

[3] Wilton and Cumberland v Coal and Allied Operations Pty Ltd [2007] FCA 725 at [28].

[5] Dalgety Farmers Ltd, trading as Grazcos v Bruce (1995) 12 NSWLR 36 at 46: Wilton and Cumberland at [29]

[6] The Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) 97 ATC 5070 at 5074.

[13] See eg. Wilton and Cumberland.

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