s.365 - Application to deal with contraventions involving dismissal

Application to deal with contraventions involving dismissal - jurisdictional objections - whether the Applicant was an employee - whether the Applicant was dismissed at the Respondent's initiative - application dismissed

[1] Mr Ka Chun Cheung has made an application under section 365 of the Fair Work Act 2009 for the Fair Work Commission (the Commission) to deal with a general protections dispute involving dismissal against Moetch Design Oceanic Pty Ltd (Moetch). The Applicant claims he was employed by Moetch from 4 October 2024 until 14 April 2025, when he was dismissed after he raised a number of workplace complaints.

[2] In this matter, the Applicant (Mr Ka Chun Cheung) and one of the Respondent's directors (Mr David Cheung) have the same surname. In this decision I will refer to Mr Ka Chun Cheung as the Applicant and the Respondent's director as Mr David Cheung.

[3] Moetch has raised two interrelated jurisdictional objections to the application. First, Moetch claims the Applicant was not an employee. Moetch claims the Applicant was effectively one of three founding business partners of a start-up company, and that the business partners had agreed they would not pay themselves wages in the start-up phase.

[4] Secondly, Moetch claims that as the Applicant was not an employee, he was not dismissed on 14 April 2025.

[5] This decision considers the jurisdictional objections raised by Moetch.

[6] The parties filed written submissions and witness statements in this matter and attended a determinative conference on 21 November 2025. At the determinative conference the Applicant gave evidence on behalf of himself. Mrs Yuet Lai Ng and Mr Qian Zhang also gave evidence in support of the Applicant.

[7] Mr David Cheung and Mr Jarvis Zhong gave evidence on behalf of Moetch.

[8] I found Mr David Cheung and Mr Zhong to be honest, upfront and straightforward as witnesses. I found that there were some inconsistencies in the Applicant's evidence, so have treated it with caution.

[9] In determining whether the Applicant was an employee three key issues arose:

• Did the Applicant perform "work" for Moetch?
• Was the Applicant a business partner?
• Was there an employment relationship between the Applicant and Moetch?

1. Did the Applicant perform "work" for Moetch?

[10] On the evidence before me the Applicant performed work for Moetch between 4 October 2024 and 14 April 2025.

[11] The Applicant submitted that he worked approximately 20 hours a week performing duties as a bookkeeper and Moetch's Business Development Manager.

[12] I am satisfied that the Applicant did perform bookkeeping duties for Moetch. This is supported by evidence from the Applicant and also from Mr Qian Zhang, who was engaged as an external accountant for Moetch. In addition, both Mr David Cheung and Mr Zhong acknowledged Mr Cheung performed bookkeeping duties.

[13] Mr Cheung also provided a number of emails showing work he had performed to secure business opportunities for Moetch. Both Mr Zhong and Mr David Cheung gave evidence that all three of them (that is the Applicant, Mr Zhong and Mr David Cheung) performed business development duties in trying to build the company.

[14] On the evidence before me I am satisfied that Mr Cheung performed approximately 20 hours work a week for Moetch consisting of bookkeeping duties, and some business development work. I am not satisfied that Mr Cheung was the Business Development Manager.

[15] One of the key issues in dispute was whether the Applicant was a business partner, or an "unnamed" shareholder of Moetch.

[16] The Applicant provided evidence that he was not a business partner or a shareholder, but an employee. While the Applicant acknowledged that his mother, Mrs Yuet Lai Ng had a 30% shareholding in Moetch, the Applicant claimed this arrangement was independent of his work as an employee for Moetch.

[17] The Applicant gave evidence that he knew Mr David Cheung because prior to Moetch they had been shareholders in another company together.

[18] At the determinative conference, the Applicant appeared to give evidence to the effect that his mother, Mr David Cheung and Mr Zhong had set up the Company, and that his mother had known about the proposed Company before him. The Applicant also gave evidence that he facilitated the registration of the Moetch.

• [19] Mrs Ng gave evidence that she became a shareholder of Moetch at the Applicant's request to "assist with company registration and early setup."[1] Mrs Ng gave evidence that she did not participate in management or daily business operations.[2]

[20] Mr Jarvis Zhong gave evidence that he approached the Applicant to start a company. The Applicant had suggested they involve Mr David Cheung. Following this, the three men met and decided to set up Moetch. Mr Zhong gave evidence that the three men each contributed to the initial investment, with the Applicant and Mr David Cheung both supplying 30% of the initial investment, and Mr Zhong covering the remaining 40%. Mr Zhong gave evidence that the Applicant had wanted to be an "unnamed" shareholder, so put his shareholdings in his mother's name. Mr Zhong provided evidence that the Applicant organised the registration of Moetch through the external accountant he uses, Mr Qian Zhang.

[21] Mr David Cheung gave evidence that the Applicant wanted his shareholdings in his mother's name for personal reasons. Mr David Cheung gave evidence that the Applicant organised the registration of the company through the external accountant he uses, Mr Qian Zhang. Mr David Cheung gave evidence that he had no direct communication with Mrs Ng until the email on 15 April 2025 where she formally gave authority to the Applicant to act on her behalf. Mr David Cheung gave evidence that he, Mr Zhong and the Applicant met regularly to discuss Moetch.

[22] On the evidence before me I find that the Applicant was, in effect, one of the three business partners of Moetch. I make this finding based on the following:

• I am satisfied on the evidence that the Applicant, Mr David Cheung and Mr Zhong agreed to set up a company together, and provide the initial investment, with the Applicant providing 30% through his mother's shareholding.

• The Applicant organised for the registration of Moetch through his external accountant, Mr Qian Zhang.

• It is clear Mrs Ng had no involvement in the running of Moetch and received little communication except through WeChat, and through the Applicant. Her one direct communication with the other shareholders on 15 April 2025 was to formally authorise her son to act on her behalf in all matters.

• I am satisfied on the evidence that the Applicant, along with Mr Cheung and Mr Zhong, discussed building Moetch and engaged in business development activities to do this.
• The Applicant had access to Moetch's bank accounts, along with Mr David Cheung.

1. Was there an employment relationship between the Applicant and Moetch?

[23] Being a business partner is not mutually exclusive with being an employee. I will now turn to consider whether, despite being a business partner, the Applicant had an employment relationship with Moetch.

[24] The Applicant's key arguments that there was an employment relationship can be summarised as follows:

• First, the Applicant argues there had been an agreement that he would be paid wages at the industry rate once Moetch was up and running; and

• Second, the Applicant argues, Moetch, and in particular, Mr David Cheung directly controlled his work.

[25] It is uncontested that there is no written employment contract between the Applicant and Moetch. The Applicant in effect argued that prior to engagement he and Mr David Cheung agreed that the Applicant would be paid wages once Moetch was up and running. The Applicant gave evidence that they discussed the "industry wage" and hours of work.

[26] Mr David Cheung gave evidence that the three business partners, who all had other jobs, had agreed that they would put in work to see if they could make the company profitable. It was understood that this work was unpaid. Compensation would come if the company was profitable in the future. Mr David Cheung gave evidence that there was never a discussion about industry rate of pay or hours.

[27] Mr Zhong gave similar evidence to Mr David Cheung. He stated that he, Mr David Cheung and the Applicant agreed at the start of the business venture no one would receive a salary. It was understood that people would do work if they could, but there was no obligation. Mr Zhong provided further evidence of a meeting in March where Mr Cheung raised the prospect of recording hours for work performed, but Mr Zhong and Mr David Cheung stated that this was not something they would consider until Moetch was making more money.

Evidence relating to whether Moetch controlled the Applicant's work

• [28] The Applicant argued that Mr David Cheung had direct control over his work, that "he instructed me on what work was to be done, when it was to be completed, and how it was to be carried out"[3], and "work schedule, scope of duties and reporting obligations were entirely determined by David".[4] Mr David Cheung gave evidence that he did not have oversite of what the Applicant was doing, and he did not know what his hours were or when he worked them. Mr David Cheung gave evidence that given they all had other jobs, there was no way of knowing when the Applicant could perform work. Mr Zhong gave evidence that all three business partners agreed to contribute the Company when they could, but there was no obligation to perform work.

[29] Having considered the evidence before me, I am not satisfied there was an employment relationship.

[30] I am not satisfied that there was ever an agreement about paying wages. I prefer Mr David Cheung and Mr Zhong's evidence to the Applicant's. I find that the three business partners agreed at the commencement of Moetch that all three of them would perform work to get the business up and running, and that they would receive compensation later if the company was profitable. While the Applicant may have become unhappy with this arrangement, this is better classified as a dispute between business partners rather than a dispute about an employment contract.

[31] I am also not satisfied that Moetch, or Mr David Cheung, controlled the Applicant's work. The Applicant was not able provide any examples of directions from Mr David Cheung, or any documentary evidence to show that Mr David Cheung determined his duties, hours or place of work.

[32] Furthermore, at no stage did anyone from Moetch tell the Applicant he was "dismissed". The discussions around the Applicant ceasing work appeared to be focussed on Mrs Ng's shares. This evidence supports a finding that the dispute between the parties is a business partner/shareholder dispute, as opposed to a dispute about an employment relationship ending.

[33] For the above reasons, I find that the Applicant was not an employee.

[34] As the Applicant was not an employee, there was no dismissal.

[35] Furthermore, I note that even if there had been an employment relationship, for the reasons discussed above at [32], it is difficult to identify an act by Moetch that could be considered a dismissal.

[36] For completeness I note that if I had found that the Applicant was dismissed on 14 April 2025, his application for a general protections dispute, which was made on 10 May 2025, was filed out of time. This matter was not identified by the Applicant or Moetch prior to or at the determinative conference, despite paid agents initially being involved in this matter. While this matter was not specifically addressed during the determinative conference, it was not apparent to me that there were any exceptional circumstances that would justify the granting of an extension of time for the Applicant to file his application out of time. Accordingly, even in the event I found the Applicant was an employee and was dismissed, it is unlikely he would have been granted an extension of time to progress his application.

[37] For the reasons given above, I have upheld Moetch's jurisdictional objections that the Applicant was not an employee and not dismissed. Accordingly, the Applicant's application is dismissed.

[1]Witness statement of Mrs Yuet Lai Ng at 2.1.

[3] Witness statement of Mr Ka Chun Cheung at 4.1.

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