s.365 - Application to deal with contraventions involving dismissal

Application to deal with contraventions involving dismissal - whether applicant employed by respondent and "dismissed" within the meaning of s.386(1)(a) of Fair Work Act 2009- whether applicant engaged as an independent contractor - meaning of employee for purposes of Act - section 15AA - real substance, practical reality and true nature of the relationship - s.386(2) - whether applicant employed under a contract for a specified period of time and employment terminated at the end of the period

• [1] The primary question for determination in these proceedings is whether the applicant, Ms. Keogh, was "dismissed" by the respondent, Onyx Developments Pty Ltd (Onyx, or respondent) within the meaning of s.386 of the Fair Work Act 2009 (Cth) (Act). That question arises because Onyx has objected to the applicant's application under s.365 of the Act for the Fair Work Commission (Commission) to deal with a dispute involving the applicant's alleged dismissal which, the applicant contends, was carried out in contravention of the general protections provisions in Part 3-1 of the Act. Onyx's principal objection is that there was no relevant dismissal because the applicant was never employed by them but rather was engaged as an independent contractor.

• [2] The respondent also contends that the applicant's engagement came to an end because the applicant was employed under a contract of employment for a fixed term and the contract had come to the end of its term. Section 386(2) of the Act provides that a person is not dismissed where a person was employed under a contract of employment for, amongst other things, a specified period of time and the employment has terminated at the end of that period. I propose to consider that submission on the basis that if it is found that the applicant was an employee, the respondent would contend that exclusion in s.386(2) would operate and the applicant could not be found to have been 'dismissed' for the purposes of Part 3-1.

• [3] The question of whether a person has been 'dismissed' is one which must be determined before the Commission can deal with the dispute by conducting a conference under s.368 of the Act.[1] I have concluded below that the applicant was an employee who was dismissed by the respondent and that the exclusion in s.386(2) has no application.

• [4] The applicant was engaged by the respondent in a position described as a 'sessional trainer assessor' in a written contract that was entered into by the parties and which commenced operation on 22 July 2024. The contract has the title 'Independent Contractor Agreement' (Agreement).

• [5] The respondent provides educational services and trades under the name Australasia International School. The applicant delivered classes to students at the respondent's premises in Sydney. The classes were delivered during 10-week terms at the end of which the applicant would have a period of 3 weeks off. When the applicant first commenced in 2024, she was working three days per week. The applicant was advised by the respondent of the course or courses and days that she would be teaching in advance of the commencement of each term. At the time the relationship ended, the applicant had been working on Mondays and Tuesdays each week delivering a salon management course to students.

• [6] In June 2025 the applicant was the subject of a complaint to the respondent by one of the students. Following the complaint, the applicant was advised by the respondent that the complaint had been considered and the decision had been taken not to renew the applicant's contract for the upcoming July teaching term. The applicant was told in writing by the respondent that the 'difficult decision' had been taken not to renew the contract not only on the basis of the complaint, but because of a need to 'focus on preparing for an upcoming audit.'

15 Ordinary meanings of employee and employer

(1) A reference in this Act to an employee with its ordinary meaning:

(a) includes a reference to a person who is usually such an employee; and

(b) does not include a person on a vocational placement.

Note: Subsections 30E(1) and 30P(1) extend the meaning of employee in relation to a referring State.

(2) A reference in this Act to an employer with its ordinary meaning includes a reference to a person who is usually such an employer.

Note: Subsections 30E(2) and 30P(2) extend the meaning of employer in relation to a referring State.

• [8] The method by which the ordinary meaning of the terms 'employer' and 'employee' is to be ascertained for the purposes of the Act is now set out in s.15AA. Section 15AA of the Act was inserted by the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth) and commenced on 26 August 2024. It applies to a relationship entered into before that commencement date that is in existence as at that date[2] which is the case here. Section 15AA provides as follows:

15AA Determining the ordinary meanings of employee and employer

(1) For the purposes of this Act, whether an individual is an employee of a person within the ordinary meaning of that expression, or whether a person is an employer of an individual within the ordinary meaning of that expression, is to be determined by ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person.

(2) For the purposes of ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person:

(a) the totality of the relationship between the individual and the person must be considered; and

(b) in considering the totality of the relationship between the individual and the person, regard must be had 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.

Note: This section was enacted as a response to the decisions of the High Court of Australia in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2.

(3) Subsections (1) and (2) do not apply to the following provisions of this Act:

(a) Divisions 2A and 2B of Part 1‑3;

(b) Part 3‑1, to the extent that Part 3‑1 applies only because of the operation of section 30G or 30R.

• [9] Section 15AA(2) requires a consideration of the totality of the relationship which involves a consideration of, amongst other things, the terms of the contract between the parties and an assessment as to how the contract is performed in practice. The approach to a consideration of the totality of the relationship under s.15AA is guided by the common law principles established by cases such as Stevens v. Brodribb Sawmilling Co. Pty Ltd[3] and Hollis v Vabu Pty Ltd[4] and involves a reversion to the multifactorial test that was well known and widely applied prior to the High Court decisions in CFMMEU v. Personnel Contracting[5] and ZG Operations v. Jamsek.[6]

• [10] Although the contract was titled 'Independent Contractor Agreement' and includes terms which suggest the relationship was one of principal and independent contractor, there are also terms of the document which point to or support a conclusion that there was an employment relationship. I have considered the terms of the contract in its totality. I deal with some of the key terms of the contract, in summary form, below.

• [11] The contract referred to the applicant as the 'contractor'[7] and cited the applicant's Australian Business Number (ABN). It required the applicant to submit invoices on a fortnightly basis.[8] It provided that the applicant was responsible for expenses incurred in the performance of the services.[9] The contract required the applicant to take out insurance against public liability and workers' compensation claims.[10] It provided that the applicant was to provide their own equipment in the provision of services, although the respondent was to provide such additional equipment as it deemed necessary.[11] The contract expresses the intention that the parties are by entering into the agreement, creating the relationship of principal and contractor, and not that of employer/employee.[12] The contract contemplates that the applicant could employ employees to perform work under the contract.[13]

• [12] On the other hand, the contract also provides that the applicant is to perform the duties set out in the contract and the position description and 'any other duties which the company may reasonably require which (the applicant is) skilled and capable to perform.'[14] The contract also requires the applicant to always act in good faith and in the best interests of the respondent[15] and work 'in accordance with any written direction, procedure or other specifications provided by the company...relating to the performance of (the applicant's) work or anything connected with it.[16] The applicant is required by clause 3(c)(vi) to attend meetings and/or other professional development or training sessions as reasonably required by the respondent. The hours of work of the applicant are set out in the schedule to the contract. This schedule provides that the applicant is to work the hours as per the allocated timetable for the contract period. The contract allows the respondent to allocate such additional hours as reasonably required by the company[17] and to cancel or open classes dependent upon student demand and thereby alter the applicant's hours.[18] Schedule 1 provides that the applicant is to report to, amongst others, the respondent's directors.

• [13] The applicant is required by the contract to sign a sign-in sheet and enter start and finish times for 'every shift appointed to work.' These sheets are to be validated by the supervisor/manager or delegate daily and if they are not completed, the applicant does not get paid. Clause 13 provides that the respondent may terminate the contract without notice if the applicant refuses to carry out a lawful and reasonable direction. Clause 8 provides that the applicant is to comply with the respondent's policies and procedures as varied from time to time. The policies and procedures are expressed as taking effect as lawful and reasonable instructions, but as not forming part of the contract.

• [14] A further document was tendered into evidence at the hearing by the applicant. It is titled 'Employee Details Form.' It is described as a document to be completed by an employee when starting employment with the respondent. It was completed and signed by the applicant and a representative of the respondent. It includes the applicant's personal details and qualifications. It says that the applicant has completed and returned a choice of superannuation fund form and been provided with a copy of the Fair Work Information Statement. Under the heading 'Office use only,' the applicant's 'employment status' is described as 'casual'. The applicant's evidence was that she was given this form along with the Agreement, when she attended her interview for the position with the respondent. I accept that evidence.

[14] The evidence given at the hearing establishes that as a matter of practice:

(i) The respondent determined the days and the hours that the applicant was to work;

(ii) The applicant generally/regularly worked 18 hours per week over two days, 9am to 6pm Monday and Tuesday, although there were some small variations, if for example, the applicant left work slightly early;

(iii) The allocation of courses and days/hours was done by the respondent and provided to the applicant in advance of each term and could change from term to term;

(iv) The course material presented by the applicant to the students was created by the respondent's academic team and provided to the applicant to deliver;

(v) The applicant reported to Mr. Shalaby, including through written reports and weekly meetings at which the course, class issues and student attendance would be discussed. Mr Shalaby reviewed the applicant's work.

(vi) Mr. Shalaby supervised the applicant's work and gave instructions or directions as to what the applicant had to do and how the work needed to be done;

(vii) The courses delivered by the applicant were delivered at the respondent's premises.

(viii) The respondent provided equipment to the applicant to enable her to perform her work, including whiteboards and projectors;

(ix) The applicant invoiced the respondent for work performed and was paid fortnightly;

(x) The applicant was paid a single hourly rate of pay for the work performed;

(xi) The applicant did not work for anyone else while she was engaged by the respondent.

• [15] The common law approach to determining the question of whether a person is an employee or independent contractor has been set out in numerous decisions of the courts and in decisions of this Commission. In Jiang Shen Cai trading as French Accent v. Do Rozario[19] the Full Bench summarised the approach to the determination of the employee/contractor issue including 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, the nature of the work performed and the manner of its performance, the identification and application of the relevant indicia to the circumstances, and the terms of the contract between the parties.[20]

• [16] In the same decision, the Full Bench identified the various indicia that are ordinarily considered in an assessment of the nature of the relationship. They include the actual exercise, or the right to exercise, control over the putative employee, whether the worker performs work for others, or provides tools and equipment, whether the work can be delegated, whether the worker is remunerated by periodic wages or salary or by reference to completion of tasks and whether the worker is presented to the world at large as an emanation of the putative employer's business.[21] The Bench also cautioned 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."

• [17] In my assessment, the evidence in this case establishes that the applicant was an employee of the respondent. Although the contractual document was styled as establishing a contractor relationship and some of the terms were indicative of that relationship, overall the substantive rights and obligations created by the document support the view that the relationship was one of employment. The legal capacity of the respondent to direct and control the work of the applicant conferred by the contract is in very wide terms. The respondent has effective control over the applicant's hours of work and the scope of the applicant's work. The contract reserves to the respondent the right to issue general instructions or directions as to how work is to be performed and where,[22] and to terminate the contract without notice for a failure to comply with lawful and reasonable directions. It provides that the applicant is obliged to conform with the respondent's policies and procedures as varied by the respondent from time to time. The contract goes so far as to oblige the applicant to act in good faith and in the interests of the respondent. This is something akin to the obligation of good faith and fidelity that is ordinarily implied into contracts of employment.

• [18] I have noted that the contract said that it was intended that the agreement would create a relationship of principal and contractor and not that of employer and employee. The plurality in Personnel said that generally speaking, the opinion of the parties on a matter of law is irrelevant and that it is erroneous in point of principle to use the parties' description of their relationship to resolve uncertainty.[23] I regard this term as having limited weight in the overall analysis. I also regard the terms in relation to insurances as of limited assistance to the respondent in that they follow from the labelling of the arrangement adopted in the agreement. These terms can and should be taken into account but are not conclusive.[24]

• [19] The contractual term requiring the applicant to provide her own equipment points to a contract for services. However, the term also allows for the respondent to provide such equipment as it deems necessary and the evidence clearly demonstrated that equipment, from course materials to whiteboards, was supplied by the respondent. To the extent the contract permitted the applicant to engage or employ others to do the work, or did not require that the services be delivered personally, this would weigh in favour of a conclusion that it was a contract for services. However, as a matter of practice, the evidence was that the work was performed by the applicant personally and there was no evidence of delegation of work. Unlike the position that prevailed immediately before the enactment of s.15AA,[25] it is necessary to consider the totality of the relationship, including how the contract is performed in practice to ascertain the real substance, practical reality and true nature of the relationship.

• [20] I regard the Employee Details Form to be of little if any assistance in determining the status of the applicant. It does not purport to set out any binding legal obligations or rights and is for the most part, simply a statement of information provided by the applicant to the respondent. I note the respondent's description of the applicant as a casual employee but as noted above, I do not regard this description as useful to resolve any uncertainty as to the applicant's status.

• [21] The terms relating to the applicant having an ABN and claiming GST point towards a contract for services but follow on from the designation of the applicant as an independent contractor. They are relevant but not determinative.

• [22] The right to control the work of a person is an indicator of an employment relationship.[26] The substance of the right to control was described by Wilson and Dawson JJ in Stevens v. Brodribb[27] as whether the contractual arrangement "subjects the person engaged to the command of the person engaging" not just as to what shall be done, but how it shall be done.[28] In this case the respondent had the contractual right to control the applicant's work and exercised that control as a matter of practice. Mr. Shalaby for the respondent readily conceded that he supervised the applicant's work and gave instructions or directions as to what the applicant had to do and how the work needed to be done. He said he supervised the applicant's work and required regular written reports as well as in-person meetings for the applicant to report on the work that was being undertaken. The content of the course work that was delivered by the applicant was determined by the respondent. The respondent controlled how, when and where the applicant's work was performed both as a legal and practical matter.

• [23] There are also aspects of the arrangement which show that the applicant was integrated into the respondent's business. Those aspects are supportive of the view that an employment relationship existed, but they are not determinative. The respondent is in the business of delivering educational services to students. The applicant delivered the courses determined by the respondent to the students at the respondent's premises. The applicant was presented to third parties as an emanation of the respondent.

• [24] It was accepted by the plurality in Personnel that although not determinative, the question of whether someone is conducting their own independent business as opposed to serving in the business of another could be a useful framework to guide the characterisation of the relationship.[29] Here I consider that in practice, the performance of the contract meant there was little scope for the exercise of entrepreneurship on the part of the applicant. The content of courses was determined by the respondent. The applicant simply delivered the courses that were made available to her which she was qualified to teach.

• [25] The characterisation of a relationship as being either one of employer and employee, or principal and independent contractor is ultimately an evaluative judgment. It is often not a straightforward exercise because contractual terms and the practices adopted by the parties can point in opposite directions. That is evident in the present case. However, I am comfortably satisfied that those matters which point in favour of a contract for services are outweighed by those factors which are consistent with an employment relationship and that viewed as a whole, the real substance, practical reality and true nature of the relationship was one of employer and employee.

• [26] The balance of the respondent's objection can be disposed of in short order. The respondent's position in relation to the circumstances of the termination was inconsistent. On the one hand they submitted that the contract had a limited duration and concluded automatically at the expiration of its term. The respondent said the contract did not end because of action by the employer but was 'a natural conclusion of a fixed-term agreement.'[30] On the other hand, the respondent submitted that 'unless otherwise notified, contracts are renewed automatically' and that they had made a decision 'not to renew a contract based on serious conduct-related concerns.'[31] There is no doubt on the evidence that the relationship was terminated on the initiative of the respondent. The applicant was notified in writing that the respondent had determined that the contract would not be extended for the July term.[32] The decision was made primarily as a result of the complaint. The respondent's actions directly and consequentially resulted in the termination of the applicant's employment.[33] It was action that was intended to bring the employment to an end or had that probable result.[34] The applicant was dismissed within the meaning of s.386(1)(a) of the Act.

• [27] There is no substance to the argument that the contract was for a specified period of time and the employment ended at the end of that period. The respondent accepted that the written contract did not specify any end date. That is the end of the matter. Even so, the applicant's evidence, which I accept, was that there was no discussion about periodic renewal of a contract of a specified period. Mr. Shalaby accepted that there was no such discussion and that the applicant was engaged on an ongoing basis subject to performance and student numbers. There was no contract for a specified period and the exception in s.386(2) does not apply.

• [28] The respondent's objections are dismissed. The matter will be relisted for conference on a date to be advised.

[1] Coles Supply Chain Pty Ltd v. Milford [2020] FCAFC 152; (2020) 279 FCR 591.

[2] Fair Work Act 2009 (Cth), Schedule 1 clause 116(1)(a).

[3] (1986) 160 CLR 16.

[4] [2001] HCA 44; (2001) 207 CLR 21.

[5] [2022] HCA 1.

[6] [2022] HCA 2.

[7] Clause 16(a) provides that the reference to 'the contractor' includes a reference to any employee and/or associate/s of the contractor.

[13] For example, clauses 3 and 15. See also clause 16(a).

[19] [2011] FWAFB 8307.

[24] Deliveroo Australia Pty Ltd v. Franco [2022] FWCFB 156 at [41] referring to ACE insurance Ltd v. Trifunovski [2013] FCAFC 3 at [37].

[25] JMC Pty Ltd v. Commissioner of Taxation [2023] FCAFC 76

[27] (1986) 160 CLR 16.

[28] JMC Pty Ltd v. Commissioner of Taxation [2023] FCAFC 76 at [91].

[33] Mohazabv Dick Smith Electronics Pty Ltd (No 2) [1995] IRCA 645 (29 November 1995), [(1995) 62 IR 200 at p. 205]. See also Khayam v Navitas English Pty Ltd t/a Navitas English [2017] FWCFB 5162at [75(2)] and Pawel v Advanced Precast Pty Ltd Print S5904

[34] Barkla v. G4S Custodial Services Pty Ltd [2011] FWAFB 3769; Khayam ibid_._

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