s.365 - Application to deal with contraventions involving dismissal

Application to deal with contraventions involving dismissal - objection that applicant not employed by first respondent but engaged as an independent contractor - whether applicant dismissed for the purpose of s.365 of the Act - s.15AA of the Act - ordinary meaning of employee and employer - real substance, practical reality and true nature of the relationship

• [1] The applicant in this matter, Ms. Sarah Murray (Applicant), has applied under s.365 of the Fair Work Act 2009 (Cth) (Act) for the Fair Work Commission (Commission) to deal with a dispute relating to her alleged dismissal by 239 Brunswick Pty Ltd (First Respondent). By her application, the Applicant claimed that she was employed under the terms of the Live Performance Award 2020 and that her alleged dismissal by the First Respondent was in contravention of Part 3-1 of the Act. The second respondent, Mr. Moussa Raffoul, is said by the terms of the application to be involved in the contravention by the First Respondent pursuant to s.550 of the Act.

• [2] The First and Second Respondents (collectively, the Respondents) have objected to the application on the basis that the Applicant was not employed by the First Respondent but was engaged by them as an independent contractor. For that reason, the Respondents contend that the Applicant could not have been, and was not, dismissed for the purposes of s.365 of the Act.

• [3] The Respondents' jurisdictional objection must be determined before the Commission can proceed to deal with the dispute by conducting a conference under s.368 of the Act.[1] This decision deals with that objection.

• [4] For the reasons that follow, I have concluded that the Applicant was not an employee of the First Respondent and was not dismissed by the First Respondent for the purposes of s.365.

• [5] On 24 February 2025, directions were made for the filing of material by the parties and the determination of the jurisdictional objection of the Respondents was listed to be heard on 3 April 2025. The Respondents filed material in accordance with the directions that were made. The Applicant sought and was granted an extension of time to file material on 10 March 2025 and then again on 24 March 2025. On the latter of those dates, the Applicant was given until 30 March 2025 to file her material. No material was filed by the Applicant by 30 March 2025.

• [6] On 31 March 2025 the Applicant's legal representative filed a notice that he had ceased to act for the Applicant. On the same date I wrote to the Applicant pointing out that nothing had been received from the Applicant in response to the original directions and directing that any material upon which the Applicant intended to rely was to be filed by 4pm on 31 March 2025, along with the reasons for the failure to comply with the original directions. Nothing was received from the Applicant in response to that direction. Consequently, no evidence was filed in the proceeding by the Applicant.

• [7] On 2 April 2025 the Respondents made an application for the substantive application to be dismissed under s.587(1)(c) of the Act. The Applicant was asked to provide a response to that application prior to the hearing but did not do so.

• [8] The Applicant did not appear at the hearing on 3 April 2025.

• [9] It was noted at the hearing that s.587(2) does not permit the Commission to dismiss an application under paragraphs (1)(b) and (c) of s.587 in cases where an application is brought under, amongst other sections, section 365 of the Act. The Respondents asked that the matter be determined on the basis of the material that had been filed. I have adopted that course.

• [10] The evidence of the Respondents consisted of a statement by Mr. Paul Kane, the director and licensee of the First Respondent. The uncontested evidence of Mr. Kane was, in summary, as follows:

(i) The First Respondent holds a nightclub licence and adult entertainment permit issued under the Liquor Act 1992 (Qld) (Liquor Act). It provides live entertainment to patrons and a full-service bar at a venue called "K Klub" in Fortitude Valley, Queensland (Club).

(ii) As the holder of an Adult Entertainment Permit, the First Respondent is required to comply with the Adult Entertainment Code (the Code) in accordance with the Liquor Act. Amongst other things, the Adult Entertainment Permit also sets out what specific rooms may be used for adult entertainment within the Club.

(iii) Under the Code, the First Respondent may provide live entertainment on licensed premises by a person performing an act of an explicit sexual nature (but excluding sex acts and solicitation).

(iv) At the entrance of the Club is the main stage, where one dancer ordinarily performs on weekdays and two or three dancers perform on weekends. The Club has two additional rooms, the 'lap room' and the 'VIP lap room', where dancers perform lap dances for clients in accordance with the Adult Entertainment Permit.

(v) Dancers are not paid for performing on the main stage. They are paid only for performing private dances for clients and are ordinarily paid directly by the clients, in cash.

(vi) The First Respondent does not pay the dancers for any of the entertainment they provide. If a dancer does not perform any private dances or receive tips from clients, they do not receive any money.

(vii) An adult entertainment controller, a person approved under the Liquor Act, observes all dances. Their role is to monitor compliance with the Code. The Club is subject to regular inspection to ensure compliance with both the liquor licence and the Code.

(viii) The primary restrictions placed on the dancers in how they perform their duties are directly linked to compliance with the Liquor Act and the Code. So long as the dancers are adhering to legal requirements, they may choreograph their dances however they choose and engage whichever clients they choose.

(ix) An adult entertainment controller will not interfere with how a dance is conducted unless it is in breach of the Liquor Act and the Code or there is a risk to the safety of the dancer or the client.

(x) The Applicant entered into an agreement with the First Respondent on approximately 22 September 2023 (Agreement). The Applicant commenced work at the Club in or about September 2023 and worked under a pseudonym chosen by her.

(xi) Under the Agreement, the Applicant was required to pay the First Respondent a fee for reserving the premises, which was determined by the day and the time the reservation is made for.

(xii) The Agreement also included a clause that the Applicant was not entitled to receive any fee or payment from the First Respondent for any of her performances. The Applicant was not paid any form of remuneration by the First Respondent for her performances, and she made her income for the night by being paid directly by clients, either by cash or bank transfer. The only payment the Applicant received for performing at the First Respondent's premises was directly from her clients. This included any tips paid by clients, the whole of which the Applicant was entitled to keep.

(xiii) Under the Agreement the Applicant was also required to pay a fine for failing to give notice or give sufficient notice of cancelling or not showing up to a reservation. This was only implemented so that the First Respondent had sufficient time to ask another dancer if they were available to perform if it was expected to be a busy night.

(xiv) The current rostering process involves dancers being provided access to make a reservation to perform at the Club through the mobile application called "Deputy". The ordinary process was that through Deputy, dancers would roster the times that they wanted to perform (by selecting from a range of available time slots).

(xv) Dancers could also arrange for another dancer to perform in their place if they were unavailable at the last minute.

(xvi) Where the Deputy application was not used, dancers would contact managers directly and on occasions dancers would arrive at the Club without pre-scheduling a time slot.

(xvii) The Applicant was not issued with directions regarding the hours or days on which she would perform by the First Respondent.

(xviii) The First Respondent did not enforce any minimum shift requirements or specific days of work for the Applicant in practice even though Friday and Saturday nights are the busiest nights for the Club and dancers were encouraged to perform at least one of those nights.

(xix) All of the dancers were responsible for approaching their own clients and inviting them to receive lap dances. The First Respondent does not allocate clients to dancers. Although some clients might request specific dancers, it is ultimately up to the dancer who they perform for.

(xx) The Applicant was required to pay the First Respondent a door fee depending on the time that they arrive at the Club. If they arrive at the Club before 7.00pm they are not charged a door fee, but the later they arrive, the higher the door fee. Dancers also pay a fixed price to the Club per lap dance that they provide, based upon the length of the dance. The Applicant risked running at a loss if she were unable to secure enough lap dances in one night.

(xxi) The First Respondent did not pay tax in relation to dances performed by the Applicant, did not pay superannuation contributions to the Applicant and did not otherwise provide her with sick leave, annual leave or any other employment entitlements.

(xxii) The Applicant was not provided with any uniforms or clothing by the First Respondent and was not required to wear clothing bearing the logo of the First Respondent's business. Any equipment or props used by dancers such as the Applicant, were to be supplied at their own discretion and cost.

• [11] A copy of the Agreement between the parties was in evidence as an annexure to Mr. Kane's statement. Under the terms of that contract:

(i) the Applicant was permitted the right to perform at the First Respondent's Club, subject to the payment of the reservation fee by the Applicant to the First Respondent (clause 2);

(ii) the solicitation and selection of clients for performances by the Applicant was at the Applicant's discretion (clause 3B);

(iii) the Applicant negotiated the price charged of patrons for private performances directly with patrons (clause 3B);

(iv) the First Respondent would not direct or control the Applicant in respect of how she chose to perform or the patrons for whom the Applicant performed (clause 3C);

(v) the Applicant was required to maintain her own insurances (clause3E);

(vi) the Applicant was required to pay to the First Respondent a fee per reservation,

which was dependent upon the day and time of the reservation (Door Fee). The Door Fee was $15.00 per reservation before 8.00 pm and $35.00 per reservation after 8.00 pm on Sunday to Thursday. On Friday and Saturday, the Door Fee was $35.00 per reservation prior to 8.00 pm, $50.00 per reservation between 8.00 pm and 9.00 pm, and $70.00 per reservation between 9.00 pm and 9.30 pm (clause 7);

(vii) the First Respondent was not obligated to pay the Applicant for any of her performances (clause 8e);

(viii) the Applicant's right to use the First Respondent's premises ceased automatically at the end of each reservation and the First Respondent could terminate the right to make a reservation on any occasion on which the Applicant was performing (clause 14); and

(ix) the Applicant was responsible her own income tax (clause 8d).

• [12] Section 365 of the Act provides as follows:

365 Application for the FWC to deal with a dismissal dispute

(b) the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;

the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.

• [13] Section 386 of the Act sets out when a person is taken to have been dismissed for the purposes of s.365. It provides, relevantly:

(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.

• [14] As is apparent from the terms of s.386(1) above, a person can only be dismissed when their employment comes to an end in the circumstances described. In the absence of a relationship of employer and employee, a person cannot be dismissed within the meaning of s.386 and an application under s.365 can proceed no further.

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.

• [16] 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] This is the situation in this case. 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:

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

• [17] Section 15AA(2) requires a consideration of the totality of the relationship which involves in turn 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]

• [18] The common law approach 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[7] 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.[8]

• [19] In the same decision, the Full Bench identified the various indicia that are ordinarily considered in an assessment as to 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.[9] 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."

• [20] The terms of the Agreement did not exclusively point in favour of a relationship of principal and independent contractor and in some respects, there were internal inconsistencies and contraindicators. For example, as to direction and control, although the First Respondent was not to direct or control the performance of the Applicant's work or the selection of patrons for whom the Applicant performed, the Agreement provided that the Applicant was to obey all lawful and reasonable directions of the First Respondent and comply with the First Respondent's policies and procedures as varied.[10] It also provided that the First Respondent could direct the Applicant to work in other roles from time to time,[11] that the Applicant would perform all duties as directed by the First Respondent and that the First Respondent could change the Applicant's duties from time to time.[12] Clause 5 provided that the Applicant was to initially report to the floor manager but that the First Respondent could change that reporting line from time to time. Clause 6 provided that the First Respondent could direct the Applicant to work at other locations on a temporary or permanent basis.

• [21] Further, reservations which the Applicant may have wished to make were subject to the discretion of the First Respondent.[13] The contract also required the Applicant to work at least one shift between Sunday to Monday and one shift between Friday to Saturday,[14] although the evidence of Mr. Kane was that the Applicant was not, as a matter of fact, given any directions as to the days or hours during which she was to perform, and the First Respondent did not enforce minimum shift requirements or specific days of work.[15] There was no detailed evidence as to the frequency with which the Applicant worked at the First Respondent's premises.

• [22] The Respondents referred to other practical characteristics of the relationship and the evidence of Mr. Kane as to how the contract was performed in practice. This included the proposition that any restrictions placed on dancers such as the Applicant as to how they performed their duties were directly linked to compliance with the Liquor Act and the Code and so long as these legal requirements were met, the Applicant was at liberty to choreograph the dances as she chose and to engage whichever clients she chose.[16] Further, the evidence was that the Applicant was not paid by the First Respondent, received no superannuation contributions or leave entitlements from them and was not required to wear a uniform or other clothing bearing a logo of the First Respondent.

• [23] Having considered the totality of the relationship, including the terms of the contract and how the contract was performed in practice, I am of the view that the real substance, practical reality and true nature of the relationship was one of principal and independent contractor. In reaching that conclusion I have taken into account the numerous provisions in the Agreement, including those referred to above, that confer a right of control over the Applicant's working arrangements on the First Respondent. I have also considered the other aspects that are consistent with and point towards, a relationship of principal and independent contractor. Nonetheless, the assessment is not a mechanical running through of items on a checklist[17] and a simple tallying of items for or against either conclusion. Nor is it any longer overwhelmingly focused on the legal rights and obligations created by the contract at its inception. Regard must be had to the totality of the relationship, including how the contract is performed.

• [24] In this assessment I think it significant that the Applicant was not paid a wage or any other remuneration by the First Respondent for the performances at the Club. To the contrary, the Applicant paid the First Respondent a reservation fee to perform at the Club and a part of the income earned for each dance performance, depending on the length of the dance. The Applicant could also be penalised for cancelling a reservation. It is also noteworthy that the Applicant's earnings were derived directly from the clients for whom she performed not the First Respondent. The identity of the clients, the number of those clients and the amounts that the clients were to pay were all determined, or in the latter case, negotiated by, the Applicant. Accordingly, it was the Applicant who bore the financial risk of earning or losing money for each attendance at the Club.

• [25] As a practical matter, on the basis of the evidence I have before me, although the contract specified a minimum number of shifts during particular periods, generally the Applicant was able to choose the days and times at which she could perform through the rostering application and the rostering arrangements were not fixed but could also be changed informally by the performers discussing that issue with Club managers. There was no detailed evidence as to the frequency of the Applicant's performances at the Club from September 2023 onwards. Moreover, the evidence as to the control that was exercised or sought to be exercised by the First Respondent suggests that the involvement, direction or intervention in the work that was being performed by the Applicant was minimal and limited to ensuring that the legal obligations of the First Respondent under the Code and the licence were met.

• [26] As to whether the Applicant was presented to the world as an emanation of the First Respondent's business, whilst the performances were conducted at the Club, there was nothing in the way of uniform, logo or other branding to suggest that the Applicant was such an emanation. The Applicant chose her own stage name and performed under that name. Any equipment or props that were to be used in the performances were to be provided by the Applicant at the Applicant's own expense.

• [27] There may be a conventional sense in which it could be said that the Applicant served in, or was integrated into, the business of the First Respondent. However, I do not think that the Applicant was employed in the business of the First Respondent as opposed to carrying on a business on her own behalf. The Applicant had considerable control of and independence in relation to the timing and duration of her work, the rates charged for the work, the persons for whom the work was performed and how the work was actually performed. In my view the Applicant was not employed by the First Respondent but was engaged by them as an independent contractor.

• [28] It is appropriate to reiterate here that the above conclusion has been reached on the basis of the uncontested evidence of the Respondents and without the benefit of any active participation, evidence or submissions from the Applicant. As the outcome of these matters is dependent in large measure on findings of fact relating to the practical realities/true nature of the relationship and the performance of the contract over the course of that relationship, it is possible that a contested hearing and different findings would have yielded a different result. In the application as filed, the Applicant had contended for example, that she was directed by the First Respondent to perform duties outside the scope of an (unsigned) performance contract and that the First Respondent exercised control over how the Applicant completed her performance obligations. As no evidence was provided to this effect, those matters can be taken no further.

The jurisdictional objection of the Respondents is upheld and the application is dismissed.

By video using Microsoft Teams at 10:00am AEDT on Thursday, 3 April 2025.

[1] Coles Supply Chain Pty Ltd v. Milford [2020] FCAFC 152; (2020) 279 FCR 591 and see Lipa Pharmaceuticals v Jarouche [2023] FWCFB 101.

[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] [2011] FWAFB 8307.

[17] Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (1997) 37 ATR 528 at 532-3 per Winneke P (with whom Phillips and Kenny JJA agreed).

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