[2024] FWC 1152
General information, not legal advice.
Fair Work Commission
2024-05-02
Original judgment source is linked above.
[2024] FWC 1152 [Note: An appeal pursuant to s.604 (C2024/3320) was lodged against this decision.]
s.394 - Unfair dismissal
Shazlia Saleh, Mohamed Namaoui, Hamoda Dayein, Salwa Elshikh, Elhadi Almahadi, Abdelrahman Wedissa, Muhammad Ahmed, Qusai Mubaidin, Elsyaed Ali Eltaher Bashir, Suzanne Maksoud, Mohammed Obaidi, Mohammad Abdul-Hwas, Yassine Belkamel, Zach Kalany, Mu'ammar Ibrahim Najjar, Abdalaal Nassir, Mohamed Ben Mansour, Abdulrazig Osman
Saudi Arabian Cultural Mission/Saudi Embassy & Embassy of the Kingdom of Saudi Arabia, Cultural Mission
(U2022/4348; U2022/4550; U2022/4553; U2022/4557; U2022/4565; U2022/4568; U2022/4575; U2022/4579; U2022/4695; U2022/5015; U2022/6848; U2022/6904; U2022/7868; U2022/8775; U2022/8853; U2022/8885; U2022/9536; U2022/9642)
Applications for unfair dismissal remedy - jurisdictional objections - immunity from Commission jurisdiction - sovereign foreign state - Foreign States Immunities Act 1985 (Cth) - employee v independent contractor - inconsistent contractual terms - permanent resident of Australia - applications said to have been made prematurely prior to any termination taking effect - jurisdictional objections dismissed - applications to proceed.
"As per paragraph 10(7)(b) of the Foreign States Immunities Act 1985 (FSI Act), nothing in this document should be taken to indicate that the Respondent has submitted to the jurisdiction of the Fair Work Commission and/or waived, intentionally or otherwise, the immunity and privileges provided in the FSI Act generally, and specifically by s 9, s 6, s 24, s 25 and s 39 of the FSI Act or any other Act, common law, or under international law and international treaties or conventions or customary international law. All the interventions and steps taken in the proceedings are for the purpose of, or in the course of. asserting immunity only."
(a) the Respondent has not waived its foreign State immunity;
(b) none of the exceptions to immunity in the FSI Act apply to the present applications;
(c) the relevant exceptions to immunity only apply to proceedings in a "court" and the Commission is not a court; and
(d) in any event the exceptions to immunity referred to in s.12 of the FSI Act do not apply.
(a) all of the Applicants were independent contractors and therefore were not dismissed from employment; and/or
(b) the written contracts contain provisions said to be inconsistent with the employment exclusion (see s.12(4) of the FSI Act); and/or
(c) some of the Applicants were not permanent residents at the time they were engaged (see s.12.6); and/or
(d) the six applicants who are permanent residents will be barred from the exception under s.12 by operation of the savings provision in s.6 of the FSI Act.
For contractors at the Representatives and Attaches offices abroad
It is on the [date] this contract was concluded between each of:
The (Second Party) shall work for the (First Party) at the Cultural Office in the capacity of secretary.
The duties of the post shall include the following:
(a) ...
(b) ...
(c) Obey supervisors and perform work duties accurately, honestly and in the best possible way. Preserve the time, documents, papers, tools, machines, equipments, and properties of the Mission.
(d) Refrain from all that may affect the continuity and execution of this contract, observe fine etiquette when dealing with others, protect the confidentiality of the job. and not use its authority and power for personal gain.
(e) Any other duties assigned to him/her.
Article 2: The two parties agreed that the duration of this Contract shall be for (one year) and will be renewed automatically unless either party notifies the other, in writing, of his wish to terminate it at least two months prior to its expiration.
Article 3: The (Second Party) appointed shall be under probation for three months during or at the end of which the (First Party) may terminate the contract in accordance with Article (16) Paragraph (K), without the (Second Party) having any claims or compensations except for the salary of the period of work.
Article 7: The (First Party) shall pay the (Second Party) a lump sum monthly salary of [$$] Australian Dollar, to be paid at the end of every Gregorian month, and this salary shall include social insurances, health and other (1).
Article 9: The (Second Party) shall be entitled to an ordinary paid leave of (thirty days) per year at full salary.
Article 10: The (First Party) has the right to defer the (Second Party)'s ordinary leave, provided that the postponement period does not exceed five months from the date of the leave entitlement. He also has the right to divide the leave to two parts if so required in the interest of work. A financial compensation for the leave is not permitted.
Article 11: The (First Party) may, in emergency situations accepted at his discretion, grant the (Second Party) an emergency leave to a maximum of five days per year.
Article 12: The (Second Party) "Contractor lady" is entitled to a full paid maternity leave of forty days, including public holidays.
(a) The (Second Party) in case of illness or injury that prevents him from performing his work temporarily entitled to a sick leave to a maximum of one month, paid in full per year. A sick leave is not allowed if the injury or illness from which the (Second Party) suffers occurred during his leave. Evidence to that shall be in the form of an approved medical report from the entity designated by the (First Party). The (Second Party) shall also lose his right to the said sick leave with the end of the year in which it was allowed.
(b) If the illness or injury was the result of work or while performing it, without any error or failure on his part, the (Second Party) shall be entitled to a fully paid sick leave of no more than three months per year, in accordance with an approved medical report from the entity designated by the (First Party).
(c) If the (Second Party) used all the sick leave he is entitled to as mentioned in Paragraphs (a) or (b) of this Article and did not resume his post, or has become unfit medically, suffering from some infectious or chronic diseases or a permanent impairment. the (First Party) may treat him in accordance with Article (16) Paragraph (d), ending his contract for his inability to work.
Article 14: If the (Second Party) has become sick or injured because of work and while performing it, without error or failure on his part, the (First Party) is obliged to cover the costs of his treatment for a maximum of three months, after which he shall be treated in accordance with Article (13) Paragraph (c), in the absence of any health insurance for the (Second-Party).
Article 16: The contract shall be terminated before the expiry of its term in the following cases:
(a) Ending the work of the (Second Party) for public interest.
(b) Cancellation of the contracted post.
(c) Death.
(d) Health impairments preventing the performance of the work duties or the consummation of the sick leave periods.
(e) Acceptance of resignation.
(f) Absence from work without a legitimate excuse accepted by the (First Party) for more than fifteen consecutive days or thirty non-consecutive days 1 within the contract year.
(g) Failure to perform work or inability to perform the job duties.
(h) Misconduct.
(i) If it was proven that the (Second Party) is medically unfit or suffering from infectious or chronic diseases or permanent impairments prior to contracting him.
(j) If the (Second Party) is convicted in,or imprisoned for, a crime related to breaching honour or honesty.
(k) Ineligible to undertake work during or by the end of the probation period.
(l) The (Second Party) does not begin work within three days from the date of signing the contract and the contract is considered null and void.
Article 21: The Arabic copy shall be considered the original copy, and any dispute arising between the parties of the contract regarding any of its Articles shall be presented to the Ministry of Civil Service in the Kingdom of Saudi Arabia, and its decision on the matter shall be considered final."
The Evidence: The work performed by the applicants
"I was employed by the Respondent for work at SACM pursuant to a contract of employment made in Australia (Employment Contract).
Whether I was employed as a contractor, or an employee is very crucial as it will affect:
(a) Whether I fall under the foreign state immunity exception under section 12 of the FSI Act; and
(b) What sort of entitlements I may claim from my employer under legislation such as the Fair Work Act 2009 (Cth) and any Fair Work instruments your employment may fall under (such as a Modern Award).
There are two distinct requirements that must be met to satisfy the definition of an employee, being:
There are a number of factors to consider in regard to such a question. The matter of Abdalla, Abraham v Viewdaze Pty Ltd t/as Malta Travel (2003) 122 IR 215 (Abdalla v Viewdaze) at [34] provided the following helpful list that a court may consider in deciding whether, ultimately, a person was the worker for someone else's business (that is, an employee) or was carrying on a trade or business on their own behalf (that is, an independent contractor) (c.f. Hollis v Vabu [2001] HCA 44; (2001) 207 CLR 21 at 41-42, citing Justice Windeyer in Marshall v Whittaker's Building Supply Co (1963) 109 CLR 2010 at 217), including:
(c) Obeying superiors and carrying out duties accurately and diligently at their best possible [SIC] in a timely manner and take care of documents and equipment owned by the mission"
I was an employee of the Respondent and not an independent contractor."
The Evidence: The 2014 "Contractor Declaration Form"
"I declare that since the commencement of my providing professional services to the Saudi Arabia Cultural Mission in Australia (SACM), I have worked as an independent contractor. I wish to receive all the future dues of the contract as a lump sum progressive payment as per the option that I have selected above.
I hereby consciously undertake full responsibility to deal with any federal, state/territory, or any other, legal requirements, including the payment of any taxation liabilities and superannuation, and SACM shall hold no responsibility for any legal or financial requirement resulting from the disbursement of the contract value to me directly in full by the payment method selected above."
"In 2014, the Respondent presented me and many of the Applicants with a "Contractor's Declaration Form" (Sham Declaration) which provided that the Relevant Applicant:
(a) declared retrospectively that they had worked as an independent contractor since the commencement of providing professional services to the Respondent;
(b) wished to receive all the future dues of the contract as a lump sum progressive payment monthly, quarterly, biannually or annually as selected by the Applicant or Group Member; and
(c) undertook full responsibility to deal with any federal, state/territory or other legal requirements including the payment of taxation liabilities and superannuation.
(a) did not provide any consideration for the Sham Declaration;
(b) did not provide the Applicants and Group Members with advance notice of the Sham Declaration;
(c) did not explain the nature and consequences of the Sham Declaration to the Applicants and Group Members;
(d) did not provide the Applicants and Group Members with adequate time to read and consider the Sham Declaration;
(e) did not provide the Applicants and Group Members with an opportunity to obtain legal or other advice in relation to the Sham Declaration;
(f) directed and/or required the Applicants and relevant Group Members that they were required to sign the Sham Declaration;
(g) told the Applicants and some Group Members that they were required to sign the Sham Declaration as a condition of continuing their employment with the Respondent;
(h) did not provide the Applicants and Group Members with a choice other than to sign the Sham Declaration, including because it treated employees who did not sign the Sham Declaration as having done so.
(a) the arrangement was represented as lawful; and/or
(b) I understood I would lose my employment if I did not sign the Sham Declaration.
After the Sham Declaration, the Respondent ceased paying superannuation to the superannuation funds."
Except as provided by or under this Act, a foreign State is immune from the jurisdiction of the courts of Australia in a proceeding."
In the application of this Act to a court, this Act has effect only in relation to the exercise or performance by the court of a judicial power or function or a power or function that is of a like kind."
""court" includes a tribunal or other body (by whatever name called) that has functions, or exercises powers, that are judicial functions or powers or are of a kind similar to judicial functions or powers."
(1) A foreign State, as employer, is not immune in a proceeding in so far as the proceeding concerns the employment of a person under a contract of employment that was made in Australia or was to be performed wholly or partly in Australia.
(2) A reference in subsection (1) to a proceeding includes a reference to a proceeding concerning:
(a) a right or obligation conferred or imposed by a law of Australia on a person as employer or employee; or
(b) a payment the entitlement to which arises under a contract of employment.
(3) Where, at the time when the contract of employment was made, the person employed was:
(a) a national of the foreign State but not a permanent resident of Australia; or
(a) an inconsistent provision is included in the contract of employment; and
(b) a law of Australia does not avoid the operation of, or prohibit or render unlawful the inclusion of, the provision.
(5) Subsection (1) does not apply in relation to the employment of:
(a) a member of the diplomatic staff of a mission as defined by the Vienna Convention on Diplomatic Relations, being the Convention the English text of which is set out in the Schedule to the Diplomatic Privileges and Immunities Act 1967; or
(b) a consular officer as defined by the Vienna Convention on Consular Relations, being the Convention the English text of which is set out in the Schedule to the Consular Privileges and Immunities Act 1972.
(6) Subsection (1) does not apply in relation to the employment of:
(a) a member of the administrative and technical staff of a mission as defined by the Convention referred to in paragraph (5)(a); or
(b) a consular employee as defined by the Convention referred to in paragraph (5)(b);
unless the member or employee was, at the time when the contract of employment was made, a permanent resident of Australia.
(7) In this section, permanent resident of Australia means:
(b) a person resident in Australia whose continued presence in Australia is not subject to a limitation as to time imposed by or under a law of Australia."
(a) the Fair Work Commission is not a "court" as defined in the FSI Act; or
(b) an applicant was engaged as an independent contractor; or
(c) the standard contract contained a term that is consistent with the Respondent maintaining its immunity; or
(d) an applicant was not a permanent resident of Australia at the time their contract of employment was made.
Jurisdictional objection: Is the Fair Work Commission a 'court'?
"[10] In Adam v High Commission of Malaysia [PR963745] Deegan C held that the Commission is a tribunal that has functions or exercises powers which are of a kind similar to judicial functions or powers and was therefore a "court" as defined in s.3 of the FIS Act [at 36]. Deegan C did not refer to the earlier decision in Christodulakis.
[11] In my view, the conclusion reached by Deegan C was correct. It is not to the point that the Commission does not exercise the judicial power of the Commonwealth. That is a given. If the definition in s.3 was intended to be confined to tribunals that exercise judicial power then there would be no point in the definition of "court" in s.3 referring to functions or powers "of a kind similar to judicial functions or powers". Those words indicate that the definition extends beyond courts exercising judicial power to "tribunals or other bodies" exercising functions and powers that, although not judicial functions and powers, are similar to judicial functions and powers. On any view, the Commission exercises functions and powers that are "similar" to judicial functions or powers in its termination of employment jurisdiction. It is unnecessary to set out a full list of the provisions of the WR Act that confer relevant functions and powers on the Commission. It is sufficient to note that the Commission conducts arbitration hearings where parties may be represented. It adjudicates upon applications for relief made pursuant to provision in the WR Act that requires the Commission to apply a broad discretionary standard in determining [whether] a termination of employment was harsh, unjust or unreasonable. The Commission can administer an oath and receive evidence (although it is not bound by the rules of evidence). It can issue summonses for the attendance of witnesses and the production of documents by witnesses and can exercise the other powers specified in s.111(1). It makes decisions that are amenable to appeal to a Full Bench of the Commission. It can make orders requiring the payment of compensation in relation to a termination of employment that is found to be harsh, unjust or unreasonable. It can make orders as to costs in certain circumstances. It must act judicially. With respect to Simmonds C, the obligation to ensure a "fair go all round" in relation to termination of employment matters is not something that is antithetical to the similarity between the Commission's functions and powers and judicial functions and powers."
Jurisdictional objection: Were the applicants independent contractors?
"[9] In addition, as a practical matter of the due administration of justice, the task of raking over the day-to-day workings of a relationship spanning several decades is an exercise not to be undertaken without good reason having regard to the expense to the parties and drain on judicial time involved in such an exercise. The claims made by the respondents in this case did not give rise to an occasion for such an exercise, those claims involving no suggestion that any aspect of the day-to-day performance of the contract superseded the rights and duties established by the contract. That having been said, however, in order to aid an understanding of the reasons of the courts below and of the arguments in this Court, it is desirable to summarise the salient aspects of the history of the dealings between the parties."
Jurisdictional objection: Were the terms of the standard contract relevant inconsistent?
"The Respondent says that Article 21 of the Contract that was signed by all of the Applicants represents a mandatory agreement in writing between it and each of the Applicants that the jurisdiction of relevant authorities of Saudi Arabia, rather than the courts of Australia, is to apply to the relationship between the parties and the locus fori of any disputes that may arise."
"[47] Accordingly, I consider it appropriate to proceed on the basis that s 12(4)(a) requires an enquiry as to whether there is a provision in the contract of employment which is inconsistent with the local court having jurisdiction over disputes arising from, or in relation to, the contract. An actual inconsistency with the Australian courts having jurisdiction is required. It is not sufficient that courts of the foreign State could hear and determine the dispute. Nor is it sufficient that matters exist which may attract the doctrine of forum non conveniens. If an inconsistent provision of the requisite kind is included in the contract of employment, the enquiry under subs (4)(b) is whether there is a law of Australia which negates in one or other of the specified ways the effect of that provision."
(a) the purpose of the FSI Act is to reflect the more restrictive view of the common law immunity which had been taken in other countries and adopted in legislation;
(b) the FSI Act was introduced after the publication of the Australian Law Reform Commission Report Foreign State Immunity (Report No 24, 10 October 1984);
(c) the recommendations of the ALRC Report were wholly accepted and the report's draft legislation formed the basis for the FSI Act;
(d) the ALRC Report provides an important context by reference to which the terms of the FSI Act are to be interpreted (per Greylag Goose Leasing 1410 Designated Activity Company v P.T. Garuda Indonesia Ltd [2023] NSWCA 134 at [18]- [22], [51]-[52] and [79][2023] NSWCA 134; , (2023) 111 NSWLR 550);
(e) the ALRC Report cannot displace the clear meaning of the FSI Act (see Firebird Global Master Fund II Ltd v Republic of Nauru [2015] HCA 43 at [173], [2015] HCA 43; (2015) 258 CLR 31 at [81];
(f) the scheme of s.12(1) is to provide first that a foreign State, as employer, is not immune from the jurisdiction of Australian courts in respect of proceedings concerning the employment of a person whose contract of employment has a defined nexus with Australia (Republic of Italy (Minister of Foreign Affairs and International Cooperation - Adelaide Consulate) v Benvenuto [2018] FCAFC 64 at [8]);
(g) the summary section of the ALRC Report (page xiii) includes the following:
"19. Contracts of Employment. A special provision is needed to take into account both the sensitivity of the employment relationship between a foreign state and its employees, and the interest of Australia in asserting jurisdiction over local employment. A foreign state should not be immune with respect to a contract of employment made in Australia or to be wholly or partly performed in Australia, unless made with a person who, when the contract was entered into, was a national of that state and not a national or permanent resident of Australia, or who was habitually resident in that state."
(h) the body of the report includes the following (at [94]-[97]):
"94 ... It can be assumed that the Australian government would not wish to be able to be sued in a foreign court by its employee where the employee was an Australian citizen recruited in Australia and perhaps only present in the foreign state for the briefest of periods. Yet were an alleged breach of the employment contract to occur in the foreign state it would be open, if the ordinary rules of jurisdiction are applied, to the employee to sue in this way. On the other hand where a foreign state hires an Australian national in Australia to work in Australia and the breach occurs here it seems clear that the interest of Australia in providing a local forum for the employee outweighs the foreign state's interest in exclusive jurisdiction.
96. Avoiding Unnecessary Distinctions. Two distinctions appearing both in the European Convention and in the United Kingdom Act, and which add significantly to their complexity in this respect, can be dispensed with in an Australian provision. The first involves a distinction, in applying the connecting factors of nationality or permanent residence, between the time when the contract is entered into and the time when the proceedings are brought. Both times are relevant under the United Kingdom provisions. On balance it is sufficient to refer only to the time when the contract is made, both because it is simpler and because that is the time when the intention of the parties is formed. The employee may change status without reference to his employer and, to take the worst case, might even do so simply in order to take advantage of a greater opportunity to sue his employer... In the Annotated Draft Legislation circulated by the Commission, the distinction between 'commercial office' and other employment was adopted in slightly simpler form. The effect was to exclude jurisdiction over third state nationals not permanent residents of Australia and not employed in relation to a commercial office. But the employment of third state nationals may have no nexus at all (other than nationality) with the third state, and it does not seem desirable to assert (or encourage the assertion of) jurisdiction over transactions based solely on the plaintiffs nationality. There is no reason to treat employment by a state of a national of another state (not a habitual resident of the employing state) as necessarily or exclusively a matter for the employing state. For these reasons, it is better to assert jurisdiction over local contracts of employment based on justifiable jurisdictional links independently of the distinctions between 'commercial office' and other employment.
97 Connecting Links with State Employment Contracts. In designing an Australian provision for employment contracts it is necessary to consider first what links should exist between the employment contract and Australia, such that it is reasonable that Australian courts have jurisdiction over the contract. A second issue is whether any further links between the employee and Australia should be required, or alternatively which links between the employee and the foreign state should be sufficient to attract immunity...
Status of employee: A state has a special relationship with persons who are its own nationals, and with persons who (whatever their nationality) are closely linked to the state by virtue of long term residence there. For these reasons, and consistently with the overseas provisions a foreign state should be immune from local jurisdiction in respect of a contract of employment with a person who, when the contract was entered into, was a national of that state and not a national or permanent resident of Australia, or who was habitually resident in that state at that time. For the reasons already given, no general distinction should be drawn between Australian and third state nationals with respect to local employment. The foreign state's interests are sufficiently protected by excluding employment with its own nationals or habitual resident, and by the provisions for agreements to the contrary, and for employees of diplomatic and consular missions..."
(i) as can be seen from this excerpt, the focus of the exclusion for permanent residents in s.12(3) and s.12(7) is to preserve immunity for foreign states in relation to the employment of nationals of their own state. The report found that it is better to assert local jurisdiction over local contracts of employment based on justifiable jurisdictional links and that there was sufficient reason/justifiable links to treat the employment of nationals of a third state as local employment/local contracts because the other protections and immunities are sufficient to protect the foreign state's interests; and
(j) it is in this context that one should consider whether the contested applicants were permanent residents of Australia at the relevant time.
"... Such a limitation could be that a visa expires on a specified date or that a visa expires on the occurrence of a specified event that will necessarily occur. A visa may also expire by reason of some other factor which may occur, such as, in the case of a Special Category Visa (SCV) subclass 444, travelling, changing New Zealand nationality or cancelling the visa for any reason."
(a) the person is a resident in Australia; and
(b) the person's continued presence in Australia is not subject to a limitation as to time (imposed by or under a law of Australia).
Mr Abdelrahman Wedissa and Mr Qusai Mubaidin (no documentation)
Granted 30OCT08. Holder(s) permitted to travel to and remain in Australia until notified that the permanent visa application has been decided or until the permanent visa application is withdrawn. Multiple travel."
Mr Mohammed Namaoui (New Zealand citizen with subclass 444 visa)
Mr Yassine Belkamel (New Zealand citizen with subclass 444 visa)
Mr Zach Kalany, Mr Muaammar Ibrahim Najjar, Mr Abdalaal Nassir, Mr Abdulrag Osman, and Mr Mohammad Obaidi (permitted to remain indefinitely)
Jurisdictional Objection: Premature Applications
Shazlia Saleh, Mohamed Namaoui, Hamoda Dayein, Salwa Elshikh, Elhadi Almahadi, Abdelrahman Wedissa, Muhammad Ahmed, Qusai Mubaidin, Elsyaed Ali Eltaher Bashir, Suzanne Maksoud, Mohammed Obaidi, Mohammad Abdul-Hwas, Yassine Belkamel, Zach Kalany, Mu'ammar Ibrahim Najjar, Abdalaal Nassir, Mohamed Ben Mansour, Abdulrazig Osman, Applicants
C Harris, T Mills, J Noakes and H Wilson of Norton Rose Fulbright for the Respondent
Printed by authority of the Commonwealth Government Printer
Shazlia Saleh, Mohamed Namaoui, Hamoda Dayein, Salwa Elshikh, Elhadi Almahadi, Abdelrahman Wedissa, Muhammad Ahmed, Qusai Mubaidin, Elsyaed Ali Eltaher Bashir, Suzanne Maksoud, Mohammed Obaidi, Mohammad Abdul-Hwas, Yassine Belkamel, Zach Kalany, Mu'ammar Ibrahim Najjar, Abdalaal Nassir, Mohamed Ben Mansour, Abdulrazig Osman
Saudi Arabian Cultural Mission/Saudi Embassy & Embassy of the Kingdom of Saudi Arabia, Cultural Mission [2024] FWC 1152
(1999) 91 IR 362
(2022) 312 IR 1
(1914) 18 CLR 691
(2023) 111 NSWLR 550
(2003) 122 IR 215
(2001) 207 CLR 21
(1963) 109 CLR 2010
(2015) 258 CLR 31
(2022) 312 IR 74