[2023] FWCFB 42
General information, not legal advice.
Fair Work Commission (Full Bench)
2023-02-24
Original judgment source is linked above.
[23] The Deputy President also identified several terms which he found to be implied in the contract at [115] of the Decision and set out below. While these terms were not expressly agreed upon by the parties, the Deputy President considered them necessary for the contract's reasonable and effective operation:
"a. The hourly rate was the total amount payable to the Applicant by the Respondent
and no annual leave, sick leave, superannuation or other amounts would be payable.
[24] In paragraphs [126] - [129] of the Decision, the Deputy President listed various terms, advanced primarily by the Appellant, that he did not consider to be express or implied terms of the contract as it was formed in September 2016:
"a. The Applicant's miscellaneous duties that he was required to perform included:
(i) cleaning duties pursuant to a roster;
(ii) managing company meetings;
(iii) photography duties for other companies for which the Respondent would be paid.
[25] Turning to the contractual variation that occurred in January 2017, the Deputy President found at paragraph [131] of the Decision that the contract was amended such that the Appellant's working days increased from three to five days per week. However, he did not find any other variation of the contract had occurred. Notably, he did not consider that the contract had been varied in as to allow the Respondent to exercise a greater degree of control over the Appellant.
[26] The Deputy President proceeded to characterise the contract, identifying aspects which pointed towards an employment relationship. The Deputy President considered that the Respondent initially sought to engage a part-time employee on a "time-structured" basis to be indicative of an employment relationship. Similarly, the contractual requirement to work on fixed days demonstrated a greater degree of control by the Respondent. Also pointing to an employment relationship was that the Appellant's work had to be performed personally and could not be delegated. The Deputy President considered the factor which mostly strongly pointed to an employment relationship was that the Respondent was obliged to pay for fixed blocks of the Appellant's time and the Respondent could ask the Appellant to perform other tasks if his core photography and videography work were not available.
[27] The Deputy President moved to discuss other aspects that went against a finding of an employment relationship. Notably, that the Respondent could not dictate how the Appellant's work was to be performed, other than that it had to be at a requisite standard. The Appellant also likely retained intellectual property ownership over his work, which suggests that these works were assets of his own business. Likewise, the Appellant was not paid any amounts for annual leave, sick leave and other similar benefits, and income tax was not deducted from the Appellant's pay. Further, at the beginning of September 2016, the Appellant had his own clients separate from the Respondent's business, and this was a key reason why he was initially engaged as a "contractor" for three days per week.
[28] The fact that the Appellant provided his own equipment pointed slightly towards a contracting relationship, though the Deputy President found that the supply of equipment is not itself inconsistent with an employment relationship. Additionally, the Deputy President considered that photographers are frequently engaged as both independent contractors and as employees, and noted that there is nothing inherent about photograph/videography/marketing work that points specifically towards an employee or independent contractor relationship.
[29] The Deputy President finally turned his attention to the impact that the label of contractor, which was initially agreed upon by both parties, had on the question of characterisation:
"[154] The Respondent was originally recruiting for an employee. However, the bargain of the parties consciously proceeded in a different direction - at the Applicant's behest - where they agreed a "contractor" relationship would ensue. The context for this was that the Applicant was, at that time, working only as a contractor, he had his own existing business and customers, and he wanted to preserve and continue them. I consider that this context helps "assist in identifying the purpose or object of the contract" as it was made (and, other than the Variation, remained unchanged).
[155] The absence of a formal documented agreement lends significance to the parties' own characterisation of the arrangement between them in these circumstances and reflects the purpose or object of the contract they sought to achieve. That object was for the Applicant to remain a contractor, but while working on fixed days for the Respondent." [citations omitted]
[30] Ultimately, the Deputy President came to the following conclusion:
"[156] When considering the totality of the relationship between the parties having regard to all the matters above, I conclude that the correct characterisation of the Contract as it was formed in around 23 September 2016 was that of an independent contracting arrangement. The characterisation was not changed by the Variation. Other than the increase of the days to be worked, I am not satisfied there is evidence that the parties expressly sought to alter to or detract from the terms of the Contract by the Variation and I am not satisfied from the evidence that there was a manifestation of control that would other change the character of the control by those practices, together with the Variation.
[157] It is for this reason that I find that the Applicant is not an employee and, accordingly, his application must be dismissed."
[31] In light of the complexity of the matter before him, the Deputy President subsequently considered whether the Appellant's unfair dismissal application would have been successful, had he been an employee. At [188] of the Decision, following a detailed analysis of the matters specified in s.387 of the Act, the Deputy President was satisfied that the dismissal of the Appellant would have been harsh, unjust and unreasonable had he been incorrect about the Appellant not being an employee. On this counterfactual basis, and pursuant to s.392(1) of the Act, the Deputy President noted at [200] of the Decision that he would have ordered the Respondent pay the Appellant an amount for lost remuneration.
[32] The Appellant raised 12 grounds of appeal in his Form F7 - Notice of Appeal, which were subsequently expanded upon in written and oral submissions. The grounds, as set out in the Notice of Appeal, are as follows:
[33] The Decision subject to appeal was made under Part 3-2- Unfair Dismissal - of the Act. Section 400(1) of the Act provides that permission to appeal must not be granted from a decision made under Part 3-2 unless the Commission considers that it is in the public interest to do so. Further, in unfair dismissal matters, appeals on a question of fact can only be made on the ground that the decision involved a 'significant error of fact' (s.400(2)). Section 400 of the Act manifests an intention that the threshold for a grant of permission to appeal is higher in respect of unfair dismissal appeals than the threshold pertaining to appeals generally.
[34] The public interest test in s.400(1) is not satisfied simply by the identification of error or a preference for a different result. In GlaxoSmithKline Australia Pty Ltd v Makin, a Full Bench of the Commission identified some of the considerations that may attract the public interest:
"... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or they result in counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters..."[4]
[35] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.[5] However, that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.
[36] The Full Bench is satisfied that the grant of permission to appeal in this matter is in the public interest. We are of the view that the appeal concerns issues of importance and general application concerning the proper approach to interpreting and applying the High Court decisions of Jamsek and Personnsel Contracting. Permission to appeal is therefore granted in accordance with s.400(1) of the Act.
[37] We have read and considered all the material filed by the Appellant and Respondent on appeal. We are not satisfied that the Appellant has identified any instance of appealable error in the Decision. We consider that the Deputy President's approach to dealing with the Appellant's application was correct and open to him on the facts and evidence before him. We agree with the Deputy President's ultimate conclusion that the Appellant was not an employee of the Respondent and therefore reject Grounds 1 and 2 of this appeal. Further, we are satisfied that the Deputy President properly applied the correct legal principles to determine whether the Appellant was an employee or independent contractor of the Respondent, as brought down in Personnel Contracting and Jamsek.
[38] However, given the appeal raises questions regarding the interpretation and application of the recent High Court approach to determining whether a person is an independent contractor or employee, in circumstances where the contract is entirely oral, we will address the Appellant's remaining grounds of appeal.
[39] Grounds 3 and 4 are, in our view, the most contentious grounds of appeal. Both grounds challenge the Deputy President's findings regarding recourse to post-contractual conduct. The Appellant alleges that the circumstances of the present appeal differ from Personnel Contracting, Jamsek and other High Court decisions as it relates to an unwritten contract which was partly oral and partly implied. The Appellant agrees that the approach taken in Personnel Contracting and Jamsek applies to oral contracts and submits that such an approach allows recourse to post-contractual conduct. Ground 3 alleges that the Deputy President erred by finding it was "unnecessary to consider post-contractual conduct for proof of the terms of the contract", especially as he found at [153] of the Decision that the contract was not comprehensive, although we consider that when paragraph [153] is read as a whole, it is apparent that the Deputy President used of the word "comprehensive" to indicate that the terms of the contract were not voluminous. The Appellant furthers this assertion by contending that post-contractual conduct can be relevant to construing and interpreting the terms of the contract. Specifically, Ground 3 alleges that the Deputy President erred by failing to find that wearing a uniform, attending staff meetings, needing approval for absences and other work practices were terms of the contract as varied in January 2017.
[40] The Respondent submits that the Appellant mischaracterised the Deputy President's reasoning. They say that the Deputy President reasoned, consistent with Personnel Contracting and Jamsek, that post-contractual conduct may only be relevant and available in limited exceptions. We agree with the Respondent. The Deputy President did not indicate that post-contractual conduct is "unnecessary". To the contrary, the Deputy President accepts that post-contractual conduct can be used when there is doubt about contract formation or whether it was a sham, to ascertain the scope of the terms of an oral contract and to prove variation in the contract. However, the Deputy President held that the terms of the contract, as varied in January 2017, cannot be added to, or subtracted from by reason of post-contractual conduct. We note that this would be, in effect, reverting back to the multi-factorial test which focuses on the indicia of employment as opposed to the parties' rights and duties under the contract as it was formed.
[41] In support of the Deputy President's approach, we have had regard to the recent Federal Court decision of Secretary, Attorney-General's Department v O'Dwyer [2022] FCA 1183. At [28]- [29], Goodman J confirmed that Personnel Contracting and Jamsek apply where there is no wholly written contract and expressly rejected the applicability of the multi-factorial approach in such cases. Accordingly, we are satisfied that the Deputy President's approach to post-contractual conduct in this matter is reflective of the High Court's reasoning in Personnel Contracting and Jamsek and we find no error as alleged in Ground 3.
[42] Ground 4 alleges that the Deputy President erred by refusing to consider conduct after the January 2017 variation to determine whether there was an imposition of work practices that gave rise to a contractual right of control. From the conclusion above, it follows that Ground 4 cannot succeed. We have confirmed the Deputy President's approach to post-contractual conduct was correct and therefore he did not err by failing to consider whether post-contractual conduct evinced a contractual right of control.
[43] Accordingly, we reject Grounds 3 and 4.
[44] Ground 5 asserts that the Deputy President erred at [135] of the Decision by finding that the evidence of the parties' conduct or work practices did not manifest an assumption of a right of control over the Appellant. The Appellant submits that he was subject to the Respondent's authority and right to exercise control over his performance at work, for example, by performing the tasks he was directed to perform during a routine fulltime working week. The Respondent submits that Ground 5 is no more than a bare assertion that the Deputy President's conclusion with respect to this issue was wrong. We note that these submissions were already put to and dealt with by the Deputy President at first instance. The Deputy President's findings on this issue are set out at [134] and [135] of the Decision:
"[134] I accept there were some work practices suggestive of an increased level of control or power. They included the Applicant's use of an email address and the (likely) wearing of a uniform. The regularity of Mr Muller's hours and the participation by Mr Muller in staff team meetings (c.f. 16 December 2016) are similarly suggestive of an increasing level of control. The meeting minutes of 16 December 2016 describe Mr Muller's role somewhat more broadly to include "Media Coordinator", which was not a task expressly referred to in the Contract (cf. photography, videography and marketing).
[135] However, when assessed against the evidence as a whole during this period, I do not consider that the evidence of the parties' conduct or work practices during this period rises to such a level that it manifests an assumption of a right of control over Mr Muller by the Respondent that was sufficiently different from the terms of the Contract originally agreed.
[136] I do not consider that recourse to the post-contractual conduct occurring after the Variation assists, other than I have set out above. In those circumstances, I do not consider those matters appropriate to have regard to in characterisation of the Contract or the Variation.
[45] We find no error in the Deputy President's findings on this issue. We do not agree that the Deputy President erred by focusing on whether an assumed right of control over the Appellant by the Respondent was 'sufficiently different' from the terms of the contract as originally agreed. As we have stated above, the emphasis on the terms of the contract as originally agreed aligns with High Court precedent and reflects the Deputy President's approach to not consider post-contractual conduct in a way which amends the terms of the contract after it was varied.
[46] Ground 6 alleges that the Deputy President erred by finding that it was not a term of the contract that the Appellant was unable to reject a direction to perform duties or a direction on how he should perform those duties. The Appellant submits that this finding is inconsistent with the Deputy President's other findings at [139] and [142] of the Decision. Paragraph [142] of the Decision is set out as follows:
"[142] The Applicant's submissions stated that the work performed was as directed by the Respondent. I consider that proposition is generally correct in what was to be performed and when. However, and relevantly, it was not the case that the Respondent dictated how the work was to be undertaken, other than it remained the case that work needed to be performed to a requisite standard."
[47] Having regard to the Appellant's second contention, we note that the Deputy President explicitly rejected at [142] that the Respondent dictated "how" the Appellant's work was to be undertaken, and we are of the view that such a finding was open to him on the evidence and is not infected with error.
[48] As for the Appellant's first contention, we do not consider that the Deputy President's finding that the Respondent directed "what was to be performed and when" contradicts the finding that there was no contractual term that the Appellant was unable to reject a direction to perform duties. Further, we do not agree that [142] evinces that such a term must exist in the contract. We consider that in both employment and contracting relationships, the Respondent would likely direct work to the Appellant and there would be general guidance about when such work would be performed. Having regard to [139], the Deputy President considered that it was likely that, in some circumstances, the Respondent might ask the Appellant to perform other tasks, incidental to the particular services the Appellant had been contracted to perform. We agree with the Deputy President that this often speaks to an employment relationship, but do not find that this contradicts the Deputy President's finding that the Appellant was unable to reject a direction to perform duties.
[49] Therefore, we do not find any error in Grounds 5 and 6 and we dismiss these grounds of appeal.
Grounds 7 and 8: Own Business/Employer's Business Dichotomy
[50] Grounds 7 and 8 allege that the Deputy President erred in failing to find that after the variation of the contract, the Appellant was not conducting his own business as distinct from serving in the Respondent's business. The Appellant points to the fact that the Deputy President found that the Appellant was performing more work for the Respondent's business than his own business and that the Appellant was not working for anyone else, except for sporadic weekend work at weddings. Further, the Appellant submits that the consequence of the variation and the Appellant's hours becoming full time is that the Appellant was subordinate to the Respondent's business.
[51] The Respondent rejects this proposition. The Respondent submits that by the initial contract terms, the Appellant was free to work elsewhere or for others, so long as it did not conflict with the contracted time which would be devoted to the Respondent's work. The Respondent submits that there was no term in the contract which required the Appellant to present himself as an employee of the Respondent or that the Appellant was required to work exclusively for the Respondent during weekdays. The Respondent contends that the effect of the January 2017 variation was that the Appellant's availability to perform work increased from three to five days and that there were no other express amendments.
[52] We agree with the Respondent. The Deputy President found that the only express contractual variation from January 2017 was that the Appellant's workdays increased from three to five. The Appellant's reliance on the fact that, after the variation, he was not working for anyone else is again an attempt to take post-contractual conduct into account. Accordingly, we are satisfied there is no inconsistency in the Deputy President's findings, and we find that the Deputy President did not fall into error. Grounds 7 and 8 are therefore dismissed.
[53] Ground 9 alleges that the Deputy President erred in failing to find that the effect of the variation was that the Appellant's "hours of work increased from part time to full time" and that this materially increased the Respondent's right of control over the Appellant such that the Appellant's capacity to work in his own business was diminished. We are of the view that this ground is merely a rewording of the Appellant's previous grounds of appeal and submissions. We have dealt with the contractual right of control in Grounds 5 and 6 and the own business/employer's business dichotomy in Grounds 7 and 8. The Appellant has raised no new contentions that have not already been put to the Full Bench in other grounds and we see no utility in reventilating these issues. As discussed above, the Deputy President's findings on these matters are not infected by error and we dismiss this ground of appeal.
[54] Ground 10 asserts that the Deputy President either failed to consider or failed to find that there was a further variation to the contract after January 2017, and that this variation gave rise to an employment relationship. While the Appellant submits that they put this submission to the Deputy President at first instance, this was not asserted in their outline of submissions from first instance and in their final oral submissions at first instance, the Appellant confirmed their case relied on the terms of the contract as they existed at its inception and as at the January 2017 variation.[6] The Appellant has failed to identify any evidence that supports that a variation of the contract after January 2017 occurred, and nor has the Appellant identified what terms of the contract might have been varied after January 2017. Therefore, apart from the Appellant seeking to advance a submission not made at first instance when there was the opportunity to do so, this ground of appeal is without substance and does not disclose any error, let alone appealable error, and is accordingly dismissed.
[55] Ground 11 takes issue with the Deputy President's consideration of the labels used by the parties to describe the nature of their relationship. The Appellant asserts that the Deputy President erred at law by giving unreasonably high regard to the label assigned by the parties to their relationship at [152]-[155] of the Decision. The relevant paragraphs of the Decision are set out as follows:
"[152] While the recent High Court authorities make it clear that recourse to the parties' description or "label" of the arrangement should be approached cautiously - and in many cases not at all - the case before me is a matter where I consider it appropriate to have regard to the parties' own characterisation of the Contract (unchanged upon the Variation). I do so not as a "tie breaker" nor as a determinative factor, but as a factor relevant to the "whole of the contract" and which, in this case, "can shed light on the objective understanding of the operative provisions of their contract".
[153] Here, the contract is not comprehensive and - indeed - is entirely oral in relation to the limited express terms that were agreed, and the description given by the parties of their relationship in this context is not merely a label or descriptive gloss but, in the bargain struck by the parties before me, states in a short-hand way the very outcome that the parties were seeking to achieve.
[154] The Respondent was originally recruiting for an employee. However, the bargain of the parties consciously proceeded in a different direction - at the Applicant's behest - where they agreed a "contractor" relationship would ensue. The context for this was that the Applicant was, at that time, working only as a contractor, he had his own existing business and customers, and he wanted to preserve and continue them. I consider that this context helps "assist in identifying the purpose or object of the contract" as it was made (and, other than the Variation, remained unchanged).
[155] The absence of a formal documented agreement lends significance to the parties' own characterisation of the arrangement between them in these circumstances and reflects the purpose or object of the contract they sought to achieve. That object was for the Applicant to remain a contractor, but while working on fixed days for the Respondent." (citations omitted)
[56] The Appellant submits that the Deputy President gave "too high a regard to 'contractor' labels assigned by the parties" and incorrectly considered that labels were a "relevant factor" in construing the contract as a whole. The Appellant contends that the Deputy President should have instead "recognised that the terms of the contract were more in common with a traditional contract of employment and, further, were incomplete."
[57] The Respondent identified, correctly in our view, that the Appellant has not challenged the Deputy President's identification of the relevant principle in terms of the relevance of labels to determining whether a relationship is one of independent contractor or employee. We note that the Deputy President acknowledged that caution ought to be taken towards any consideration of characterisation applied by parties to a work relationship at [96], [97] and [152] of the Decision. We are satisfied that the Deputy President applied such caution in the Decision and that he did not place too much weight on the parties' own description of their relationship. Accordingly, we find no error and dismiss this ground of appeal.
[58] Ground 12 alleges that the Deputy President erred by finding that the mode of remuneration, tax arrangements, payment of a flat hourly and the lack of paid leave were each suggestive of an independent contracting relationship at [148] of the Decision. The Appellant submits that "these considerations are merely consequential upon the 'lay' labelling adopted by the parties about a contractor arrangement and are of no or little bearing." The Appellant relied on the following passage from ACE Insurance Limited v Trifunovski (ACE)[7] which the Full Bench considered had not been overtaken by Personnel Contracting in Deliveroo Australia Pty Ltd v Franco[8] at [41]:
"It is also difficult, in my view, to give much independent weight to arrangements about taxation, or even matters such as insurance cover or superannuation. These are reflections of a view by one party (or both) that the relationship is, or is not, one of employment. For that reason, in my view, those matters are in the same category as declarations by the parties in their contract (from which they often proceed). They may be taken into account but are not conclusive. These matters are less important than the adoption by the parties (where this occurs) of rights and obligations which are fundamentally inconsistent with basic requirements of a contract of employment, such as the ability to delegate the discharge of obligations under a contract to another person, or where there is a lack of control over how work is done." (emphasis added)
[59] We have considered the Appellant's submissions and find no inconsistency between the Deputy President's findings and the reasoning in ACE above. We do not agree that ACE suggests that these aspects of the contract should be deemed to have little or no bearing or that they are simply a consequence of the parties' own labels of their relationship. Rather, we find that ACE holds that "[labels] may be taken into account but are not conclusive". Consistent with ACE, the Deputy President took these factors into account and found them to be suggestive of an independent contracting relationship. The Deputy President did not deem these factors were conclusive evidence that the Appellant was an independent contractor and not an employee. As is clear from the Decision, the Deputy President considered a myriad of evidence and aspects of the contract which pointed towards an independent contracting relationship, and importantly, he also considered other aspects which leaned towards an employment relationship. The Deputy President took all these considerations into account in characterising the contract and making his ultimate finding that the Appellant was not an employee. Therefore, we are satisfied that the Deputy President's findings are sound and disclose no error. We dismiss this ground of appeal.
[60] Given that we have found that the Deputy President did not err by finding that the Appellant is not an employee of the Respondent, there is no need for us to consider the alternate outcome posed in the Decision.
[61] Permission to appeal is granted.
[62] The appeal is dismissed.

[2] John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 4513 at [93]-[94]; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 442.
[5] Wan v AIRC [2001] FCA 1803; (2001) 116 FCR 481 at [30].
[6] AB 221, Transcript 30 June 2022 at PN 608.
[7] [2013] 209 FCR 146 at [37] (Buchanan J, with whom Lander and Robertson JJ agreed).
Printed by authority of the Commonwealth Government Printer
Shelton Muller
Timbecon Pty Ltd [2023] FWCFB 42
Appeal against decision [2022] FWC 1685 of Deputy President Bell at Melbourne on 06 October 2022 in matter number U2022/2774 - permission to appeal granted - appeal dismissed.
[15] After setting out the background and factual findings, the Deputy President turned to consider the applicable legal principles to determine whether the Appellant was an employee or an independent contractor. The Deputy President began by pointing to the relevance of CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 (Personnel Contracting) and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 (Jamsek), both of which were addressed by the parties in their submissions.
[16] Given the contract between the Appellant and Respondent was wholly oral, and noting that this was a key point of distinction from Personnel Contracting, the Deputy President addressed additional matters concerning post-formation conduct and variation. To this end, the Deputy President observed that where a contract is not wholly in writing, it is necessary at the threshold level to identify the terms of the contract, the parties to it and when it was formed because, as the Deputy President noted, inevitably some of these aspects will be in dispute. The Deputy President then provided the relevant principles to identify express and implied terms in an oral agreement,[2] and noted that like written contracts, recourse may be had to external events where appropriate.[3]
[17] The Deputy President subsequently considered the characterisation of traditional indicia, including the existence of a right to control and the "own business/employer's business" dichotomy. On this point, the Deputy President noted that Personnel Contracting confirmed that while the elements of control and the own/employer's business dichotomy are significant matters, it remained appropriate to consider the "totality" of the relationship between the parties albeit as framed by the rights and duties established by the parties' contract.
[18] Next, he turned to the use of "labels" as the Respondent placed some importance on the fact that the parties had called the relationship a contracting relationship, whereas the Appellant submitted that "the High Court has held that the label ascribed by the parties to the engagement is of no consequence." The Deputy President did not accept that the High Court had made such a definitive statement, although he did accept that the parties' own descriptions cannot be determinative.
[19] Finally, the Deputy President considered how conduct which occurs after the formation of the contract should be characterised. The Deputy President considered the judgments of Kiefel CJ, Keane and Edelman JJ at [45], and Gordon J (Steward J concurring) at [176], which clarified that such conduct cannot, as a general rule, be admitted for the purpose of construing the contract. He noted that while there are exceptions to this general rule, as discussed below, they are confined.
(2010) 197 IR 266
(1995) 185 CLR 410
(2001) 116 FCR 481