Contractor or employee for fair work laws

Here is a useful analysis of the current state of tyhe law from the Fair Work Commission about the distinction between an employee and a contractor.

Is the Applicant a sub-contractor or employee?
[20] I will first consider whether the Applicant was an employee of the Respondent in
considering whether he is a person protected from unfair dismissal per s396(b) of the Act.
[21] In ZG Operations Australia Pty Ltd v Jamsek1
and Construction, Forestry, Maritime,
Mining and Energy Union v Personnel Contracting Pty Ltd,
the High Court emphasised the
central importance of the contract between the parties in ascertaining the existence and nature
of any relationship between them. When characterising a relationship regulated by a wholly
written, comprehensive contract which is not a sham or otherwise ineffective, the question is to
be determined solely by reference to the rights and obligations under that contract. It is not
permissible to examine or review the performance of the contract or the course of dealings
between the parties.3 However where there is no written contract, in the determination of
whether the relationship was one of employment or otherwise, it is necessary to identify by way
of inference from the dealings between the parties what the terms of that contract were.4
[22] The Respondent submits that the Applicant was hired as a sub-contractor and that the
employment contract was not valid. The Respondent states that he did not sign it rather his wife
signed it and added his name later. It is a well-established principle from L’ Estrange v F
Graucob Ltd [1934] 2 KB 394 to Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR
165 that a party who signs the contract is bound in the absence of fraud.
“It is not the subjective belief or understandings of the parties about their rights and
liabilities that govern their contractual relations. What matters is what each party by
words and conduct would have led a reasonable person in the position of the other party
to believe.”5
“[w]hen a document containing contractual terms is signed, then, in the absence of
fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly
immaterial whether he has read the document or not.”6
[23] In this matter, the Applicant provided an employment contract that had been signed by
the Respondent and witnessed which stated that the Applicant was a full-time employee.
[24] The Agreement between the Respondent and the Applicant appear to be one of an
employment relationship. The first page of the Agreement states ‘Employment Agreement’.
Furthermore, in the Recitals, the Respondent states themselves to be an employer and states Mr
Georgiou to be an employee. Furthermore, in clause 5 of the Employment Agreement, it states
that ‘the employee is to carry out all reasonable instructions and to undertake any work
reasonably required by the employer.’ The wording of the duties provided by this contract
appears to be one of an employee-employer arrangement rather than one of a sub-contractor.
[2023] FWC 749 6
[25] I am satisfied that the wording of the agreement indicates Applicant was engaged as an
employee of the Respondent on a full-time basis.”

Passages from Georgiou v Wingman Solutions Pty Ltd [2023] FWC 749 delivered 30 March 2023 per Lake DP