Fair work issues; employee or contractor

Following upon yesterday’s post, here is another very interesting extract from a Fair Work Commission decision dealing with the legal principles which are involved when determining whether a person is an employee or an independent contractor.

“Consideration

[39] The issue to be determined in this application is whether Ms Helft was an employee of the respondent.

[40] The decisions of the High Court in ZG Operations Australia Pty Ltd v Jamsek 45 and Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd46 emphasise the primacy 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.47 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.48

[41] The respondent contends that there is a written contract between the parties and refers to the Agency Agreement discussed earlier in this decision at [18]-[25]. Mr Webb gave evidence that Ms Helft “should have” signed a copy of the Agency Agreement on the basis that it was, and remains, the protocol that the respondent’s management is to follow when engaging sex workers. However, the respondent was unable to produce to the Commission a signed copy of the Agency Agreement it purports to have executed with Ms Helft, or with any other sex worker. Nor is there any evidence before the Commission from the interviewing manager as their identity is not known.

[42] Ms Helft recalls signing a contract in August 2019 but cannot recall the terms of that contract. Nor could Ms Helft recall who interviewed her, or any of the matters discussed during the interview. 49 Ms Helft gave evidence that her “understanding is that the requirement to sign a contract is something that all sex workers must do in order to work for a licenced brothel.”50 Notwithstanding this, Ms Helft’s view is that there is an industry wide prevalence of engaging vulnerable sex workers on “dodgy” contracts, with a different “set of rules” applying in the venue.51

[43] In these circumstances, Ms Helft contends that there is no evidentiary basis for a finding that the Agency Agreement set out the rights and obligations of the parties. 52 I accept this submission. There is insufficient evidence which would allow a reasonable inference to be drawn that Ms Helft signed the version of the Agency Agreement that is before the Commission. I therefore cannot accept that Ms Helft signed a document which detailed the legal rights and obligations of the parties such that it might be decisive of the character of the relationship. Further, I do not consider there to be any evidence of the specific terms of the contract Ms Helft says she signed in 2019. It follows that on the evidence, no express terms of any agreement can be identified.

[44] Ms Helft does not dispute that she has a contractual relationship with the respondent. 53 Ms Helft contends that the “nature of the relationship, and the terms of the contract between the parties must therefore be determined by way of inference from the dealings between the parties, the manner in which the relationship worked in practice and the totality of the relationship.”54 Further, Ms Helft submits that “consideration of the reality of the relationship and the dealings between the parties must result in the characterisation of the relationship between the parties as one of employment.”55 While I have rejected that the Agency Agreement represents a valid contract between the parties, I note Ms Helft submits in the alternative that the Agency Agreement is a sham and the Commission should characterise the relationship by reference to the dealings between the parties and the reality of the relationship.

[45] In light of my conclusions at [43], I consider that the characterisation of Ms Helft as an employee or an independent contractor of the respondent can only be achieved by analysis in the manner prescribed by Ms Helft, irrespective of whether such a characterisation effectively represents the relationship pursuant to the contractual rights and obligations in any misplaced written agreement. Recent developments in the law suggest that such an approach is available in these circumstances, 56 and it is consistent with the manner in which Ms Helft presented her case. In the circumstances described an assessment of the nature of the relationship in the manner requested is appropriate.57 The exercise therefore involves identifying whether the matters relied upon by Ms Helft amount to rights and obligations of the parties.58

Relationship between the parties

[46] Ms Helft submits that the terms of the contract between the parties were as follows: 59

(a) Ms Helft was required to work at the respondent’s premises.

(b) Ms Helft was expected to adhere to the respondent’s rostering arrangements, including that Ms Helft was explicitly informed by the posters put up by the respondent in the staff areas that she was unable to cancel her shifts.

(c) Ms Helft was unable to delegate her work or shifts to others.

(d) Ms Helft was required to adhere to the respondent’s dress code.

(e) The prices for Ms Helft’s services were set by the respondent.

(f) Ms Helft was expected to comply with the respondent’s instructions as to how she was to perform her work. These instructions included the following:

(i) Ms Helft had to physically sit and stand in the workplace, even when she was not completing client bookings.

(ii) Ms Helft could not use her personal phone on the “floor” when clients were present;

(iii) Ms Helft could only use certain equipment and/or supplies, and only in a prescribed manner or circumstances, for example:

  1. Ms Helft was not allowed to use oil in the rooms.
  2. Ms Helft was not allowed to use the respondent’s towels and drop sheets on the floor.

(g) Ms Helft was expected to use equipment supplied by the respondent, including towels, condoms, lubricant, sheets and other hygiene and cleaning supplies, and abide by any limits on access to such equipment and supplies enforced by the respondent.

[47] The respondent has addressed specific components of this evidence, in addition to other aspects of Ms Helft’s material that contribute to or supplement the matters set out at [46] above. I turn now to consider this evidence and, where appropriate, the parties’ contentions before assessing the nature of the relationship.

Location

[48] Ms Helft’s evidence is that she worked regular six-hour shifts on Friday and Saturday nights at the respondent’s Flinders Street premises, with the occasional additional shift. 60

[49] The respondent submits that its approved licence relates to the premises in Flinders Street. The nature of the work involved Ms Helft performing services at the respondent’s licenced premises. In considering the nature of the relationship, little significance can therefore be attached to the fact that Ms Helft worked at the respondent’s Flinders Street location during each shift. 61

Rosters

[50] As noted above at [48], Ms Helft’s evidence is that she worked regular six-hour shifts on Friday and Saturday nights at the respondent’s Flinders Street premises, with the occasional additional shift. 62 Ms Helft was provided with a phone number to which she sent text messages regarding any work-related matters, including her availability to work.63 Ms Helft says that she was required to provide the respondent with her availability by each Wednesday for the following week.64 Repeated cancellations, no shows or early finishes would result in a sex worker being taken off the roster for one week.65

[51] The respondent submits that approximately 130 sex workers have executed agency agreements, each of whom seek an opportunity to utilise the respondent’s premises. The performance of work on Friday and Saturday nights is said to be particularly lucrative such that rostering arrangements are required to enable efficient administration. 66

[52] Mr Webb gave evidence that (a) the Booklet sets out the respondent’s intentions with respect to the working conditions applicable to sex workers, and (b) it has not been changed since at least 2015. Mr Webb’s evidence in this respect was not challenged and I accept it. The Booklet identifies that the establishment is “busy” and has in place a room allocation system to avoid confusion. 67

[53] In relation to the roster, the evidence reveals that there was a “waiting list.” Sex workers were placed on the waiting list if no shifts were available and would be contacted in the event of a cancellation. 68 There is no evidence of Ms Helft or any other sex worker being placed on the waiting list, or how the waiting list functioned.

[54] There is evidence before the Commission of Ms Helft making ad hoc requests to work, absent being placed on a roster. Firstly, Ms Helft made an undated request by text message to work “tonight at midnight” which was readily agreed to. Secondly, Ms Helft made a request on Tuesday 22 March 2022 to work the coming Friday and Saturday night from midnight, and the respondent accepted that request the same day. 69 Each of Ms Helft’s requests were acceded to, absent any reference to a roster.

[55] Ms Helft says that she was unable to cancel shifts once they were allocated. 70 Ms Helft relies on posters said to have been made visible to sex workers at the respondent’s premises in support of her position. The first poster states, amongst other things, “consistent cancellations including cancelling on the day & No Shows will unfortunately NOT be tolerated. If the roster for the day is full we will ensure to put you on a waiting list incase [sic] there are any cancellations.”71 While Ms Helft’s evidence is that she was unable to cancel a shift, it is apparent from the evidence before the Commission that Ms Helft did cancel a shift on 27 November 2021 around three hours before it was meant to commence and the response from the respondent was “OK babe feel better xx.”72 I therefore do not accept that the poster was indicative of the rights and obligations of the parties, as it appears instead that Ms Helft had the freedom to cancel her shift.

[56] The second poster is illegible in part and provides “Please be aware that if you CANCEL, NO SHOW, GO HOME EARLY too many times you will be taken off all perm [sic] shifts (if you have any) and you will be taken …..ster for 1 week.” 73 There is no evidence before the Commission of Ms Helft being removed from a roster or not rostered by the respondent for any reason. I accept that the respondent had the right to exclude Ms Helft from a roster by not offering, or rejecting Ms Helft’s offer, to undertake a shift. I observe, however, that no right or expectation to work any future roster is apparent of the evidence, and the arrangement is one of ad hoc offer and acceptance.

[57] Generally, the posters relied upon by Ms Helft do not specify that sex workers could not cancel a single shift. They refer to “consistent cancellations” or cancelling “too many times” not being tolerated. It is to be inferred from the reference to sex workers being placed on a “waiting list” that the posters were reflective of the respondent’s desire to avoid consistent and repeated late cancellations.

[58] I find that the rostering system was a necessary operational requirement for the organisation of sex worker shifts, consistent with the respondent’s licence which is limited to 11 booking rooms for a maximum of 18 sex workers at any time, amongst a wider group of, as submitted, 130 sex workers. 74

Shifts

[59] Ms Helft contends that she was required to work at least six-hour shifts. 75 Mr Webb denied that there is a minimum shift length but accepted that there may have been a poster distributed by the respondent to this effect.76 I accept that the shifts worked were generally requested or implied to be a minimum of six hours.

[60] In large part, the respondent’s operations involve the facilitation of sex work by making a limited number of booking rooms available for use by sex workers. The organisation of shifts into six-hour blocks is unremarkable in circumstances where the respondent has an operational need to manage the demand on its booking rooms.

[61] The respondent submits that when and how Ms Helft undertakes her work is a matter for her. 77

[62] Ms Helft gave evidence of a conversation with Ms Petts where she was coarsely pressured into continuing a shift when Ms Helft wanted to go home. 78 Further, Ms Helft contends that Ms Petts would “bribe” sex workers with lollies and cookies to continue their shifts beyond the end time.79 However, Ms Helft gave evidence of her understanding that all receptionists received a monetary bonus if there were over 100 bookings per shift, and she believes that this is why sex workers were often pushed to stay for the duration of their shift or longer.80

[63] Ms Helft’s evidence is not inconsistent with a right to leave a shift early, or to perform sex work or related work at her discretion throughout a shift. The evidence reveals that some pressure may be exerted by Ms Petts as a means to encourage sex workers into working shifts of six hours or more. However, I consider that the incentive structure explains why pressure may have been placed on sex workers to work longer shifts.

[64] I find that the respondent had an expectation that sex workers would work a six-hour shift. This reflects an agreement as to the rights between the parties. However, the evidence before the Commission does not persuade me that Ms Helft could be compelled to work longer when the respondent encouraged her to do so. Nor am I satisfied that the respondent held a right to discipline Ms Helft for any failure to work the minimum shift length, or extended shifts upon request.

Delegation

[65] Ms Helft submits that she was unable to delegate her work or shifts to anyone else. 81

[66] Ms Helft said that where clients wish to see her, she is unable to delegate that work to another sex worker. When pressed on this matter during cross examination, Ms Helft accepted that sex work is unlikely to be capable of delegation. I accept this evidence.

[67] Further, there is nothing before me that suggests that Ms Helft could delegate a shift. Rather the respondent’s rostering system reveals that “shifts” were interchangeable between sex workers and that there was a waiting list in the event of a cancellation. It was therefore the respondent that retained the choice as to who would fill a shift if a sex worker cancelled, and not any particular sex worker.

Dress code

[68] Ms Helft submits that she was required to adhere to the respondent’s dress code. In this respect, the Booklet states relevantly as follows: 82

“Dress code is sexy, sassy and sophisticated. Confidence is the key to looking great. Make up, hair and nails add to the experience. Hygiene and being well groomed at all times is expected.”

[69] Mr Webb gave evidence that sex workers could not be naked in the lounge or common areas. Ms Helft also gave evidence that she was not allowed to “be naked.” 83 To the extent that the respondent put parameters on sex workers being naked or having their nipples or genitals visible when not in the booking rooms,84 such boundaries amount to mere courtesies and are not of themselves demonstrative of any rights and obligations between the parties.

[70] The high watermark of Ms Helft’s evidence as it relates to a dress code imposed by the respondent is that she was “typically” required to wear lingerie and high heels, “or a dress if we wanted to.” 85

[71] I consider that there was freedom afforded to Ms Helft with respect to the dress code, provided that it met the vague expectations extracted from the Booklet. Relevantly, Ms Helft could elect to wear a dress or lingerie and there appears to be no other conditions with respect to the dress code apparent on the evidence.

Advertising

[72] Ms Helft gave evidence that the respondent placed her profile on its website and identified Ms Helft on its “Who’s Available” roster when performing a shift. 86 It is noted that Ms Helft did not specifically identify this evidence as inferring a term of the contract indicative of an employment relationship.87

[73] During cross examination, Mr Webb denied advertising for Ms Helft, but agreed that the respondent placed Ms Helft’s profile on its website. The parties did not otherwise explain what this type of profile was, who controlled the various elements of the profile, and whether it was mandatory for all sex workers to maintain in order to perform shifts at the respondent’s brothel.

[74] Given the deficiencies in the evidence as to relates to advertising, I do not consider that the evidence gives rise to any inference as to the terms of an agreement identifying the rights and obligations of the parties.

Price and services

[75] Ms Helft submits that the prices for her sex work services were set by the respondent. 88 The respondent submits that Ms Helft decides the price for her personal services, and the nature of those services, when contracting with her client.89

[76] Ms Helft gave evidence that “[w]e offered two services to clients,” referring the standard and deluxe services. 90 The respondent produced a poster which details the various services offered by sex workers, including the standard and deluxe services.91

[77] During the hearing, Mr Webb gave evidence that the poster contains the prices for each service which are reflective of industry standard. The poster explains the amount payable for the room fee and for the sex worker, being two different amounts. However, Mr Webb explained that the sex workers are free to negotiate prices with each individual client. This is consistent with the information in the Booklet which states: “negotiate services before arriving at reception,” “[r]eception will not negotiate services for you” and “[i]f you are doing additional services with your client it is your responsibility to collect the monies charged for these extra services.” 92

[78] I am satisfied that Ms Helft had the right to negotiate the type of services she provided and the price for those services with any client.

Payment

[79] Ms Helft contends that the respondent set prices for her services. The respondent would collect cash payment from the client, withhold 40% of the fees paid representing the “room fee,” and provide the balance to Ms Helft. 93 A specific request by a client for Ms Helft by name would yield a $20 bonus from the respondent.94 Ms Helft says that she does not hold an Australian Business Number (ABN).95

[80] It is not in dispute that the client pays the respondent the cost of the room hire. Further, while it is not in dispute that Ms Helft was paid in cash for services rendered, there is some inconsistency in the evidence as to the manner in which Ms Helft received the cash payment for services rendered.

[81] Ms Helft’s contention during the hearing was that the client’s cash payment is handed to her by reception and not by the client. Ms Helft produced a series of invoices 96 which evidence payments made by clients in cash. It is not evident from these invoices whether the cash payment was provided by the client directly to Ms Helft or handed to Ms Helft by reception because they each attribute the entire sum to “room fee.” However, Ms Helft’s position is supported by the content of the Booklet, which provides:97

“Payment – the client pays the brothel the cost of the room hire and for the cost of the services provided. The money is handed discretely to the Service Provider. It is the Service Providers [sic] responsibility to hold their money and for this reason lockers are provided.”

[82] Mr Webb gave evidence that the respondent does not have visibility over the cash paid directly to Ms Helft. The respondent’s position is that the client pays the sex worker directly the agreed cost in return for services rendered. Mr Webb said that the respondent facilitates this process where a client seeks to pay by credit card by allowing a client to withdraw cash from the respondent’s till at the time the room fee is paid. The invoice produced by the respondent 98 as well as various invoices produced by Ms Helft99 demonstrate that in these circumstances, the client transacts directly with the respondent to pay the room fee and, where necessary, withdraws money so as to enable the payment of cash to the sex worker.

[83] It is apparent from the following material that clients are advised by the respondent upon entry that they are required to pay fees for service directly to the sex worker. Firstly, each invoice contains a note which states “PLS NOTE: The fees are for the use of rooms and facilities only. All payments for personal service that may be required are to be paid directly to the service provider.” 100 There is no basis for Ms Helft’s contention that this invoice is provided to sex workers only and that clients do not receive a copy. I therefore reject Ms Helft’s contention to this effect.

[84] Secondly, the poster produced by the respondent 101 discloses the various room fees applicable for different services. For instance, the room fee for an all-day service exceeds the room fee for the deluxe service. In addition, the posters specify that “ladies charge you” a minimum rate which differs by reference to the service sought.102 I accept that this poster supports a conclusion that sex workers may charge an amount for services that is agreed directly with the client.

[85] Accordingly, as it relates to the mechanism for payment of services rendered by sex workers, I find that different approaches apply depending upon the client’s preferred payment method. Where the client holds cash, the evidence supports a finding that transactions may occur directly between the client and the sex worker that are not visible to the respondent. This includes where, as contemplated by the Booklet, a sex worker is performing additional services with the client where the Booklet states: “it is your responsibility to collect the monies charged.” 103 Where the client wishes to effect payment by way of credit card, the respondent provides a facility for this by allowing the client to withdraw cash from its till. In these circumstances, the cash may either be given directly to the sex worker by the client in return for services rendered or provided “discreetly” by reception to the sex worker.

[86] I find, on the evidence, that there is no financial relationship between Ms Helft and the respondent. The client pays the respondent the cost of the room hire and pays Ms Helft the agreed cost in return for services rendered. Whether the cash payment is provided directly to Ms Helft by the client or handed to her discreetly by the respondent is not relevant to the issues in this application. In either scenario, the respondent derives no material benefit from the transaction between the client and Ms Helft, and merely provides administrative assistance to ensure Ms Helft was appropriately paid by the client.

Instructions on the performance of work

[87] Ms Helft submits that she was expected to comply with the respondent’s instructions as to how she was to perform her work and identifies three matters in support of this position. At the hearing, the parties were in dispute about what constituted Ms Helft’s “work.” The following analysis considers the dispute as to what constituted “work” and the evidence with respect to any arrangements between the parties when Ms Helft was not completing client bookings (“service processes”), the restriction on mobile phone usage and the use of equipment in turn.

Service processes

[88] Ms Helft contends that her work involved attending the lounge and introducing herself to clients upon their arrival. 104 The respondent’s position is that it does not issue instructions as to how Ms Helft is to perform her work. It says that as a sex worker, Ms Helft’s work was confined to the provision of sexual services to clients and did not include the “service processes.”

[89] Ms Helft contends that the respondent imposed limitations on taking breaks. 105 Ms Helft says that she felt that the respondent deliberately sought to discourage the taking of breaks by making conditions uncomfortable for sex workers to take respite in the staff area.106 Ms Helft further contends that she was compelled by the respondent to attend the lounge when clients were present.107 Ms Helft gave evidence that the receptionist, Ms Petts or sometimes the assistant receptionist would “hassle” Ms Helft to return to the lounge despite Ms Helft being on a break.108 There is no evidence before the Commission from Ms Petts or the assistant receptionist to refute this allegation and accordingly, I accept it.

[90] The Booklet contains information relevant to what is described as the “service process,” which includes the process from when a client enters the lounge, payment, pre-service practices, negotiations, post-service practices and other matters. 109

[91] Specifically, the Booklet describes how clients are to be greeted by sex workers in the lounge (sometimes referred to as “the floor.”) The Booklet explains that “…ladies can introduce themselves and must be friendly. Please smile. If you do not wish to see a client, please be professional and excuse yourself from the lounge.” 110 The Booklet further states that “when clients are in the lounge area all ladies are expected to be present in the front lounges. If you do not wish to be available for services please advise reception that you are on a break. Then advise reception upon your return.”111

[92] It is not in dispute that Ms Helft performed sex work with complete autonomy. With the exception of certain statutory requirements, 112 I am satisfied that the respondent has no right or responsibility in requiring, controlling or supervising Ms Helft’s sex work. Further, Ms Helft’s evidence and the evidence in the Booklet is that Ms Helft could refuse bookings and felt safe to do so.113

[93] However, I find that the “service processes,” as the Booklet explains, impose an “expectation” on sex workers to be present in the front lounge when clients attend the brothel. This stated expectation, coupled with the directions issued to Ms Helft to return to the lounge and refrain from taking a break, infers the existence of an agreement between the parties for Ms Helft to attend the lounge and introduce herself to clients upon their arrival, and to not take excessive breaks.

[94] I accept that Ms Helft’s agreement with the respondent extended beyond the performance of sex work and included the “service processes” as described at [93].

[95] While not contended by Ms Helft, I would not be persuaded that the other parts of the “service processes” in the Booklet not otherwise addressed in this decision disclose the existence of a relevant aspect of the relationship. These matters are largely operational necessities and bear immaterially upon the characterisation of the relationship between the parties. 114

Mobile phone use

[96] Ms Helft contends that she was not permitted to use a mobile phone while at the respondent’s premises and was directed to remove it when a client was in attendance. 115 Consistent with this evidence, the Booklet specifies that “[m]obile phones, laptops and iPads can only be used if no clients are in any of the lounge areas.”116

[97] I am satisfied that the respondent issued an instruction to Ms Helft to the effect that she could not use her mobile phone on the floor when clients were present. The respondent did not lead evidence or make submissions explaining its policy to prohibit the use of mobile phones in the lounge. I therefore accept that it formed part of the agreement between the parties.

Use of the respondent’s equipment

[98] Ms Helft submits that she was expected to use equipment provided by the respondent such as towels, condoms, lubricant, sheets and other hygiene and cleaning supplies. 117 Further, Ms Helft says that she was to abide by any limits on access to such equipment and supplies enforced by the respondent.118 Ms Helft relies on this evidence to support her contention that the respondent instructed her on how to perform her work, and as a standalone matter demonstrating the existence of an employment relationship.

[99] In the ordinary course, the provision of equipment to a worker is a factor that may be indicative of an employment relationship. However, in the particular circumstances of Ms Helft’s engagement, this requires some qualification.

[100] The Public Health and Wellbeing Act 2008 (Vic) requires the respondent to provide clean linen and towels such that the provision of this “equipment,” in addition to condoms and lubricant, is a legislative requirement. 119

[101] Ms Helft contends that the respondent imposed a limit of three towels and one sheet per client, 120 and instructed sex workers not to use oil in the rooms which stains the towels.121 The legislative requirement to provide clean linen and towels applies “for the use of clients,”122 not sex workers. The respondent meets this obligation by providing clean linen and towels to clients in return for the payment by the client of a room fee. Mr Webb gave evidence that the respondent previously had some difficulty with its laundry service such that it imposed limits on the use of towels and linen for a period of time. Mr Webb said it no longer imposes these limits. This evidence is not challenged, and I accept it.

[102] The respondent’s election to limit the number of towels and sheets to clients for a confined period is unrelated to the performance of Ms Helft’s work and does not bear upon the inquiry before me. Further, I am satisfied that any request made by the respondent to refrain from using oil is to ensure compliance with its obligations to provide clean linen to clients in accordance with the requirements of the Public Health and Wellbeing Act. As a result of these requirements, I consider that the provision of towels and linen is a cost paid for by the client as part of the room fee and not “equipment” in the sense it is understood in the context of this type of dispute. 123

Cleaning

[103] While not directly raised in Ms Helft’s submissions, Ms Helft contends that she was required by the respondent to clean the room after each booking. 124 Ms Helft said that she always did this as she “wanted clients to come into a nice, clean space and get what they paid for.”125

[104] The request of sex workers in this respect is to be distinguished from the duties required by the cleaner who is specifically engaged by the respondent. 126 The Booklet provides that sex workers are to clean and disinfect the shower, as well as remove dirty linen, once a service was complete.127 I accept that this was a relevant aspect of the agreement between the parties.

Characterising the relationship

[105] The following analysis takes into account the factual findings above and proceeds on the basis that employment and contractor relationships are dichotomous. 128 Further, Personnel Contracting suggests that the “‘own business/employer’s business’ dichotomy” shapes the characterisation inquiry. That is, while the central question is always whether or not the person is an employee, it is nevertheless useful to focus attention on whether a person is conducting his or her own independent business, as distinct from serving in the business of the putative employer.129

[106] I note that in undertaking this analysis, regard may be had to other decisions in which similar facts were considered. 130 However, the significance of considerations, and the weight to be afforded to any particular consideration, will vary significantly from case to case such that decisions with factual similarities have diminished utility.

[107] The right to control, while not necessary nor determinative of a relationship of employment in Australia, 131 has historically been the most significant indicia of an employment relationship.132 In Personnel Contracting, the High Court affirmed this position, albeit with reference only to the putative employer’s contractual right to control a person in their work.133

[108] The evidence as to the respondent’s rostering system discloses that Ms Helft determined when she performed work by notifying the respondent of her availability to work her preferred shifts. There is no evidence of the respondent expressly inviting Ms Helft to work a shift. Further, there is evidence of Ms Helft making ad hoc requests to be placed on a shift each week outside of the specified rostering arrangements. Any rostering arrangement was subject to Ms Helft’s right to decline to perform a shift, even following its allocation to her. Having regard my findings as to the necessity of the roster in the management of the respondent’s operations, I am satisfied that the rostering system, which is predicated upon Ms Helft nominating when she sought to work, tells strongly against the respondent having the right to control the times at which Ms Helft performed work.

[109] Moreover, Ms Helft had the right to refuse bookings, and negotiate the prices and types of services with each client.

[110] I find that Ms Helft retained a right to control the fundamental elements of the relationship. In summary, I find that Ms Helft had the right to:

(a) request to undertake shifts at her discretion;
(b) decline to perform a shift at any point prior to its commencement;
(c) refuse to provide services to any client at any point; and
(d) charge different amounts and adjust her services for each client.

[111] I am satisfied that the respondent’s expectation that Ms Helft would work a minimum six-hour shift establishes that the respondent had a right to control the length of a shift. However, I am not persuaded that this is a matter of significant weight in the assessment of the relationship between the parties. This is because I regard the respondent’s preferred shift duration as reflective of a necessary operational requirement. The respondent’s business seeks to make a profit from the use of its booking rooms in circumstances where there are statutory limitations upon the number of rooms for which the respondent is licenced. In these circumstances, a minimum shift streamlines the respondent’s administrative arrangements such that the requirement to perform six-hour shifts is equally as indicative of the service specifications attached to a contractor relationship as it is to an employment relationship.

[112] There is an expectation on Ms Helft to present in the front lounge when clients attend the brothel, coupled with the directions issued to Ms Helft to return to the lounge and refrain from taking a break. These are matters which demonstrate a right of control on the part of the respondent over Ms Helft.

[113] However, the exercise of control exhibited by the respondent in respect of the matters identified at [112] is of marginal significance when compared to the rights of control retained by Ms Helft and set out at [110] above. I consider that the absence of any significant right of control by the respondent over Ms Helft indicates the relationship is one of independent contractor.

[114] There was no financial relationship between the respondent and Ms Helft. Payment was made separately to Ms Helft and to the respondent by the client.

[115] The room fee was always fixed, albeit dependant on whether the service was standard or deluxe (which was at the request of the client.) While there appears to be some collaboration between the respondent and Ms Helft as to the minimum fee for a particular service by way of the industry standards, Ms Helft had the right to negotiate prices with a client.

[116] I am satisfied that the evidence as to payment supports a finding that Ms Helft’s sex work was undertaken for her own business. This weighs in favour of a characterisation of the relationship as independent contractor.

[117] Typically, the absence of a right to delegate work is indicative of an employment relationship and not of a contractor relationship. 134 However, in these circumstances, I do not consider that the absence of a capacity to delegate is indicative of the nature of the relationship. As discussed above at [92], Ms Helft retained the absolute right to refuse to provide her services at any point. It follows that Ms Helft provided sex work on an engagement-by-engagement basis. In circumstances where Ms Helft retained the discretion to perform the work, the absence of a right to delegate is not indicative of an employment relationship.

[118] I accept that there were rights and obligations between the parties with respect to the restrictions on the use of mobile phones, the dress code, cleaning of booking rooms after use and the restrictions on the use of oils in booking rooms. Further, Ms Helft was expected to use equipment supplied by the respondent, including towels, condoms, lubricant, sheets and other hygiene and cleaning supplies, and abide by any limits on access to such equipment and supplies.

[119] As found above, the requirements for towels, condoms and lubricant to be provided by the respondent to clients and sex workers are the express subject of statutory requirements and would therefore be required to be provided to a sex worker characterised as an employee or contractor.

[120] Further and in any event, even when considered at their highest and collectively, these matters are not indicative of an employment relationship or a independent contractor relationship, and are immaterial to my assessment.

[121] Overall, I consider that the relationship between the parties was not an employment relationship but rather an independent contractor relationship. I consider that the absence of control and of a direct financial relationship tells strongly in favour of this conclusion.

Disposition

[122] Having regard to the above matters and the conclusions reached, I find that Ms Helft was not an employee of the respondent.

[123] It follows that I uphold the respondent’s jurisdictional objection and Ms Helft’s application for an unfair dismissal remedy is dismissed.”

Helft v Top Of The Town (2022) FWC 2656 delivered 5 October 2022 per Millhouse DP