Fair work laws; employee or contractor?

Here is a particularly useful extract from a recent decision of the Fair Work Commission dealing with the practical implications of two very important an d reasonably recent decisions of the High Court of Australia about the law which is to be applied when determining whether a relationship is that of employer and employee or principal and contractor. Self evidently this is of profound impact to the work of the Fair Work Commission.

(1) On 7 January 2022 Mr John Saab applied to the Fair Work Commission under s.394 of the Fair Work Act 2009 (Cth). Mr Saab claims that he was an employee of Genelec Power Solutions Pty Ltd and that he was dismissed unfairly from his employment. Genelec Power Solutions Pty Ltd says that Mr Saab was never its employee, and he was therefore not dismissed.

[2] This decision deals only with the jurisdictional objection raised by the Respondent.

[3] For the reasons that follow I have found that Mr Saab was not an employee of the Respondent and his application must fail.

Background and uncontroversial evidence

[4] Mr Saab made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Genelec Power Solutions Pty Ltd (Genelec). Mr Saab seeks reinstatement to his former position.

[5] Section 394(1) allows “a person who has been dismissed” to apply for an unfair dismissal remedy.

[6] Under s.385(a) of the FW Act a person can only be unfairly dismissed if they are “a person who has been dismissed.” The definition of “a person who has been dismissed” in s.386(1) expressly refers to the termination of “employment”.

[7] Not many of the facts are agreed between the parties. Nonetheless following matters were not controversial:

(a) Mr Saab was never paid wages per se as an employee and income tax was never deducted from any payments made;

(b) Mr Saab provided invoices to Genelec for all work performed. The invoices refer to “consulting fees” and in the service description say “Business Development Consulting Fees;”

(c) Mr Saab has an Australian Business Number (ABN) but did not charge GST when he sent invoices for his work;

(d) Between March and August 2020 Mr Saab issued four invoices to Genelec:

  1. i) 25 March 2020 – $800
  2. ii) 8 April 2020 – $2400

iii) 24 April 2020 – $836.59; and

  1. iv) 29 June 2020 – $1,650.

(e) From August 2020 until December 2021 Mr Saab was paid a regular amount each week. Initially Mr Saab was paid $650 per week but this increased to $800, then $865 and then $965 per week from June 2021 onwards;

(f) Mr Saab was also paid “commission” from time to time. In total $13,939 was paid in commissions. The first commission payment was in March 2021 and the last commission payment was in October 2021;

(g) Mr Saab used business cards that included the title “Business Development Manager” and an email address bdm@genelecps.com.au;

(h) The email address bdm@genelecps.com.au was used or accessed by Mr Saad and another person in a similar role and Mr Saab did not otherwise have a separate email account issued by Genelec; and

(i) Mr Saab did not wear a uniform.

Genelec’s evidence

[8] I made directions for the filing of written evidence prior to the hearing of the matter. The written materials filed prior to the first scheduled hearing were inadequate. Another hearing was scheduled to give both parties a further opportunity to file proper evidence. Unfortunately the additional evidence was not particularly adequate and did not provide a proper evidentiary foundation upon which I could make findings of fact.

[9] As a result, both parties were given significant leeway to lead oral evidence in chief at the hearing.

[10] Mr McVernon gave evidence on behalf of Genelec. Mr McVernon said that in January 2020 Genelec had engaged Mr Ryan Stevenson to do some “contract business development work”. Mr Saab worked with Mr Stevenson at another solar business and, according to Mr McVernon, Mr Stevenson and Mr Saab were looking to work as a team on a contracting basis.

[11] Mr Stevenson and Mr Saab were together offering Genelec access to “leads and some opportunities predominantly in the solar market for residential and commercial solar opportunities.”

[12] According to Mr McVernon:

“So Ryan and John explained that they had quite a large lead list available. Customers that were looking for solar in both residential and commercial opportunities. And that they were able to provide those opportunities to us … on a Commission basis. So there was no sales retainer or sales contract … predominantly their work was only to engage clients, present the clients to our business and then for us to provide proposals and solutions to the clients.”

[13] Mr McVernon says that Mr Stevenson “stepped away during Covid to pursue other opportunities” and so Genelec continued discussions with Mr Saab.

[14] Mr Saab was then paid on a commission-only basis according to the sales he secured for Genelec.

[15] Later on Mr Saab spoke to Mr McVernon and suggested that the commission on each sale be reduced and that Mr Saab be paid a weekly retainer “in the form of an invoice provided by [Mr Saab] on a weekly basis.”

[16] Mr McVernon said of the varied arrangement:

“However, he you know, obviously we we’re trying to work with him at the time … and we agreed [on] a weekly retainer for his continued work. At no stage did we say that he [had] to give up any of these other opportunities … the dollar amount was quite small to start with, so we were under no impression that he was solely working for us.”

[17] Mr McVernon said that Genelec uses subcontractors in other parts of its business “so essentially we just accepted the weekly invoices from [Mr Saab] and then they were paid accordingly.”

[18] Mr McVernon said that Mr Saab sourced the clients:

“John would engage the clients and then he would present the clients to us to meet either in person or with e-mail information regarding the particular sites and their requirements. Our team would then [put] together the complete systems and packages, including all the technical data, the products that we would use, the performance of the system, the return on investment and then the final capital price. … So John’s was role was significant in the fact that he would bring the clients, engage the clients and then present our offer to the client and then look to negotiate that to close and then we would take over the client.”

[19] Mr McVernon said that Mr Saab supplied his own computer, phone and car to perform his work. He said that Mr Saab was presented to potential clients as part of Genelec’s organisation, but that “he wasn’t specifically introduced as an employee.”

[20] In cross-examination Mr McVernon accepted that Mr Saab had spent some time training Ms Rebecca Scott, who is an administrative assistant employed by Genelec.

[21] Mr McVernon said that Mr Saab was not required to work any particular hours:

“We didn’t keep tabs on where John was. He ran his own mobile phone. He ran his own computer. He ran his own car. So what he did on a day-to-day basis, as long as he was bringing in a subsequent amount of leads and opportunities for us to put proposals to … that’s all we worried about.”

[22] Mr McVernon was cross-examined about documents that Genelec prepared and/or sent to the Australian Taxation Office to claim JobKeeper payments during COVID-19. Genelec claimed JobKeeper payments for at least some of its employees but did not claim any payments for Mr Saab nor represent to the Australian Taxation Office (ATO) that he was an employee for this purpose.

[23] Genelec continued to pay Mr Saab’s weekly retainer during periods of COVID-19 lockdown. Mr McVernon said in cross-examination that he discussed lockdown issues with Mr Saab and agreed “on the capacity and things that he could and couldn’t do” and:

“… So we come up with a plan on how we could still possibly keep our leads live and keep people interested at least to get through the period. Obviously the period was never seen before. So we made a lot of it up like everybody else as we went I think.”

[24] Genelec received some sales enquiries from its website and these enquiries were passed on to Mr Saab to follow-up. In evidence there was also some emails between Mr McVernon and Mr Saab that record Mr McVernon providing either potential sales leads or lines of enquiry that Mr McVernon was suggesting could be followed up.

[25] Genelec relied on printouts of “Employee/Contractor decision tool,” which is an online tool provided by the ATO. Genelec answered various questions in the online tool and sought to rely on the results/conclusions generated by the tool. Mr McVernon was questioned about many of the answers that he provided when using this online tool. I am not inclined to place much weight on this material and I place no weight at all on the conclusions reached by the tool. I am not critical of the online tool or its usefulness in this regard. The only probative evidence derived from the online tool in this case is Mr McVernon’s answers in cross-examination when he was asked direct questions about the arrangements with Mr Saab by reference to the responses given when he used the tool.

[26] Ms Scott also gave evidence about Genelec’s operational and administrative arrangements. Ms Scott’s evidence was helpful in understanding the day-to-day arrangements between Mr Saab and Genelec, and others who work for Genelec, but did not particularly go to the terms of the contract between Mr Saab and Genelec.

[27] Ms Scott indicated that one of her duties is to administer annual leave, sick leave and the like. Ms Scott indicated that employees of Genelec notified her about sick days, annual leave and so on, but Mr Saab did not ever do so. Mr Saab was not issued with a fuel card, keys to the office, Dropbox passwords or passwords to any of Genelec’s computer systems.

Mr Saab’s evidence

[28] Mr Saab’s written evidence about the formation of the contract was as follows:

“I was employed under a verbal contract of employment by Mr. David Mc Vernon who is the Managing Director (sole director) of the Respondent’s business. I started on a sporadic casual trial basis in February 2020, doing a number of jobs over the following couple of months (See my invoices 1 to 4). The trial went well and I was offered a permanent position with Genelec by David McVernon. David was aware I had to give notice, from my current job where I was employed doing the same work within the solar industry that he wanted me to perform at Genelec. David asked that all followup calls and enquiries I received from potential clients (once I started with him) be directed to Genelec. I agreed. Some of the jobs / sales that I generated for Genelec came through my existing contacts.

At all material times I followed the instructions from my employer, including the supply of a weekly invoice. See invoice 5, dated 7.08.20 as the first of my weekly invoices.

My weekly wages increased on a number of occasions during my employment in recognition of the good work I was performing. I also received a bonus based on my sales.”

[29] At the hearing Mr Saab had leave to give further oral evidence in chief about the formation of the contract and said:

“I originally met David McVernon whilst I was employed full time as a manager at a company called Era Gaia [where I was] in the sales division as a manager.

The conversation at the bus stop was after Ryan [Stevenson] and I had given some clients to [Mr McVernon]. Ryan had informed [Mr McVernon] that he was to discontinue as he attained a full time job outside of the solar industry due to the COVID stoppages. And I was invited to come and work with David on an ongoing basis … I think [this] was approximately February 2020.

… In that period the whole company [Era Gaia] was stood down due to COVID and that’s when Ryan and I saw other employment opportunities. We were entertaining other employment opportunities … we could foresee that Era Gaia wasn’t going to survive.”

[30] Genelec began making regular payments to Mr Saab in early August 2020. In late August 2020 Mr Saab began full-time employment with another company, EnergUs Pty Ltd, as a Business Development Manager. Mr Saab says that this employment was on “a trial basis, a short-term basis for a commitment I’d entered into before I entered into a commitment with [Genelec].”

[31] When asked by Mr McVernon in cross-examination about whether any of the contractual arrangements were in writing, Mr Saab indicated that there were written contracts of employment between himself and Era Gaia and with EnergUs. In relation to Genelec, Mr Saab said:

“OK, whilst we did not sign a contract, we had a verbal agreement, otherwise I would not be giving you clients.”

[32] In his written statement Mr Saab said the following about his interactions with clients and potential clients:

“I was introduced by my employer (the Respondent) to their clients as their employee, Mr. John Saab, their Business Development Manager of Genelec Power Solutions Pty Ltd both verbally and via the business cards they initiated and procured containing this information. I also introduced myself at all materials times as their employee and via the use of the same business cards. (See above for details of the card) and further by;

My correspondences to clients were in accordance with the company policy, this included my signature block must show that I’m the Respondent’s employee reiterating my name, position within the company, my contact details, which included my employee e-mail address, bdm@genelecps.com.au which incorporates the respondent’s business name within that e-mail address.

At all material time I did not hold myself out as being an independent contractor for the Respondent or believe I was one…”

[33] Mr Saab did not appear to have a working knowledge of Genelec’s client relationship management software nor the systems it uses to prepare proposals.

[34] An Order for Production was issued to Mr Saab at Genelec’s request, that required Mr Saab to produce “any documents recording taxation paid by the Applicant for the financial year ending 30 June 2020, 30 June 2021 and 30 June 2022” and “any documents issued by the Australian Taxation Office relating to tax paid or to be paid by the Applicant for the financial year ending 30 June 2020, 30 June 2021 and 30 June 2022”. Mr Saab produced a single document in answer to these two categories, being a “Notice of assessment – year ended 30 June 2020”.

Observations about the evidence from the parties

[35] I have already described the procedural difficulties and the less-than-ideal way in which evidence was received in this matter. Whilst I am comfortable that both parties have had a fair opportunity to prepare and present their case, I must necessarily take into account these procedural difficulties when assessing the evidence of both parties.

[36] Mr Saab is clearly an ambitious salesperson. Unfortunately much of his written evidence was aspirational rather than factual. As can be seen from the excerpts reproduced above, his evidence is perhaps best described as a series of stated conclusions he would like me to draw, sprinkled with some facts, but not many.

[37] There were significant gaps in his account and even though his paid agent had a further opportunity to lead oral evidence in chief at the hearing, those gaps were not filled.

[38] In cross-examination Mr Saab indicated that he has had an ABN since the age of eighteen and has worked as an employee and provided services as a contractor over the course of his career to date.

[39] Mr Saab issued invoices throughout the whole of his engagement which, of itself, is not a determinative factor. However Mr Saab’s account of his dealings with Genelec did not adequately explain these invoicing arrangements and how or why the parties maintained the appearance of a contracting arrangement.

[40] For what it is worth Mr Saab professed to be clear on the distinction between employees and independent contractors. At a superficial level he was treated as a contractor by Genelec for almost two years, and his evidence before the Commission was unhelpfully brief and vague about how these arrangements came about and how they were perpetuated.

[41] Mr Saab’s assertions such as “I was employed under a verbal contract of employment by Mr. David Mc Vernon who is the Managing Director (sole director) of Genelec’s business. I started on a sporadic casual trial basis in February 2020, doing a number of jobs over the following couple of months” are difficult to assess or accept because, from an evidentiary point of view, they seem to conceal or avoid more things than they show.

[42] Mr McVernon is an employee of Genelec, appeared as advocate for Genelec in the proceedings and gave evidence.

[43] Genelec’s filed evidence was not comprehensive. Mr McVernon did not even prepare a written statement. However Mr McVernon gave his oral evidence at hearing in a measured and straightforward way and appeared to be careful to ensure that the evidence he gave was accurate and correct.

The law after Jamsek and Personnel Contracting

[44] In Waring v Hage Retail Group Pty Ltd [2022] FWC 540 (Waring) Deputy President Anderson provided the following helpful summary of the significance of the two recent High Court decisions Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 312 IR 1, [2022] HCA 1 (Personnel Contracting) and ZG Operations Australia Pty Ltd v Jamsek (2022) 312 IR 74, [2022] HCA 2 (Jamsek):

“[52] In two judgements delivered on 9 February 2022 the High Court of Australia pronounced on the law that applies in determining whether, absent a specific statutory rule, a person is an employee or contractor. In doing so, the Court reviewed past decisions of the Court (and other courts) and set out afresh relevant legal principles.

[53] In important respects the law as expressed by the High Court in Jamsek and Personnel Contracting has modified, if not replaced, former approaches. In particular, the past approach of the Commission (itself based on past court authority) as outlined in the leading full bench case of [Jiang Shen Cai trading as French Accent v Rozario [2011] FWAFB 8307 at [30]] is, with some limited caveats, no longer good law.

[54] The High Court, via the combination of judgements in both Jamsek and Personnel Contracting, has largely rejected an approach whereby the relationship between parties across its life span is examined (including how the relationship operates in practice). The Court has stated that contractual terms and not performance, where those terms can be ascertained and where the contract is not a sham, will determine the true nature of the relationship. However, the Court has observed that the manner in which the relationship is worked in practice may be relevant for certain limited purposes, such as to find contractual terms where they cannot otherwise be ascertained or to determine the nature of any variation to agreed terms.

[55] Indicia (such as those identified in earlier cases in the Court) may be relevant but only insofar as the terms of the contract give voice to them. One approach, to be used as a guide, is to look at whether, under the contract, the worker is engaged to work in the business of another, though this may not necessarily be useful in all cases. The extent of a contractual right to control, as evident from the terms of the contract itself, remains a major signifier of an employment relationship. That an arrangement was brought about by the superior bargaining power of one party has no bearing on the meaning and effect of the contract.

[56] Amongst the caveats expressed by the Court, is that a mere label acting as a subterfuge to the true nature of the contractual relationship will not determine the status of the parties. In this respect at least, the law remains unchanged by these recent decisions.”

[45] The Deputy President’s summary was endorsed by the Full Bench in Azad v Hammond Park Family Practice Pty Ltd T/A Jupiter Health Warnbro [2022] FWCFB 66 at [14].

[46] In Chambers and O’Brien v Broadway Homes Pty Ltd [2022] FWCFB 129 at [74] a subsequent Full Bench provided this summary of the key propositions in Personnel Contracting:

“(1) 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 (Personnel Contracting at [40]-[62], [172]-[178] and [203]);

(2) The subsequent conduct of the parties may be considered to ascertain the existence of variation of contractual terms (Personnel Contracting at [42], [45], [177]-[178], [188]-[190] and [203]);

(3) The multifactorial approach only has relevance in respect of the required assessment of the terms of the contract (Personnel Contracting at [33]-[34], [47], [61], [174], [186]-[189] and [203]);

(4) It is necessary to focus on those aspects of the contractual relationship which bear more directly upon whether the worker’s work was so subordinate to the employer’s business that it can be seen to have been performed as an employee of that business rather than as part of an independent enterprise (Personnel Contracting at [39]). The question is: whether, by the terms of the contract, the worker is contracted to work in the business or enterprise of the purported employer (Personnel Contracting at [180]-[186] and [203]);

(5) Existence of a contractual right to control the activities of the worker (including how, where and when the work is done) is a major signifier of an employment relationship (Personnel Contracting at [73]-[74], [113]-[114] and [121]); and

(6) The label or characterisation placed on the relationship by the contract is not relevant even as a “tie breaker” (Personnel Contracting at [58], [63]-[66] and [79]), or at least it is not determinative (Personnel Contracting at [127], [184] and [203]).”

[47] In Deliveroo Australia Pty Ltd v Franco [2022] FWCFB 156 at [34]-[35] (Deliveroo) the Full Bench endorsed the above summary and added a further point:

“… A contractual freedom on the part of the party performing the relevant work to accept or reject any offer of work and to work for others is not necessarily a contraindication of employment and may rather be consistent with casual employment.”

[48] The significance of the High Court’s decisions in Personnel Contracting and Jamsek are most apparent in the Full Bench decision in Deliveroo (at [53]-[54]):

“In the circumstances described, the application of the Personnel Contracting decision has obliged us to ignore certain realities concerning way in which the working relationship between Mr Franco and Deliveroo operated in practice…

Had we been permitted to take the above matters into account, as the Commissioner did, we would have reached a different conclusion in this appeal. As a matter of reality, Deliveroo exercised a degree of control over Mr Franco’s performance of the work, Mr Franco presented himself to the world with Deliveroo’s encouragement as part of Deliveroo’s business, his provision of the means of delivery involved no substantial capital outlay, and the relationship was one of personal service. These matters, taken together, would tip the balance in favour of a conclusion that Mr Franco was an employee of Deliveroo. However, as a result of Personnel Contracting, we must close our eyes to these matters.”

Consideration

[49] It is necessary to make findings about the contract between Mr Saab and Genelec. There was no written contract and the evidence provided from both parties is less than ideal.

[50] There appears to be two phases in the period over which Mr Saab contracted with Genelec:

(a) from February or March 2020 until August 2020 – when only four invoices were issued; and

(b) from August 2020 until the contract ended in December 2021 – when Mr Saab provided weekly invoices and was paid weekly.

[51] Both Mr Saab and Mr McVernon agree that they first spoke in February 2020. The first invoice for a regular weekly payment is dated 7 August 2020. Between March and 7 August 2020 there are approximately 21 weeks. Four invoices were issued in this period – one in March, two in April, one in June and none in May or July. Two of the four invoices issued by Mr Saab appear to refer to particular sales or clients.

[52] Mr Saab’s account of the first phase (from March until August 2020) is entirely unconvincing. He says of this period:

“I started on a sporadic casual trial basis in February 2020, doing a number of jobs over the following couple of months (See my invoices 1 to 4). The trial went well and I was offered a permanent position …”

[53] By contrast Mr McVernon’s account is far more plausible. Mr McVernon’s evidence is described above and records Mr Saab pitching his services to Genelec by offering to connect his “large lead list” with Genelec’s business. Mr Saab was an employee of Era Gaia at this time and Mr Saab’s evidence was that he thought Era Gaia “wasn’t going to survive.”

[54] Quite obviously the “large lead list” was built while Mr Saab was an employee of Era Gaia – either by Mr Saab in his capacity as an employee of Era Gaia or by Mr Saab separately in furtherance of his own consultancy business.

[55] In cross examination Mr Saab said that in or around February 2020 “I had given some clients to [Mr McVernon]”, which is consistent with Mr Saab cultivating clients and potential clients in his own business (that he could then offer to “give” to other businesses for commission or a fee).

[56] On balance I find that the material terms of the contract between Mr Saab and Genelec for the first phase (February 2020 until August 2020) were as follows:

(a) Mr Saab was authorised to represent Genelec’s business and services to clients sourced or identified by Mr Saab;

(b) Mr Saab was not required to perform this work at any particular time, place or by any particular method;

(c) Genelec did not have the right to control if, how, when or where Mr Saab represented Genelec’s business and services to clients sourced or identified by Mr Saab;

(d) Mr Saab was not restrained or restricted to only working for Genelec;

(e) Genelec retained control over the specifications and price of any proposal put to any particular client;

(f) Genelec was required to pay commission to Mr Saab – payable by reference to sales secured by Mr Saab; and

(g) Genelec was not required to reimburse Mr Saab for any expenses incurred by Mr Saab while performing the above work.

[57] As Kiefel CJ, Keane and Edelman JJ said in Personnel Contracting at [39] and [62]:

“While the “central question” is always whether or not a person is an employee, and while the “own business/employer’s business” dichotomy may not be perfect so as to be of universal application for the reason that not all contractors are entrepreneurs, the dichotomy usefully focusses attention upon those aspects of the relationship generally defined by the contract which bear more directly upon whether the putative employee’s work was so subordinate to the employer’s business that it can be seen to have been performed as an employee of that business rather than as part of an independent enterprise. In this way, one may discern a more cogent and coherent basis for the time-honoured distinction between a contract of service and a contract for services than merely forming an impressionistic and subjective judgment or engaging in the mechanistic counting of ticks on a multifactorial checklist.

Workpac Pty Ltd v Rossato concerned the question whether a person who was engaged to work under what were indisputably contracts of employment was a casual employee. This Court rejected the argument that this question was to be determined by reference to all the circumstances of the employment, including disparities in the bargaining power of the parties. Hollis had been cited in support of that argument. Kiefel CJ, Keane, Gordon, Edelman, Steward and Gleeson JJ noted that because, in Rossato, the Court was concerned with what was, on any view, a contract of employment, Hollis was not on point. Their Honours went on to say that, “[o]n one view”, the resolution of the question whether a person engaged to work for another is an employee or an independent contractor “may depend upon the extent to which it can be shown that one party acts in the business of, and under the control and direction of, the other”.118 But because the issue of present concern did not arise in Rossato, the plurality refrained from expressing a concluded view as to the significance of the observations in Hollis in relation to that issue. The occasion to express a view on that matter has now arrived: the point was squarely raised and fully argued. There is no reason in principle why the approach taken in Rossato should not be applied where the issue is whether the relationship in question is one of employment.”

[Footnotes omitted]

[58] For at least the first phase of the dealings between Mr Saab and Genelec it is reasonably apparent that Mr Saab was advancing the interests of his own business (albeit to the mutual benefit of Genelec) by exploiting his own list of leads/clients. Mr Saab had curated or otherwise obtained a list of leads/clients and was performing work in his business to connect those leads/clients with Genelec’s business.

[59] Genelec did not control how Mr Saab’s work of exploiting Mr Saab’s list was performed and Mr Saab was not obliged by any contractual term to act in Genelec’s interests to the extent that Genelec’s interest might have intersected with his own. Overall Mr Saab’s work was not “so subordinate to the employer’s business that it can be seen to have been performed as an employee of that business rather than as part of an independent enterprise.”

[60] I therefore find Mr Saab was not an employee of Genelec for the initial period of engagement with Genelec from February to August 2020.

[61] Mr Saab relied on a small number of emails between himself and Mr McVernon about potential sales leads. These emails do not change my view on the nature of the contractual dealings between the parties. Firstly, on the evidence there was only a small number of leads or internet inquiries generated by Genelec. Secondly, it is one thing for Genelec to discuss possible lines of enquiry with Mr Saab, but it is another thing for Genelec to be controlling or directing how Mr Saab is to identify and cultivate new clients.

[62] The second phase (from August 2020 until December 2021) is less clear because in this phase Genelec paid Mr Saab a regular weekly amount.

[63] The evidence in relation to how the regular weekly payment was introduced is significantly less controversial. Both Mr Saab and Mr McVernon indicated that a discussion or discussions occurred prior to August 2020 and it was agreed that Mr Saab was to receive less by way of commission and also receive a weekly payment. Mr Saab called this weekly payment a “wage” and Mr McVernon called the ongoing payment a “retainer.”

[64] Quite obviously there was a change in the contractual arrangement between the parties at that time. However there is no evidence of any other change in the arrangements. That is, nobody suggested in their evidence that the work performed by Mr Saab changed, or that the obligations of either party changed. On the evidence before me I have assumed that Mr Saab continued to identify and cultivate leads and continued to represent Genelec’s business to those clients/leads.

[65] On balance I find that the material terms of the contract between Mr Saab and Genelec for the second phase (August 2020 until December 2021) were as follows:

(a) Mr Saab was authorised to represent Genelec’s business and services to clients sourced or identified by Mr Saab;

(b) Mr Saab was not required to perform this work at any particular time, place or by any particular method;

(c) Genelec did not have the right to control if, how, when or where Mr Saab represented Genelec’s business and services to clients sourced or identified by Mr Saab;

(d) Mr Saab was not restrained or restricted to only working for Genelec;

(e) Genelec retained control over the specifications and price of any proposal put to any particular client;

(f) Genelec was required to pay a weekly amount to Mr Saab that was not directly referable to any particular sale or sales secured by Mr Saab;

(g) Genelec was also required to pay commission to Mr Saab from time to time – payable by reference to sales secured by Mr Saab; and

(h) Genelec was not required to reimburse Mr Saab for any expenses incurred by Mr Saab in the course of performing the above work.

[66] The question for determination is whether the change in the contract in relation to payments brought about a change in the nature of the overall contract.

[67] In my view the answer to this question is no. Although the amounts paid to Mr Saab were less directly tied to the output or results of Mr Saab’s work, Mr Saab’s work continued to be part of his independent enterprise and was not subordinate to Genelec’s business.

[68] In this second phase of the engagement Mr Saab still retained control over his own time and work. In commercial terms there were good and cogent reasons for Mr Saab to continue to identify, cultivate and introduce new clients/leads in order to keep the ongoing contractual relationship with Genelec and his weekly payment. However there is no suggestion in the evidence that when the weekly payment was introduced Mr Saab was required to work a minimum number of hours or secure a minimum number of sales or the like, or that his obligations to Genelec changed in any other way.

Conclusion

[69] Mr Saab was not employed by Genelec at any time. In January 2022 when he lodged his application for an unfair dismissal remedy he was not “a person who has been dismissed” for the purposes of s.394(1) or s.385(a) of the FW Act and therefore could not have been unfairly dismissed.

[70] I have separately made an order dismissing Mr Saab’s application. 1

Saab v Genelec Power Solutions Pty. Ltd. (2022)  FWC 2637 delivered 29 September 2022 per- Easton DP