This extract from a recent decision of the Fair Work Commission deals with the sometimes complex question of whether the person making the application was, at the material time, an employee or a contractor.
“Legislative framework
[33] Section 365 of the Act provides:
Application for the FWC to deal with a dismissal dispute
If:
(a) a person has been dismissed; and
(b) the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part; the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.
[34] In order for the Commission to be able to deal with the dispute under s.368 of the Act it must determine that the Applicant has been dismissed within the meaning of s.365.12 The Commission must conclude that the relevant dismissal has actually occurred as a matter of jurisdictional fact. It is not sufficient that the Applicant merely alleges that they were dismissed. If there is a contest as to whether the alleged dismissal the subject of the application has occurred, this is an antecedent question which has to be determined before the powers to deal with the dispute conferred by s.368 can be exercised.
[35] Section 386 of the Act sets out the circumstances in which an employee can be said to
have been ‘dismissed’ for the purposes of s.365. That section provides:
Meaning of dismissed
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer‘s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
[36] In order to be dismissed under s.386(1)(a), a person’s ‘employment’ has to be terminated and terminated on the employer’s initiative. For employment to be terminated it has to have commenced in the first place. The Act does not define “employment.” Section 335 provides that in the relevant Part of the Act, Part 3-1 – General Protections, “employee” and “employer” have their ordinary meanings.
[37] Employment contracts and employment relationships are related but distinct concepts. In Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (Personnel Contracting),13 the High Court observed:14
In Commonwealth Bank of Australia v Barker, French CJ, Bell and Keane JJ said:
“The employment relationship, in Australia, operates within a legal framework defined by statute and by common law principles, informing the construction and content of the contract of employment.”
An employment relationship will not always be defined exclusively by a contract between the parties. Historically, the employment relationship was recognised and regulated by the law before the law of contract came to govern the relationship. An employment relationship, though principally based in contract, may be affected by statutory provisions and by awards made under statutes.
[38] Section 357 prohibits an employer from representing that an employment relationship is one of independent contract, a prohibition colloquially referred to as “sham contracting”.
[39] Section 15AA, inserted by the Fair Work Legislation Amendment (Closing Loopholes) Act 2024, directs courts and tribunals to determine whether a person is an employee by reference to the “real substance, practical reality and true nature” of the relationship having regard to the totality of the work arrangements. Section 15AA of the Fair Work Act, which took effect from 26 August 2024, is entitled “Determining the ordinary meanings of employee and employer.” Section 15AA relevantly provides:
15AA Determining the ordinary meanings of employee and employer
(1) For the purposes of this Act, whether an individual is an employee of a person within the ordinary meaning of that expression, or whether a person is an employer of an individual within the ordinary meaning of that expression, is to be determined by ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person.
(2) For the purposes of ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person:
(a) the totality of the relationship between the individual and the person must be
considered; and
(b) in considering the totality of the relationship between the individual and the person, regard must be had not only to the terms of the contract governing the relationship, but also to other factors relating to the totality of the relationship including, but not limited to, how the contract is performed in practice.
Note: This section was enacted as a response to the decisions of the High Court of Australia in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2.
…
[40] The note in s. 15AA refers to High Court decisions in Personnel Contracting and ZG Operations Australia Pty Ltd v Jamsek (Jamsek),15 where the High Court applied the principles of contract interpretation, which it described as the long-standing approach in determining the nature of the relationship between parties. The Court criticised the multi-factorial approach that had been adopted following the decisions in Stevens v Brodribb Sawmilling Co Pty Ltd (Stevens v Brodribb),16 and Hollis v Vabu Pty Ltd (Hollis)17 and went on to explain that Stevens v Brodribb and Hollis had not departed from the long-standing approach to contract interpretation that predated those decisions. In particular, reference was made to the earlier cases of Narich Pty Ltd v Commissioner of Pay-roll Tax (Narich),18 approving the earlier decision in Australian Mutual Provident Society v Chaplin (Chaplin).19
[41] Narich and Chaplin stood for the proposition that where there is a written contract between the parties a court is confined, in determining the nature of that relationship, to a consideration of the terms, express or implied, of the contract in the light of the circumstances surrounding the making of it, and it is not entitled to consider the manner in which the parties subsequently acted in pursuance of such contract. In Personnel Contracting, the Court said that Stevens v Brodribb and Hollis did not alter the orthodox principle that courts are not concerned with what has actually occurred in a relationship but rather were concerned with the obligations by which the parties were bound.
[42] By contrast, as noted above, section 15AA sets a statutory test for ascertaining the real substance, practical reality and true nature of the relationship between the parties by considering the totality of the relationship having regard to not only to the terms of the contract governing the relationship, but also to other factors relating to the totality of the relationship including, but not limited to, how the contract is performed in practice.
[43] Consequently, for the purpose of the Act, in determining the issue of whether a person is an employee or independent contractor, the Commission is required to ascertain the real substance, practical reality and true nature of the relationship between the parties. This adopts the approach described in Hollis:20
It should be added that the relationship between the parties, for the purposes of this litigation, is to be found not merely from these contractual terms. The system which was operated thereunder and the work practices imposed by Vabu go to establishing “the totality of the relationship” between the parties; it is this which is to be considered.
[44] The approach to be taken under s. 15AA adopts the multi-factorial test that was eschewed in Personnel Contracting.
The multifactorial test was summarised by a Full Bench of the Commission in Jiang Shen Cai trading as French Accent v Do Rozario21 (Jiang Shen), wherein the Full Bench described the focus of the enquiry in Hollis as whether the person carries on a trade or business of his or her own or is working in the business of another, the nature of the work performed and the manner of its performance, and the terms of the contract between the parties. Various indicia may be considered. They include the actual exercise, or the right to exercise, control over the putative employee, whether the worker performs work for others, whether they provide tools and equipment, whether the work can be delegated, whether the worker is remunerated by periodic wages or salary or by reference to completion of tasks, and whether the worker is presented to the world at large as an emanation of the putative employer’s business.
Consideration
[45] While the Agreement states in clauses 2 and 3 that “The Engager appoints the Independent Contractor” and that “Nothing contained in this Agreement will be deemed to create any partnership or joint venture or relationship of agent or employer and employee between the Engager or any Group Company and the Independent Contractor”, Section 15AA requires that the true relationship between the parties be determined by reference to the totality of the relationship between the parties. Regard must be had not only to the terms of any contract governing the relationship, but also to other factors including, and not limited to, how the contract is performed in practice.
[46] The Agreement had clearly ceased to apply to the Applicant and the Respondent after 8 April 2024, however even before that date, the Agreement did not reflect the reality of the relationship between the parties. In particular:
(a) The Applicant did not submit a monthly report (Clause 5.1);
(b) But for the first few months of the engagement, the Applicant did not submit a tax invoice on a weekly basis (Clause 6); and
(c) The Applicant did not arrange insurance with respect to workers compensation, public liability insurance or professional indemnity insurance (Clauses 11.1, 12.1 and 13.1).
[47] A factor against a finding of employment was the tax arrangements of the Applicant whereby no tax was deducted from remittances to the Applicant.22
[48] As to the Respondent’s submission that the Agreement somehow continued past 8 April 2024, I reject that submission. Clause 2.3 clearly outlined that the Agreement could only be renewed or the Term extended if agreed by the parties, and there was no such agreement. Further, the Agreement did not express the terms of any agreement between the parties as it did not reflect in any material way the employment relationship that has continued to exist at common law.
[49] The totality of the relationship between the parties, however, disclosed significant levels of control by the Respondent over the Applicant. In particular:
(a) The Applicant was required to sign the Respondent’s Employee Handbook that stated all employees must adhere to the Code that included provisions to manage performance, conduct and, amongst other things, the use of social media during or outside work hours;
(b) The Applicant worked in accordance with a roster which was prepared and finalised by the Respondent. The Applicant was not able to set his own times for classes;
(c) The Applicant was paid a fixed per class rate for each class he conducted. The Applicant did not set his own rates or terms of engagement;
(d) Should the Applicant be unable to attend a class, he was not able to provide a replacement of his choosing, without approval from the Respondent;
(e) Ultimate authority over the Applicant in his performance of work resided with the Respondent; and
(f) The Respondent provided the workplace, equipment, booking system music and clients, the Applicant solely provided his labour.
[50] I accept that the Applicant was presented to clients as a representative of the Respondent and promoted on social media as part of its “squad”.
[51] The Applicant did not advertise his services outside the Respondent’s business and did
not have his own workplace and did not have his own business.
[52] I accept that the relationship between the parties is that the Respondent is the business that took the risk of profit or loss and unlike an independent contractor, the Applicant did not operate a business and bore no business risk. On this issue the Respondent submitted that the Applicant took entrepreneurial risk. Mr Martin described entrepreneurial risk as:23
You’ve got in your statement that Mr Bull bore an entrepreneurial responsibility. Can you tell the tribunal what that is? — As all independent contractors have their own businesses, that bears its inherent risks. You are choosing to not work at a place at a 9 to 5 where you’re getting minimum wage. You take on the risk of needing to find work. That is risk. If you are going to be your own business, that is entrepreneurial risk, and every independent contractor at our studio has made that decision.
[53] The Respondent’s submission regarding entrepreneurial risk was that it was somewhat like being a casual and not having the guarantees of permanent employment. That is not correct, and I note nonetheless that the Applicant was looking for more hours to work. In On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3)24, Bromberg J stated:
“Simply expressed, the question of whether a person is an independent contractor in
relation to the performance of particular work may be posed and answered as follows:
Viewed as a “practical matter”:
(i) is the person performing the work as an entrepreneur who owns and operates a business; and
(ii) in performing the work, is the person working in and for that person’s business as a representative of that business and not of the business receiving the work.”
[54] Bromberg J, then went on to state in the same paragraph that if the answer is “no”, then the person is likely to be an employee. In this matter, the Applicant was working in and for the Respondent’s business.
[55] The Applicant did not create any goodwill in carrying out his role as a fitness trainer, however he did create goodwill and value for the Respondent.
[56] While the Respondent placed considerable weight on the Applicant performing work at other Gyms while also working for the Respondent, that fact does not on its own point to a contractor relationship. That a person has a number of casual employment relationships simultaneously, as it appeared the Applicant did, does not render them otherwise as a contractor.
Conclusion
[57] The indicia that pointed to the Applicant being a Contractor rather than an Employee arose from the formal structure imposed by the Agreement rather than how the relationship was performed in practice. Those indicia included that the Applicant was responsible for his own taxes and insurances. In the overall balance, however, those indicia can be accorded little weight in determining the totality of the relationship.
[58] Section 15AA requires the Commission to decide the “true nature” of the relationship. Taking into account the level of control, integration, branding and restraints imposed on the Applicant, I find that the relationship was one of employment notwithstanding the Agreement and the description of the relationship therein. The Applicant was for all intents and purposes working in the business of the Respondent.
[59] In conclusion, I wish to indicate that I consider Ms Doan and Mr Martin used their best endeavours to properly engage the Applicant. Ms Doan’s evidence, which I accept, was:
You never had a discussion on 9 April 24 with Mr Bull to say, ‘Your independent contract has expired, but it will continue on.’ You never did that, did you? — No, and look, I hear you, and there are a lot of things that we didn’t enforce, and this is a small business, the first small business that my husband and I are running, and there are a lot of things that come with running a small business, learnings, and we lean heavily on our master franchisor to guide us to ensure best practices, and I think this was evidenced in setting up payroll. We did our best and what we knew how to do it and then they showed us the best approach, and part of this, while it’s not excusable, is that, you know, you do these contracts, make sure you renew it, make sure you follow up, make sure you have all the liability insurance and enforce it. No, it wasn’t documented and a contract wasn’t renewed, or a verbal agreement, or a meeting was in place. He continued to teach and I’m sure on 9 April, he taught, and also he never came to us and said, ‘Hey, this contract has expired, am I still working here, is our agreement and our arrangement the same?’ Neither party came and had this conversation.
[60] Ultimately, however, Section 15AA of the Act requires the Commission to decide the “true nature” of the relationship, and in this matter the indicia found point overwhelmingly to the relationship being one of employment.
[61] Accordingly, the jurisdictional objection fails.
Disposition
[62] For the foregoing reasons, the Respondent’s objections to the Application are dismissed.
[63] The matter will be relisted for a conference pursuant to s.368 of the Act on a date to be fixed.”
Bull v Rmbl Bxng Bondi Pty Ltd [2025] FWC 3069 delivered 22 October 2025 per Cross DP