This section of an unfair dismissal decision of the Fair Work Commission contains an excellent summary of the current legal authorities about whether a person should be categorized as an employee or an independent contract; or indeed attributed some other status.
“Consideration
[12] The approach of the common law to the determination of whether someone is an employee or independent contractor was reconsidered in two High Court decisions in the matters of Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd 3 and ZG Operations Australia Pty Ltd v Jamsek4. The Court made it clear in those cases that the approach to that question must be undertaken by reference to the legal rights and obligations created by the contract between the parties. In the recent decision of the Full Court of the Federal Court of Australia in EFEX Group Pty Ltd v. Bennett5 the Court considered a situation where, as here, the terms of an alleged employment relationship between the parties had not been reduced to writing. The plurality in that case said:
- This case did not involve any written contract at all, much less a comprehensive written contract. It was a wholly oral contract, with sparse details of the agreement reached expressed in the lead up to its formation. In the absence of a written contract and no evidence of a particular conversation during which the contract was made, “evidence of the parties’ conduct must necessarily be considered in order to draw inferences as to whether the meeting of minds necessary to create a contract has occurred and what obligations they have thereby undertaken”: Personnel Contracting at [177] per Gordon J (Steward J agreeing), as summarised in Chiodo v Silk Contract Logistics [2023] FCA 1047 at [9].
- As Kennett J explained in Chiodo at [8]–[9], where there is no written contract, the identification of the parties’ contractual rights “must proceed somewhat differently but the fundamental task is the same: the parties’ contractual rights and obligations are to be ascertained and characterised”; and the focus is on the ascertainment of the legal rights and obligations of the contracting parties, “rather than how they behaved in the performance of their contract”.
- The terms of an oral contract may be able to be inferred from the circumstances, including in whole or in part from the parties’ conduct or a course of dealing between them, or implied where necessary for business efficacy: Realestate.com.au Pty Ltd v
Hardingham [2022] HCA 39; 406 ALR 678 at [21]–[22] per Kiefel CJ and Gageler J.6
[13] On the basis of the evidence before me I am not satisfied that there was a relationship of employer and employee between the Applicant and the Respondent. The Applicant’s evidence was that his work commenced in January 2017 when Mr. Dodd “introduced (him) to work at Axia Office Pty Ltd.” He said he was told by Mr. Dodd that he needed to invoice the Dodd Group monthly for his work. He said he thought he was a contractor because he invoiced to get paid. He said the initial verbal arrangement with Dodd/Axia in January 2017 was that he would get paid $2500 plus commissions by way of monthly invoice. He said Dodd invoiced Axia and paid him after it deducted its commissions. It was not in issue that the Applicant invoiced the Dodd Group and was paid by them. The evidence of the Applicant supports a view that to the extent that there was a ‘meeting of the minds’ and a contractual arrangement in place, that arrangement was between the Applicant and the Dodd Group, not the Applicant and the Respondent.
[14] The evidence of Mr. Keen and Mr. Dodd about the nature and terms of the relationship, which was not challenged support that view. This included Mr. Keen’s evidence that neither he nor his company had any involvement in the engagement of the Applicant by the Dodd Group and Mr. Dodd’s evidence about the terms of the Applicant’s engagement by the Dodd Group. The legal obligation was for the Applicant to perform work for the Dodd Group, albeit work that was to the benefit of the Respondent. Although Mr. Dodd’s correspondence regarding the renegotiation of the commission structure came from the Respondent’s email system, I do not think that he was negotiating contractual terms for the Respondent. The Applicant was at all times paid by the Dodd Group. I conclude There was a contractual arrangement between the Respondent and the Dodd Group under which certain services would be provided by the latter to the former, but there was no contract or employment relationship between the Applicant and the Respondent.
[15] The application is misconceived. The Applicant is not a person protected from unfair dismissal by the Respondent because there was no relationship of employer and employee between them. Consequently, there is no need to consider whether an extension of time should be granted. It is also unnecessary for me to express a concluded view as to the nature of the relationship between the Applicant and the Dodd Group.
[16] The application is dismissed. “
Han v Axia Office Pty. Limited [2024] FWC 2189 delivered 16 August 2024 per Roberts DP