Tax arrangements and whether a person is an employee

This passage from a recent unfair dismissal case deals with the relevance of agreed tax arrangements on the issue whether a person is a contractor or an employee.


“[58] Ground 12 alleges that the Deputy President erred by finding that the mode of

remuneration, tax arrangements, payment of a flat hourly and the lack of paid leave were each

suggestive of an independent contracting relationship at [148] of the Decision. The Appellant

submits that “these considerations are merely consequential upon the ‘lay’ labelling adopted by

the parties about a contractor arrangement and are of no or little bearing.” The Appellant relied

on the following passage from ACE Insurance Limited v Trifunovski (ACE)7 which the Full

Bench considered had not been overtaken by Personnel Contracting in Deliveroo Australia Pty

Ltd v Franco8

at [41]:

“It is also difficult, in my view, to give much independent weight to arrangements about taxation,

or even matters such as insurance cover or superannuation. These are reflections of a view by

one party (or both) that the relationship is, or is not, one of employment. For that reason, in my

view, those matters are in the same category as declarations by the parties in their contract (from

which they often proceed). They may be taken into account but are not conclusive. These matters

are less important than the adoption by the parties (where this occurs) of rights and obligations

which are fundamentally inconsistent with basic requirements of a contract of employment, such

as the ability to delegate the discharge of obligations under a contract to another person, or where

there is a lack of control over how work is done.” (emphasis added)

[59] We have considered the Appellant’s submissions and find no inconsistency between the

Deputy President’s findings and the reasoning in ACE above. We do not agree that ACE

suggests that these aspects of the contract should be deemed to have little or no bearing or that

they are simply a consequence of the parties’ own labels of their relationship. Rather, we find

that ACE holds that “[labels] may be taken into account but are not conclusive”. Consistent

with ACE, the Deputy President took these factors into account and found them to be suggestive

of an independent contracting relationship. The Deputy President did not deem these factors

were conclusive evidence that the Appellant was an independent contractor and not an

employee. As is clear from the Decision, the Deputy President considered a myriad of evidence

and aspects of the contract which pointed towards an independent contracting relationship, and

importantly, he also considered other aspects which leaned towards an employment

relationship. The Deputy President took all these considerations into account in characterising

the contract and making his ultimate finding that the Appellant was not an employee. Therefore,

we are satisfied that the Deputy President’s findings are sound and disclose no error. We dismiss

this ground of appeal.


[60] Given that we have found that the Deputy President did not err by finding that the

Appellant is not an employee of the Respondent, there is no need for us to consider the alternate

outcome posed in the Decision. ”

Muller v Timbecon Pty Ltd [2023] FWCFB 42 delivered 24 February 2023 per Catanzariti VP, Clancy DP and Yilmaz C