Fair Work Act 2009
s.365—General protections

David Houston
v
Ethical Developments Pty Ltd & Steffenie Langby
(C2021/8686)

Application to deal with contraventions involving dismissal – First and Second Respondents deny an employment relationship existed – employment relationship found to have existed – applicant was dismissed as an employee – jurisdictional objection dismissed

[1] On 17 December 2021, Mr David Houston made an application to the Fair Work Commission (the Commission) under s.365 of the Fair Work Act 2009 (the Act) to deal with a general protections dispute involving dismissal. Mr Houston stated that he had been dismissed from his employment with Ethical Developments Pty Ltd (the First Respondent) on 26 November 2021.

[2] In its Form F8A – Response to general protections application, the First Respondent raised a jurisdictional objection to the application on the grounds that Mr Houston was never employed by the First Respondent. The First Respondent is a start-up business in the hydrogen industry.

[3] Following the Full Court of the Federal Court decision of Coles Supply Chain Pty Ltd v Milford, 1 the Commission must determine whether Mr Houston was dismissed as an employee before it can exercise powers under s.368 of the Act to deal with a dispute about whether Mr Houston was dismissed in contravention of the general protections provision.

Hearing of the application

[4] The matter was listed for a Jurisdiction Hearing by video using Microsoft Teams on 15 June 2022. Ms Denielle Pohlner, Lawyer of Anderson Gray was granted leave pursuant to s.596(2) of the Act to represent Mr Houston. Ms Steffenie Langby appeared for the Frist Respondent, Managing Director and is the Second Respondent in these proceedings. Mr Houston and Ms Langby gave evidence and were cross-examined.

Legislation

[5] Section 365 of the Act provides as follows:

“365 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.”

[6] The meaning of “dismissed” is provided at s.386 of the Act:

“386 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.

(2) However, a person has not been dismissed if:

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or

(b) the person was an employee:

(i) to whom a training arrangement applied; and

(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;

and the employment has terminated at the end of the training arrangement; or

(c) the person was demoted in employment but:

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and

(ii) he or she remains employed with the employer that effected the demotion.

(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.”

[7] It is not in contest that the definition in s.386(1) takes as its predicate the prior existence of an employment relationship. 2

[8] This decision deals only with the jurisdictional objection to be determined.

Mr Houston’s evidence

[9] Mr Houston first met Ms Langby in March 2020 when Ms Langby became a client of Mr Houston’s gardening business. On 10 May 2021, Mr Houston and Ms Langby were discussing the business of the First Respondent. Mr Houston gave Ms Langby a brief rundown of his employment history to which she responded that if he were looking to change his job, he could work for her.

[10] Later that day the following text messages were exchanged:

“Mr Houston: Hi steff, I was just thinking about our chat today. Were you serious when you said “if I ever wanted a change of job.” I have extensive experience in the manufacturing sector obviously more directed at the food industry. I would love to have a more serious discussion with you when the time is right

Ms Langby: Yes! Delighted! Give me a couple of weeks.”

[11] On 19 May 2021, the pair exchanged text messages and agreed to meet on 22 May 2021 at a coffee shop. When they met, Ms Langby discussed the business and explained it was a start-up company with wages put aside for the executive. Mr Houston detailed his manufacturing and management experience. He explained that he would be employing somebody to do the physical gardening work in his own business, and his partner would then run the business.

[12] On 23 May 2021, Mr Houston emailed Ms Langby to thank her for the opportunity to discuss the issue and stated he would consider selling his business if he had surety that he would receive an income. He attached his CV.

[13] On 29 May 2021, Mr Houston attended on Ms Langby at her home where his potential employment was discussed. The terms of offer would be for a salary of $150,000 per annum, plus superannuation, a $20,000 car allowance and a phone allowance. He would be issued with a laptop and a mobile phone and be entitled to shares, when issued.

[14] Mr Houston’s evidence is that Ms Langby advised she had $3.5m available to cover salaries until December 2021 and was expecting funds from other investors. She asked him if he could commence in two weeks. Mr Houston explained he was looking to hire somebody and allow his partner to run the business. He informed her he would let her know when this was done so that he could focus his attention on employment with the First Respondent.

[15] On 25 June 2021, Mr Houston informed Ms Langby that he would be available to commence employment on 5 July 2021. Ms Langby telephoned him that day and they agreed he would commence on 5 July 2021. The following text message was sent by Mr Houston:

“Hi steff, just letting you know that I will be available from next tuesday onwards if you need me to sign the paperwork etc instead of sending it to me. I am a definite start on 5 july.”

[16] Mr Houston stated that he commenced employment on 5 July 2021 as Operations Manager, reporting to Ms Langby. He was given an email address, being dave.houston@ethicaldevelopments.com.au.

[17] Mr Houston stated that he was given the following tasks to perform:

•  Locating office space on the Gold Coast and in Brisbane;

•  Locating land and accommodation for a manufacturing facility in Townsville;

•  Overseeing the manufacturing and distribution of ‘Boost Box’ product in Australia; and

•  Assisting with Horizon education stem kits.

[18] Mr Houston made numerous phone calls to real estate agents and inspected a number of potential sites. He attended a number of meetings and conducted an interview with an applicant for the role of post-graduation engineer. He stated that he delegated duties and had day-to-day meetings with Ms Lisa Sullivan, Marketing Coordinator, Horizon Educational and Oceania Executive; Mr Spencer Cann, Marketing Executive; and Mr Ales Rakovsky, Business Development Manager Executive. Ms Sullivan, Mr Cann and Mr Rakovsky also reported to Ms Langby.

[19] Mr Houston attended webinars on hydrogen-related topics, manufacturing automation and government grants for renewable energy.

[20] He said that he liaised with Townsville City Council to understand planning restrictions, new development restrictions, building code regulations and flood mapping in order to arrange the manufacturing facility in Townsville.

[21] On 15 July 2021, the following text exchange occurred:

“Ms Langby: Can you send me your bank details via email?

Mr Houston: Just heading back from oxendord. Will send shortly.

Ms Langby: Ok!

Money should be in your account -sent payment confirmation. Steffenie

Mr Houston: Thank you”

[22] On 21 July 2021, Ms Langby sent Mr Houston a document titled “Preliminary Engagement Agreement”. The document incorrectly said the commencement date was 15 July 2021. Mr Houston requested, by email, that the date reflect his true start date of 5 July 2021.

[23] Mr Houston stated that in a telephone call on 22 July 2021, it was agreed with Ms Langby that the payment of his salary would be in the first week of August 2021. This was then reflected above the signature provision within the agreement.

[24] On 29 July 2021, the pair exchanged email messages as follows:

“Ms Langby: Updated Preliminary Engagement Letter

Dave

Sorry for the delay – updated doc.

Mr Houston: All good. I agree with that. Do you need a signed copy sent back?

Ms Langby: Yes – for our file.”

[25] Mr Houston signed the preliminary engagement letter that day and sent her a photo of the signature page, noting the scanner was not working.

[26] The Preliminary Engagement Letter is as follows:

“The Offer

In consideration of your valued contribution prior to activating our offer and as a valued member of our team, we will offer shares to you (or your entity) in Ethical Developments. Your share allocation will be attached to conditions, which are currently being worked through with our legal representatives and our Chairman.

Role – Operations Manager

Your role with Ethical Developments, in the capacity of Operations Manager, recognises your exceptional experience and background and your capability to take on this role.

You will effectively be assisting the company to deliver three key core elements of business:

•  Developing the Hydrogen Assembly plant in Townsville, North Queensland to operational phase

•  Managing the establishment of the BoostBoxH2 Assembly Plant and distribution set up

•  Assisting with the establishing the outsourced manufacture and distribution for Hydrogen Refuelling Bowsers and Storage

As the company is moving from its Start Up phase to delivering products and services, your role will also include assisting the company establishing Horizon Educational Oceania (STEM kit sales to the K-12, VET & University sectors).

We acknowledge your role will evolve as Ethical Developments determines and implements strategy and business plans associated with our core focus to manufacture and assemble hydrogen electrolysers.

In addition to the above, key deliverables will encompass the following activities:

•  Work directly with and under the direction of the COO when he comes onboard.

•  Support our endeavours to deploy Hydrogen electrolyser deployments and BoostBoxH2 throughout Australia.

•  Attend relevant local, and regional events.

•  Travel to Townsville, North Queensland in consideration of establishing the Hydrogen Assembly plant.

•  Assist the COO to ascertain local/regional supply manufacturers who may be suited to contribute to the component supply for Ethical Development’s electrolyser and BoostBoxH2 assembly.

•  Assist with the establishment of an office on the Gold Coast.

•  Provide monthly and annual forecasting, budgeting, and planning for operational activities.

•  Manage support and technical staff appointed to assist you in your role.

•  Support other areas of the business upon request to assist with the overall growth of company activities in Queensland and interstate.

1. Position & Remuneration

Your position description will be based on the above key deliverables. We acknowledge in view of Ethical Developments being a start-up company, your position is likely to be further developed and agreed between parties.

Your formal employment will commence and subject to your satisfactory performance of the stipulated duties will continue until terminated by either party in accordance the Fair Work Act 2009.

You will faithfully work with Ethical Developments to the best of your ability and will endeavour to competently exercise all skills of your position.

Your working week is based on 40 hours.

Ethical Developments allows consideration of your working hours to be flexible to a certain degree so as to enable you attend to personal matters (such as medical appointments or to attend to family members) during working hours.

We acknowledge you have a business that you are aiming to sell and accept and acknowledge this circumstance. We have no issue if you do not sell the business and decide to retain the business, providing you are able to manage your work commitments to Ethical Developments. Beyond your own business circumstance, the company will require that you do not directly or indirectly undertake any other employment while employed by Ethical Developments, without the prior consent of Ethical Developments

We may ask you to undertake a Police check and/or a medical assessment.

We will ask you to provide Ethical Developments with such information as is reasonably required by Ethical Developments for personal record purposes.

2. Remuneration

*Company Superannuation Contribution 10.0% and according to Australia’s Super Guarantee.

**Equates to the standard value of a fully maintained motor vehicle

*** Subject to meeting agreed criteria and specified in Clause 2.3 – Performance Bonus arrangements.

2.1 Base Salary

a) Your base salary component will be paid in equal monthly amounts, by the 15th of each month into a bank account nominated by you.

b) Your base salary will also be used for superannuation and insurance purposes for the calculation of all paid entitlements during employment, subject to legislative requirements.

c) The base salary will be used for leave paid out on termination and for insurance purposes.

d) Subject to compliance with taxation legislation and other laws affecting employment, Ethical Developments will provide flexible remuneration packaging of the base salary component to employees whose remuneration makes this feasible. Participation in salary packaging is voluntary and the salary component will continue to be subject to PAYE tax in accordance with Income Tax Law.

e) Your remuneration will be reviewed on 1 July each year, with any increase in your remuneration will be at the discretion of Ethical Developments and subject to its assessment of your performance and the liquidity of the organisation. No annual increase is guaranteed but your remuneration cannot be reduced as a result of any such review.

2.2 Superannuation

Ethical Developments will make employer superannuation contributions of 10% of your base salary in line with the Super Guarantee as required by the Australian Government.

You will be asked to provide Ethical Developments with details of your nominated superannuation fund for payment of your salary super component while under the employment of Ethical Developments.

In the case where you wish to salary sacrifice part of your salary to your nominated superannuation fund, Ethical Developments will make these payments on your behalf upon request. Details of payments will be included on your monthly payslip.

Ethical Development’s superannuation contributions are determined as stated above. As a minimum however, they are governed by the Superannuation Guarantee legislation and any changes to that legislation.

2.3 Performance Bonus Arrangements

A separate bonus scheme will form part of your renumeration package, in addition to an allocation of shares.

As a Senior Executive of the company, we will provision bonus arrangements as the company moves into a cashflow position, generated from sales and reaching milestones.

We also aim to provide a whole-of-company bonus to all staff, paid in December each year.

2.4 Motor Vehicle

You will be provided with a motor vehicle allowance, which is designated as Tool of Trade subject to the terms and conditions outlined by Ethical Developments.

Our HR Manager (outsourced) will discuss with you, your options in consideration of the Motor Vehicle allowance.

You may avail yourself to a leased vehicle through a salary sacrificing mechanism such as a novated lease.

2.5 Telecommunications and Computing Facilities

We will provision you with a laptop (or equivalent) and relevant software that can only be used for work purposes.

We acknowledge you would prefer to use and retain your own telephone and number and will provide a compensation of $50 per month to cover reasonable expenses for mobile phone data and calls.

In the case where you require a new handset for work purposes, we will supply an android or apple phone.

3. Provisions of Services

Your role is as Senior Executive requires you with certain autonomy to carry out your work as you see fit.

Ethical Developments will encourage such autotomy in the case where deliverables are being met.

3.1 Annual Work Plan, Performance Measurement and Assessment.

As part of your role and with input from the Managing Director, we will develop a strategy and plan that will outline deliverables as a workplan for each quarter.

A formal process of agreed measures will be implemented, and your performance will be measured against that on a regular basis.

3.2 Office

Ethical Developments is currently assessing our requirements to establish an office on the Gold Coast. Later in the year we will also establish an office in Brisbane. In the short term, you will work from home after which you will have the option to work from home or the office.

4. Hours, Leave and Working Conditions

4.1 Hours of Work

Your standard hours of work are 40 hours per week. We believe in a flexible work environment to allow you to work to your own work/life balance.

You may be required to work reasonable hours outside of standard work hours (including weekends) to attend functions or meet with clients. There will be no provision for over-time payments, but sensible Time in Lieu arrangements can be negotiated where appropriate.

4.2 Leave

a) Your entitlements to annual leave, personal/carer’s leave and compassionate leave will be in accordance with the National Employment Standards and you will at all times be at least the minimum standards specified from time to time that are applicable to you.

b) Leave entitlements require approval and are as follows:

•  Four (4) weeks annual leave per annum which accrues based on the employee’s ordinary hours of work.

•  Ten (10) days per annum paid personal/carer’s leave. (Note Personal/Carer’s leave is paid leave taken by an employee because of personal illness or injury (paid sick leave) or paid leave taken by an employee to provide care and support to a member of the employee’s immediate family or household, who requires care and support because of a personal illness or injury or an emergency (paid carer’s leave); and

•  Two (2) days paid compassionate leave per occasion. Compassionate Leave is paid leave for the purpose of spending time with a member of the person’s immediate family or household who contracts or develops a personal illness or sustains and injury that poses a serious threat to his or her life or passes away.

c) Annual leave loading is incorporated into the base salary.

d) Leave without loss of pay is provided on gazetted public holidays applicable to the relevant State.

e) Long service leave accrues in accordance with statuary requirements applicable in the State or Territory where you are based.

4.3 Travel

Ethical Developments will provide you with company policy and processes associated with travel for company purposes.

All travel and/or accommodation bookings must first be approved by the Managing Director, CEO or Office Manager.

Travel expenses reasonably incurred by you in the course of your employment travel will be reimbursed to you on completion of a monthly reimbursement form along with all relevant copies in the form of receipts, tax invoices or other evidence.

Alcohol will not be an expense claim.

5. Over Payments & Owed Amounts

If we inadvertently overpay you, then you authorise Ethical Developments to make deductions from your next pay, following the discovery of the error or over an agreed number of pay periods, or otherwise agree to simply repay the amount on receipt of substantiation of the overpayment.

You will authorise the deduction from your termination pay any amounts owed to Ethical Developments.

Such amounts include, but are not limited to, annual leave granted in advance, personal/carer’s leave granted in advance, pay granted in advance and items purchased without permission.

6. Policies & Procedures

All Ethical Developments’ staff will abide by any policies and procedures adopted by Ethical Developments as well as all other employment conditions relating to the workplace environment such as harassment, EEO, use of email and internet facilities, workers compensation, insurance and expense reimbursement.

7. Ethical Developments’ Business Information and Intellectual Property

From the commencement of your engagement, you will have access to information about Ethical Developments’ business interests and those of its related parties, associates, contracted parties and partners, including our and their practices, financial details, pricing, products, services (existing , past and contemplated) as well as our and their computer and other electronic and information technology and telecommunication systems. All such information is commercially sensitive and confidential, and any such information must not be used, disclosed, reproduced, published, copied, extracted or dealt with in any manner whatsoever except in the authorised and proper exercise of your position in the course of employment with Ethical Developments.

Under no circumstances must any parts or parts of such information be dealt with or sold or assigned or transferred to any third person without Ethical Developments’ prior written and informed consent.

In particular, the information relating to the intellectual property secured by Ethical Developments and its stakeholder partners, is strictly Commercial in Confidence. Unless instructed by the Managing Director or CEO of Ethical Developments, none of this information is to be copied, reproduced, emailed, transcribed, extracted, codifies or dealt with in any manner whatsoever for your own use or to benefit or advantage any other person or corporation during your employment or at any time after you have ceased employment by Ethical Developments.

8. Termination

a) Your employment may be terminated on one month’s written notice, either by you or Ethical Developments.

b) If you fail to give notice to Ethical Developments pursuant to the clause above, then Ethical Developments has the right to withhold monies due to you to the maximum amount of one month’s pay.

c) Ethical Developments, in its absolute discretion, may pay out all or some of any period in lieu of working through the notice period. We may also deduct any monies owed by you to Ethical Developments from any of your entitlements.

d) Employment may also be terminated without notice if you commit or threaten any criminal or dishonest act, engage in serious misconduct or recklessness or gross negligence or any other act or omission that reasonably and objectively justifies immediate dismissal or which legally prevents or hinders you or prohibits you from performing your duties of employment. If your employment is terminated in these circumstances without notice, you will only be entitled to remuneration to the date of the termination and your statutory leave entitlements, but not to other compensation as a result of that termination.

e) If your job description is varied consistent with your skills, qualifications and experience, this will not constitute termination of your employment and the terms and conditions of this employment agreement that have not been altered by agreement will continue to apply.

f) At the end of your employment, or sooner if required by Ethical Developments, you will deliver to Ethical Developments all company property and items used in conjunction with your employment, including keys, files, Documents, designs, records, programs, client lists, manuals, passes, computers, software, security passes, motor vehicles, fuel cards, mobile phones and any other identified property of Ethical Developments.

9. Intellectual Property and Moral Rights

All intellectual property rights including copyright in works whether conceived, created, developed, written or otherwise generated by you either alone or with any other person in the course of your employment, whether during or outside normal working hours, belong entirely to Ethical Developments.

Your consent extends to any licence of, or successor in title to, the copyright of the operation (in whole or in part) and to any person authorised by any of them to do any acts in relation to the operation of Ethical Developments.

10.Workplace Health and safety

Ethical Developments is committed to providing a safe and healthy workplace for all employees, contractors and visitors in accordance with Work Health and Safety (WHS) and occupational Health and Safety (OHS) legislative requirements specific to our operations.

At all times, you are required to comply with Ethical Developments’ WHS policies and Procedures and all relevant WHS requirements.

11. Governing Law and Severance

The law of this agreement will be that of Queensland.

If a provision of your Employment Agreement is found by a court of competent jurisdiction to be void or unenforceable, it shall be read down to the extent necessary or enforceable in that jurisdiction. If the whole or part of a provision in your Employment Agreement is found to be void or unenforceable it will be severed from the Employment Agreement, but the remainder of the Agreement will have full force and affect unless the severance alters the basic nature of the Agreement.

Also ensuring that the above terms reflect your understanding of the full conditions of employment, in so far as anything said or implied in any discussion before acceptance that is not expressly set out herein, is of no effect and cannot be incorporated in or deemed to be part of your employment agreement.

12. Acceptance of the Offer

Signed by Steffenie Langby, Managing Director and Dave Houston, in consideration of agreement to the items above, therefore forming the basis to progress to a formal Employment and as and when established Employee Shareholder Agreement. We aim to expedite your formal agreement as early as possible with a start date of the 15th July (if agreed).”

[27] On 30 July 2021, the following emails were exchanged:

“Ms Langby: Dave just trying to sort out some of the paperwork for Paulette – if you can complete the tax and super docs and return as soon as possible.

Mr Houston: Steff, forms signed and returned.”

[28] The tax form was from the Australian Taxation Office, being a “Tax file number declaration” form. As to the question, “On what basis are you being paid?”, Mr Houston ticked, “Full-time employment”. He declared that he wanted to claim the tax-free threshold from this employer.

[29] On 14 September 2021, Mr Houston informed Ms Langby that he had sold his business and would require two weeks to show the new owner the rounds and meet with clients. Ms Langby approved the leave.

[30] Mr Houston stated that when Ms Langby introduced him to a real estate professional and Gold Coast town planner, she did so by stating his title is Operations Manager.

[31] On or around 9 September 2021, Ms Langby provided Mr Houston a template non-disclosure agreement. On or around 15 October 2021, Mr Houston used that template to prepare a non-disclosure agreement with a prospective supplier. Mr Houston sent the completed agreement to Ms Langby for her approval, which she gave. Mr Houston then sent the non-disclosure agreement to the prospective supplier. The prospective supplier executed the agreement, and Mr Houston then did so on behalf of the First Respondent.

[32] On 18 October 2021, Ms Langby sent the following email to Mr Houston and others:

“Lisa and gents

As we will be issuing shares along with your employment contracts, could you please advise your residential address and the entity you wish the shares to be issued to (such as a family trust or your SMSF) or your full name (including middle name).”

[33] Between 10 September 2021 and 25 November 2021, Mr Houston sent numerous emails to Ms Langby requesting that his salary/wages be paid.

[34] Only the following gross payments were made by the First Respondent to Mr Houston:

[35] On 26 November 2021, Mr Houston received the following email:

“Termination of our business relationship as of today

Dave

You do not have a contract as I cannot legally employ you until there are funds in the bank. Yes, funds were anticipated months ago.

I have provided cash advances to assist you and thank you for your efforts.

It is my full intention to reimburse fair remuneration for your efforts. However, you took time to sell your business. This is on your time, not mine.

You have made me clear of your situation. I have made you clear of my situation. I cannot be held responsible for your decisions.

As of today, I cannot, in the future, offer any role with Ethical Developments as I do not believe, even with remuneration, we will recover from this situation. An SMS at 5:57am with its contents, is not cricket. If you feel otherwise, please advise.

I have suspended your email in consideration of terminating our business relationship today.”

Evidence of the First and Second Respondents

[36] Ms Langby stated that Mr Houston was a gardener, providing approximately three hours of assistance each fortnight to the home Ms Langby shares with her partner. Ms Langby’s partner suffers from Lewy Body Spectrum and at the time, was being cared for at-home by Ms Langby.

[37] In April 2021, Mr Houston informed Ms Langby that he was selling his business, prompting a discussion of his career to-date, including that he was previously a Detective with the Queensland Police.

[38] Ms Langby agreed that she met with Mr Houston in May 2021 to discuss with him her business. She made him aware that she was engaged in capital raising which was on track to be finalised. On 23 May 2021, she sent him the following email:

“Dave

Thank you for your time also!

Of course there are checks and balances – we have outsourced our HR to a specialist company, however I’m not entirely happy with their work to date.

As we now have Executive and Senior Management roles being established (beyond the original start up team), I will be organising as soon as possible to work with a new HR Agency.

I understand you are selling your business and yes, we are very prepared to be open to senior employees with regard to the status of our capital raising, business plans, recruitment plan and program requirements for the next 12 months. We will require NDA’s to be signed as part of this process.

Yes – happy to discuss the position and drafting (from which a contract will be drafted) – if Saturday is most convenient, we can organise for this Saturday.

All good!”

[39] It is Ms Langby’s contention that she was prepared to provide to Mr Houston a draft proposal for him to work for the First Respondent. Mr Houston requested that he commence on 5 July 2021. Ms Langby stated that investor funds were promised by the end of June 2021. The original start date of 5 July 2021 was offered to provide a buffer in the event investor funding was delayed.

[40] Ms Langby stated that “no formal working contract” was provided to Mr Houston, and he commenced activities and tasks to learn about the core business of the company. Mr Houston was still selling his business at this time. He requested a company email account, which was provided. He did not keep a timesheet of the activities he undertook.

[41] In fact, the email provided by Ms Langby in her evidence demonstrates that on 5 July 2021, Ms Langby provided Mr Houston with a login. He then used his Gmail email account to ask her, “What e-mail address am I using?” She responded with: dave.houston@ethicaldevelopments.com.au.

[42] On 7 July 2021, the pair exchanged the following emails:

“Mr Houston: Just trying to organise my finances as things are a bit tight. Can you let me know if I’ll be getting paid next week (15/7) or will I have to wait till August?

Ms Langby: I’ve anticipated first pay at the end of the month – to align them with monthly (starting on the 1^st) on the 15^th (effectively two weeks in advance).

Can you manage this?”

[43] Ms Langby’s evidence is that she informed Mr Houston that investment money promised from a strategic investor, Mr Ira Winston had not come through. In April 2021, Mr Winston had promised the First Respondent $1.5m. I shall have more to say about Mr Winston below.

[44] It is Ms Langby’s evidence that on 15 July 2021, she verbally informed Mr Houston that the promised investment funds had not materialised, and his offer of employment could not be progressed and would be withdrawn. Mr Houston asked, “How can I help?”. The parties agreed to Mr Houston undertaking three tasks while the First Respondent progressed alternative funding options.

[45] It is Ms Langby’s evidence that Mr Houston was actively trying to sell his gardening business, and he was “helping out” the First Respondent, but he was not employed.

[46] On 15 July 2021, the First Respondent transferred a cash advance of $1,000 at Mr Houston’s request. Ms Langby sent a receipt to Mr Houston’s Ethical Developments email address.

[47] On 29 July 2021, Mr Houston was verbally advised that the First Respondent had several interested parties keen to invest. In anticipation of funds becoming available, Mr Houston provided a photograph of his signature to the agreement. The following day he provided his tax declaration and superannuation details.

[48] Discussions took place between Mr Houston and Ms Langby around the car allowance and potential leasing of a vehicle.

[49] Ms Langby’s evidence is the Preliminary Engagement Agreement clearly stated it would be used for “forming the basis to progress to Formal Employment and as and when established Employee Shareholder Agreement. We aim to expedite your formal agreement as early as possible with a start date of the 15^th of July (if agreed).”

[50] She stated that the First Respondent did not co-sign the preliminary employment offer and it was made very clear to Mr Houston that a formal agreement could not occur until funding became available.

[51] Ms Langby learned on 5 August 2021 that Mr Winston had been imprisoned in the 1990s for a misappropriation offence. A judgment of Thomas J of the Supreme Court of Queensland in 1986 3 refers to Mr Winston as a “confidence man”, having swindled associates of money and a title deed. In 1991, Mr Winston was convicted in absentia of misappropriation. He absconded and was sentenced to six years’ imprisonment after being brought back pursuant to a bench warrant. He sought to appeal his conviction in 1994, making an out of time application which was refused.4

[52] Ms Langby contended that on 10 August 2021, she verbally informed Mr Houston that interested investors had declined to invest because the then Chairman had an unfavourable review on the website, wikifrauds. The then Chairman had been referring to himself as a barrister, however after investigation, Ms Langby satisfied herself that the person had not been a barrister for over 30 years. After the Chairman refused to step down, he was dismissed six weeks later.

[53] Ms Langby said that despite Mr Houston knowing that investor money was required, he continued to be associated with the First Respondent.

[54] On 10 September 2021, Mr Houston sent the following email:

“Hope you are making headway with these solicitors.

I just want to explain my situation and why I have been persistent in asking for my wages.

We are now coming at the end of week 10 since I commenced. I indicated when I started that it would be a stretch to work till the 15 August without having a wage.

Actually I have not taken a wage or moneys from my business since the week of the 18^th of June as being winter and [name] isn’t being as efficient as myself, the business has only been able to support paying his wage and operating costs leaving us living day to day for weeks.

I have had to move mortgage payments every couple of weeks as every week there is a hold up and no money, (The bank has been great but I’m pushing the friendship now).

I appreciate the advance money which has gone to paying some of the mortgage and a few bills over the past 2 mths.

Dana has cut her hours to look after the business but she is now going to have to look for more clients to help paying our expenses.

We have now exhausted our savings and this has set us back months.

………..

I love my job and I’m so excited for the future of this company. Looking forward to being part of the growth and development of a very successful company making our country greener and healthier, but my excitement is soured by the stress of having no income coming in and the possibility of losing our house.

Unfortunately it has come to the point that the money has to be in today so I can pay my bills.

I am telling you this so you can communicate to whoever is holding things up, they are not only costing the company but also impacting on you and the quality of life for your employees.

I appreciate how hard you have been to getting this rectified. I can’t begin to know the frustration and stress you under at this time, however we are feeling the pain as well and are now at the end of our rope.”

[55] Ms Langby said that she verbally informed Mr Houston to look for work elsewhere as the First Respondent could not sustain providing cash advances and would continue to seek investor funding. She could not provide a date of this alleged conversation.

[56] On 14 September 2021, Mr Houston sent a text message to his gardening clients. He was not doing work for the First Respondent for a period of two weeks. The following emails were exchanged on 14 September 2021:

“Mr Houston: Are we any closer to a payment.

Ms Langby: Yep – the whole hog – I’ll be in touch.”

[57] On 15 September 2021, Mr Houston acknowledged he was working in his gardening business.

[58] On 30 September 2021, Mr Houston sent the following email:

“Unfortunately we are now in a difficult financial situation due to no reasonable income for multiple week.

I parked up a lucrative small business which covered our monthly needs comfortably.

I’ve shown my dedication and loyalty by sticking this out and doing my job in spite of not being paid.

Weekly conversation with my mortgage lender, which is becoming stressful, as of Monday Dana’s car will be unregistered, and the list goes on.

I cannot stress how important these unpaid wages has become to us. Every week now I’m told it’ll be there this week, yet nothing ever arrives. I’m sure you can appreciate my concerns and unrest.”

[59] Ms Langby stated that in consideration of Mr Houston’s dire situation, a cash advance was organised to assist Mr Houston and his wife. A $9,000 cash advance was paid into his bank account on 30 September 2021. Her email to Mr Houston announced the $9,000 cash advance and said, “More to follow.”

[60] On 6 October 2021, Mr Houston sent the following email:

“….I meant to ask yesterday, are the pay cycles set up now for the 15th of each month. Just remember I now don’t have an income from the business now.”

[61] On 18 October 2021, Ms Langby issued to Mr Houston and others the email regarding shares at [32].

[62] On 25 October 2021, the following emails were exchanged:

“Mr Houston: Morning Steff,

Just letting you know nothing came in over the weekend. Hope there is no more hold ups. Can you give me an update as to when it will be please.

Ms Langby: Dave

Funds have not hit the business account this morning.

I’m in the process of admitting John to hospital – I’ll be in touch when I get John sorted.

Mr Houston: Oh no, hope he is OK.

Ms Langby: It’s my call – I’m at the end of my tether. Its’ been very difficult over the past three weeks.

Best for John and a relief for me, I can sleep and work and get things done. He’ll likely be in [hospital] for two-three weeks. Plenty of time for me to recover. I’ll be in touch.”

[63] On 27 October 2021, the following emails were exchanged:

“Mr Houston: I didn’t hear from you in 24hrs.

I need you to understand the urgency with this. I started 16 weeks ago. Have been told weekly that everything is going nicely and that money will be in and paid on the 15^th of the month. None of this has happened in this period of time.

I fully understand that you have had some difficulties and have had to change things around, and I have remained as patient as I can be.

This shouldn’t take 16 weeks.

Over 1 month ago my stable income stopped as the business was sold. It was not a million dollar company just a small garden business. What little money that was left after catching up has gone.

16 weeks of making plans to pay bills, constantly in contact with banks to cancel, wondering if any money is coming in to meet commitments has been incredibly stress and has taken its toll on both of us.

I never signed up for that.

I appreciate the advanced money but that has just kept us going while we wait for my pay.

It is now 6 weeks till Christmas and we can’t start to prepare anything for our family, as we have no idea of when I will have a regular income.

This stops today!

You employed a man who gets the job done, thinks outside the square and is loyal to the cause.

I’m just not feeling anything in return.

Ms Langby; I’m sorry – I am working to remedy, however John’s condition has deteriorated over the past three days.

I’ve had a hell morning – now turning my attention to Ethical.

I will be in touch.

Mr Houston: Thoughts are with you and I hope John recovers quickly and things get back to normal.

I just need you to know the urgency of this. Dana and I are now in the worst financial position ever. No income, no safety net. Thinking of you both.

Ms Langby: Mojo is back.

I am genuinely sorry and moving things into place so I never need to worry about wages again. You and the team are my utmost priority (aside from my John).

…………….

I’ll be in touch.”

[64] On 5 November 2021, Mr Houston sent the following email:

“Just want to check if the funds are in. I haven’t received anything yet.

Can you make sure it is an urgent transfer into my ING account as I have lots of direct debits coming out today.

See you at 10:30”

[65] On 8 November 2021, Mr Houston sent the following email:

“I know you’re busy with John this morning. Can you just do the $10,000 by wed/thur for this week.

I will pay it back when the other funds drop. I really need to pay my mortgage and my insurances as they are all overdue and I have to pay them by Thursday this week.”

[66] On 10 November 2021, Ms Langby provided an update on the declining health of her partner. She said she will continue with the business as this is what he would want her to do. Mr Houston replied as follows:

“So sorry to hear that about John. Our thoughts are with you in this trying time. If there is anything we can do don’t hesitate to ask.

I understand that you are working hard on rectifying the money situation. I hate having to keep asking you but my situation is dire. As I stated in my previous email we need a minimum of $10,000 by today to pay outstanding mortgage and other outstanding utility bills. I cannot move my payments anymore as I have done for the past 5 months. I have no other means of getting this money and have nowhere to turn.

You said you had a plan to put $10,000 in each of our accounts and work the rest out. Can we please do that.”

[67] On 11 November 2021, the following emails were exchanged:

“Ms Langby: I’m sorry I haven’t returned your call.

I am working to ensure everyone gets paid. Not just you – but all of us.

And you are right – my personal issues are none of your concern.

I’ll advise as soon as possible.

Mr Houston: Thanks for email, I am very concerned about you and John at this time which is why I have offered to help any way I can.

I also appreciate the time you are putting into this situation, not only for me but for everyone.

If you could please simply deposit the $10,000 promised last Friday I can leave you alone for a while to get this sorted.

…….”

[68] On 17 November 2021, Mr Houston’s wife, Dana, sent a text message to Ms Langby requesting she beg, borrow or steal to pay Mr Houston as the family was in a dire financial state. Ms Langby described the text message as distressing for her to read, as in she was distressed to receive the text message; she was not distressed to learn of the family’s dire finances.

[69] On 25 November 2021 in an email titled “Steff bitch”, Mr Houston sent the following:

“Thank you for the update, much appreciated. However,

What is your plan in the interim while you continually search for investors. As indicated I have no income? (You are my employer?)

I have on numerous occasions detailed in confidence my financial situation. On one phone call you even said to me and I quote, “if you have to find another job then do what you have to do”. (WOW)

Riddle me this. Employers have an immediate and direct responsibility for their employees wages/salaries. (Under state/commonwealth law).

I was offered 185k salary package under a signed agreement (have legal advice). Supposed to get a new phone. Never happened. Supposed to get lap top, never happened. Supposed to get the best internet VPN security for home. Never happened.

Since day one haven’t received a pay slip/advice. No super. Fully understand the working out of the share thing. (Not real important when you haven’t been paying anyone!!!!!!)

Since 1 July I have received the full amount of $16400. Which is totally appreciated. The bulk of it was paid before Sept.

I emailed/messaged/phoned you in start of Sept indicating that I did not have any income except coming from you. Still from the 30^th Sept you have paid me a total of $1400. It is now nearly December. $1400 for 3 months $466 per month, $116.66 per week. I was earning that when I started working at 17 years old.

My KPI’s as in the agreement was to assist in finding office space on the Gold Coast. Met.

Assist with Horizon educational Oceania with 3pl logistics plus cost analysist. Met.

Development of a manufacturing facility in Townsville for Electrolyzer production. Located suitable land. Liaised with Director Ross Heatley with regards to planning. Commenced the ground work with a possible office/accommodation space etc. Met.

I have done this without my own funds/computer/internet. Without question.

TIME IS UP.

This is what will happen.

By close of business Friday 26/11/21 you will deposit $2000 into my account.

By close of business Monday 29/11/21 you will deposit $10,000 into my account.

By close of business Friday [3/12/21] you will deposit $58,000 into my account. (Accounting for remaining salary, super entitlements and damages caused to our credit rating/insurance/rates/fees etc.).

I think you owe me that. I will walk away and have nothing to do with you or your company.

If this is not met, I will not only and rightly take legal against you and your so called share holders, plus I will go to the media and explain how someone in charge of a company can financially ruin an employees family.”

[70] On 26 November 2021, Ms Langby replied:

“You have been fully made aware that Ethical Developments is a start-up. In consideration of this, shares would have been allocated.

It is not ok to send an SMS at 5:57am making demands.

Can you please provide details of your activities during the period.

You have not worked full time and I’m not aware of any activities over the past few weeks.

I am also sorry that over the past few weeks, I have had to prioritise my partner’s health situation and dropped a few balls.

Being nasty and making demands does not help. I understand your situation only too well – your wife asked me to beg, borrow or steal.”

[71] Mr Houston replied, as follows:

“Not demanding, just an employee asking to be paid. You shouldn’t of hired anyone if you are broke.

Beg, borrow and steal is what you have to do when you are forced into poverty.

This is not a performance evaluation. Indicate to me on my employment agreement where it says I’m part-time.

Also can you please indicate to me my current employment status as it stands today?”

[72] In addition to the email sent to Mr Houston at [35], Ms Langby says that she spoke with Mr Houston on the phone on 26 November 2021. He asked, “Are you terminating my employment?” to which she replied, “I am terminating our business relationship.”

[73] In her written material, Ms Langby contended that of the 270 emails sent by Mr Houston when he was “helping out” the First Respondent, 58 of the emails concerned salary or payments said to be owed to him. Ms Langby contended that Mr Houston only then sent an average of three emails per working day. Ms Langby suggested that Mr Houston was barely active and the only conclusion that can be drawn is that he was intent on obtaining funds from the First Respondent for little or no contribution.

[74] Ms Langby acknowledged that Mr Houston attended approximately 10 meetings with real estate agents and others, and also met with her approximately 12 times either at her home or at a café.

[75] Ms Langby contended that the payments made to Mr Houston were cash advances, and Mr Houston was told he could not rely on these coming as Ms Langby had to concentrate on seeking investor funding.

[76] Ms Langby said that Mr Houston’s continuous demands on her caused significant stress. She considered that Mr Houston would not listen or even contemplate the effort required to attract investment. She considered that Mr Houston would be kind in one email to be assertive in another and this was a method of careful manipulation.

Evidence given during the hearing

[77] Ms Langby was hopeful the application would be dismissed because there was an ‘s’ missing from the name of the First Respondent. I informed Ms Langby I would make a correction order to resolve that issue.

[78] The following evidence was given: 5

Ms Langby: Mr Houston, despite not theoretically getting paid for six months, and all the information that I gave him in terms of the investor funding, continued to want to help out in the business.  He wanted to also obtain shares in the business.  I refinanced and recalibrated the company in consideration of investor funding coming in.

So, I do not - I do not - believe that Mr Houston was a full-time employee.  He was working his own business.  Yes, he did things for Ethical Developments - I have no issue with that - but the claim is completely untenable or unacceptable in view of the fact that Mr Houston has lied in certain parts by saying that he's taking two weeks off when, in actual fact, I didn't know that he did that until I challenged him, for example.

Commissioner: Ms Langby, do you understand that I am not determining whether he was employed on a full-time basis?  Whether it was full time, part time, casual, it doesn't matter.  I'm here to determine whether or not he was employed.

Ms Langby: Okay.  I don't believe he was employed in the context of beyond two weeks and then helping out, for which I was willing to pay him.

[79] In cross-examination, Ms Langby agreed that she sent Mr Houston the ‘Preliminary Engagement Agreement’ on 22 July 2021 and sent an amended version on 29 July 2021 nominating 5 July 2021 as the commencement date. Ms Langby agreed that Mr Houston sent her the signed signature page. The following was put and answered: 6

Ms Langby: Yes.  However, I never signed or returned that document.  I was waiting for investment funding and that was made clear to Mr Houston.

Ms Pohlner: But Mr Houston signed the document and returned the signed page to you?

Ms Langby: And I did not sign the return.  Mr Houston was made fully aware that I was waiting for investment funding.

Ms Pohlner: You would agree that there is no clause within that amended document that you provided to Mr Houston and Mr Houston signed and returned to you that states that Mr Houston's employment was subject to the provision of investor funding, would you not?

Ms Langby: No.  It was made verbally to Mr Houston on several occasions because the investment moneys had not come in from Mr Ira Winston.

Ms Pohlner: The document itself, though, Ms Langby, contains no reference to investor funding, does it?

Ms Langby: No it doesn't, but verbally - verbally - this was setting up the arrangements because I had other investment funding that was due to come in.  It was preparing for Mr Houston to receive a formal agreement for his employment.  A preliminary agreement was never intended to be formalised until - and Mr Houston is aware of this - an HR agency had been committed, and so the preliminary document was going to the HR people to have a proper - a proper and legal document created for Mr Houston's employment.

Ms Pohlner: But the document that you provided to Mr Houston that he signed and returned to you contained no reference to investor funding, does it?

Ms Langby: No, it does not because it is - - -

Ms Pohlner: All right, thank you.

[80] Ms Langby accepted that she had sent Mr Houston an email requesting he complete a tax file number declaration and superannuation form. In cross-examination she accepted that the term ‘wages’ is used to describe payments made to employees for the work they perform on behalf of their employers.

[81] Ms Langby insisted that the payments totalling $16,400 to Mr Houston were cash advances. She said she did so because Mr Houston had issues with his mortgage and his cash flow. She said it was not a payment for wages. She said: 7

“Let's be very clear.  And that's also on the deposits and also on what I personally put through for Mr Houston because he was desperate.”

[82] Ms Langby conceded that at no time did she respond in writing to Mr Houston to say to him that he was not entitled to wages.

[83] I had the following exchange with Ms Langby: 8

Commissioner: Ms Langby, it's not usual for a company to make a written offer of employment, ask for a tax declaration, pay some moneys to a person, provide them with a work email address unless they're performing services for the business.  Now, they are either an employee or a contractor.  What did you think Mr Houston was?

Ms Langby: Mr Houston was helping out and entitled, yes, but he wasn't working full time, he was working, as I understood it, with his gardening business.  You know, in November, September and October, he sent very few emails.

Commissioner: All right.  Ms Langby, I'm not here to determine whether or not he's owed $185,000 a year.  That's not my business here.  I'm here to determine whether he was an employee of the first respondent.

Ms Langby: I don't believe so, no.

Commissioner: On what basis don't you believe so?  I mean if you - - -

Ms Langby: Because - - -

Commissioner: Let's just say you had a Subway chain and you asked a young person to come in and you didn't sign a contract with them but you had them there for two weeks serving the customers, and they then said, 'Well, where's my wages, please?'  You couldn't turn around to them and say, 'Well, you were helping out and we didn't sign anything, so off you go.'

Ms Langby: I agree with you, I agree with you, okay, but I have also asked Mr Houston to give me details of what hours he worked and he never did.

Commissioner: So why did you pay him?  I mean you've asked for a tax file number and you've ended up paying him.  You don't pay strangers.  You must have thought in your mind that he was owed something, otherwise you wouldn't pay him.

Ms Langby: Certainly.  He sent emails saying that he was in a crisis situation.  He'd been our gardener.  I wouldn't let somebody get to that point.  I had no idea of his finances in terms of, you know, his situation.  He had just sold his business.  Well, you know, it's all a bit odd that he's in a crisis situation, but, you know, I did the right thing as a human being, you know, and it's someone who I had known for several years.

Commissioner: You accept that he did some work for Ethical Developments?

Ms Langby: Absolutely, absolutely, I have no issue with that.

Commissioner: Okay.  And then how would you describe the work that he did for Ethical Developments?  How did he perform that?  As an employee?

Ms Langby: Well, by rights, it would be under a contract arrangement because there was, in my mind, no formal agreement because after I'd advised him that I know investors, or the investor, Mr Ira Winston, fell through, you know, I had to relook at the situation, and Dave said, 'Hey, listen, I'll help you out.'  Well, of course, there's got to be remuneration for that.  When he worked as a gardener, you know, he was paid cash.  So, you know, he had an ABN and all the rest of it, so there was this facility, as I thought, for David to give an invoice if he wanted, but - - -

Commissioner: But you asked him for a tax file number.

Ms Langby; Yes, I did, because we were setting up, because I had three other investors now coming through, and I really wanted to put all of this paperwork over to the HR lady so that he could get paid and we reconciled it as quickly as possible.

Commissioner: When you did make the payments to him, you didn't ask him to invoice you and you didn't pay it to the ABN, did you?

Ms Langby: No, no.  Well, he needed money right away.  He asked me to put it into a business account, though.

Commissioner: Did you deduct any taxation from the payment?

Ms Langby: No, they were cash advances, they were clearly made as cash advances.  He had issues with his mortgage.

Commissioner: So what is the business paying Mr Houston for?  What does a cash advance mean?

Ms Langby: In the context that when the investment came through, we would reconcile and we would sort things out in terms of Mr Houston's hours.

[84] In evidence-in-chief, Mr Houston stated that he had never been asked to provide an invoice to the First or Second Respondents and the bank account the payments were made to was to his personal account.

[85] In cross-examination, Mr Houston denied that Ms Langby had ever said that she could not employ him or to cease work as she was awaiting investor funds.

[86] Ms Langby asked Mr Houston to verify his activity; the following was put and answered: 9

Ms Langby: So how can you justify working 40 hours a week if there's nothing to show on the record what you did apart from speak to a few real estate agents and respond to a few emails?

Mr Houston: I can justify what I did.

Ms Langby: Really?  Okay.  I understand that you were actually quite active in August and October.  However, September/October, there's not a lot to justify what you did.  Could you provide any detail for those months as to what you achieved?

[87] The following exchange then occurred: 10

Commissioner: Again, parties, I'm not here to determine whether or not Mr Houston is owed for wages.  Ms Langby, there you just said, 'You were quite active in August' and which other month?

Ms Langby: August/September.

Commissioner: What do you think he was doing for you?

Ms Langby: We agreed - after I said to Mr Houston that we had a problem with investment, he asked me, 'How can I help?'  So, he wanted - he wanted to keep doing things for the company even though, at that point in time, he knew that funding wasn't available for remuneration.

Commissioner: Mr Houston, did you understand that if you were providing or doing work in August and September of 2021 that Ms Langby understood that you weren't an employee, that you were doing this out of the goodness of your heart?

Mr Houston: No.

Ms Langby: Commissioner, I wouldn't say out of the goodness of his heart.  Of course he's entitled to something.  However, he was selling his business through this time.

Commissioner: What's he entitled to, Ms Langby, through this time?

Ms Langby: Remuneration for the work that he did, for the time, for the hours, but he's taken two weeks off.  You know, I was not - - -

Commissioner: Remuneration as what?  As an employee?

Ms Langby: No, as a contractor.

Commissioner: As a contractor?

Ms Langby: Yes.

Commissioner: Is that where you - that's what you mean now, is it, Ms Langby, as a contractor?

Ms Langby: The issue was that he would not become an employee until he had a full contract.  So, I was quite happy to - and remember, too, we also had a previous relationship with Mr Houston as a gardener.  I really thought that he understood the situation and we would work things through, and I have been fair in providing Mr Houston, not with wages, but as cash advances.

[88] During cross-examination, Mr Houston stated that he interviewed the son of Ms Langby’s friend in consideration of a role with the First Respondent. Ms Langby said that she didn’t know that had occurred. Mr Houston said yes, she did, because she had asked him to and had provided to him the young man’s phone number. The following was put and answered: 11

Commissioner: Ms Langby, why did you ask Mr Houston to do this activity?

Ms Langby: Because I did not have any space myself with a sick partner and other things that were going on.  My focus was investment, so - - -

Commissioner: What was the nature of Mr Houston's responsibilities there in contacting [name]?  Why does he do that for you or for the business?

Ms Langby: In the capacity of so-called operations manager, the idea of seeing if [name] was suitable or if Mr Houston, you know, could have a rapport with him via a phone call.  [name] actually - - -

Commissioner: So Mr Houston was an operations manager and performing operations manager duties?

Ms Langby: No, he was - he was helping out, he was helping out.

Commissioner: As an operations manager?

Ms Langby: Well, in this case, [name] was an engineer who worked with us at the Brisbane Truck Show and so I would have valued Mr Houston's input.

Commissioner: But you don't ask anybody else, you ask Mr Houston to contact [name] to have some sort of conversation?

Ms Langby: Yes, I provided a telephone number.  [name] had contacted me at various times, I just didn't have the bandwidth.

[89] Ms Langby submitted that Mr Houston only did the three tasks she had set for him. The following exchange occurred: 12

Commissioner: So he did what you asked him to do?

Ms Langby: Correct.  Three times.

Commissioner: And in what capacity did he do that?

Ms Langby: In helping out, but I was expecting to pay him, of course.

Commissioner: How were you expecting to pay him?

Ms Langby: Well, to use the three tasks and the time that he spent doing it - he was selling his business through this time - and to work it through and pay him.

Commissioner: In what capacity would you pay him?

Ms Langby: I would have paid him in the capacity as a contractor if there were no funds in the bank.

Commissioner: All right.  Did you ever have a discussion with him about, 'You are a contractor, you are to invoice me, you are to charge me GST'?

Ms Langby: No.

Commissioner: You never had those sorts of conversations with him?

Ms Langby: No, no, I did not.  But helping out and saying that you're doing three tasks, that he would do three tasks and complete three tasks, does not constitute a full-time job, and that was my understanding.

Commissioner: Again, I'm not here to determine whether he worked full-time hours for you.

Ms Langby: Yes.  It would be good to submit, you know, this email, all the detail, because he agrees, when he's demanding money, that he agreed to do three tasks.

Commissioner: Mr Houston, you thought that was in the performance of your employment, did you?

Mr Houston: Yes, that was part of the employment contract, part of my duties.  I did other things as well.

Consideration

[90] Ms Langby was not able to properly articulate what she thought the relationship between the First Respondent and Mr Houston was. At times she suggested it might have been one of principal and contractor; at other times she suggested that Mr Houston was simply “helping out”.

[91] There is, of course, no such legal position as “helping out”. Mr Houston was not a family member helping to run a small, family business. Neither is there any capacity to define Mr Houston’s contribution of that of a volunteer as one might in a charitable or community organisation.

[92] In the contest of whether Mr Houston was an employee or a contractor, recent authorities can assist with the determination. The High Court recently revised the applicable legal principles to determine whether a person is an employee or an independent contractor in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (‘Personnel Contracting’) and ZG Operations Australia Pty Ltd v Jamsek (‘Jamsek’). 13 A useful analysis was applied in the Commission decision of Waring v Hage Retail Group Pty Ltd:14

“[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 French Accent 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.” (footnotes omitted).

[93] It seems to me that Ms Langby concluded in her own mind that the arrangement she had with Mr Houston was somehow preliminary, and when investor funding came in, something more formal would be arranged. It is really unclear as to what Mr Langby thought the arrangement from July 2021 was. She had offered an employment agreement and it had been accepted. Simply putting the word ‘preliminary’ in front does not, at law, alter the relationship between the parties. The document reads like a typical employment agreement, providing for paid leave, with references to employment and the National Employment Standards contained within the Act.

[94] The email to Mr Houston and others on 18 October 2021 at [32] perhaps sheds some light on her thinking, where she declared to the email recipients that they would be offered shares “along with your employment contracts”. It seems that Ms Langby was working off the notion that Mr Houston, at least, was performing work for the First Respondent in a mystical capacity; not as an employee and not as any other description she can properly explain.

[95] At no time was Mr Houston offered a contracting agreement. He was, in fact offered and accepted an employment agreement prepared by the First Respondent. Ms Langby has attempted to declare the employment agreement as not valid on account of the fact that she did not sign it and return it to Mr Houston. She did, however, send it to him in an amended fashion, asked him to sign and return it, and when he did, never said by fact or deed that the First Respondent had no intention of being bound by it. On 29 July 2021, Ms Langby informed Mr Houston that she required Mr Houston’s signed copy for the First Respondent’s file.

[96] Within days, Ms Langby requested Mr Houston’s Tax File Number Declaration and completed superannuation forms. These are all of the acts undertaken by an employer to their employee. Mr Houston returned the signed forms to Ms Langby. It is noted that he had declared himself to be a full-time employee. Ms Langby did not at any time correct Mr Houston.

[97] Ms Langby accepted in evidence that Mr Houston did work for the First Respondent. She takes issue with how much work he claims to have done, but that, of course, is not the matter for determination by the Commission. Ms Langby accepted that he met with real estate agents, interviewed a friend’s son in consideration of joining the business, and met with her on numerous occasions. Ms Langby conceded that Mr Houston was quite busy in August and September 2021. She considers he only did the three things she tasked him to do.

[98] Ms Langby’s grip with reality is disturbing when she has attempted to fashion Mr Houston as a manipulator and somebody she is scared of. She further suggested that he was intent on obtaining funds from the First Respondent for little to no contribution. Mr Houston repeatedly requested the remuneration he was owed to be paid to him. For many months, Ms Langby was stringing Mr Houston along with false promises of full payment. Two days after the commencement of the relationship, on 7 July 2021 at [42], she informed him he would be paid monthly. She was unable to meet the First Respondent’s obligations.

[99] Incredulously, Ms Langby considered she was being generous by drip-feeding payments which she calls cash advances because she did the right thing as a human being and Mr Houston was desperate for money. She referred to wages in her email to Mr Houston on 27 October 2021 at the bottom of [63]. When she provided him a payment of $9,000, she told him there was more to follow. I note that there was no lawful basis for Ms Langby to pay a gross sum to Mr Houston as infrequently as she did, without deducting taxation and remitting it to the Australian Taxation Office.

[100] On 14 September 2021, Ms Langby promised payment to Mr Houston – the whole hog, she declared. This communication to Mr Houston is not the act of a person directing Mr Houston to cease performing work because no funds were available. Where issues of credibility are at stake, without hesitation I prefer the evidence of Mr Houston over Ms Langby. I do not accept that at any time Ms Langby directed Mr Houston to cease performing work.

[101] Where Ms Langby asserted to Mr Houston that the act of sending a text message at 5:57am demanding money is not cricket, Ms Langby would benefit from understanding that stringing an employee along for months and months and not paying their lawful entitlements is not cricket! On 26 November 2021, Ms Langby emailed Mr Houston to say she had dropped some balls in the previous weeks on account of her partner’s illness. On reflection, Ms Langby ought to recognise that she dropped the balls as early as July 2021 when she failed to pay to Mr Houston his lawful entitlements.

[102] I consider Mr Houston provided the most sensible piece of advice to Ms Langby; she shouldn’t have hired anyone if she was broke.

[103] I am satisfied that the First Respondent did offer to Mr Houston employment as an Operations Manager. He accepted the offer and commenced employment on 5 July 2021. His employment did not cease until 26 November 2021. It ceased at the initiative of the First Respondent by Ms Langby’s acts in informing Mr Houston both in writing and orally that the arrangement that they had entered into was terminated.

Conclusion

[104] On the basis of the material before me, I find that Mr Houston was an employee of the First Respondent. His employment ceased by way of a dismissal at the initiative of the First Respondent on 26 November 2021. The jurisdictional objection is dismissed.

[105] Should the parties with to engage in conciliation they should advise my Chambers by no later than 4.00pm (AEST) on 21 July 2022. If the matter does not resolve by conciliation, I will issue a certificate under s.368(3)(a) of the Act.

COMMISSIONER

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 1   [2020] FCAFC 152.

 2   Chambers & O’Brien v Broadway Homes Pty Ltd t/a Broadway Homes [2022] FWCFB 129 at [2].

 3   Murphy v Winston and Timms, No. 1169 of 1985.

 4   The Queen v Ira John Winston [1994] QCA 435.

 5   Transcript PN 88 – 91.

 6   Transcript PN 133 – 142.

 7   Transcript PN 158.

 8   Transcript PN 180 – 201.

 9   Transcript PN 338 – 340.

 10   Transcript PN 346 – 360.

 11   Transcript PN 378 – 387.

 12   Transcript PN 433 – 448.

 13   Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2.

 14   Waring v Hage Retail Group Pty Ltd [2022] FWC 540.