| [2022] FWC 1977 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Antony Robert Course
v
Wavin Technologies Pty Ltd
(U2022/3632)
COMMISSIONER O’NEILL |
MELBOURNE, 28 JULY 2022 |
Application for an unfair dismissal remedy - whether applicant an employee or independent contractor – applicant was an employee – jurisdictional objection dismissed
[1] This decision concerns an application by Mr Antony Course for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (Act). Mr Course contends that on 22 March 2022 he was dismissed from his employment as an Advisor with the Respondent (Wavin). Mr Course claims that his dismissal was unfair and seeks reinstatement.
[2] Wavin has raised a jurisdictional objection to the application on the ground that Mr Course was not an employee of the company and therefore could not have been dismissed within the meaning of s.386 of the Act. It contends that the Applicant was an independent contractor.
[3] The objection was dealt with at a hearing on 19 May 2022, for which I granted both parties permission to be legally represented.
[4] I have concluded that the Applicant was an employee of the Respondent for the reasons set out below.
[5] The factual context regarding the jurisdictional objection is largely uncontentious. By agreement between the parties the witnesses were sworn in and adopted their statements. They were not required for cross-examination on the basis that neither party would make a submission that a Browne v Dunn inference should be drawn.
[6] Mr Course gave evidence on his own behalf and Mr Adam Friedman, Ms Bernadene Voss, Mr Paul Rosenberg and Ms Siobhan Casey gave evidence on behalf of the Respondent.
[7] The Applicant has several qualifications and has undertaken postgraduate studies in business administration. His business career has focused on introducing new technology to corporate clients. He has founded a start-up software business and had multiple roles as part of a management team. 1
[8] Bernadene Voss was the CEO of Wavin when Mr Course was first engaged. Siobhan Casey is the Director of Scaleups and Innovation Labs for the not-for-profit Australian Computer Society, in which capacity she provided advisory services to Wavin and had various dealings with the Applicant.
[9] Mr Friedman is the director of Wavin, a software technology start-up company. Wavin works with 5 referral partners, 4 advisors and an outsourced software support and development team. 2 Mr Friedman has extensive experience in the technology start up market, creating his first technology start-up in 2009. He has hired both employees and contractors and incubated the Wavin business and put his life savings into it as did his friend, Mr Rosenberg, the co-founder and Operations Manager.
[10] Mr Friedman’s evidence is that his experience in the Australian technology start-up business is that in early-stage start-ups it is standard practice for external ‘advisors’ to be engaged for equity and commission rewards to provide guidance and introductions to the business. He says that advisors do so at their own risk because they are getting involved in unproven high-risk businesses that may or may not grow exponentially, however they take this risk on because of the huge potential upside of making significant money. His evidence is that he has worked with over 10 people in this capacity over the last decade and that the process is well-established. He states that advisors are not employees, they are senior, experienced people who are entrepreneurial, bring their own networks of contacts and function as external consultants who help start-up founders with their knowledge and experience for a success-based reward when a start-up idea grows. He contends that the Applicant knew this and that this explains why he proposed arrangements in which he would only get paid if he generated revenue.
[11] On 11 November 2020, the Applicant met with the then CEO, Bernadene Voss. Mr Course and Ms Voss were good friends and had worked together previously founding a start-up software business. Ms Voss had recently commenced as CEO of Wavin. Ms Voss told him that the company had been set up for fast COVID tracking using technology that was faster than QR codes and the company had visions of extending the use of this technology into other markets. The chairman Mr Friedman was in the process of raising capital to do this and she suggested that the Applicant work with Wavin.
[12] On 13 November 2020, the Applicant responded to Ms Voss’s suggestion with some notes for discussion about a potential role as Sales Manager. 3 The notes included that remuneration was to be agreed, payable out of cash generated from clients he brought in and include shares based on performance. The notes included that it was conditional on Ms Voss being on a long-term agreement. Ms Voss forwarded this to Mr Friedman who responded to her that he was potentially interested in the proposal where the Applicant would introduce customers and investors, be paid on a commission-only basis in the form of potential cash and shares upon success and then step away from the business after establishing a sales pipeline. He authorised Ms Voss to offer the Applicant Wavin’s standard model of a 20% flat commission on any sales made.4
[13] The Applicant met with Ms Voss and Mr Friedman on 17 November 2020, and the next day Ms Voss and the Applicant discussed how to further progress the prospective working arrangement.
[14] On 19 November 2020, the Applicant sent Ms Voss a further document with a covering email headed “my thoughts’ and read “let’s discuss in morning before sending to Adam.” It included details of his proposed salary, bonus and share options and included:
• Investors like paying bonuses and share options when employees interests are aligned with their own;
• It is a bit less than the 20% proposed; and
• My lawyer specialises in early stage IT businesses. Prior to finalising would get his advice on any structure and employment agreement. 5
[15] On 20 November 2020, following a discussion between the Applicant and Ms Voss, the Applicant sent a further proposal (the Final Proposal), which largely expanded on his earlier notes sent on 19 November. The document read:
“This is TC thoughts
Target Market:- TC to focus on enterprise clients in Australia and overseas, predominantly where TC has an existing network. Ie many sites and in retail, trade, shopping centres etc
TC will focus in first few weeks on high value clients to business/globally and hopes to get quick decisions ie within 2-4 weeks of big high profile clients eg Woolworths group, Wesfarmers-Bunnings, Vicinity, Overseas chains
If there is overlap. CEO works out how and who is responsible for good of business.
Base Salary: $10,000 per month
This is accrued each month to a maximum of $10,000 per month but payable at 50% of cash received from revenue bought in or capital raised by TC. Three examples:
(a) Low Revenue: TC brings in $25k revenue in month 2. TC would be paid $12,500 (ie 50% of $25K) and $7,500 would be accrued.
(b) Capital Raising: TC contact brings in $2M capital in month 2: TC would be paid $20,000 ie 2 months at $10k per month.
(c) High Revenue: TC brings in $2M sales from month 1 to month 6. TC would be paid $10K for 6 months ie $60,000.
Bonus: $15,000 per quarter
Payable in quarter if cumulative annual revenue is over $1m+p.a. eg 3,500 sites signed up @$25 per month. (Annual revenue calculation 3,500 sites @ $25 per month @ 12 months = $1,050,000). Three examples:
(a) Low Revenue: TC brings in 1,750 sites and annual revenue of $500K by end of quarter 2. No bonus is payable.
(b) Target Revenue: TC brings in more than 3,500 sites and annual revenue of $1M plus by end of quarter 3, TC paid $15,000 bonus for quarter.
(c) High Revenue: TC brings in more than 10,500 sites and annual revenue of $3M plus by end of quarter 5, TC paid max $15,000 bonus for quarter 5.
Share Options: (2.5% in total)
• When TC revenue is over $1m p.a. in Australia provided it is within 12 months (0.8%)
• When TC revenue is over $1m p.a. overseas provided it is within 18 months (0.8%)
• If TC sales/marketing process is finalised and in a position to be profitably rolled out in Australia provided it is within 12 months. For example employ new sales person or can spend more on proven direct advertising to generate sales. (0.9%)
Why TC thinks this is in all our interest?
• It is investor friendly
(i) Investors are looking at high upside, with Saas metrics understood. Wavin keeps 100% of the margin of TC sales at high volumes. For instance if TC brings in 50,000 sites through Walmart, Walgrens, Tesco etc.
(ii) TC is not given any additional remuneration for raising capital. Eg Proposed 6% of $2m ie $120,000. Wavin keeps the capital raised so it can be used to work in the business (Investors really hate paying commissions)
(iii) TC upside is in options. Investors like paying bonuses and share options when employees interests are aligned with their own. If TC has helped business raise capital, TC has earned $1m+ p.a. in Australia, $1m+ p.a overseas and Wavin has a proven business model. All investors shares are worth more.
(iv) Investors look at a salary/bonus structure of employees. $120k base + $60k bonus as being below market but not ridiculously low for similar tech skills. If they see an employee earning $500K p.a. because of ongoing trailing commissions or a founder not paying themselves market rates they discount profit.
• Wavin
(i) It is significantly less than the proposed 20% proposed ongoing. If you got $1m+ pa sales with 20% commission recurring at end Year 2.
a. Wavin proposed: Year 1 - $200K, year 2 - $400k.
b. TC proposed: Year 1 - $135k, Year 2 – 180k
(ii) The early months are often hard to build momentum with enterprise sales (TC is only paid out of revenue bought in and if there are delays then TC is disadvantaged and incentivised to only focus short term).
(iii) TC is working for team goals (If TC is commission only then have to keep best deals to myself to get paid). Wavin can’t build a sales team or scalable business that way.
(iv) There is flexibility to pivot – which often happens in early stage business to work on different metrics.
• Note: These sort of structures are standard and most sophisticated investors will understand them.
• TC lawyer specialises in early stage IT businesses. Prior to finalising would get his advice on any structure and employment agreement” 6
[16] Mr Friedman understood this to be a counteroffer to Wavin’s proposal of 20% commission and told Ms Voss (but not the Applicant) that he thought the Final Proposal was too complicated and ‘preferred to stick with our standard model’. 7 On 25 November 2020, the Applicant emailed Ms Voss and Mr Friedman a link to a standard employment agreement with the following message:
“Adam and Bernadene
This is a good place to get Investor friendly template documents
The attached agreement is the standard employee agreement. It does not include options (so would need to get that worked through). If you want to get the CFO to draft the agreement to your satisfaction – I will get my lawyer to review and draft the option piece.” 8
[17] On 1 December 2020, the Applicant met with Ms Voss who handed over the sensors (the product being marketed) and gave him a brief training session. Mr Course understood that this induction session marked the commencement of his employment with Wavin, and later that day he emailed Ms Voss asking her “Could you get Adam to confirm the agreement in principle…” 9
[18] Later that evening Mr Friedman emailed the Applicant saying:
“Thanks Tony - sounds exciting!
Yes, happy to proceed and agree in principle to your most recent proposal sent in email. Have forwarded the construction to my advisors to help complete the formal agreement.
Looking forward to working with you.
Cheers,
Adam.” 10
[19] Although the proposed formal agreement between the parties was discussed on several occasions, it was never finalised. At various times there were also further discussions about payment, including requests by the Applicant that he be paid a retainer and receive equity in the business.
[20] The Applicant continued working on what he contends was a full-time basis, for approximately 16 months until his engagement was terminated.
[21] However, the company’s ambitions did not eventuate, largely following a decision of the Victorian Government to require the use of its own QR codes during the COVID-19 pandemic. The business plans were decimated, the team reduced from having 12 people on 1 December 2020, to only the Applicant and Mr Friedman. Wavin had no product to sell and the original sales role envisaged for the Applicant changed dramatically. His duties pivoted to include identifying other products to sell, support in capital raising, developing new contracts, project managing clients and tasks such as printing signs and gluing sensors to signs. 11
[22] On 13 July 2021, the Applicant signed his first piece of business with TPF Think on behalf of Wavin for $30,000 to be paid in instalments. He was paid $5,000 commission on 26 July 2021, as the first of two instalments. The second instalment of $5,000 was paid on 8 November 2021. On 8 September 2021, the Applicant received a $500 reimbursement for printing expenses. 12 These were the only payments made to the Applicant during the entire period of his engagement with Wavin.
[23] On 22 March 2022, the Applicant’s services were terminated by Mr Friedman.
[24] Counsel submits that the Applicant’s Final Proposal of 19 November 2020 set out in full at paragraph 15 above, when accepted ‘in principle’ by the Respondent on 1 December 2020, established a contract of service between the parties. The Applicant contends that an employment arrangement and not a principal-contractor relationship was contemplated between the parties for reasons including:
• The document provides for remuneration of a ‘base salary’ of $10,000 per month and describing a payment for work done as salary or wages is an indicator of a contract of service.
• The fact that the salary would effectively be clawed back through commission earnings in no way prevents an employment relationship arising. Similarly, the fact that the contract when performed, did not see the Company make payments at the contemplated level is of little relevance in assessing the nature of the arrangement at the time of its formation.
• If the Respondent held the view that an independent contractor relationship was to be established then, having received the Final Proposal it needed to make a clear statement by way of a counteroffer to the Applicant. It did not do so, instead Mr Friedman’s response was that he was “happy to proceed and agree in principle” to the Final Proposal.
• Whilst the parties contemplated a further formal agreement would be prepared, there was sufficient agreement on the core terms of the employment contract, being the identity of the parties, an agreement that the Applicant would provide service, and the remuneration structure to establish a binding contract.
[25] Counsel for the Applicant contends that whether an agreement was reached, with an expectation that at some future time a comprehensive written agreement would be produced, is to be determined objectively. In assessing the objective intention of the parties, it is significant that the Applicant immediately started working for Wavin with no indication from Wavin that this was premature and that he needed to wait until a written agreement had been signed.
[26] The Applicant submitted that the use of the words ‘in principle’ in the Applicant’s email to Ms Voss of 1 December 2020 and Mr Friedman’s agreement later that evening, would have been significant had the Applicant sought to enforce an agreement that has only been approved in principle. But Mr Course started working for Wavin and the company did not cavil with this. Counsel submitted that Wavin cannot take the benefit of the Applicant’s work for 16 months and then say that because of the words ‘in principle’, he was never an employee.
[27] The Applicant submits that if there was no intention to create legal relations, the Respondent would have been expected to say “hang on, you know Mr Course, you can’t start working for us. We have to sort this out. We have to finalise this employment agreement.” Instead, the issue was parked and the parties simply moved on with their relationship.
[28] The Applicant submits that the references in the Final Proposal to employment, the reference to getting legal advice on ‘any structure and employment agreement’, the sending of the link to the employment contract template, and the absence of any attempt by Wavin to dispute that an employment relationship was intended, leads to the conclusion that an employment relationship was intended.
[29] Counsel for the Applicant submits that the agreement between the Applicant and the Respondent was of the first, or possible fourth, category of agreement considered by the High Court in Masters v Cameron 13 and G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd.14It contends that the fact the Applicant started work on 1 December 2020 strongly suggests that a contract was in place, and that once there is contractual intention and part performance, the courts do their utmost to uphold the bargain. It submits it is fanciful that there was no contract between the parties, as the Applicant was clearly not working as a volunteer.
[30] As a result, counsel contends that this is sufficient to establish that Mr Course was an employee and that it is not necessary to make findings about the actual operation of the contract between the parties.
[31] In relation to the impact of the High Court decisions in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd 15 and ZG Operations Australia Pty Ltd v Jamsek16, Counsel contends that the multifactorial approach is no longer good law at least in the context of parties to a written agreement, which it submits exists between the parties in the present case. Counsel submits that whilst there may be a continuing role for the multifactorial approach in examining wholly oral contracts, that is not the case here.
[32] Counsel for the Applicant nonetheless makes submissions that even if the multifactorial test were to be applied, the same conclusion would be reached. It submits that if the use of language in the Final Proposal that is indicative of an employment relationship is considered only a label, and not determinative, an examination of the various indicia of employment yields the same result.
[33] Counsel for the Applicant submits that Mr Course was not operating a separate business in any meaningful sense but was working within Wavin’s business. The Applicant’s submissions concerning the various indicia of employment are discussed below.
[34] Counsel for the Respondent submits that there is a verbal agreement between the Applicant and the Respondent, and that the Final Proposal reflected something short of a binding commitment and was not contractual. There is no formal written agreement between the parties.
[35] The terms of the asserted verbal agreement are said to be that the Applicant would act as an external sales consultant to Wavin, that he would be compensated as a contractor and would receive a 20% commission on sales. The Applicant’s acceptance of this offer was said to have emerged from the fact that this was Wavin’s standard practice which had been made clear to the Applicant, together with what is said to be the absence of acceptance by Wavin of the Final Proposal put forward by the Applicant. Additionally, consistent references between the parties to ‘commission’ is said to not be the language of the November proposal which refers to ‘bonus’ and ‘salary’. Reliance was also put on evidence that it was made clear to the Applicant that Wavin did not have the superfluous cash flow and was not in a position to employ a salesperson. Also, the title that Mr Course used during the engagement was ‘advisor’ and Mr Friedman, Mr Rosenberg, and Ms Casey each gave evidence that in the Australian technology industry there was an accepted meaning of advisor that was not an employee. Counsel also submitted that it was inherently unlikely that the parties intended an incomplete document (the Final Proposal) to be contractual given the potentially high stakes and equity arrangements contemplated, referring to the final paragraph where the Applicant stated that prior to finalising he ‘would get advice on any structure and employment agreement’.
[36] Counsel submits that the Final Proposal was something short of a binding commitment between the parties and is therefore not contractual. This is said to be evidenced by both Mr Friedman and the Applicant by the use of the language of “in principle”. Counsel for the Respondent relied on various authorities to submit that very significant weight should be put on the use of the words “in principle’, whilst noting that their use is not conclusive and are capable of being overridden having regard to other facts.
[37] In terms of the categorisation of agreements found in Masters v Cameron, Counsel for the Respondent submits that it’s in the third category.
[38] In the alternative, Counsel for the Respondent submits that if the Final Proposal is contractual, it is not in the nature of an employment agreement, having regard to the rights and obligations of the parties under it. Rather it indicates an independent contractor status because:
• It was prepared by the Applicant and given to the Respondent, which is very odd in an employment relationship, and that this makes it more consistent with him having an enterprise of his own, akin to a solicitor’s letter of retainer;
• It contemplated a short-term engagement with the three stated aims (a very quick rollout to many thousands of sites, building a scalable process with no salespeople required to get new sites, prove global opportunity, then leave those sales processes so Wavin can get someone else to come in and manage on an ongoing basis) being the language of a consultant or contractor and not an employee;
• The reference by the Applicant to the arrangement as a ‘deal’ and not employment; and
• The labels ‘employment agreement’ and ‘employee’ in the document aren’t determinative, the Commission must look at the actual true nature of the rights and responsibilities of the parties under the Final Proposal.
[39] Applying the multi-factorial test, the Respondent contends that this approach leads to a conclusion that the Applicant was an independent contractor. The Respondent’s submissions concerning the multifactorial test are discussed below.
[40] I have concluded that the answer to this question is yes.
[41] In the Final Proposal Mr Course put forward an arrangement where he would provide his services to secure clients and investors for Wavin. He would focus on enterprise clients in Australia and overseas, predominantly where he had an existing network of potential clients. Based on the amount of revenue he generated, the Applicant would be remunerated up to $10,000 per month. Based on meeting specified performance targets, he would also potentially receive a bonus of up to $15,000 per quarter, and up to 2.5% in share options.
[42] The Final Proposal also set out the Applicant’s claims that this arrangement was in Wavin’s interests along with his own. As to his own interests, it included that it was investor friendly and that “TC upside is in options”. As to Wavin’s interests it included that it was significantly less than the proposed 20% ongoing commission.
[43] I reject the Respondent’s submission that there was a wholly verbal agreement in place. That verbal agreement is said to be that the Applicant would act as an external sales consultant to Wavin and receive 20% commission on sales. There is evidence that this was the arrangement for other Wavin advisors and was offered to Mr Course. 17 However, the Final Proposal which was accepted ‘in principle’ was not consistent with such arrangements. In it, Mr Course made clear he didn’t agree to that offer, for example by stating that his proposal “is significantly less than the proposed 20%% ongoing”.
[44] There is no evidence that Mr Course accepted the Respondent’s offer and I do not accept Wavin’s submission that acceptance somehow “emerged”. There is no dispute that Wavin’s standard practice, which Mr Course knew about, is to engage advisors on the 20% arrangement. However, the Final Proposal put forward alternative terms which were agreed. Similarly, it is not to the point that Mr Course made consistent references to ‘commission’ rather than “bonus’ or ‘salary’ – the language used in the Final Proposal. I accept that there is evidence that it was made clear to the Applicant that the business did not have the cashflow to employ a salesperson and that there was an accepted meaning in the industry of “advisor”, however neither factor necessitates a conclusion that the Final Proposal was not contractual and there was, instead, a wholly verbal agreement in place.
[45] I also do not accept the Respondent’s submission that there is no written agreement between the parties as the Final Proposal was something short of a binding commitment and is therefore not contractual. Whilst the words ‘in principle’ can signify an intention to agree that is short of making a binding commitment, I do not accept that that was the position here. Firstly, as counsel for the Respondent pointed out, the use of these words is not conclusive and is capable of being overridden by other facts. Secondly, they were words used by Mr Course and Mr Friedman and not lawyers who might be expected to understand the potential legal effect of this language. Thirdly, whilst it was clear that the parties anticipated that a comprehensive agreement would subsequently be reached, it doesn’t follow that the acceptance of the Final Proposal could not and did not constitute a binding agreement.
[46] The High Court decision in Masters v Cameron held that where parties reach an agreement of a contractual nature and also agree to subsequently draw up a formal contract, the case may fall into one of three categories: 18
1. the parties intend to be bound immediately, though expressing a desire to draw up their agreement in a more formal document at a later stage;
2. the parties intend to be bound immediately but may wish the operation of a particular clause or term to be conditional upon the execution of a more formal document; or
3. the parties intend to postpone the creation of contractual relations until they execute a formal contract.
[47] The first and second categories give rise to an enforceable settlement, but the third does not. The subsequent decision of Baulkham Hills recognised a fourth category, where the parties intend to be bound immediately by the terms that they have agreed upon, while expecting to make a further contract containing additional terms, in substitution for the original agreement.
[48] I do not accept counsel for the Respondent’s submission that the ‘in principle’ acceptance of the Final Proposal was an agreement of the third category. Rather, I agree with counsel for the Applicant that the agreement was of the first, or possibly fourth, category. If the parties’ mutual intention had been to postpone the creation of contractual relations until a formal contract was executed it is inherently unlikely that the Applicant would have commenced working until this occurred, and even more unlikely that the Applicant would have continued working for an extended period without any contract being in place. The parties simply put the issue aside and never pursued a final written contract until Mr Course’s services were terminated some 16 months later.
[49] The NSW Supreme Court in Jago v Coastalwatch Pty Ltd 19said:
“75. On the other hand, where an oral arrangement is partially performed before the execution of a document reflecting its terms, the more readily a Court will conclude that the parties had reached a consensus before the execution of the document because the performance presupposed a binding agreement of the parties. In Azzi v Ors v Volvo Car Australia Pty Ltd [2007] NSWSC 319 at [22] Brereton J, after referring to the above passage from Palmer J, said:
But a less cautious approach is called for where there are commercial dealings between parties who act as if they are in legal relations and document their arrangements, albeit imperfectly: it is far more difficult to say that a contract which is apparently part-performed is no contract at all, since to do so must attribute to the parties an intention to perform work either at no cost, or alternatively on a basis yet to be determined, even though the work has been done in the context of an apparent agreement to perform it.
…
94. The lack of speed with which a draft employment agreement and a draft shareholder agreement were produced and considered is testament to the proposition that a binding oral agreement had already been struck. If the parties intended that no contract would come into existence until documentation was executed, one would have expected Mr Sundell to require the execution of an employment agreement before he gave instructions to increase Mr Jago’s salary to $100,000 per annum backdated to 1 July 2005. Equally, one would have expected Mr Jago to have required the documentation to be brought into existence and executed expeditiously to secure his entitlements.”
[50] The facts here share similarities with the decision of Gzell J in Jago: the arrangement had been not only partially performed but performed for an extended period without challenge by either party or by pursuing or finalising a comprehensive written contract. This strongly suggests that a binding agreement was intended, and I am satisfied that the Final Proposal when accepted by the Respondent, created a binding agreement between them.
[51] The contract that was entered by the acceptance of the Final Proposal was simple and far from comprehensive. However, I am satisfied it contained sufficient detail namely, that the Applicant would provide his services, drawing on his expertise and network of contacts, to attract clients and investors to Wavin in return for the remuneration detailed within it.
[52] Having found that a contract existed, it remains to be considered whether it was a contract of employment. This requires an analysis of the contractual relationship between the parties.
[53] Both parties referred to the recent High Court decisions in Personnel Contracting and Jamsek. They further pointed to the recent summary of the effect of these decisions in Waring v Hage Retail Pty Ltd: 20
“[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.” (footnotes omitted)
[54] Counsel for the Respondent submitted that the approach to be taken to ascertain whether the Applicant was an employee or not depends upon which of two scenarios is accepted by the Commission. As set out earlier in this decision, the Respondent’s primary submission was that there was a wholly verbal agreement in place. In that scenario, counsel submitted that the primacy to be given to a written contract required by Personnel Contracting has reduced application and that the multi-factorial test is to be applied and the entire relationship considered.
[55] As I have found that the Final Proposal was contractual and rejected the submission that a wholly verbal agreement was in place, counsel for the Respondent’s alternative submission was that the task is to focus on the rights and duties created by that document, and whether the express or implied terms are in the nature of an employment relationship or a contracting relationship. Essentially the test is whether the Applicant was engaged in his own business or that of the Respondent’s. The Respondent contends that the contract, if there is one, is one involving Mr Course being engaged by Wavin as an independent contractor, and not as an employee.
[56] Counsel for the Applicant submits that in light of the High Court decisions it is critical to ascertain the nature of the relationship as agreed between the parties. Counsel submitted that the Court’s focus in those cases was on the terms of the contract, as entered, and not the actual performance of the contract.
[57] Counsel for the Applicant submitted that in the present case the question is whether the Final Proposal regulates the relationship between the parties. If it does, there is no foundation for an analysis going beyond when the contract was formed. However, if there is no such agreement then the pre-Personnel and pre-Jamsek situation applies, using the multifactorial analysis to assess the totality of the relationship which involves looking at the way the relationship was performed in practice.
[58] Counsel for the Applicant submits an employment relationship was contemplated and not a principal-contractor relationship.
[59] Since the hearing of this matter, in a decision dealing with whether the applicant was an employee or independent contractor where the parties had a comprehensive written contract, Hampton C helpfully distils some of the relevant principles arising from the High Court decisions, including (footnotes omitted): 21
“• The characterisation of the relationship is to be determined by reference only to the parties’ legal rights and obligations.
• Where a comprehensive written contract is in place, this will be the primary source of the parties’ legal rights and obligations, and these will be decisive of the characterisation of the relationship. This will apply unless the contract is a sham, or has been varied after it was made, or post agreement conduct or context demonstrates that a term is legally ineffective.
• The conduct and expectations of the parties after entering into the contract are not generally relevant to the assessment.
• 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.
• It is permissible to have regard to objective events, circumstances and things external to the contract known to the parties at the time of contracting which assist in identifying the purpose or object of the contract.
• The relative bargaining power of the parties is not relevant. That is, the fact that the arrangement was brought about by the superior bargaining power of the company has no bearing on the meaning and effect of the contract.
• The “multifactorial” test remains appropriate; however, it is to be applied by reference to the parties’ legal right and obligations not to the post contract conduct. In that respect, the terms of contract between the parties are not merely “factors” but are determinative. The manner in which the contractual terms address the mode of remuneration, provision of equipment, obligation to work, hours of work, delegation of work, holidays and the right to control may show that it is not an employment contract.
• Whilst all relevant factors require consideration, two factors in particular assist in assessing the ultimate question of whether an applicant was an employee:
• Control: The greater the degree (rights) of control exercisable by the principal/employer over the work performed, the greater the likelihood that an employment relationship existed.
• Own business/employer’s business: The resolution of the question whether a person engaged to work for another as an employee or an independent contractor depends upon the extent to which, upon an analysis of the parties’ rights and obligations under the terms of their contract, it can be shown that the person acts in the business of, and under the control and direction of, the other. In this way, one may discern a more cogent and coherent basis for the time-honoured distinction between a contract of service and a contract for services than merely forming an impressionistic and subjective judgment or engaging in the mechanistic counting of ticks on a multifactorial checklist’.
While the “own business/employer’s business” dichotomy may not be perfect or universal (because not all contractors are entrepreneurs), it usefully focuses attention upon those aspects of the contractual relationship which bear more directly upon whether the worker’s work was so subordinate to the employer’s business that it can be seen to have been performed as an employee of that business rather than as part of an independent enterprise.
It is not necessary or suitable to ask whether the worker is working in their own business. This is not a binary choice between employment or own business. The better question is whether, by the terms of the contract, the worker is contracted to work in the business or enterprise of the purported employer.
• The notion of the generation of goodwill by the worker is not necessarily relevant or decisive.
• When assessing the significance of a relevant fact in the characterisation process, the court (Commission) should consider the extent to which the fact bears directly or obliquely on whether the worker is contracted to work in the employer’s business rather than part of an independent enterprise. The more directly it bears on that issue, the more significant it is.
• The label applied by the parties to the contract is not decisive and does not act as a “tie-breaker” where the multifactorial test is ambiguous. The proper characterisation of the relationship is a matter for the courts, not the parties.
• Non-exclusive work may be consistent with casual employment and not just contracting. The fact that the worker was free under the contract to accept or reject any offer of work, and not precluded from working for others, are not necessarily contraindications of employment, since this is also commonplace for casual employees.
• Terminability at short notice and the absence of a guarantee of work of any direction are not decisive given that they may also be indicative of casual employment.”
[60] Unlike the factual circumstances dealt with in Personnel Contracting, Jamsek and Nawaz, the contract between Mr Course and Wavin was anything but a comprehensive written agreement. The Final Proposal provides little or no detail about most aspects of the relationship. It identifies the parties and, whilst not in express or detailed terms, provides for Mr Course to provide his services to Wavin and provides a remuneration structure comprising of salary, bonus and equity arrangements all of which are payable only upon achievement of the identified performance standards.
[61] In assessing the nature of the relationship, two of the major factors are whether under the terms of the contract, Mr Course was acting in the business of, and under the control and direction of Wavin. This assessment is conducted by reference to the parties’ legal rights and obligations and not to post contract conduct. However, to ascertain the parties’ contractual rights and obligations, it is necessary in this case to examine the performance of the contract, in order to ascertain what the contractual terms were.
[62] The Final Proposal does not confer in explicit terms a right upon Wavin to exercise control over how, when and where Mr Course undertook his work. To ascertain whether the contract as entered between the parties included this right of control requires an examination of how the relationship worked in practice.
[63] The Respondent submits that the Final Proposal did not provide any such right, and that factually the Applicant had significant autonomy, did not work regular hours, and was not directly supervised. He was free to investigate possible sales leads and to draw upon his network of contacts. Secondly, it submits that Mr Course did not behave like an employee.
[64] Mr Friedman’s evidence was that the Applicant never functioned or behaved as a subordinate and that:
“I had no visibility or influence over Tony Courses’ activities, other than to accept or reject potential opportunities or approve proposed content for sales pitches. Tony Course managed his own time, at his own premises, covered his own expenses and pursued his own opportunities. The business made no consistent demands of Tony’s time. Any activities he did were completely by his own choice and initiative. I only had about 5 face-to-face meetings with Tony over the 15 months, and there were no regular internal meetings. Throughout the 15 or so months, he scheduled sales meetings with customers that I attended online. These meetings amounted to a few hours a week. Tony didn’t report to anyone specifically within Wavin: in fact it was Wavin’s job to respond to any potential leads he had. He determined the way in which he wanted to approach his network. He “advised” the business on the marketing collateral he wanted to help him socialise the business with his connections. Tony Course functioned with complete autonomy, and was free at all times to work with whoever he wanted to. Tony mentioned on a number of occasions that he was working with other technologies including Stoploss Logic and he said that he may be able to introduce Wavin to deals that business was doing. My involvement with Tony, particularly in the first few months he was making introductions, was infrequent - maybe a few times a month when I was invited to join a customer presentation.” 22
[65] Mr Course disputes Mr Friedman’s claims and gave evidence that:
• There were regular meetings that continued when Mr Friedman took over the CEO role after Ms Voss left 23
• Regular meetings included agenda items such as: low sales conversions; templating of products; go to market strategy; setting and achievement of sales targets; and clear definitions of roles and responsibilities 24
• There were consistent demands on his time including bi-weekly meetings with Siobhan Casey from August 2021 to his dismissal in March 2022 25
• He was directed to project manage the XXXX Dry promotion which included weekly work in progress meetings between August and December 2021 26
• There were regular sales meetings 27
• That following discussion with Ms Voss on 20 November 2020, he amended his proposal to Wavin to include in the Final Proposal “If there is overlap. CEO works out how and who is responsible for good of business” 28
• That although he was originally engaged in a sales capacity, he was asked to do many things outside sales including project managing promotional activities, identifying potential new products, going to Officeworks to get sensors printed, accounts management, writing specification etc. 29
[66] The Applicant, whilst denying Mr Friedman’s assertion at paragraph 17 of his witness statement that the Applicant unilaterally changed the business’ standard engagement model for TPF Think to accept progress payments against Mr Friedman’s express wishes, contends that this demonstrates the degree of involvement and control exercised over him by Mr Friedman. 30
[67] Attention was also drawn to the following evidence:
(a) An email from Ms Voss to Mr Course about a potential referrer and targets sent on 4 December 2020 that reads:
“Hi Tony,
a couple of clarifications for you.
Confirming that I am comfortable with similar commercial arrangements as you have with WAVIN – except for the Options component. No options will be issued to anyone else.
Also, Catherine’s sales will not count towards your sales targets. She will have her own similar targets.
Hope this clarifies things
many thanks
Bernadene Voss” 31
(b) Annexure J to Mr Friedmann’s witness statement where in a document to Mr Course dated 11 October 2021, he included:
“…6. General reporting and day to day management
Let’s create some discipline around sales management, and schedule a weekly sales performance workshop to review the campaign…” 32
This was said to constitute a detailed description of how the Applicant was to perform his job and to be inconsistent with communicating with an independent contractor running his own business.
(c) Mr Friedman’s witness statement where he refers to meeting with the Applicant to discuss “the lack of sales performance” and the Applicant’s defensiveness when “confronted with his failure to achieve sales”. 33
This language is said to speak of managing and controlling an employee’s performance.
(d) An email from Mr Friedman to the Applicant dated 22 Mach 2022 terminating the engagement:
“As you’ve refused to accept my request for a phone conversation this evening, I have no choice but to communicate with you via email.
Your conduct over the past few days has left the business with serious concerns about your professionalism and the risks associated with your behaviour.
To reiterate, you approached Wavin to work with the business as an external sales person on a commission-only basis.
Your performance has been documented in emails, you have made two sales in the 18 month period that you’ve worked with the business.
Paul and I have discussed the matter and have decided that your involvement with Wavin will cease effective immediately...” 34
[68] Counsel submitted that the inclusion of the words in the Final Proposal - “If there is overlap. CEO works out how and who is responsible for good of business” - signifies that the performance of the Applicant’s duties was subject to the CEO working out ‘how and who is responsible’ for the good of the business. Further, the significant change in Mr Course’s duties at the direction of Wavin, indicates that his activities were subject to control by Wavin, and strongly suggests an employment relationship.
[69] Counsel for the Applicant submits the control over Mr Course’s work is illustrated by the evidence including that set out above, and points to a conclusion that there was an employment relationship between the parties. This evidence is said to constitute detailed descriptions of how the Applicant was to perform his job, was language consistent with and indicative of an employment relationship, and not consistent with communicating with an independent contractor running his own business.
[70] Counsel further contends that Mr Course did not perform outside work, the fact that he had previously conducted a business working for others is irrelevant given that that business (StopLoss) has been dormant throughout the period of engagement with Wavin, and further that his full-time work with the Company did not accommodate the performance of outside work.
[71] I am satisfied that Wavin did have the legal right to and did exercise control over the work Mr Course undertook. There is no evidence that it exercised its right to control where Mr Course worked or his hours of work. Mr Course clearly had extensive autonomy in deciding how to undertake his work and was not the subject of close supervision or direction. However, that is not surprising in respect of an employee with high levels skills and experience. The absence of day-to-day supervision does not necessarily preclude a finding that Wavin had the right to control his work. Further, as the authorities make clear, it is the right of control and not the actual exercise of it, that is the relevant question.
[72] Further, the Respondent on several occasions, did direct the manner in which Mr Course performed his work. I consider the provision in the Final Proposal that “If there is overlap. CEO works out how and who is responsible for good of business” to be significant. There was no evidence as to what this phrase was intended to mean, however on its face it seems to reserve to the Respondent the right to override Mr Course’s efforts in securing clients and investors in a particular scenario. This indicates that Mr Course was not free, without restriction, to undertake and complete his work without Wavin’s approval. In my view it reflects that Mr Course was subordinate to Wavin in carrying out his core duties, and to a sufficient degree that he was performing his work as an employee of Wavin’s business rather than as part of an independent enterprise.
[73] I also consider that requiring Mr Course to attend regular sales meetings and work in progress meetings, discussions with him about his lack of sales performance, and the close attention and control paid by Wavin to the terms upon which Mr Course was able to negotiate with clients are indicative of the exercise of a legal right to control the manner in which Mr Course worked.
[74] Also, it is highly significant that whilst the Final Proposal envisaged that Mr Course was engaged in a largely sales capacity to attract clients and investors, the evidence is that when the original business plans were derailed, he was directed by Wavin to undertake quite different duties including project managing promotional activities, identifying potential new products, going to Officeworks to get sensors printed, accounts management, writing specification etc. 35 Whether this change constituted a variation to the original contract or whether the direction to alter his duties was permitted under the existing contract is unnecessary to decide. It speaks of a right to control the work Mr Course undertook and is suggestive of an employment relationship.
[75] Turning to the second of the two primary factors, again the Final Proposal sheds little light on the issue.
[76] Mr Friedman’s evidence included that “Tony mentioned on a number of occasions that he was working with other technologies including Stoploss Logic and he said that he may be able to introduce Wavin to deals that business was doing.” 36
[77] Mr Course’s evidence was that he did not make any such statement to Mr Friedman. Instead, he says that Stop Loss Pty Ltd has not traded since January 2018 and that it was an administrative error to have not updated his LinkedIn profile. 37 His evidence was that he worked full-time for the Respondent and often worked long hours on short deadlines throughout his engagement.38
[78] In light of this evidence, Counsel for the Applicant contends he was not operating a separate business in any meaningful sense but was working within the business of Wavin.
[79] The Respondent contends that the Applicant was operating his own business of which his contracting/consulting for Wavin formed part. Counsel referred to extracts of newspaper articles and the Applicant’s LinkedIn profile to demonstrate what is said to be his entrepreneurial history dating back to 1998. The Respondent’s witness evidence as to the accepted meaning of an “advisor” in the technology start-up space together with the fact that the Applicant assumed the financial risk of no sales or very low sales in the Final Proposal were said to indicate that Mr Course was running his own business and acting for himself rather than being an employee of Wavin. The Respondent submits that the Applicant was, in truth, an entrepreneur looking to obtain equity in Wavin and/or hundreds of thousands of dollars in potential commissions.
[80] Counsel for the Respondent relied upon the analysis of Bromberg J in On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3). 39The analysis of Bromberg J needs to be viewed in light of the Personnel Contracting decision, and in particular, Gordon J’s statement:40
“180. In construction of an employment contract it is not necessary to ask whether the purported employee conducts their own business. That is, the inquiry is not to be reduced to a binary choice between employment or own business. The question must always focus on the nature of the relationship created by the contract between the parties.
181. Asking whether a person is working in their own business may not always be a suitable inquiry for modern working relationships. It may not take very much for a person, be they low-skilled or otherwise, to be carrying on their own business. The reality of modern working arrangements, the gig economy, and the possibility that workers might work in their own business as well as one or more other businesses in the same week, suggest that focusing the analysis on “own business” considerations distracts attention from the relevant analysis –whether the totality of the relationship created by contract between the person and a purported employer is one of employee and employer. The parties to, and the terms of, the contract may show that the purported employee entered into the contract as part of their own business.
182. Another reason for not asking whether a person is carrying on a business of their own is that that inquiry will ordinarily direct attention to matters which are not recorded in the contract, such as what “the parties said or did after it was made”. For instance, in Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd, North and Bromberg JJ said that some of the “hallmarks of a business” are conducting a commercial enterprise “as a going concern”, the “acquisition and use of both tangible and intangible assets in the pursuit of profit”, the “notion of system, repetition and continuity”, and “operat[ing] in a business-like way”. But, unless those matters are provided for in the contract, they are not relevant and should be put to one side.
183. The better question to ask is whether, by construction of the terms of the contract, the person is contracted to work in the business or enterprise of the purported employer. That question is focused on the contract, the nature of the relationship disclosed by the contract and, in this context, whether the contract discloses that the person is working in the business of the purported employer. It invites no inquiry into subsequent conduct. A consequence of a negative answer to that alternative question may be that the person is not an employee. Another consequence may be, but does not have to be, that they have their own business. As five judges of this Court said in Hollis v Vabu Pty Ltd, both employees and contractors can work “for the benefit of” their employers and principals respectively, and so that, “by itself”, cannot be a sufficient indication that a person is an employee (emphasis added). That does not detract from the fact that where the contract is oral, or partly oral and partly in writing, subsequent conduct may be admissible in specific circumstances for specific purposes – to objectively determine the point at which the contract was formed, the contractual terms that were agreed or whether the contract has been varied or discharged.” (footnotes omitted)
[81] Whilst I do not consider that the full analysis applied by Bromberg J can be treated as good law in light of Personnel Contracting, His Honour articulates a question at paragraph 208 that may assist in ascertaining whether a person is an independent contractor in relation to the performance of particular work:
“Viewed as a “practical matter”:
(i) is the person performing the work an entrepreneur who owns and operates a business; and
(ii) in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?” 41
[82] In relation to Mr Course and Wavin, there is no probative evidence that Mr Course was an entrepreneur who owned and operated a business during his engagement with Wavin. Counsel for the Respondent submitted that there was no contractual impediment to him working for other companies and relied on a fairly lengthy text message sent to Mr Friedman on 18 January 2022. The message included “I am an accountant and work with big 4 as job and over the last 4 years with PwC.” However, there was no evidence about what this part of the message meant, and I am not satisfied that it evidences Mr Wavin operating his own business. 42
[83] Whilst I am satisfied that Mr Course acted in an entrepreneur-like manner and in putting forward the Final Proposal, assumed high levels of risk along with potential significant reward, it does not follow that he was operating his own business. Whilst he had an ABN, the only other entity that was referred to in evidence had, on Mr Course’s evidence, ceased trading prior to his engagement with Wavin. There is no unambiguous evidence that he was working for any other business (including his own) during his engagement with Wavin and Mr Course’s evidence is that he worked full-time.
[84] Another indicator that the Applicant was working in his own business, though not determinative, may have been if he was generating saleable assets or goodwill for himself. Mr Course’s evidence included examples of the use of his intellectual property and creation of services and goodwill for Wavin’s benefit. 43 There was no evidence that Mr Course could sell his work for the Respondent to another person, or that he generated any goodwill or saleable assets personally, rather his efforts were directed at adding value to Wavin’s business.
[85] I have also considered the factors identified by Gageler and Gleeson JJ in Personnel Contracting at paragraph 113, as being relevant to the question of whether the Applicant was contracted to work in the business or enterprise of Wavin. As Gordon J noted the fact that a person is working “for the benefit of” the entity that has engaged them is not a sufficient indicator of employment, as both independent contractors and employees alike can do so.
[86] Under the Final Proposal, Mr Course was entitled to remuneration in the form of salary, bonus and options, all of which were entirely contingent on performance.
[87] The Respondent submits that the contingent nature of the entitlements means that the label ‘salary’ is of no consequence. The remuneration, in reality, is performance-based commission, there being no entitlement to payment unless and until the Applicant brought in the specified levels of revenue and/or investment. Whilst acknowledging that commission only sales agents can be employees, the Respondent contends that the Final Proposal (and the claimed verbal agreement) was a different arrangement as in cases where commission-only workers have been found to be employees there is quite a stable entitlement to commission, such that it begins to resemble a salary. In this case, it was known to both parties that the arrangements could involve irregular commission, bonuses of significantly varying amounts, significant intervals between payments and a significant risk of minimal or no commission.
[88] Further, counsel relied upon evidence that at different times the Applicant requested to be paid a retainer, which was submitted to be consistent with being an independent contractor rather than an employee. Finally, counsel pointed to the fact that the two payments of $5000 commission were paid based on the nominated tax rate of ‘GST on expenses’, consistent with payments to an external contractor.
[89] Counsel for the Applicant relied on the reference to a base ‘salary’ of $10,000 per month and contends that whilst what ultimately transpired was a lack of success in bringing in the amounts contemplated, that is an issue about the performance of the contract, and doesn’t change what was agreed at the time, namely a base salary arrangement.
[90] I consider that the contingent nature of the salary arrangements results in an entitlement to remuneration that is more accurately described as commission. However, employees can be engaged on a commission-only basis. 44 Unless the sales and/or investment standards were achieved, Mr Course was not entitled to any payment at all. It is unusual for an employee to have no entitlement to any payment under a contract of employment. The other elements of the agreed remuneration arrangements do not shed any further light on the nature of the relationship. Employees and independent contractors can be incentivised with potential equity arrangements and/or bonuses.
[91] I consider that to a modest degree, the contractual remuneration arrangements point to a conclusion that the Applicant was contracted to work in the business or enterprise of Wavin rather than running his own business.
[92] Again, the Final Proposal is silent here. The Respondent submits that the Applicant was not provided with tools and equipment and did not provide or pay for his mobile phone, laptop or other IT equipment, and whilst he was provided with a Wavin email address, Mr Course primarily used his personal email address. Further, reliance is placed on the proprietary way the Applicant emphasises and referred to his databases and contacts and his demand that the then CEO, Ms Voss, remain in the role.
[93] The Applicant’s evidence is that soon after he commenced with the Respondent, an email address was set up for him and all communications with prospects and clients were sent via this account, totalling 2,796 emails. 45 He says that Wavin paid for all software tools and there were no significant specialist tools or equipment that he was expected to provide. Most of his work was done on a personal device and he worked principally from home, as did all employees of the company, with meetings conducted by zoom.46
[94] The provision of some equipment and systems such as an email address and access to software does not point clearly towards a relationship of either employment or independent contracting, given the nature of the work to be undertaken under the contract which required little in the way of specialist equipment or tools. Whilst it is highly unusual (but not inconceivable) that a potential employee would indicate that his engagement was conditional upon a CEO remaining in place, this requirement was not included in the Final Proposal, and was not a contractual term.
[95] I do not consider that this evidence assists in any significant way in determining whether Mr Course was contracted to work in the business or enterprise of Wavin.
[96] I have, in concluding that there was a binding contract in place between the parties, found that it included an obligation for Mr Course to provide his services to Wavin in return for the agreed remuneration.
[97] The Respondent contends that the Final Proposal lacks many of the fundamental features one would expect of an employment agreement including any reference to holidays, superannuation or other entitlements, hours of work and performance standards. It contends that the Applicant was never provided with paid holidays or sick leave, never received nor requested that he be paid superannuation, and never requested Wavin’s approval for periods in which he took holidays or was out of contact. Mr Friedman’s evidence was that “No sick leave or holiday pay was ever discussed.” 47
[98] Counsel for the Applicant contended that the Applicant remained entitled to payment of his remuneration for periods when he was not working and relied upon Mr Course’s evidence that he took leave, approved by Mr Friedman, from 20 December 2021 until 17 January 2022.
[99] It is not possible to resolve the conflict in this evidence. There was, however, no evidence from the Respondent about the extent to which the Applicant was on leave of any kind or out of contact and not performing work. At the same time, it is not disputed that superannuation was never paid on behalf of Mr Course, and this is not consistent with an employment relationship.
[100] Counsel for the Applicant submits that given the existence of statutory entitlements in the National Employment Standards and the Superannuation Guarantee legislation it is unnecessary for the contract to deal with the specifics of such conditions and their absence does not turn the relationship into something other than an employment relationship. Whilst that may be the case, the absence of any such terms is more consistent with a principal-contractor relationship than one of employment. In that sense, it does not suggest that Mr Course was acting in Wavin’s business. At the same time, it does not suggest that he was working in his own business.
[101] A similar conclusion is reached in relation to taxation. There is no dispute that income tax was not deducted from the two $5,000 payments of commission and the reimbursement of expenses, being the only payments made to Mr Course. The Respondent contends that this is not consistent with an employment relationship. The Applicant contends that the company cannot profit from a failure to fulfil its tax obligations.
[102] The non-deduction of tax is not consistent with an employment relationship. At the same time, the evidence is that the Applicant never provided invoices to the company for his services or expenses. He never provided his ABN number nor charged GST on payments from the company. 48 In the circumstances, I do not consider that these facts point strongly towards either a relationship of employment or of independent contracting.
[103] I agree with the submissions of counsel for the Applicant that there was no right under the contract for Mr Course to send another person in his place. There was certainly no express term to that effect (or to the contrary effect). Viewed objectively, I consider that the contract required Mr Course to provide his personal services to Wavin, noting that the pre-contractual discussions all clearly related to the provision of Mr Course’s personal services and expertise.
[104] Mr Course was largely working in a sales capacity, and performing other duties as directed, rather than providing a separate professional service. He was working for the business in carrying out the Company’s key activities rather than providing an ancillary professional service.
[105] This suggests a relationship of employment. Whilst counsel for the Respondent pointed out that the Applicant was bringing not just his own labour but also his contacts and networks and potential sales targets and investors, this is not necessarily uncommon in sales employees and I do not consider this to be of significant weight.
[106] At the same time, counsel for the Respondent’s submission is that there was no contractual impediment to Mr Course working for other companies or pursuing entrepreneurial ventures. However, I do not consider that a significant factor in the overall assessment of the nature of the contractual relationship.
[107] The Applicant contends that Wavin clearly presented Mr Course, including externally, as an integral part of Wavin’s business. For example, Annexure C3 to Mr Friedman’s witness statement is a promotional document showing the Company presenting three people as holding positions within the Company, being Ms Voss, Mr Friedman and Mr Course. Counsel submitted that he was not an outside service provider but an integrated position holder whose role was central to the business. In addition, Mr Course was provided with an email address by the Company which presented him as representing the Company.
[108] The Respondent relied on the Applicant’s description of his role as an ‘advisor’ which is consistent with being an external consultant or referral partner specialising in start-up companies rather than being an employee. As I found earlier in paragraph 43, although Wavin engaged other ‘advisors’ on different terms that are said to establish a principal-contractor relationship, it does not mean that the Applicant was engaged on these terms, when the evidence is that such terms were rejected by him and a counter-offer was made and accepted by Wavin.
[109] For completeness, I consider that the parties’ submissions concerning whether Mr Course had a separate place of work or attended the company’s premises, are of little assistance. In recent times many employees have been working from home, and this sheds little light on the nature of the parties’ relationship.
[110] In summary, my overall assessment of all the evidence and submissions concerning this question, including the above factors, is that under the contract agreed between the parties, Mr Course was acting in the business of, and under the control and direction of, Wavin. Having regard to the totality of the relationship, by reference to the rights and duties established by their contract, I conclude that Mr Course was an employee of Wavin.
[111] The Respondent’s jurisdictional objection is dismissed.
[112] The matter will be listed for a mention to deal with the future programming of the Applicant’s unfair dismissal application.
COMMISSIONER
Appearances:
R Millar of counsel for the Applicant.
H Hill-Smith of counsel for the Respondent.
Hearing details:
2022
Melbourne (by video):
May 19.
Printed by authority of the Commonwealth Government Printer
<PR744215>
1 Exhibit A1 Witness Statement of Antony Course at [2]-[3].
2 Exhibit R1 Witness Statement of Adam Friedman.
3 Exhibit A1 Witness Statement of Antony Course, Annexure 1.
4 Exhibit R1 Witness Statement of Adam Friedman at [1].
5 Exhibit A1 Witness Statement of Antony Course, Annexure 2.
6 Exhibit A1 Witness Statement of Antony Course, Annexure 4.
7 Exhibit R1 Witness statement of Adam Friedman at [2].
8 Exhibit A1 Witness Statement of Antony Course, Annexure 5.
9 Exhibit A1 Witness Statement of Antony Course, Annexure 6.
10 Exhibit A1 Witness Statement of Antony Course, Annexure 7.
11 Exhibit A1 Witness Statement of Antony Course at [24]-[25].
12 Exhibit R1 Witness Statement of Adam Friedman at [18]-[22], [28].
13 [1954] HCA 72; (1954) 91 CLR 353.
14 (1986) 40 NSWLR 631.
15 [2022] HCA 1; 96 ALJR 89.
16 [2022] HCA 2; 96 ALJR 144.
17 See [10], [12] above; Exhibit R1 Witness Statement of Adam Friedman at [1].
18 [1954] HCA 72 at [9].
19 [2009] NSWSC 594 at [75] and [94].
20 [2022] FWC 540 at [52]-[55].
21 Nawaz v Rasier Pacific Pty Ltd (t/a Uber B.V.) [2022] FWC 1189 at [51].
22 Exhibit R1 Witness Statement of Adam Friedman at [8].
23 Exhibit A1 Witness statement Antony Course at [34].
24 Exhibit A1 Witness statement Antony Course, Annexure 10.
25 Exhibit A1 Witness statement Antony Course at [34].
26 Ibid at [33]-[34].
27 Ibid at [30].
28 Ibid at [13].
29 Ibid at [30].
30 Ibid at [35].
31 Exhibit A1 Witness Statement of Antony Course, Annexure 11.
32 Exhibit R1 Witness Statement of Adam Friedman, Annexure J.
33 Exhibit R1 Witness Statement of Adam Friedman at [29] and [35].
34 Exhibit A1 Witness Statement of Antony Course, Annexure 9.
35 Exhibit A1 Witness Statement of Antony Course at [30].
36 Exhibit R1 Witness Statement of Adam Friedman at [8].
37 Exhibit A1 Witness Statement of Antony Course at [39]-[40].
38 Ibid at [38].
39 [2011] FCA 366; (2011) 214 FCR 82 at [201]-[220].
40 [2022] HCA 1 at [180]-[183].
41 (2011) 214 FCR 82 at [208].
42 Exhibit R1 Witness Statement of Adam Friedman, Annexure M.
43 Exhibit A1 Witness Statement of Antony Course at [64]-[67].
44 On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) [2011] FCA 366; Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395, ACE Insurance Limited v Trifunovski [2013] FCAFC 3 at [158]; Re Optimisation [2018] NSWSC 31 at [431], Expedit (Stan) Carvalho v J-Corp Pty Ltd [2013] FWC 6877 at [53].
45 Exhibit A1 Witness Statement of Antony Course at [44].
46 Ibid at [47]-[51].
47 Exhibit R1 Witness Statement of Adam Friedman at [36].
48 Exhibit A1 Witness Statement of Antony Course at [56]-[59].