FWC 70
FAIR WORK COMMISSION
Fair Work Act 2009
PeleGuy Pty Ltd T/A PeleGuy
MELBOURNE, 10 JANUARY 2013
Application for unfair dismissal remedy.
 On 31 July 2012 Mr Tomer Rabba (the Applicant) filed an application pursuant to section 394 of the Fair Work Act 2009 alleging that the termination of his employment by PeleGuy Pty Ltd trading as PeleGuy (the Respondent) was harsh, unjust or unreasonable.
 The Respondent filed a response to the application and raised a jurisdictional objection to the application. The Respondent alleged that the Applicant was engaged as an independent contractor and was not an employee of the Respondent.
 The matter was referred for conciliation on 20 August 2012 but the matter was not resolved and a jurisdictional hearing was conducted on 30 November 2012.
 Mr Garry Dircks appeared with permission for the Applicant and Mr Ben Skinner appeared with permission for the Respondent.
 The Applicant gave evidence on his own behalf and Mr Yaniv Peleg, the Director of the Respondent, gave evidence for the Respondent.
 The Respondent sells products to petrol stations and convenience stores. 1 Between September 2008 and 29 July 2012 the Respondent engaged the Applicant to sell its products to its customers.
 It is agreed that there was no written contract of engagement. It is agreed that the Applicant was paid solely on commission. Further it is agreed that the Applicant leased a vehicle from the Respondent for the purpose of carrying out his duties. This leasing arrangement was not in writing and involved the Applicant having monies deducted from his commission.
 It was not contested that the Applicant did not receive holiday pay, personal leave, no income tax was deducted, and no superannuation was paid.
The Respondent’s evidence
 Mr Peleg gave evidence that when he met the Applicant in September 2008 he made it clear to the Applicant that he would be engaged as an independent contractor. 2 It was his evidence that there was a verbal agreement to this effect.
 It was his evidence that the Applicant had no set hours of work. Mr Peleg did not care how the Applicant did the work as long as he serviced specific customers. 3
 It was his evidence that the Applicant would carry the risk of whether he made any money. Mr Peleg described this as the risk of making a profit or a loss. 4 Further he gave evidence that he told the Applicant he would have to have an ABN.5
 The Applicant stocked his own vehicle albeit from stock provided by the Respondent and he was responsible for ensuring he had sufficient stock. 6
 He also gave evidence that during his engagement with the Respondent, the Applicant worked setting up his wife’s business and had engaged someone else to drive for him when he was injured. 7
 The Applicant’s engagement was ended due to poor performance and his unsatisfactory conduct towards Mr Peleg and others.
 Mr Peleg gave evidence that after the termination of the engagement the Applicant continued doing the same work for a competitor as an independent contractor and subsequently established a business called Ta Rabba Distribution. 8
 Mr Peleg gave evidence that he attempted to formalise his arrangements with the Applicant in October 2011. A document headed ‘contract agreement’ was tendered. 9 Mr Peleg gave evidence that the Applicant refused to sign this document. In cross examination it was put to Mr Peleg that this document was never given to the Applicant which Mr Peleg denied. Mr Peleg had no explanation, other than it was a typo, that the document made reference to 26 October 2012 as the date it was to be signed and returned.10
 The document was a subcontractor agreement. Whilst Mr Peleg suggested that it reflected the terms agreed, the document provided that the Applicant was not able to subcontract the work without the Respondent’s consent, it set the minimum number of customers that were to be seen per day, the Applicant could only sell products agreed by the Respondent, and he was to start work at 8.30 am and work at least eight hours per day.
 The document was not signed by the Applicant.
 The Respondent sent the Applicant another contract on 15 July 2012 in substantially similar terms. 11
 Mr Peleg gave evidence in cross examination that in addition to selling the Respondent’s goods, the Applicant sold watches that he had bought on EBay to customers. 12
 Mr Peleg accepted that when the Applicant sold goods to the customers he issued a tax invoice under the Respondent’s name which had the Respondent’s ABN on it. 13
 Mr Peleg accepted that he supplied the Applicant with a tee shirt with the Respondent’s company logo on it and he supplied the Applicant with a business card which had the Respondent’s contact details as well as the Applicant’s personal mobile phone number. 14
 Further Mr Peleg accepted that he provided the Applicant with a daily call and summary sales sheet. 15 In re-examination he said that the Applicant was expected to visit the customers on the sales sheet in that week but he did not tell him the order of visits or the time of the day.
 Mr Peleg accepted that the Applicant did not buy the goods from him and resell them. 16 Further, he accepted that the Applicant predominately serviced customers the Respondent referred him to.17
 Mr Peleg gave evidence that he had other subcontractors engaged as sales people but he also had another salesperson who was an employee. This salesperson did the same job as the Applicant but because he wanted regular hours and a secure income he chose to be an employee. 18
 In cross examination Mr Peleg, when denying that he required the Applicant to work 8.00 am to 5.00 pm, gave evidence that the Applicant wanted flexibility of hours because of his personal circumstances. 19 It was Mr Peleg’s evidence that the Applicant wanted to be a subcontractor.20
 It was Mr Peleg’s evidence that the Applicant was told he needed to supply his own vehicle but when the Applicant said he could not afford to buy a van Mr Peleg told him he could rent a van from him. 21
 Mr Peleg agreed that the Respondent set the prices at which the goods were sold to the customers but that the Applicant could discount the price without reference to him. If the employee driver wanted to offer a discount he needed Mr Peleg’s agreement. 22
 Mr Peleg gave evidence that the Applicant’s hours of work became an issue when it affected the service provided to his customers. 23
 Mr Peleg accepted that he instructed the drivers in May 2012 that they had to see each customer at least once every four or five weeks. 24
 Mr Peleg also gave evidence that he engaged his office worker as a subcontractor. 25
 Mr Peleg gave evidence that the Applicant provided him with tax invoices for the services he rendered each month which set out the value of the goods sold. 26
The Applicant’s evidence
 The Applicant gave evidence that he was paid commission, and was provided with a company van. He had private use of the van and paid the Respondent $312 per month for the van. He paid for petrol and tolls and the Respondent paid for the servicing of the vehicle. 27
 The Applicant was provided with a list of customers to service but he was also required to find new customers. It was his evidence that Mr Peleg gave him a day sheet of customers he was required to see and at the end of each day he faxed to the Respondent the details of sales made. 28 In examination in chief the Applicant said that, in the last year, because he was familiar with the customers, he completed the daily sheets himself.29
 The Applicant was required to wear a uniform which carried the name PeleGuy Pty Ltd importers and distributors. This was the name that appeared on the Applicant’s business card. 30
 The Applicant’s evidence about his engagement with the Respondent differed from that of Mr Peleg. He said that he was told it was a commission only job and that he had to provide an ABN as Mr Peleg “did not do tax”. 31 It was his evidence that at this initial meeting the words employee or subcontractor were not used.32 He further denied that Mr Peleg said that there we no set hours, that he would carry the risk of making a profit or loss or that there would be no superannuation paid or leave payments.33
 In May 2011, the Applicant was given a warning by the Respondent. That warning referred to the Applicant’s conduct as a “subcontractor” but also advised that if there was a continuation of the behaviour the employment would be terminated. The warning provided for it to be signed by the employee. 34 The Applicant signed in the place reserved for the employee signature.
 In May 2012 Mr Peleg told the Applicant and other drivers that they needed to see each customer once a month. The Applicant did not consider this was possible. 35
 In July 2012 Mr Peleg told the Applicant that he was not happy with his work commitment and told him that he was not sure that he wanted the Applicant to work for him. Mr Peleg told the Applicant to take a week’s break to think about it. 36
 In the same week the Respondent sent the Applicant a subcontractor agreement which he was required to sign by 30 July 2012. The Applicant did not sign the agreement. 37 The Applicant gave evidence that he had never seen the 2011 contract and had not been asked to sign it.38
 Some discussions occurred between the parties about the terms under which the Applicant would return to work but on 30 July 2012 Mr Peleg told the Applicant that he couldn’t work with him and the Applicant took this as the termination of his employment. 39
 The Applicant accepted that he performed work on his wife’s business. He also arranged for a friend to drive him when he was injured but the friend did not get paid. 40
 The Applicant, in evidence in chief, denied operating a business of supplying products to service stations or convenience stores. He gave evidence that he had commenced working as an employee for a similar business after his employment was terminated. 41
 The Applicant denied that whilst working for the Respondent he ever sold any goods other than those supplied by the Respondent. 42
 In cross examination the Applicant admitted that Ta Rabba Distributions is a trading name attached to him. After he stopped working for the Respondent he said he approached a competitor and asked for work. So that he would not be seen by the customers as working for them he suggested he not wear their uniform but work for them under his trading name. There was no signed agreement and there was no discussion about whether he would be an employee or contractor. He gave evidence that he was paid a salary of $700 per week. 43
 In cross examination the Applicant accepted that he worked for the Respondent “more or less eight, seven, nine more or less” hours each day. 44 He accepted that he was paid commission and carried the risk of making a profit or loss. Further he paid his own income tax and superannuation and was not paid annual leave or personal leave.
The submissions of the Respondent
 The Respondent submitted that there was a verbal agreement between the Respondent and the Applicant and it was a contract for service, not a contract of service. The Respondent submitted that the Applicant was exposed to risks as he had overheads, namely the rent of the vehicle and its fuel and toll costs. Further it was submitted that the Applicant “effectively collected on consignment the stock he would sell from Peleguy client lists exclusively from Peleguy and would sell that stock for profit, being the agreed percentage margin, or commission.” 45
 It was further submitted that since his engagement was terminated the Applicant has continued his business selling the same products to the same outlets but purchasing stock from another supplier or suppliers demonstrating the continuity of his business. 46
 It was further submitted that both the Applicant and the Respondent shared the risk of damage to goodwill and that the Applicant retained that goodwill after his engagement ended and that was evidenced by the continuance of his business. It was further submitted that his autonomy led to a conclusion that he was an independent contractor. 47
 It was submitted that the Applicant was free to engage customers of his choice and further submitted that the Respondent “requested that some sites on the database be serviced on a nominal frequency, but otherwise placed no restrictions on Mr Rabba’s autonomy of movement, timeliness of orders, and hours or days of operation. 48
 It was submitted that the Applicant’s hours of work varied and he was free to work in other businesses. 49
 The Applicant, it was submitted, supplied invoices to the Respondent and was responsible for his own tax, superannuation and leave. 50
 The Applicant, it was submitted, was required to supply a vehicle. In lieu of him supplying the vehicle, one was rented to him at a commercial rate. 51
 The Applicant, it was submitted, was free to implement his own systems for stocking his vehicle and delivery of goods. 52
 The Applicant, it was submitted, was free to engage others to work with him. 53
The submissions of the Applicant
 The Applicant submitted that he was an employee of the Respondent. It was submitted that he did not conduct a business of his own. It was submitted that the provision of invoices with the Applicant’s ABN did not change the true nature of the relationship. It was submitted that the work did not require any special skills or qualifications. 54 The Applicant could not sell for anyone else and did not build up goodwill. Further it was submitted that he could not subcontract the work and he was subjected to significant control.55
 It was further submitted that the payment of tax should not be a significant consideration. 56
Employee or independent contractor?
 In Abdalla v Viewdaze Pty Ltd 57 the Full Bench of the Australian Industrial Relations Commission set out in detail the common law approach to the determination of whether a person is an employee or independent contractor and provided a summary of the law.58 I adopt the approach taken by the Full Bench.
1. Was the Applicant conducting a business of his own?
 The Respondent submitted that the Applicant bought goods on consignment. There is no evidence to support this contention. He did not purchase the products from the Respondent and on sell them. He sold the Respondent’s products at prices set by the Respondent. He did have the ability to offer some minor discounts but his authority to do this was controlled by the Respondent. He was provided with a customer list by the Respondent and while he found additional customers they were customers of the Respondent not of the Applicant. He visited the customers as directed by the Respondent. The customers paid the Respondent for the goods, not the Applicant. While the Applicant would have the amount of commission paid reduced due to the non payment of accounts, the debts arising from unpaid accounts were the debts of the Respondent.
 The Respondent submitted that the Applicant continued his business after the termination of his engagement. However while there was evidence that the Applicant commenced working for a competitor of the Respondent after the termination of his engagement there was no evidence to support the contention that the Applicant was selling the same goods to the same customers. There was no evidence to support the submission that the Applicant was purchasing stock from another supplier. There was insufficient material before the Tribunal to determine if the Applicant’s arrangement with the competitor was that of employer/employee or a contractor arrangement.
 I find that the Applicant was a sales person in the Respondent’s business. He was not conducting a business of his own. He was subject to the disciplinary procedures of the Respondent. He wore the Respondent’s uniform and he carried the Respondent’s business card.
 I do not consider that the Applicant’s work in his wife’s business in any way changed the relationship between him and the Respondent.
 There is insufficient evidence to conclude that, during the time the Applicant was engaged by the Respondent, he was conducting his own business. The evidence supports a conclusion that he served the Respondent in the Respondent’s business. When the Applicant worked he did so as a representative of the Respondent and not as a representative of his own business.
2. The nature of the work performed and the manner in which it is performed.
 The work performed required no special skill or qualification. It appears that the Applicant was given a week or two to familiarise himself with the work and then he was on his own.
 The Applicant initially was given running sheets of customers to visit. Later, due to his experience, he was able to draw up the running sheets himself.
 He was able to determine the order in which he visited customers and he was not directed as to how he would sell products to the customers.
 I accept that the contract developed by the Respondent set out the expectations of the Respondent about the manner in which work was to be performed. In particular there was an expectation about the number of customers to be seen each day and there was an expectation about the number of hours to be worked each day.
 The evidence supports a finding that these expectations applied equally to those that the Respondent described as employees. 59
3. The terms of the contract
 No written contact was entered into by the parties though the Respondent sought to formalise a subcontractor arrangement in 2012. I accept that Applicant’s evidence that he was not provided with a written contact in 2011. The document itself discloses that it was not drawn up until 2012. The document was dated 26 October 2011 but makes reference to a price list as at 1/1/2012 and has a return date of 26 October 2012. The Respondent’s explanation for this discrepancy that this was a typo is not sustainable. In relation to this evidence I prefer the evidence of the Applicant.
 I accept the Applicant’s evidence that the discussion about the terms of the engagement were limited to the fact that this would be a commission based engagement, that he could provide a vehicle himself or rent one from the Respondent. Further the Respondent advised the Applicant that the Respondent did not do tax and that he would have to provide an ABN. I am not convinced that there was a discussion about superannuation or leave. It was not put to the Applicant in cross examination that he wanted to be a subcontractor because of his personal circumstance. I prefer the evidence of the Applicant on this matter and find that the discussion about the nature of the engagement as described by Mr Peleg did not occur.
4. The indicia of an employment relationship
4.1 Whether the Respondent exercises, or has the right to exercise control over the manner in which the Applicant’s work is performed, place of work, hours of work and the like.
 It was not contested that the Applicant set his own hours of work. However it is also clear that the Respondent had an expectation about the hours of work that the Applicant should be working. In fact one of the Respondent’s complaints about the Applicant was that he was not working enough hours.
 The Applicant’s work apart from restocking his vehicle was not performed at the premises of the Respondent however this was not surprising given the nature of the work.
 I do not accept the submissions of the Respondent that the Applicant was only required to service the Respondent’s customers on a nominal frequency. The Applicant was required by the Respondent to visit each customer on a regular basis and from May 2012 a direction was issued that each customer needed to be visited once a month.
 Mr Peleg’s evidence suggested that greater control was exercised over his employee sales person who performed the same work as the Applicant. For example this person was required to refer back to Mr Peleg if he wished to offer a price variation to a customer. 60 He was paid a wage and required to work fixed hours. However it appears from Mr Peleg’s evidence that the question about whether you were an employee or contractor came down to a question about how you wanted to be paid. If you wanted to be paid commission you were a contractor but if you wanted a guaranteed wage you were an employee.
 I accept that the Applicant determined how he would perform his work. He could vary the hours he worked as long as he got the job done. His selling techniques were his alone.
 However the evidence supports a conclusion that if the job was not being done to the Respondent’s satisfaction, the Respondent had the power to direct the Applicant, as it did in May 2012, as well as issue the Applicant with warnings about his conduct.
4.2 Whether the Applicant works for others (or has a genuine and practical entitlement to do so).
 I do not consider that the Applicant’s work in his wife’s business is relevant in this matter. There was no evidence that the Applicant was paid for this work or received any income from his wife’s business. The Applicant was not cross examined in detail about this work. He did not perform sales work for other businesses during the time he was engaged by the Respondent. I accept that the Respondent did not prevent the Applicant from working for others provided that they were not his competitors.
4.3 Does the Applicant have a separate place of work and/or advertises his or her services to the world at large.
 The Applicant did not have a separate place of work. There is no evidence that the Applicant advertised his services to the world at large or to anyone else during his engagement with the Respondent.
4.4 Whether the Applicant provides or maintains significant tools or equipment?
 The Applicant was required to provide his own vehicle or rent one from the Respondent. The vehicle was able to be used for both personal and private use. The submissions of the Respondent that this was a commercial arrangement, is not supported by the evidence. The Applicant paid $78 per week for the vehicle and he was able to use the vehicle for personal use. This was not a commercial arrangement. 61 However the Applicant did pay for to the fuel used for work purposes.
5. Whether the work can be delegated or subcontracted.
 There was no contractual right to delegate or subcontract the work. The use of another driver to drive him when he was injured does not support a conclusion that he could delegate the work. There was no evidence that the driver was doing anything other than driving the Applicant from job to job.
 There was no evidence that the Applicant was able to have someone else do the sales job in his absence. When a discussion occurred between the parties about the hours of work being performed by the Applicant in the period before his termination the parties discussed the Applicant working three days a week. This was rejected by the Respondent as it would mean that the vehicle was idle for the other two days. The Respondent did not put to the Applicant that it was his responsibility as a subcontractor to ensure that the work was done on all five days of the week even if that meant he had to employ someone else to do the work. This suggests that the Respondent had not contracted the Applicant to provide a service.
4.6 Did Respondent have the right to suspend or dismiss the person engaged?
 The letter of warning issued to the Applicant in May 2011 and the suspension from work in July 2012 supports a conclusion that the Respondent considered it had the right to suspend and discipline the Applicant. The Respondent also dismissed the Applicant.
4.7 Did the Respondent present the Applicant to the world at large as an emanation of the business?
 The Applicant was required to wear a uniform and was provided with a business card indentifying him as a sales consultant with the Respondent.
4.8 Was income tax deducted from remuneration paid to the Applicant?
 No income tax was deducted.
4.9 Was the Applicant paid a periodic wage or salary or by reference to completion of tasks?
 The Applicant was paid commission and no retainer was paid. If the customer did not pay, he did not get paid the commission.
4.10 Was the Applicant provided with paid holidays or sick leave?
 No. However given that both parties understood this to be a commission based job this is not surprising. Both parties understood that if the Applicant did not work he would not get paid.
4.11 Did the work performed by the Applicant involve a profession, trade or distinct calling on the part of the person engaged?
 As set out above this work did not involve any particular skill or qualification. This is not to suggest that selling is unskilled work.
4.12 Whether the Applicant created goodwill or saleable assets in the course of his or her work.
 I do not accept that Applicant created any goodwill or saleable asset in the course of his work. While some of the customers may have been willing to buy similar goods from the Applicant after he ceased working for the Respondent this is no different to an employee sales person’s clients deciding to buy goods from the salesperson when he or she changes employer. This does not mean that the Applicant had a saleable asset or that he created goodwill.
4.13 Whether the Applicant spends a significant proportion of his remuneration on business expenses.
 No tax returns for the period were tendered into evidence. No submissions were made that any inferences should be drawn from the failure of the Applicant to produce this material.
 On the material provided, it is not possible to make any findings about the proportion of the Applicant’s remuneration that was allocated to business expenses associated with the performance of work with the Respondent.
Summary of the evidence
 What are the features that support the contentions of the Applicant that he was an employee?
● He worked exclusively for the Respondent;
● He was not able engage others to perform his work;
● He was subject to supervision by the Respondent;
● Selling goods was an inherent part of the business of the Respondent;
● He did not create any good will or saleable asset.
 What are the features that support the contentions of the Respondent that the Applicant was an independent contractor?
● The Applicant submitted invoices to the Respondent however these invoices were not in evidence before me;
● The Applicant paid the fuel costs
● The Applicant was not subject to PAYG taxation;
● The Applicant was paid by result by way of a commission on sales made;
● The Applicant was not paid annual leave, sick leave or any other entitlement normally associated with employment;
● The Applicant determined his own hours;
● The Applicant commenced working after termination doing the same work under his own ABN.
 This is another in a long list of cases which evidence “the ill defined dividing line between employment and independent contract.” 62
 The lists set out above appear to favour a conclusion that the Applicant is a contractor, after all employees don’t invoice their employer and determine their own hours.
 However these practices as well as the taxation and leave arrangements arose from the presumption by both the Applicant and the Respondent that this is how sales people can be engaged. It is not based on an analysis of the actual relationship between the Applicant and the Respondent. It is the nature of that relationship that leads to the conclusion that the Applicant was an employee of the Respondent.
 The Applicant was an integral part of the Respondent’s business and in performing his role as a sales person he was subject to control by the Respondent. The Respondent allocated work to the Applicant and supervised the work. While the Applicant could determine the sales method, what time of day he visited customers as well as the frequency he visited them over and above the minimum number of visits determined by the Respondent, the Applicant was not conducting his own business when he performed work for the Respondent. I therefore find that the Applicant was an employee of the Respondent.
 The jurisdictional objection is therefore dismissed and the matter will be listed for hearing of the substantive application.
G Dircks for the Applicant
B Skinner for the Respondent
1 Exhibit A2 at 
2 Ibid at 
3 Ibid at [4(a)]
4 Ibid at [4(c)]
5 Transcript PN 245-250
6 Exhibit A2 at [4(h)-(i)]
7 Ibid at 
8 Ibid at -
9 Exhibit A3
10 Transcript PN 115
11 Exhibit R4 at TR3
12 Transcript PN 155 and 166
13 Ibid at PN 158
14 Ibid PN 177-183
15 Exhibit R2 and Transcript PN 186
16 Transcript PN 195
17 Ibid PN 198
18 Ibid PN 212
19 Ibid PN 242
20 Ibid PN 243
21 Ibid PN 260-264
22 Ibid PN 298-301
23 Ibid PN 322
24 Ibid PN 329
25 Ibid PN 337
26 Ibid PN 347-350
27 Exhibit R4 at -
28 Ibid at -
29 Transcript PN 409
30 Exhibit R4 at 
31 Ibid at 
32 Transcript PN 413
33 Ibid PN 421-426
34 Exhibit R4 at TR2
35 Ibid at 
36 Ibid at 
37 Ibid at -
38 Transcript PN 396
39 Exhibit R4 at -
40 Ibid at -
41 Ibid at -
42 Transcript PN 433
43 Ibid PN 448-461
44 Ibid PN 502
45 Exhibit A1 at 
46 Ibid at 
47 Ibid at -
48 Ibid at 
49 Ibid at -
50 Ibid at 
51 Ibid at 
52 Ibid at 
53 Ibid at 
54 Exhibit R5 at 
55 Ibid at -
56 Ibid at -
58 Ibid at 
59 Transcript PN 328
60 Ibid PN 301
61 Ibid PN 222
62 Abdalla op cit at 
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