[2014] FWC 3467 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Georgios Adalopoulos
v
CMC International Pty Ltd
(U2013/8792)
COMMISSIONER RYAN |
MELBOURNE, 27 MAY 2014 |
Application for relief from unfair dismissal - jurisdiction - not an employee, no dismissal and minimum period of employment not served.
[1] An application for an unfair dismissal remedy was filed by the Applicant on 22 April 2013 in relation to his alleged dismissal by the Respondent on 5 April 2013.
[2] The Respondent filed a Form F3 Employer’s Response to Application for Unfair Dismissal Remedy on 9 May 2013 in which the Respondent contended that the Applicant had not been dismissed and that “his job is still available”.
[3] On 7 June 2013 the Respondent filed a Form F4, Objection to Application for Unfair Dismissal Remedy in which the Respondent identified 2 specific jurisdictional objections:
● The applicant was never dismissed.
● The applicant had given the respondent ABN number so as to be working as a contractor.
[4] On 28 June 2013 A Notice of Listing with Directions was issued by the Commission listing the application for Jurisdiction (Not an Employee; No dismissal) Conference/Hearing on 30 August 2013.
[5] When the Respondent filed its written submissions the Respondent raised a third jurisdictional challenge namely that:
The Applicant fails to meet the minimum period of employment criterion.
[6] This third jurisdictional challenge had not been raised in the Form F4.
[7] In support of its case the Respondent filed witness statements from Mr Spiros Stouraits, Managing Director of the Respondent, Mrs Effie Stouraitis, HR Officer of the Respondent and wife of Mr Spiros Stouraitis, Mr John Stouraits, General Manager of the Respondent and son of Mr Spiros Stouraitis, Mr Tony Papas, a relative of Mr Spiros Stouraitis and of Mrs Effie Stouraitis, Ms Lena Glagkoulis, PA to Mr Spiros Stouraitis, Mr Dimitri Papagianopoulos, cousin of Mrs Effie Stouraitis.
[8] On 27 August my Associate wrote to the parties asking them to advise whether they consented to having the application dealt with on the papers without a hearing. The Applicant agreed to this course but the Respondent did not. In addition the Respondent advised that the Managing Director of the Respondent was in hospital and the Respondent wanted the matter to be relisted for hearing at a later date. The matter did not proceed on 30 August 2013 and was eventually dealt with at a hearing on 22 October 2013.
[9] At that hearing the Applicant attended by way of telephone from Greece where he was now living and had been living since shortly after the alleged dismissal and the Respondent was legally represented by Mr Tatti. The Managing Director of the Respondent, Mr Spiros Stouraitis was unfit to attend the hearing but evidence was given on behalf of the Respondent by Mrs Effie Stouraitis who was the HR Officer of the Respondent. The matter was adjourned to be dealt with at a later date.
[10] The matter was next dealt with at a Mention on 11 December 2013 where it was agreed with the parties that the matter be adjourned to late January 2014 in order to allow the Respondent to lead evidence from Mr Spiros Stouraitis. Mr Tatti was to advise the Commission when Mr Spiros Stouraitis would be medically fit to give evidence. At the mention on 11 December 2013 Mr Tatti sought to introduce new evidence in support of the Respondent’s jurisdictional challenges.
[11] On 11 February 2014 my Associate contacted Mr Tatti on the basis that the Commission had not heard from Mr Tatti since 11 December 2013 and enquired when Mr Spiros Stouraitis would be available to give evidence. On 12 February 2014 Mr Tatti advised the Commission that he would seek instructions from his client.
[12] On 27 February 2014 a Notice of Listing was issued advising the parties of a further arbitration hearing on 13 March 2014.
[13] On 7 March 2014 Mr Tatti filed with the Commission the signed document which he sought to introduce on 11 December 2013 together with outline of submissions in relation to the Applicant being required to attend the Commission. Mr Tatti also advised the Commission that Mr Spiros Stouraitis may be unable to attend the hearing on 13 March 2014. On 7 March 2014 the Applicant by email challenged the veracity of his signature on the document filed by the Respondent and wanted the opportunity of challenging the document at a hearing.
[14] On 12 March 2014 Mr Tatti filed a medical certificate attesting to Mr Spiros Stouraitis’s incapacity to give evidence to the Commission. The hearing listed for 13 March 2014 was vacated.
[15] On 14 March 2014 Directions were issued to both parties requiring the parties to file their final submissions in relation to the jurisdictional challenge.
[16] The final submissions were received on 28 April 2014.
Not an Employee
[17] The Respondent in its written submissions filed on 17 July 2013 contended as follows:
“6. The Applicant was interviewed by the Director of the Respondent for the position advertised on Gumtree and was advised that there were other applicants that were being interviewed. Upon hearing this Applicant pleaded with the Director to give him the job. The Director sympathised with the Applicant’s situation and explained to him that;
a. he would be employed as a contractor, to which the Applicant agreed as he had another job that commenced at 4.00 pm;
b. he would be paid at $15.00 per hour;
c. there would be no additional payments made for over time or weekend work as he was a contractor; and
d. there would be a probationary period to ascertain whether or not the Applicant could do the work.
7. In this case, the Respondent submits as follows:
a. The Applicant was told by the Director he was being engaged as a contractor;
b. The Applicant was carrying on his own business; this is evidenced by his obtaining an Australian Business Number;
c. The work performed was on an ‘as needed’ basis;
d. He was paid on an hourly rate;
e. He was not paid for overtime or time he did not work;
f. His pay’s varied from week to week;
g. No tax was deducted;
h. The Applicant worked for others;
1. The Applicant was not provided with any leave entitlements;
J. The work was clearly that of a trade;
k. No Tax File Number was supplied; and
I. The advertisement responded to by the Applicant was for a Contractor.”
[18] The question as to whether a worker is an employee or an independent contractor has been considered on many occasions by the Commission and its predecessors and by the courts. A useful and relevant starting point is the Full Bench decision in Jiang Shen Cai trading as French Accent v Do Rozario 1 (French Accent) which said:
“[29] The nature of the general law approach to distinguishing between employees and independent contractors is such that a summary of that approach that is faithful to the court authorities has a continuing utility in this jurisdiction. The apparent tension in the summary in Abdalla highlighted in this appeal, together with the emphasis on the proper approach to a consideration of the indicia provided by the decision of Full Court of the Federal Court in Roy Morgan, makes it desirable to recast the summary in Abdalla, albeit we do not see that summary as wrong.
[30] The general law approach to distinguishing between employees and independent contractors may be summarised as follows:
(1) In determining whether a worker is an employee or an independent contractor the ultimate question is whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part? This question is concerned with the objective character of the relationship. It is answered by considering the terms of the contract and the totality of the relationship.
(2) The nature of the work performed and the manner in which it is performed must always be considered. This will always be relevant to the identification of relevant indicia and the relative weight to be assigned to various indicia and may often be relevant to the construction of ambiguous terms in the contract.
(3) The terms and terminology of the contract are always important. However, the parties cannot alter the true nature of their relationship by putting a different label on it. In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole: the parties cannot deem the relationship between themselves to be something it is not. Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.
(4) Consideration should then be given to the various indicia identified in Stevens v Brodribb Sawmilling Co Pty Ltd and the other authorities as are relevant in the particular context. For ease of reference the following is a list of indicia identified in the authorities:
● Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like.
Control of this sort is indicative of a relationship of employment. The absence of such control or the right to exercise control is indicative of an independent contract. While control of this sort is a significant factor it is not by itself determinative. In particular, the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where the work involves a high degree of skill and expertise. On the other hand, where there is a high level of control over the way in which work is performed and the worker is presented to the world at large as a representative of the business then this weighs significantly in favour of the worker being an employee.
“The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.” “[B]ut in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. That was made clear in Queensland Stations Pty. Ltd v Federal Commissioner of Taxation, a case involving a droving contract in which Dixon J observed that the reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.”
● Whether the worker performs work for others (or has a genuine and practical entitlement to do so).
The right to the exclusive services of the person engaged is characteristic of the employment relationship. On the other hand, working for others (or the genuine and practical entitlement to do so) suggests an independent contract.
● Whether the worker has a separate place of work and or advertises his or her services to the world at large.
● Whether the worker provides and maintains significant tools or equipment.
Where the worker’s investment in capital equipment is substantial and a substantial degree of skill or training is required to use or operate that equipment the worker will be an independent contractor in the absence of overwhelming indications to the contrary.
● Whether the work can be delegated or subcontracted.
If the worker is contractually entitled to delegate the work to others (without reference to the putative employer) then this is a strong indicator that the worker is an independent contractor. This is because a contract of service (as distinct from a contract for services) is personal in nature: it is a contract for the supply of the services of the worker personally.
● Whether the putative employer has the right to suspend or dismiss the person engaged.
● Whether the putative employer presents the worker to the world at large as an emanation of the business.
Typically, this will arise because the worker is required to wear the livery of the putative employer.
● Whether income tax is deducted from remuneration paid to the worker.
● Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks.
Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks. Obviously, in the modern economy this distinction has reduced relevance.
● Whether the worker is provided with paid holidays or sick leave.
● Whether the work involves a profession, trade or distinct calling on the part of the person engaged.
Such persons tend to be engaged as independent contractors rather than as employees.
● Whether the worker creates goodwill or saleable assets in the course of his or her work.
● Whether the worker spends a significant portion of his remuneration on business expenses
It should be borne in mind that no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.
(5) Where a consideration of the indicia (in the context of the nature of the work performed and the terms of the contract) points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. However, a consideration of the indicia is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The ultimate question remains as stated in (1) above. If, having approached the matter in that way, the relationship remains ambiguous, such that the ultimate question cannot be answered with satisfaction one way or the other, then the parties can remove that ambiguity a term that declares the relationship to have one character or the other.
(6) If the result is still uncertain then the determination should be guided by “matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability” including the “notions” referred to in paragraphs [41] and [42] of Hollis v Vabu.”
[footnotes omitted]
[19] The list of indicia set out in the French Accent decision is not the only list. In On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) 2 (On Call Interpreters), Bromberg J set out a different list which focussed on the concept of a “business” yet still asked and answered the “ultimate question” stated in French Accent at pn [30](1).
[20] Bearing in mind the salutory caution of the Full Bench in French Accent that:
“It should be borne in mind that no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.”
I will nevertheless use the indicia provided by that decision as the start point for considering the “ultimate question”. As the above decision makes clear the very use of the word “indicia” is to describe a factor which points to a conclusion but which does not make such a conclusion.
Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like.
[21] The four elements of the control test identified by this indicia (the manner in which work is performed, place of work, hours of work and the like) point to different conclusions.
[22] The very fact that the Respondent complains about the manner in which the Applicant performed some of the installation work suggests that the Respondent did not exercise or did not have the right to exercise much control over the manner in which the Applicant performed his work. Whilst this aspect of the indicia points away from an employment relationship it must be seen in light of the reality that for many trades and technical employees the employer does not exercise any control over the manner of work as the manner of work is expected to be decided by the employee based on the relevant trade or technical skills that the employee has.
[23] It is clear from the Respondent’s own material that the Respondent exercised control over the place of work of the Applicant, the timing of that work and the availability of that work. It is also reasonably clear that the respondent exercised a degree of control over the hours of work of the Applicant.
[24] This indicia, in total, points to an employment relationship.
Whether the worker performs work for others (or has a genuine and practical entitlement to do so).
[25] The evidence in this matter is clear that the Applicant was performing work for others.
[26] However this does not of itself support the Respondent’s contention that this is indicative of a contractor relationship.
[27] In the present matter the other work performed by the Applicant was as a cleaner, so much is admitted by the Respondent’s material. It is clear from the material in this matter that the Applicant was seeking other employment outside of his work for the Respondent but the work sought and performed by the Applicant for persons other than the Respondent was very different to the nature of the work performed by the Applicant for the Respondent.
[28] In the present matter this indicia is neutral.
Whether the worker has a separate place of work and or advertises his or her services to the world at large.
[29] The Respondent made no contention nor led any evidence that the Applicant had a separate place of work or that the Applicant advertised his services as an installer to the world at large.
[30] On the material before the Commission this indicia would point to an employment relationship.
Whether the worker provides and maintains significant tools or equipment.
[31] In the present matter it is clear that the Applicant did not supply his own tools. The witness statement of Mrs Effie Stouraitis suggests that the Applicant had no tools at all.
“When George bought a cot etc for this children he asked to borrow an electric drill which I let him borrow and told him to make sure he returned it to me - it was not returned to anyone”
[32] This indicia would point to an employment relationship.
Whether the work can be delegated or subcontracted.
[33] The material in this matter strongly supports a conclusion that that the Applicant was required to perform the work himself for the Respondent.
[34] The Respondent does not contend that the Applicant had any ability to subcontract or delegate the work to anyone else.
[35] This indicia would point to an employment relationship.
Whether the putative employer has the right to suspend or dismiss the person engaged.
[36] The Respondent contended that it never dismissed the Applicant and apart from this contention the Respondent did not contend that it did not have the right to suspend or dismiss the Applicant. Nor did the Applicant contend that the Respondent had the right to suspend or dismiss the Applicant.
[37] In all of the circumstances of the present matter this indicia is neutral.
Whether the putative employer presents the worker to the world at large as an emanation of the business.
[38] Neither the respondent nor the Applicant addressed this indicia.
[39] In all of the circumstances of the present matter this indicia is neutral.
Whether income tax is deducted from remuneration paid to the worker.
[40] In the present matter the material provided by the Respondent makes clear that no income tax was deducted from the payments made to the Applicant.
[41] In the present matter this indicia suggests a relationship other than an employment relationship.
Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks.
[42] The Respondent’s own material indicates that the Applicant was paid an hourly rate of pay. The Applicant was paid for hours worked and not for jobs completed.
[43] In the circumstances of the present matter this indicia would point to an employment relationship.
Whether the worker is provided with paid holidays or sick leave.
[44] It is clear from the material in the present matter that the Respondent did not provide the Applicant with paid holidays or sick leave.
[45] In the present matter this indicia suggests a relationship other than an employment relationship.
Whether the work involves a profession, trade or distinct calling on the part of the person engaged.
[46] It is clear from the Applicant’s material that he was engaged to perform work which required trades skills and that such work was the installation and maintenance of spray booths in panel beater shops.
[47] Given that trades qualified persons can be engaged as either employees or independent contractors this indicia is neutral in the present matter.
Whether the worker creates goodwill or saleable assets in the course of his or her work.
[48] Neither the Respondent nor the Applicant directly addressed the issue of goodwill or saleable assets. However in all of the circumstances of this matter it does not appear that the Applicant’s work for the Respondent created any goodwill or saleable assets for the Applicant.
[49] In the circumstances of the present matter this indicia would point to an employment relationship.
Whether the worker spends a significant portion of his remuneration on business expenses.
[50] The Applicant’s material makes clear that the Applicant spent nothing on business expenses. The Respondent did not contend that the Applicant spent any of his remuneration on business expenses.
[51] In the circumstances of the present matter this indicia would point to an employment relationship.
[52] Before answering the “ultimate question” I intend to apply the indicia stated by Bromberg J in On Call Interpreters. As mentioned earlier Bromberg J’s indicia focus on looking at the existence of a business being conducted by the performer of the work. Bromberg J explained his approach as follows:
“208. Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work, may be posed and answered as follows:
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?
If the answer to that question is yes, in the performance of that particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee.
209. The question which this approach poses appears to me to be the central question in the application of the totality test. The question provides the focal point around which the indicia thrown up by the totality test may be examined. The central question has two elements. The first is whether the person has a business. The second is whether the work or the economic activity being performed is being performed in and for the business of that person: Sweeney at [31].
210. As to the first element, to carry on a business is to conduct a commercial enterprise as a going concern: Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 at [83]. It will usually involve the acquisition and use of both tangible and intangible assets in the pursuit of profit: Gribbles Radiology at [39]. The desire to make profit is an important element and generally a business will enter into transactions on a continuous and repetitive basis in the pursuit of profit: Hope v Bathurst City Council (1980) 144 CLR 1 at 8-9. A business typically has (or at least aspires to have) value (goodwill or saleable assets) beyond its physical assets: Steven v Brodribb at 37. A common intangible asset of a business is its name, brand, reputation or goodwill. Typically, the activities of a business will be organised in a business-like manner, including by the use of systems: Ferguson v Federal Commissioner of Taxation (1979) 37 FLR 310 at 314 – 315. The word “business” imports the notion of system, repetition and continuity: Hungier v Grace (1972) 127 CLR 210 at 216-217. A business will normally operate in a business-like way; Puzey v Commissioner of Taxation [2003] FCAFC 197 at [48].
211. It is not possible to exhaustively enumerate the facts and circumstances which will support the inference that a course of activity is a business: London Australia Investment Company Ltd v Federal Commissioner of Taxation (1976-1977) 138 CLR 106 at 129. The nature of a business will vary and some of the typical indicia I have identified will be less important in some settings than in others. Many of the characteristics of a share trading business will be different to those of a retail shop and different again to those of a business selling personal services. It is to the characteristics of the latter and the distinguishing features between it and an employment that, in this case, attention needs to be given.
212. A personal services business is a business which is likely to involve system, repetition and continuity in the pursuit of profit. A genuine personal services business will aspire to make profits and not simply be paid remuneration, as is an employee. Such a business will seek to be remunerated not simply for the provision of the labour of the self-employed entrepreneur that provides the personal services, but also for the risks involved in that person being an entrepreneur.
213. The risk profile of a personal services business is very different to that of an employee. By its very nature, a genuine commercial enterprise is an undertaking which involves risk. Business risk is a product of a need for a business to invest (either in physical assets, time or effort) at a cost and without any certainty or assurance of that cost being recovered and any profit being made. Unlike an employee who generally seeks security, and is not risk-tolerant, a personal services business is prepared to invest time, money and effort with little or no certainty that such investment will be rewarded with a financial return. All of that is done in the hope of making a profit. It is in that sense, that an entrepreneur operating a personal services business seeks profit and not simply remuneration, for the personal services provided.
214. A genuine independent contractor providing personal services will typically be: autonomous rather than subservient in its decision-making; financially self-reliant rather than economically dependent upon the business of another; and, (as I have said), chasing profit (that is a return on risk) rather than simply a payment for the time, skill and effort provided.
215. In an employment relationship, there will typically be an entrepreneur, but that will be the employer, it will never be the employee. The employer will take the risk of profit or loss. The employee seeks the security of fixed and certain remuneration. Unlike the independent contractor, the employee has no business, and typically will have no interest or desire, in exposure to the risk of loss in return for the chance of profit.
216. As Stewart (at 261) has observed:
There does seem to be a fundamental difference, in a capitalist system, between running your own business and working for somebody else’s. It is a distinction that has not only been articulated in these terms by the courts: (See, eg, Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 at 217; Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at [39], [41]) but that most people in the community would implicitly understand and accept. The entrepreneur risks whatever capital they have been able to accumulate in a bid to profit from their venture. They may earn a little or a lot, or indeed they may lose money. Within whatever constraints are imposed by the need to raise finance and/or the conditions of the relevant product market, the entrepreneur makes their own decisions as to how the business is to operate.
Indicia of a Business
217. That analysis and an understanding of what constitutes a business and, in particular, a personal services business, suggests the following indicia for consideration in the ‘Is there a business?’ element of the totality test:
• Do the economic activities of the putative business involve the taking of risk in the pursuit of profits?: Gribbles at [39]; Hope v Bathurst at 9; Roy Morgan Research (2010) at [47]; Yaraka Holdings at [41] and [49]; Montreal v Montreal Locomotive Works Ltd [1947] 1 DLR 161 at 169; Market Investigations v Minister of Social Security [1968] 2 QB 173 at 184; Lee Ting Sang v Chung Chi-Keung (1990) 2 AC 374 at 382.
• Does the putative business engage in a repetitive and continuous manner with purchasers of its services?: Hope v Bathurst City Council at 9; Hungier v Grace at 216-217; Puzey at [48]; Commissioner of Taxation v Sleight (2004) 136 FCR 211 at [48];
• Does the putative business employ or engage persons other than the owner/operator to carry out its economic activities?: Stevens v Brodribb at 26 and 38;
• Is goodwill (name, brand and reputation) being created by the economic activities of the putative business?: Hollis at [48]; Steven v Brodribb at 37; Roy Morgan (2010) at [46]; Re Porter; Re Transport Workers Union at 186;
• Is the putative business promoted as a business to the public through advertising or other promotional means?: Hope v Bathurst City Council at 9; Abdalla v Viewdaze at [35]; Yaraka Holdings at [35];
• Does the putative business have tangible assets such as buildings and equipment which are utilised to support its economic activities?: Steven v Brodribb at 37; Gribbles Radiology at [39];
• Does the putative business have the basic transactional systems that are common of a business of that kind? For instance: invoicing systems; standard rates and terms and conditions of trade; insurance coverage; payment and debt collection systems; appropriate financial records; budgeting or forecasting systems; business based arrangements with a bank or other financial institution: Hollis at [54]; Sweeney at [31]; Hope v Bathurst City Council at 9; Wesfarmers Federation Insurance Ltd v Stephen Wells trading as Wells Plumbing [2008] NSWCA 186 at [42]; Ferguson at 311;
• Do the services provided by the putative business involve the provision of labour of sufficient skill to be suggestive of the pursuance of a profession or trade through a business: Hollis at [48]; Stevens v Brodribb at 36-37; Yaraka Holdings at [51];
• Are the regulatory requirements of a business (including business name registration, taxation, GST and ABN registration and compliance) being met by the putative business?: Wesfarmers at [39]-[42];
Indicia as to Whose Business the Economic Activity is Being Performed In
218. The second element – ‘Whose business is the economic activity being performed in and for?’, raises the following indicia for consideration:
• Does the provision of the economic activity provide an opportunity for profit and involve the risk of loss: Roy Morgan (2010) at [47]; Market Investigations at 185; Lee Ting Sang at 382; or is the payment made largely consistent with the remuneration that an employee would have received for providing the activity?: Hollis at [54]; Commissioner of Taxation v Barrett (1973) 129 CLR 395 at 405-407; Yaraka Holdings at [41] and [49];
• In that respect and in relation to profit:
- to what extent is the reward for the provision of the activity negotiable and negotiated commercially?: Hollis at [54];
- to what extent does the putative owner/entrepreneur have the capacity to manage the activity so as to maximise the potential for profit?: Hollis at [58]; Roy Morgan (2010) at [47]; Market Investigations at 185; Lee Ting Sang at 382;
• In that respect and in relation to risk:
- to what extent is the agreed payment contingent upon the person providing a satisfactory result (i.e. are there financial consequences for poor performance)?: Roy Morgan (2010) at [47]; Yaraka Holdings at [49];
- who bears the risks associated with providing any equipment or assets required for the performance of the economic activity?: Hollis at [56].
• Does the putative business or the putative employer’s business control and direct or have the capacity to control and direct the manner in which the economic activity is carried out?: Hollis at [43]-[45], [49] and [57]; Stevens v Brodribb at 24 and 35-36; Roy Morgan (2010) at [49].
• Is the economic activity represented or portrayed as the activity of the putative business or that of the putative employer’s business?: Hollis at [50]-[52] and [57]; Yaraka Holdings at [43];
• To what extent is the person providing the economic activity integrated with the business receiving the activity?: Stevens v Brodribb at 26-27 and 35-36; Hollis at [57];
• To what extent is the person providing the economic activity financially self-reliant from, as opposed to, economically dependent upon or organisationally tied to, the business receiving the activity?: Re Porter: Re Transport Workers Union at 184-185. Exclusivity is suggestive of an employment relationship: Commissioner of Taxation v Barrett at 407. However, it does not follow that a person who provides casual or
part-time work to multiple purchasers is not an employee: Yaraka Holdings at [34] and [36]; Sgobino v State of South Australia (1987) 46 SASR 292 at 308;
• Is the person providing the economic activity free to employ his or her own means (employees or contracted agents) to produce the activity or must that person personally perform the work?: Stevens v Brodribb at 24-26 and 38; Neale v Atlas Products (Vic) Pty Ltd (1955) 94 CLR 419 at 425 and 428; Yaraka Holdings at [41]; and see [285] below;
• To whose business does any goodwill created by the economic activity enure?: Hollis at [48]; Stevens v Brodribb at 37; Roy Morgan (2010) at [46]; Yaraka Holdings at [52];
• In contracting to provide the economic activity has the person agreed to provide an outcome or result?: Neale v Atlas Products at 425; Roy Morgan (2010) at [42];
• To what extent is the person providing the economic activity doing so with his or her own tools and equipment?: Hollis at [56]; Sweeney at [32]; Roy Morgan (2010) at [41]; Yaraka Holdings at [37]-[40]; Market Investigations at 185; Lee Ting Sang at 382;
• If the person is providing their own equipment, to what extent can the person be directed in the management and control of that equipment?: Stevens v Brodribb at 26;
• Have the parties involved characterised the economic activity as that of the owner/entrepreneur being performed in and for that person’s business, or alternatively as part of the receiving business, and to what extent does that characterisation reflect the reality?: See [188] to [200] above.
219. Whether or not income tax has been withheld and whether annual, long service or sick leave is afforded are often also used as relevant indicators: Stevens v Brodribb at 37; Yaraka Holdings at [44]-[48]. It is not incorrect to have regard to these factors, but there are differing views as to the inference which should be drawn from such arrangements: Wesfarmers Federation Insurance at [40]-[42]. Reliance on these factors may involve circularity of reasoning particularly where these factors are based upon the self-assessed and objectively incorrect label that the parties have attached to their relations: see Hollis at [37] and Owens and Riley at 140. Further, it is necessary to appreciate that casual employees are not ordinarily entitled to leave or sick pay: Sgobino at 293 and 308; Yaraka Holdings at [50];
220. The indicia which I have listed reflect various indicators largely taken from the decided cases. In many respects the indicators are differently expressed to accommodate the particular approach that I have taken which, consistently with the approach in Hollis, seeks to emphasise what I have described as the central question in the application of the totality test. The indicators listed are not intended as exhaustive and many of them will be the subject of qualification depending upon the nature of the economic activity in question and the circumstances in which it is being carried out. The task to be undertaken is not to be performed mechanically by checking off against a list of indicia and without recognising that different significance may attach to the same indicators in different cases: Lopez v Deputy Commissioner of Taxation [2005] FCAFC 157 at [82].
[53] As can be seen, some of the indicia stated by Bromberg J are the same or are very similar to the indicia stated by the Full Bench in French Accent. However the focus of the indicia stated by Bromberg J is on the putative business which in this case the Respondent contends that the Applicant is conducting. I intend to address each of the indicia identified by Bromberg J.
Do the economic activities of the putative business involve the taking of risk in the pursuit of profits?
[54] In the present matter there is nothing to suggest that the Applicant is taking any risk in the pursuit of profits. Given the amount and form of payment made by the Respondent to the Applicant it would appear that the concept of profit making by the Applicant is fanciful.
[55] This indicia would not support a finding that the Applicant is an independent contractor.
Does the putative business engage in a repetitive and continuous manner with purchasers of its services?
[56] The answer to this question would, on the material supplied by both parties in this matter, be that the putative business of the Applicant does engage in a repetitive and continuous manner with purchasers of its services, namely the Respondent.
[57] This indicia supports a finding that the Applicant is not an independent contractor.
Does the putative business employ or engage persons other than the owner/operator to carry out its economic activities?
[58] This indicia addresses the same issue as raised by the indicia in French Accent which is expressed as: Whether the work can be delegated or subcontracted.
[59] The answer to this question is: No.
This indicia supports a finding that the Applicant is not an independent contractor.
Is goodwill (name, brand and reputation) being created by the economic activities of the putative business?
[60] This indicia addresses the same issue as raised by the indicia in French Accent which is expressed as: Whether the worker creates goodwill or saleable assets in the course of his or her work.
[61] On the material before the Commission in this matter it is reasonable to conclude that the Applicant is not generating any goodwill which attracts to a putative business conducted by the Applicant.
[62] This indicia supports a finding that the Applicant is not an independent contractor.
Is the putative business promoted as a business to the public through advertising or other promotional means?
There is nothing in the material before the Commission which suggests that the Applicant has promoted the putative business to the public through advertising or other promotional means.
[63] This indicia supports a finding that the Applicant is not an independent contractor.
Does the putative business have tangible assets such as buildings and equipment which are utilised to support its economic activities?
[64] This indicia addresses the same issue as raised by the indicia in French Accent which is expressed as: Whether the worker provides and maintains significant tools or equipment.
[65] There is nothing in the material before the Commission which suggests that the Applicant has any tangible assets which are used to support the economic activities of the putative business.
[66] This indicia supports a finding that the Applicant is not an independent contractor.
Does the putative business have the basic transactional systems that are common of a business of that kind? For instance: invoicing systems; standard rates and terms and conditions of trade; insurance coverage; payment and debt collection systems; appropriate financial records; budgeting or forecasting systems; business based arrangements with a bank or other financial institution.
[67] There is nothing in the material before the Commission which suggests that the Applicant has the basic transactional systems that would be common to a business providing installation and maintenance services in relation to spray booths for the automotive repair industry.
[68] This indicia supports a finding that the Applicant is not an independent contractor.
Do the services provided by the putative business involve the provision of labour of sufficient skill to be suggestive of the pursuance of a profession or trade through a business?
[69] The answer to this question is: Yes.
[70] This indicia suggests that the Applicant may be an independent contractor.
Are the regulatory requirements of a business (including business name registration, taxation, GST and ABN registration and compliance) being met by the putative business?
[71] The answer to this question is mixed. The Applicant had an ABN but there is nothing to suggest that the Applicant had a registered business name. There is nothing to suggest that the Applicant has met any compliance obligations for a business, eg filing Business Activity Statements and payment of GST. At the same time the Applicant contends that he provided his personal Tax File Number to the Respondent.
[72] On balance this indicia supports a finding that the Applicant is not an independent contractor.
Does the provision of the economic activity provide an opportunity for profit and involve the risk of loss or is the payment made largely consistent with the remuneration that an employee would have received for providing the activity?
[73] The answer to this question is: No. It is clear from the material supplied by the Respondent that the Applicant was initially engaged at the rate of $15.00 per hour which rose to $23 per hour during the period of work.
[74] It is very clear that the rate of $15 per hour is well below the rate that would be paid to an employee performing the same work. Considering the Respondent treated the Applicant as being contracted to perform work on as needs basis then if the Applicant was an employee he would have been classified as a casual employee. The lowest casual rate of pay under the Manufacturing and Associated Industries and Occupations Award 2010 as at the date the Applicant commenced work for the Respondent was in excess of $15 per hour. Considering that the Respondent wanted the Applicant to exercise trade skills then the rate of $15 per hour was significantly lower than the casual rate for a trades qualified employee under the Award.
[75] This indicia supports a finding that the Applicant is not an independent contractor.
In that respect and in relation to profit:
To what extent is the reward for the provision of the activity negotiable and negotiated commercially?
[76] If it could be established that the Applicant had the opportunity to make a profit then it could only have been minimal given that the hourly rate was set by the Respondent and the hourly rate was, on the material in this matter, not negotiated commercially.
[77] This indicia supports a finding that the Applicant is not an independent contractor.
To what extent does the putative owner/entrepreneur have the capacity to manage the activity so as to maximise the potential for profit?
[78] The level of control exercised by the Respondent over the activities of the Applicant strongly suggests that the Applicant had little or no capacity to manage the work so as to maximise the potential for profit.
[79] This indicia supports a finding that the Applicant is not an independent contractor.
In that respect and in relation to risk:
To what extent is the agreed payment contingent upon the person providing a satisfactory result (i.e. are there financial consequences for poor performance)?
[80] On the material in this matter the agreed amount was a payment for time and not for a result. On the Respondent’s material it is clear that when the Applicant made an error in the performance of wok that the Respondent carried the cost of rectifying that error.
[81] This indicia supports a finding that the Applicant is not an independent contractor.
Who bears the risks associated with providing any equipment or assets required for the performance of the economic activity?
[82] On the material in this matter it is clear that the Respondent bore the risks associated with providing any equipment or assets required for the performance of the economic activity. The only cost expected to be borne by the Applicant was for speeding fines incurred when driving the Respondent’s vehicle. This is not conclusive of any relationship as it is often the case that a user of a vehicle, whether contractor or employee, will be responsible for speeding fines and parking tickets and the like.
[83] This indicia supports a finding that the Applicant is not an independent contractor.
Does the putative business or the putative employer’s business control and direct or have the capacity to control and direct the manner in which the economic activity is carried out?
[84] This indicia addresses the same issue as raised by the indicia in French Accent which is expressed as: Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like.
[85] It is clear on the material before the Commission in this matter that the putative business of the Applicant does not control or direct or have the capacity to control or direct the manner in which the economic activity is carried out. However, it is clear on the material before the Commission in this matter that the putative employer’s business does control or direct or have the capacity to control or direct the manner in which the economic activity is carried out.
[86] This indicia supports a finding that the Applicant is not an independent contractor.
Is the economic activity represented or portrayed as the activity of the putative business or that of the putative employer’s business?
[87] This indicia addresses the same issue as raised by the indicia in French Accent which is expressed as: Whether the putative employer presents the worker to the world at large as an emanation of the business.
[88] On the material before the Commission in this matter it is reasonable to conclude that when the Applicant performs work for the Respondent in the installation or maintenance of spray booths in panel beating shops that the economic activity is portrayed as an economic activity of the putative employer’s business.
[89] This indicia supports a finding that the Applicant is not an independent contractor.
To what extent is the person providing the economic activity integrated with the business receiving the activity?
In the present matter the material relied on by both the Applicant and the Respondent indicates that the Applicant worked as part of a team when installing spray booths in panel beating shops. The team comprised an integrated work unit of the Respondent’s business.
[90] This indicia supports a finding that the Applicant is not an independent contractor.
To what extent is the person providing the economic activity financially self-reliant from, as opposed to, economically dependent upon or organisationally tied to, the business receiving the activity?
[91] On the material before the Commission in this matter it is reasonable to conclude that the Applicant is not financially self reliant from the Respondent’s business and that the Applicant is economically dependent upon the business of the Respondent.
[92] This indicia supports a finding that the Applicant is not an independent contractor.
Is the person providing the economic activity free to employ his or her own means (employees or contracted agents) to produce the activity or must that person personally perform the work?
[93] This indicia addresses the same issue as raised by the indicia in French Accent which is expressed as: Whether the work can be delegated or subcontracted.
[94] The material supplied by both the Respondent and the Applicant in this matter strongly suggests that the Applicant was not free to employ his own means to have the work performed but rather that the work had to be performed personally by the Applicant.
[95] This indicia supports a finding that the Applicant is not an independent contractor.
To whose business does any goodwill created by the economic activity enure?
[96] This indicia addresses the same issue as raised by the indicia in French Accent which is expressed as: Whether the worker creates goodwill or saleable assets in the course of his or her work.
[97] The indicia as expressed by Bromberg J focuses on who gets the benefit of any goodwill which is created by the work performed. To the extent that the Applicant performs his work well in the installation of spray booths in panel beating shops it would appear that any and all goodwill created through such work goes to the Respondent.
[98] This indicia supports a finding that the Applicant is not an independent contractor.
In contracting to provide the economic activity has the person agreed to provide an outcome or result?
[99] The evidence of the Respondent in this matter is that the Applicant was contracted to provide labour by the hour. There was no contract with the Applicant which required to provide a specific outcome or result.
[100] This indicia supports a finding that the Applicant is not an independent contractor.
To what extent is the person providing the economic activity doing so with his or her own tools and equipment? If the person is providing their own equipment, to what extent can the person be directed in the management and control of that equipment?
[101] These two indicia cover the same subject as the indicia in French Accent which is presented as: Whether the worker provides and maintains significant tools or equipment.
[102] In the present matter it is clear from the material in this case that the Applicant is not providing the economic activity through use of his own tools or equipment.
[103] These two indicia support a finding that the Applicant is not an independent contractor.
Have the parties involved characterised the economic activity as that of the owner/entrepreneur being performed in and for that person’s business, or alternatively as part of the receiving business, and to what extent does that characterisation reflect the reality?
[104] The Respondent contends that both the Applicant and the Respondent have characterised the economic activity as that of the Applicant providing contracted services for the Respondent. The Respondent relies upon the Security Undertaking to support this characterisation. Although the Applicant considers the Security Undertaking to be a fraudulent document, I am prepared for the sake of considering this indicia to treat the Security Undertaking as having been agreed to and signed by the Applicant. This leads no further than having both the Applicant and Respondent characterise the economic activity as that of the Applicant as an independent contractor. However considering all the circumstances of this matter, the reality of the relationship is not what it is characterised to be.
[105] Whether approached from the perspective of the indicia stated in French Accent or the indicia stated by Bromberg J in On Call Interpreters the “ultimate question” is answered the same - viewed as a practical matter, the Applicant cannot be said to be conducting a business of his own of which the work in question forms part, and viewed as a practical matter the Applicant was the servant of the Respondent in the Respondent’s business.
No dismissal
[106] On 5 April 2013 the Applicant and Mr Spiros Stouraitis had a physical altercation in the workplace. There is no agreement between the Applicant and the Respondent as to the all of the circumstances surrounding that altercation. However, both Mr Spiros Stouraitis and the Applicant agree that before any physical contact occurred between the Applicant and Mr Spiros Stouraitis that Mr Spiros Stouraitis called the Applicant a thief both in relation to the hours he claimed payment for and in relation to taking a t shirt from a customer’s premises.
[107] The witness statement of Mr Spiros Stouraitis contains the following:
“29. On the 5th April, 2013 just after lunch time George came into the general office together with another worker. He sat at the bar in the general office area and he spoke to the other worker telling him to right down his hours on the timesheet the same way that he had done his hours. George then game the time sheets to my wife Effie Stouraitis who does all the payments. My wife bought the time sheets to my office and I gave her my diary in order for her to check the hours I had kept noted and those that had been given to us. My wife then went back to her office to compare the hours. I then went out to where George was sitting at the bar and I went and stood next to him.
30. I noticed that the time sheets were very clean (that is written out very neatly and no other notes on the pages) and I asked him - when did you write these hours George - George replied today. I said l want you to give me the ones you have written on site. George said I don’t have it with me, don’t you believe me? I said no because the hours are not matching with mine. He said are you calling me a thief? I said yes I am call you a thief because I have received other information from a customer in Sydney he is missing things in his office. George said which customer? I said Jim Dimitriou.
31. I had also found out that George had been wearing one of the polo tops for my business as well and I asked him. Where did you get this polo top? George said the manager of the panel shop gave them to me. I knew this to be a lie because I had spoken with the manager of the panel shop a few days earlier and he said he did not give them to George. The manager of the panel shop and I also had more discussions about things that George had been doing; taking work apparel and using my mobile phone without permission. It was for this reason I said I am calling you a thief.”
[108] The Applicant in his application, Form F2, described the events as follows:
“I arrived from Sydney to my home on the 4th of April at 11 o clock at night, everything was well for me, I had no idea that something was wrong. The following afternoon I took the paper with my hours written on it to go the factory to be paid, I even took with me my 5 year old son. I was about to give my hours and discuss the following weeks plan. I got in and I saw that Spyro was red with anger from unknown to me cause.
I gave him my hours and he called me a thief! I worked 92 hours in a week during Easter I was asking for nothing more than my 23 dollars per hour that of course would be taxed since I am all this time since December under ABN, and I was the thief! I asked how he could say that and he said that I used a different pen than I had in Sydney. My hours of course were the same as the Italian, I was accused furthermore that I picked an expensive motel on the way to Sydney after the incident with the police, after I almost killed myself. The motel was picked by the Italian who was driving after the incident with the police but they told him it wasn’t his fault, I should know better, the next thing he said is that he wouldn’t pay me because I had burnt the switchboard I mentioned just before and of course at the same moment I asked the Italian what they had told him from Italy and he responded that the switchboard could NOT be burnt, the exact words were that “is impossible to burn it”. He claimed that the paper where I was writing the hours wasn’t the original and that I was a thief. I explained that I just wrote it again to be more clear because I mixed the pm with the am, the original paper is among my stolen papers that he held.”
[109] A physical altercation between the Applicant and Mr Spiros Stouraitis occurred after this exchange. Once the physical altercation between the Applicant and Mr Spiros Stouraitis became apparent to other staff of the Respondent they intervened. The witness statement of Mr John Stouraitis contains the following:
“38. .....I broke up George and my father after Lena and my father called to me.
After 5 minutes of insisting him to get out George made his way outside so I could calm down the situation. I told my mother to work out the hours so we could pay George for his hours in Sydney.
39. My father told me about the t-shirts as he asked the workers from Concours.
40. I had seen Jim many times so I do not know what he is talking about.
I remember his wife threatening the company if we don’t take him back or don’t pay him she will try and close the company down and she doesn’t care if they have to go back to Greece she will do it from there.”
[110] Mr Dimitri Papagianopoulos, a cousin of Mrs Effie Stouraitis, provided a witness statement in support of the Respondent. Mr Dimitri Papagianopoulos recounts a conversation he had with the Applicant. The date of the conversation is not identified. Part of the recount of the conversation is as follows:
“He mentioned his and his families visa - I asked him why you bring your family here then if you do not have the correct visa - he said to me Spiros needed me he did not anyone else to work for him.
I told him that Spiros is not happy with the way you are working and he is not happy with the way you talk to him and to the ladies in the office. You are rude sometimes and that is why Spiros has put ads in the papers and on the internet to find someone else.”
[111] Whilst the statement is only hearsay as to what Mr Spiros Stouratis may have said it is a witness statement provided by the Respondent in support of the Respondent’s case.
[112] The witness statement of Mr Dimitri Papagianopoulos suggests that the Respondent intended to end the relationship with the Applicant and to replace the Applicant with another worker.
[113] The Respondent’s contention that the Applicant was never dismissed sits very oddly with statements of Mr Spiros Stouraitis, Mr John Stouraitis and Mr Dimitri Papagianopoulos.
[114] Taking each of the three statements at face value it is clear that Mr Spiros Stouraitis considered that the Applicant was a thief and that Mr Spiros Stouraitis had commenced a process to find a replacement for the Applicant. It also is clear that immediately after the Applicant had been directed to leave the Respondent’s office that the Applicant’s wife, who had not been present at the time of the altercation between the Applicant and Mr Spiros Stouraitis, was “threatening the company if we don’t take him back”. Such a threat only makes sense if the Applicant and the Applicant’s wife had the understanding that the employment relationship either had ended or was clearly in danger of being ended by the Respondent.
[115] It is also relevant to note that there is nothing in the witness statement of the Respondent’s witnesses which indicate that the Respondent intended for the working relationship between the Applicant and the Respondent to continue. Nor was anything put by the Respondent to Mrs Effie Stouraitis, the Respondent’s HR Officer, (who was the only witness of the Respondent who gave oral evidence in these proceedings) in relation to the status of the Applicant after the altercation on 5 April 2013.
[116] It is also relevant to note that the Applicant had identified in his Form F2 filed in April 2013 the details of the events on 5 April 2013 including the details of the conversation between himself, his wife and Mr John Stouraitis after the altercation that occurred between the Applicant and Mr Spiros Stouraitis. The Applicant recounted the end of the conversation as follows:
“In the end of our discussion John told me that he had to convince his parents about me coming back to my work~ in general by his behaviour I was convinced that this was just a bad moment and everything would be fine soon. So I waited for his call as he told me to do . They didn’t call me for a whole ten days and on Tuesday 16th of April I called to ask for a reference letter since I assumed I wasn’t going to return to my job.”
[117] The Respondent was on notice as to what the Applicant’s contentions were in relation to the conversation between the Applicant and Mr John Stouraitis on 5 April 2013 yet the sworn witness statement of Mr John Stouraitis does not deal with this aspect of the conversation on 5 April 2013. Mr John Stouraitis only includes a reference to a particular comment made by the Applicant’s wife.
[118] In its Outline of Respondents Final Submissions filed on 31 March 2014 the Respondent contended as follows:
“Dismissal
27. The Respondent did not dismiss the Applicant and relies on section 386(1) of the Act to refute the merits of the Application on the basis that the Respondent neither terminated the Applicant’s employment on its initiative, nor engaged in a course of conduct which forced the Applicant to resign.
(paragraph 23 of Ms Lena Giagkoulis’ Affidavit sworn on 20 October 2013, paragraph 35of Mr Stouraitis’ Affidavit sworn on 20 October 2013)
28. In Centofanti v Assisi Centre Inc [2011] FWA 6123, the Commission said that:
“…there needed to be some action on the part of the employer which is intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end” (at [42]).
29. In the Full Bench decision of the Australian Industrial Relations Commission in A.S. Doumit v ABB Engineering Construction Pty Ltd [1996] AIRC Print N6999 (9 December 1996), it was said:
“Where the conduct of the employer is ambiguous, and the bearing it has on the decision to resign is based largely on the perception and subjective response of the employee made unilaterally, considerable caution should be exercised in treating the resignation as other than voluntary”.
30. By his own admission, the Applicant states that he contacted the Respondent for a reference and he assumed he was not going to return to work.
31. The Applicant assumed on his own, that he was not returning to work and was not dismissed due to the Applicants initiative or due to their conduct.
32. The Respondent at no time expressed to the Applicant that he was dismissed.
(paragraph 35 Mr Stouraitis’ Affidavit sworn on 20 October 2013)”
[119] I accept that the Respondent did not any time expressly tell the Applicant that he was dismissed. However I do accept that the Respondent through Mr John Stouraitis told the Applicant not to return to work until contacted by Mr John Stouraitis and that Mr John Stouraitis did not ask the Applicant to return to work.
[120] The meaning of “dismissed” is dealt with in s.386.
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or
(b) the person was an employee:
(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(c) the person was demoted in employment but:
(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the demotion.
(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.”
[121] The proper approach to applying s.386(1) was stated by a Full Bench in Searle v Moly Mines Limited 3:
“It is clear that the statutory test relates to termination of the employment relationship, not termination of the contract of employment.”
[122] When considering whether the employment relationship has been terminated by the employer regard should be had to the decision of a Full Court in Mohazab v Dick Smith Electronics P/L (No 2) 4:
“… a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship.”
and
“In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship.”
[123] In the present matter it is reasonable to conclude that the employment relationship was effectively brought to an end on 5 April 2013 when Mr Spiros Stouraitis the Managing Director accused the Applicant of being a thief. The physical altercation between the Applicant and Mr Spiros Stouraitis merely confirms that the employment relationship had effectively ended before the physical altercation started. Whilst no words of dismissal were used by Mr Spiros Stouraitis or Mr John Stouraitis the employment relationship had been terminated by Mr Spiros Stouraitis in calling the Applicant a thief.
Minimum period of employment
[124] The Applicant in his Form F2 - Application for Unfair Dismissal Remedy identified his commencement of employment with the Respondent as 22 June 2012 and the date of his dismissal as 5 April 2013. However during the proceedings the Applicant contended that his actual commencement date was in March 2012. Therefore the Applicant contends that he was employed for over 1 year.
[125] Only an employee who served the minimum period of employment may apply for an unfair dismissal remedy. S.383 of the Act provides as follows:
“383 Meaning of minimum employment period
The minimum employment period is:
(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:
(i) the time when the person is given notice of the dismissal;
(ii) immediately before the dismissal; or
(b) if the employer is a small business employer—one year ending at that time.
[126] The relevant minimum employment period for the Applicant will be dependent upon whether the Respondent is a Small Business Employer.
[127] Section 23 provides as follows:
“23 Meaning of small business employer
(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.
(2) For the purpose of calculating the number of employees employed by the employer at a particular time:
(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and
(b) a casual employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis.
(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.
(4) To avoid doubt, in determining whether a national system employer is a small business employer at a particular time in relation to the dismissal of an employee, or termination of an employee’s employment, the employees that are to be counted include (subject to paragraph (2)(b)):
(a) the employee who is being dismissed or whose employment is being terminated; and
(b) any other employee of the employer who is also being dismissed or whose employment is also being terminated.”
[128] The Applicant contends that the Respondent is not a Small Business Employer because the Respondent would employ more than 15 people when installing equipment on site. The Applicant contended that in the case of the installation of equipment at a site in Sydney the Respondent employed at least 17 persons.
[129] Whether or not the contention of the Applicant is true it is not relevant. The test in s.23 is not whether the Respondent ever employed more than 15 employees but rather whether the Respondent employed 15 or more employees at the time of the dismissal of the Applicant.
[130] The evidence of Mrs Effie Stouraitis is clear. The Respondent was a Small Business Employer as at the date of dismissal. I note that even if the persons who Mrs Stouraitis considered were contractors were in fact employees then the Respondent would still be a Small Business Employer.
[131] The question then to be determined is whether the Applicant has served the minimum period of employment of at least 1 year.
[132] The Applicant contended that he had been employed since March 2012 and he produced bank statements to show that payments had been made to him on a weekly basis from end of March 2012 until 5 April 2013.
[133] The Respondent challenged that the Applicant had worked for at least a year. The Respondent contended that initial work performed by the Applicant was a trial and would not account as part of a period of employment for the purposes of s.383.
[134] The Respondent produced to the Commission a document, titled Security Undertaking and dated 10 April 2012, purported to have been signed by the Applicant in which the Applicant both agrees to work for the Respondent as a contractor and in addition agrees that the first three months work is as a trial after which he would be advised by the Managing Director of the Respondent (Mr Spiros Stouraitis) if the Applicant is to continue working for the Respondent as a contractor.
[135] The Applicant strenuously challenged the veracity of the Security Undertaking and alleged that the document was a fraud as he had never signed such a document.
[136] At the very least the Security Undertaking shows that there was a working relationship in existence between the Applicant and the Respondent by 10 April 2012.
[137] The Respondent relies upon the decision of Williams C in Lockley v Westug t/as North West Crewing 5 in support of the contention that the trial period worked by the Applicant does not count towards the period of employment.
[138] There are significant differences between the circumstances in the present matter and the facts in Lockley v Westug t/as North West Crewing. In the present matter the Applicant was not engaged as a casual for a set trial period and there was no gap in the engagement between the trial period and the substantive period of work. Also every contention of the Respondent in relation to the existence of the trial period and the engagement as a contractor is disputed by the Applicant.
[139] Considering all of the circumstances of this matter I find that the trial period which the Respondent contends was in place was merely part of the overall period of employment of the Applicant.
[140] I am satisfied that the Applicant commenced work for the Respondent no later than 30 March 2012. Therefore the Applicant’s period of employment is more than 1 year and the Applicant has served the minimum period of employment as required by s.383(b).
Conclusion
[141] For the foregoing reasons I dismiss each of the three jurisdictional objections of the Respondent. As the application in this matter is within jurisdiction the application will be listed for hearing in relation to merit.
Further Disposition of the Application
[142] Directions will be issued separately to this decision which require the Applicant within 14 days to file with the Commission and serve on the Respondent any further submissions or witness statements or other supporting material in support of the Applicants claim that the dismissal is harsh unjust or unreasonable and in relation to any remedy sought by the Applicant.
[143] The Respondent will be given 14 days after the date that the Applicant has to file his material for the Respondent to file and serve its material in reply.
[144] A hearing will be held within 7 days of the date set for the Respondent to file its material.
[145] Given that the Applicant is unrepresented I draw the Applicant’s attention to the relevant provisions of the Fair Work Act 2009 namely s.387 in relation to the criteria for considering whether a dismissal is harsh, unjust or unreasonable and to s.390 to 393 in relation to remedies. I also draw the Applicant’s attention to the resources available on the Commission’s website, in particular, the unfair dismissals benchbook. The links to the Fair Work Act and the unfair dismissals benchbook are as follows:
https://www.fwc.gov.au/about-us/legislation-regulations/fair-work-act-2009
http://benchbooks.fwc.gov.au/unfair/
COMMISSIONER
1 [2011] FWAFB 8307 at pn 29-30.
2 [2011] FCA 366.
3 [2008] AIRCFB 1088 at pn 22.
4 (1995) IR 200 at pn 205.
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