[2016] FWC 6407 [Note: An appeal pursuant to s.604 (C2016/7426) was lodged against this decision - refer to Full Bench decision dated 23 December 2016 [[2016] FWC 9190] for result of appeal.]
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Mr Troy Petrie
v
Grant Johnson Pty Ltd ATF The Grant Johnson Trust T/A Platinum Roof Coating
(U2016/7864)

DEPUTY PRESIDENT BINET

PERTH, 25 NOVEMBER 2016

Application for relief from unfair dismissal - employee or independent contractor.

[1] On 22 June 2016, Mr Troy Petrie (Mr Petrie) filed an application (Application) with the Fair Work Commission (FWC) pursuant to section 394 of the Fair Work Act 2009 (Cth) (FW Act) alleging he was unfairly dismissed by Grant Johnson Pty Ltd ATF The Grant Johnson Trust T/A Platinum Roof Coating (Platinum).

[2] On 30 June 2016, Platinum lodged a Form F3 Employer Response to the Application which included three jurisdictional objections to the Application. Those objections assert that:

[3] The Application was listed for a conciliation conference on 3 August 2016 however the parties were not able to reach an agreed resolution of the issues in dispute. The Jurisdictional Objections were therefore referred for hearing and determination. Taking into account the parties circumstances, and their wishes, it was determined that a Determinative Conference would be the most effective and efficient way to determine the Jurisdictional Objections.
[4] At the Determinative Conference Mr Grant Johnson (Mr Johnson), the sole director of the holding company of Platinum and Ms Michelle Simpson (Ms Simpson), an administrator employed by Platinum, gave evidence on behalf of Platinum. Mr Petrie and Mr Keith Harrison (Mr Harrison), who performed similar work to Mr Petrie for Platinum, gave evidence for Mr Petrie.

Permission to be Represented

[5] Platinum sought permission to be represented by Mossensons at the Determinative Conference.

[6] Section 596 of the FW Act provides as follows:

[7] Mossensons submitted that one of their lawyers should be granted permission to represent Platinum because, according to Mossensons, the Jurisdictional Objections raised were complex, involved legal principles, required familiarity with the FWC’s jurisprudence and could be dealt with more effectively through legal representation. Mossensons also asserted that unfairness would result if Platinum was not represented because Platinum’s representative, Mr Grant Johnson (Mr Johnson), was a tradesman with limited capacity to articulate Platinum’s case.

[8] In reply, Mr Petrie submitted that leave should not be granted because he could not afford legal representation and he was already at a disadvantage because Platinum had the assistance of Mossensons in the preparation of Platinum’s submissions and arguments at hearing. Mr Petrie also pointed out that unlike himself, Mr Johnson was not simply a tradesman but was instead an experienced supervisor and a company director of Platinum.

[9] Cambridge C in Karkamakar v Australian Campus Network Pty Ltd [2013] FWC 2340 made the following comments about section 596 of the FW Act:

[10] Having had the opportunity to observe Mr Johnson and Mr Petrie during a lengthy conciliation conference I was satisfied that both Mr Johnson and Mr Petrie were capable of representing themselves at the Determinative Conference. As a company director and experienced supervisor Mr Johnson could reasonably be expected to have greater capacity to articulate his case than Mr Petrie. In addition, Platinum had the advantage of legal assistance in the preparation of its written submissions and Mr Johnson had the advantage of legal assistance in the preparation of his oral arguments, examination and cross examination of witnesses. In these circumstances, to have allowed Platinum to be represented when Mr Petrie was not would have been unfair. Leave to be represented was therefore denied. Mr Johnson conducted Platinum’s case at the Determinative Conference and Mr Petrie conducted his case on his own behalf.

Directions for Filing of Materials

[11] Directions were issued on 5 August 2016 to ensure the efficient conduct of the Determinative Conference (Directions). Those Directions required Platinum to file and serve an outline of submissions, copies of authorities on which it proposed to rely at hearing, witness statements of any witnesses Platinum proposed to call and copies of any documents on which it sought to rely as evidence on or before close of business on Thursday 11 August 2016.

[12] The same Directions required Mr Petrie to file and serve his outline of submissions, copies of authorities on which he proposed to rely, witness statements of any witnesses he proposed to call and copies of any documents on which he sought to rely as evidence on or before close of business on 18 August 2016.

[13] Platinum filed its outline of submissions, witness statements, documentary evidence and a request for permission to be represented at the hearing by Mossensons in accordance with the Directions, however Mr Petrie was not properly served until four days later on Tuesday, 15 August 2016. As a consequence Mr Petrie was granted an extension of four days until Tuesday 22 August 2016 to file his materials.

[14] At 1.42pm on Friday 26 August 2016 Mossensons sought to file a bundle of a further 26 documents totalling 92 pages (Additional Documents).

[15] No leave was sought prior to, or at the time of, the filing of the Additional Documents.

[16] Mr Petrie opposed the admission of the Additional Documents on the grounds that the Additional Documents were not filed in accordance with the Directions, no leave was sought for the late filing of the Additional Documents and he did not have the resources available to him over the weekend to print or review the content of the documents and was therefore disadvantaged because he was not in a position to properly respond to them.

[17] At the Determinative Conference, Mr Johnson was invited to make submissions as to why leave should be granted to admit the Additional Documents. He explained that it only became apparent that the additional evidence was relevant after Mr Petrie filed his materials. Mr Johnson was unable to explain why neither he, nor his lawyers, alerted either the FWC or Mr Petrie that they intended to file additional materials or why the materials were not filed earlier than the afternoon of the last business day before the Determinative Conference, other than to say that he was busy.

[18] I am not satisfied that the relevance of the Additional Documents could only have been ascertained after Mr Petrie filed his materials. The bundle of documents is large and the contents diverse. Given Mr Petrie is self represented, the admission of the documents at such a late date was likely to place him at a disadvantage. The possibility of adjourning the matter to allow Mr Petrie time to properly review and prepare a response to the evidence contained in the Additional Documents was raised with the parties and both indicated a desire for the matter to proceed as listed. I have reviewed the documents and I am satisfied that they would not alter the ultimate conclusion I have reached in this matter. Given all of the circumstances I do not propose to admit the Additional Documents.

Background

[19] Platinum is a roof restoration company which Mr Johnson established in 2014. Mr Johnson is the sole director of the holding company. When he first established Platinum, Mr Johnson performed the roof restoration and repair work of Platinum himself. 1

[20] Subsequently, Mr Harrison began to perform some of the work. 2

[21] Following the breakdown of his marriage Mr Petrie found himself with shared custody of, and the sole bread winner for, his five children. 3

[22] In May 2015, Mr Johnson became aware that Mr Petrie might be interested in working for Platinum and he subsequently arranged to meet with Mr Petrie.

[23] On 14 May 2015, Mr Petrie met with Mr Johnson to discuss the terms and conditions on which Mr Petrie could be engaged by Platinum. The parties chose not to record any of the arrangements in writing, and what those terms and conditions were is now largely in dispute. 4

[24] The parties agree that Mr Petrie made it clear that he required some flexibility in his hours of work to accommodate his custody obligations. 5

[25] Mr Johnson asserts that it was the intention of the parties that Mr Petrie would be engaged as an independent contractor not an employee. Mr Petrie disputes this and says that the terms and conditions which Mr Johnson imposed on his engagement created a relationship of employment.

[26] Mr Petrie commenced performing work for Platinum on approximately 19 May 2015, about 1 week after their initial meeting. 6

[27] Over time the relationship between Mr Petrie and Mr Johnson soured.

[28] On 25 May 2016 Mr Petrie sent Mr Johnson an email in which he informed Mr Johnson that he intended to take a leave of absence. Mr Johnson treated Mr Petrie’s email as an indication that Mr Johnson wished to sever the relationship between the parties. In a reply email sent the same day, Mr Johnson directed that Mr Petrie complete certain work by a specified date in order to finalise their working relationship. Mr Petrie treated Mr Johnson’s email as an indication that Mr Johnson wished to sever the relationship between the parties.

[29] On 22 June 2016, Mr Petrie filed the Application seeking a remedy for unfair dismissal.

[30] Platinum oppose the hearing and determination of the merits of the Application on three grounds. Firstly, Platinum assert that Mr Petrie was an independent contractor and not an employee and therefore not a person protected from unfair dismissal. In the event that Mr Petrie is found to be an employee for the purposes of the FW Act, Platinum assert that Mr Petrie was not dismissed for the purposes of section 385 of the FW Act because they say that he resigned from his employment and was not forced to do so because of the conduct of Platinum. In the event that Mr Petrie is found to have been dismissed for the purposes of the FW Act, Platinum assert that the Application was lodged outside the time limit imposed by section 394(2)(a) of the FW Act.

Was Mr Petrie an employee?

[31] The first ground on which Platinum object to Mr Petrie’s Application is that they assert that Mr Petrie was an independent contractor and not an employee and therefore not a person protected by section 382 of the FW Act from unfair dismissal.

[32] The relevant authorities with regard to the distinction between an employee and an independent contractor are well established. 7 In Jiang Shen Cia trading as French Accent v Do Rozario (French Accent) the Full Bench summarised the test as follows:

[33] The Full Bench helpfully went on to provide a summary of the indicia identified in the authorities. Each of these indicia are considered in turn below in light of the evidence of the parties.

[34] There were discrepancies between the evidence of the various witnesses on matters relevant to determining whether or not an indicia weighed in favour of Mr Petrie being properly characterised as an employee or an independent contractor. In the absence of collaborating evidence to otherwise assist me to resolve these discrepancies I have based my findings of fact on my following assessment of the witnesses.

[35] Mr Harrison appeared to be a forthright and honest witness. He may have paid the ultimate price for this if it is true (as alleged by Mr Petrie in subsequent correspondence to Chambers) that his engagement with Platinum was terminated following the hearing because of his involvement as a witness.

[36] Given the challenges of switching between his role as an advocate for his own case and a key witness, I found Mr Petrie on the whole to be a credible witness. Ms Simpson clearly had strong views as to whose case she favoured and this appeared to be reflected in her evidence. I found Mr Johnson on the whole to be an evasive and uncooperative witness.

Did Platinum exercise, or have the right to exercise, control over what work was performed and where it was performed?

[37] Employers typically exercise, or have the right to exercise, control over what work is performed and where it is performed. Independent contractors typically determine what work they perform and where. 8

[38] The parties agreed that when a prospective client contacted Platinum, Mr Johnson would go to the client’s property to determine the scope of work to be performed. He would then prepare a document known as a Roof Restoration Contract which would set out the scope of work and the price.

[39] Mr Johnson says that Ms Simpson or his wife would contact Mr Petrie or Mr Harrison to ask whether they wished to perform the job. 9 Both Mr Petrie and Mr Harrison say that they were required to perform whatever work was allocated to them and that they had no discretion to reject particular jobs.10

[40] The parties agree that once it was determined whether Mr Petrie or Mr Harrison was to perform then that person would be given the relevant Roof Restoration Contract and proceed to perform the work. Once the work was finished the person who performed the work would complete the bottom half of the Roof Restoration Contract recording the number of consumable items used, any extra work performed and the date on which the work was started and completed. 11

[41] Mr Johnson says that the information he completed on the Roof Restoration Contract was only a guide and that Mr Harrison and Mr Petrie had the discretion to decide what work needed to be done. 12 Ms Simpson also gave evidence that the Roof Restoration Contract was only a guide.13 However, in addition, she gave evidence that the client was only charged for the scope of work costed in the Roof Restoration Contract and that Platinum would bear the cost of any variations.14

[42] Both Mr Harrison and Mr Petrie say that they had no discretion to decide what work needed to be done. Both agree that the work to be performed was clearly specified by Mr Johnson in the Roof Restoration Contract and that variations were only permitted with the approval of Mr Johnson. Mr Petrie says that in fact if variations were necessary and Mr Johnson did not authorise them then he would not be paid for them. 15

[43] The evidence of Ms Simpson that Platinum bore the cost of any variations from the price quoted in the Roof Restoration Contract, and the evidence that Mr Petrie was not paid for any unauthorised variations, makes it more likely than not that Mr Johnson did in fact determine what work was performed.

[44] Mr Johnson claims that Mr Petrie was entitled to refuse to perform work and did so when he refused to perform emergency call outs or remote work. Ms Simpson conceded under cross examination that Mr Petrie did perform emergency call outs but towards the end of his engagement became reluctant to perform them. 16 Mr Petrie admits that on one occasion he declined to perform an emergency call out. He says he did so because the fee he was to be paid to attend the call out was less than the petrol cost to attend the call out and the cost of his time in preparing a report required by Mr Johnson.17

[45] Mr Petrie says the only occasion on which he resisted performing remote work was a job located outside the metropolitan area which would have prevented him collecting his children from daycare by 6:00pm but says that, after discussions with Mr Johnson, other arrangements were made so that it was not necessary for him to perform the work at a time which would prevent him collecting his children. 18

[46] I am satisfied that Mr Johnson determined where and what work would be performed when he prepared the Roof Restoration Contract and that any discretion that Mr Petrie had in relation to what work was performed was limited to minor variations which could not have been foreseen by Mr Johnson when he prepared the Roof Restoration Contract. I am not satisfied that either Mr Petrie or Mr Harrison had a genuine right to refuse work. Rather this occurred on very rare occasions and there were extenuating circumstances which are not determinative of their status as either employees or independent contractors.

[47] I am therefore satisfied that the evidence weighs in favour of a finding that Platinum did have the right to exercise control over what work was performed and where it was performed. In this regard the relationship between Mr Petrie and Platinum was indicative of an employee – employer relationship rather principal and independent contractor.

Did Platinum exercise, or have the right to exercise, control over the manner in which the work was performed?

[48] Employers typically exercise, or have the right to exercise, control over the manner in which work is performed. Independent contractors typically determine the manner in which the work is performed. 19

[49] Platinum assert that Mr Petrie determined the manner in which work was performed. 20

[50] Mr Johnson claimed that Mr Petrie told him, when they met to discuss Mr Petrie’s engagement, that Mr Petrie had been trained by Mr Harrison to perform the work. 21 However Mr Johnson conceded that he directed Mr Petrie to perform his first few jobs under the supervision of Mr Harrison to give him:

[51] This is consistent with Mr Harrison’s evidence that Mr Johnson directed him to instruct Mr Petrie how to perform his duties the way Mr Johnson wished to have them performed. 23

[52] Mr Petrie’s evidence was that Mr Johnson attended a number of his first jobs to direct Mr Petrie in the manner in which the work should be performed and the order in which tasks should be performed. 24

[53] I am satisfied that the evidence weighs in favour of a finding that Platinum exercised control over the manner in which work was performed. In this regard the relationship between Mr Petrie and Platinum was more indicative of an employee – employer relationship rather than one of principal and independent contractor.

Did Platinum exercise, or have the right to exercise, control over the hours of work?

[54] Employers typically exercise, or have the right to exercise, control over the hours of work. Independent contractors typically determine when work is performed. 25

[55] Mr Johnson and Ms Simpson said that Mr Petrie determined when he worked and, as evidence of this, Mr Johnson says that Mr Petrie only worked 156 of 246 working days in the period during which he performed work for Platinum. 26

[56] Mr Petrie says that he was required by Mr Johnson to be available for work both week days and weekends and that he was required to perform work as and when it was allocated to him by Platinum. Mr Petrie says that Platinum’s own records reveal that he was unavailable for work on only 13 occasions throughout the entire time he worked for Platinum. These are recorded on Mr Petrie’s timesheet as four ‘sick days’, one ‘court day’ and eight ‘days off’. Mr Petrie says that the other occasions identified by Mr Johnson as days on which Mr Petrie did not work were days on which Mr Johnson failed to provide him with work to do. 27

[57] Under cross examination Mr Johnson conceded that he required Mr Petrie to be available every weekday and that a number of the 156 days he says that Mr Petrie didn’t work were days that Platinum did not have work for him to perform. Mr Johnson also conceded that Mr Petrie only declined to perform work somewhere within the range of 5-15 days. 28 This evidence is consistent with the evidence of Mr Petrie. The explanations provided by Mr Petrie for these absences are consistent with the type of leave an employee might take and do not appear to be indicative of a relationship of principal/independent contractor whereby Mr Petrie could generally, at will, decline work at his discretion.

[58] Mr Johnson also says that Mr Petrie did not work full days but would finish work when he finished a particular job or would go home earlier if it started raining. 29 Mr Johnson provided no evidence that he offered Mr Petrie any alternative duties in these circumstances or that he required him to do anything other than go home.

[59] Mr Johnson says that Mr Petrie and Mr Harrison determined when they would start work. Both Mr Petrie and Mr Harrison say that they were instructed by Platinum as to the time at which they were required to start work. 30 Mr Petrie says that he was not permitted to contact customers to arrange an alternative start time other than if specifically directed to do so by Mr Johnson.31 In fact he says that on the occasions where he was unable to arrive at the job location within the designated time due to traffic conditions he would be telephoned and counselled.32 Mr Harrison conceded that at times he had some scope with respect to start times but not start dates.33

[60] I am not convinced that Mr Petrie was genuinely at will to decline work at his discretion in a manner which would be consistent with the characteristics of independent contracting. I am satisfied that Mr Petrie had little to no control over his start times and that his finish times were determined by the scope of the work and the prevailing weather conditions. In this regard the relationship between Mr Petrie and Platinum appears to be indicative of an employee – employer relationship rather than that of principal and independent contractor.

Did Mr Petrie perform work for others or have a genuine and practical entitlement to do so?

[61] The right to perform work for others is usually indicative of a principal and independent contractor relationship. 34

[62] Mr Petrie gave evidence that Mr Johnson told him when they first met to discuss the terms of his engagement that he required Mr Petrie to be available every day to complete work for Platinum and that under no circumstance was Mr Petrie to accept or complete work for anyone else. 35

[63] Mr Petrie says he complied with this instruction and did not perform paid work for anyone else. Mr Harrison confirmed that Mr Johnson also instructed him that he was not to perform any work on his own account and that all potential customer inquiries must be forwarded to Mr Johnson. In fact, Mr Harrison says that Mr Johnson told him on a number of occasions that if he did work for anyone else then Mr Johnson would ‘get rid’ of Mr Harrison. 36

[64] Mr Johnson conceded that he told Mr Petrie that he would prefer that Mr Petrie did not do work for others. Mr Johnson says he did so because he was aware that Mr Petrie had limited availability. Mr Johnson claimed that this was a preference rather than an express term of the relationship and Mr Petrie did in fact do work for others. 37 The only example Mr Johnson could point to of Mr Petrie performing work for others was a job Mr Petrie performed for his sister in September 2015.38

[65] Mr Petrie admitted that he performed this work but he said that he did so in his own time without charge as a favour to his family member. He says that he completed no paid work other than for Platinum in his entire time with Platinum  39

[66] I am satisfied that Mr Petrie had no genuine or practical entitlement to perform paid work for others.

Did Mr Petrie have a separate place of work?

[67] The existence of a separate place of work is usually indicative of an independent contractor and principal relationship. 40

[68] Platinum submitted that Mr Petrie did his administrative work from home and, from there, attended job sites. Platinum submitted that Mr Petrie only attended Platinum’s place of business when he needed to collect materials or dispose of debris. 41

[69] Mr Petrie says that, since Platinum prepared the invoices, there was minimal administrative work for him to perform at home or elsewhere. 42

[70] Mr Harrison and Mr Petrie say that jobs were allocated to them one at a time and normally the day before the job was due to be performed. 43 Both agree that they were issued with the consumable materials required for each job on a job by job basis and that therefore they attended at the Platinum premises on a regular basis to collect materials for the job and returned to dispose of waste.44 Ms Simpson says that sometimes Mr Harrison and Mr Petrie would be given several jobs at a time and would collect the materials for all of those jobs at the same time to remove the need to attend site daily.45 Both Mr Harrison and Mr Petrie say that this was unusual.46

[71] There was no evidence that Mr Petrie had anything that might be described as a place of work other than Platinum’s place of business or the properties of Platinum’s clients. In this regard the evidence of the arrangements between the parties is more indicative of employee and employer than an independent contractor and principal.

Did Mr Petrie advertise his services to the world at large?

[72] Evidence that a worker was entitled to advertise his or her services to the world at large is typically indicative of an independent contractor and principal relationship. 47

[73] Mr Petrie says he did not have a website business card or any form of stationary or advertising material for his company, Complete Outdoor Transformations, during the period he performed work for Platinum. 48

[74] Given Mr Johnson’s evidence that he preferred that Mr Petrie did not do work for others 49 and his evidence that he expected that if anyone approached Mr Petrie at work about performing work for them that Mr Petrie would provide the prospective client with Platinum’s contact details and not Mr Petrie’s own contact details,50 I am satisfied that Mr Petrie was not entitled to advertise his services to the world at large and that, even if he were, that there was no rational reason for him to do so given the constraints on his ability to perform work for others.

[75] These findings weight in favour of the relationship between Mr Petrie and Platinum being one of employee and employer.

Did Mr Petrie provide and maintain significant tools or equipment?

[76] The provision and maintenance of a significant proportion of the tools or equipment required to perform the work in question by the worker has been held to be an indicia of an independent contractor and principal relationship. 51

[77] The parties agreed that Mr Petrie provided and maintained his own vehicle. 52

[78] Mr Johnson says that when he met with Mr Petrie to discuss his engagement Mr Petrie told him he would provide and maintain all of the equipment required to undertake the work other than a high pressure cleaner which he would borrow from Mr Harrison. 53 Mr Johnson conceded under cross examination that Mr Petrie did not in fact have the necessary equipment to perform the work when he commenced.54 Mr Johnson says that Mr Petrie subsequently told him that he wanted to buy a high pressure cleaner because Mr Harrison wanted his returned, but could not afford to do so.55

[79] Mr Johnson says that, in or around July 2015, he saw a high pressure cleaner for sale at a discounted price and called Mr Petrie to ask him if Mr Petrie wanted him to purchase it for him and pay the cost back in instalments. Mr Johnson says that Mr Petrie asked him to purchase the cleaner and agreed to pay him back in instalments. Mr Johnson says that, as Mr Petrie did not make any payments in May 2016, Mr Johnson issued Mr Petrie with an invoice for the cost of the cleaner. Mr Johnson says that Mr Petrie ignored the invoice. 56

[80] Mr Petrie says Mr Johnson provided the pressure cleaner and that no payment for the pressure cleaner had ever been spoken of or agreed to. 57 He says that, apart from his vehicle, other tools and equipment necessary to complete the work, such as double storey ladders, impact drivers and safety equipment, were provided by Platinum.58

[81] The parties agreed that Platinum provided the consumable materials necessary to perform the work such as roof tiles, capping and valleys, with the exception of sand and cement which Mr Petrie supplied. 59 Mr Petrie says that he was reimbursed by Platinum for any cement he required and the amount of sand required to perform the work was very limited.60 In fact, under cross examination Mr Johnson conceded that the cost of performing a particular job were “… near on a hundred per cent, mine”.61

[82] The evidence tends to suggest that the arrangements between the parties in this respect were indicative of an employee and employer relationship.

Could Mr Petrie delegate or subcontract the work to another?

[83] If the worker is contractually entitled to delegate work to others (without reference to the punitive employer) then this is a strong indicator that the worker is an independent contractor. 62 This is because a contract of service (as opposed to a contract for service) is personal in nature. It is a contract for the supply of the services of the worker personally.63

[84] Ms Simpson says that Mr Petrie and Mr Harris would often work together as a team on a job and could decide between them which of them would perform what work on each job they undertook together. She says that Mr Petrie and Mr Harris would advise Platinum who did each item of work and Platinum would prepare tax invoices for Mr Petrie and Mr Harris respectively. 64

[85] Both Mr Petrie and Mr Harrison say that they worked together when directed by Mr Johnson. Mr Petrie says that this typically occurred when the job involved a two storey home and was a safety measure insisted upon by Mr Johnson. Ms Simpson conceded that she had directed Mr Petrie and Mr Harrison to work together in these circumstances. 65 Both Mr Petrie and Mr Harrison say that this was not a case of either Mr Petrie or Mr Harrison delegating or subcontracting work, but rather obeying a direction from Mr Johnson.66

[86] I am satisfied that the occasions on which Mr Petrie and Mr Harrison worked together were most commonly at the direction of Platinum. There was no evidence that Mr Petrie had any entitlement to, or in fact ever did, subcontract or delegate the work to anyone other than Mr Harrison. In this regard I am satisfied that the arrangements between Mr Petrie and Platinum were indicative of an employee and employer relationship.

Did Platinum have the right to suspend or dismiss Mr Petrie?

[87] A right to suspend or dismiss a worker is generally indicative of an employer and employee relationship. 67

[88] Platinum did not submit any evidence in relation to its right to suspend or dismiss Mr Petrie. Mr Petrie gave evidence that Mr Johnson, on a number of occasions, made comments such as: “I am your boss and you do as I say … if you don’t like it then no work tomorrow”. 68

[89] It is unclear whether Mr Johnson was exercising a right, as principal, not to allocate an independent contractor further work or whether he was proposing to suspend Mr Petrie. Given the lack of clear evidence in this regard I have not taken this factor into account in determining whether Mr Petrie was in fact an employee or an independent contractor.

Did Platinum present Mr Petrie to the world at large as an emanation of the business?

[90] Evidence that a punitive employer presents a worker to the world at large as an emanation of the business is typically indicative of an employer and employee relationship. Often this takes the form of the worker wearing a uniform. 69

[91] It is uncontested that Platinum provided Mr Petrie and Mr Harrison with shirts, jackets and high visibility vests that displayed Platinum’s logo.  70

[92] Mr Johnson conceded that he required that Mr Petrie display the Platinum logo in a non-removable sign on all sides of Mr Petrie’s van but says that Mr Petrie was paid a fee of $100 per week to display the sign. 71 Platinum submit that the arrangement should be characterised as a commercial arrangement reached between two contracting parties rather than an indicia of employment.72 Mr Harrison confirmed that he too was required to display a Platinum logo on his vehicle, however he was not paid for doing so.73

[93] Mr Petrie says that Mr Johnson told him that it was a term of his engagement that he display the sign and that the sum of $100 was only paid until December 2016, after which time he was still required to display the sign but was not paid for doing so. 74

[94] The parties agree that Mr Petrie was provided with business cards with Mr Johnson’s contact information and Platinum pamphlets to distribute to potential customers. 75

[95] Under cross examination Mr Johnson conceded that he described Mr Petrie to clients as a ‘worker’ because:

[96] Mr Johnson was also very firm in his evidence that he expected that if anyone approached Mr Petrie at work about performing work for them that Mr Petrie would provide the prospective client with Platinum’s contact details and not Mr Petrie’s own contact details. 77

[97] Based on all of this evidence I am satisfied that it was Platinum’s aim to present Mr Petrie to the world, and in particular their potential clients, as an employee rather than an independent contractor given the poor reputation of independent contractors in the industry.

Did Platinum deduct income tax from the remuneration paid to Mr Petrie?

[98] The deduction of income tax from the remuneration paid to a worker is generally indicative of an employee and employer relationship, 78 but not always.79

[99] The parties agreed that Platinum did not deduct income tax from the remuneration paid to Mr Petrie. 80

[100] In light of the other evidence of the arrangements between Mr Petrie and Platinum I am not satisfied that the failure to deduct income tax is conclusive that Mr Petrie was not an employee of Platinum.

Was Mr Petrie remunerated by periodic wage or salary or by reference to completion of tasks?

[101] Employees tend to be paid a periodic way for salary. Independent contractors tend to be paid by reference to completion of tasks typically on the presentation of an invoice. In the French Accent case, the Full Bench of Fair Work Australia noted that this distinction has reduced in relevance in the modern economy. 81

[102] The parties agreed that Mr Petrie was paid as follows:

These rates were set by Mr Johnson and were at a reduced rate as compared to the rates paid by Platinum to Mr Harrison because Mr Johnson believed that Mr Petrie’s level of experience didn’t warrant a higher rate. 82

[103] The parties agreed that the process by which Mr Petrie was paid was that he would submit a job sheet each Thursday to Platinum, Platinum’s account clerk would prepare an invoice on Mr Petrie’s behalf and Platinum would deposit the invoiced amount into Mr Petrie’s nominated account on Thursday evening. 83

[104] The invoice included an amount for Goods and Services Tax which Platinum paid and which Mr Petrie says he remitted to the ATO. 84

[105] The method of determining Mr Petrie’s remuneration might be indicative of an independent contractor and principal relationship, however the arrangements for the payment of Mr Petrie’s remuneration appear to be a fa�ade to create an illusion of an independent contractor relationship. It is clear from the evidence that Mr Petrie was renumerated on a systematic and regular basis for the work he performed without playing any part in the preparation or presentation of an invoice.

[106] In this respect the evidence is mixed as to whether Mr Petrie should properly be characterised as an employee or an independent contractor.

Was Mr Petrie provided with paid holidays or sick leave?

[107] The provision of paid holidays and sick leave to a worker is generally indicative of an employee and employer relationship. 85

[108] The parties agreed that Mr Petrie was neither paid holiday pay nor sick leave. 86

[109] This evidence suggests that the relationship between Mr Petrie and Platinum might be one an independent contractor and principal.

Did the work involve a profession, trade or distinct calling on the part of Mr Petrie?

[110] Where the work involves a profession, trade or distinct calling on the part of a worker such persons are more likely to be independent contractors rather than employees. 87

[111] Platinum did not submit any evidence in relation to whether the work performed by Mr Petrie involved a profession, trade or distinct calling on the part of Mr Petrie.

[112] Mr Petrie’s evidence was that he had no formal training or qualifications to perform the work. He says that Mr Johnson attended a number of his first jobs to direct Mr Petrie in the manner in which the work should be performed and the order in which tasks should be performed. 88

[113] In this regard the evidence suggests that the relationship between Mr Petrie and Platinum is one of employee and employer.

Did Mr Petrie create goodwill or saleable assets in the course of his work?

[114] If a worker creates goodwill or saleable assets in the course of performing the work then their relationship is more likely to be one of independent contractor and principal than employee and employer. 89

[115] Platinum did not submit any evidence in relation to whether the performance of the work by Mr Petrie created for him either goodwill or a saleable asset. Mr Petrie denies that it did. 90 Under cross examination, Mr Johnson conceded that all goodwill created by the performance by Mr Petrie of his duties belonged to Platinum.91

[116] Both Mr Petrie and Mr Harrison say that Mr Johnson told clients that Mr Petrie and Mr Harrison were employees of Platinum and instructed both men not to contradict this in their dealings with clients of Platinum. Mr Petrie also says that he was instructed by Mr Johnson that all new business inquires, for example from neighbours of the premises where Mr Petrie performed work, were to be directed to Mr Johnson. 92

[117] Mr Petrie, in his written submissions, also reported that he was provided with business cards with Mr Johnson’s contact information and Platinum pamphlets to distribute to potential customers. 93 Mr Petrie says he did not have a website business card or any form of stationary or advertising material for his company, Complete Outdoor Transformations during the period he performed work for Platinum.94

[118] In this regard the evidence tends to suggest that Mr Petrie was an employee rather than an independent contractor.

Did Mr Petrie spend a significant portion of his remuneration on business expenses?

[119] The fact that a worker spends a significant proportion of his remuneration on business expenses is typically found to be an indicia of an independent contractor and principal relationship. 95

[120] Platinum submitted that Mr Petrie spent a significant proportion of his remuneration on business expenses such as maintaining his van, purchasing petrol, and securing public liability insurance and WorkCover insurance. 96

[121] Mr Petrie says that it was not until 9 May 2016 that he was required to provide a certificate of currency for insurance and was never required, and never did obtain, WorkCover insurance. 97 Mr Petrie says that his only expense was petrol and this equated to roughly $10 per job.

[122] Mr Petrie says the bulk of the expenses for each job were paid for by Platinum. He estimates these expenses as:

[123] The parties agreed that Platinum provided the consumable materials necessary to perform the work such as roof tiles, capping and valleys with the exception of sand and cement which Mr Petrie supplied. 99 Mr Petrie says that he was reimbursed by Platinum for any cement he required and that the amount of sand required to perform the work was very limited.100 In fact, under cross examination, Mr Johnson conceded that the cost of performing a job were “… near on a hundred per cent, mine”.101

[124] This evidence is indicative of an employee and employer relationship between Mr Petrie and Platinum.

Other Relevant Factors

[125] As further evidence of their assertion that Mr Petrie was not an employee, Platinum submit that Mr Petrie was engaged and paid via a corporate structure.

[126] Mr Johnson says that when he first met with Mr Petrie to discuss Mr Petrie’s engagement by Platinum, Mr Petrie told Mr Johnson that he had an ABN and was proposing to set up a company shortly, via which Mr Petrie would perform work for Platinum. 102 Mr Petrie disputes this. He says he did not have an active ABN but was told by Mr Johnson at that initial meeting that he would be required to have one in order to be paid.

[127] Initially, when Mr Petrie commenced work on 19 May 2015, he provided Mr Johnson with an inactive ABN which had been registered in his name as a sole trader/individual. An ASIC search reveals that this ABN had been cancelled in May 2007. Mr Petrie says that, at Mr Johnson’s behest, he instructed his accountant to register a company called Complete Outdoor Transformations WA Pty Ltd. Consistent with Mr Petrie’s evidence, a search of the ASIC database reveals that Complete Outdoor Transformations WA Pty Ltd was registered on 26 June 2015. 103

[128] Initially, Platinum prepared tax invoices on Mr Petrie’s behalf, citing his inactive sole trader ABN. 104 On 22 July 2015, Mr Petrie asked that the tax invoices issued for the period from 1 July 2015 and any future tax invoices be addressed to Mr Petrie’s company, Complete Outdoor Transformations Pty Ltd. The tax invoices included a sum for GST which Mr Petrie says he remitted to the Australian Taxation Office.105

[129] The engagement and payment of a worker via a corporate structure is generally significant indicia that the relationship is one of independent contractor and principal rather than employer and employee. However it cannot, of itself, turn a relationship of employment into one of independent contractor and principal. 106

Conclusion as to whether Mr Petrie was an Employee or an Independent Contractor

[130] There are no rules as to the weight to be given to the various indicia in the decision making process. 107 The indicia are just a guide, with the ultimate question being whether the worker is acting for another or on their own behalf.108

[131] It appears that Mr Johnson selected, between those indicia of employment and independent contracting, which best suited his interests when determining the terms and conditions under which Mr Petrie was engaged. Mr Johnson sought to retain control over when and how work was performed by Mr Petrie and ensure that Mr Petrie performed work exclusively for him and could not freely delegate work to others. Mr Johnson encouraged clients to assume that Mr Petrie was an employee to improve client perceptions of his business and endeavoured to secure for himself all goodwill created by Mr Petrie’s labours.

[132] Despite insisting on these arrangements, which are typically hallmarks of an employment relationship, Mr Johnson sought to avoid the costs and legal liability associated with employment, such as an obligation to provide paid leave or not unfairly dismiss employees, by creating a fa�ade of independent contracting by requiring Mr Petrie to provide an ABN and arranging for invoices to be prepared on Mr Petrie’s behalf. Mr Johnson was able to insist on these arrangements because of the perilous financial circumstances in which Mr Petrie found himself.

[133] It is clear from the evidence that Mr Petrie was not carrying on a business on his own part but instead was a servant of Mr Johnson’s business.

[134] Platinum submitted that the fact matrix of the present case was similar to the facts in the case of Williams v Trimview Roof Restoration Pty Ltd [2001] WASCA 414 (Trimview Case), in which Murray J, Anderson J & Enfield AJ found that an appeal against the finding that a principal – contractor relation existed had no prospect of success. In my view, the facts in the Trimview Case differ in critical regards to those in the present matter.

[135] In the Trimview Case, the worker in question conceded in cross-examination that he regarded himself as a contractor. He also conceded that he had set himself up in business with his own commercial vehicle, fitted out with the racks, tools and implements necessary to perform his work. Significantly, he conceded that he specified the specific work he was prepared to do and nominated the rate of pay for that work. According to the worker, he was able to nominate the work he would and would not perform and was paid against invoices which he prepared. The evidence before the court was that the worker was free to engage others to assist him with the work he was given and that he was free to work for other people and refuse to work for the respondent in that matter.

[136] Based on all of the evidence before me I am satisfied that Mr Petrie was an employee for the purposes of section 382 of the FW Act and was therefore a person protected from unfair dismissal.

Was Mr Petrie Dismissed?

[137] The second ground on which Platinum object to Mr Petrie’s claim is that they assert that Mr Petrie was not ‘dismissed’ for the purposes of section 386 of the FW Act but instead that Mr Petrie terminated the contractual relationship between the parties at his own initiative by way of his email of 25 May 2016. 109

[138] The term ‘dismissed’ is defined in section 386 of the FW Act as follows:

[139] On 25 May 2016, Mr Petrie sent Mr Johnson an email in which he stated inter alia:

[140] In the same email Mr Petrie then went on to detail allegations that Mr Johnson had bullied and harassed him over many months and concluded by saying:

[141] On 25 May 2016, Mr Johnson replied by email in which he said inter alia:

[142] I do not accept that Mr Petrie’s email evidenced an intention to bring the contractual relationship to an end. To the contrary, the use of the words ‘take a leave’ and ‘return’ indicate a contrary intention.

[143] I find that the contractual relationship between the parties was terminated at the initiative of Mr Johnson by way of his email of 25 May 2016.

Was Mr Petrie’s application brought within the required timeframe?

[144] The final ground on which Platinum object to Mr Petrie’s Application is that they assert that Mr Petrie did not make the Application within the twenty one day time period prescribed in subsection 394(2) of the FW Act.

[145] Section 394 provides as follows:

[146] Platinum say that Mr Johnson’s employment came to an end on 25 May 2016 when Mr Petrie sent his email or when Mr Johnson sent his email in response. 112

[147] I do not accept that Mr Petrie’s email evidenced an intention to bring the contractual relationship to an end. To the contrary the use of the words “take a leave” and “return” indicate a contrary intention.

[148] Further, I do not accept that Mr Johnson’s email in reply evidenced an intention for the contractual relationship to end immediately. To the contrary Mr Johnson indicates that he requires Mr Petrie to “fulfil your agreements” and perform specific tasks on or before a certain date.

[149] I therefore find that the contractual relationship between Mr Johnson and Mr Petrie terminated on 3 June 2016 in accordance with Mr Johnson’s email of 25 May 2016. Mr Petrie filed the Application on 22 June 2016. I therefore find that the Application was made within the timeframe prescribed by subsection 349(2) of the FW Act.

Conclusion

[150] For the reasons set out above I am not satisfied that any of Platinum’s jurisdictional objections have any merit.

[151] An Order [PR585145] to this effect will be issued. Further directions for the determination of the merits of the Application will be issued shortly.

tle: Seal of the Fair Work Commission with DP Binet's Signature

DEPUTY PRESIDENT

Appearances:

T Petrie, applicant

G Johnson for the respondent

Hearing details:

2016.

Perth:

August 29.

Final written submissions:

Applicant, 22 August 2016

Respondent, 26 August 2016

 1   Witness Statement of Mr Johnson at [1] – [5].

 2   Witness Statement of Mr Harrison at [1].

 3   Witness Statement of Mr Petrie at [1].

 4   Witness Statement of Mr Johnson at [29] and Witness Statement of Mr Petrie at [3]-[6].

 5   Witness Statement of Mr Petrie at [4].

 6   Witness Statement of Mr Johnson at [30].

 7   Jiang Shen Cia trading as French Accent v Do Rozario [2011] FWAFB 8307 (French Accent), Abdalla v Viewdaze Pty Ltd (2003) 121 IR 215, Hollis v Vabu Pty Ltd (2001) 207 CLR 21 and Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 (Brodribb).

 8   French Accent at [30].

 9   Witness Statement of Mr Johnson at [53].

 10   Transcript [PN630].

 11   Witness Statement of Mr Petrie at [28]-[30] and Transcript at [PN75] – [PN77].

 12   Witness Statement of Mr Johnson at [56]-[57].

 13   Transcript at [PN75] – [PN77].

 14   Transcript at [PN112] – [PN113].

 15   Witness Statement of Mr Petrie at [26]-[28] and Witness Statement of Mr Harrison at [21].

 16   Transcript [PN140].

 17   Witness Statement of Mr Petrie at [39]-[41].

 18   Witness Statement of Mr Petrie at [42] and Transcript [PN897].

 19   French Accent at [30].

 20   Exhibit A3 Respondent's Outline of Submissions at [5] – [6].

 21   Witness Statement of Mr Johnson at [23].

 22   Witness Statement of Mr Johnson at [30].

 23   Witness Statement of Mr Harrison at [6].

 24   Witness Statement of Mr Petrie at [6].

 25   French Accent at [30].

 26   Witness Statement of Mr Johnson at [34] – [35] and Witness Statement of Ms Simpson at [10].

 27   Witness Statement of Mr Petrie at [16] – [20].

 28   Transcript [PN287, PN288, PN297, PN301- PN310].

 29   Witness Statement of Mr Johnson at [34] – [35] and Witness Statement of Ms Simpson at [10].

 30   Witness Statement of Mr Harrison at [16].

 31   Transcript [PN823-PN825] and [PN839].

 32   Witness Statement of Mr Petrie at [35]-[36].

 33   Transcript at [PN619].

 34   French Accent at [30].

 35   Witness Statement of Mr Petrie at [6].

 36   Witness Statement of Mr Harrison at [14] and [22].

 37   Respondent’s Outline of Submissions at [7] – [8] and Witness Statement of Mr Johnson at [24] – [25].

 38   Witness Statement of Mr Johnson at [48] and Transcript at [PN389 – PN402].

 39   Witness Statement of Mr Petrie at [98].

 40   French Accent at [30] and Brodribb per Wilson and Dawson JJ at p 37.

 41   Respondent’s Outline of Submissions at [9] and Witness Statement of Mr Johnson at [46] – [47].

 42   Witness Statement of Mr Petrie at [6] and Transcript at [PN765-PN769]

 43   Witness Statement of Mr Harrison at [15] and Transcript at [PN614].

 44   Witness Statement of Mr Harrison at [18].

 45   Transcript at [PN79].

 46   Transcript at [PN617] and [PN775].

 47   French Accent at [30].

 48   Witness Statement of Mr Petrie at [94].

 49   Respondent’s Outline of Submissions at [7] – [8] and Witness Statement of Mr Johnson at [24] – [25].

 50   Transcript at [PN326].

 51   French Accent at [30] and Brodribb per Mason J at p 24.

 52   Witness Statement of Mr Johnson at [22].

 53   Respondent’s Outline of Submissions at [10] – [12] and Witness Statement of Mr Johnson at [22].

 54   Transcript at [PN267]-[PN268].

 55   Witness Statement of Mr Johnson at [37].

 56   Witness Statement of Mr Johnson at [38] – [43].

 57   Witness Statement of Mr Petrie at [22].

 58   Witness Statement of Mr Petrie at [33].

 59   Witness Statement of Mr Johnson at [20].

 60   Witness Statement of Mr Petrie at [32].

 61   Transcript [PN481].

 62   French Accent at [30] citing Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 539.

 63   French Accent at [30].

 64   Respondent’s Outline of Submissions at [13] – [14], Transcript at [PN93] – [PN95].

 65   Transcript at [PN153].

 66   Witness Statement of Mr Petrie at [82]-[82] and Witness Statement of Mr Harrison at [9].

 67   French Accent at [30] and Brodribb per Wilson and Dawson JJ at p 36.

 68   Witness Statement of Mr Petrie at [71].

 69   French Accent at [30].

 70   Respondent’s Outline of Submissions at [15] – [17].

 71   Witness Statement of Mr Johnson at [21].

 72   Respondent’s Outline of Submissions at [15] – [17].

 73   Witness Statement of Mr Harrison at [12].

 74   Witness Statement of Mr Petrie at [6].

 75   Witness Statement of Mr Petrie at [6] and Transcript at [PN323-PN324].

 76   Transcript [PN321].

 77   Transcript [PN326].

 78   French Accent at [30] and Brodribb per Mason J at p 24.

 79   Rabba v PeleGuy Pty Ltd t/a PeleGuy [2013] FWC 70.

 80   Respondent’s Outline of Submissions at [18] and Witness Statement of Mr Johnson at [64] and Transcript at [PN819].

 81   French Accent at [30].

 82   Witness Statement of Mr Johnson at [15] – [18] and Witness Statement of Mr Petrie at [6] and Transcript at [PN727].

 83   Witness Statement of Mr Johnson at [26].

 84   Transcript at [PN813]-[PN820].

 85   French Accent at [30] and Brodribb per Mason J at 24.

 86   Respondent’s Outline of Submissions at [20] and Transcript at [PN820].

 87   French Accent at [30] and Brodribb per Wilson and Dawson JJ at p 37.

 88   Witness Statement of Mr Petrie at [6].

 89   French Accent at [30].and Brodribb per Wilson and Dawson JJ at p 37.

 90   Witness Statement of Mr Petrie at [96].

 91   Transcript at [PN333].

 92   Witness Statement of Mr Petrie at [6] and Witness Statement of Mr Harrison at [13].

 93   Witness Statement of Mr Petrie at [6].

 94   Witness Statement of Mr Petrie at [94].

 95   French Accent at [30] and Brodribb per Wilson and Dawson JJ at 37.1.

 96   Respondent’s Outline of Submissions at [21] – [22].

 97   Witness Statement of Mr Petrie at [91].

 98   Applicants Response to Submissions at [22]-[25].

 99   Witness Statement of Mr Johnson at [20].

 100   Witness Statement of Mr Petrie at [32].

 101   Transcript at [PN481].

 102   Witness Statement of Mr Johnson at [14] and Transcript at [PN252].

 103   Witness Statement of Mr Petrie at [6].

 104   Witness Statement of Mr Johnson at [32].

 105   Witness Statement of Mr Johnson at [33].

 106   Rozanitis v Quadrifoflio Verde Pty Ltd t/a East Melbourne IGA & Liquor [2013] FWC 9247.

 107   Sammartino v Mayne Nickless Express t/a Wards Skyroad (2000) 98 IR 168 at [58].

 108   Brodribb at 37.

 109   Respondent’s Outline of Submissions at [27] – [29].

 110   Witness Statement of Mr Petrie at Annexure F.

 111   Witness Statement of Mr Petrie at Annexure G.

 112   Respondent’s Outline of Submissions at [30] – [34].

Printed by authority of the Commonwealth Government Printer

<Price code C, PR585144>