Feb 1st, 2024
A recent case brought before the Fair Work Commission has underscored the importance of documentation, highlighting a specific emphasis on employment contracts.
Recently, an applicant made an unfair dismissal claim against the owner of a gym – a franchisee - where he had been working for the last 12 months. The gym owner sought to have the claim dismissed on jurisdictional grounds – their argument being that the applicant had been an independent contractor instead of an employee, and hence not eligible to make such a claim before the Commission.
This made determining the appropriate classification of the applicant essential for the Commission, which called a preliminary hearing to go over the facts of the matter and make a ruling.
Both parties presented their evidence at the outset – the applicant provided a signed employment contract which explicitly defined him as a casual employee, whereas the franchisee explained how the applicant had verbally agreed to work under his ABN prior to his first shift, and their understanding that this made them a contractor.
As the proceedings advanced, more evidence was then examined to weigh the case in favour of either employment or contracting. Advocating for the applicant’s status as an independent contractor, it was highlighted that he was invoiced for his services rather than receiving a traditional payslip. His prior experience being a contractor was also emphasised.
On the other hand, the argument for him instead being an employee was that he represented the franchisee on duty by wearing a uniform, followed a roster, and was expected to carry out work on the direction of the franchisee.
Acknowledging that there was potentially ambiguity over the nature of the relationship, the Commissioner first went back to the terms of the written contract. There was no ambiguity here – the “Employment Contract” specified an hourly wage for the applicant, and the invoices for work performed were sent at this rate. No documentation existed to show a mutually agreed amendment of the terms of the contract, indicating that the contract was still in effect.
On assessing the totality of factors, the Commissioner was satisfied that the applicant qualified as an employee and would be eligible to make an unfair dismissal claim.
When comparing employment and independent contracting, it is key to note that no single indicator can determine if a worker is one or the other. Instead, the totality of the relationship must be considered, with all relevant factors being assessed. This decision provides a valuable reminder that, while the line between independent contracting and casual employment can be blurry at times, it is crucial to have the appropriate documentation to fall back on in the case of potential conflict.
1/02/2024
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