In the decision of Aspire 2 Life Pty Ltd v Tidmarsh [2024] FWCFB 289, the Fair Work Commission Full Bench (FWCFB) has dismissed a disability services provider’s jurisdictional objection to a general protections application involving a dismissal which was made on the grounds that a former employee, Ms Jessica Tidmarsh, was an independent contractor rather than an employee, and accordingly, not eligible to bring the application. The FWCFB applied the soon to be re-introduced multi-factorial test, which involves looking at the circ*mstances of a worker’s employment, in reaching its decision.
Facts
Ms Tidmarsh was employed by Aspire 2 Life Pty Ltd (Aspire 2 Life), a support coordination service for the elderly based in Queensland. At the time of her dismissal, Ms Tidmarsh was employed pursuant to an independent contract agreement which required her to:
- have an Australian Business Number;
- pay her own tax and superannuation;
- hold and maintain professional indemnity insurance and public liability insurance; and
- be responsible for her own workcover insurance.
On 9 October 2023, Ms Tidmarsh’s contract was terminated by Aspire 2 Life. This decision followed Ms Tidmarsh raising concerns regarding her working arrangements with the Fair Work Ombudsman. Ms Tidmarsh subsequently filed a general protections application involving dismissal with the Fair Work Commission (FWC), alleging she was unlawfully dismissed by Aspire 2 Work pursuant to section 340 of the Fair Work Act 2009 (FW Act).
Prior to the matter proceeding to conciliation, Aspire 2 Life challenged Ms Tidmarsh’s standing to bring the general protections application. Aspire 2 Life argued that Ms Tidmarsh was an independent contractor, rather than an employee, and accordingly, was ineligible to bring a general protections application, as these can only be brought by employees. As such, the FWC was required to consider whether Ms Tidmarsh was an independent contractor or an employee.
At first instance, Deputy President Roberts of the FWC found that Ms Tidmarsh was an employee of Aspire 2 Life. In reaching this decision, Deputy President Roberts followed the High Court’s ruling in CFMEU v Personnel Contracting Pty Ltd (2022) 275 CLR 165, which focuses on the rights and obligations established by the contracts rather than the true nature of the relationship between the parties. Aspire 2 Life subsequently appealed the decision to the FWCFB.
Decision
On appeal, the FWCFB departed from the approach taken by Deputy President Roberts and instead applied the multi-factorial test to determine whether Ms Tidmarsh was an independent contractor or an employee, despite this not being the current enforceable test. The traditional multi-factorial test to determine whether a person is an employee or independent contractor focuses on the indicia of employment with reference to both the terms of the contract as well as the true nature of the relationship between the parties. Despite the differences in the tests applied, the FWCFB reached the conclusion that Ms Tidmarsh was an employee of Aspire 2 Life. The FWCFB noted that Aspire 2 Life exercised a strong degree of control over Ms Tidmarsh, noting that she:
- received an hourly rate from the Applicant;
- submitted a weekly timesheet for processing;
- received payments directly from the Applicant;
- was obligated to be available during specified hours;
- complied with the Applicant’s policies and procedures; and
- was restricted from subcontracting or working with competing businesses.
Accordingy, the FWCFB upheld Deputy President Robert’s decision at first instance that Ms Tidmarsh was an employee of Aspire 2 Life, and concluded that:
‘[I]n our view, the aspects of the contract that point towards the existence of an employment relationship outweigh those that weigh in favour of an independent contracting arrangement.’
As such, the FWCFB listed the matter for a conference to discuss the merits of Ms Tidmarsh’s application.
Take home messages
This decision reaffirms the relevance of the multi-factorial test in distinguishing between employment and independent contracting arrangements. Despite the contract’s language, factors such as control, integration, and subcontracting rights are crucial in determining the true nature of the relationship.
The Commission’s decision confirms that the multi-factorial test is still crucial for resolving jurisdictional disputes related to a worker’s legal status. Employers should be aware of the updates to the employment definition effective 26 August 2024, under the Fair Work Amendment (Closing Loopholes No.2) Act 2024. This will necessitate that organisations utilising independent contractors reassess their operations to ensure proper employee or independent contractor classification. Employers should be aware of the circ*mstances of the relationship, not just the words of an agreement.
For more specific information or advice on any of the material contained in this article please contact Lincoln Smith on +61 8 8210 1203 or lsmith@normans.com.au or Christian Beltrame on +61 8 8210 1315 or cbeltrame@normans.com.au.
