Manager’s template invoice had preset hourly rate and formula provided by company director
The Fair Work Commission (FWC) recently dealt with a general protections dismissal application from a worker, to which a dental company was the respondent.
The worker's engagement with the company was terminated effective 10 July 2025.
The company made a jurisdictional objection to the application on the basis that the worker was not an employee of the company.
A jurisdictional prerequisite of a general protections dismissal application is that an applicant must have been "dismissed".
The meaning of the term "dismissed" requires that the person is an employee.
Consequently, for the Commission to be satisfied that the worker had been dismissed, it was necessary to determine whether the worker was an employee of the company.
Background to engagement
The worker was engaged by the company commencing on 25 November 2024. The worker predominantly performed work for the company in relation to a dental practice.
The company acquired the dental practice effective 1 November 2024. The background to the worker's engagement by the company was connected to the company's acquisition of the dental practice.
The worker and his sister were shareholders in a company. The sister was a dentist. Prior to November 2024, that company owned the dental practice and the worker was employed as practice manager of the practice, and the sister performed work as a dentist at the practice.
During 2024, the company and the dental company entered into an agreement in which the company sold the dental practice to the dental company.
Two brothers were directors of the dental company. The families of the worker and his sister, on the one hand, and the brothers, on the other, were apparently known to each other.
The evidence indicated that those families had other business relationships. It was apparent that the brothers or their associated entities held a significant shareholding in the dental company.
The sister, through a trustee company, also held a 20% shareholding in the dental company. However, the worker denied that he held or had ever held a shareholding interest, either directly or indirectly, in the dental company.
The Commissioner accepted the worker's evidence in this regard.
Contract preparation and terms
During negotiations regarding the sale of the dental practice, the sister recommended to the brothers that her brother, the worker, be engaged as practice manager after the sale. In late November 2024, the worker and one of the brothers had a discussion, including regarding his engagement with the company.
A remuneration rate was discussed, amounting to $75,000 annually. The discussion concluded with the worker and the brother agreeing that the worker would prepare and send proposed agreements for the company to engage the worker, a nurse and a receptionist.
The worker had available to him some template documents previously used by the company to engage employees at the dental practice.
The worker used those templates to prepare documents to send to the brother. On 29 November 2024, the worker emailed the brother two documents concerning his own engagement by the company. The first document sent was entitled "Terms and conditions – Employees other than dentists".
The document had various features, including that the cover page identified the "Employer" as the dental practice and the company, and the "Employee" as the worker.
The document variously described the position or role as "dental receptionist", "front office coordinator" and "practice manager", an infelicity likely due to the inattentive use by the worker of a template or precedent document.
The document variously used terminology such as "employed", "employment", "employee", "employer", and "national employment standards".
The document made provision for various conditions such as paid personal/carer's leave in accordance with the Act, annual leave in accordance with the Act or the relevant modern award, long service leave as per legislation, parental leave as per the Act, express provisions regarding "Termination of Employment" and "Redundancy", and express provisions for dispute resolution including arbitration by "Fair Work Australia".
One clause stated that the worker may be required to perform other tasks not included in the job description.
Invoicing arrangement and work performance
In early December 2024, the brother and the worker met at the premises of the dental practice. During this meeting, the brother indicated that he wanted the worker to be remunerated upon the provision of a fortnightly invoice by him to the company.
There was some dispute between the parties as to the degree of choice the worker had regarding this mechanism for invoicing. The worker gave evidence that he was not comfortable with an invoice arrangement but he agreed to it because the brother indicated that it would put the relationship to a bad start if he did not agree to it.
In any event, one clause of the contract was finalised to insert terminology stating the salary was "$75,000 i.e $40/hour on ABN or $70,000+Super on TFN" per annum.
The finalised document was then signed by the worker on his own behalf and the brother on behalf of the dental practice.
The worker and the brother each dated their signatures as 25 November 2024, albeit the document was signed in early December 2024. This backdating was apparently intended to give retrospective effect to the terms of the engagement, being 25 November 2024.
Despite the inconsistencies in the contract description of the position or role, the Commissioner found the worker was engaged by the company as a practice manager.
The duties the worker undertook included marketing and front desk coordination at the dental practice. The front desk coordination duties involved matters related to sterilization, tracking laboratory work, devising patient payment plans, and providing information for patients to obtain release of their superannuation to fund dental treatment.
The worker also undertook duties formulating new processes for a new dental clinic to be opened by the company in Footscray, including setting up practice management software and working on a marketing plan for the Footscray clinic.
Invoicing template and termination
The worker was generally required to work between 9:00 am – 5:00 pm each day. One of the brothers provided the worker with a template invoice to be sent fortnightly to the company.
As discussed with the other brother, the worker would send the company fortnightly invoices. The template invoice had a preset hourly rate and formula.
The worker would enter his hours worked in the template and the formulas would generate the amount the subject of the invoice.
In the first few invoices, the worker used an ABN of an entity that he had previously set up with his sister but had never otherwise operated.
Thereafter, the worker ceased inserting an ABN in the invoices. The worker's engagement was terminated in writing by letter dated 10 July 2025.
The FWC examined whether the worker was an employee. The Commissioner stated: "I consider that [the worker] was an employee of [the company]. I have reached this view having assessed the true substance, practical reality and true nature of the relationship between [the worker] and [the company], having regard to the totality of the relationship between [the worker] and [the company], including the terms of the contract and how it was performed in practice."
In his role, the worker was not in business on his own account. He was engaged by the company in the position of practice manager.
The worker was not in the business of providing practice management services to dental practices outside of his engagement with the company.
Furthermore, he had no business interest in the company. These matters indicated a relationship of employment.
Further, the title of practice manager, the work performed in that role, and the hours generally worked were indicative of an employment relationship.
Employment relationship findings
The Commissioner stated: "The [contract] is replete with references to terms such as 'employed', 'employment', 'employee', 'employer'. Furthermore, the [contract] sets out a multiplicity of express conditions referrable to employment and which are not conditions of an independent contractor. The existence of this terminology and employment conditions is indicative of a relationship of employment."
One clause of the contract conferred an express power on the company to direct the worker in the performance of his duties.
The existence of a right to control indicated a relationship of employment. The worker said that he was allocated tasks by one of the brothers.
The brother denied that he had, in fact, ever exercised such a right of control, but conceded that the contract conferred this right on the company.
Whether or not such a right of control was exercised in fact, the Commissioner found that the company had the right to direct the worker in the performance of his duties.
One clause of the contract required the worker to "devote the whole [of his] time and attention during working hours to [his] responsibilities and duties."
This requirement indicated a relationship of employment. The contract made no provision for the worker to delegate his work as a practice manager to third parties, and it was apparent that he did not.
The absence of a provision permitting delegation was indicative of a relationship of personal service in the nature of employment rather than the provision of services in the nature of independent contracting.
The worker did not use significant tools or equipment of his own. The worker at best used his own laptop computer, which could not be regarded as use by him of a substantial tool or equipment.
The worker's absence of significant tools or equipment was indicative of an employment relationship.
The worker was not creating any goodwill or saleable assets of his own in the course of his work for the company. This was indicative of an employment relationship.
Employee status confirmed
The worker was remunerated by periodic payments. These payments were paid on the provision by the worker of an invoice to the company.
This mode of remuneration by invoice and use of an ABN in initial invoices was indicative of a relationship of principal and independent contractor as between the company and the worker.
However, the Commissioner noted that the invoice template was provided to the worker by one of the brothers, which tended to mitigate the force of the company's contention that the use of invoices was indicative of independent contracting.
The Commissioner stated: "Having regard to the above matters, my overall impression of the true substance, practical reality and true nature of the relationship between [the worker] and [the company] is that it was a relationship of employment. [The worker] was an employee of [the company] commencing on 25 November 2024 until his termination on 10 July 2025."
Consequently, the Commissioner ordered that the respondent's jurisdictional objection be dismissed. The application would now be listed for a conference.
