Can an oral contract prove an employment relationship?

Fair Work examines circumstances between parties

Can an oral contract prove an employment relationship?

The Fair Work Commission recently dealt with a worker’s claim that he was dismissed by his employer, while the latter argued against his employment status.

On July 17, 2023, Harpreet Singh initiated a general protections application concerning dismissal with the FWC against HNP Transport Logistics Pty Ltd.

Singh's claim hinges on his alleged dismissal by HNP Transport. The company, however, disputed his position, raising objections to the application.

Background of the case

Singh's narrative revolves around his interactions with HNP Transport regarding employment.

He said he responded to a job advertisement on Gumtree, initiating discussions about a job role, work hours, and pay rates with Mr. Boporai from HNP Transport.

According to records, a text message he received from someone named "Harry" confirmed his work commencement. He engaged in conversations with Boporai about his pay rate, starting time, and work responsibilities.

Subsequently, an in-person meeting with Boporai involved discussions about safety, induction procedures, and the provision of personal protective equipment (PPE).

Nature of work and payment

Singh highlighted the nature of his work arrangement and compensation. He said he received a minimum of eight hours' pay for the days he worked, with fluctuating hours.

He didn't own a truck but was assigned a specific truck by HNP Transport for each work session. He said that he exclusively worked for HNP Transport, providing evidence such as emails and documents.

Meanwhile, Boporai presented a different perspective regarding the nature of the employment arrangement. He said that HNP Transport engaged multiple subcontractors, some utilizing their trucks while others used the company's vehicles.

He said that subcontractors, including Singh, are expected to invoice for their services, and payments are processed accordingly.

As evidence, tax invoices from both parties showcased weekly activities and vehicle usage without monetary details. Additionally, there was also a daily run sheet for July 1, 2023, which offered a breakdown of recorded hours.

Contractor or not?

The FWC found that Singh “was required to submit daily run sheets and what are described as being ‘tax invoices’ that recorded each week’s hours of work and further that he was subsequently paid for those hours of work.”

It added that Singh “was at no stage required to provide his own vehicle, that he carried out his duties in vehicles allocated to him upon his arrival at work and that he worked exclusively for HNP Transport, performing as much work as was directed by HNP Transport.”

It said that there was “an oral contract between Singh and HNP Transport formed as a result of discussions between [him] and Boporai in February 2023, the terms of which were that Singh would drive HNP Transport vehicles as required and directed by HNP Transport, would receive an agreed hourly rate of pay of $35 for hours worked and would be paid weekly following the submission of ‘tax invoices’ particularising his hours of work.”

Along with other terms that the parties agreed on, the FWC said that these were “features of employer/employee relationships.”

“This oral contract established an employment relationship. Singh was clearly subject to HNP Transport’s control, having agreed to present at approximately 5:00 am for up to 6 days per week and work as directed or the hours HNP Transport required, using a company-supplied vehicle.”

“Contrary to the assertions of HNP Transport, Singh was not running his own business,” it added. Thus, it said that Singh was an employee and was dismissed. It then listed the matter for conference.

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