Fair Work discusses different factors to consider
The Fair Work Commission (FWC) recently dealt with a worker’s claim that she was employed by a company despite the absence of a written contract.
The worker, Eunjin Lee, filed a general protections application related to dismissal with the Fair Work Commission (FWC) on 11 July 2023. She alleged that her employer, P & K Total Services Pty Ltd, took adverse action against her.
The employer contested this, raising a jurisdictional objection that the worker was not dismissed.
The worker started working for the company on 22 May 2022, with her taking on the role of a tiler and grouter. No written agreement or employment contract governed the relationship between the parties. Hyungju Lee served as the worker's direct supervisor and a manager of the employer, while Hyoungjin Kim held the position of director.
The worker said she was dismissed but the employer said she was an independent contractor or, in the alternative, had voluntarily resigned on 4 May 2023.
No written employment contract
Since the parties don’t have a written contract, the FWC said the nature of their relationship must then be examined. Among others, the following criteria were tested:
- Whether the putative employer exercises or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like;
- Whether the worker performs work for others (or has a genuine and practical entitlement to do so);
- Whether the worker has a separate place of work and or advertises his or her services to the world at large;
- Whether the worker provides and maintains significant tools or equipment;
- Whether the work can be delegated or subcontracted;
- Whether the putative employer has the right to suspend or dismiss the person engaged;
- Whether the putative employer presents the worker to the world at large as an emanation of the business;
- Whether income tax is deducted from remuneration paid to the worker;
- Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks;
- Whether the worker is provided with paid holidays or sick leave;
- Whether the work involves a profession, trade or distinct calling on the part of the person engaged;
- Whether the worker creates goodwill or saleable assets in the course of his or her work;
- Whether the worker spends a significant portion of his remuneration on business expenses.
Texts with the manager
The worker reportedly received text messages through Kakaotalk from her supervisor and manager, regarding the requirements of her role. The FWC said that it seemed the worker "cannot freely decline work provided by the [employer]."
The text messages between the parties below have been translated from Korean to English:
Worker: "Can I please have a day off tomorrow?"
Supervisor/Manager: "Fuck off, you cannot take a day off. Go there and roll the glue."
Another conversation happened between the parties:
Supervisor/Manager: "7 o’clock, must not be late for this one."
Worker: "Ah ok. You mean I need to start at 7??"
The FWC said that it was "clear" that there was an "appearance of an employment relationship rather than one of an independent contracting arrangement." The messages also demonstrate that she "does not appear to carry on a trade or business of her own."
Independent contractor or not?
The employer submitted a series of tax invoices with the worker’s ABN and an employee’s list. There was evidence submitted which demonstrated that the worker was to buy her own equipment, have an ABN, and a requirement that the worker provide invoices and be responsible for any taxation.
However, the FWC said that “there are reasons why an employer may require employees to prepare their own invoices.”
“Employers may disguise the employment relationship as one of an independent contractor to avoid tax, superannuation obligations and minimum entitlements prescribed by the NES,” it said.
The FWC further said that the worker was “under clear instruction of the tasks that she needs to perform.”
“[She] does not control her hours, does not have the freedom to select how she completes her tasks and is given instructions every time she is required to attend a new site,” it added.
Thus, the FWC said that the worker was employed by the company and not an independent contractor. It said that she was dismissed at the employer’s initiative. Consequently, the matter was listed for conference.
