Recent FWC case shows that job titles can be misleading; employment factors still decisive
The Fair Work Commission (FWC) recently dealt with a jurisdictional objection in a general protections application. The dispute centred on whether a worker could access protections under the Fair Work Act following the termination of her engagement.
The worker argued she was an employee entitled to lodge a general protections application, presenting evidence about the control exercised over her work, how she was directed in her duties, and her limited ability to set her own schedule.
The employers objected to the application, claiming the worker was an independent contractor who had agreed to a contractor arrangement from the outset.
The case required consideration of section 15AA of the Fair Work Act, which took effect from August 26, 2024. This section was enacted in response to High Court decisions, requiring that when determining employee status, "the totality of the relationship between the individual and the person must be considered."
Part 3-1 of the Fair Work Act provides general workplace protections, including those related to workplace rights and protection from discrimination.
The FWC noted that for employees who have been dismissed, there is a requirement to apply to the Commission first before taking a general protections matter to court.
The Commissioner observed that determining whether someone is an employee is "not necessarily straight-forward" and referred to the "long history of decisions in this tribunal and the courts in relation to deciding whether a person is an employee."
The worker was hired as a nanny for two children, beginning in January 2023, with the engagement ending in October 2024. The terms of the contract weren't reduced to writing, making them difficult to identify clearly.
The employers claimed text messages established certain terms: the worker would charge $35 per hour, be paid $50 weekly for superannuation, administer her own superannuation, and be paid via bank transfer. They also claimed there was a term that the worker would be a contractor.
The Commissioner didn't accept the contractor characterisation, noting that the text message exchange fell short of an agreement on employment status.
The Commissioner considered whether the employers had the right to exercise control over the worker, noting that nannies are "self-evidently expected to fulfil parents' directions as to the care of their children."
The worker's hours were negotiated weekly based on one employer's work schedule. She started working five days a week but by January 2024 was providing care just two days weekly as the employer's work arrangements changed.
Evidence showed the employers set the timing and location of the children's appointments. The worker claimed she was directed to perform various household tasks beyond childcare, while the employers disputed the frequency of these directions.
The Commissioner found: "Having regard to the evidence I accept that the parents had the right to direct [the worker] in the performance of her duties as a nanny." The Commissioner determined the employers "had the right to direct [the worker] in relation to where she cared for their children."
The worker was paid for hours worked rather than on a task basis. Neither party properly handled tax obligations. The employers created payslips showing withheld tax and superannuation payments that hadn't actually occurred when the worker needed proof of income for a rental application.
The Commissioner noted that the worker did not appear to be running her own business: "There is no suggestion she was providing nannying, childcare, or other personal care services to other households on her own account. She took on another job at a childcare centre, that is, in someone else's business. She did not render invoices, provide an ABN, arrange to be engaged through an incorporated entity, or file quarterly reports with the Australian Taxation Office."
Regarding delegation, one employer admitted: "If it had been discussed, and if the person was vetted, in the same way that we vetted her... then I wouldn't have been against that. But it's not something you would do... when we're talking about children."
After considering all factors and "the real substance, practical reality and true nature of the relationship," the Commissioner concluded: "Having taken the foregoing into account, and considering the real substance, practical reality and true nature of the relationship, I find that [the worker] was an employee capable of being dismissed on 5 October 2024."
The Commissioner determined that the worker was indeed an employee under the ordinary meaning of that term as guided by section 15AA of the Fair Work Act. This meant she was entitled to bring a general protections application involving dismissal.
The employers had conceded that if the worker was found to be an employee, then the employment came to an end at their initiative. The Commissioner therefore concluded: "I have found that the [worker] was an employee of the [employers] and was dismissed, within the meaning of that term for the purposes of section 365 of the Fair Work Act."
The case illustrates how Australia's multifactorial approach to determining employee status applies to domestic workers. The FWC dismissed the jurisdictional objection, with the final order stating: "The Respondents' jurisdictional objections are dismissed. The matter will be listed for conciliation."
