Worker paid by invoice with own ABN but claims employer controlled when and where he worked
A fitness instructor challenged his dismissal, arguing he was an employee despite signing an independent contractor agreement.
The worker contended that the contract was unfair and unbalanced, that he had no ability to subcontract work, was required to perform extra duties, including preparing classes and attending meetings, and that the employer had control over when and where he worked.
The employer maintained the relationship was one of principal and independent contractor, pointing to invoicing arrangements, freedom to determine when and where classes were conducted, and the ability to organize substitute instructors.
Application and non-attendance at hearing
The worker made an application to deal with contraventions involving dismissal. The employer, in its response, argued that the worker does not meet the requirement because they were not employed by the employer but engaged by them as an independent contractor.
For this reason, they argued the worker could not have been, and was not, dismissed within the meaning of the Act. The employer's jurisdictional objection must be determined before the Commission can proceed to deal with the dispute.
Directions were issued for the parties to file evidence and submissions. On 8 August 2025, parties were advised that the jurisdictional objection was listed for a hearing on 11 September and directed to attend a mention on 20 August.
Both parties filed relevant materials, including an independent contractor agreement entered into between them, and participated in the meeting, confirming their attendance at the scheduled hearing.
However, only the employer presented evidence and submissions at the hearing. After being contacted by the Commissioner's chambers prior to the hearing commencing, the worker indicated he was unable to attend because he was at work.
The worker did not participate in the matter, despite being aware that the matter would proceed.
Later the same day, the worker emailed the Commissioner's chambers, indicating he was sorry about the confusion, was recovering from injury and that he would have been in attendance if he properly understood the hearing would proceed without him.
Worker's arguments about contract terms
In responding to directions, the worker made the Commissioner aware of challenges he was dealing with, including sick family members, illness and the forced change of employment that had limited his ability to provide more detailed submissions and material.
The material he did provide included a copy of his independent contractor agreement and short submissions of the major issues in support of his argument that he was an employee.
The worker's arguments included that one clause of the contract indicated it was subject to change, which he submitted seemed unfair and unbalanced. That he had no ability to subcontract his work.
That under another clause, the employer reserved the right to modify the scope of services offered at its discretion and without notice, which he says happened to him.
That he was required to perform extra duties, including preparing classes, passing on membership enquiries and attending meetings. That another clause indicated the contract remained in full force and effect indefinitely. And further, that the employer had control over when and where he worked.
The employer's chief executive officer provided sworn oral evidence to the Commission in support of the employer's submissions, which was uncontested.
The employer's material also included a copy of the independent contractor agreement signed by the worker, invoices provided by the worker and paid by the employer, along with material demonstrating the worker making requests for classes he had organised to be covered, and proposing new courses, along with details of the termination notice provided and post-termination settlement agreement.
Legal framework for determining employment status
A person can only be dismissed when their employment comes to an end in the circumstances described by the Act. In the absence of a relationship of employee and employer, a person cannot be dismissed within the meaning of the Act, and an application cannot proceed.
The means by which the ordinary meaning of the terms "employer" and "employee" are to be determined are set out in the Act.
Whether an individual is an employee of a person within the ordinary meaning of that expression is to be determined by ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person.
For the purposes of ascertaining the real substance, practical reality and true nature of the relationship, the totality of the relationship between the individual and the person must be considered, and in considering the totality of the relationship, regard must be had not only to the terms of the contract governing the relationship, but also to other factors relating to the totality of the relationship including, but not limited to, how the contract is performed in practice.
This approach draws the distinction that an employment relationship exists when an individual provides their personal service under a contract of service to be discharged by the individual personally.
Whereas an independent contracting relationship is a contract for services where an individual is conducting their own independent business with a degree of control over how their services are provided.
Multi-factorial test applied
To assist in drawing this distinction, numerous decisions have identified a multi-factorial test to be applied in ascertaining the true nature of the relationship.
Key factors to be considered include: the degree of discretion and control over how and when works is to be performed, the degree of freedom to perform work for others, the requirement to provide and maintain tools and equipment, the mode of remuneration including taxation arrangements, the provision of clothing and livery and the extent of presentation within the business, the provisions of leave and other entitlements usually associated with relationships of employment, and the opportunity for profit and risk of loss.
Previous decisions have cautioned, however, that "no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances."
The Commissioner reviewed the available evidence and material with respect to the relationship between the worker and employer in the present case. The contract between them is clearly set out as an independent contracting agreement.
It includes terms with respect to services, performance, term, invoicing, non-exclusivity, payment, and explicitly clarifies that their relationship is one of independent contractor, not employment. The Commissioner's assessment was that there is nothing particularly onerous or unusual about these terms for them to be considered by a contracting party to freely enter.
Independent contractor relationship found
The Commissioner further considered the worker's submissions and evidence of the employer with respect to the totality of their relationship and its true and practical effect, including how the contract was performed in practice.
The Commissioner considered that this evidence indicates that the real substance, practical reality and true nature of their relationship was one of principal and independent contractor.
In reaching this conclusion, the Commissioner was persuaded by the uncontested evidence of the employer. This evidence includes the invoicing terms by which the worker was paid for services rendered; the freedom of the worker to determine when and at which facility he conducted class; and the freedom of the worker to perform other work and organise substitute instructors for work he had arranged; that the worker was not paid superannuation or leave entitlements and was responsible for his own insurances and ABN.
The Commissioner also considered whether it can be said that the worker was integrated into the business of the employer.
However, the Commissioner did not think that this was the case, as opposed to carrying out a business on his own behalf.
The uncontested evidence is that the worker had considerable control and independence in relation to the classes he organised and conducted, the time of his work, its location and how, in fact, it was performed. In the Commissioner's view, the worker was not an employee of the employer.
Accordingly, the employer's jurisdictional objection was upheld, and the application was dismissed for want of jurisdiction.
