Employer argued worker operated through company providing services to multiple clients
The Fair Work Commission (FWC) recently dealt with a general protections application involving dismissal from a delivery business owner who alleged his employment was terminated by a furniture retailer in contravention of the general protections provisions.
The employer argued that he was not an employee but rather an independent contractor, and second, he was not dismissed.
The case required the FWC to examine whether the worker was an employee or an independent contractor, and whether the worker had been dismissed.
Business structure and operations examined
The evidence established that the worker was the beneficial owner via a trust of a company that owned the business name Adelaide Delivery Services.
The company rented a 950 square metre warehouse and owned 10 delivery trucks, a van and a station wagon.
The company employed five drivers and five offsiders to collect and deliver goods, including lounges, beds and other furniture and provide house moving services. A contract mechanic was retained to service the vehicles.
The company also engaged a person to perform administrative duties and one other person to provide accounting support.
The worker spent the majority of his time, 20 to 30 hours per week, running the business and undertaking administrative activities.
The worker assisted with delivering goods and driving when they were short-staffed or an urgent order was received.
The worker's wife previously performed driving, delivery, and marketing duties as an employee, but is no longer in that role. The wife appeared to be remunerated via distributions from the trust.
The company provided services to a number of furniture retailers. Approximately 50 per cent of the company's revenue was received from the furniture retailer employer, 15 per cent from a bedding retailer, 20 per cent from a furniture retailer, 10 per cent from providing storage services to a retailer, and 5 per cent from providing house moving services direct to the customer and "too hard" furniture deliveries to other retailers.
The worker contended he was responsible for determining the delivery routes to be used for deliveries using the employer's software.
Contractor service agreement executed
In January 2025, the worker, as managing director, executed a written comprehensive contractor service agreement with the furniture retailer employer in the name of his company.
The agreement was for the provision of delivery and assembly of goods such as home furniture, outdoor furniture and homeware. It required the company to provide and maintain vehicles and insurance, and allowed for the services to be provided by employees or subcontractors and allowed for substitution.
The contract required certain things of the company, including compliance with road traffic laws, provision of equipment, materials and fuel, following the routes generated by the software, taking measures to protect the goods transported, complying with health and safety standards and regulations, and obtaining and holding required licences and consents.
The employer provided the company with a weekly statement of services, which was then used by the company to submit tax invoices to the employer in accordance with the schedule of rates. The company submitted business activity statements in respect of its employees and GST matters.
The contract between the company and the employer appeared to have ended on 12 July 2025.
The worker's relevant submissions contended that the following criteria supported the characterisation of the worker as an employee: the employer's control over invoicing, oversight of the worker and his staff, rigid task definitions, provision of tools, imposition of strict deadlines and responsibilities outside of the contract.
The worker provided correspondence from the employer, which appeared to be related to complaints and incidents that occurred during deliveries undertaken by the company.
This correspondence appeared to be related to the safe and competent undertaking of deliveries and did not establish that excessive control was being exerted by the employer.
The worker contended he was almost entirely dependent on the employer for income. This view was inconsistent with the spread of income from various suppliers.
Employee or contractor assessment
The FWC examined whether the worker was an employee or an independent contractor.
The worker contended that he was an employee throughout his engagement with the employer, as a result of the application of section 15AA of the Fair Work Act. The employer contended that the worker was a contractor and not an employee and thus could not have been dismissed.
In determining whether the Commission's jurisdiction had been enlivened for the purposes of section 365, the question was whether the worker was an employee on the date the engagement came to an end and, therefore, was susceptible to being dismissed on that date.
The Commissioner referred to a previous decision which stated that section 15AA(2) requires a consideration of the totality of the relationship, which involves, in turn, a consideration of, amongst other things, the terms of the contract between the parties and an assessment as to how the contract is performed in practice.
The approach to a consideration of the totality of the relationship is guided by common law principles and involves a reversion to the multifactorial test that was well known and widely applied.
The common law approach had been set out in numerous decisions.
A Full Bench had summarised the approach to the determination of the employee or contractor issue including whether the worker is the servant of another in that other's business or whether the worker carries on a trade or business of his or her own behalf, the nature of the work performed and the manner of its performance, the identification and application of the relevant indicia to the circumstances, and the terms of the contract between the parties.
Multifactorial test applied
The Full Bench had identified the various indicia that are ordinarily considered in an assessment as to the nature of the relationship.
They included the actual exercise, or the right to exercise, control over the putative employee, whether the worker performs work for others or provides tools and equipment, whether the work can be delegated, whether the worker is remunerated by periodic wages or salary or by reference to completion of tasks, and whether the worker is presented to the world at large as an emanation of the putative employer's business.
The bench also cautioned 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 stated: "When I balance the factors contained in the multi-factorial approach, I am not persuaded that [the worker] was an employee of [the employer] on or about 12 July 2025."
The worker was and remained the managing director of a company which provided delivery and storage services to multiple clients, with a fleet of vehicles and 12 employees. The company maintained its fleet and rented a warehouse.
The distribution of work was controlled by the company, as were the routes. There was no evidence that the worker was presented to the world as an employer-employee.
The majority of the worker's time was spent on the business, noting that when needed, he provided hands-on support.
The control exerted over the company and thus the worker appeared consistent with the terms of the commercial contract and did not appear to be excessive.
The Commissioner stated: "When these facts are considered objectively and as a whole, [the worker] cannot fairly be described as an employee of [the employer]."
Application dismissed for lack of jurisdiction
The Commissioner found that, as the worker was not an employee, he could not have been dismissed, and his general protections application failed for want of jurisdiction.
At the conclusion of the determinative conference, the Commissioner determined that the worker was not an employee and therefore could not have been dismissed.
The general protections application was dismissed.
The decision confirmed that in determining whether a person is an employee or independent contractor, the Commission must consider the totality of the relationship, including the terms of the contract and how it is performed in practice.
