Employee contract and C-suite title couldn't override reality, Fair Work ruled
A startup chief marketing officer worked without pay under a contract promising $300,000 and 5 per cent equity, then lost her unfair dismissal claim.
Stacey Davies thought she had it all mapped out. A written contract named her Co-Founder, Chief Marketing Officer and Chief Sales Officer at OneRD Pty Ltd. The document promised 5 per cent equity and a salary climbing to $300,000 annually once the telematics company turned profitable. It used the word "employee" throughout.
None of that protected her.
On February 16, 2026, Fair Work Commissioner Walkaden dismissed Davies' unfair dismissal claim, ruling she was never actually an employee despite what her contract said. The case offers a stark lesson for HR leaders navigating startup arrangements and equity-based compensation: titles and labels mean nothing if the working relationship tells a different story.
Davies began working for OneRD in June 2024 under a three-year contract. Her compensation was structured around milestones—$4,000 monthly after reaching 2,500 customers, $8,000 at 10,000 active users, eventually $25,000 monthly at stable profitability. She never reached those targets. She never received a dollar in wages, though it appears she held a 1 per cent share in the company.
The Commission examined how the work actually happened. Davies held a full-time job elsewhere and performed her OneRD duties after hours. She worked an estimated five to ten-plus hours weekly, sometimes exceeding ten hours during intensive launch phases. She chose her own hours. Nobody tracked them. Nobody required her attendance at the weekly co-founder meetings, which she attended voluntarily because she was invested in the venture's success.
Davies worked from home using her own computer, tablet, phone and furniture. OneRD never reimbursed her for equipment or running costs. She received no wages, no superannuation, no annual leave, no sick leave. In her own words, Davies was "generally left to execute the task" without direction on how to perform her duties.
The ruling applied Section 15AA of the Fair Work Act, which took effect in August 2024. The provision requires examining the complete picture—both what the contract says and how the relationship actually operates. Commissioner Walkaden weighed traditional factors: control over work methods, exclusive service, tools and equipment, remuneration structure, and employment benefits.
Several elements proved fatal to Davies' claim. The Commissioner gave "considerable weight" to her working after hours alongside primary employment, with total autonomy over her schedule, receiving no wages or traditional benefits beyond promised equity.
CEO James Williamson testified that he considered the arrangements involving Davies to be a collaboration of founders who were all playing a role in a startup business. Five co-founders, including Davies, apparently all maintained full-time jobs elsewhere while building OneRD.
The contract's termination clause gave OneRD the right to dismiss Davies with 30 days' notice. When the relationship ended, the company exercised that right. But dismissal rights don't create employment status.
The decision highlights a critical issue for HR leaders structuring early-stage ventures or side arrangements. Calling someone an employee doesn't make them one. The Commission stated that "the parties cannot alter the true nature of their relationship by putting a different label on it."
Organisations using equity compensation without wages, engaging after-hours contributors, or structuring co-founder arrangements face a question: does the day-to-day reality match what the paperwork says? Because when the relationship falls apart, only the reality matters.
