Resolution123 recently secured a huge win for one of our clients Andrew O’Farrell. Commissioner Riordan in his decision Andrew O’Farrell v Guest Tek Australia Pty Ltd wrote that “if a bird looks like a duck, walks like a duck and quacks like a duck – then it is a duck – the Applicant in this case is an employee”.
Andrew was originally an employee of Guest Tek based in Canada and in 2012 requested that he relocate to Sydney. To facilitate the transfer, Andrew’s employer asked him to sign a new contract. One of the provisions in the contract said “it is expressly understood and agreed that the contractor is not an employee, agent, joint venture of partner of Guest Tek”. It was also a condition of the transfer that Andrew divide his salary in 12 installments and invoice his employer each month.
Having made the move to Australia Andrew only ever worked for Guest Tek and was able to accrue annual leave.
In July 2017, Guest Tek made Andrew’s project manager position redundant. His employer failed to consult with him about the redundancy and also failed to consult with him about any possible redeployment opportunities.
When Andrew contacted us we were able to explain that he wasn’t an independent contractor and that he had been unfairly dismissed. On Andrew’s behalf Resolution123 filed an unfair dismissal claim with the Fair Work Commission.
Employee or independent contractor?
Commissioner Riordan considered the following indicia listed at  of the decision to determine whether Andrew was an employee or independent contractor:
- 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 wages 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; and
- whether the worker has a business, and whether the work or the economic activity being performed is being performed in and for the business of that worker.
Applying the above indicia Commissioner Riordan at - took into account that Andrew:
- accrued annual leave and when Andrew was on leave, Guest Tek would source his replacement who was typically a Guest Tek employee;
- did not pay his replacements wages, but rather Guest Tek paid;
- was paid a form of annualised salary where his annual remuneration was divided into 12 equal payments, irrespective of work days in that calendar month;
- did not charge GST on his monthly invoices to his employer;
- worked remotely but was in regular contact with his managers on a daily or weekly basis; and
- sought no profit but only recovered his wages.
Having painted an overall picture, Commissioner Riordan found that Andrew was indeed an employee.
Decision and compensation
Commissioner Riordan delivered his decision on 14 February 2019 finding that Andrew was an employee and had been unfairly dismissed. Guest Tek was ordered to pay Andrew $17,704.29 (US dollars) within 14 days and the Commissioner made a recommendation that Andrew make an application to the Fair Work Ombudsman to claim unpaid superannuation and long service leave.
You can read our recent article about the differences between employees and independent contractors here – https://resolution123.com.au/blog/the-whole-truth-are-you-an-employee-or-independent-contractor
If you are uncertain about your employment status as to whether an employee or independent contractor, or think that you have been unfairly dismissed, please contact us on 1800 RES 123 or you can book a free 15 minute consult by clicking on this link – calendly.com/genevieve123