Fair Work Commission ruling highlights the complexities of engaging contractors

In a Fair Work Commission decision handed down on 18 April 2016, a worker was found to be an employee and not an independent contractor, leading to a decision of unfair dismissal.

Overview of the findings

In the case of  John Rohde v Bedlam Enterprise Pty Ltd T/A Cola Solar (U2015/13986), a worker ended his employment with the employer in August 2014 to be able to offer his services as an independent contractor to the same company.  The change in arrangements was at the worker’s request. The contract was terminated by the company on 12th October 2015.

Overview of recommendations

In determining the arrangement was one of employer/employee, the Commission considered the following:

• Whether the worker is a servant of the company or carries on a business of his own
• The nature of the work and the manner in which it was performed
• The terms of the Contract
• The level of control exercised
• Whether the worker worked for other companies (or whether he works regularly and systematically for the one company)
• Investment in capital equipment
• Whether the worker was able to delegate
• Whether the worker presented to the public as an emanation of the business wears business uniform or badge)
• How the worker was paid – weekly wages or invoiced
• The goodwill generated for the business.

The above list is not exhaustive and different weight is given to the above depending on the different circumstances in each case.  The Fair Work Commission and Courts will assess each consideration and look at the totality of the specific relationship in each case.

This case is significant in that the worker opted to become an independent contractor, then subsequently claimed he was an employee.  The Commission found the worker was in fact an employee and that he was unfairly dismissed. The worker was awarded $7,000 in compensation.

Further information on this topic can be found in our workplace relations white paper.

 

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