FWC Full Bench applies multifactorial test in determining worker was an employee, not an independent contractor (Aspire 2 Life Pty Ltd v Tidmarsh)
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Background
The business – Aspire 2 Life – claimed that it provided a ‘support coordination service’ for the elderly, in the Fraser Coast region of Queensland. Aspire 2 Life gave evidence that it assisted around 200-300 clients through a workforce of approximately 45 independent contractors, most of whom were engaged as personal care workers.
Ms Tidmarsh was one of these workers. Ms Tidmarsh was engaged from February 2023, pursuant to a contract that purported to establish an independent contracting relationship.
The contract made multiple references to the worker being engaged as an independent contractor and required Ms Tidmarsh to:
In the decision at first instance, Deputy President Roberts noted that he was obliged to follow the decision of the High Court in?CFMEU v Personnel Contracting Pty Ltd, and focus his analysis on the legal rights and obligations created by the contract between the parties – not the history of the parties’ dealings with one another during the course of their relationship.
However, although the terms of the contract made multiple references to the worker as an independent contractor, the Fair Work Commission (FWC), at first instance and again on appeal, reached the conclusion that the worker was in fact an employee of Aspire 2 Life, after application of the multifactorial test.
Central to the determination was a consideration of the degree of control Aspire 2 Life exercised over the manner in which the worker performed their work. The FWCFB noted that:
‘Ms Tidmarsh undertook personal care work for clients sourced by Aspire 2 Life, for which she was paid an hourly rate by Aspire 2 Life. The right to control the nature of the services to be provided to clients, when those services were provided, and the way in which the personal care work was to be undertaken by Ms Tidmarsh lay in the hands of Aspire 2 Life, which is consistent with its ongoing responsibility to manage the services being provided to the clients.’
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The FWCFB also had regard to the degree to which Ms Tidmarsh was integrated into the business of Aspire 2 Life and the fact that she did not have the ability to subcontract her work to a third party, as the contract expressly required her to advise Aspire 2 Life of any restrictions on her availability, so that it could manage the allocation of work in her absence.
The FWCFB upheld the decision at first instance, that Ms Tidmarsh was an employee of Aspire 2 Life, and concluded that:
‘[I]n our view, the aspects of the contract that point towards the existence of an employment relationship outweigh those that weigh in favour of an independent contracting arrangement.’
Key takeaways
The decision of the FWCFB demonstrates that the multifactorial test remains relevant in determining jurisdictional objections that centre on the legal status of the worker.
The changes to the definition of employment, that are contained in the?Fair Work Amendment (Closing Loopholes No.2) Act 2024, and that take effect on 26 August 2024, will require businesses who engage a large network of independent contactors – like Aspire 2 Life – to review their operations in order to ensure they have correctly classified their workers.
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