Monday 19 September - Creating Confidence In How Australians Are Paid

STP Training Course: What we’ve learnt so far ...

Have you read the Employer Guide and are still unsure about the practical application of the reporting requirements? Jasmine will cover the aspects of STP Phase 2 reporting where we see the most common errors and where we get the most questions.

Join Jasmine Fernance , Head of Consulting at Australian Payroll Association, as she explores our STP Phase 2 learnings so far.

What you will get:

• 3 hours of STP2 content
• Copy of materials
• Your questions answered

This course is suitable for:

• Employers who have already transitioned to STP and want to re-affirm their reporting is correct
• Employers currently transitioning to STP
• Employers who are yet to transition to STP and want to be prepared in advance

?It is recommended that attendees have familiarity with the basic obligations of STP Phase 2 reporting prior to attending this session.

Date:?Thursday 27th?October

Time:?1pm to 4pm

Price:?$425 (member discounts apply)

Click here to book.

Free complimentary Payroll Pulse Health Check

Try the free complimentary Payroll Pulse Health Check - This tool is specifically designed to identify areas of risk or underperformance in your payroll operation. It will assist you to optimise and reduce the risk in your payroll function before any issues become expensive to fix problems. Your emailed report is easy to digest with recommendations that are actionable immediately. Pulse Payroll

Click here to take the health check - Payroll Pulse Health Check.

Newsbite: The Full Bench of the Fair Work Commission applied recent High Court authorities when determining that a Deliveroo driver was not an employee

The law regarding the characterisation of relationships between employers and workers has seen significant development this year, with the High Court handing down its decisions in?CFMMEU v Personnel Contracting Pty Ltd1?(Personnel Contracting) and?ZG Operations Australia Pty Ltd v?Jamsek2?(Jamsek) on 9 February 2022.

The High Court found in?Personnel Contracting?and?Jamsek?that, where the working relationship is governed by a comprehensive written contract, the written terms are paramount in determining the nature of the relationship between the parties. Absent an allegation that the contract is a sham, or that the terms of the contract have been varied by the conduct of the parties, businesses can now have greater certainty that the terms of their written contracts will be upheld by the courts.

In?Deliveroo Australia Pty Ltd v Franco,3?the Full Bench of the Fair Work Commission applied the principles in?Personnel Contracting?and?Jamsek?in the context of an unfair dismissal application made by Diego Franco, a worker in the gig economy.

Background

Mr Franco commenced working for Deliveroo’s meal delivery business on 22 April 2017 as a delivery driver pursuant to a?‘supplier agreement’?(Agreement), using motorbikes which he had purchased himself. For the majority of Mr Franco’s engagement, Deliveroo used a self-service rider engagement system which required Mr Franco to book the sessions he would work in advance and provided preferential access to particular sessions based on his performance, as well as incentivising him not to cancel engagements.

Mr Franco worked regularly for Deliveroo until 30 April 2020. He also performed work for Uber Eats and Door Dash whilst he worked for Deliveroo. In April 2020, Mr Franco was identified by Deliveroo as a driver with delayed delivery times. Deliveroo determined the delays were unacceptable and emailed Mr Franco on 23 April 2020 advising that, as?he failed to deliver orders within a reasonable time, he was in breach of his agreement with Deliveroo and his agreement would be terminated. On 30 April 2020, Mr Franco’s access to the Deliveroo Rider App was disabled.

Mr Franco subsequently made an unfair dismissal application against Deliveroo pursuant to section 394 of the?Fair Work Act 2009?(FW Act).

Issues

The principal issue in this case was whether Mr Franco was an employee of Deliveroo, and therefore entitled to protection against unfair dismissal under the FW Act.

Deliveroo alleged that, at the time of the termination of Mr Franco’s engagement, he was an independent contractor providing services to Deliveroo.

Mr Franco alleged that, properly construed, the Agreement demonstrated that he was Deliveroo’s employee because he was subordinate in the business and was serving in it (rather than any business of his own), he was subject to Deliveroo’s authority and right to exercise control over his performance of work, and his performance of work was dependent on Deliveroo’s business.

Decision at first instance

On 18 May 2021, prior to?Personnel Contracting?and?Jamsek?being handed down, the Fair Work Commission determined that Mr Franco had been unfairly dismissed and ordered Deliveroo to reinstate Mr Franco and restore his lost pay. In making that determination, the Commission found that Mr Franco was an employee of Deliveroo based on a consideration of the totality of the working relationship between Mr Franco and Deliveroo (in accordance with the reasoning in?Stevens v Brodribb Sawmilling Co Pty Ltd4?and?Hollis v Vabu Pty Ltd5). The Commission considered?the level of control that Deliveroo possessed, and which it could choose to implement or withdraw, over Mr Franco’s performance of work (via its self-service driver engagement system) strongly supported the existence of an employment relationship rather than an independent contracting relationship. In addition, the Commission found that the fact that Mr Franco could and did work for competitors of Deliveroo was not inconsistent with an employment relationship bearing in mind the context of a modern, changing workplace impacted by our new digital world.

Decision on appeal

Deliveroo appealed the decision on the basis that, among other things, the Commission erred in concluding that Mr Franco was an employee.

In upholding the appeal and dismissing the unfair dismissal application, the Full Bench found that Mr Franco was not an employee of Deliveroo for four reasons:

1. The terms of the Agreement indicated a lack of control by Deliveroo over the manner of performance of any work which Mr Franco agreed to undertake. The Agreement provided that once an order has been picked up for delivery, it must be delivered in a reasonable time period but that Mr Franco may use any route which he deems safe and efficient. Further, the Agreement did not require Mr Franco to perform any particular delivery work and did not specify the type of vehicle to be used in the delivery. Therefore, Mr Franco had control of the mode of performance of the work, not Deliveroo.
2. The Agreement provided that Mr Franco was to supply, at his expense, the vehicle used to make deliveries. Therefore, it is possible that Mr Franco may provide a ‘substantial item of mechanical equipment’?such that?‘the personal is overshadowed by the mechanical‘.6
3. The Agreement did not require personal service on the part of Mr Franco. Mr Franco had the right, without the need for prior approval from Deliveroo, to arrange for someone else to perform the services he was contracted to provide.
4. The Agreement provided that Mr Franco was required to pay an administrative fee of 4 per cent of the total fees payable to him for access to Deliveroo’s software and for Deliveroo providing invoices and other administrative services. This requirement was considered by the Full Bench to be inconsistent with the existence of an employment relationship.

Key takeaways

The decision demonstrates the importance of having comprehensive written contracts with all workers and carefully drafting the written terms of those contracts to reflect the intended relationship between the parties. The Full Bench recognised the fundamental shift brought about by the High Court decisions in?Personnel Contracting?and?Jamsek, observing that they would have decided the matter differently had they applied the now-outdated multifactorial test which gave significant weight to the conduct of the parties rather than to the terms of the contract.

While companies which engage independent contractors can now have greater certainty that their independent contractors will be unable to claim entitlements reserved for employees, any complacency will still pose a significant risk to business, noting:

1. a)?A failure to enter into a written contract, or a poorly drafted written contract, may result in a finding that a worker is an employee rather than an independent contractor;
2. b)?A failure to comply with the terms of the contract may result in a finding that the contract has been varied so as to render the worker an employee rather than an independent contractor;
3. c)?The Courts will look to the reality of the relationship between the parties if there is a finding that the contract was a sham; and
4. d)?Even if a worker is genuinely an independent contractor, companies must also consider whether the worker is an ‘employee’ for the purposes of superannuation legislation noting any failure to properly characterise and pay superannuation to employees can result in significant penalties.

Did you know | Overpayments

• If you identify an overpayment to an employee relating to a prior financial year, the employee is required to repay the full gross amount of the overpayment?

Do you know - the cost your cost per payslip?

The average cost per payslip takes into account the total payroll-related costs of responding organisations, and the number of payslips produced annually, which is determined by number of staff and payment frequency. Included in the total payroll-related costs are:

• Salary costs
• Payroll staff salaries and wages including superannuation, and bonuses if relevant Technical costs
• Payroll, time and attendance, and employee self service software and services costs Other costs
• Payroll consulting fees
• Payroll recruitment fees
• Payroll training costs ?(including conferences and travel)
• Payroll temporary staff costs

Nationally, the average cost per payslip is $125.79, however this varies significantly based on factors such as organisational size, location and industry.

Frequently asked questions?

Question.

• Do I need to pay Public holidays while employees are on unpaid stand down?

Answer.

• Yes. Employees who are stood down without pay by their employer under the Fair Work Act are still entitled to be paid for public holidays that fall during the stand down period. This applies if the employee would normally have ordinary hours of work falling on the day of the public holiday.

Talking Payroll on The Switzer Show

In this special episode, Tracy Angwin is the one who gets interviewed.?Recently invited onto The Switzer Show with Peter Switzer and Paul Rickard, Tracy discusses overpayments, underpayments, superannuation and payroll fraud.

Click here to play this episode.

Have a great week ... from the team?Australian Payroll Association.