On 4 July 2014 the Federal Circuit Court handed down a useful judgement about betting agency TAB dismissing one of its operators. The decision clarifies how the courts will determine whether an independent contractor is an employee, and reveals an interesting analysis of the sorts of conduct which might be sufficient in amounting to a loss of trust and confidence warranting dismissal.
Independent Contractor vs. Employee Relationship
The court said that no single factor was decisive and concluded that Ms Morrow, the dismissed operator, was in an employee-employer relationship with TAB.
TBA said that Ms Morrow was an independent contractor because she had a contractual agreement stipulating that she was responsible for:
- employing her own staff; and
- determining her staff’s wages, hours and conditions of employment.
However, there were also compelling factors to suggest Ms Morrow was an employee including that TAB:
- provided the premises in which Ms Morrow worked and equipment which Ms Morrow used;
- controlled the identity of persons Ms Morrow was able to employ; and
- remained responsible for approving Ms Morrow’s leave.
Ultimately, the court considered these factors to outweigh those suggesting an independent contractor relationship, concluding that Ms Morrow was clearly working in TAB’s business, rather than a business of her own. This decision is consistent with the recent authorities of Stevens v Brodribb Sawmilling Co Pty Ltd  HCA 1, Hollis v Vabu Pty Ltd (2001) 50 AILR and ACE Insurance Ltd v Trifunovski  FCAFC 3 which highlight the following propositions:
- The characterisation of the relationship by the parties, whilst of some weight, is not determinative of the proper characterisation of that relationship;
- No one matter is likely to be determinative of whether a particular relationship between two people is that of employer and employee. Some matters will attract more weight in a particular case than those same factors will attract in another case; and
- The “test”, if there is one, is said to be multi-factorial. All of the relevant circumstances need to be weighed and the totality of the relationship identified.
General Protections Claim
Having established her status as an employee, Ms Morrow was eligible to make a general protections claim. Her claim was based on her argument that TAB dismissed her because she exercised a workplace right to inquire about TAB’s liability to make superannuation contributions.
TAB responded to Ms Morrow’s claim by arguing that its dismissal of Ms Morrow was not a consequence of Ms Morrow exercising this right, but rather, was a result of the underhanded way in which she went about exercising this right. The court held that Ms Morrow deliberately chose to keep her superannuation inquiries secret from TAB, and this supported TAB’s argument that Ms Morrow investigated the superannuation in a surreptitious manner. This superannuation inquiry issue, in conjunction with evidence of poor conduct and several other failures by Ms Morrow during the course of her employment with TAB, resulted in the court accepting TAB’s argument that the grounds for Ms Morrow’s dismissal were in fact a loss of trust and confidence. Accordingly, Ms Morrow’s general protections claim failed.