The Full Federal Court has recently considered whether an agency contractor for Tattsbet Limited was an employee or an independent contractor, finding that a multi factor test must be undertaken to determine the true status of the agent.
The Full Federal Court has recently considered whether an agency contractor for Tattsbet Limited was an employee or an independent contractor, finding that a multi factor test must be undertaken to determine the true status of the agent.
Ms Sharyn Morrow was engaged by Tattsbet Limited in 2004 to operate a shopfront betting agency. Under the agency agreement, Ms Morrow was deemed to be an independent contractor and was required to work at least 32 hours per week in the agency, with the option of employing staff to operate the agency during the hours that she was not present. She was paid commission based on the turnover of the agency.
In November 2011, Ms Morrow made inquiries as to whether Tattsbet should be making payment to her for superannuation contributions as required under the Superannuation Guarantee (Administration) Act 1992 (Cth). She held discussions with BT Financial Group who advised her that she should be receiving superannuation contributions from Tattsbet. Ms Morrow considered whether she should seek a ruling from the Australian Taxation Office on this or whether she should make a complaint to Tattsbet. Ms Morrow was reluctant to pursue the claim personally as she did not want to get into trouble with Tattsbet.
Ms Morrow instead met with a former agent who was prepared to take the superannuation contribution issue up with the ATO. That agent instead approached Tattsbet advising it that Ms Morrow was considering taking legal action against it to enforce her entitlement to receive superannuation contributions.
Following this, Tattsbet terminated Ms Morrow’s engagement.
Ms Morrow commenced proceedings in the Federal Circuit Court of Australia claiming that:
- She was an employee rather than an independent contractor;
- Tattbet had taken adverse action against her contrary to section 340 of the Fair Work 2009 (Cth) because she had exercised or proposed to exercise her workplace right to make complaints and inquiries in relation to the superannuation contributions issue.
Ms Morrow claimed that if the Court found that she was not an employee, section 340 of the Act would still apply as the section protects both employees and independent contractors.
Decision of Federal Circuit Court
The Judge at first instance found that Ms Morrow was an employee rather than an independent contractor as Tattsbet supplied the necessary equipment, determined the minimum hours the agency operated and Ms Morrow had little flexibility in the way she operated the agency. His Honour found that it was clear that Ms Morrow was working in Tattsbet’s business rather than in a business of her own.
However, the Court rejected Ms Morrow’s claim that Tattsbet had taken adverse action against her because of an exercise of her workplace right and dismissed her claim.
Tattsbet appealed to the Full Court of the Federal Court claiming that the Judge was in error to have held that Ms Morrow was its employee. Ms Morrow made a cross appeal against the Judge’s dismissal of her adverse action claim.
Decision of the Full Court of the Federal Court
The Full Court of the Federal Court upheld Tattsbet’s appeal, finding that Ms Morrow was not an employee and was an independent contractor. In coming to this decision, the Court considered a number of factors, including:
- The agency agreement specifically stated that Ms Morrow was an independent contractor;
- Ms Morrow was not paid for her own work alone but was able to employ others to assist her;
- Ms Morrow was an employer and undertook the obligations required by that role, including executing an enterprise agreement covering her employees and paying for a membership of the employers’ association;
- Ms Morrow’s personal income was only one third of the gross remuneration which she received for operating the agency;
- The parties adopted a taxation situation which required Ms Morrow to participate in the GST system and Ms Morrow spent a significant period of time preparing BAS returns.
As the Federal Circuit Court had not considered whether adverse action had been taken against Ms Morrow as an independent contractor because it found that she was an employee, the Full Court of the Federal Court remitted the adverse action claim back to the Federal Circuit Court for consideration and decision.
