Introduction

Read the full decision here.

The question I ask is: has the Fair Work Commission gone beyond its remit in ruling on an alleged case of elder abuse? The Commissioner in this matter felt it necessary to do so, in deciding on this unfair dismissal application.

I must admit, I am at a quandary with decision. Would the result be different if the respondent placed the applicant on paid suspension and called in an independent specialist investigator? Then acted on the investigator’s report. On the other hand, the respondent might well have felt that if it did nothing, this would put its funding in jeopardy, and therefore be out of business?

Apart from this, I feel the quality of the process (ie the letters and the manner in which the allegations were put) were very good. Unfortunately, for the respondent, they were not good enough.

The only way we will know for certain if the respondent appeals the decision.

Background

A registered nurse at a nursing home was summarily dismissed for elder abuse and obtaining patient records whilst on suspension (using someone else’s password). The Applicant had been employed as a registered nurse, working nightshift for over a year and had 26 years practical experience. She considered that her dismissal was harsh, unjust, and unreasonable and sought reinstatement and continuity of service and wages.

The respondent dismissed the applicant for a number of reasons, the most serious being an allegation of elder abuse, where it was alleged that the Applicant engaged in elder abuse, by using unreasonable force when undertaking a suctioning procedure to assist the resident’s breathing. In addition, it was alleged the Applicant had directed a personal support worker, (working on the shift with her) to use unreasonable force to hold down the resident’s hands, when the resident, it was alleged, was not agreeable to having the procedure performed.

The Respondent considered the Applicant’s alleged conduct constituted elder abuse and that if substantiated, would present as a contravention of the Respondent’s Senses framework, Code of Conduct, the Resident’s Charter of Rights, and the Aged Care Act 1999.

Police report

Prior to investigating the matter, the employer, assessed the conduct to be elder abuse and accordingly, the Respondent considered it necessary at that point to report the incident to the Queensland Police and the Department of Health. It was submitted that an appropriate investigation, affording the Applicant procedural fairness had not been undertaken prior to the reporting.

The first allegation letter

The allegations were put to the applicant in writing [Note: this is a very good letter]:

“It is alleged that:

  1. On or around 26 August, 2019 –
  2. You used unreasonable use of force when you were suctioning client [redacted] against her will;
  3. During the ‘sunctioning (sic) process you directed a PSW to use unreasonable force and hold down [redacted]’s hands indicating that [redacted] was not agreeable to being suctioned.
  4. On 29 June, 2019 –
  5. You were rude and abusive to HRM, [name], when she phone you at 11:00 pm and 11:30 pm to make you aware there was an important email that had been sent to you and you were required to open your emails. During this phone call you stated you were with a ‘patient’ and would not allow [name] to speak as you spoke over her and then hung up in her ear. It is acknowledged you asked [name] for her phone number, however, as [name] tried to inform you the phone call would have only taken 30 secs. It is to be noted that [name] took the option to be transferred to the After Hours Supervisor [name] on the first phone call, however, as you stated you were busy [name] waited 20 mins before making the second phone call and took the option of being transferred to the Nurses Station so she could speak to a Person Support Worker who could advise her if you were still busy and you answered the phone and again hung up in her ear;
  6. You phone the Residence Manager (RM) at 23:29 pm, following [name] phone call, and you were rude and abusive and informed her that you were being harassed by [name] and that you were trying to administer S8 medications. You also said that if [name] kept repeatedly contacting you and kept harassing you the RM would have to complete the night duty shift as you would not work if [name] constantly harassed you. It is to be noted that a review has been conducted of the S8 Medication book and the first S8 drug that you administer that night was not signed out until 11:23 pm, after [name] 2 phone calls.
  7. On 30 June 2019 –
  8. During a phone call at 4:40 am you were rude and abusive to the RM when she asked you if you had opened your email and you responded ‘No’. The RM tried to explain to you that an important email had been forwarded to you and you were to open your emails and you became argumentative, abusive would not listen to what she was saying and over talking her. You continued this abusive, argumentative manner throughout the phone call as the RM was trying to explain to you about the email and you were required to open it. You also started to ‘rant’ about [name] harassing you and that the residents could not get their S8 medication because of [name]. Due to your inappropriate behaviour the RM told you that she had to disconnect the call. It is to be noted as previously identified on a review of the S8 Medication book and the first S8 drug that you administered that night was not signed out until 11:23 pm, after [name] 2 phone calls;
  9. you lodged a vexatious claim against [name], Human Resources Manager Qld, when you completed an Incident Report claiming that [name] had bullied and harassed you during two (2) phone calls to you at 11:00 pm and 11:20 pm. It is to be noted in her role of HRM [name] had a responsibility to inform you of the consequences of you taking unapproved leave and that was the purpose of the phone calls. It is also to be noted that during their working hours, it is the responsibility of After Hour Supervisors e.g. [name] that they answer and respond to any phone calls during their shifts;
  10. you were belligerent and defiant in your manner when you informed the Registered Nurses by Message Board that ‘Admin’ had made an error as follows: ‘Just to let you know I am on leave from 30.6.2019 to 23.7.2019. Admin must have forgotten to take me off the roster. Please liaise with [name] about replacement- Thanks’; This was after speaking to the RM at 4.40 am who had rang you to reinforce and advise you to read your email from HR regarding taking unauthorised leave.
  11. On 8 September, 2019 –
  12. when you were informed that client Pat, Room 18, said she had a sore throat and couldn’t swallow you gave her 50mg Tramedol medication (note Medman indicates that this medication is for abdominal pain) and Pat did not wake up until 0500 expressing concerns regarding the medication you gave her saying words to the effect, ‘what happened? … I can remember the nurse giving me the tablet, but I can’t remember anything else after that, was I unconscious‘;
  13. you thought it was funny when you were made aware that Room 7 had buzzed for pain relief for her sore foot around 1:30 am and you forgot to give it to her until you were reminded again around 05:14 am;

III. when the client in Room 3 had buzzed for a third time to go to the toilet you answered the buzzer and told client Yvonne she had already been to the toilet and that she had to wait;

  1. when the client in Room 2 had been up to the toilet quite a few times around 2:00 am you asked the PSW if the client had any pain and the client said that he had no pain whatsoever. You stated if the client gets up again that you would just give him something although he had not requested any medication;
  2. During the night shift on 8 & 9 September, 2019 it has been alleged as follows:
  3. You left client Betty’s room in a dirty state following her cares as you left her in sheets that had faeces on them as well as leaving her used pad with faeces in it on the toilet seat;
  4. You falsified documentation and did not follow Policy as you documented that you administered Resource to (redacted) at 6:00 am as a full glass of Resource was found in (redacted) room indicating that you did not sight (redacted) taking the Resource and (redacted) not receiving the Resource;

III. Although you had been directed to ensure client (redacted) was showered during the night shift as she was going to hospital in the morning to have an operation you did not shower (redacted). The PSW on duty asked you to assist her to shower (redacted) as she was a two person assist and you told her you would not assist her;

  1. On a number of occasions, you have encouraged the PSWs who have been rostered to work with you to work outside of their scope by telling them to administer medications and they have informed you they are not able to administer medications.

Your alleged actions have compromised the health, safety and wellbeing of a number of [respondent] clients and staff.

[Respondent] views these alleged behaviours as constituting Elder Abuse. If substantiated, these actions are in clear contravention of [Respondent] Senses Framework, Code of Conduct, Residents’ Charter of Rights, and the Aged Care Act 1997. The alleged behaviour has caused stress to both clients and staff members.

Under mandatory reporting requirements, incident ‘1’ has been reported to the Queensland Police and the Department of Health.

You are therefore required to attend an investigation meeting at [respondent] on Wednesday, 18 September 2019 at 3pm. In attendance at the meeting will be [name], Regional Support Manager and myself. You may bring a support person of your choice to this meeting. If you do intend to bring a support person, please advise me directly not less than 24 hours prior to the meeting.

At this point in time, the above are allegations only and no conclusions have been reached. The purpose of this meeting is to provide you with the opportunity to respond to the allegations. This information will be vital in enabling us to assess whether the allegations are substantiated or not. Should you fail to attend the meeting without an acceptable reason, it will be assumed that you accept the validity of the allegations made against you and any disciplinary action that may result.

If not substantiated, there will be no further action. If substantiated, it could lead to one or more of the following outcomes:

  1. Counselling or Mediation
  2. Training
  3. Performance Improvement Plan
  4. Written Warning
  5. Summary dismissal

You are formally directed not to discuss the nature of the investigation with any other staff, residents, their families or any other parties associated with [respondent]; failure to adhere to confidentiality, if substantiated, may result in disciplinary action up to and including termination of employment.

Please also be aware that subjecting, or threatening to subject, any person who has been involved in this matter to any form of disadvantage or victimisation will not be tolerated.

[Applicant], it is appreciated that being the subject of an allegation and involvement in the subsequent investigation can be difficult for you. Please do not hesitate to use the Employee Assistance program on (redacted), which is a completely confidential counselling service provided at no cost to you.

Any queries you have should be directed to myself.

Yours sincerely,

[Name]

Group Manager – Human Resources”

The Applicant was suspended on pay from this date.

The second allegations letter

Subsequently, the Applicant received a second letter from the Respondent including further allegations, namely that while she was suspended:

  • The Applicant entered the Facility, accessed the IT system, printed off personal information, and removed property from the facility;
  • Her conduct breached the Respondent’s Policy and Procedure – Suspending an Employee, Respondent’s Values and Conduct, and the Applicant’s Position Description; and
  • The Applicant would be given an opportunity to respond to these allegations at the meeting.

Lack of cooperation leads to dismissal

The applicant was dismissed by letter, because she failed to cooperate with the investigation and subsequent interview meeting, in which gave a “no response” answers to question put to her.

Legal representation

Both the applicant and respondent were given permission to be represented by legal counsel.

The Applicant was represented by Ms Polina Kinchina, of Counsel, instructed by Mr Alexander Williams of Hall Payne Lawyers. The Respondent was represented by Mr Vince Rogers, Partner of Ashurst Australia (and then Landers and Rogers) instructed by Ms Patricia Ehlers, Human Resources Manager of the Respondent. Both parties were granted permission to appear pursuant to s.596 of the Act, due to the matters having some complexity and the dismissal having significant implications (with regard to the reporting of alleged elder abuse) and the potential repercussions of a finding of such, for the Applicant’s continuation as a registered nurse.

Respondent sought an 11th hour adjournment

It should be noted that the Respondent had legal representation at the Hearing, who had advised that he had been briefed, in the week before the Hearing, at a time when the Respondent participated in a Member Assisted Conciliation (MAC), before another Member. The Respondent’s legal representative sought to halt the proceedings (at the commencement of the Hearing) and sought fresh Directions to be set then, to allow for the filing of further evidence and submissions. This application was not foreshadowed at any time prior to the Hearing by the legal representative or the Respondent’s Senior Human Resources Officers. The Respondent’s senior personnel involved in this matter, had previously been put on notice by the Commission and the Applicant’s legal counsel, regarding the limited nature of the evidence they had filed. This matter was brought to the Respondent’s attention prior to the Hearing, in circumstances where the Applicant’s representatives had raised written concerns regarding imposing further costs on the Applicant. Further, the Applicant’s representative prior to the Hearing, when a MAC was under consideration, set out that delaying the matter and further costs would cause significant prejudice to the Applicant.

The Commissioner:

“At the commencement of the Hearing, both parties made lengthy submissions regarding the request on behalf of the Respondent for the late provision of new material and witnesses. I put the Respondent on notice that my provisional view was that there would be significant prejudice, to the Applicant, in allowing further material to be filed so late.

[…]

“That has meant that, and fully cognisant of the fact that the company had not complied with provisional statements in accordance with the directions and that they should’ve been provided on 13 January, and it’s a case where people internally within the organisation, for whatever reason, weren’t fully cognisant of what was required of them, notwithstanding the directions had been issued. The fact is that they did seek some guidance from in-house counsel. Unfortunately that in-house counsel within the company do not have experience in this area of the law and hence weren’t able to sort of give direction as to what approach [name], who was the person who was preparing that material, had to address.

[…]

“Taking into account all matters, after adjourning to consider the submissions, I decided (on the transcript) not to allow further material to be filed in relation to the matter (and not to allow new witnesses to be introduced, who had not provided statements of evidence)…”

Reverse onus of proof

In cases of dismissal for serious misconduct (summary dismissal or dismissal without notice), the onus is on the Respondent, in the current matter, to discharge the conduct that there was a valid reason for dismissal, on the balance of probabilities, in accordance with the principle established in Briginshaw v Briginshaw:

“The standard of proof remains the balance of probabilities but ‘the nature of the issue necessarily affects the process by which reasonable satisfaction is attained’ and such satisfaction ‘should not be produced by inexact proofs, indefinite testimony, or indirect inferences’ …”

Applicant chose her right to remain silent

The commissioner’s view was that the applicant had the ‘right to remain silent” (all though there was no evidence that the applicant needed to be Mirandized (in accordance with American police TV dramas). The Commissioner:

“It was emphasised on behalf of the Applicant, that as the Respondent had contended that as the 26 August 2019 incident, was capable of constituting a criminal offence, answering the questions posed in relation to these allegations at the meeting of 18 September 2019, had real consequences. The Applicant was concerned that the answers could be relied on to prove her guilt of criminal conduct, and therefore the Applicant was entitled to claim privilege against self-incrimination”.

Right to have a support person present

Given the “criminality” of the allegations, the applicant’s union was unable to represent the applicant. This was to provide somewhat fatal to the respondent’s case, in that it failed to provide procedural fairness in allowing the applicant time to seek legal representation.

The Commissioner:

“Whilst, I am satisfied there was no unreasonable refusal to allow [the applicant] to have a support person present, however in the circumstances, the employers required timing of the meeting responses and the gravity of the allegations prevented a procedurally fair meeting for the Applicant. She was not able to have a relevant support person, that is she sought to obtain a representative, to assist in the serious discussions. She was unable in the time provided, to do this. She advised the Respondent of this, and on that basis would not be able to respond to the questions at the meeting”.

The procedure in question

The allegation of elder abuse was that the applicant forcibly undertook a suctioning procedure on a patient, ordering a subordinate to hold down the patient’s hands as the patient was resisting the treatment.

In the Commissioner’s words:

“…In this regard I accept the Applicant’s evidence that in her professional opinion the suctioning was necessary. I also accept that it was not inconsistent with the resident’s care plan which did not indicate that the suctioning should not be carried out, if it was necessary to prevent choking. In addition, whilst it is recognised that changing a sanitary pad was a necessary hygiene duty, it can be deferred for a short time and it cannot be considered to the same physical necessity level, as the requirement for the suctioning, in the circumstances of the patient, as confirmed. I prefer [the applicant’s] evidence, that suctioning was only performed where there was a medical necessity and the resident was at serious risk of choking, asphyxiation, and possibly death, if the procedure was not performed. [The applicant’s] uncontested evidence was that choking could begin in a matter of seconds. The patient’s chart demonstrated that suctioning had been performed and required in the past.

“[The applicant] is an experienced nurse and the documented evidence demonstrated that is was necessary to perform the procedure regularly. [The applicant] was the only RN on night shifts and the only one qualified to determine whether the suctioning was necessary. In making the assessment, [the applicant] was required to act quickly and without delay”.

Allegation of elder abuse not proven

The Commissioner found that this did not constitute elder abuse, finding:

“On the balance of probabilities, the allegations of elder abuse were not made out. This allegation was the primary and most serious allegation. The other allegations related to nursing matters that would regularly be dealt with in daily notifications, ward handover matters and not raised in an aggregate form sometime later. Whilst not in any way diminishing the importance care of patient duties, these allegations would not form the basis for dismissal, where the allegations had not previously been raised in a timely manner, and had formed the basis of discussions. Further allegations of insubordinate conduct towards [HR name] regarding these issues form the category of alleged rudeness and not immediately responding to her emails whilst on night duty, do not support a valid reason for the termination.

“The employer reported the allegation of elder abuse, on a premature basis. No proper investigation was conducted. The onus is on the Respondent, in establishing the basis for the criminal referral of ‘elder abuse’. The Respondent should be able to prove, to meet those tests, the basis of proving the conduct ‘beyond a reasonable doubt’. The witness evidence relied on by the Respondent in this matter in regard to the two employees that were working on the night shift with the Applicant was not cogent or credible. Their evidence demonstrated that they did not have a sound understanding of the procedure. One witness had an ulterior motive for complaining about the Applicant, rather than a genuine consideration that the Applicant had engaged in elder abuse. The other witness was not confident in her evidence about the alleged incident or her complaint”.

[…]

“Even if [the Applicant] did instruct the personal support workers to hold [the patient’s] hands tightly or firmly, in the context of her performing a medically required procedure, in the circumstances as described with this patient. I consider that such an instruction would not constitute elder abuse or excessive force. The procedure is uncomfortable and to be effective, involves precisely inserting a tube into the resident’s mouth and throat. Allowing the resident to pull at the tube, would hamper administering the procedure which, was time sensitive and necessary and if not done safely, could result in injury to the resident”.

Insubordination (rudeness over the phone)

The Commissioner found that:

“…whereby it was suggested that the Applicant was insubordinate to the manager, in circumstances where the manager repeatedly contacted her, whilst on duty on the night shift, to check her emails, the response to these matters does not adequately form a basis for the dismissal. There were reasonable alternatives to these demands to the Applicant, whilst she was on duty. The repeated contact of the primary registered nurse, responsible for the care of the residents on the night shift, cannot be considered appropriate or contribute to a valid reason for the dismissal. Whilst the Respondent stated that the Applicant’s involvement in dispensing medications at particular times during the shift did not match with those times that the Respondent called for her, the provision of medications were not the only necessary duties undertaken on shift by the Applicant”.

Accessing confidential patient records whilst suspended

Here, in a rare (part) concession to the respondent, the Commissioner noted:

“However, the employer did make a serious allegation against the Applicant, in relation to the Applicant’s accessing and removal of patient information and records, after being suspended. The Respondent considered the Applicant has engaged in a significant contravention of her general obligations to patients in relation to this matter. It is inconsistent with her evidence of her experience and knowledge as a registered nurse, that she was not aware of the strict required custody and privacy requirements of patient records. However, this must be balanced with the pressure the employer placed on the Applicant, in refusing an adjournment of the meeting, which required specific responses to defend herself, in relation to the allegations related to patient care. The allegations, had the potential to end her career as a registered nurse and to expose her to criminal investigation, by referring the elder abuse allegations without an appropriate investigation and without receiving an appropriate response from the Applicant.

“The allegations of the conduct of the Applicant in returning to the workplace and accessing patient records has been carefully considered in the context. It was submitted that the conduct was undertaken in the mitigating circumstances, in that the Applicant stated, she was not clear on the specific details of the allegations involving patients and therefore the need to check patent records to verify such. The Applicant said she was unclear on the parameters of the suspension from the workplace and that she was not advised, that she was not able to return to the workplace, while suspended. Further that she was directed to respond to a series of serious allegations, that directly affected her ongoing registration, in her long-term vocation. The real concern regarding criminal charges being laid, in the circumstances, provided significant pressure to be able to have the relevant documentation to address and defend the allegations. The decision to access the records was taken in circumstances, where it can be considered that the Applicant was under real duress given, she did not have any representation at that time and the timeframes in which she was being required to respond were short. She was also without representation”.

[…]

“…The allegations have not been made out, this matter of itself does not constitute a valid reason for dismissal. Notwithstanding this, the breach of conduct in accessing and copying patient records, forms a serious matter”.

Conclusion

The Commissioner summarised as follows:

“Having determined that there was no valid reason and that the Applicant’s dismissal was procedurally and substantively unfair, it is necessary to consider the question of remedy. As required by s. 390 of the Act, I am satisfied that the Applicant was protected from unfair dismissal and that she was unfairly dismissed. I am also of the view that the Applicant should receive a remedy for her unfair dismissal”.

Reinstatement or no reinstatement?

The applicant was insistent that she wished to be reinstated to her former position.

On the other hand, the respondent argued that there was a loss of trust and confidence.

The Commissioner:

“Reinstatement is the primary remedy for unfair dismissal, and compensation can only be awarded where the Commission is satisfied that reinstatement is inappropriate. In the present case the Applicant is seeking reinstatement as the remedy. The Respondent submitted that reinstatement was not an appropriate remedy, given the further conduct of interference with patient records. The parties were, further to the Hearing and the subsequent Directions, were afforded a further opportunity to address remedy and to make submissions in relation to remedy as requested. The Respondent provided an additional more recent statement in relation to remedy. This evidence did not indicate any impediment (bar the issue of trust and confidence addressed later) to the Applicant’s reinstatement.

Adding:

“However, the elevated criminal test would be relevant if the matter was considered in circumstances beyond the Commission findings, that provided for the Applicant losing her certificate to practice nursing.”

Reinstatement: The precedents

The Commissioner provided useful information in what to consider when determining whether reinstatement should be granted.

“…The relevant legislative provisions for consideration of a remedy are set out in s.390, s.391 and s.392 of the Act…In considering whether reinstatement is appropriate in all of the circumstances, the issue of the loss of trust and confidence raised by the Respondent must be considered. The following observations regarding the issue of loss of trust and confidence in Australia Meat Holdings Pty Ltd v McLauchlan, are relevant:

‘In our view a consideration of the appropriateness of reinstatement involves the assessment of a broader range of factors than practicability…

We accept that the question of whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate. It is one factor to be taken into account, but it is not necessarily conclusive.

In Perkins v Grace Worldwide (Aust) Pty Ltd, the Full Court of the Industrial Relations Court said:

“…We accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.

At the same time it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee’s employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court’s finding on that question in the resolution of an application under Division 3 of Part VIA of the Act.

If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of loss of confidence in the employee.

Each case must be decided on its own merits.”

“In assessing the evidence, there were no impediments to reinstatement made out on the evidence”.

The outcome

The Commissioner finding:

“For all of the aforementioned reasons, it is determined that the Applicant was unfairly dismissed…I consider the Respondent’s reasons for dismissal, in that it considered that the Applicant had engaged in the alleged misconduct of elder abuse is not substantiated. The other allegations also were not made out and would not equate to a valid reason, as set out. No loss of trust and confidence in returning to undertake her duties has been made out. It is appropriate, based on the evidence and submissions, to make an order…for reinstatement to the position in which the Applicant was employed, immediately before the dismissal [and] to maintain the continuity of the Applicant’s employment and to ensure the period of continuous service.

“In the circumstances, where it is considered that there is no valid reason for the termination, but a breach due to the accessing of patient records and it is considered that the termination was harsh, unjust and unreasonable. It is therefore considered appropriate to make an Order for compensation, as set out, this does not restore the Applicant’s lost remuneration in terms of ordinary time wages for the period between the dismissal and the reinstatement. The Order, as explained reduces the amount in recognition of the conduct of accessing the records.

“I have determined that in the circumstances of this case, it is appropriate to make a 75% deduction, from the amount awarded for lost renumeration, on the basis of the Applicant’s conduct in accessing and removing confidential patient records from her workplace without authorisation. This conduct was inconsistent with her employee obligations; however, I do not consider this conduct alone amounted to a reason for the dismissal, although it is considered sufficiently serious, as to warrant a significant reduction in interim renumeration”.

Introduction

Read the full decision here.

This is a Full Bench appeal of a decision by a Commissioner who found that the person who claimed an unfair dismissal was an “employee” not a “contractor. In this current “gig” economy it is increasingly important that businesses ensure that they put in place practices that ensure they are either “employing” an employee or “engaging” a contractor.

Whilst the Full Bench “allowed” this appeal (as it enlivened the “public interest’) – the appeal was ultimately dismissed, with the original Commissioner’s decision finding that even though the Nurse had a “contractor’s agreement”, she was in fact an employee and therefore eligible to bring an unfair dismissal.

However, this does not reduce the fact that it provides an excellent guide for practitioners that are faced with the question which has kept courts, from the High Court down, busy for decades: “employee or contractor?” That is, just because you call an apple a lemon, does not mean it is a lemon – it remains an apple.

This decision is also a useful addition to my FREE “Employee or Contractor?” guide.

Background

The Company lodged an appeal, for which permission to appeal is required, against a decision of Commissioner Simpson in relation to an unfair dismissal application by what the company argues was a contractor that was found, by the Commissioner, to be an employee.

The contractor/employee provided home care services on behalf of the company.

The Company is a business that provides nursing services to patients in their homes:

  • Its patient base and revenue are obtained via contractual arrangements with government and other health organisations, principally the Department of Veterans Affairs (DVA).
  • It engages qualified nurses for the purpose of providing its services.
  • The [Nurses Name] was engaged by the Company in November 2013 as a community registered nurse.
  • It was a term of her engagement that she obtain an Australian Business Number (ABN) and enter into an agreement as a contractor.

The contractor agreement

The [Nurses Name] has entered into three successive contractor agreements with the Company during the period of her engagement. Each of these were in a standard form determined by the Company for the purpose of the engagement of all its in-home nursing workers. Her latest (the 2020 Contract) is entitled “Independent Contractor Agreement” and relevantly provides that the [Nurses name] is required to:

  • Have an ABN.
  • Provide Community Nursing Services…and to provide the Services to a commercially acceptable and professional standard.
  • Immediately notify the Company so that the Company may engage another contractor to provide the Services if the Contractor becomes incapable of performing the Service through illness or involuntary injury.
  • The Company may vary the Services by increasing, decreasing, or omitting any of them, changing their character or content, changing their direction or dimensions, or requiring the Contractor to perform additional duties.
  • To ensure that the Services are provided properly and carefully, in a reasonable and professional, businesslike manner, and promptly and to industry standard.
  • Comply with the DVA Service Charter and Australian Public Service values.
  • Follow any lawful direction of the Company in providing the Services.
  • Ensure that the performance of the Services are not interfered with, delayed, or hindered by any other work the Contractor may be doing under any other contract or arrangement with any other person or organisation.
  • Provide its own tools of trade to enable it to provide the Services.
  • Provides that the “Service Fee” (specified in Schedule 1 Item 3 in a table of monetary amounts payable for visits which vary depending upon when the visit is conducted and how long is spent at the client’s premises to deliver the requisite care) is payable within 7 days of receipt by the Company of a fortnightly tax invoice and worksheet.
  • Allows the Company to vary the Service Fee by notice in writing to the Contractor.
  • Provides that the Contractor may engage in other work and assignments provided that they do not involve a conflict with their duties and responsibilities to the Company.
  • To give absolute priority at any time to the provision of the Services to the Company…over any other work or assignments they may be engaged in.
  • “The relationship of the parties is such that the Contractor is appointed as an independent contractor and not as an agent or an employee of the Company. Nothing in this Deed shall be deemed to create an employment relationship between the Company and the Contractor”.
  • That the “Contractor is solely responsible for all payments to the Contractor” in respect of annual leave, sick leave, long service leave, public holidays, redundancy payments and other similar benefits under any law or industrial instrument, superannuation, workers’ compensation and taxation “for and on behalf of the Contractor and any other persons employed or engaged by the Contractor to provide, or assist in providing, the Services to the Company”.
  • The Contractor to hold and maintain any necessary insurance relating to or arising out of providing the Services, including workers’ compensation insurance, public liability insurance and other insurances required by law or regarded as good commercial practice, and provide proof of such to the Company on request, provided that the Company may elect to assist the Contractor in taking out professional indemnity insurance and/or reimburse the Contractor for the cost of this.
  • “The Contractor acknowledges that, as an independent contractor, it is responsible for the cost of providing the Services and for any loss or damage to any third party caused by the manner in which the Services are provided, or arising out of providing the Services, or any related activities or conduct by the Contractor in providing the Services” and provide for an indemnity in this respect.
  • A restraint clause which requires among other things that the Contractor not seek or accept the custom of any of the Company’s customers and not interfere with the relationship between the Company and its customers, franchisees, employees, or suppliers.
  • The Contractor assigns all intellectual property rights to the Company.
  • The 2020 Contract may be terminated by either party on 4 weeks’ notice, and that the Company may in its sole discretion terminate the 2020 Contract immediately without notice upon the occurrence of various specified events, including that the Contractor in the Company’s reasonable opinion fails to remedy its failure to properly perform the Services within one week of the Contractor being advised in writing by the Company of any complaint or performance issues relating to the provision of the Services.
  • “The Contractor must not sub-contract all or part of its obligations under this Deed without the prior approval of the Company. Any permission to sub-contract all or part of the Contractor’s obligations under this Deed does not discharge the Contractor from any liability for the performance of its duties and obligations under this Deed”.

The work of the [Nurses name]

The [Nurses Name] was provided with induction training upon engagement. She was assigned patients to whom she had to provide home nursing services. She initially worked only part-time hours providing the services, and also provided nursing services for another business. However, after a period of time, the Company increased the work assigned to her to a degree which constituted full-time hours, and the Company either instructed or requested that she resign from her role with the other business.

It was up to the [Nurses Name] to determine when and how regularly services would be provided subject to the patient’s requirements and management’s approval. When the [Nurses Name] visited a patient’s residence, she would wear the Company’s name badge and provide the patient with a business card with the Company’s branding. The business cards were provided to the [Nurses Name] by the Company.

Branding

Patient paperwork and folders were supplied by the Company and bore the Company’s logo. At the time of the termination of her engagement, the [Nurses Name] had ordered uniforms from the Company, which were provided to nurses to wear on a voluntary basis at their expense.

Management

The Company had a management structure that oversaw the provision of the services. It would from time-to-time issue instructions to the [Nurses Name] about the performance of her nursing work, including instructions to attend staff meetings from time to time. If the [Nurses Name] wished to take any period of unpaid leave, the approval of management was required. As a matter of practice, if the [Nurses Name] was going to be absent and unable to provide nursing services to the patients allocated to her, she had to arrange another of the Company’s nursing contractors to cover for her. The [Nurses Name] assisted in the training of other newly engaged nursing contractors.

Tools of trade

The [Nurses Name] used her own car to travel to and from patients’ homes, and she bore the expense of this. The [Nurses Name] has also provided “tools of trade” at her expense, at least on a replacement basis, including a stethoscope, oximeter, pen torch, blood pressure monitor, thermometer and blood sugar measurer. Consumables such as gloves, aprons, sacrum protection, anti-microbial alginate dressings, bandages, wound care dressings, numerous creams, incontinence pads, protective sheets and catheter packs were provided by the Company, and the [Nurses Name] took these as needed from the Company’s storeroom at its place of business. Any administrative duties were performed by the [Nurses Name] in her own home using her own computer.

Taxation

The [Nurses Name] was responsible for the payment of tax on her income, and no tax was deducted by the Company from the fees which it paid to her. The [Nurses Name] began charging for GST only towards the end of her engagement, when she was prompted to do so by the Company after it became aware her annual income exceeded $75,000. The [Nurses Name] reported to the Australian Taxation Office (ATO) that she was a Sole Trader/Contractor in her tax returns. She claimed deductions for business expenses in her tax returns over the course of her engagement, with the highest amount claimed being $26,563 in 2015.

The Commissioner’s decision under appeal

In his decision, the Commissioner proceeded on the basis of the multi-factor test for distinguishing between employer-employee relationships and principal-independent contractor relationships as summarised, on the basis of the relevant court authorities, in the Full Bench decision in Kimber v Western Auger Drilling Pty Ltd. The Commissioner also identified the ultimate question to be determined, by reference to the Full Bench decision in Abdalla v Viewdaze Pty Ltd t/a Malta Travel, as being whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business on his or her own behalf such that the worker could be said to be conducting a business of his or her own.

Control?

The Commissioner then proceeded to analyse and make findings in relation each of the factors in the multi-factor test identified in the Kimber decision. The Commissioner first dealt with “[w]hether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like” and, after referring to the evidence given and some of the provisions of the 2020 Contract, made the following findings:

“[47] On the basis of the evidence it is apparent that the patients were assigned to [the Company] by [the Nurses name] and [the Nurses name] did not seek to obtain patients to provide care herself independently of [the company]. Further, she needed approval for leave and any work not performed by her was required to be performed by another nurse connected to [the company]. I am also satisfied on the evidence that [the Nurses name] was directed to assist in the training of others in connection with the performance of nursing work for [the company…and the company] retained the ability to reallocate a particular patient from one nurse to another if for example a patient raised a concern about a particular nurse. The evidence was also that in the event of a patient ceasing to use the services provided to [the company], the patient file was returned to [the company].

“[48] While the Independent Contractors Agreement on its face is written with a clear intent to establish a contracting and not employment agreement, a range of clauses within the Agreement provide [the Company] a greater right of control and direction over [the Nurses name] then is often the case in a contracting arrangement. The overall picture also includes that of [the respondent] appearing to be required to report through a structure of management at the Company. This is indicative of the Company exercising a level of control more indicative of employment than a contracting arrangement.”

Able to work for others?

The Commissioner then dealt with “[w]hether the worker performs work for others (or has a genuine and practical entitlement to do so)”. The Commissioner found:

“[51] The evidence established that [the Nurse name] performed hours of work for the Company commensurate with what would be regarded as approximating full-time employment. While [the Nurses name] did perform brief periods of work for other entities in years gone by this had not been the case for a lengthy period of time. Whilst her most recent employment contract included a term allowing her to engage in other work, the reality is given the amount of work provided by the [company] to [the Nurses Name], that such work could only have been performed on the two days of the week she was otherwise not engaged by the Company, or in the evening after 5.30 pm when she had already completed a full day of work with the Company. This indicia [sic] tends more to indicate employment rather than a contracting arrangement.”

As to “[w]hether the worker has a separate place of work and or advertises his or her services to the world at large”, the Commissioner found that “The evidence does not indicate [the Nurses name] had a separate place of work and [the Nurses name] did not advertise her services to the world at large. This indicia [sic] is more indicative of employment than of contracting.” In relation to “[w]hether the worker provides and maintains significant tools or equipment”, the Commissioner stated the following conclusions:

“[65] The Full Bench decision in Gupta v Portier Pacific Pty Ltd, Uber Australia Pty Ltd t/a Uber Eats ([2020] FWCFB 1698, 296 IR 246 at [65]) did not consider that because Ms Gupta in that matter was required to provide her own vehicle in order to carry out her work necessarily pointed to her being an independent contractor as the vehicle in that case was not a specialised item of equipment and was already owned and used for personal purposes, and the provision of a vehicle is common feature of employment relationships. The same can be said in this case.

. . . .

“[69] Based on the evidence…it would appear that besides the fact [the Nurses name] used her own vehicle to travel, virtually all equipment and medical supplies required by [the Nurses name] to perform her nursing role were provided to her by the Company. [the Nurses name] gave evidence concerning the Company maintaining an inventory of such supplies. The [Nurses name] appears not to have made any significant investment in capital equipment. This evidence is indicative of employment and not an independent contracting arrangement.”

Able to delegate work to others?

In relation to “[w]hether the work can be delegated or subcontracted”, the Commissioner found:

“[78] Based on the evidence it is apparent that [the Nurses name] did not have an unfettered ability to delegate or subcontract work in that it was not a matter entirely within her discretion. The evidence is that [the Nurses name] had to follow certain protocols in providing work to someone else and it was also the case that such work had to be provided to another person also engaged by the Company, presumably so the Company could still retain a degree of control over the performance of that work.

“[79]…Overall the evidence concerning the extent that [the Nurses name] could delegate or subcontract her duties tends more to indicate employment than independent contracting.”

The Commissioner found in relation to whether the putative employer has the right to suspend or dismiss the person engaged that clause 10.2(f) of the 2020 Contract tended to indicate employment rather than contracting. As to “[w]hether the putative employer presents the worker to the world at large as an emanation of the business”, the Commissioner found that “Given [the Nurses name] wore the Company name badge and had a business card, used the Company email address, and used the Company paperwork, folders and a Company bag during consultations with patients, [the Nurses name] was presenting to the world at large as a emanation of the Company which tends to indicate employment rather than a contracting arrangement”.

Taxation?

In relation to “[w]hether income tax is deducted from remuneration paid to the worker”, the Commissioner referred to the evidence given by…a taxation accountant who was called by the Company to give evidence, to the following effect:

“[92] In cross-examination, [the accountant] was asked whether [the Nurses name] would be able to claim expenses if she was an employee. [The accountant] said she would. [The accountant] was asked whether she could claim the same amount on her motor vehicle if she were an employee and was entitled to a travel allowance. [The accountant] said the ability to claim as an employee would not be impacted by a travel allowance.

“[93] It was put to [the accountant] that if an employee uses equipment as part of their role, they could still claim these and that there would be no difference between an employee and a contractor making these claims and Mr Molesworth agreed.”

[18] The Commissioner then concluded: “The evidence is that The Company did not deduct income tax from remuneration paid to [the respondent] which tends to indicate a contracting arrangement and not employment. It is notable however that much of what was claimed by [the respondent] could also be claimed by an employee.”

Paid by results or wages?

As to “[w]hether the worker is remunerated by periodic wage or salary or by reference to completion of tasks”, the Commissioner found:

“The evidence is that [the respondent] was paid fortnightly on the basis of the amount of time she had recorded spent with clients as provided by her. Its seems the method of payment does not fall neatly into the category of a periodic wage or salary in that it was subject to [the respondent] reporting the number and length of visits with clients. However, it also cannot be said that the method of payment is based on purely completion of tasks in that it is not based on a completion of a tasks such, but on the amount of time spent with a client. If anything, the overall method of remuneration tends more to indicate contracting then employment.”

Paid holidays or sick leave?

In relation to “[w]hether the worker is provided with paid holidays or sick leave”, the Commissioner found that [the Nurses name] was not paid for holidays or sick leave and on that basis this was more indicative of contracting. As to “[w]hether the work involves a profession, trade or distinct calling on the part of the person engaged”, the Commissioner found that: “Given that in order to practice as a Registered Nurse, a tertiary level qualification and specialist skills are required, this tends to favour the prospect of the engagement being a contracting relationship rather than employment.”

Creates goodwill?

In relation to “[w]hether the worker creates goodwill or saleable assets in the course of his or her work”, the Commissioner accepted [the company’s] evidence that she did not obtain goodwill or saleable assets in the course of her work over 6½ years, and this tended to support a conclusion that the engagement was employment and not independent contracting.

Business expenses?

Finally, the Commissioner considered “[w]hether the worker spends a significant portion of remuneration on business expenses” and made the following findings:

“[115] The primary costs [of the Nurses name] incurred were in relation to running costs associated with her vehicle. However, as was observed in the matter, in the event that [the Nurses name] was an employee there are means to recover a significant portion of these costs. [The Nurses name] said that she purchased gloves on one occasion when she could not access the inventories of the Company and replaced the blood pressure machine, she had initially been given by the Company on commencement herself when it became outdated.

“[116] Besides expenses associated with her vehicle I have not been persuaded that [the respondent] did spend a significant proportion of her remuneration on other business expenses despite her submitting a number of tax returns which appeared to claim significant business expenses that on her own evidence she is unlikely to have incurred. For example, her evidence was to the effect that she did not do a significant amount of work from home however has claimed reasonably significant home office expenses in several tax returns.”

The Commissioner concluding…

The Commissioner then stated the following overall conclusions:

“[117] I have made findings in relation to each of the indicia as set out above. I have considered the various employment contracts which describe the relationship as one of contracting however as was stated in French Accent ([2011] FWAFB 8307) the parties cannot alter the true nature of their relationship by putting a different label on it.

“[118] I have also given consideration to the fact while [the Nurses name] said the much of the work was equivalent to that of Assistant Nursing or Enrolled Nursing work, at times [the Nurses name] would have exercised a high degree of skill and expertise given her qualifications as a Registered Nurse. As was observed in Stevens v Brobribb ((1986) 160 CLR 16) the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where the work involves a high degree of skill and expertise.

“[119] Using the multi-factorial approach, whilst certain indicia would indicate the relationship was that of independent contracting, and it is clear [the Nurses name] submitted tax returns and claimed expenses as if she were an independent contractor, the overall picture on the evidence is not ambiguous to the extent that the Independent Contracting Agreement of itself sways the matter in favour of the Company. The evidence is sufficiently clear to weigh in favour of concluding that [the Nurses name] was performing work for the Company in the capacity of an employee rather than an independent contractor.

“[120] In the recent Full Bench decision of the FWC in Gupta v Portier Pacific ([2020] FWCFB 1698, 296 IR 246) the Full Bench gave significant weight in that matter to there being no control over the when and how long Ms Gupta performed work, Ms Gupta’s ability to accept work through other competitors, and Ms Gupta not presenting as an emanation of Uber ([2020] FWCFB 1698, 296 IR 246 at [69]). This matter is distinguishable on all three counts. The evidence indicates that in practical terms the Company did exercise a degree of control over when and how long [the Nurses name] worked. Given [the respondent]’s ongoing commitments to the same patients the Company had allocated to her to provide care for on a week in week out, year in year out basis occupying the equivalent of full time employment, and given her contract required her to ensure performance of the service is not interfered with or delayed by the performance of any other work with any other person or organisation (clause 3.1) it is not realistic to say that [the Nurses name] was free to accept work from others of her own choosing. Finally, as was concluded earlier unlike the case in Gupta, [the Nurses name] did present as an emanation of the Company.

“[121] The ultimate question is whether [the Nurses name] was a servant in the Company’s business or viewed practically, she was carrying on a trade or business of her own. I am satisfied on the evidence that in practical terms the Company retained rights of control over [the Nurses name] to such an extent that [the Nurses name] was an employee of the company and was not conducting her own business…”

The Full Bench’s decision

Consideration

The FB reviewed the facts and the Commissioner’s previous decision (ie the decision under appeal):

“We consider that it is in the public interest to grant permission to appeal in this case. The question of whether [the Nurses name] for an unfair dismissal remedy was, at the time of the alleged dismissal, an employee of the party against which a remedy is sought is one of jurisdictional fact. This means, for the purpose of the exercise of the appellate function, that the decision is not be treated as one involving the exercise of a discretion; rather it involves the application of a legal standard to a given set of facts. Appealable error will be found if on appeal a different conclusion on the facts and the law is reached than that arrived at by the primary decision-maker. Further, notwithstanding the conclusion we reach later in this decision, it cannot be said that the question of whether [the Nurses name] was an employee of the Company or performed services for the Company in the capacity of an independent contractor has an easy and obvious answer. Appellate review is appropriate in these circumstances. Accordingly, permission to appeal is granted”.

The company’s appeal

“For the most part, the Company’s grounds of appeal invite us to reach a different conclusion concerning [the Nurses name] status than the conclusion reached by the Commissioner by reconsidering the proper conclusion to be reached on a number of the factors relevant to the multi-factor test identified in a number of High Court decisions, most notably Stevens v Brodribb Sawmilling Co Pty Ltd…[I]t is necessary at the outset to consider…by which The Company contends that primacy in the analysis is to be given to the characterisation of the relationship between the Company and [the Nurses name] in the 2020 Contract and its predecessors, and that the way in which the contracts were implemented in practice should not have been given more significance than the contractual labelling”.

The contract

“We do not accept this contention, and we agree with the approach taken by the Commissioner whereby he considered the substance of the rights and obligations under the 2020 Contract, and how those rights and obligations were applied in practice, to be the primary considerations. The correct approach, derived from the relevant court authorities, was described in the recent Full Bench decision in Gupta v Portier Pacific Pty Ltd as follows:

“However all the above provisions may be regarded as merely labelling or characterising the nature of the contractual relationship between Ms Gupta and Portier Pacific/Uber; none of them set out the substantive rights and obligations of that relationship. It is well established that such labels cannot alter the substantive nature of the relationship. As was stated by Isaacs J in Curtis v Perth & Fremantle Bottle Exchange Co Ltd ([1914] HCA 21, 18 CLR 17):

‘Where parties enter into a bargain with one another whereby certain rights and obligations are created, they cannot by a mere consensual label alter the inherent character of the relations they have actually called into existence. Many cases have arisen where Courts have disregarded such labels, because in law they were wrong, and have looked beneath them to the real substance.’”

The way the work is carried out

“More recent decisions of the Federal Court Full Court have elucidated this principle in the context of the identification of whether an employment relationship exists. In ACE Insurance Limited v Trifunovski, Buchanan J (with whom Lander and Robertson JJ agreed) said that “the nature of the relationship may be legitimately examined by reference to the actual way in which work was carried out” ([2013] FCAFC 3, 209 FCR 146, 235 IR 115 at [91]). In Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd, North and Bromberg JJ (with whom Barker J relevantly agreed) said that: “…appellate courts in Australia and the United Kingdom have been particularly alert, when determining whether a relationship is one of employment, to ensure that form and presentation do not distract the court from identifying the substance of what has been truly agreed. It has been repeatedly emphasised that courts should focus on the real substance, practical reality or true nature of the relationship in question…” ([2015] FCAFC 37 at [142], Barker J agreeing at [316]). And in WorkPac Pty Ltd v Skene the Full Court said “The conduct of the parties to the employment relationship and the real substance, practical reality and true nature of that relationship will need to be assessed ([2018] FCAFC 131 at [180]).”

“To the above summary might be added the following statement made by the High Court majority (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ) in Hollis v Vabu Pty Ltd:

“It should be added that the relationship between the parties, for the purposes of this litigation, is to be found not merely from these contractual terms. The system which was operated thereunder, and the work practices imposed by Vabu go to establishing “the totality of the relationship” between the parties; it is this which is to be considered.”

“Accordingly, although not irrelevant, the characterisation of [the Nurses name] status in the 2020 Contract and its predecessors as that of an independent contractor and not employee is of lesser significance in the face of substantive contractual rights and obligations which, as applied in practice, point in a different direction.

Arrangement of her affairs

“The Company…seeks that significant and indeed decisive weight be placed on the fact that [the Nurses name] arranged her affairs as if she were an independent contractor, consistent with the contractual characterisation of her relationship with the Company. This included that she operated with an ABN, issued tax invoices to the Company, eventually charged the Company with GST, and declared in her tax returns that she was a contractor. It is to be accepted that these are matters which weigh to some degree in favour of a conclusion that [the Nurses name] was a contractor. However, we do not consider that these matters are to be given the decisive weight contended for by the Company since they are all consequential upon the contractual characterisation of the relationship – a characterisation in substance determined by the Company through the standard-form contracts it used as the sole basis for the engagement of its in-home nursing staff, including [the Nurses name]. As was stated in the Federal Court Full Court decision in ACE Insurance Limited v Trifunovski (per Buchanan J, with whom Lander and Robertson JJ agreed):

“One of the strongest arguments in favour of the appellant’s position was that the agents themselves had organised their affairs on the basis that they were not employees, an arrangement which met Combined’s requirements. The arrangements to which the trial judge referred, whereby for taxation purposes the agents were treated as non-employees, are clearly not decisive in their own right. They follow the prior assumption about employment (or more correctly non-employment). That assumption led to what was done about income tax deductions, GST, payroll tax, superannuation contributions and the like.”

“Buchanan J added:

“It is also difficult, in my view, to give much independent weight to arrangements about taxation, or even matters such as insurance cover or superannuation. These are reflections of a view by one party (or both) that the relationship is, or is not, one of employment. For that reason, in my view, those matters are in the same category as declarations by the parties in their contract (from which they often proceed). They may be taken into account but are not conclusive.”

“In respect of [the Nurses name] tax returns, The Company submitted that the work expenses claimed by [the Nurses name] as deductions from her taxable income should have been treated as a substantial indicator of her being a contractor. We disagree, for a number of reasons. First, the mere fact that a person performing work for another claims expenses incurred in the performance of that work as tax deductions, even when the amounts claimed are of significance, is not of itself determinative of the person’s status, as the decisions in ACE Insurance Limited and Jamsek v ZG Operations Australia Pty Ltd demonstrate.

“Second, the expenses claimed were primarily for the provision of [the Nurses name] motor vehicle and for her home office. It is not uncommon for workers who are undeniably employees to use their personal motor vehicle for work travel, and also to establish home offices for the purpose of working from home. In this connection it may be noted that clause 16.5(a) of the Nurses Award 2010 provides for an allowance of $0.80 per kilometre for an employee “required and authorised to use their own motor vehicle in the course of their duties”. The tax expert called by The Company to give evidence…said that there is no distinction in the capacity of employees or contractors to claim tax deductions for the cost of personal motor vehicle and home office use for work purposes…

“The motor vehicle provided by [the Nurses name] was not a specialised piece of equipment requiring particular skill or expertise to operate, but simply a car which could equally be used for private purposes. There is no basis to conclude that it constituted a capital investment of significance for the purpose of the operation of a business. The same can be said of the establishment by [the Nurses name] of a home office. The evidence as to the “tools of trade” did not establish that any substantial cost was involved in their purchase.

“Third, the Company’s characterisation…of the amount of expenses claimed as deductions as being ‘substantial’ or ‘significant’ requires scrutiny. The tax returns for the earlier years of her engagement with the Company, which nominally show a high proportion of her income being consumed in business expenses, are problematic. In those years [the Nurses name] was also earning income from [another company], with this appearing to be her primary income source initially, so they do not necessarily provide an accurate picture with respect to her engagement with the Company. Additionally, in the 2014/15 financial year, [the Nurses name] seems to have obtained an instant asset write-off for the purchase of a car, which added $14,692 to her deductions for that year, resulting in an unusually high 63.9% of her income being deductible in that year. The later years for which tax returns were available, during which [the Nurses name] was working exclusively for The Company, give a more consistent picture: in 2016/17, [the Nurses name] earned $96,420 and had expenses of $13,858 and, in 2017/18, [the Nurses name] earned $104,155 and had expenses of $15,493. We do not regard tax deductions of this order necessarily to be indicative of a contracting rather than employment relationship”.

Work was obtained by the company

“There are, as the Commissioner found, a number of indicia which firmly point to the existence of an employment relationship. The first is that it cannot be said that [the Nurses name] was conducting a business of her own. The patients she provided services to were obtained by the Company through its commercial contractual arrangements and allocated to [the Nurses name]. There was no evidence that [the Nurses name] had the capacity on her own initiative to increase the number of her patients and thus increase her income. The patients had no separate contractual or commercial relationship with [the Nurses name] and the 2020 Contract expressly restrained [the Nurses name] from such arrangements. As a consequence, [the Nurses name] acquired no goodwill or saleable asset

No right to sub-contract or delegate

“The second is that there was no effective right for [the Nurses name] to subcontract or delegate the performance of the services under the 2020 Contract or its predecessors, as the Commissioner found, with the consequence that the arrangement was in substance one for personal service. Under clause 13.8 of the 2020 Contract, [the Nurses name] was not permitted to sub-contract her obligations under the contract without the prior approval of the Company, and there was no evidence that such approval was ever sought or obtained. She was not permitted or required to supply another nurse to replace herself if she were sick or injured, since clause 2.2 simply required her to immediately notify the Company in this eventuality so that the Company could arrange another contractor to provide the services. In practice, [the Nurses name] was required if absent to arrange for another nurse contracted to the Company to replace her. However, we reject the contention advanced by the Company…that this amounted to a right of delegation. The proper characterisation of this practice is that the Company assigned to [the Nurses name] its administrative task under clause 2.2 of arranging another contracted nurse to replace her. The evidence showed that she was certainly not allowed to arrange anyone external to the Company to replace her. We also reject the Company’s contention that the requirement for [the Nurses name] to communicate instructions and advice to another contracted nurse if handing over a patient was in some way indicative of a right to delegate. This was a sensible administrative arrangement required by the Company to ensure quality and continuity of care and is indicative of [the Nurses name] being employed in a business conducted by the Company”.

Control of work

“Third, The Company controlled the work of [the Nurses name] in important ways. The legal means of control were provided by the 2020 Contract (and its predecessors). Clause 2.3 of the 2020 Contract gave The Company the power to determine the quantity and nature of the services to be provided by [the Nurses name], and under clauses 2.1 and 3.1(a) [the Nurses name] was required to perform those services promptly to a commercially acceptable and professional and industry standard and to dedicate an appropriate time for the provision of the services. Clause 3.1(g) required [the Nurses name] to follow any lawful direction made by the Company as to the provision of those services. Assessed cumulatively, these provisions gave the Company legal control over what amount of work was to be performed by [the Nurses name], what the nature of the work was to be, and how it was to be performed.

“The evidence showed that, in practice, The Company gave considerable latitude to [the Nurses name] as to when and how the work was to be performed. This may be regarded as consistent with allowing [the Nurses name] to exercise quasi-professional judgment as to the degree and timing of the nursing care to be provided to individual patients. However, the Company certainly did exercise its legal powers of control over the allocation of work, to the extent that in or about 2016 it instructed or requested that [the Nurses name] resign her engagement with [the other company] in order for her to provide services to additional patients. Additionally, it exercised control through the arrangements required to be made when [the Nurses name] was sick or injured, as previously discussed, the requirement that [the Nurses name] attend staff meetings from time to time, and the requirement for her to obtain permission from the Company before taking any period of unpaid leave. We therefore agree with the Commissioner’s conclusions that the extent of the Company’s control over the performance of work by [the Nurses name] was indicative of the existence of an employment relationship…”

Work exclusively for the company

“Fourth, the Company had the legal right to, and did in practice, require [the Nurses name] to work exclusively for the Company. Although, as the Company submitted, clause 5.2 of the 2020 Contract allowed [the Nurses name] to engage in other work provided that this did not conflict with her duties and responsibilities to the Company, clause 5.4 empowered the Company to require [the Nurses name] to give absolute priority to the provision of services to the Company under the contract over any other work or assignments. This provision, together with the capacity of the Company under clause 2.3 of the 2020 Contract to require [the Nurses name] to provide a quantity of services amounting to full-time work, meant that the Company had the legal means to require exclusivity. The evidence did not establish that the Company invoked its equivalent powers under earlier contracts to achieve exclusivity, but it is clear that this is what it did by increasing the allocation of patients to [the Nurses name] to a level that required a full-time commitment and instructing or her requesting her to resign from her engagement with [the other company]. We consider that the Commissioner was correct in concluding that this indicium supported a finding that an employment relationship existed…”

System of payment

“Fifth, the payment system is one more relatable to [the Nurses name] being an employee rather than an independent contractor. Under the 2020 Contract, the rate of payment was as provided for in Item 3 of Schedule 1, or as varied by the Company on notice pursuant to clause 4.2. There was no capacity for [the Nurses name] to set or bargain for a price for the provision of her services to The Company. The rate structure provided for in the 2020 Contract was a hybrid of a piece rate and a time-based rate, in that [the Nurses name] was paid per visit to patients at their homes, but the payment varied depending on the length of the visit. Because, as earlier explained, the 2020 Contract was in substance one for personal services, the payments were made for the provision of [the Nurses name] personal labour, and not for the production of a result by whatever means [the Nurses name] selected”.

Emanation of the company

“Finally, to a limited degree, [the Nurses name] presented herself to the patients as an emanation of the Company in that she had the Company-branded name badge, business card, folder and paperwork and, at the time of the termination of her engagement, she had the Company uniforms on order. There was no countervailing evidence to the effect that she presented herself to the patients or the public at large as operating her own business.

Disagreement with the Commissioner’s decision

“There is one conclusion reached by the Commissioner with which we disagree. In paragraph [113] of the decision, the Commissioner found that because [the Nurses name], as a Registered Nurse, held a tertiary level qualification and exercised specialist skills, this “tends to favour the prospect of the engagement being a contracting relationship rather than employment”. This cannot be correct. The same proposition is true of all nurses, as well as other occupations such as teachers, engineers and lawyers, the large majority of whom work as employees. In the absence of evidence that [the Nurses name] performed her work as a nurse in a business of her own, we consider that this must be treated as a neutral consideration. This conclusion is, of course, not one that favours the Company in its appeal.

The FB’s summary

“The degree of control which the Company had over [the Nurses name] work, its capacity to require her to work exclusively for the Company, the system by which she was remunerated, her lack of capacity to subcontract or delegate her work, the lack of any evidence that [the Nurses name] ran a business on her own account, and her presentation as working in the Company’s business rather than her own, lead us to conclude that she was an employee of The Company. These are matters going to the substance of the relationship. [The Nurses name] conduct of her tax affairs and the fact that she held an ABN, charged GST (at the Company’s insistence) and rendered tax invoices are matters of lesser weight because they are merely consequential upon the contractual label given to the relationship – a label which arose because the Company required its nurses to contract with it on that basis”.

Cases cited

1   [2020] FWC 4782

2   [2015] FWCFB 3704, 252 IR 1

3   [2003] AIRC 504, 122 IR 215 at [34]

4   [2020] FWC 4782 at [58]

5   Ibid at [80]

6   Ibid at [87]

7   Ibid at [97]

8   Ibid at [103]

9   Ibid at [113]

10   Ibid at [114]

11   [2017] FWC 1264

12   [2020] FWC 3122

13   [2020] FCAFC 119, 297 IR 210

14   [2011] FCA 366, 214 FCR 82, 206 IR 252

15   [2020] FWC 3122

16   Sammartino v Foggo [1999] FCA 1231, 93 IR 52 at [9]-[10]; Jamsek v ZG Operations Australia Pty Ltd [2020] FCAFC 119, 297 IR 210 at [2] per Perram J and at [171]-[174] per Anderson J

17   [1986] HCA 1, 160 CLR 16

18   [2020] FWCFB 1698, 296 IR 246

19   [2001] HCA 44; 207 CLR 21, 106 IR 80 at [24]

20   [2013] FCAFC 3, 209 FCR 146, 235 IR 115 at [122]

21   Ibid at [37]

22   [2013] FCAFC 3, 209 FCR 146, 235 IR 115 at [133], [137]

23   [2020] FCAFC 119, 297 IR 210 at [189]-[190]

24   Transcript, 23 June 2020, PNs 209-211

25   See Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52, 184 FCR 448 at [40]-[41]; ACE Insurance Limited v Trifunovski [2013] FCAFC 3, 209 FCR 146, 235 IR 115 at [133]; Jamsek v ZG Operations Australia Pty Ltd [2020] FCAFC 119, 297 IR 210 at [206]-[207]

26   [2020] FWC 3122

27   Ibid at [68], [70]

Introduction

Read the full decision here.

What happens when two work colleagues have worked harmoniously for almost a decade, suddenly cannot simply work well together. In this case gun licences, referencing mental health issues, a somewhat arrogant MD and a scathing FWC member.

In this unfair dismissal matter, the managing director represented the company and the applicant defend herself. The applicant having been employed for some 91/2 years, starting as a receptionist to administrative manager. The applicant’s “crime”: taking sick leave without approval, plus sending allegedly “confidential” emails to her private email address – an email account she shares with her husband (which had the FWC member somewhat mystified that she did not have her own email account).

The email

The email in question relates to the behaviour of the applicant’s co-worker (“ZA”), which the applicant passed on to another employee, who then forwarded to the medical clinic that was to assess the co-worker’s behaviour. It read:

“Hi

I am sure there is more, but this is a start

Bullet points

  • Short fuse
  • Staff freighted to talk to him in case he losses it (has smashed trays at work, kicked and threw a chair)
  • Victim
  • Selfish
  • Takes no responsibility for actions
  • Threatens to kill himself (putting 2 fingers to his head)
  • Said everyone is inconsiderate (on the road), so now doesn’t indicate, speeds and if he dies, so be it
  • Gun licence – guns and bullets at home
  • Said if he losses his guns then life is not worth living as these are the only things that make him happy
  • Money – will not spend as if he has to now that means his whole life has been a waste
  • Worries about everything to the extreme – laid awake at night worrying if neighbours were going make noise
  • wont drive into city and will not pay for taxi so IBS staff have to take him or pay for cabs
  • Doesn’t want to go on any medication, he said it is better for everyone else but no him, so not doing it
  • Should of stayed in Cairns????? Took drugs, drank and got a slut pregnant
  • Talked about trying something new, but said if he doesn’t like it after 3 months then its been a waste of money
  • Lives with mum
  • The only thing that would make him happy is more money, and opening up a gun range/place to ride bikes or quads
  • Doesn’t understand why he hasn’t got a girlfriend
  • Hates Brisbane and talks of moving back home
  • Depressed and miserable all the time
  • Doesn’t attend work Christmas parties…..”
[original text]

Following receipt of the above correspondence from the applicant, the other employee forwarded a copy of the email to a reception email account of the medical clinic to where the problematic co-worker was to attend an appointment. In doing so the other employee included the correspondence below:

“Hi

We are bringing [Mr ZA] in on Friday at 11am to see [doctor’s name] for his appointment.

I thought it best that we right down a few things that we are very concerned about and why the company is paying for his initial treatment.

The office is “walking on eggshells” at the moment so we have written down below an insight on to what is going on.

Please add this to his file. I will be the one driving him in on Friday.

He’s a good [occupation] but we are very concerned about his mental health.

Kind regards

[Name]

Bookeeper”

[original text]

Why MR ZA was being sent to a psychiatrist was not explained – only inferred.

Confidentiality Order

The Commissioner granted the “co-worker” a Confidentiality Order, so economising his name to “ZA”.

Co-worker v Applicant

The applicant stated that she asked Mr ZA a question three times, and after he ignored her, she asked him, “Are you deaf?”. He replied that she was a raging bull and that she had better watch herself. Her evidence is that he made that statement with real malice and hatred. Further, Mr ZA said to her, “We all know what you areyou’re a vindictive narcissist, and you better look that up”. The applicant replied that she knew what it meant to which he replied, “I bet you do”. The applicant went home early that day as she felt threatened.

Manager’s fear of being shot

The applicant met with management representatives the next day to explain what had happened. She requested Mr ZA be given a written warning as she felt threatened in the office. Her evidence is that a management representative said he didn’t want to do anything just in case it set Mr ZA off and he came in and shot them.

At no stage throughout the dealings with Mr ZA was there any conflict resolution undertaken. The best that management did was advise the applicant to stay away from ZA.

The applicant claimed that on many occasions Mr ZA would walk past her desk to leave the office, and he would say words to the effect, “Still here, you won’t be for long, narcissist”. The applicant acknowledged that on some occasions she snapped back at him.

MD has been watching too many courtroom dramas

In a fruitless attempt to go to the applicant’s state mind, the MD brought up domestic violence issue that the applicant had suffered. However, the Commissioner was on to this tactic, as the bringing this issue to the table brought forward the fact that this had occurred some eight years previous and was of no probity value; and painted the MD in a very poor light. Put plainly, it backfired.

Not to be beaten on this point, the MD then went on to suggest that the applicant’s stress was caused by a car accident and wrote off her car. The applicant provided correspondence from her insurer indicating that the vehicle was repaired and not written off.

Dismissed for serious misconduct

The applicant, being dismissed for serious misconduct, was not paid notice period and was six months from being eligible for long service leave (this being in Queensland).

The Commissioner’s own words…”pretty thick”

I will leave it to the Commissioner’s own words which are very pointed, noting that I have highlighted the juicy bits):

“Upon learning that she was likely going to be taking some time off work, [the MD] took it upon himself to declare that it would be paid as annual leave, and that if she did not return to work by Friday, he would be looking for somebody to replace her. Another employee (the same one who sent the email to the medical clinic] relayed this information to [the applicant]. [The MD] asks the Commission to accept his evidence that he did not consider dismissing [the applicant earlier] on account of her absence from the office, and when he said he would need somebody to replace her, he meant that he would need the job to be performed by somebody in her absence.

“It is difficult to accept [the MD’s] evidence on this issue when he said…that [the applicant] would have to be “pretty thick” if she didn’t get the message that if she didn’t attend work…she should know that she was being dismissed”.

The Commissioner goes to town on the MD

“I find [the MD’s] views on [the applicant’s] absence from the workplace…to be astounding. He is not a doctor, yet he considered that she was retaliating against him. He had no regard for the medical certificate obtained by her, issued by a medical practitioner, and in these proceedings appeared to me to unnecessarily eager to discuss the fact that she had, many years ago, and not in her present relationship been a victim of domestic violence. Why he did so appears to me to be perverse and demonstrative of his views of [the applicant]. It is not clear why [the MD] thought it appropriate to raise this issue. Did he think the Commission would think less of [the applicant]? Think her weak? Think her a victim? Think her the continual subject of abusive men? The fact that [the applicant] was a victim of domestic violence many years ago has no bearing on why [the applicant] was declared absent from work at this relevant period of time…[The MD] need be assured the Commission thinks poorly of [the MD] for even raising the issue, not [the applicant] for her past unfortunate circumstances.

“Further…[the MD} rudely suggested that perhaps it was [the applicant] and not Mr ZA who should have been seeing a psychologist. [The MD’s] contempt for [the applicant] was evident, and in my view unpalatable, unnecessary and unwarranted. It appeared to me during the hearing that [the MD] simply wanted to point-score against [the applicant], yet he did not impress me at all, nor did he succeed in his attempt to point-score.

“This is evident [when] I was questioning [the MD] if [the applicant] needed his permission to be absent from work on account of being ill and he laughed at the question put to him. His contempt for the question being put demonstrated to me the arrogance that [the MD] dealt with [the applicant’s] absence; how dare she be ill and not well enough to attend for work!”

Permission not required to take sick leave

“[The applicant] did not need [the MD’s] permission to be absent from work…She was excused from attending for work by a medical practitioner…who declared on a workers’ compensation medical certificate that she would be examined again on 11 April 2020.

“[The applicant’s] obligation to the Respondent was to inform the Respondent of her inability to attend for work and provide evidence of such. She met this obligation and did not attend for work during the period of her incapacity.

“Where [the applicant] did not need to obtain consent to commence taking leave on account of her incapacity, she did not need to consult with the Respondent to make a workers’ compensation claim. [The applicant] had statutory entitlements regarding personal leave per ss.95, 69, 97, 98, 99 of the Act, and a statutory entitlement to make a worker’s compensation claim. Relevantly, s.352 of the Act provides that:

‘An employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations.’

“Similar provisions apply at s.772 of the Act. Ms Tracy was certified unfit to attend for work until 11 April 2020. She provided the evidence required at regulation 6.04 of the Fair Work Regulations 2009.

“[The applicant] left the Respondent short-staffed during a critical time for the Respondent’s business. This is a fact, not a feeling, sentiment or perception. Her inability to perform work would have been the same if she had been suffering from gastroenteritis, influenza, or any other ailment preventing her from performing work. It was [the MD’s] inference that she was deliberately pulling a “strike” on the Respondent that contributed to the Respondent’s decision to dismiss her.

“For the above reasons, one of the reasons for the dismissal, being the Respondent’s assertion that [the applicant] took unauthorised and unwarranted leave in a time of crisis is not a valid reason for the dismissal.”

Breach of confidentiality

“Primarily, the Respondent contends that [the applicant] either did not have exclusive use of the email account shared with her husband, or it was her husband’s email account and not hers. The termination letter states the following, suggesting that it was because it was sent to [the applicant]:

‘You not only betrayed this trust by taking unapproved leave at a time of national crisis but you also forwarded sensitive internal emails to other parties [the applicant’s husband] on [date/time] using the admin account. This is a direct violation of [the respondent’s] Policy and directly affects government restrictions on OTP payroll conditions for suppliers. It is also a violation of your Employee Confidentiality Contract and Employment contract. This violation alone is sufficient cause for instant dismissal.’ [The Commissioner’s emphasis].

“[The MD], put to [the applicant] that it was odd that a woman would share the same email account as her husband. [The applicant] responded that she had done so for around three years. I do accept that it is an odd thing to do; [the applicant] would no doubt have had her own personal email account prior to meeting her now husband, but now shares use of his account which uses his name. Why [the applicant] gave up using a prior, personal email account has not been explained. I accept her evidence that she and her husband share the account. I do not accept the inference that it is solely an account for [the husband’s] use and therefore it would mean there was a further improper reason for sending the emails to [the husband’s] email account.

“While the forwarding of work emails to an employee’s email account (or one that is shared with a family member) should be discouraged, in these circumstances I do not accept that it constituted a breach (or if it did it was not a serious breach) of the Respondent’s policies. Nor do I find that at common law it would constitute a breach or serious breach of confidentiality obligations an employee in [the applicant’s] position owes to the Respondent.

“The most ‘damning’ email included in the emails [the applicant] sent to herself…is the one prepared by her, with her own thoughts and opinions on Mr ZA’s psychological issues. It is clear that this is what she considered to be significant issues with Mr ZA’s psychological state in [at the time], and she listed them and forwarded them to [another employee]. [The other employee] then added her own email to provide context to the relevant medical practitioner who was shortly going to be examining Mr ZA.

“There was nothing company-sensitive in the material…I do not accept that the material [the applicant] sent herself would constitute the defined term of Confidential Information…Any reliance on it then being Confidential Information and a breach to share is not then supported.

“I accept [the applicant’s] evidence that she was encouraged to provide as much relevant information to her workers’ compensation claim as was necessary. [The applicant’s] own opinions on Mr ZA’s psychological condition was, in my view, not overblown or overstated as asserted by the Respondent. She held genuine and real concerns, based on Mr ZA’s various statements to her over a relatively short period of time that Mr ZA was unstable.

“I accept [the applicant’s] evidence that Mr ZA put two fingers to his head and suggested that he didn’t want to be here (as here on Earth, not at work or in his location as suggested by him in his evidence). I accept [the applicant’s] evidence that she was dealing with a real scenario of an employee violently punching a chair, intimating suicide by putting two fingers to his head, and she demonstrated the appropriate duty of care to Mr ZA by meeting with him privately and investigating the issue.

“[The applicant] reported all of this information at the time. [The MD] has, in my view, now turned on [the applicant] and conveniently forgotten the seriousness of the issue because of his loyalty to Mr ZA. He approved and endorsed the medical examinations of Mr ZA with the information he had before him at the time. It appears to me that [the MD]…had no regard to [the applicant’s] sizeable length of service with the Respondent and her exemplary employment history, but reverse engineered a determination that [the applicant] was the root cause of Mr ZA’s mental health issues. This is so despite a very good relationship existing between [the applicant] and Mr ZA for the period late 2010 to August 2019.

“Where [the applicant]left the meeting of 18 March 2020 in tears, with [the MD] suggesting she might find another job, and he would choose Mr ZA over her if necessary, it is understandable that [the applicant] might gather for herself a modest amount of material generated during work time to assist with her in making her workers’ compensation claim.

“The mere fact that [the husband] might read these emails is, in the circumstances, not an important issue. [The applicant] no doubt discussed with [her husband] the concerns she held about Mr ZA’s psychological state, including her concerns regarding his access to firearms.

“I do not accept that the material sent by Ms Tracy to herself constitutes employee sensitive medical information. All it simply confirms is that Mr ZA had medical appointments which is a fact. The emails do not contain medical information.

“The Respondent’s submissions make it clear that the Respondent was more concerned with Mr ZA’s potential emotional breakdown than that of [the applicant]. This is so because of the more valued position Mr ZA holds within the Respondent and his known fragile state. [The MD] was, as is demonstrably clear, more concerned with Mr ZA bringing a workers’ compensation claim against the Respondent than he was about [the applicant] doing the same. When she did, he immediately dismissed her.

“Further…the Respondent appears to me, to make some concession that if [the applicant] is correct, the Respondent’s employees might be at risk if Mr ZA had a psychiatric breakdown. This is supported by [the applicant’s]…evidence…where [the MD] suggested that Mr ZA should not be set off as he could come into the office and shoot people up

“I reject the Respondent’s assertion that [the applicant’s] act of sending the emails that she sent to herself would affect the Respondent’s reputation in the marketplace or with the ATO as a trusted data repository and processor. There is no evidence that this constituted any sort of data breach, was reportable, or would otherwise become widely known.

“For the above reasons, one of the reasons for the dismissal, being the alleged breach of confidentiality is not a valid reason for the dismissal”.

The Commissioner becomes medically trained?

In what to me sounds contradictory, in that the Commissioner noted the lack of medical training of the MD relating to the sick leave certificate, went on to comment:

“I accept [the applicant’s] evidence that Mr ZA would, at times, ask her if she was still at work and call her a narcissist. He clearly was projecting all of his own issues on her, making out that they were her fault and not his. I have no doubt she held concerns about his conduct, yet she was still doing her work right up until 18 March 2020 when [the MD] suggested she should find other work because of the conflict in the office”.

[…]

“For the above reasons, one of the reasons for the dismissal, being the ongoing conflict and alleged bullying of Mr ZA since August 2019 is not a valid reason for the dismissal”.

The Commissioner rips into the MD in concluding

In finding that there was no valid reason for the dismissal, the Commissioner summarised the matter as follows:

“The MD’s] conduct in the manner of the dismissal is, in my view, one of the poorest displays of a respondent I have seen since being appointed to the Commission. One of the reasons for the dismissal was [the applicant’s] absence from work whilst incapacitated. During the hearing [the MD} made further statements that she would have been “thick” if she had not have known that she would have been dismissed from the role if she didn’t return to work.

“Unfortunately for [the applicant], [the MD] placed his loyalties with Mr ZA and determined that he would rather see Mr ZA remain in the business than [the applicant]. Fortunately for [the applicant], she no longer has to work for [the MD]”.

The Commissioner then philosophises that:

“When one runs their own business, it would be helpful to have some self-reflection of one’s own conduct. It is almost impossible to imagine how [the MD] could reason that the Commission would not find for [the applicant] with all of the information before it. This is so, despite [the MD’s] “declared victory” in having [the applicant’s] workers’ compensation claim rejected. The considerations before WorkCover Queensland are not the same as the considerations before the Commission.

“I find that [the applicant’] dismissal was harsh, unjust and unreasonable. Whilst it is not necessary to determine all three grounds, I find that [the applicant] was unfairly dismissed”.

Remedy

The Commissioner ordered that the applicant be awarded compensation to the maximum allowed, that is six month’s pay plus superannuation ($32,850).

However, in a twist, the Commissioner ordered that the applicant produce to his chambers bank statements for the period from her dismissal to the date of the hearing to determine whether the applicant had earnt any income during this period (as this would ordinarily be deducted from any compensation order).

A nod to COVID-19

The Commissioner ended on:

“I regret that there has been a sizeable delay for the parties in having this matter determined by the Commission. This is due to the large number of reserved decisions I currently have before me as a result of the spike in various applications in this very unusual year. I consider it would not have been appropriate for the material above …to have been sought in the lead-up to this decision being released as it would have foreshadowed that I have made a finding of unfair dismissal”.

Even over the festive season, the FWC continues to operate, advising that the 21-day limit for unfair dismissal/adverse actions will still be enforced.

See my FREE resource “Extension of Time in the Fair Work Commission”. This could save you $thousands!

There is a 21-day time limit for lodging unfair dismissal applications and general protections dismissal applications. It is very important that you get your application in before the deadline.

We count the 21 days from the date your dismissal took effect.

If the deadline falls on a weekend or a public holiday, we will extend the time limit to the next day. This deadline still applies even if our office is closed.

FWC Annual report 2020-2021 in its historical context

The latest annual report from the Fair Work Commission is titled “Access for Justice”. I know several employers who would strongly disagree! As I have done for many years now, I report on the longitudinal study of unfair dismissal and adverse action claims. This is an eye-opener…I will also touch on other aspects of the Commission’s work and a bit of history. Enjoy.

First up, if you are a business that employs people and one (or more) of those people are not performing their duties to your satisfaction or done something that constitutes serious misconduct I urge you to read for FREE resource Preventing Unfair Dismissals and Unfair Actions.

The cash-grab that is the unfair dismissal industry

With the advent of the “unfair dismissal” legislation in 1997, this opened a previously unheard of business opportunity for lawyers and non-lawyers (known as “paid” agents) to expand their previous workers compensation businesses to what we now see as the proliferation of “no-win, no-fee” providers. This, for the first time, allowing sacked employees to seek redress in the FWC for being dismissed.

To illustrate my point, this financial year 2020-2021, will see the 300,000th unfair dismissal claim. At a conservative average of $10,000 per claim, this means that employers have shelled out $30,000,000!

The last financial year saw a year-on-year increase of 10 percent of unfair dismissal claims from last year.

For a year on year, the analysis goes to Preventing Unfair Dismissals and Unfair Actions.

The Fair Work Commission: How we got to where we are?

As with most Government actions, the establishment of (the now) FWC was born out of adversity; in this case the “great strikes” of the 1890’s which resulted in the colony of New South Wales conducting a Royal Commission into the strikes.

Fast forward to 1904 (three years post federation), where Henry Bournes Higgins, the industrial relations delegate for Victorian, said that a new Australian constitution should include a power to make laws with respect to:

“conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State”.

Noting that this term evolved over time to be called “interstateness”. Unions learning to circumvent this requirement by serving a log of claims on a company (say in Victoria) that they were targeting, and then a random company in (say NWS). These so-called “logs of claims” were a written document served on two or more employees that were so fanciful they could not be agreed (think 52 weeks annual leave per year). Because a company would not/could not agree to such an outrageous claim, this be definition put the union in a dispute with the company, and the “interstateness” was established. And hence the agreed outcome became the first commonwealth industrial awards (being the “agreed” outcome arbitrated by the (then) Australian Industrial Relations Commission.

See the historical timeline at the end of this report for a very interesting insight into how our industrial relations evolved.

The Kennett era

When the (then) Premier of Victoria was elected, he decided it was his mandate to get the state “back in the black”. His strategy to get the finances of Victoria back to “AAA” status was to sell off most publicly owned services to the private sector and move what he could from state-control to being financed by the federal government (not to mention removing the Melbourne Show Day public holiday).

Until this time, Victoria has two systems of industrial relations tribunals: “state” (located at the lower levels of Nauru House) and Federal or Commonwealth (upper levels of Nauru House).

In 1996 he disbanded the Victorian state tribunal and “transfers its powers” to the commonwealth for the private. Sector. The public sector followed in 2009.

Hence, therefore all our industrial relations issues are resolved in the federal jurisdiction, including the (now) FWC and federal courts of Australia.

What is the role of the Fair Work Commission?

The FWC is headed by the President, the Hon Justice Iain Ross AO, who is also a Judge of the Federal Court of Australia.

Commission Members perform quasi‑judicial functions under the Fair Work Act, including conducting public hearings and private conferences for both individual and collective matters. They also perform certain functions under the Registered Organisations Act concerning federally registered unions and employer organisations.

Members come from diverse backgrounds, including the law, unions and employer associations, human resources and corporate management, and the public service. Expert panel members must have knowledge or experience in one or more fields specific to their panel.

Members are independent statutory officeholders appointed by the Governor‑General on the recommendation of the Australian Government. They are appointed until the age of 65 on a full‑time basis, although they may perform duties on a part‑time basis with the President’s approval. Members of state industrial tribunals may hold a dual appointment to the Commission. Expert panel members are appointed on a part‑time basis for a specified period of not more than five years.

The role of the Fair Work Commission

The Commission is Australia’s national workplace relations tribunal. It was established by the Fair Work Act 2009 (Fair Work Act) and is responsible for administering the provisions of the Fair Work Act.

The Commission’s powers and functions include:

  • Dealing with unfair dismissal claims.
  • Dealing with anti‑bullying claims.
  • Dealing with general protections and unlawful termination claims.
  • Setting the national minimum wage and minimum wages in modern awards.
  • Making, reviewing and varying modern awards.
  • Assisting the bargaining process for enterprise agreements.
  • Approving, varying and terminating enterprise agreements.
  • Making orders to stop or suspend industrial action.
  • Dealing with disputes brought to the Commission under the dispute resolution procedures of modern awards and enterprise agreements.
  • Determining applications for right of entry permits.
  • Promoting cooperative and productive workplace relations and preventing disputes.

2019 to 2020 (oh what a) financial year

Justice Iain Ross AO, President of the FWC, sums up the year as:

“2019–20 has been a busy and challenging year for the Commission, as it has been for the Australian community generally. The COVID‑19 pandemic has affected many aspects of our lives and has brought significant changes to workplaces and the economy”.

The following pictograms set out the highlights of the annual report.

The FWC’s operational performance

As with most organisations, the FWC has key performance indicators (KPI’s) by which it measures its performance.

Enquiries through the roof

The number of enquiries to the FWC is staggering; 300 staff (including members) last financial year dealt with a huge number of enquires as this picture shows:

The number of claims

As previously mentioned, the number of formal applications that need to be dealt with by the FWC is enormous, with unfair dismissals being almost more than the total sum of all other matters.

Appendix 1: History of Industrial Relations in Australia

 

See the historical timeline at the end of this report for a very interesting insight into how our industrial relations evolved.

Introduction

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Introduction

In this matter the applicant was employed as a catering assistant at an aged care and was dismissed following an incident where he deliberately coughed in the face of a Registered Nurse.

It was alleged that the applicant acted this was as he was annoyed that he needed to have his temperature taken for COVID-19 reasons prior to commencing work. The respondent further submitted that the applicant was frustrated that the temperature checking process was taking too long and coughed directly in the nurse’s face to express his dissatisfaction. The applicant had received training in the form of “toolbox notes” concerning the need for strict hygiene measures while at work and that the applicant had signed the notes. The applicant submitted that he coughed involuntarily, and it was too sudden for him to put his hand over his mouth.

Outcome

The Commission noted that the registered nurse was not an employee of the respondent but rather a contractor and had no personal interest in the outcome of the matter. The evidence of the nurse was compelling and cogent while the evidence of the applicant was not convincing in respect to how he coughed and why he was unable to move away from the nurse to prevent a direct cough on another person. The Commission further noted that the applicant did not immediately apologise and that it was only until later when he was directed to apologise that he reluctantly did so. The applicant’s failure to instantly recognise that his conduct was a serious incident that was contrary to the known hygiene procedures in an aged care facility during a pandemic, raises the incident in its seriousness exponentially.

The Commission accepted that the applicant’s behaviour was inconsistent with all expectations of the employer and posed a potential serious health risk to the residents and employees at the facility and understandably led to a direction that the applicant was to no longer work at the site. The Commission found that applicant had not made out his case that his dismissal was unfair, and as such the applicant’s case was dismissed.

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Introduction

This matter (which has been successfully appealed), relates to an unfair dismissal application involving a casual employee who the company argues did not work on a “regular and systematic” basis.

In this application for an unfair dismissal remedy, the respondent lodged a jurisdictional objection that the applicant was a casual employee and was not regularly and systematically employed, had no reasonable expectation of continuing employment and therefore was not a person protected from unfair dismissal. The jurisdictional objection upheld in the 20 September 2019 decision [[2019] FWC 6448]. The September decision was appealed and a Full Bench of the Commission quashed the September decision and remitted to a Commission Member for final determination [[2020] FWCFB 306].

Background

The applicant was employed as a casual sales assistant. The respondent argued that applicant failed to properly notify of her absences, sent intimidatory and disrespectful emails and created a threat to the health and safety in the workplace. The applicant had also covertly recorded conversations between herself and the respondent.

FWC consideration

Commission considered that the recordings were not consistent with the respondent’s version that the applicant had behaved aggressively although the covert recordings would constitute a valid reason for dismissal. The Commission however noted the recordings were not the reason relied on for the dismissal and could not have been as the employer was unaware of the recording until the filing of materials in this matter. The Commission noted that the applicant did not intend to harm the employer by making the recordings and could have achieved the same objective if she had of advised the respondent that she was making the recordings.

Finding

The Commission was satisfied that the dismissal of the applicant was unreasonable because she was not notified of the reasons for her dismissal and did not have an opportunity to respond. The applicant was also effectively denied the opportunity for a support person. The Commission found that the applicant was unfairly dismissed.

Outcome

The applicant wanted to be reinstated. The Commission noted that given the conduct of the applicant having recorded conversations, there was a likelihood that on return to work there would be disciplinary action which would likely result in the applicant’s termination. The Commission further noted that trust and confidence was lost as a result of the recordings and reinstatement would be inappropriate in the circumstances. The Commission held that Directions were to be issued to elicit necessary information to consider and finalise the matter of compensation.

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Introduction

A casual labour-hire worker has been found to have ongoing employment despite being a casual and having more than 3 months off work.

Background

The applicant in this application for unfair dismissal remedy was engaged by the respondent, a labour hire business, as a casual employee on 23 January 2018. The respondent opposed the application on a number of jurisdictional grounds. There was, however, no dispute applicant was engaged as an employee.

Upon commencement in the role, the applicant worked six days a week and was sent text messages each week with his roster for the following week. The applicant’s last day of work was 28 July 2019 and he did not return after this date due to medical issues. The applicant was declared unfit for work until the end of November 2019 and on 4 December 2019 obtained medical clearance to return to work on light duties. When applicant contacted the respondent, he was advised that he was made “inactive” the respondent’s records as he had not worked for more than three months. The respondent further advised the applicant would need to reapply for work or be re-inducted.

The respondent contended that the applicant resigned his employment during a telephone conversation on 2 January 2020 and there had been no dismissal at the initiative of the employer.

Outcome

The Decisions of Wayne Shortland, Bronze Hospitality and Ponce were considered in this matter. The Commission acknowledged the nature of the labour hire industry was that where a resignation was given verbally it was not essential that it be confirmed in writing or that in the absence of a request an employment separation need be issued. It was also contended that in labour hire, there may be a lengthy period where no work is provided, however an employer of a casual employee does not repudiate the employment contract when it fails to offer another shift. Further, a casual employee remains employed until a decision is made by the employer that there is no further work and no further work will be offered.

The Commission was not satisfied the applicant actually resigned his employment on 2 January 2020 during a telephone conversation as the applicant continued to engage with the respondent in respect of seeking employment after 2 January 2020 without it being confirmed by respondent that it was their understanding that he had resigned, including their last correspondence of 4 March 2020 which failed to mentioned resignation but provided other reasons for the employment termination.

The Commission found the applicant’s dismissal effective as of 4 March 2020 was made within the prescribed period. The respondent’s jurisdictional objections were dismissed. Commission held that the matter will be subject to further directions and if necessary, arbitration on the merits of the unfair dismissal application. [Where, presumably, the casual “regular and systematic” argument will be explored – in the unlikely event that the matter is arbitrated]

Introduction

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Qantas became aware of the applicant’s use of the iPad to view pornographic material following reports made by a female refueller employed by Caltex who alleged that on two occasions during working hours, she had seen the applicant viewing a video selection page containing pornographic images on his iPad.

Background

In this application for unfair dismissal remedy, the applicant employed as a Licensed Aircraft Engineer (LAME) since January 1978. In 2016 Qantas issued LAMEs with iPads for use at work. The LAMEs were permitted reasonable personal use of their Qantas issued iPads. Qantas operates a Mobile Device Management (MDM) system which allows employees to remotely access work information systems from mobile devices which includes Qantas issued devices and those that are privately owned or leased by employees.

Upon being issued with the iPad in May 2016 and in accordance with instructions from Qantas, the applicant enrolled it into the then MDM system. Qantas subsequently changed the MDM system and the applicant enrolled his iPad into the new system known as ‘Comp Portal’. The Comp Portal app had two settings: ‘corporate’ and ‘personal’, regardless of which setting is selected there is a privacy statement located within the app which deals with what the Company can and cannot see on a device on which the app is installed.

The Comp Portal privacy statement informed applicant that Qantas could not see a range of personal material stored on the iPad including his web history and photographs. The applicant used the iPad to view and store pornographic and offensive material. Qantas became aware of the applicant’s use of the iPad to view pornographic material following reports made by a female refueller employed by Caltex who alleged that on two occasions during working hours, she had seen the applicant viewing a video selection page containing pornographic images on his iPad. The applicant’s iPad was seized by Qantas and forensically examined.

The investigation

Following examination an investigation commenced in relation to allegations. During the investigation, another female refueller alleged that on three occasions she witnessed the applicant viewing pornographic images in the workplace during working time. These allegations were substantiated and following a show cause process the applicant was dismissed.

The applicant maintained that he did not use the iPad to view pornographic material while at work and that such viewing was undertaken at home, in his own time and using his personal Wi-Fi connection. The applicant further contended that he reasonably believed that he was permitted to use the iPad in this way, given the privacy statement and other information provided to him when he was issued with the iPad.

Qantas maintained that its investigation substantiated that the applicant used a company issued iPad to browse pornographic websites and view explicit content, both at work and outside work hours, in contravention of the Company’s Standards of Conduct (SOC) Policy and Information Technology (IT) Policy.

Outcome

The Commission found a lack of clarity in the SOC and IT Policies in relation to personal use and on the basis that the original Mobility Terms and Conditions suggest that private material can be stored on the iPad. It was also found that the lack of clarity was compounded by unsatisfactory training provided to the applicant when issued with the iPad.

The Commission considered distinction between private use and viewing pornographic and offensive material at work and held that regardless of lack of clarity in relation to private use of the iPad on his own Wi-Fi when the applicant was at home, the applicant knew that it was not, under any circumstances, appropriate to view pornographic, obscene, offensive or sexually related material in the workplace.

The Commission found the applicant’s conduct in viewing and storing pornographic and offensive material was a breach of the SOC and the IT Policies and despite the applicant’s apologies and expressions of regret to the female refuellers, the applicant’s denial he was viewing pornography implicitly impugned the credit of the witnesses. The Commission was satisfied there were valid reasons for the applicant’s dismissal and that his dismissal was not harsh, unjust or unreasonable. The application for unfair dismissal remedy was dismissed.

 

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Introduction

This decision concerns an unfair dismissal application contending a “forced resignation” (also known as a “constructive dismissal”). The applicant was a “customer assist specialist” with an energy retailer

Background

The applicant contended that he was forced to resign because, when in July 2020 the company directed him to work from home (in accordance with the COVID-19 restrictions), it refused to pay for or provide him with a home desk to enable him to do so, and also refused to allow him to work from the office or take six weeks’ leave.

The applicant’s job required him to use a computer and speak to customers on the telephone. On 16 March 2020, the company sent an email notice to staff stating that they were now encouraged to work from home because of the COVID-19 pandemic. On or around 1 April 2020, the applicant’s manager told him that the company could allow him to work in the office at present, but that he should start making arrangements to be able to work from home. The applicant replied that he had recently moved to a new house and did not have furniture, including a table or desk to work from. His manager suggested that he look at second-hand websites to procure one.

On 8 May 2020, the company sent an update to staff about working from home. Later that day, the applicant sent his manager an email message, stating that he did not have furniture in his house, and that he was under financial pressure due to medical expenses. He said that he was ill-equipped to work from home but that if the company would cover the cost of a desk, he would buy one. On 11 May 2020, the manager called the applicant and said that the company would not buy him a desk, but that he could continue to work from the office for the time being.

On or around 1 June 2020, the manager said to the applicant that he needed to “sort out arrangements” for working from home. The applicant replied that if the company could not properly facilitate his working from home, then his role was redundant. The manager told the applicant that redundancy was [ironically] “not on the table”.

On 7 July 2020, the Victorian government announced the reintroduction of stage 3 restrictions, which mandated that, where employees could work from home, they were required to do so. The same day, the company’s CEO sent an email to all employees stating that unless there was an urgent need to come to the office, they were to work from home. On 8 July 2020, the manager spoke to the applicant and told him that he was required to work from home. Later that day, an official of the applicant’s union sent an email to the company’s human resources manager, stating that the applicant had been directed to work from home without being provided with “the appropriate equipment necessary to carry out his work from home, namely a desk”. The union requested a dialogue with the company about the applicant either being reimbursed for the cost of purchasing a desk or being allowed to continue to work from the office.

On 9 July 2020, the HR Manager replied to the union, stating that in line with WorkSafe Victoria guidelines, the company was providing employees with all reasonable equipment and support necessary to work from home, including a laptop, headset, adjustable chair, ergonomic assessments, access to an occupational therapist, and online resources, but that the company would not be providing desks or reimbursement for purchasing them, as it was not fair and reasonable to do so. The union proposed that, as the applicant already had an ergonomic chair and laptop, the company could simply buy him a desk instead [hang-on, I thought he did not have any furniture?].

Contrary to the directions given on 7 and 8 July 2020, the applicant worked from the office on Friday, 10 July 2020. He then took leave on 13 and 14 July 2020. On Wednesday, 15 July 2020, the manager called the applicant and said words to the effect of “where are you at with getting a table?” as the applicant was not to continue working from the office.

Later that day the applicant submitted an application to take six weeks’ leave, commencing on Monday, 20 July 2020. His manager checked the leave calendar, and then advised the applicant that his request could not be accommodated.

On Monday, 20 July 2020, Mr McKean sent Mr Burnside an email stating: “I wish to advise that I am resigning from [the company] effective immediately. I will leave my computer and headset in my old locker, which I will keep locked and surrender my security pass to the front reception staff”. His manager replied to the email accepting his resignation.

Finding

The FWC found the applicant’s argument that he was forced to resign was “entirely without merit”, noting that applicant could have purchased a desk rather than resigning and that the applicant conceded that he has since purchased a table, stating that his position not to purchase a desk was a position of principle.

In dismissing the application, the Commission considered the respondent’s requirements for the applicant to work from home came nowhere near constituting an occupational health and safety risk or a contravention of the Occupational Health and Safety Act 2004 (Vic), noting that the respondent had provided adequate resources for employees to work from home as per Government guidelines. Concluding that it was reasonably practicable for applicant to buy himself a desk and that the request for six weeks leave was excessive and not unreasonably refused by employer; and ultimately determining that there was no forced resignation.