UNFAIR DISMISSAL APPLICATION

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2022 WAIRC 00211

DELIVERED : WEDNESday, 18 May 2022

FILE NO. : U 45 OF 2021

Applicant

AND

Community Arts Network Ltd

Respondent

CatchWords : Unfair dismissal - Preliminary jurisdictional issue - Out of time - Employee - Independent contractor - Terms of contract

Legislation :  Fair Work Act 2009 (Cth)
Industrial Relations Act 1979 (WA)

Result : Application to accept application out of time is refused

Representation:

Applicant : Ms C Van Der Heyden

Respondent : Mr R Watson and Ms A Rens (of counsel)

Case(s) referred to in reasons:

Abdalla v Viewdaze Pty Ltd (2003) 53 ATR 30; (2003) 122 IR 215

Aboriginal Legal Service of Western Australia (Inc) v Lawrence (No 2) [2008] WASCA 254; (2008) 89 WAIG 243

ACE Insurance Ltd v Trifunovski [2013] FCAFC 3; (2013) 235 IR 115

Annette Tracy Garlett v Wirnda Barna Artists Inc [2015] WAIRC 00911; (2015) 95 WAIG 1645

Bankstown Handicapped Children’s Centre Association Inc v Hillman & Anor [2010] FCAFC 11; (2010) 182 FCR 483

Cai (t/as French Accent) v Do Rozario [2011] FWAFB 8307; (2011) 215 IR 235

Construction, Forestry, Maritime, Mining and Energy Union & Anor v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 96 ALJR 89

Malik v Paul Albert, Director General, Department of Education of Western Australia [2004] WASCA 51; (2004) 84 WAIG 683

Michael Moore-Crouch v Goldfields Individual and Family Support Association [2014] WAIRC 01364; (2014) 95 WAIG 147

Paul Ernest Dallaston v Canon Foods [2005] WAIRC 01978; (2005) 85 WAIG 2999

Personnel Contracting Pty Ltd t/as Tricord Personnel v The Construction Forestry Mining and Energy Union of Workers [2004] WASCA 312; (2004) 85 WAIG 5

Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1;(1986) 160 CLR 16

The Director of The Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No 7) [2013] FCCA 1097

Reasons for Decision

1         Ms Van Der Heyden applies to the Western Australian Industrial Relations Commission (the Commission) for an order for financial compensation because of her termination from employment by the Community Arts Network Ltd (CAN) which she claims was unfair.

2         CAN assert that Ms Van Der Heyden was engaged as an independent contractor and was not an employee and the Commission lacks jurisdiction to consider Ms Van Der Heyden’s claim.  In addition, CAN submits that Ms Van Der Heyden’s application was made outside of the 28 day limit and contend that the application ought be dismissed because there is no basis to conclude that it would be unfair not to grant the extension.

3         I must decide whether to accept Ms Van Der Heyden’s application outside of the 28 day limit.  

Principles

4         Section 29(2) of the Industrial Relations Act 1979 (WA) (IR Act) provides that an application under s 29(1)(b)(i) for a remedy of an unfair dismissal must be made within 28 days of a dismissal from employment.  Section 29(3) provides that the Commission may accept an application outside of the prescribed time limit if it would be unfair not to do so.  That is, the time limit ought to be complied with unless there is an acceptable reason for the delay which makes it equitable to extend.

5         The principles to be applied in deciding whether to accept an application made after 28 days from a dismissal are set out in Malik v Paul Albert, Director General, Department of Education of Western Australia [2004] WASCA 51; (2004) 84 WAIG 683 and include consideration of:

(a) The length of the delay

(b) The reasons for the delay and whether an acceptable explanation makes it equitable to extend the time

(c) Merits of the claim

(d) Prejudice to the respondent

(e) Fairness between the applicant and other persons in a similar position

(f) Any action taken by the applicant to contest the dismissal other than the filing of the claim

Length of Delay and Reason for the Delay

6         Ms Van Der Heyden submits that she initially made an application to the Fair Work Commission (FWC) within the 21 days of her dismissal required under the Fair Work Act 2009 (Cth).  On 29 April 2021, CAN notified that it believed it was not a national system employer in its submissions filed with the FWC.

7         Ms Van Der Heyden contends that the respondent did not file its submissions in which it raised an objection to the jurisdiction of the FWC within a time frame that would have permitted her to make an application to the Commission.  Ms Van Der Heyden asserts that the CAN engaged legal expertise and did not notify her of the nature of the organisation in a timely manner.

8         Ms Van Der Heyden submits that her claim ‘had been sitting’ with the FWC until 21 May 2021.

9         Ms Van Der Heyden submitted an application to the Commission on 2 June 2021 and it was filed on 10 June 2021.  On 3 June 2021 the Commission’s Registry notified Ms Van Der Heyden that her application was deficient.  On 10 June 2021 the Registry sent an email to Ms Van Der Heyden advising that the Registry had not received any further correspondence from her and sought her intentions concerning her application.  Later that day, Ms Van Der Heyden addressed the deficiencies and submitted a corrected application.

10      Ms Van Der Heyden submits that she is representing herself and is not familiar with the laws in Western Australia as she is not from this State and did not have knowledge of the Commission. Ms Van Der Heyden contends that her lack of knowledge of the Western Australian employment laws ought to be considered and her application accepted out of time.

11      The respondent contends that it notified Ms Van Der Heyden at the earliest opportunity in their submissions to the claim in the FWC filed on 29 April 2021.  CAN submit that Ms Van Der Heyden did not act upon this information for 42 days after being first notified by it that it considered it was not a national system employer.

12      CAN submit that on 17 May 2021 the FWC urgently convened a teleconference during which Ms Van Der Heyden agreed that CAN was not a national system employer and she was advised that she could make a claim to the Commission.  The respondent asserts that the Commission ought not accept Ms Van Der Heyden’s application because she did not act on the information until 24 days after being made aware that she could commence a claim in the Commission.

13      I do not agree with CAN’s assertions that Ms Van Der Heyden ought to have made an application to the Commission when CAN notified her through its submissions filed in the FWC that it believed it was not a national system employer.  The issue is not whether the applicant could lawfully have lodged a claim in this Commission earlier than she did, it is whether she acted unreasonably in not doing so.  In circumstances where the respondent is a not for profit organisation it can be difficult to assess the correct identity of the organisation and it would be reasonable for applicants to consider the respondent’s submissions and possibly obtain professional and expert advice.

14      I accept that an error as to the correct jurisdiction in which to commence a claim may occur in cases where the identity of the employer may not be clear.  Ms Van Der Heyden’s lack of knowledge of employment law and being self-represented could be considered a contributory explanation for the initial error in applying to the FWC.

15      However, once Ms Van Der Heyden had decided that her application was not made in the correct jurisdiction, Ms Van Der Heyden ought to have acted promptly.  I find that Ms Van Der Heyden waited 16 days after she agreed her initial claim to the FWC was in error and she had been made aware that she could commence a claim with this Commission.  Ms Van Der Heyden has not provided an explanation for this delay.  Ms Van Der Heyden did not provide an explanation for the delay of eight days to address the deficiencies in her application so that her application could be filed with the Commission.  This has resulted in a delay of 24 days before commencing proceedings in the Commission without an explanation from Ms Van Der Heyden.  This delay represents a significant proportion of the prescribed time limit of 28 days.

16      I find that Ms Van Der Heyden has not provided an explanation for the full extent of the delay.  The application is 72 days outside of the time limit and given the delay resulting from an initial error in the selection of jurisdiction Ms Van Der Heyden was obliged to act promptly unless there was a reasonable explanation for not doing so.  The absence of an explanation for the delays in initiating and progressing her application to the Commission fails to satisfy one of the considerations established in Malik.

Merits of the Claim

17      In deciding whether it would be unfair not to accept an application out of time, an assessment of the merits is required.  However, the assessment at this stage is only in a ‘rough and ready way’ as Steytler J observed in Malik:

The Commission is empowered to accept a late referral if it would be ‘unfair’ not to do so, and, while an assessment of the merits ‘in a fairly rough and ready way’ (see Jackamarra v Krakouer (1998) 195 CLR 516 at [9]) will often be an important consideration, there is nothing in the words of s 29(3) which imports any obligation, on the part of an applicant, to establish any degree of merit (and it should not be overlooked, in this regard, that the Commission is given broad powers to dismiss a matter summarily under section 27(1)(a) of the Act).  It is, of course, difficult to imagine that it would ever be unfair to an applicant to deny him or her the right to lodge a referral out of time where it was positively shown that the applicant had no prospect of success [25].

18      CAN contend that Ms Van Der Heyden’s application lacks merit and cannot succeed because Ms Van Der Heyden was not an employee, and the Commission lacks the necessary jurisdiction to hear and determine her claim.

19      Ms Van Der Heyden submits that she was originally engaged by CAN from Cairns, QLD as a contractor for the Place Names Walyalup project.  However, Ms Van Der Heyden says that she believes it was a sham contract arrangement and that she worked for four days a week as a Project Manager without any benefits of an employee.  Ms Van Der Heyden says she was:

under the constant direction of CEO and micromanaged without reasonable means to manage the project autonomously, to be a representative of the organisation and the project at all times with an organisational business card in my name, to have a key to the office, to receive wages/salary fortnightly after invoicing, representation on the CAN website, listings of my set work hours and days on the internal/office CAN staff board, my days and hours listed on an internal Google doc available to all staff in CAN, requested to sign into the CAN Slack channel daily as per all other staff employed by CAN.

20      Ms Van Der Heyden submits that during her time working with CAN she was also engaged to assist in writing grant and funding proposals and work on other projects within the organisation.  ‘These were not tasks set out in my working arrangement however CAN benefit from my skills and expertise outside of my nominal role as Place Names Project Manager.’

The Principles of Assessing the Nature of the Relationship

21      Section 29 of the IR Act provides the Commission with power to determine claims brought by employees and provides as follows:

29. Who may refer industrial matters to Commission

(1) An industrial matter may be referred to the Commission —

 (a) in any case, by —

(i) an employer with a sufficient interest in the industrial matter; or

(ii) an organisation in which persons to whom the industrial matter relates are eligible to be enrolled as members or an association that represents such an organisation; or

(iii) the Minister;

and

 (b) in the case of a claim by an employee —

(i) that he has been harshly, oppressively or unfairly dismissed from his employment; or

(ii) that he has not been allowed by his employer a benefit, not being a benefit under an award or order, to which he is entitled under his contract of employment,

by the employee.

22      Section 7 defines an “employee”:

7. Terms used

employee means —

(a) any person employed by an employer to do work for hire or reward including an apprentice; or

(b) any person whose usual status is that of an employee; or

(c) any person employed as a canvasser whose services are remunerated wholly or partly by commission or percentage reward; or

(d) any person who is the lessee of any tools or other implements of production or of any vehicle used in the delivery of goods or who is the owner, whether wholly or partly, of any vehicle used in the transport of goods or passengers if he is in all other respects an employee,

but does not include any person engaged in domestic service in a private home unless —

(e) more than 6 boarders or lodgers are therein received for pay or reward; or

(f) the person so engaged is employed by an employer, who is not the owner or occupier of the private home, but who provides that owner or occupier with the services of the person so engaged;

23      In Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1;(1986) 160 CLR 16, the High Court held that determining whether a relationship is that of an employer and employee or principal and independent contractor requires the consideration of a number of factors including, but not limited to, control, mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision of holidays, the deduction of income tax and the delegation of work.

24      The principles set out in Stevens v Brodribb have been adopted and applied by this Commission in Personnel Contracting Pty Ltd t/as Tricord Personnel v The Construction Forestry Mining and Energy Union of Workers [2004] WASCA 312; (2004) 85 WAIG 5. Abdalla v Viewdaze Pty Ltd (2003) 53 ATR 30; (2003) 122 IR 215, provides a summary of the factors or indicia to be considered when determining the nature of the relationship.

25      The question to ask when determining whether a worker is an employee or contractor is ultimately whether the worker is a servant of another in that other’s business, or whether the worker carries on a business of his or her own account.

The Contract Itself

26      In Abdalla v Viewdaze [34] the Full Bench of the Australian Industrial Relations Commission held that:

The terms and terminology of the contract are always important and must be considered. However, in so doing, it should be borne in mind that the parties cannot alter the true nature of their relationship by putting a different label on it.  In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole: that is, the parties cannot deem the relationship between themselves to be something it is not.  Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.  If after considering all other matters, the relationship is ambiguous and is capable of being one or the other, then the parties can remove that ambiguity by the very agreement itself which they make with one another. [34(3)].

27      Subsequently the Full Bench of the FWC in Cai (t/as French Accent) v Do Rozario [2011] FWAFB 8307; (2011) 215 IR 235, considered the principles articulated in Abdalla v Viewdaze and the apparent tension between the consideration of the description of the relationship in a written agreement where an assessment of all other matters results in a conclusion that is ambiguous and the alternative test, in the face of ambiguity, of being:

… guided primarily by whether it can be said that, viewed as a practical matter, the individual in question was or was not running his or her own business or enterprise with independence in the conduct of his or her operations as distinct from operating as a representative of another business with little or no independence in the conduct of his or her operations [10(5)].

28      In a recent High Court case, Construction, Forestry, Maritime, Mining and Energy Union & Anor v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 96 ALJR 89, the majority held that where parties have comprehensively committed the terms of their relationship to a written contract, the efficacy of which is not challenged on the basis that it is a sham or is otherwise ineffective under general law or statute, the characterisation of that relationship as one of employment or otherwise must proceed by reference to the rights and obligations of the parties under that contract. These rights and obligations are to be ascertained in accordance with established principles of contractual interpretation.  Absent a suggestion that the contract has been varied, or that there has been conduct giving rise to an estoppel or waiver, a wide‑ranging review of the parties’ subsequent conduct is unnecessary and inappropriate.

29      Ms Van Der Heyden contends that the initial engagement as a contractor was a sham arrangement and that the relationship properly construed is that of an employee.  Ms Van Der Heyden submits that she was denied the benefits of an employee.

30      A written contract applied to Ms Van Der Heyden’s engagement at the time of her termination.  The contract describes Ms Van Der Heyden as a ‘contractor’ and the terms are comprehensive.  The terms of the contract could only be varied by further agreement in writing by both parties.

31      Ms Van Der Heyden submitted that she was originally engaged as a contractor for a project however she believes it was a sham contract arrangement.

Control

32      Schedule 2 – Services of the written contract sets outs the components of the project and the outcomes required.  The text of the Schedule does not provide a distinction between the term of a contract for an independent contractor and the terms used to describe the duties of an employee engaged to work on a specific discrete project.

33      CAN’s evidence is that Ms Van Der Heyden was engaged to deliver a project and had autonomy over how the project would be delivered.  CAN’s evidence is that the project was allocated a budget and Ms Van Der Heyden had control over how the funds were spent.

34      Ms Van Der Heyden asserts that she was micromanaged without reasonable means to manage the project autonomously.  Ms Van Der Heyden did not provide any details nor evidence of her assertion of micromanagement.  Ms Van Der Heyden did not contest CAN’s evidence of her control over the budget and project funds.

35      I find that this indicator favours the characterisation of the relationship as one of principal and independent contractor.

A Business, Working for Others and Advertising for Alternate Practice

36      In Paul Ernest Dallaston v Canon Foods [2005] WAIRC 01978; (2005) 85 WAIG 2999, the Full Bench of the Commission held that it was correct to find that Mr Dallaston was an independent contractor because Mr Dallaston in purchasing a round of business clients from another person engaged by Canon Foods and in attempting to sell his own round including the goodwill of a purported business and equipment Mr Dallaston was conducting a business of his own.  In addition, the equipment provided by Mr Dallaston was a van with a freezer unit, which involved a comparatively large capital outlay.

37      The existence of a separate location for the operations of a business indicates an independent contractor as considered in Stevens v Brodribb (37) and similar to the inclusion in an industry directory in Abdalla v Viewdaze [35] the promotion of their own business will point to an independent contractor.

38      CAN’s evidence was that Ms Van Der Heyden was not required to provide her services to CAN exclusively during the term of her engagement.  CAN submits that Ms Van Der Heyden worked for another organisation during her engagement.  CAN contend that Ms Van Der Heyden actively promoted herself as a business using several trading names to be engaged by others during her engagement with CAN.  This was not contested by Ms Van Der Heyden.

39      The terms of the contract provided for CAN to make available appropriate workspace when requested by Ms Van Der Heyden.  CAN’s evidence is that Ms Van Der Heyden delivered her services from her home office for most of the duration of the engagement and that attendance at CAN’s office was for specific tasks at the request of Ms Van Der Heyden.  This evidence was not contested.

40      My assessment of this indicator favours the characterisation of the relationship as one of principal and independent contractor.

Payment, Taxation, Superannuation and Benefits

41      Payment by results or completion of a task may be indicative of a contractor however it is not uncommon for employees to be paid commissions as in ACE Insurance v Trifunovski.  Payment on submission of an invoice suggests a business but carries less weight if the employer provides the form and dictates the content see The Director of The Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No 7) [2013] FCCA 1097.

42      The terms of the contract prescribe a contract price which is calculated on assumptions concerning expected hours at an expected rate.  The contract makes it clear that the obligations of the contractor must be performed regardless of the actual hours or effective hourly rate received.   The contract states that payment is reliant on the progress toward milestones set out in the contract.

43      CAN’s evidence is that Ms Van Der Heyden received payment following the fortnightly submission of invoices.  The invoices cited an Australian Business Number and were sent from a business email address held by Ms Van Der Heyden.  CAN did not prescribe the form and content of the invoices.

44      The non-payment of superannuation contributions, workers compensation levies, deductions of income tax, holiday pay or sick leave is dependent on the view taken by the putative employer, and whether these are done depends on whether the relationship is viewed as one of employment and not the other way around as established in ACE Insurance v Trifunovski [37].

45      The terms of the contract do not refer to annual leave or sick leave.  CAN’s evidence is that it did not deduct income tax.  CAN agreed that it paid superannuation and asserts that it did so because the professional industrial body advised that it was best practice to do so.

46      My assessment of this indicator favours the characterisation of the relationship as one of principal and independent contractor.

Assessment of Merits of the Claim

47      My assessment of the relationship is that it is one of principal and independent contractor and therefore, Ms Van Der Heyden’s claim of unfair dismissal cannot succeed.

Fairness Between the Applicant and Other Persons in a Similar Position

48      Where the respondent is a not for profit organisation the correct identification of the employer and, therefore, the correct jurisdiction, is not always readily evident.  See the contrasting decisions of Aboriginal Legal Service of Western Australia (Inc) v Lawrence (No 2) [2008] WASCA 254; (2008) 89 WAIG 243 and that of the Full Court of the Federal Court in Bankstown Handicapped Children’s Centre Association Inc v Hillman & Anor [2010] FCAFC 11; (2010) 182 FCR 483.

49      Delays occasioned by the selection of an incorrect jurisdiction and where an applicant has subsequently identified an error has been made and has promptly made an application to the Commission, then applications have been accepted out of time.  See for example Michael Moore-Crouch v Goldfields Individual and Family Support Association [2014] WAIRC 01364; (2014) 95 WAIG 147.  Where an applicant has not acted promptly to actively consider and decide on the question of jurisdiction the Commission has not accepted the application out of time.  See for example Annette Tracy Garlett v Wirnda Barna Artists Inc [2015] WAIRC 00911; (2015) 95 WAIG 1645.

50      Similar to the decision of Garlett, where the applicant waited a month to file her application with the Commission after becoming aware of the ability to do so, I find that Ms Van Der Heyden having agreed that her application to the FWC was in error did not promptly act.  It would not be fair to other individuals who acted promptly on information to allow Ms Van Der Heyden’s application, particularly given there is no explanation for the delay in taking any action.

Any Action Taken by the Applicant to Contest the Dismissal Other than the Filing of the Claim

51      There is no evidence that Ms Van Der Heyden contested her dismissal other than by filing a claim in the FWC.  Ms Van Der Heyden submits that her claim to the FWC was filed within the prescribed 21 day time limitation required by that jurisdiction.

52      The action taken by Ms Van Der Heyden lessens the consequences of this claim being filed outside of time.

Prejudice to the Respondent

53      CAN asserts it is a not for profit organisation that relies on government grants to fund its community service focused activities.  CAN contends it has not in any way caused or contributed to Ms Van Der Heyden’s delay in bringing this application.  CAN has expended resources because of Ms Van Der Heyden pursuing the claim in the FWC, including for the preparation of extensive witness statements and legal submissions.

54      CAN further submits that it will suffer if this claim precedes, in terms of drawing Board members and executive personnel away from CAN’s day-to-day community focused activities to prepare for further legal proceedings.

55      I find that the matters to which the respondent refers arise more from the applicant contesting her dismissal and do not raise any significant prejudice arising from the delay in the claim being referred to the Commission.  The preparation of witness’ statements and legal submissions will not be wasted if this claim is accepted out of time.

Conclusion

56      The considerations set out in Malik are not exhaustive and each case will turn on its own facts and circumstances.  In this matter some factors favour the application being accepted out of time.  However, the lack of explanation for the delay in initiating the claim to the Commission promptly and delay in correcting a deficient application, along with my assessment that the claim has little prospect of success means that I am not satisfied that it would be unfair not to accept the referral out of time.  The application to accept the application out of time is refused.