In determining the employment arrangement, the FWC relied on the key concepts of the level of control the applicant had over their working arrangements, and the nature of the financial relationship between the parties.

Overview of the facts

The applicant, a sex worker, worked regular shifts at an establishment until she was dismissed on 18 June 2022, notified via text message that there were no longer any shifts available. The applicant admitted that she verbally insulted the establishment’s head receptionist but contended that the dismissal was due to raising workplace complaints about health and safety. She argued she should be considered a casual employee and eligible to make a claim for unfair dismissal.

Although the usual written contract and standard agency agreement with the applicant could not be found, the respondent challenged the unfair dismissal claim on the basis that it provides booking, introduction, accommodation, and support services to independent contractor sex workers who then service the customers as sole traders. In addition, the respondent argued it terminated the applicant’s services due to “unacceptable and threatening behaviour on site”.

Decision

Ultimately the FWC found that the relationship was based on the worker being an independent contractor and not an employee, and therefore the unfair dismissal remedy was not available. To determine the mode of employment, the FWC evaluated the various factors that are taken into consideration to determine the nature of employment.

One of the considerations was the respondent’s rostering system. The applicant was able to notify the respondent of her availability to work her preferred shifts, including ad hoc requests to work each week on times outside of the specified rostering arrangements. However, there was no evidence to suggest that the respondent expressly invited the applicant to work a shift.

As such, the evidence “tells strongly against the respondent having the right to control the times at which work was performed”. This is historically one of the more significant indications of the nature of an employment relationship.

Furthermore, the FWC found that there was “no financial relationship” between the parties, as the client pays the respondent the cost of the room hire and then pays the applicant the agreed cost for services rendered. There is no “material benefit” to the respondent from the transaction between the respondent and the client, and the respondent “merely provides administrative assistance” to the applicant.

Learnings for Business

This decision outlines the importance of ensuring that businesses implement written contracts with their workers that clearly state the nature of their employment to ensure there is no ambiguity that may result in these outcomes.

It demonstrates the various factors that the court will consider when evaluating the nature of employment and how these elements are looked at in conjunction with each other to determine a relationship of either employee or independent contractor.

Employers should also consider their contractual obligations to employees and the requirement of clarity in such agreements, to mitigate the risk of sham contract arrangements.

How the Victorian Chamber can assist

For assistance on any aspect of your employment obligations, please call the Victorian Chamber Workplace Relations Advice Line on 8662 5222.

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