In April 2017, the driver made an online application and signed an electronic supply agreement to begin work as an independent contractor. After attending an onboarding session, he began performing work on 22 April 2017.

The supplier agreement confirmed the driver was:

• free to work whenever and wherever he wanted;
• not obliged to do any work;
• required to use his own vehicle and mobile phone.

The agreement also stated the driver was responsible for his own tax and insurance and had to complete services within a reasonable time and in an efficient manner. The agreement could be terminated for any reason, at any time by either party by giving one weeks’ notice.

The business periodically reviewed the service delivery to identify any poor performance. If two complaints were recorded within a 21-day period, the business would investigate the matter, and this could lead to termination of the agreement.

Between October 2017 and January 2020, several complaints about the driver were made concerning four occasions when orders had not been received. An analysis of delivery times also showed the driver was 30 per cent slower than other drivers in his area.

In April 2020, the driver was notified via email that he had breached the supplier agreement and was given seven days’ notice of termination.

The driver filed an unfair dismissal application, seeking reinstatement.

The decision

When deciding whether the driver was unfairly dismissed, The Fair Work Commission (the “Commission”) first had to determine whether the driver was an employee or an independent contractor.

The Commission considered several factors in characterising the relationship including:

• the level of control the business had over the driver;
• his working patterns;
• the ability to work for competitors;
• the terms of the supplier agreement;
• the uniform worn by the driver;
• the provision of his equipment;
• the mode of remuneration;
• and the lack of any taxation or leave entitlements.

Ultimately, the Commission concluded that the relationship was that of an employee and employer, finding, “the level of control that [the Business] possessed... represented an indicium that strongly supported the existence of employment rather than independent contracting”.

The Commission acknowledged there were “aspects of [the worker’s] relationship with [the Business] including elements usually associated with that of an independent contractor”, however, when considering the overall picture, the Commission was satisfied the worker was an employee.

The employee was therefore protected from unfair dismissal, and the Commission concluded there was no valid reason for his dismissal, stating the “termination of his services by way of email communication and without any proper prior warning was unjust, unreasonable and unnecessarily harsh.”

The Commission ordered the employee be reinstated and receive payment for lost pay.

Learnings for business

This case highlights the ever-evolving employment landscape, and how important it is to regularly review the engagement and classification of workers. Whether a relationship is that of a contractor or an employee can depend on several factors and needs to be assessed on a case-by-case basis.

An incorrect classification will have significant impacts for a business.

In this decision the Commission noted the way we do business has changed and businesses must assess their employment and contractor arrangements “in the context of a modern, changing workplace impacted by our new digital world.”

How we can help

For assistance on any aspect of your employment obligations, please call the Victorian Chamber Workplace Relations Advice Line on (03) 8662 5222.

Complete members can receive unlimited general advice on a range of workplace issues including Occupational Health and Safety, WorkCover, workplace policies, disciplinary procedures and more.

The Victorian Chamber also have specialised Consultants who can assist your business with delivering training in various Workplace Relations or Occupational Health and Safety matters, drafting policies and procedures, navigating WorkCover claims and handling performance management and disciplinary issues.

[2021] FWC 2818