The case
Mr Antony Course was engaged by Wavin Technologies Pty Ltd (Wavin), a start-up tech company, initially to assist with sales.
At commencement, there had been several discussions between Wavin and Mr Course in relation to a formal agreement to govern the working relationship, but no formal documents were signed. Importantly, Mr Course’s latest proposal included a link to a template employment agreement. This proposal, which included very basic terms and conditions, was accepted by Wavin on an ‘in-principle’ basis by email.
Over time, the original sales role Mr Course was engaged for changed dramatically and his new duties included identifying other products to sell, support capital raising, developing new contracts, project managing clients and other ancillary tasks.
By the time Mr Course’s engagement was terminated, he had only been paid $10,000 for 16 months’ work. He subsequently brought an unfair dismissal claim against Wavin. Wavin objected on the basis that Mr Course was not an employee and therefore jurisdictionally barred from bringing the claim.
Mr Course contended that the in-principle agreement was a contract of service and established an employment relationship.
Conversely, Wavin submitted that the in-principle agreement was short of a binding commitment and was not contractual in nature. In the alternative, Wavin submitted that the relationship between the parties was that of independent contractor and principal – not employee and employer.
FWC Decision
The FWC held that:
- there was a contractual relationship established between the parties upon acceptance of the ‘in-principle’ agreement; and
- the relationship between the parties was that of employee and employer – not independent contractor and principal.
In reaching its decision, the FWC looked at the recent High Court cases of Jamsek and Personnel, which clarified that contractual terms, and not performance or conduct, will determine the true nature of the relationship between parties. Importantly however, the High Court observed that performance or conduct may be relevant for certain limited purposes, such as to clarify contractual terms where they cannot otherwise be ascertained or to determine the nature of any variation to agreed terms.
In this matter, the FWC held that there was a binding agreement in place, on the basis that the arrangement between the parties continued for some time without issue – implying that a contractual relationship had been established – despite no formal arrangement in place.
Given the ‘in principle’ agreement and “simple and far from comprehensive agreement” proposed by Mr Course, the FWC was required to look at the totality of the conduct by the parties to acertain the contractual terms. In examining Mr Course’s performance, the FWC held that he was acting in the business of, and under the control and direction of, Wavin, as opposed to conducting his own business. Therefore, having regard to the totality of the relationship, Mr Course was held to be an employee of Wavin.
As a result of this decision, Mr Course is now able to pursue his unfair dismissal claim as an employee, as well as potentially seek other entitlements such as, backpay, leave entitlements etc., potentially creating a significant liability for Wavin.
What does this mean for employers?
The case emphasises the importance of having clear contracts with those engaged by your business, whether as an employee, independent contractor, consultant or even a volunteer.
In the absence of a clear contract between parties, ambiguity can arise in relation to the working relationship between the parties, which in turn creates uncertainty regarding your rights and obligations. Further, the case reinforces the importance of ensuring your contracts and agreements remain current, particularly where there are changes to a worker’s role over time.
If you need any assistance in reviewing your agreements or your operations more broadly, our team is here to help. Please don’t hesitate to contact your favourite team member or if you don’t have a favourite contact us at info@hrlegal.com.au.
Antony Robert Course v Wavin Technologies Pty Ltd [2022] FWC 1977 (28 July 2022)
