Where parties have entered into a comprehensive written contract that sets out the terms of their relationship, the rights and obligations under the contract should determine the character of that relationship. Where there is no comprehensive written agreement in place, “… the manner in which the relationship is worked in practice may be relevant … to find contractual terms where they cannot otherwise be ascertained…”. This will involve examining the parties’ performance of the contract.

In Antony Robert Course v Wavin Technologies Pty Ltd (2022), the Fair Work Commission (FWC) heard an application for unfair dismissal where the employer raised an objection on the ground that the adviser was not an employee and could not have been dismissed. The FWC dismissed this objection, finding that the adviser was an employee.

Case background

The employer was a software technology start-up company who engaged the adviser as an external adviser to the company. The adviser and a company representative had informal discussions about the adviser’s role within the company but no formal contract of employment was issued to the adviser. The only documentation of the adviser’s roles and responsibilities at the company were contained in email proposals sent by the adviser to the representative. In one of those proposals (final proposal), the adviser put forward an arrangement where they would provide their services to secure clients and investors for the company. The final proposal was agreed to ‘in principle’ by the company.

Although there was no formal agreement between the parties, the adviser continued working for approximately 16 months with the company until they were terminated.

Did the ‘in principle’ acceptance of the final proposal create a contractual relationship between the adviser and the company?

The FWC found the final proposal put forward by the adviser and subsequently accepted in principle by the company did establish a contractual relationship between the parties. The parties intended to be bound immediately by the terms set out in the final proposal while also expecting to enter into a further contract containing additional terms in substitution to the final proposal.

Was the contractual relationship between the parties an employment relationship?

Having found there was a contractual relationship between the parties, the FWC also found the relationship between the parties to be an employment one. In coming to this conclusion, the FWC referred to the recent High Court decisions in Personnel Contracting and Jamsek, and reaffirmed the position that when determining whether a person is an employee or contractor, it is the contractual terms (if they can be ascertained) rather than the performance of the contract that will determine the true nature of the relationship.

As the contractual terms between the parties in this decision were not comprehensive, it was appropriate for the FWC to examine the performance of the contract to ascertain what the contractual terms were. In assessing the nature of the relationship between the parties, the FWC considered several factors, and ultimately determined that in this case the adviser was acting under the control of the company and was contracted to work in the business of the company.

These factors were important in the FWC ruling that the adviser was an employee.