The Full Bench of the Federal Court has dismissed an insurance
company's appeal against a 2011 decision that found its five
sales representatives were employees and not independent
contractors, despite signed contracts saying they were independent
contractors. As a result, the workers will be entitled to over
$500,000 in accrued annual and long service leave. The Court upheld
the findings that the workers lacked the true independence and
autonomy to be called individual agents, having regard to the close
control the insurance company had over the organisation of the work
and how the sales representatives were sent out. ACE Insurance
Limited v Trifunovski  FCAFC 3.
Lesson for employers: Caution should be
exercised when entering into an independent contracting
relationship, particularly with an individual. Organisations should
consider, and preferably seek professional advice, as to whether
such an arrangement will stand up as a true independent contract
rather than one of employment.
Court finds performance management was not unlawful
The Federal Court has upheld a decision of the Federal
Magistrates Court that found an employer did not breach the general
protections provisions of the Fair Work Act 2009 (Cth) when it
performance managed and disciplined an employee. The employee, who
had made a complaint and later resigned, unsuccessfully argued that
he was constructively dismissed as a consequence of making a
The Federal Court agreed that management had legitimate concerns
about the employee's performance, and while the conduct of the
employer did alter his position "to his prejudice", such
conduct was not in any way connected to the employee's
workplace right to make a complaint. Ramos v Good Samaritan
Industries  FCA 30.
Lesson for employers: This decision is welcomed
as it reinforces that employers can take legitimate "adverse
action" against an employee, so long as that action is not
being taken for an unlawful reason.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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