Court upholds contractors were actually employees
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 [2013] 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 adverse action
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 complaint.
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 [2013] 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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.