In the recent decision of Prince v Seven Network (Operations) Ltd  NSWWCC 313, the Workers Compensation Commission of New South Wales was asked to determine whether the applicant, who had appeared in a reality TV program on the Seven Network, was a 'worker' entitled to compensation under NSW workers compensation legislation.
The Commission determined that the applicant had provided a service to the Seven Network under an agreement that indicated that the relationship was one of employer/employee. This was despite that same agreement including a clause in which the applicant acknowledged that the relationship was not one of employer/employee, and did not entitle her to compensation for work injuries.
The decision has a number of important implications for employers generally (both in respect of the engagement of independent contractors and workplace bullying) and the TV industry in particular.
Ms Prince, a former contestant on reality renovation programme House Rules on the Seven Network, issued a compensation claim for psychiatric illnesses developed as a result of her time filming and appearing on the programme.
Ms Prince alleged that her injuries occurred as a result of her systematic isolation from, and bullying by, the other contestants, which was encouraged and aggravated by the programme's producers.
Seven Network (Operations) Ltd (Seven) opposed the claim on the basis that Ms Prince was not a 'worker', submitting that she was instead a 'contestant', as she did not provide a service under a contract of service as a professional renovator, nor as a professional entertainer.
Seven also relied on an agreement signed by Ms Prince prior to her participation on the programme (contract), which included the following clause:
"You acknowledge that your participation in the program is not employment, does not create an employer/employee relationship between Seven and you and is not subject to any award or collective bargaining or workplace agreement and does not entitle you to any wages, salary, corporate benefits, superannuation, workers compensation benefits or any other compensation."
Ms Prince sought to rely on the High Court decision of Hollis v Vabu Pty Ltd  HCA 44 in submitting that it is the substance of the relationship between the parties that is determinative of whether an employment relationship exists, not an agreement.
The Commission found that Ms Prince was a 'worker' within the meaning of the NSW workers compensation legislation.
The Commission determined that Ms Prince had provided services to Seven under a contract of service, given that the contract provided that she would engage in home renovations (the underlying basis of House Rules) and, in the time of her engagement, would not undertake any other vocation and would be available at all times to Seven. Seven derived benefit from this service, namely, having Ms Prince appear on House Rules.
The Commission also considered whether the relationship was one of employer and employee. It did so by examining the totality of the relationship between Seven and Ms Prince, under the lens of established legal principles set out in prior Court and Tribunal decisions. It came to the conclusion that the relationship was one of employer and employee based on the following indicia in the contract:
- the rate of remuneration was set by Seven;
- Seven paid an allowance for Ms Prince's weekly expenses, paid on a pro rata basis;
- Ms Prince took no risk as an entrepreneur in the running of her own business. Rather, she was paid a weekly rate which was set by Seven;
- the activity being carried out by Ms Prince (and the other contestants) was done for the benefit of Seven's business, rather than any enterprise of her own. Any goodwill arising from that activity vested in Seven's enterprise, rather than in Ms Prince;
- Ms Prince was essential to the very product and business Seven was undertaking;
- Seven had exclusive use of Ms Prince for every hour of every day during filming;
- Seven had the power to veto Ms Prince wearing certain clothes, and she was unable to wear any items that displayed business or brand names;
- the rules of the programme provided that Ms Prince was a public face Seven's business
- Ms Prince commenced and completed tasks when directed by Seven, and
- Seven provided tools and materials for Ms Prince to use.
In coming to its determination, the Commission acknowledged that certain indicia suggested there was no employment relationship, for example, that Ms Prince was not paid superannuation and no income tax was withheld. However, the overwhelming evidence indicated an employee/employer relationship for the purposes of awarding worker's compensation.
The decision serves as a timely reminder to any business engaging independent contractors that, merely because the relevant contract states there is no employment relationship, a Court or Tribunal can look past that to the totality of the relationship.
It also gives rise to a question of whether the numerous contestants on reality TV programs may be entitled to statutory employment benefits such as annual leave and minimum remuneration under applicable awards or enterprise agreements. The natural end to this is that there may be class actions (or class action type litigation) arising as a consequence.
The decision also brings into focus that managers (in this case, the TV producers) who deliberately foster a hostile and combative environment, may expose their employer to liability for workplace bullying.
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.