Can a worker with no contract successfully claim employment?

The Fair Work Commission (FWC) recently dealt with a worker’s application, alleging that he was an employee of an organisation even without having a written contract. The Commission had to explore the circumstances of their relationship to determine their obligations.

The worker was contracted by the employer to undertake the role of a soccer coach in various schools, which started around April 2023. The employer, however, said the worker had been engaged as an independent contractor.

Harrison Pye filed an application to deal with a general protections dispute regarding the alleged termination of his employment. He named Samuel (Ryan Michael) Smith as his employer.

The worker’s duties

In his application, the worker said:

“Smith engaged me as an ‘independent contractor’ although I am certain that I represented that of an employee during my entire time of engagement. All the responsibilities I had an (sic) undertook resemble that of an employer-employee relationship as defined by Fair Work,” the worker said.

The worker provided a document titled “Sports for Better Minds: Coaches Conduct.” It outlined the “expectations of the relationship,” which had the following requirements:

• “Expectations that each session would be accompanied by a 15 minute set up and a 15 minute set down;
• Deduction from wages for lost or damaged equipment;
• Session structures;
• Pay rates based on completion of a session;
• Probationary pay rates increasing after 3 months;
• Different rates for working as a Lead Coach, Assistant Coach or working in Holiday Clinics;
• Where the agreed conditions were not met, provisions for taking disciplinary action verbal warning, written warning and dismissal; and
• A required notice period when “leaving” the Respondent of 2 weeks.”

The Applicant also gave a copy of the invoice template he used to invoice the employer for his services.

Employer argues he was hired as a contractor

The employer said the worker was not dismissed because he was a subcontractor and that he got fired because he ended a coaching session 20 minutes early and left children unsupervised.

It said it “created a serious risk to the safety of these children as children whose parents were not there early to pick them up, were left unsupervised.”

It then gave a copy of an email sent to the worker on 28 April 2023 that confirmed that he was required to register as a coach on the employer’s website with an ABN before payments could be made.

The employer said he was hired as a contract coach and that he would complete coaching sessions for the employer when required.

It also argued that it presented the worker with multiple session options across different schools and schedules throughout the week. Ultimately, it was the worker's choice to select from these opportunities as per his preference.

‘No written contract’ between the worker and employer

According to records, there was “neither a written employment contract nor a written independent contract in place, however, both parties agreed that there was a verbal understanding as a result of a meeting between Smith and the worker.”

The employer said that the worker knew “the relationship would be of a contractor nature; that he would supply an ABN and would be responsible for payment of taxation and superannuation and that [he] would provide invoices for payment.”

Worker said he ‘understood the role of a contractor’

The worker said that “he understood the role of a Contractor as he had registered for an ABN to perform work for Uber Eats which he understood to be of a similar nature to the type of work he was to perform for the [employer].”

He also said he was paid a set fee for each coaching session he performed and that the fee was set by the employer. That fee increased with experience or if the worker performed as an Assistant Coach or in Holiday Clinic sessions.

The worker further said that “he did not question the nature of his employment until after the relationship came to an end and he sought legal advice from a community legal centre.” He said that it was “the community legal centre’s advice that gave him cause to believe that the nature of the engagement was as an employee not a contractor.”

‘A shared understanding’ between the parties

The FWC noted that while “a clear written agreement was absent, there was some shared understanding between the parties that the relationship was one of a contractor rather than employee nature.”

However, the Commission also found that the “Expectations Document” between them was confusing. “Some of the material filed by the parties demonstrated confusing language that was inconsistent with that understanding, such as the referral to payment of wages and to the taking of disciplinary action, both in the Expectations Document,” the Commission said.

In the end, after considering all the factors, “including the Expectations Document, the verbal understanding by the parties at the commencement of the relationship and the greater conduct of the parties being consistent with that agreement up until the relationship came to an end,” the Commission found that the worker was an independent contractor.

“The parties understood this from the beginning of the engagement and conducted themselves predominantly in this manner until after the relationship came to an end,” the Commission added.

Thus, it ruled that the worker was an independent contractor and rejected his claims against the employer.