Trainer says she performed admin shifts for gym owner
The Fair Work Commission (FWC) recently dealt with a dispute between a worker and an employer regarding the worker's employment status.
The worker, a qualified personal trainer, claimed that she was an employee and had been unfairly dismissed. In contrast, the employer, a gymnasium owner, argued that the worker was an independent contractor and therefore not protected by unfair dismissal laws.
In this case, the central issue revolved around whether the worker was an employee or an independent contractor. The distinction between these two categories is crucial, as it determines the rights and protections afforded to workers under Australian employment law.
The FWC's decision discussed the specific facts and circumstances of the working relationship between the parties, particularly the terms of the contract and the conduct of the parties following the change in ownership of the gym.
Background and context
The worker had been working at the gym under a "personal training contract" with the previous owner. When the employer took over the gym in late October 2023, the worker continued to perform essentially the same work as before.
The employer had informed the previous owner that they would keep all the subcontractors and employees but would send new agreements in due course.
The contract, which the employer was initially unaware of, contained inconsistent language, referring to both "employment" and engagement as a "contractor."
It outlined various obligations for both parties, such as the gym providing a safe and clean workplace, access to facilities for the worker and her clients, and the worker maintaining her qualifications and insurance.
Under the contract, the worker was required to pay a weekly rent of $100, which was later waived by the previous owner. She was also responsible for her own tax and insurance and was paid upon rendering invoices without receiving paid leave or other employee entitlements.
Parties’ arguments
Disputes arose when the employer became aware that the worker was conducting her personal training business during "admin" shifts and wished to make changes to her working arrangements.
The employer offered the worker a formal employment contract for the "admin" work, which she did not accept. Disagreements over pay rates and the worker's ability to train her own clients during shifts led to a breakdown in the relationship, and the employer terminated the worker's engagement.
The worker argued that she was an employee and had been unfairly dismissed. She argued that the nature of her work, particularly the "admin" shifts, and the level of control exercised by the employer indicated an employment relationship.
On the other hand, the employer maintained that the worker was an independent contractor. They pointed to factors such as the worker's responsibility for her own tax and insurance, her ability to run her own personal training business alongside her work at the gym, and the terms of the contract.
The FWC's consideration
In determining the worker's employment status, the FWC considered various factors and legal principles. It examined the terms of the personal training contract, which it found to be the primary embodiment of the contractual terms between the parties, as well as the parties' conduct after the change in ownership.
The FWC noted that while the level of control was higher for the "admin" shifts, it was not a decisive factor given the primary purpose of the contract was for the gym to utilise the worker's expertise in personal training and fitness.
The "own business/employer's business" dichotomy pointed more strongly towards an independent contracting relationship, as the contract expressly contemplated the worker running her own personal training business.
As stated by the FWC, "The contract envisages a synergistic benefit to both parties – [the worker] will be largely free to run and expand her business around the direct needs of the [employer's] business (including by drawing upon members of the gym by running group classes for the gym) while the gym obtains the benefit of [the worker's] fitness and training expertise for its own members."
The FWC also examined other factors such as the mode of remuneration, provision for paid holidays, deduction of income tax, and insurance responsibilities.
It noted that while the hourly pay was consistent with an employment relationship, the worker's responsibility for her own tax and insurance pointed towards an independent contracting arrangement.
Independent contractor or employee?
Ultimately, the FWC found that the worker was an independent contractor, not an employee. As stated in the decision, "Considering the totality of the arrangements, I find that, properly characterised, [the worker's] contractual relationship was a contract for service as an independent contractor, not a contract of services by employment."
The FWC emphasised that the "own business/employer's business" dichotomy pointed strongly towards an independent contracting relationship, noting that "The contract envisages a synergistic benefit to both parties – [the worker] will be largely free to run and expand her business around the direct needs of the [employer's] business."
Furthermore, the FWC stated, "As [the worker] was not an employee, it follows that she was not 'dismissed' within the meaning of s 365 of the Act. The [employer's] jurisdictional objection is upheld, and [the worker's] application is dismissed."
This decision highlights the importance of carefully considering the nature of working relationships and the specific terms of contracts when determining employment status.
