FWC looks into employer's degree of control over worker's performance
The Fair Work Commission (FWC) recently dealt with a dispute where a worker claimed unfair dismissal and had to first prove his employee status.
The worker, despite using an ABN and issuing invoices for payment, argued his work arrangements indicated he was an employee rather than an independent contractor.
The case turned on several key questions about modern working relationships: does having an ABN automatically make someone a contractor? If a worker provides services to multiple businesses, can they still be an employee? What matters more - how parties label their relationship, or how it works in practice?
The case involved a group fitness instructor who started delivering classes at a Melbourne gym in August 2020 after responding to an advertisement.
Working at multiple gyms was standard practice in the fitness industry, and during his time with this particular gym, he taught at four other facilities.
No written contract existed between the parties. The worker already had an Australian Business Number (ABN) when he started, and the manager at the time instructed him to submit invoices for payment.
The gym called regular instructors like him 'permanent instructors,' distinguishing them from those who taught infrequently.
For nearly four years, the worker delivered three weekly classes: an hour-long Monday evening class, a 45-minute Wednesday class, and an hour-long Saturday morning class.
The gym operated on a membership model where members paid weekly, fortnightly, or monthly fees for unlimited class access.
The gym paid set rates: $40 for 30-minute classes, $55 for 45-minute classes, and $60 for hour-long classes, plus superannuation.
Though the gym said these rates were negotiable, evidence showed they remained consistent across instructors.
The worker pointed to several features of the relationship that he said showed he was an employee.
His evidence stated: "[The gym] prescribed days, times and duration, and the type of work" and "The work must be performed personally and could not be sub-contracted or delegated to another person."
He also noted that the gym's equipment was used for classes, and participants were the gym's customers, not his.
The gym maintained that instructors operated their own businesses. As stated in evidence: "[The gym] does not dictate to its independent contractors how or who they supply their services to. Independent contractors are paid at a premium contract rate to teach a set class." They argued that instructors could accept or decline classes as they wished.
The arrangement came into question when the worker gave notice about reducing his classes due to opportunities at another gym.
The gym responded by suggesting he drop all remaining classes, citing a need for instructors who could fully commit to the timetable.
The FWC examined the actual working relationship closely. The Commission noted: "Once [the worker] was assigned to classes based on his availability, [the worker] had little discretion in the performance of his work. [The worker] was required to deliver the specific classes he was allocated at the time(s) stipulated in the timetable."
The Commission found significant control by the gym: "[The worker] had no involvement in promoting or advertising the classes, he received a set pay rate which he could not negotiate... participants in the classes were customers of [the gym] rather than of [the worker]."
The decision ultimately rested on weighing various factors. The Commission concluded: "The matters which potentially indicate a relationship of principal and independent contractor are [the worker] having an ABN, issuing an invoice for payment and paying his own tax and for his insurance. However, these matters are outweighed by the degree of control exercised by [the gym] while [the worker] was performing work, and that [the worker] was working in [the gym's] business not his own."
The Commission ruled the worker was an employee, allowing his unfair dismissal claim to proceed to the next stage.
