Abdulai Salim v AFA Sheetmetal Components Pty Ltd, Daniel Paragalli [2023] FWC 1834

1 Fair Work Act 2009 s.365—General protections Abdulai Salim v AFA Sheetmetal Components Pty Ltd, Daniel Paragalli (C2023/506) DEPUTY PRESIDENT EASTON SYDNEY, 25 JULY 2023 Application to deal with contraventions involving dismissal – jurisdictional objection – is the applicant a person who has been dismissed – employee v independent contractor – terms of contract – conduct under the contract relevant to identifying contractual terms – no evidence of worker operating his own business – cash payments – paucity of records – worker has no specialised skills – arrangement indistinguishable from casual employment. [1] On 31 January 2023 Mr Abdulai Salim made an application to the Fair Work Commission under s.365 of the Fair Work Act 2009 (Cth). Mr Salim claims that he was dismissed from his employment with AFA Sheetmetal Components Pty Ltd and that the dismissal contravened the general protection provisions of the Act. [2] AFA Sheetmetal maintains that Mr Salim was not an employee, only worked for a brief period as an independent contractor for AFA Sheetmetal, and therefore was not ever dismissed. The Commission’s task [3] The Fair Work Commission can deal with applications under s.365 of the Act by way of conciliation or mediation under s.368. If the Commission is satisfied that all reasonable attempts to resolve the dispute have been or are likely to be unsuccessful it can issue a certificate under s.368(3). Section 370 imposes a substantial restriction upon applicants by preventing a general protections court application being made unless the FWC has issued a certificate under s 368(3)(a) in relation to the dispute (Ward v St Catherine’s School [2016] FCA 790 at [3]). [4] The Full Court in Coles Supply Chain v Milford (2020) 300 IR 146, [2020] FCAFC 152 (“Milford”) made the following relevant observations about the FWC’s capacity to deal with applications under s.365 and antecedent disputes about dismissal: a) the FWC’s non-determinative powers to deal with a dispute under s.368 are only enlivened if an application is properly made under s.365. The proper making of an application under s.365 is an essential precondition to the FWC’s authority to perform its functions under s.368 (at [51]); b) a dispute about whether a person has been dismissed raises an antecedent issue going to the existence of the FWC’s authority to compel an employer to participate in its conciliation processes (at [65]); [2023] FWC 1834 DECISION -- 1 of 11 -- [2023] FWC 1834 2 c) it is open for a respondent to assert that there has been no dismissal, which gives rise to a dispute on that question which falls to be determined under s.365 (at [67]); d) that dispute must be resolved before the FWC’s powers under s.368 can be exercised at all (at [67]); e) the FWC is entitled to determine the limits of its authority to deal with a dispute under s.368, although it has no authority to conclusively determine those limits (at [43]). f) in so determining the limits of its authority the FWC may determination matters of fact (at [71]); g) the Federal Court or the Federal Circuit Court has the power to judicially determine whether a person is entitled to make an application to the FWC (at [74]). The FW Act establishes alternative pathways for an applicant and prospective litigant and a court might decline to recognise an “application” or resulting certificate is valid when determining an objection to competency of a legal proceeding under s.370 of the FW Act (at [75]); and h) the determination by the FWC is not authoritative in the sense of being final. If the FWC errs in determining a question upon which its authority depends, it will commit jurisdictional error by wrongfully denying that it has the authority to “deal with the dispute” under s.368 of the FW Act (at [79]). [5] Therefore the overall task of the Commission in this application is to determine whether Mr Salim was “a person who has been dismissed.” “A person who has been dismissed” [6] Mr Salim is able to make a general protections claim if he is “a person who has been dismissed” (per s.365(a)). “Dismissed” is defined in s.12 of the Act by reference to s.386. Section 386 is in the following terms: “386 Meaning of dismissed (1) A person has been dismissed if: (a) the person's employment with his or her employer has been terminated on the employer's initiative; or (b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.” [7] Section 386 refers only to “employment” ending. As such, the reference to a “person” who has been dismissed can only be a reference to an employee who has been dismissed. The law after Jamsek and Personnel Contracting [8] In Waring v Hage Retail Group Pty Ltd [2022] FWC 540 (Waring) Deputy President Anderson provided the following helpful summary of the significance of the High Court decisions in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 312 IR 1, [2022] HCA 1 (Personnel Contracting) and ZG Operations Australia Pty Ltd v Jamsek (2022) 312 IR 74, [2022] HCA 2 (Jamsek): “[52] In two judgements delivered on 9 February 2022 the High Court of Australia pronounced on the law that applies in determining whether, absent a specific statutory -- 2 of 11 -- [2023] FWC 1834 3 rule, a person is an employee or contractor. In doing so, the Court reviewed past decisions of the Court (and other courts) and set out afresh relevant legal principles. [53] In important respects the law as expressed by the High Court in Jamsek and Personnel Contracting has modified, if not replaced, former approaches. In particular, the past approach of the Commission (itself based on past court authority) as outlined in the leading full bench case of [Jiang Shen Cai trading as French Accent v Rozario [2011] FWAFB 8307 at [30]] is, with some limited caveats, no longer good law. [54] The High Court, via the combination of judgements in both Jamsek and Personnel Contracting, has largely rejected an approach whereby the relationship between parties across its life span is examined (including how the relationship operates in practice). The Court has stated that contractual terms and not performance, where those terms can be ascertained and where the contract is not a sham, will determine the true nature of the relationship. However, the Court has observed that the manner in which the relationship is worked in practice may be relevant for certain limited purposes, such as to find contractual terms where they cannot otherwise be ascertained or to determine the nature of any variation to agreed terms. [55] Indicia (such as those identified in earlier cases in the Court) may be relevant but only insofar as the terms of the contract give voice to them. One approach, to be used as a guide, is to look at whether, under the contract, the worker is engaged to work in the business of another, though this may not necessarily be useful in all cases. The extent of a contractual right to control, as evident from the terms of the contract itself, remains a major signifier of an employment relationship. That an arrangement was brought about by the superior bargaining power of one party has no bearing on the meaning and effect of the contract. [56] Amongst the caveats expressed by the Court, is that a mere label acting as a subterfuge to the true nature of the contractual relationship will not determine the status of the parties. In this respect at least, the law remains unchanged by these recent decisions.” [9] The Deputy President’s summary was endorsed by the Full Bench in Azad v Hammond Park Family Practice Pty Ltd T/A Jupiter Health Warnbro [2022] FWCFB 66 at [14]. [10] In Chambers and O’Brien v Broadway Homes Pty Ltd [2022] FWCFB 129 at [74] a subsequent Full Bench provided this summary of the key propositions in Personnel Contracting: “(1) When characterising a relationship regulated by a wholly written, comprehensive contract which is not a sham or otherwise ineffective, the question is to be determined solely by reference to the rights and obligations under that contract. It is not permissible to examine or review the performance of the contract or the course of dealings between the parties (Personnel Contracting at [40]-[62], [172]-[178] and [203]); -- 3 of 11 -- [2023] FWC 1834 4 (2) The subsequent conduct of the parties may be considered to ascertain the existence of variation of contractual terms (Personnel Contracting at [42], [45], [177]-[178], [188]-[190] and [203]); (3) The multifactorial approach only has relevance in respect of the required assessment of the terms of the contract (Personnel Contracting at [33]-[34], [47], [61], [174], [186]- [189] and [203]); (4) It is necessary to focus on those aspects of the contractual relationship which bear more directly upon whether the worker’s work was so subordinate to the employer’s business that it can be seen to have been performed as an employee of that business rather than as part of an independent enterprise (Personnel Contracting at [39]). The question is: whether, by the terms of the contract, the worker is contracted to work in the business or enterprise of the purported employer (Personnel Contracting at [180]- [186] and [203]); (5) Existence of a contractual right to control the activities of the worker (including how, where and when the work is done) is a major signifier of an employment relationship (Personnel Contracting at [73]-[74], [113]-[114] and [121]); and (6) The label or characterisation placed on the relationship by the contract is not relevant even as a “tie breaker” (Personnel Contracting at [58], [63]-[66] and [79]), or at least it is not determinative (Personnel Contracting at [127], [184] and [203]).” [11] In Deliveroo Australia Pty Ltd v Franco [2022] FWCFB 156 at [34]-[35] (Deliveroo) the Full Bench endorsed the above summary and added a further point: “… A contractual freedom on the part of the party performing the relevant work to accept or reject any offer of work and to work for others is not necessarily a contraindication of employment and may rather be consistent with casual employment.” [12] The significance of the High Court’s decisions in Personnel Contracting and Jamsek are most apparent in the Full Bench decision in Deliveroo (at [53]-[54]): “In the circumstances described, the application of the Personnel Contracting decision has obliged us to ignore certain realities concerning way in which the working relationship between Mr Franco and Deliveroo operated in practice… … Had we been permitted to take the above matters into account, as the Commissioner did, we would have reached a different conclusion in this appeal. As a matter of reality, Deliveroo exercised a degree of control over Mr Franco’s performance of the work, Mr Franco presented himself to the world with Deliveroo’s encouragement as part of Deliveroo’s business, his provision of the means of delivery involved no substantial capital outlay, and the relationship was one of personal service. These matters, taken together, would tip the balance in favour of a conclusion that Mr Franco was an -- 4 of 11 -- [2023] FWC 1834 5 employee of Deliveroo. However, as a result of Personnel Contracting, we must close our eyes to these matters.” The evidence from the parties [13] The evidence before the Commission is less than ideal. Directions were made to prepare the matter for hearing. For a long period Mr Salim did not comply with any directions. Allowing for the fact that English is not Mr Salim’s first language, Mr Salim nonetheless did not properly co-operate or communicate with the Commission. The Commission's power to dismiss an application made under s.365 is very limited (see s.587(2)). [14] Eventually Mr Salim sent an email containing four paragraphs of text and some attachments. This material was taken to be Mr Salim’s evidence and also his submissions. [15] AFA Sheetmetal had permission to appear by way of a legal representative. AFA Sheetmetal’s evidence and submissions were filed on time and addressed many but not all of the issues in the matter. [16] Whilst I am comfortable that both parties had a reasonable opportunity to prepare and present their respective cases, I must necessarily take into account these procedural difficulties when assessing the evidence of both parties. Mr Salim’s Evidence [17] Mr Salim’s evidence in chief was: “1.Afa sheet metal company said have received paid true my account as ABN holder n have never received money from this Afa sheet metal company true my account he do always pay me cash in hand n have evidence from my bank have never received any money from this Afa Sheetmetal company which I send him an invoices on 1st January 2023 which he never did send that money in my account I find out after I report this company to my lawyer this company started updating my ABN in their system on 23rd January 2023. 2 … 3. Like my attachment, I sent him the Abn invoice on 7th January but he never paid in my bank account during this time. I also provide him with my bank account number. 4 …” [18] In another email sent prior to the hearing the Applicant said: “This Salim have bully n sexual harassment by Afa sheet metal also will be happy to have a hearing date I knw when my lawyer first ask him I wrk for him he said no till further he said yes soo am still not happy abt him treating like shit n dump me after my accident all I have evidence which have been send already all I have to show have wrk for him im the message I send n the evidence I send before was the evidence I have thanks.” -- 5 of 11 -- [2023] FWC 1834 6 [19] Mr Salim also provided screenshots of SMS exchanges with Mr Paragalli and a medical certificate dated ten days after the alleged dismissal took place. Mr Salim also relied on an exchange of correspondence between AFA Sheetmetal and a law firm he engaged for a short time in relation to a workers compensation claim. AFA Sheetmetal’s Evidence [20] Mr Paragalli gave evidence on behalf of AFA Sheetmetal. Mr Paragalli is a director of AFA Sheetmetal and an alleged accessory (see s.545) to AFA Sheetmetal’s alleged contraventions of the general protection provisions of the FW Act. [21] Mr Paragalli gave evidence that he first met Mr Salim in October 2022 when Mr Salim delivered goods from a supplier to AFA Sheetmetal’s factory. Mr Paragalli said that Mr Salim told him at this time that he did not work directly for the supplier but said "I have my own ABN. Do you have any work for me?" [22] Mr Paragalli said that between October and December Mr Salim contacted him on numerous occasions asking "do you have any work for me?" [23] When Mr Salim asked about work on 7 December 2022, Mr Paragalli said to him "I will let you know. But it will have to be under your ABN”, to which Mr Salim said "okay". [24] Between 7 December 2022 and 14 January 2023 Mr Salim was told via SMS when work was available. Mr Paragalli said that the work ranged from approximately two to four days in any given week, save for a Christmas shutdown that ended on 2 January 2023. [25] Mr Paragalli said that Mr Salim was only ever paid cash for his work, although the intention was said to be that Mr Salim would be paid into a bank account once Mr Paragalli had “checked out his ABN”. [26] On 7 January 2023 Mr Salim provided his first and only invoice to AFA Sheetmetal. The invoice included Mr Salim’s ABN, appears to be for 27 hours of work over the previous three days, and a total amount owing of $945. On the same day Mr Salim provided his bank account details by SMS to Mr Paragalli. No monies were ever paid to Mr Salim’s bank account and it seems to be accepted by both parties that Mr Salim was paid $945 in cash for 27 hours of work on 4-6 January 2023. [27] In relation to payments Mr Paragalli said the following: “The Applicant's remuneration was determined by him and was significantly higher than that of an employee under any relevant award… The Applicant worked as required and was paid from time to time on the basis of work done for AFA. The Applicant was paid in cash by AFA and did not receive a payslip. The Applicant was never employed by AFA. I requested invoices from the Applicant in respect of work done. Annexed … is a copy of an invoice sent to me by the Applicant… -- 6 of 11 -- [2023] FWC 1834 7 The Applicant never made a complaint about being paid in cash. From time to time, the Applicant would request immediate payment from AFA, saying he needed money on that particular day. He also said cash was a convenient form of payment as he would give cash to the mothers of his children. AFA would then immediately pay the Applicant in cash.” [28] Neither party led any evidence of the specific amounts paid in cash to Mr Salim. If AFA Sheetmetal kept any records of these payments, those records were not provided in evidence. [29] From the paucity of evidence regarding the payments made, the only finding available is that on one occasion Mr Salim was paid $35 per hour for 27 hours of work performed on 4, 5 and 6 January 2023. [30] AFA Sheetmetal said that in the single invoice issued by Mr Salim, there was a GST component charged. It seems to be agreed that Mr Salim was not registered for GST and not able to charge GST. The terms of the invoice issued by Mr Salim are somewhat basic. Mr Salim issued the invoice by sending a photo via MMS to Mr Paragalli. The photo appears to be of a page in a book of invoices, with the information hand-written on a template document. Towards the bottom of the page there is space for the “TOTAL INCLUSIVE OF G.S.T.” but no figure was written in this space. There is also space for “Total includes G.S.T. of”. Mr Salim has written in this space “945.00”. The handwritten words “TOTAL 945.00” also appear on the page. [31] There was no evidence that AFA Sheetmetal claimed any GST input tax credits for payments made to Mr Salim. For what it's worth, I am not satisfied that Mr Salim charged GST or that AFA Sheetmetal recorded or claimed any GST payments made to Mr Salim. [32] There is also a notable absence of evidence regarding the work performed by Mr Salim. Mr Paragalli said in his written statement "the applicant was not able to complete even basic tasks to the required standard or at all." AFA Sheetmetal is a steel fabrication business. Neither Mr Salim nor AFA Sheetmetal identified any particular skills that Mr Salim has or used in his work. AFA Sheetmetal draws an inference from Mr Paragalli’s first conversation with Mr Salim that he was previously engaged as a truck driver on a contractor basis, but there is no direct evidence of this. In fact there is no evidence that Mr Salim drove a truck for AFA Sheetmetal either. On one occasion Mr Paragalli sent two photos to Mr Salim via SMS and a message saying “2 more wrong. I have to go through, repack and throw out”, which suggests that on one occasion Mr Salim did some kind of packing work. [33] There was no evidence as to who was in control of the work Mr Salim performed. There is no suggestion from AFA Sheetmetal that Mr Salim controlled or supervised his own work. In the circumstances it is highly likely that AFA Sheetmetal controlled Mr Salim's work – deciding what work was to be performed and when, where and how that work was performed. -- 7 of 11 -- [2023] FWC 1834 8 [34] In cross-examination Mr Paragalli said that he did not treat Mr Salim in the same way that he treated employees of AFA Sheetmetal in relation to: (a) asking for a tax file number and bank account details; (b) providing a choice of superannuation fund and payments for superannuation; (c) issuing payslips; and (d) issuing uniforms and PPE (jumpers, shirts, pants, hats, steel-capped shoes and specialist welding shirts). [35] There was disagreement in the evidence about whether or not Mr Salim was provided with a uniform. Mr Paragalli said in his written statement that AFA Sheetmetal did not provide him with a uniform. Mr Salim relied upon a photograph of a T-shirt bearing AFA Sheetmetal’s logo as evidence that a uniform was issued to him. In cross-examination Mr Paragalli said that on a number of occasions Mr Salim attended work without a shirt. Mr Paragalli said that eventually he gave Mr Salim one T-shirt for him to wear out of frustration. [36] From the evidence I make the following findings of fact: (a) Mr Salim has no formal or specialised skills or expertise; (b) Mr Salim was only ever paid in cash; (c) Mr Salim was only offered work on an "as needs" basis and there was no guarantee of work on any particular day; (d) Mr Salim provided one invoice, dated 7 January 2023, for 3 days work; (e) for three days of work on 4, 5 and 6 January 2023 Mr Salim was paid $35 per hour cash; (f) Mr Salim was treated differently to AFA Sheetmetal’s employees insofar as AFA Sheetmetal did not issue any uniforms or PPE, did not provide payslips or apply any of the same payment procedures; (g) there was no regularity of work or regularity of payment; and (h) payments were made by reference to time spent working rather than by reference to output. Consideration - The terms of the contract [37] There was no written contract and the evidence provided from both parties is less than ideal. In this matter conduct under the contract is relevant to identifying the terms of the contract. [38] On balance I find that the material terms of the contract between Mr Salim and AFA Sheetmetal were as follows: (a) Mr Salim was required to provide unskilled labour/work to AFA Sheetmetal; (b) AFA Sheetmetal was required to pay Mr Salim by reference to time worked; (c) AFA Sheetmetal was not required to offer any particular amount of work, or work on any particular day or days; (d) Mr Salim was not obliged to accept offers of work from AFA Sheetmetal; (e) Mr Salim was not prevented from working for others; (f) it was not essential to payment that Mr Salim provide an invoice; (g) Mr Salim was not required to warrant his work, or rectify any shortfalls in his own time; and (h) Mr Salim was not required to wear a particular uniform that might associate him with AFA Sheetmetal’s business. -- 8 of 11 -- [2023] FWC 1834 9 Consideration – was Mr Salim an employee of AFA Sheetmetal [39] As Kiefel CJ, Keane and Edelman JJ said in Personnel Contracting at [39] and [62]: “While the “central question” is always whether or not a person is an employee, and while the “own business/employer’s business” dichotomy may not be perfect so as to be of universal application for the reason that not all contractors are entrepreneurs, the dichotomy usefully focusses attention upon those aspects of the relationship generally defined by the contract which bear more directly upon whether the putative employee’s work was so subordinate to the employer’s business that it can be seen to have been performed as an employee of that business rather than as part of an independent enterprise. In this way, one may discern a more cogent and coherent basis for the time- honoured distinction between a contract of service and a contract for services than merely forming an impressionistic and subjective judgment or engaging in the mechanistic counting of ticks on a multifactorial checklist. … Workpac Pty Ltd v Rossato concerned the question whether a person who was engaged to work under what were indisputably contracts of employment was a casual employee. This Court rejected the argument that this question was to be determined by reference to all the circumstances of the employment, including disparities in the bargaining power of the parties. Hollis had been cited in support of that argument. Kiefel CJ, Keane, Gordon, Edelman, Steward and Gleeson JJ noted that because, in Rossato, the Court was concerned with what was, on any view, a contract of employment, Hollis was not on point. Their Honours went on to say that, “[o]n one view”, the resolution of the question whether a person engaged to work for another is an employee or an independent contractor “may depend upon the extent to which it can be shown that one party acts in the business of, and under the control and direction of, the other”.118 But because the issue of present concern did not arise in Rossato, the plurality refrained from expressing a concluded view as to the significance of the observations in Hollis in relation to that issue. The occasion to express a view on that matter has now arrived: the point was squarely raised and fully argued. There is no reason in principle why the approach taken in Rossato should not be applied where the issue is whether the relationship in question is one of employment.” [Footnotes omitted] [40] There is no basis to find that Mr Salim supplied labour to AFA Sheetmetal as part of his own independent business enterprise. Apart from the fact on the day that he met Mr Paragalli he asked "I have my own ABN. Do you have any work for me?" and that Mr Salim owns or borrowed a book containing an invoice template, there is no evidence consistent with Mr Salim operating his own business. [41] There is no evidence of any marketing activities, such as distributing business cards or relevant online activity. There is no evidence that Mr Salim maintained any business or personal injury insurance. To the contrary the evidence led by AFA Sheetmetal implies that Mr Salim used his work with AFA Sheetmetal to engineer a false workers compensation claim. There was no evidence of Mr Salim maintaining any records that could be described as business -- 9 of 11 -- [2023] FWC 1834 10 records, save for the photograph of the hand-written invoice that Mr Salim retained on his mobile phone. [42] In fact, on the evidence only one written document was made by either party in the whole period over which Mr Salim was engaged – being one hand-written invoice. The invoice was sent to AFA Sheetmetal by MMS at the request of AFA Sheetmetal. [43] Both Mr Salim and Mr Paragalli agree that all payments were made in cash. Mr Paragalli said that Mr Salim did not complain about receiving payments in cash – and that Mr Salim said he thought it was a convenient form of payment that allowed him to give cash to the mothers of his children. The absence of paperwork and the evidence of cash payments call into question the legitimacy of the mutual arrangement between the parties, but do not otherwise support the proposition that Mr Salim was an independent contractor. [44] The work performed by Mr Salim was performed as part of AFA Sheetmetal’s business, not his own business. [45] AFA Sheetmetal treated Mr Salim differently to its employees in relation to superannuation, payroll records, PPE and so on, which superficially points in favour of Mr Salim not being an employee. However, the real inquiry is on the terms of the contract between Mr Salim and AFA Sheetmetal. The fact that AFA Sheetmetal did not keep proper employment records relating to Mr Salim does not assist much when it is apparent that AFA Sheetmetal kept almost no records at all about Mr Salim. [46] As the Full Bench found in Deliveroo, freedom to work for others is not necessarily a contraindication of employment and may rather be consistent with casual employment. [47] In my view, apart from the arrangements relating to payment, the terms of engagement are indistinguishable from casual employment. The fact that Mr Salim brought no identified skills points strongly to the reality that he was simply engaged as a casual labourer. [48] In conclusion I find that Mr Salim was employed on a casual basis by AFA Sheetmetal in December 2022 and January 2023. Conclusion [49] AFA Sheetmetal did not otherwise contest the claim that Mr Salim was an employee who was dismissed. No argument was raised by AFA Sheetmetal about the frequency of Mr Salim’s work and whether, if he was a casual employee, Mr Salim was in fact dismissed. -- 10 of 11 -- [2023] FWC 1834 11 [50] In these circumstances I find that Mr Salim’s application was properly made under s.365 of the FW Act. As such the Commission has authority to perform its functions under s.368 and arrangements will be made for a conciliation conference in due course. DEPUTY PRESIDENT Appearances: Mr A Salim, Applicant Mr A Agostino, for the Respondent Hearing details: 2023. Sydney June 21. Printed by authority of the Commonwealth Government Printer <PR764580> -- 11 of 11 --