Fixed means just that

A security guard employed at the Manus Island Detention Centre has been found not to have been unfairly dismissed when extensions to a fixed term contract of employment ended.

The decision is reported at Cowan v Wilson Parking Australia trading as Wilson Security [2016] FWC 5768.

Mr Cowan was employed as a security guard at Manus between March 2014 and April 2016.

His original contract of employment had an end date of 30 September 2014.

When the contract was about to end he was offered a further contract, which took him to October 2015 and then two further extensions that took him to the end of April 2016.

Each time his employment was extended, Wilson specified that there was an end date and as a consequence Mr Cowan would not be entitled to be paid a redundancy if his employment was not extended.

In the end Wilson did not extend Mr Cowan’s employment because a police certificate that Mr Cowan had supplied when he first started with Wilson showed that he had a conviction for driving offences and Wilson concluded that Mr Cowan would not be able to obtain a security licence.

Along with Mr Cowan, Wilson also let five other employees go, whose fixed term contracts with extensions had also expired.

Although Commissioner Wilson acknowledged that a fixed term contract could be a sham he was satisfied that that was not the case with Mr Cowan.

Wilson did not want to commit to permanent employment because at the time it was negotiating with Transfield, which held the head security contract with the Australian Border Force to continue to supply guards to Manus Island.

Against this backdrop and letters from Wilson to Mr Cowan each time he had an extension that his employment would end unless further extended, Commissioner Wilson had no difficulty in deciding that Mr Cowan’s employment ended because of the effluxion of time and not at the initiative of the employer, Wilson.

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If it looks like a duck and quacks like a duck… Is it a duck?

In December last year, the High Court of Australia handed down judgment in the matter of Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd.

Quest Serviced Apartments (“Quest”) employed two housekeepers over several years. It then entered into a contract with Contracting Solutions whereby the two women would become independent contractors engaged by Contracting Solutions, though they continued to work for Quest and performed the same roles.

This arrangement was effectively sham contracting, which is prohibited under Commonwealth legislation.

Section 357 of the Fair Work Act 2009 (Cth) restrains an employer from representing to an individual that they are working as an independent contractor when they are working as an employee.

As a result of its sham contracting, Quest now faces pecuniary penalties, which can be as high as $54,000 per breach for a corporation. 

So how do you know if your employees are genuinely employees or independent contractors? There is no hard and fast rule and it can often depend on the individual circumstances of the situation.

There are several indicators to consider when determining the nature of your employment relationship, such as how the worker is paid, who makes the taxation payments and whether the worker is a representative of the business.

The entire arrangement will need to be considered to determine the nature of the working relationship.

If you are unsure whether your workers are employees or independent contractors, speak to one of the Workplace Relations team at Nevett Ford on (03) 9614 7111.

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