Dismissal fight kicks off after physio's first-round win

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Dismissal fight kicks off after physio's first-round win

A physiotherapist can proceed with an unfair dismissal claim after the Fair Work Commisson ruled he was an employee, not an independent contractor.

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A physiotherapist can proceed with an unfair dismissal claim after the Fair Work Commisson ruled he was an employee, not an independent contractor.

The Commission was satisifed Mark Mitchell was not conducting a business of his own, but was instead an employee within the meaning of the Fair Work Act.

Background


Mr Mitchell worked at Urailda Physio from July 2014 until December 2016. 

The business was owned by Nadine Schultz and involved a single treatment room that was used by her and, at other times, Mr Mitchell.

The Commision heard Ms Schultz had asked Mr Mitchell whether he wished to be an “employee”, in which case he would be paid an hourly rate, or a “contractor”, under which he would be paid a percentage of his billings.

Mr Mitchell opted for the “contractor” arrangement.

During the employment period, Mr Mitchell also worked in his own physio practice and at another doctor's surgery.

Was he an employee?


In December 2016 Ms Schultz wrote to Mr Mitchell advising that his services were no longer required. 

The letter stated: "As we have discussed, your availability was significantly reduced in May 2016. That has adversely affected our clientele numbers. There has been an increasing decline in doctor referred clients that are happy to see you, as well as a decline in clients prepared to transfer onto your list. As I do not think this is an issue that can be resolved Monday afternoon and Saturday morning sessions are increasingly not viable or being utilised to their full potential.

"Thank you for your support over the past two and a half years. I wish you well in your new adventure...”  

Mr Mitchell contended that at the time of his dismissal he was an employee.

His reasons included:
  • There was no written contract in relation to his engagement and the only conditions that were discussed were the hours he would work and the method that would be used to calculate the amount he would be paid.
  • The respondent exercised discretion and control over the work performed by Mr Mitchell.
  • Mr Mitchell at all times believed he was working in the business of Uraidla Physio rather than conducting his own business alongside that of the respondent.
  • Uraidla Physio had control over the hours he worked and he had an ongoing expectation these hours would continue.
  • Uraidla Physio bore the risk in relation to services performed by Mr Mitchell.
  • Uraidla Physio supplied all stationery, software and equipment required by Mr Mitchell, and
  • There was a general arrangement that payments would be made fortnightly (although this was at times sporadic) and Mr Mitchell did not provide invoices to the respondent.

Or was he a contractor?


Ms Schultz maintained that at all times Mr Mitchell was an independent contractor.

Her reasons included:
  • During initial discussions, Mr Mitchell had indicated his preference to be a contractor.
  • He was engaged to provide stand-alone physiotherapy services direct to clients and was responsible for attracting and maintaining his own client list.
  • She exercised no control over Mr Mitchell's service delivery, aside from insisting that sessions ran for no less than 30 minutes.
  • She didn't determine Mr Mitchell’s hours of work; they were negotiated between the parties.
  • Throughout his engagement with Uraidla Physio, Mr Mitchell also provided services through his own physiotherapy business and at another established practice.
  • Uraidla Physio did not provide any equipment solely for Mr Mitchell’s use.
  • Uraidla Physio did not deduct income tax or make superannuation contributions on behalf of the applicant. Mr Mitchell was also not treated as an employee for WorkCover purposes.
  • Mr Mitchell took periods of “leave” both in relation to illness and recreation, however there was never any discussion or expectation that he would be paid for these periods and the applicant maintained his own income protection insurance, and
  • The personal nature of the services provided would not tend to create goodwill for her business but rather for Mr Mitchell whom clients would, and did, follow to another practice.
Ms Schultz contended that she and Mr Mitchell were professional peers and agreed to establish a relationship which was intended to be that of an independent contractor.

Ruling


Commissioner Hampton pointed out that Ms Schultz had not sought to evade the obligations of an employer-employee relationship. Rather, she gave him the choice of arrangement and he elected to be paid a percentage of billings and to be treated as a contractor.

"However, it is the substance of the relationship that must be considered in light of the facts and the approach required by the relevant authorities," he said.

"The discussions about the consequences of being treated as a contractor were somewhat superficial and no details arrangements were agreed to confirm those implications. It is also the whole of the relationship that must be assessed."

The Commissioner found that: "fundamentally, Mr Mitchell was working within the business environment, workplace and various operational systems established by Uraidla Physio and the services were also provided as part of the business of the respondent.

"This included that it was Uraidla Physio that had the right to make the important business decisions, it set and could change the context in which the services were to be provided, and the respondent took the risks associated with the payment for the provision of those services..." 

Commission Hampton said he was satisfied that, in relation to the work undertaken at Uraidla Physio, Mr Mitchell was not conducting a business of his own but was an employee within the meaning of the FW Act.
 
According, the Commission had jurisdiction to hear and determine his unfair dismissal application.

Mark Mitchell v Uraidla Physio (U2017/625) [2017] FWC 2476


  
 
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