The question of whether a worker was an employee or contractor is a critical one when it comes to general protections or unfair dismissal claims. This is because to make a claim concerning your dismissal, you must have been dismissed. And to be dismissed, you must have been an employee, and not a contractor.
Sometimes, an employer may attempt to block a claim by arguing that you were never an employee. This is what happened to a Queensland nanny in a recent Fair Work Commission case – Ms. Jessica Dickson v Ms. Susan Kovacs, Mr. Felipe Cespedes [2025]
The nanny wanted to make a general protections claim involving dismissal against the married couple that employed her. But they argued the nanny was never an employee and had never been dismissed.
In this article, we look at the factors the Fair Work Commission considered to decide if the nanny was an employee or a contractor.
Ms. Jessica Dickson started working as a nanny for married couple Susann Kovacs and Felipe Cespedes (the Respondents) in early 2023. She initially worked five days a week taking care of their two children at their home in Queensland. About a year into the job, Ms. Dickson’s hours with the family were reduced to two days per week. At this point she took on another job at a childcare centre while still nannying for the Respondents.
Ms. Dickson claimed to the Fair Work Commission that she had been employed by the Respondents and was dismissed on 5 October 2024. She submitted a claim to the Commission in late October 2024 to deal with a general protections dispute involving dismissal.
When the Respondents were notified of the claim against them, they filed a jurisdictional objection. They argued to the Commission that Ms. Dickson was an independent contractor. If their argument was true, this meant that she had not been dismissed as per section 365 of the Fair Work Act 2009.
The Fair Work Act 2009 allows individuals to make a general protections claim involving dismissal if they were indeed dismissed. During a Fair Work Commission hearing in January 2025, the Respondents conceded that if Ms. Dickson were indeed an employee, her engagement had concluded at their initiative.
Consequently, the sole jurisdictional question to be determined by the Commission was whether Ms. Dickson had been an employee of the Respondents.
A new section of the Fair Work Act 2009 introduced in August 2024 mandated new requirements for determining if an individual is an employee or not. It requires employment status to be determined by ascertaining the “real substance, practical reality and true nature of the relationship between the individual and the person.”
To determine these qualities, the “totality” of the employment relationship” must be considered. This includes not only the contractual terms of the relationship, but also how the contract was performed in practice, among other factors.
To determine if Ms. Dickson was an employee and therefore eligible to make a general protections claim, the Fair Work Commission examined the contractual terms between her and the Respondents. It observed that these were largely oral and somewhat vague.
The Respondents said that some of the terms of the contract were in text messages. For instance, Ms. Dickson had texted that she would work at a rate of “$35hr plus $50 a week for super that I can put in myself.” She also specified that she would need payment via bank transfer, or as the Commission noted, via a “cash in hand” arrangement.
A significant point of contention was whether the parties had agreed Ms. Dickson would be a contractor. The Respondents cited a text exchange where Mr. Cespedes asked Ms. Dickson if she usually nannied “as a contractor or under an employment agreement?” Ms. Dickson replied that she had previously worked as a contractor under a “cash in hand” arrangement.
The Fair Work Commission concluded that this text exchange “obviously falls short” of an agreement that Ms. Dickson would be engaged as a contractor and not an employee. It said that the parties’ label for the relationship was not determinative.
To prove she was an employee and therefore eligible to make a general protections claim, Ms. Dickson told the Commission that she had provided the Respondents with her qualifications, superannuation details and tax file number.
In July 2024, the Respondents also referred to Ms. Dickson as “more than an employee” in a text message. Mr. Cespedes later created two “fake” pay slips at Ms. Dickson’s request for a rental application, which purported to show withheld tax and superannuation payments.
The Fair Work Commission noted that in the case of household workers like nannies, the question it needed to answer was whether the individual worked as a “servant of the household.” Or did they run a “business of their own” with the heads of the household as customers.
The Commission concluded that Ms. Dickson was not operating her own business. There was no evidence she provided nannying services to other households. It could also not be proven that she issued invoices, provided an ABN, or filed quarterly tax reports. Her other employment was as an employee in “someone else’s business,” the Commission noted.
While parties disputed specifics, Ms. Dickson’s evidence indicated the Respondents set the timing and location of children’s appointments. She was also directed to perform various tasks. This included household duties like cleaning and grocery shopping, and daily exercise sessions with their children.
Ms. Kovacs conceded that she asked Ms. Dickson to take the children to appointments or to help them with exercises. The Commission accepted that the Respondents had the “right” to direct Ms. Dickson in the “performance of her duties as a nanny.” It stated, however, that having control over a nanny does not mean they are not a contractor.
The Commission said that such an arrangement was common for nannies in the household. It added that while control is a “significant” factor in determining if an individual is an employee, it’s “not the only factor assessed.”
The Fair Work Commission observed that Ms. Dickson’s working hours were negotiated week-to-week based on the family’s needs and were not self-determined by her. The Respondents argued that this demonstrated that they had limited control over Ms. Dickson. However, they also admitted that Ms. Dickson would have felt obligated to align her work times with Ms. Kovacs’ working hours.
The Commission disagreed with the Respondents that they had limited control. It said that it could “not seriously be argued” that Ms. Dickson could choose to care for the children at any place of her choosing.
The Fair Work Commission noted that Ms. Dickson was paid based on hours worked, not on a task or piecework basis. No taxation was withheld, and Ms. Dickson did not charge GST or provide an ABN. It determined that the payment of a nominal amount for superannuation also did not clarify the relationship. This was because it was not paid to a superannuation fund and the superannuation legislation’s definition of “employee” can include independent contractors.
The Commission bluntly said that the pay slips provided to Ms. Dickson were “fake.” They therefore did help in determining if she was an employee or not. Along with the reference provided to a real estate agent, the Commission said that the pay slips indicated Mr. Cespedes’ willingness to present Ms. Dickson as an employee to external parties. However, the overall impact of these things on determining the true relationship was limited.
It was also noted that the Respondents supplied items for their children and reimbursed Ms. Dickson for purchases she made for them. While Ms. Dickson used her own car for some duties, the Respondents provided child safety car seats and did not generally reimburse her for fuel costs.
Considering the totality of the relationship, the Fair Work Commission concluded that Ms. Dickson “was an employee capable of being dismissed” on 5 October 2024.” Given the Respondents’ concession that if Ms. Dickson was an employee, her engagement ended at their initiative, the Commission also found that Ms. Dickson had been dismissed.
As a result, the Commission dismissed the Respondents’ jurisdictional objection. The matter was allowed to proceed to conciliation within the Commission, allowing Ms. Dickson to pursue her general protections dismissal dispute.
Another recent case where the Fair Work Commission had to work out if an individual was an employee or contractor is Aspire 2 Life Pty Ltd v Jessica Tidmarsh [2024]. Jessica Tidmarsh was employed as a disability support worker for Aspire 2 Life Pty Ltd, a provider of home care services.
The core of the dispute revolved around the interpretation of the contractual arrangements between Ms. Tidmarsh and Aspire 2 Life. This was set out in a “Contractors Work Opportunity” document and a separate written agreement.
Both of these described Ms. Tidmarsh as an independent contractor and required her to obtain an ABN. While working at Aspire 2 Life, she received shift offers via a rostering application and was charged a monthly fee by the company.
About nine months into her role, Ms. Tidmarsh contacted the Fair Work Ombudsman to inquire about her employment status. Following this, Aspire 2 Life Pty Ltd terminated her contract via email. Ms. Tidmarsh subsequently lodged a general protections application involving dismissal with the Fair Work Commission.
She argued that she had been unlawfully dismissed. However, Aspire 2 Life Pty Ltd launched a jurisdictional objection to the claim. The company argued that she was an independent contractor and not an employee. It claimed therefore that she was not dismissed within the meaning of section 386 of the Fair Work Act 2009.
Ms. Tidmarsh’s case was heard by the Fair Work Commission in January 2024. It gave “little or no weight” to the fact that Ms. Tidmarsh was referred to as an “independent contractor” in the contractual documents. It said that this reference was “merely consequential upon the labelling adopted in the agreement.”
The Commission also noted the control that Aspire 2 Life had over Ms. Tidmarsh. It found that she had “no contractual right” to determine what work she would do or how it would be carried out.” The contractual documents also mandated her to “comply with care standards and follow directions for client care” by a case manager and registered nurse.
Ms. Tidmarsh could not change her work hours without giving two weeks’ notice. Aspire 2 Life could allocate her work hours as they saw fit. Ms. Tidmarsh also had to comply with the company’s quality standards and clients’ needs. The Commission said that she was “simply delivering the services” that Aspire 2 Life was contracted to provide.
It was also noted that Ms. Tidmarsh’s remuneration was on an hourly basis, with rates “set by the funding body.” She was expressly prohibited from discussing these amounts with clients. This financial arrangement further limited her entrepreneurial capacity.
The Commission found that the contractual arrangements offered Ms. Tidmarsh “little if any scope for entrepreneurship.” Based on all these factors, it concluded that she was indeed an employee of Aspire 2 Life. She was therefore allowed to pursue her general protections claim.
However, Aspire 2 Life appealed this decision. Ms. Tidmarsh’s case therefore proceeded to the Full Bench of the Fair Work Commission. Aspire 2 Life claimed that the original decision had mischaracterised the nature of its business. The company argued that its role was merely to source clients and that it did not direct the manner in which services were provided.
The Full Bench disagreed, stating that Aspire 2 Life’s business extended to negotiating and managing client services. It said that its right to issue directions for “client care” meant it controlled the “mode of performance of the work.”
Aspire 2 Life argued that the original decision did not adequately consider several aspects of the contractual documents. These included Ms. Tidmarsh’s responsibility to provide her own equipment, hold a tertiary qualification, the contract’s non-restraint on working for competitors and a mutual right of termination by notice.
The Full Bench of the Fair Work Commission noted that the original decision considered the equipment factor as indicative of Ms. Tidmarsh being an independent contractor. However, it found that this was not determinative. The requirement for a Certificate III qualification was deemed an “entry level qualification” and not supportive of an independent contractor status.
While Ms. Tidmarsh was “free to undertake other forms of work,” the Full Bench observed that her availability had to be “locked in for 6 months” and required 2 weeks’ notice for any changes. It said that this constrained her capacity to work for others.
The Full Bench of the Fair Work Commission noted that Ms. Tidmarsh’s freedom to work for competitors was not inconsistent with casual employment. On the right to terminate by notice, the Full Bench acknowledged that the original decision had not explicitly referenced this point in the detailed reasoning. However, it conceded that short notice periods “may be indicative” of casual employment.
Aspire 2 Life also argued that Ms. Tidmarsh had a right to subcontract work. However, the Full Bench found that the contract imposed an “obligation” on Ms. Tidmarsh to inform Aspire 2 Life if she could not complete work. This was so Aspire 2 Life could arrange “other suitable contractors” to undertake the duties. This was deemed not to be a unilateral right for Ms. Tidmarsh to subcontract work and receive payment for it.
Given all these findings, the Full Bench upheld the original decision that found Ms. Tidmarsh was an employee, and not a contractor. It therefore dismissed Aspire 2 Life’s appeal. Ms. Tidmarsh’s general protections claim was therefore allowed to proceed.
We can help you make a general protections or unfair dismissal claim today. Australian Workplace Discrimination Representatives (AWDR) has spent over 30 years helping Australian workers challenge unfair treatment in the workplace. Whether you were forced to resign, unfairly dismissed or subjected to bullying or harassment, our expert team is here to support you.
We’ve handled more than 16,000 employee claims and are known for achieving fast outcomes and maximum payouts. Act quickly, because Fair Work claims must be filed within 21 days. Call 1800 333 666 for a free, confidential consultation and get the advice you need today.
