The Industrial Magistrates Court of Western Australia (IMC or Court) has dismissed a claim brought by an aqua aerobics instructor who alleged she was misclassified as an independent contractor rather than an employee during her engagement with the Town of Cambridge.

Between 2017 to 2018, the Town of Cambridge (respondent) employed the claimant as a casual aqua aerobics instructor at Bold Park Aquatic Centre. In October 2018, the respondent terminated its casual employment arrangements with all instructors engaged as employees and invited them to continue as independent contractors. Instructors were asked to supply an ABN and professional indemnity and public liability insurance. The claimant continued to teach at Bold Park until 23 August 2024.

The claim had a federal and state component, each dependent on the claimant being an employee between 2018 and 2024. 

The federal claim alleged the respondent breached the Fair Work Act 2009 (Cth) (Fair Work Act) by making false or misleading representations regarding her employment status as a contractor; breaching the National Employment Standards; underpaying her minimum wages according to the Town of Cambridge Employees’ Collective Agreements; failing to provide a Casual Employment Information Statement; and failing to keep and supply employment records. 

The respondent was a national system employer to which the Fair Work Act applied up until 31 December 2022. On 1 January 2023, the respondent transitioned to the Western Australian industrial relations system under the Industrial Relations Act 1979 (WA) (Industrial Relations Act). The state claim made similar allegations to the federal claim.  

The IMC is an “eligible State or Territory court”, with jurisdiction limited to civil remedy provisions listed in section 539 of the Fair Work Act. Allegations of false statements or misrepresentations, and the failure to provide a Casual Employment Information Statement fall outside the jurisdiction that an ‘eligible State or Territory court’ can hear. Since the IMC had no jurisdiction to determine these parts of the federal claim, they were dismissed.

For the remainder of the federal claim, the Court was required to consider whether the claimant was an employee and in doing so applied the relevant case law applicable at the time. Referring to principles from High Court cases Personnel Contracting ([2022] HCA 1) and Jamsek ([2022] HCA 2), the Court examined the working relationship and terms of the contract taking into account the following factors: 

1. 1. the extent to which the worker has the right to control how, where and when they perform their work; and
   2. the extent to which the worker can be seen to work in their own business, distinct to the supposed employer.

The respondent controlled what classes were offered, the timetable, the rate of pay and provided class equipment. However, the claimant controlled their class content and, provided she sourced a replacement, could choose not to attend and teach a class. She was not required to explain why she could not attend a class, and was free to advertise and work elsewhere. The claimant’s tax records also showed she operated as her own business, claiming business‑related expenses. In weighing up these factors, the Industrial Magistrate determined the claimant was not an employee, and instead, worked in her own business. 

Having concluded the claimant was not an employee, the Fair Work Act and federal enterprise agreements did not apply, and the Court dismissed the federal claim. 

The state claim was also dismissed because, on the same circumstances, the claimant did not show that the real substance, practical reality, and true nature of the relationship between the parties was one of employment. Rather, upon considering the totality of the relationship, including how the parties performed the contract, the relationship was one of independent contracting. 

The full decision can be read here.