Submitted to

Dominic Lococo (Lecturer HRM201)

Submitted by

Armand Taedo (1027269)

Date
of
Monday, 22nd of August 2016
Submission
Unfair Dismissal: Stefadouros v TNT Australia Pty Ltd
Case
(2015)
Issue
The fundamental argument is whether or not Stefadouros was hired
by TNT Australia Pty Ltd as an employee or an independent
contractor. The underlying issue would be whether the accused
engaged in unfair dismissal towards the appellant or just merely a
termination because the need for that service were completed and
no longer needed.

Facts of the Case

Job Hunting
In 2010, Stefadouros was desperately searching for chance to
work and make money to support his familys living. He found out
that TNT Company was currently hiring an owner-driver. From that
moment, knowing that he owns a van, he took the opportunity and
personally attached his Curriculum Vitae, which specify his entire
experience with transport and logistic companies.
TNTs order prior to commencement
On February 2010, just prior to his commencement, TNT asked
him to establish his own company and make it legal. Because
Steadouros was fearful of slipping his chance away, he followed
TNTs order and registered a business named Outside Logistics Pty
Ltd. The nature of the business is to supply vehicles and deliver
services that are only exclusive with TNT.
Working Agreement
The work took place at TNT, where it is a requirement for him
to wear TNTs uniform every time he comes to work. Based on the
agreed contract, he is responsible for loading and unloading the
vehicles as well as sorting and scanning the freight. He was paid
based on their agreement rate. Addition to this is the 4% overtime
penalty that was being paid on top of his salary cost. His working

hours were just the same as TNTs regular employees.

Control and Level of Independence in workplace
In terms of control, TNT had superior control in every aspect of
work. Stefadouros affirmed that he was exlusively rendering service
to TNT and that he was never allowed to delegate his work. Because
of this, he firmly believed that the only way to keep his job is to be
dependent and reliant to every order made by TNT.
Unfair Dismissal Application
Stefadouros was entitled for 6 weeks leave from work. But
when returned from his vacation, he received a notification that TNT
was terminating his services for they no longer needed his service.
In effect, the appellant applied for relief from unfair dismissal.

Relevant Law
Employment Law underlines one of the most integral concerns in
determining whether a person rendering service is an employee or
an independent contractor. Government agencies together with
legislators and courts have pursued to make a distinction between
employees and contractors based from the complexity and
disposition inculcated on working arrangements. Relevant laws on
this case were presented as well as various tests that helped assess
the distinction of the two concepts.
Fair Work Act 2009
This law governs employees, employers and independent
contractor to facilitate a fair and well-balanced working
environment. It stipulated the roles and responsibilities of each one.
Breaching any of its underlying conditions will result to penalties
and consequences that will depend on the depth and seriousness of
the offence made1.
Various Tests
There are several tests that can be utilized to determine whether a
particular worker is an employee or an independent contractor. The
two most applicable tests that were found in this case are Control
Test and Independent Test.
1FairWorkAct2009,http://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/
,AccessedAugust19,2016

Control Test is the most commonly used determinant. It

pertains to the degree of control a worker possesses on his
workplace. As a result, employment contract only exists when
employer has a superior control on the scope and process of the job
to done. Conversely, a service contract exists when a worker
exercises most control on job in any way desired2.
On the other hand, Specific Result Test deals with the scope and
nature of the service rendered. An independent contractor provide
services to meet a certain objective or result while employees also
provide services but this time, it is made available in an ongoing
basis and there is no specific objective to achieve3.
Precedent Case
Employees found to be an Independent Contractor
The case of Vella v Integral Energy (2011), an employee for
more than 37 years, was concluded to be an independent contractor
and not an employee. The decision made by the court was based
from the essentiality and substance examined in the relationship
between involved parties. It centralized on evidences and
significance that had a counter effect to both parties in establishing
a decision4.
Independent Contractor found to be an Employees
The case of ACE Insurance Limited v Trifunovski (2011), where
the latter is a sales representative who works as an independent
contractor in ACE Insurance, was found to be an employee of the
venture due to considerable circumstance found in his work
practice. The court essentially found out that Trifunovski was not
allowed to delegate his work and was required to complete his work
on his own only. It was also found that the appellant was dependent
2ThompsonRiversUniversity,http://www.tru.ca/finance/pro_manual/contract_index/contract_emp.html
Accessed:August14,2016
3LegalTeststoDetermineEmploymentContract.http:www.acadamia.edu/8848818/Legal_Tests_to
_Determine_Contract.Accessed:August14,2016
4Differentiatingbetweenemployeesandindependentcontractors:VellavIntegralEnergy[2011],
http://workplace.moray.com.au/publication.differentiaionbetweenemployees0and0independent
contractorsvellavintegral0energy2011fmca6/Accessed:Accessed:August21,2016

and was supervised by the regulatory body that gives orders and
directions to the way things should be done. Because of all these
factors, the employer was found accountable for any benefits
unrewarded towards Trifunovski5.

Argument
Stefadouros Argument:
Upon knowing that Stefadouros badly needed a job, TNT took
this advantage and asked him to establish his own company legally
where he became their contractor. However, Stefadouros could
argue that he was an employee and not a contractor as TNT had
covered the true nature of his work to get away with the
responsibility of enduring the entitlement costs of its employees. He
demonstrated that the terms and conditions on the work agreement
he signed with TNT was the same with other employees with the
similar job description working for TNT. He can claim that he was
compensated a full time labor cost with further 4% overtime
differential. Stefaudouros, working solely for TNT, could argue that
despite of supplying his own vehicle, he was required to paint it with
the logo of TNT and even wear their uniform. Furthermore, he can
proved that the establishment of his own company was the result of
the proposition of TNT to enforce the arrangement due to his limited
bargaining power, and the job would not have been given otherwise.
Therefore, the termination of his service in an unreasonable manner
would be considered unfair dismissal.
TNTs Argument
To prove that the applicant was an independent contractor,
TNT could argue that they never coerced Stefadouros on
establishing its own company legally. The applicant was solely
responsible for being the director of his own company. In addition,
he acquired considerable business expenses. Employee must not
endure the risks. Also, when expenses during the period were
insignificant, then it would mean that Stefadouros would have also
5FCA.
ACE Insurance Ltd v Trifunovski [2011] No. 1204,
http://www.austlii.edu.au/cgibin/sinodisp/au/cases/cth/FCA/2011/1204.htm Accessed: Accessed:
August19,2016

gained profits. TNT could also claim that the applicant exclusively
supplied all the equipments needed to provide services to TNT that
had been a major investment in capital equipment. Furthermore,
they can point out that the applicant paid for the general expenses
of operation and administration of his own company and even order
for GST returns. Moreover, TNT only managed the work allocation
and loading order format, as it was beneficial for both parties from a
more efficient process. In fact, similar arrangements were
implemented to other contractors as well. TNT can also proved that
Stefadourous had his own worker compensation insurance and that
they did not contribute to his superannuation fund.
Judgment
As there is a need for a more extensive analysis on the issue
presented, the deputy was not able to reach a judgment. If in this
case, a sham contracting will be proven to exists, where a worker
hired was informed to be an independent contractor but the worker
perceived that he worked just the same as the regular employees,
then corresponding penalty of $54,000 per breach of this aspect will
be imposed under Fair Work Act 2009.
In my own point of view, several considerations must be taken
into account including the individual circumstances as well as the
relevant laws and variety of tests to bring out the real nature of the
contract agreement. I believe that there is a much-needed time to
consider the relationship placed within both parties before this case
be concluded.

References
Austlii. ACE Insurance Ltd v Trifunovski [2011] Retrieved August 21,
2016, from http://www.austlii.edu.au/cgibin/sinodisp/au/cases
/cth/FCA/2011/1204.htm
Chua, Yati K. (2013). Legal Tests to Determine Employment
Contract.
Retrieved August 14, 2016, from
http:www.acadamia.edu/8848818/Legal_Tests_to_Determine_C
ontract.
Commonwealth Consolidated Acts, Fair Work Act 2009. Retrieved
August 19, 2016, from http://www.austlii.edu.au/au/legis/

cth/consol_act/fwa2009114/.
Marshall, B. (2006). Working it out- Employee or independent
contractor? The National Legal Eagle, 12(2). Retrieved August
19, 2016 from http://epublications.bond.edu.au/cgi/article

Mooray and Agnes Workplace Law. (2011). Retrieved August 21,

2016,
from http://workplace.moray.com.au/publication.differentiaionbetween-employees0and0independent-contractors-vella-vintegral0energy-2011-fmca-6/
Rivers, T. (2016, April 1). Finance. Retrieved August 19, 2016, from
http://www.tru.ca/finance/pro_manual/contract_index/contract
_
emp.htm