In a recent decision the Fair Work Commission found that a psychologist who had been engaged under an independent contractor agreement was truly a contractor and not an employee capable of being dismissed.
The Facts
The psychologist was engaged by a psychology practice on 4 March 2024 under an independent contractor agreement.
He wanted to be qualified as a clinical psychologist and also entered into a Clinical Endorsement Supervision Contract with the practice for their clinical supervision.
From 21 March 2024 he began issuing tax invoices as a sole trader under his ABN for his services to clients seen by him at the practice.
The practice issued a termination notice on 13 January 2025. By then the psychologist had completed 35.25 hours under clinical supervision.
He applied to the Fair Work Commission alleging contravention of general protections involving dismissal.
The practice objected to the application on the basis that the psychologist was never its “employee”.
Employee or contractor?
The issue in dispute was whether the relationship between the psychologist and the practice was that of employment or contracting.
The Hearing
In the hearing the psychologist alleged that he was an employee because:
- his work as a psychologist was supervised,
- instructions were provided to him as to how tasks were to be performed, and the practice unilaterally set key performance indicators (KPIs) for him,
- he was required to perform various administrative tasks beyond the delivery of client sessions, including:
– stacking the dishwasher,
– assisting the practice’s Customer Service Team,
– making tea/coffee for clients on weekends, and
– completing client notes and administrative paperwork to comply with record keeping requirements and standards imposed by the practice; - he was not free to take or not take on clients, with the allocation of work a process controlled by the practice, and
- he was required to provide 6 weeks’ notice if he wanted to suspend his room rental arrangement (i.e. to take leave).
The Decision
In assessing the true nature of the engagement as contracting, the Deputy President found that:
- “Supervision” was a mandatory requirement of registration as a psychologist and would have applied regardless of whether the psychologist was an employee or a contractor.
- The psychologist did not exclusively work for the practice and had ample time to perform work elsewhere when he was not working for the practice.
- There was no evidence that he was required to meet KPIs, rather he was required to provide a “Completed Service”, which had nothing to do with a KPI.
- The administrative tasks that he was required to perform did not extend beyond what he had agreed to do in the Agreement. He was not engaged to simply hold psychology sessions with clients and do nothing else. The tasks he was engaged for included necessary paperwork to complete his sessions and to ensure that government/funding requirements were met.
- The fact that a principal may require a contractor to:
– perform their work at a certain time or place,
– document the completion of such work, or
– demand that a particular standard be met,
does not mean that ‘control’ over the work performed is being exercised by the principal. - In fact, the practice had no control over the performance of the psychologist’s core work, i.e. the conduct of sessions with clients as a registered psychologist.
- The psychologist also retained control over his calendar and what time was available to see clients and, as such, he had control over which clients he saw.
The FWC found that the psychologist was not an employee capable of being dismissed, and therefore it did not have jurisdiction to hear the application. The application was dismissed.
Implications
The case is a reminder that principals are not required to give complete autonomy to contractors over the work that is to be performed, and contractors can be expected to fit in with the practice.
The case is also a reminder of the importance of a written contractor agreement that identifies the legal relationship as contracting and sets out the principal’s reasonable expectations of the contractor.
At WorkLegal our experienced team can answer your questions and put you on the right track. A range of fixed-price Initial Consultations will suit most people’s needs in quickly learning what their options are.