In August 2024, the Fair Work Act 2009 (Cth) (FWA) introduced a new practical test for distinguishing employees from independent contractors. With little to no guidance on how the FWA should be interpreted since its introduction, two recent decisions provide some initial illustrations of how this multifactorial test should be applied in practice. We take a closer look at the two cases and what they mean for Australian businesses.
Section 15AA background
The test is found in section 15AA of the FWA and requires an analysis of the “real substance, practical reality and the true nature of the relationship” when determining the working relationship between the parties. In other words, the totality of the relationship between the parties is once again important, including how the contract is drafted and performed in practice,
The effect of this section means that a person that is engaged as an independent contractor on paper may, in reality, be considered to be an employee under the FWA.
Recent applications of 15AA by the Fair Work Commission
In Tabitha Dickerson v Kagura Games Llc [2025] FWC 2219 (Dickerson) and Harmane Elezaj v Baldwin Care Group Pty Limited trading as Baldwin Living [2025] FWC 2159 (Elezaj), the Fair Work Commission (Commission) applied the section 15AA test in the context of an unfair dismissal application, looking beyond the terms of the contract to how the agreement was performed in practice.
While there is no fixed list of factors to consider in assessing the nature of the relationship, the Commission in both instances relied, amongst other factors, on the degree of control one had over the worker.
Tabitha Dickerson v Kagura Games Llc [2025] FWC 2219 (Dickerson)
Tabitha Dickerson (Ms Dickerson) was engaged by Kagura Games LLC (Kagura) as an independent contractor to test its computer games. After her engagement was terminated for alleged poor performance, she lodged an unfair dismissal claim.
Before considering whether the dismissal was harsh, unjust or unreasonable, the Commission had to determine whether Ms Dickerson was an employee under the FWA and eligible to bring an unfair dismissal claim. Applying the new multifactorial test, the Commission looked beyond the terms of the contract and considered how Ms Dickerson performed her work in practice. Key factors included whether she could delegate her tasks, who provided the tools and equipment, how she was remunerated and how much control Kagura had over her work.
The Commission found that Kagura exercised significant control over Ms Dickerson’s work since she was required to submit weekly reports, report to a supervisor, assist colleagues, and could not subcontract or delegate tasks. These features indicated an employment relationship, even though the contract labelled her as an independent contractor.
The Commission remarked that while the contract described Ms Dickerson as an independent contractor who was responsible for her own expenses, tax and not entitled to employee benefits, those terms alone were not enough to make her a genuine contractor.
Given that the practical reality was that Kagura exercised control over the work processes used by Ms Dickerson in the performance of work, the Commission was satisfied that Ms Dickerson was in an employment relationship. Accordingly, Ms Dickerson was eligible to bring an unfair dismissal claim.
For completeness, the Commission held Ms Dickerson’s dismissal to be harsh, unjust and unreasonable on the basis that Kagura did not have a valid reason for dismissal and did not follow a fair process in bringing about her termination. Specifically, Kagura failed to provide Ms Dickerson with an opportunity to respond to the alleged poor performance issues and dismissed her without any prior consultation.
Harmane Elezaj v Baldwin Care Group Pty Limited trading as Baldwin Living [2025] FWC 2159 (Elezaj)
Hateman Elezaj (Ms Elezaj), an independent contractor, provided home care services to two clients of Baldwin Living (the Clients) through a third-party online platform called Mable. Although she entered into service agreements with the Clients, the arrangement ended in March 2025 when the Clients decided to terminated Ms Elezaj’s services.
As with Dickerson, the Commission had to decide whether Ms Elezaj was an employee of Baldwin Living under the FWA before dealing with the merits of the claim. Applying the section 15AA test, the Commission considered both the terms of Ms Elezaj’s contract with Baldwin Living and how the arrangement operated in practice.
The Commission found that Baldwin Living had only limited involvement in Ms Elezaj’s work. While Baldwin Living sometimes gave feedback or intervened if problems arose, it was the Clients – not Baldwin Living – who set Ms Elezaj’s hours, directed her duties and ultimately ended the arrangement. The Commission further observed that Baldwin Living’s oversight over the relationship between the parties was consistent with its responsibility for managing home care packages rather than controlling Ms Elezaj as an employer.
Beyond this limited control Baldwin Living had over Ms Elezaj, the Commission found several other indicators consistent with an independent contractor relationship. For example, Ms Elezaj operated under an ABN and was paid through an invoicing arrangement where Mable would pay Ms Elezaj by reference to the tasks completed by her. All of these factors attributed to Ms Elezaj being an independent contractor rather than an employee integrated into Baldwin Living’s business.
On this basis, the Commission held that Ms Elezaj was not an employee of Baldwin Living and therefore was not entitled to pursue an unfair dismissal claim under the FWA.
What does this mean for Australian businesses?
These decisions make clear that, the Commission is adopting a rigorous approach in scrutinising all of the elements of the working relationship under section 15AA. Simply labelling a worker as a contractor or an employee in a contract does not automatically characterise them as such at law.
As highlighted in Dickerson and Elezaj, the Commission is looking beyond contractual terms to factors such as the level of control exercised, the method of remuneration, and the actual working arrangements. Against this backdrop, it is therefore prudent for businesses to critically review their working relationships, particularly to ensure they are not inadvertently engaging in sham contracting.
The following table outlines some of the key factors the Commission has taken into account when assessing the nature of worker relationships.
Comparison table of relevant factors
| Factors considered by the Commission | Factual circumstances in Dickerson
(Applicant was found to be an employee) |
Factual circumstances in Elezaj
(Applicant was found to be an independent contractor) |
| Level of control | Company exercised control over the worker by:
|
Whilst the Company exercised a degree of oversight over the Applicant (e.g. coordinating meetings and service changes, collecting and approving weekly support notes, attending team reviews and planning sessions and giving the Applicant feedback on her performance), the Commission found that the Company did not exercise the level of control over the Applicant indicative of an employee/employer relationship since:
|
| Form of remuneration | Company paid the worker on a full-time basis for 18 months despite the contract stipulating that the worker be paid by reference to the hours worked. | Company did not pay the worker. A third party paid the worker by reference to the services and hours worked. |
| Operation of a business / working arrangements | The Applicant worked from home using her own devices and internet connection. The Applicant also bore the cost of all other expenses such as, travel, meals and personnel costs. | The Applicant held an Australian Business Number. |
| Terms of the agreement | The terms of the agreement between the Applicant and the Company stated that:
The Commission found that while the terms of the agreement may be indicative of an independent contractor relationship, it was not determinative. |
There was no written contract between the Applicant and the Company.
Service contracts were made between the Company’s clients and the Applicant. |
If you require assistance with these issues or are interested in learning more, please contact Emily Cossgrove and Samantha Ryu.
