Federal Court of Australia Murphy v Chapple [2022] FCAFC 165 Appeal from: Murphy v Astute Projects Pty Ltd (Subject to a Deed of Company Arrangement) [2021] FedCFamC2F 146 File number: QUD 347 of 2021 Judgment of: JAGOT, BANKS-SMITH AND JACKSON JJ Date of judgment: 28 September 2022 Catchwords: INDUSTRIAL LAW — appeal against primary judge's characterisation of employment relationship and associated contraventions of Fair Work Act 2009 (Cth) — where primary judge correctly found that employment contract orally varied such that appellant performed limited role as employee and otherwise was independent contractor for tax minimisation — primary judge erred in failing to find further oral variation to contract reducing payment sum — consequential effect on calculation of annual leave entitlement — matter remitted to primary judge for re-calculating annual leave and outstanding issue of penalty as necessary — appeal and cross-appeal otherwise dismissed with costs Legislation: Fair Work Act 2009 (Cth) ss 23(1), 44(1), 61(3), 87(1)–(2), 90(2), 117(2)–(3)(b), 119, 121(1)(b), 285, 293, 323, 324, 345, 357(1), 535(1)–(2), 536(1)–(2), 545(1)–(2)(b), 557C Fair Work Regulations 2009 (Cth) regs 3.31–3.42 Industrial Relations Act 2016 (Qld) s 95(3) Queensland Building and Construction Commission Act 1991 (Qld) ss 30A(1)(a)(i)–(b) Building and Construction General On-site Award 2010 Cases cited: Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 261 FCR 301 Association of Professional Engineers, Scientists and Managers Australia v Bulga Underground Operations Pty Ltd [2019] FCA 1960 Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 398 ALR 404 Décor Corporation Pty Ltd & Anor v Dart Industries Inc [1991] FCA 844; (1991) 33 FCR 397 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 Marshall v Whittaker's Building Supply Co [1963] HCA 26; (1963) 109 CLR 210 Robinson Helicopter Company Inc v McDermott [2016] HCA 22; (2016) 331 ALR 550 Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 Stratton Finance Pty Ltd v Webb [2014] FCAFC 110; (2014) 314 ALR 166 Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 Division: Fair Work Division Registry: Queensland National Practice Area: Employment and Industrial Relations Number of paragraphs: 122 Date of hearing: 23 May 2022 Counsel for the Appellant: Mr C J Murdoch QC with Mr C Martin Solicitor for the Appellant: Davidson Ryan Lawyers Counsel for the Respondents: Mr P M Zielinksi ORDERS QUD 347 of 2021 BETWEEN: MICHAEL JAMES MURPHY Appellant AND: PAUL GREGORY CHAPPLE First Respondent BRADLEY KANE HOOK Second Respondent AND BETWEEN: PAUL GREGORY CHAPPLE First Cross-Appellant BRADLEY KANE HOOK Second Cross-Appellant AND: MICHAEL JAMES MURPHY Cross-Respondent order made by: JAGOT, BANKS-SMITH AND JACKSON JJ DATE OF ORDER: 28 SEPTEMBER 2022 THE COURT ORDERS THAT: 1. Leave to appeal be granted. 2. The appeal be dismissed. 3. Ground 1a of the cross-appeal be allowed. 4. The cross-appeal otherwise be dismissed. 5. The appellant pay the respondents' costs of the appeal as agreed or taxed. 6. Each party pay its own costs of the cross-appeal. 7. The matter be remitted to the primary judge for the purpose of: (a) re-calculating as necessary the amount of underpaid annual leave; and (b) such further hearing and orders as the primary judge thinks fit. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: 1. The appeal and cross-appeal 1 This matter involves an application for leave to appeal and, if leave is granted, an appeal and cross-appeal against orders of the primary judge made on 14 October 2021 consequential upon his Honour's reasons for judgment in Murphy v Astute Projects Pty Ltd (Subject to a Deed of Company Arrangement) [2021] FedCFamC2F 146. 2 Leave to appeal should be granted because, if the primary judge is wrong, substantial injustice would be caused to both Mr Murphy, the appellant and cross-respondent, and to Mr Chapple and Mr Hook, the respondents and cross-appellants. This injustice is such that the degree of doubt required to satisfy the requirement of sufficient doubt for the purposes of a grant of leave to appeal is slight: Décor Corporation Pty Ltd & Anor v Dart Industries Inc [1991] FCA 844; (1991) 33 FCR 397. 3 For the reasons given below, Mr Murphy's appeal must be dismissed and the cross-appeal of Mr Chapple and Mr Hook must be allowed, but only to the extent that the primary judge erred in not finding that the contract of employment and the contract for services between Mr Murphy and Astute Projects Pty Ltd (the first respondent in the Court below) were varied in May 2012 as explained below. 2. The central issue 4 It is appropriate to observe at the outset that the nature of the legal relationship between Mr Murphy and Astute from January 2011 is central to the many grounds of appeal and to the cross-appeal. Of particular relevance is the requirement (at least as understood by the parties involved, and as reflected in an unchallenged finding of the primary judge) imposed by the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act) that a building and construction company such as Astute employ a supervisor holding a building licence issued by the Queensland Building and Construction Commission. Mr Murphy held the requisite building licence. 5 It has been difficult in these reasons to avoid some repetition in addressing the submissions made by the parties. Some of these submissions were inconsistent. However, it assists to first acknowledge the primary position of the respective parties. 6 Mr Murphy relies on 10 grounds of appeal in his amended notice of appeal. By the first ground, he maintains that all work he performed for Astute was as an employee, and not as an independent contractor. In substance, he challenges the primary judge's finding to the effect that his role with Astute was bifurcated, such that he could simultaneously be an independent contractor but also an employee with a limited role linked to maintenance of the building licence. Some of the other grounds of appeal challenge the calculation of certain payments by Astute to Mr Murphy (or at his direction), the entitlements in turn being connected to the nature of the legal relationship between the parties. 7 The first ground of the further amended cross-appeal similarly raises the issue of the legal relationship. The respondents contend that from January 2011 Mr Murphy was only retained by Astute as an independent contractor and not on an employment contract for any purpose, and the primary judge erred in failing to make findings to that effect. 8 As becomes apparent, we have chosen to address this question of the legal relationship between Mr Murphy and Astute first and in some detail, dealing with the relevant grounds of appeal and the first ground of the cross-appeal together. 3. The primary judge's findings 9 The primary judge's principal findings are that: (1) under the QBCC Act, a building and construction company such as Astute needed to employ a nominee supervisor holding a building licence issued by the Queensland Building and Construction Commission: [7]; (2) from 1 July 2010 to 22 June 2018 Mr Murphy held a nominee supervisor's licence under s 30A of the QBCC Act authorising him as the nominee for Astute: [7]; (3) from 1 July 2010 Astute employed Mr Murphy full-time working 40 hours per week as a "site supervisor" or "foreman" pursuant to a wholly written contract of employment. Under this contract Mr Murphy was to receive $10,000 per month – $9174.31 per month in salary and superannuation contributions of $825.69 per month ($6630.30 to Mr Murphy's personal bank account, with $2544.01 withheld as PAYG withholding tax, and $825.69 in superannuation contributions in respect of each monthly salary payment): [2], [8], [9]; (4) Astute paid Mr Murphy in accordance with this arrangement from September 2010 to December 2010: [9]; (5) as a result of Mr Murphy's desire to minimise his tax, Mr McDonald, the accountant for Astute and the respondents, advised that Mr Murphy could remain an employee of Astute for the limited purpose of being the required employee licence holder under the QBCC Act and otherwise could be an independent contractor earning the bulk of his income via a trust that could be established for Mr Murphy. Mr McDonald so advised Mr Murphy: [10]–[14]; (6) Mr Murphy instructed Mr McDonald to establish the Sharconick Family Trust for this purpose and Mr McDonald did so in December 2010: [1], [15]–[17]; (7) by January 2011, Mr Murphy and Astute had agreed that Mr Murphy would remain an employee for the limited purpose of being the required employee licence holder under the QBCC Act and otherwise would perform his work as an independent contractor. Reflecting this agreement, Mr Murphy would be paid only a nominal wage of initially about $6400 per annum as an employee and the remainder from his then current salary would be paid to the trust on account of Mr Murphy's services as an independent contractor, the total still being $10,000 per month as required under the initial agreement: [18]–[19]; (8) as a result of this January 2011 agreement, Astute was required to pay $536.70 per month to Mr Murphy's personal bank account, $9415 to a separate business transaction account for the trust, and make $48.30 in superannuation contributions, being 9 per cent of the $536.70 paid to his personal bank account: [19]; (9) Astute made these required payments from January 2011 to June 2011, after which the payments became "a little erratic": [20]; and (10) in 2016 the parties agreed to increase the amount Mr Murphy was paid from $120,000 per annum to $150,000 per annum or $12,500 per month. Astute paid Mr Murphy and his trust, as required, $12,500 per month from June 2016 to June 2018 (except for January 2017, when Astute paid $6518.35): [21]. 10 The primary judge also said that: (1) His Honour did not accept Mr Murphy's evidence that "either Chapple or Hook or both of them" approached him and told him that he had to change his arrangements in late 2010: [11]; (2) Mr Murphy's evidence about his involvement in the making of the trust arrangements in late 2010 "was vague and unconvincing": [13]; (3) Mr Murphy's evidence that he had "no knowledge of any of these arrangements and that it was set up for him, without any input from him" misrepresents the situation: [15]; (4) contrary to his evidence, the arrangements "were put in place at Mr Murphy's request so as to minimise his tax": [26]; (5) "[f]rom January, 2011 to 22 June, 2018 Mr Murphy continued working for the first respondent. Nothing changed apart from the payment arrangements. The work that he did and the way that he did it did not change. But he had the benefit of the tax minimisation arrangements that he sought advice about from Mr McDonald. I am satisfied that his employment agreement had changed, such that he was employed for the specific purpose of making himself available as a nominee supervisor to the first respondent. His other payments were pursuant to the arrangement, put in place after discussions with Mr McDonald, that he should be considered a contractor operating via a family trust and accounting for his income accordingly": [22]; (6) it follows that Mr Murphy's case that the respondents misrepresented the arrangements to him was rejected as no such alleged representations were made: [26]; and (7) Mr Murphy's argument that he was worse off under the arrangements in place from January 2011 could not be accepted, as Mr Murphy sought for such an arrangement to be put in place to assist him to minimise the tax he ultimately had to pay on his income from Astute: [27], [33]. 11 As a result of these conclusions, the primary judge said that Mr Murphy's (somewhat disingenuous) claim that Astute underpaid him his contracted wages and consequential superannuation amounts, because it instead paid the trust and not Mr Murphy directly, must fail: [24], [29]. 12 The primary judge otherwise concluded that: Payment in lieu of notice (1) Mr Murphy's employment was terminated by Astute on 22 June 2018 after continuous employment (on the different bases described above) of seven years, 11 months and 22 days: [34]; (2) Mr Murphy was entitled to five weeks' notice because he was more than 45 years of age: s 117(3)(b) of the Fair Work Act 2009 (Cth) (the FW Act): [35]; and (3) Astute thereby contravened s 117(2) of the FW Act and underpaid Mr Murphy $135 in contravention of s 44, but there was no misrepresentation about his workplace rights in contravention of s 345: [35]–[38]; Redundancy (4) Astute was a small business employer within the meaning of s 121(1)(b) of the FW Act and therefore s 119 requiring redundancy payments did not apply to Mr Murphy: [40]–[41]; Annual leave (5) there is no evidence that Mr Murphy ever took annual leave and he was entitled to be paid out 32 weeks of annual leave and the failure to pay him this amount ($4320) was a contravention of s 44 of the FW Act: [42]–[44]; Long service leave (6) the Industrial Relations Act 2016 (Qld) applied to Mr Murphy's employment. Pursuant to s 95(3) of that Act Mr Murphy was entitled to a proportionate amount of long service leave namely, 7/10 of 8.6667 weeks. Accordingly, Mr Murphy was entitled to $819 by way of long service leave entitlement: [45]; Record and pay slip contraventions (7) Astute contravened ss 535(1)–(2) of the FW Act and regs 3.31–3.41 of the Fair Work Regulations 2009 (Cth) (the FW Regulations) to make and keep for seven years employee records in relation to Mr Murphy, in a legible form readily accessible to an inspector: [46]; (8) Astute also failed to make a record specifying Mr Murphy's entitlement to leave, his superannuation details, or a termination record in respect of Mr Murphy, thereby contravening s 535(1) of the FW Act and reg 3.36(2) of the FW Regulations: [47]; (9) in contravention of s 535(3) of the FW Act and reg 3.42 of the FW Regulations, Astute did not make a copy of the required records available for inspection and copying on request by Mr Murphy: [48]; (10) given the conclusions above about the arrangements agreed by January 2011, there was no contravention of s 536 of the FW Act in respect of the payslips provided to Mr Murphy: [49]; Alternative claim (11) none of the alternative claims made by Mr Murphy in his statement of claim including the alternative claim pursuant to the minimum wage provisions of the FW Act were addressed in Mr Murphy's written submissions and it could be taken that he had abandoned those claims: [50], [51]; (12) there was good reason for the abandonment of those claims given that they were inconsistent with the principal claim advanced by Mr Murphy, and Mr Murphy could not maintain the alternative claim without giving Astute credit for the amounts paid to the trust on his behalf: [51]; Involvement of Mr Chapple and Mr Hook (13) Mr Chapple and Mr Hook were directors of Astute and involved in its day to day business activities and they made no attempt in their written submissions to suggest that they were not involved in Astute's contraventions of the FW Act: [52]; and (14) Mr Chapple and Mr Hook should pay Mr Murphy compensation commensurate to the amount of Mr Murphy's loss as identified above: [53]. 13 The primary judge made declarations of contraventions, including the involvement of Mr Chapple and Mr Hook in the contraventions, and ordered Mr Chapple and Mr Hook to pay to Mr Murphy $5274 ($135.00 for the underpayment of notice, $4320 for the underpayment of annual leave and $819 for the underpayment of long service leave), the proceeding otherwise being adjourned for a hearing on penalty and interest. 4. Grounds of appeal 14 The grounds of appeal are long and with many subparagraphs. For convenience we will paraphrase them, and provide further detail later in our reasons where required. 15 As we have foreshadowed, by ground 1 Mr Murphy alleges that the primary judge erred in finding that he was from the time of the January 2011 agreement until June 2018 simultaneously employed by Astute under a contract of employment at a nominal rate and also engaged to perform the same work he previously had undertaken under a contract of employment for about the same amounts he had previously been paid, but which did not count towards his entitlements upon termination of employment, and where all work undertaken by him was performed under a contract of employment. 16 By ground 2 Mr Murphy alleges that the primary judge erred in failing to find that Astute misrepresented that the contractual arrangements "from 1 July 2010 to 22 June 2018" (although in his written and oral submissions Mr Murphy relied on the starting date "from January 2011") constituted a contract whereby services were to be provided as an independent contractor. 17 By ground 3 Mr Murphy alleges that the primary judge erred in failing to find contraventions of the FW Act in that on 43 occasions Astute failed to pay him amounts payable to him as an employee in relation to the performance of work, and that on 68 occasions Astute failed to pay him amounts in accordance with the minimum wage. 18 By ground 4 Mr Murphy alleges that the primary judge erred in the calculation of compensation payable to him by failing to take into account the base rates of pay and minimum wages that ought to have been payable having regard to presumptions that apply under s 557C of the FW Act where records are not provided. 19 By grounds 5 and 6 Mr Murphy alleges that the primary judge erred by calculating compensation for termination and annual leave payments on the wrong basis including by failing to have regard to the national minimum wage. 20 By ground 7 Mr Murphy alleges that the primary judge erred in concluding that Astute was a small business employer and so under s 121(1)(b) of the FW Act it was not obliged to make redundancy payments to him. 21 By ground 8 Mr Murphy alleges that the primary judge erred in failing to make a series of declarations with respect to record-keeping contraventions. 22 By ground 9 Mr Murphy alleges that the primary judge erred in failing to find that Astute contravened the FW Act on 68 occasions by failing to provide pay slips with respect to the performance of work. 23 By ground 10 Mr Murphy alleges that the primary judge erred in adjourning the question of only certain penalties (and not more) to a further hearing in circumstances where his Honour had failed to make findings and declarations for compensation in respect of proven contraventions. 24 It is not necessary to summarise the grounds of cross-appeal. We have already noted the relevance of ground 1. Grounds 1a, 2, 3 and 4 of the cross-appeal are not directly related to ground 1 and are set out in full below as part of our reasons. 5. General observations 25 The primary judge's findings, in particular about the nature of the legal relationship between Astute and Mr Murphy, were partly based on his view that Mr Murphy's evidence was vague, unconvincing and not to be accepted (see references above). It is apparent that Mr Murphy gave oral evidence over two days, and that Mr Hook also gave evidence. 26 In these circumstances the primary judge's findings about the nature of the legal relationship between Astute and Mr Murphy, to the extent they depend on the lack of credibility of Mr Murphy, are subject to the principle that an appellate court may not interfere unless they are demonstrated to be wrong by "incontrovertible facts or uncontested testimony", or they are "glaringly improbable" or "contrary to compelling inferences": Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [28]–[29] per Gleeson CJ, Gummow and Kirby JJ; Robinson Helicopter Company Inc v McDermott [2016] HCA 22; (2016) 331 ALR 550 at [43]; Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 261 FCR 301 at [2]–[3], [45]–[48]. 27 None of the primary judge's findings about Mr Murphy's vague and unconvincing evidence fall into this category. Accordingly, those findings must be taken as given. So too must the primary judge's findings accepting Mr Hook's evidence. 6. Legal relationship issue 6.1 Applicable principles 28 It is trite that the existence and terms of any contract are for objective, not subjective, determination: for example, Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 398 ALR 404 at [66]. 29 The relevant contractual principles include these stated in Personnel Contracting by Kiefel CJ, Keane and Edelman JJ: (1) a contract (not just an employment contract) "may be partly oral and partly in writing, or there may be cases where subsequent agreement or conduct effects a variation to the terms of the original contract or gives rise to an estoppel or waiver": [42]; (2) "[t]here is nothing artificial about limiting the consideration of legal relationships to legal concepts such as rights and duties. By contrast, there is nothing of concern to the law that would require treating the relationship between the parties as affected by circumstances, facts, or occurrences that otherwise have no bearing upon legal rights": [44]; (3) the meaning and effect of a contract must be ascertained at the time it was entered into, unless subsequent conduct casts light on a variation to that contract, citing Connelly v Wells (1994) 55 IR 73 at 74: [46]; (4) the meaning and effect of the contract, particularly the extent to which the contract itself gives the putative employer the right to control the doing of the work by the putative employee, determines the legal character of the contract as one of employment or not: [53]; (5) "[u]ncertainty in relation to whether a relationship is one of employment may sometimes be unavoidable. It is the task of the courts to promote certainty with respect to a relationship of such fundamental importance. Especially is this so where the parties have taken legitimate steps to avoid uncertainty in their relationship. The parties' legitimate freedom to agree upon the rights and duties which constitute their relationship should not be misunderstood. It does not extend to attaching a "label" to describe their relationship which is inconsistent with the rights and duties otherwise set forth. To do so would be to elevate their freedom to a power to alter the operation of statute law to suit themselves or, as is more likely, to suit the interests of the party with the greater bargaining power": [58]; (6) where a written contract exists and its validity is not challenged, the ultimate characterisation of a relationship must be concerned with the rights and duties established by that contract, however this does not mean that it is not appropriate in the "characterisation of a relationship as one of employment or of principal and independent contractor", to consider "the totality of the relationship between the parties" by reference to the various indicia of employment that have been identified in the authorities (Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 at 29; Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 at [24]): [61]; and (7) the distinction between an employee and an independent contractor remains "rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carries on a trade or business of his own" citing Marshall v Whittaker's Building Supply Co [1963] HCA 26; (1963) 109 CLR 210 at 217: [37]. 30 It is also the case that as Gordon J said in Personnel Contracting: (1) "[t]he task is to construe and characterise the contract made between the parties at the time it was entered into. The nature of the contracting parties, such as where a contracting party is a separate entity or a partnership, rather than an individual, may suggest that the relationship between the parties is not that of employer and employee. The way that the contractual terms address the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work, the provision for holidays, the delegation of work, and where the right to exercise direction and control resides may together show that the relationship is not one of employer and employee": [174]; (2) "[r]ecourse may be had to events, circumstances and things external to the contract which are objective, which are known to the parties at the time of contracting and which assist in identifying the purpose or object of the contract. The nature of the specific job that the purported employee applied for as well as the nature and extent of the equipment to be supplied by that purported employee for that particular job may well be relevant to the question of characterisation of the contract. Indeed, it is often relevant, but not determinative, to observe that the purported employee must supply some uniform, tools or equipment. But again that observation must be made in context. The context is the nature and extent of what is required to be provided under the contract. In many forms of employment, employees provide their own uniform and bring their own tools to work": [175]; and (3) "the general principle against the use of subsequent conduct in construing a contract wholly in writing says nothing against the admissibility of conduct for purposes unrelated to construction, including in relation to: (1) formation – to establish whether a contract was actually formed and when it was formed; (2) contractual terms – where a contract is not wholly in writing, to establish the existence of a contractual term or terms; (3) discharge or variation – to demonstrate that a subsequent agreement has been made varying one or more terms of the original contract; (4) sham – to show that the contract was a "sham" in that it was brought into existence as "a mere piece of machinery" to serve some purpose other than that of constituting the whole of the arrangement; and (5) other – to reveal "probative evidence of facts relevant to rectification, estoppel or any other legal, equitable or statutory rights or remedies that may impinge on an otherwise concluded, construed and interpreted contract": [177]. 6.2 Analysis 31 The competing submissions of the parties about the status of Mr Murphy from January 2011 as an employee and not an employee simultaneously or as an independent contractor miss the essential point that, unless some law provides otherwise, parties are free to contract as they see fit. 32 In this case, Mr Murphy was an employee of Astute from 1 July 2010 to January 2011 on the basis that he was required to be paid $9174.31 per month in salary and superannuation contributions of $825.69 per month ($6630.30 to Mr Murphy's personal bank account, with $2544.01 withheld as PAYG withholding tax, and $825.69 in superannuation contributions in respect of each monthly salary payment). 33 In part on the basis of the primary judge's unchallenged (or, given their credit basis, unchallengeable) factual findings, by January 2011 Mr Murphy and Astute had orally agreed to vary this contract of employment. 34 The primary judge characterised that oral variation at [22] as Mr Murphy remaining an employee but only for the specific purpose of being the required employee licence holder under the QBCC Act and Mr Murphy otherwise performing all work as an independent contractor. 35 This characterisation reflects the subjective view of Mr McDonald about the legal effect of the arrangements which, from the primary judge's findings, it is apparent that both Mr Murphy and Astute accepted. 36 Even if Mr Murphy is correct and he could not simultaneously be an independent contractor and an employee in respect of the same work (to our minds, a sound proposition), that does not undermine the substance of the primary judge's conclusions. 37 First, it is obvious from the primary judge's findings that the oral variation from January 2011 to which Mr Murphy and Astute agreed was that while Mr Murphy's overall monthly remuneration would remain the same ($10,000), Astute would pay that amount, in accordance with Mr Murphy's directions enabling him to minimise his tax, by paying $9415 to the trust on account of Mr Murphy's services as an independent contractor, and $536.70 to Mr Murphy's personal bank account, and $48.30 in superannuation contributions for Mr Murphy (9 per cent calculated on the $536.70) in salary on account of Mr Murphy's employment for the limited purpose of continuing to hold the licence required under the QBCC Act. 38 In these circumstances, where Astute paid the trust in accordance with Mr Murphy's requirements, Mr Murphy cannot suggest that the trust was paid other than as Mr Murphy's agent for the purpose of the receipt of payment (irrespective of Mr Murphy's status as an independent contractor or employee or both). This is clear from the fact that the primary judge's unchallengeable findings expose that: (1) Mr Murphy established the trust for the purpose of receiving money payable to him so that he could minimise his income tax; (2) Astute in fact paid the trust in accordance with Mr Murphy's requirements (leaving aside the minor instances of under-payment as found by the primary judge); and (3) before the termination of his employment by Astute Mr Murphy did not suggest that Astute paying the trust was other than in accordance with his requirements. 39 It necessarily follows that, if Mr Murphy is right and he continued only to be an employee after January 2011 and did not take any additional status as an independent contractor, Mr Murphy required that his wages be paid in part to the trust. Astute put the legal consequence of this in these terms: … Mr Murphy's choice to interpose the Trust between him and Astute deprived him of his personal capacity to seek relief under s 323 of the FW Act for claimed monthly underpayments of sums said to have been owing to the Trust… … Given that Mr Murphy has sought to renew his primary claim that all payments made to his personal account and to the Trust account related to ordinary time earnings for the purposes of calculating his various claimed accrued entitlements, he cannot, as part of his alternative claim, set aside the Trust account payments as being for something other than the performance of work by him. To do so would be to allow Mr Murphy to approbate and reprobate. 40 The key proposition underlying these contentions, however, is that unless the law says otherwise, a person (including an employee) is free to contract with another person (including the person's employer) as they mutually see fit. 41 Section 323 of the FW Act provides that an employer "must pay an employee amounts payable to the employee in relation to the performance of work: (a) in full (except as provided by s 324); and (b) in money by one, or a combination, of the methods referred to in subsection (2); and (c) at least monthly". This section, as with the other provisions of the FW Act, operates against the background of the fundamental doctrines of the common law. One of those doctrines is freedom to contract. Another is the doctrine that one person (the principal) can authorise another person (the agent) to act on the principal's behalf. Whatever else might be said, it is incontrovertible that, on the primary judge's unchallengeable findings of credit and fact, Mr Murphy required Astute to pay the majority of the money payable to him to the trust so that Mr Murphy could minimise the income tax payable by him. On this basis, the trust was Mr Murphy's agent for the purpose of the receipt of money. In paying the trust as Mr Murphy required, Astute was also paying Mr Murphy as its employee in accordance with s 323 of the FW Act (if he was, indeed, an employee in respect of that obligation of payment which, as discussed below, he was not). 42 For its part, Astute was not bound to agree to pay any part of money owed to Mr Murphy to the trust in accordance with Mr Murphy's requirements. But Astute plainly agreed to do so and did so. In so doing, Astute was entitled to accept that the trust had authority from Mr Murphy to be the recipient of payment of that money. Indeed, the trust manifestly did have Mr Murphy's authority in this regard. 43 For these reasons, even if Mr Murphy is right that the only thing that changed in January 2011 is that his contract of employment was varied in respect only of the method of payment such that part of his wages would be paid to the trust (which he is not), Mr Murphy cannot maintain that payments to the trust were not payments to him as Astute's employee. Mr Murphy was entitled to request payment of his wages into whatever bank account he wished. By directing (implicitly and inferentially on the primary judge's findings) that part of his wages should be paid into the bank account of the trust Mr Murphy must be taken to have authorised the trust to act as his agent for receipt of those wages. 44 Numerous legal doctrines now prevent Mr Murphy from turning around and alleging that he was not paid wages as required by s 323 of the FW Act. For example: (a) as Astute submitted, he cannot approbate and reprobate the legal arrangement he sought, enacted and took the benefit of, (b) putting it another way, he is bound by his own conduct and the conduct of the trust as recipient of part of his wages as the disclosed principal of the trust as his agent for that purpose, (c) as a result, he would be estopped from denying and acting inconsistently with the legal relationship he sought, enacted and took the benefit of as against Astute, and (d) he would be denied relief against Astute as a matter of discretion to the extent it depended on non-payment of that part of his wages to him that was required to be paid to the trust under the legal relationship he sought, enacted and took the benefit of. 45 Second, the primary judge did not find (as the grounds of appeal contend) that on 43 monthly occasions, Astute paid Mr Murphy less than the full amount payable. Rather, the primary judge found that the contract of employment between Astute and Mr Murphy was varied so that Mr Murphy would be an employee for the limited purpose of holding the required licence and would otherwise become an independent contractor so that money on account of his work as an independent contractor could be paid to the trust, as Mr Murphy wanted. As discussed, whatever mode of legal analysis is adopted, Mr Murphy cannot now escape the consequences of the legal relationship he sought, enacted and took the benefit of. It follows that the primary judge was not wrong to reject the alleged contraventions of s 323 of the FW Act. In accordance with s 323(1), Astute paid Mr Murphy by its payments in accordance with his direction to the trust. 46 Third, the primary judge did not find that Mr Murphy was simultaneously employed and not employed by Astute. We would accept the legal impossibility of a person being both an employee and an independent contractor of the same company for the same work at the same time. But that is not what the primary judge found. Rather, the primary judge found that Mr Murphy continued as an employee of Astute for one limited purpose only – to make available to Astute Mr Murphy's building licence: [14], [18], [22]. Accordingly, the primary judge did not find that, as an employee, Mr Murphy continued to perform the work he had always performed for Astute. Rather, the primary judge found that Mr Murphy continued to perform the work he had always performed for Astute, other than "making himself available as a nominee supervisor" to Astute as the holder of the licence required by the QBCC Act, as an independent contractor: [22]. It follows that Mr Murphy's complaints about inconsistency in the primary judge's findings are all misplaced. 47 The primary judge's finding that Mr Murphy continued to perform the work he had always performed for Astute as an independent contractor, other than being the holder of the licence required by the QBCC Act, is consistent with the primary judge's approach to the other issues. The assumption implicit within Mr Murphy's inconsistency complaints is that Mr Murphy was working the same hours and doing the same work for Astute as an employee at all times. But that is not what the primary judge found. According to the primary judge, the hours worked and the work done were done under the contract for services between Astute and Mr Murphy as an independent contractor, not as an employee. All Mr Murphy had to do as an employee was continue to hold the licence required under the QBCC Act. This involved no hours and no work, and was subject to the payment of the small amount of wages to Mr Murphy directly, rather than to the trust as he otherwise required. 48 We have explained above that even if Mr Murphy is right that he continued to work as an employee for all purposes, he cannot maintain any claim for unpaid wages to the extent that the wages were paid to the trust. Nor can he maintain any claim against Astute for contravention of s 323(1) of the FW Act to that extent. For the same reasons, he cannot maintain that he was not paid in accordance with any National Minimum Wage Order made under s 285 of the FW Act and in contravention of s 293 of that Act. For completeness, we note that there is no appeal against the primary judge's finding at [40] that Mr Murphy was not covered by the Building and Construction General On-site Award 2010. 49 But the correct characterisation of the legal relationship between Mr Murphy and Astute is relevant to other issues such as the calculation of annual leave. Mr Murphy maintains that he was and remained only an employee. Astute maintains that Mr Murphy was an employee but became only an independent contractor in January 2011. 50 Contrary to Mr Murphy's submissions, it is not the case that Mr Murphy and Astute were always and only parties to a wholly written contract. That is manifestly incorrect, as by January 2011 it is obvious on the primary judge's unchallengeable findings that the parties had orally agreed to a different legal relationship between themselves. The primary judge's statement at [25] that the written contract of employment was varied on two occasions to vary the rates of pay needs to be understood in context. The primary judge was recording only what was "uncontroversial". He was not suggesting that the oral variations he found related only to the required payment under the contract of employment. That is irreconcilable with all of his other findings that Mr Murphy remained an employee for one limited purpose only (holding the required licence) and otherwise performed all work under a contract for services as an independent contractor. The necessary and obvious consequences of these findings are that: (a) the written contract of employment was subject to a substantial oral variation, the terms of which need not be specified other than to say that Mr Murphy performed no work under that contract from January 2011 other than continuing to hold the licence, and (b) there came into existence a new and wholly oral contract for services under which Mr Murphy provided Astute with services as an independent contractor. 51 Contrary to Mr Murphy's submissions, the primary judge did find at [22] that this contract for services existed and the evidence enabled him to do so. It enabled his Honour to do so because the contract of employment between Mr Murphy and Astute was (at the least) varied by oral agreement by January 2011 as the primary judge found at [22]. 52 Mr Murphy's complaints that the primary judge merely found some other "arrangement", did not find "any separately identifiable work which [Mr] Murphy had to perform under the other "arrangement", in addition to the 40 hours' work he was already performing each week as an employee, as consideration for the "other payments"", and "could not find that Astute and Murphy entered a contract for services because the evidence did not demonstrate that they did so" are all hollow. The primary judge's reasons are concise but it is clear enough what his Honour found and why he found it. 53 The primary judge found that all work which Mr Murphy performed (other than continuing to hold the required licence) was performed by him as an independent contractor and no work, other than continuing to hold the required licence, was performed by Mr Murphy as an employee. Accordingly, it is wrong for Mr Murphy to submit, as he did, that the "terms of the contract were varied on two occasions, but, as the primary judge found, those variations only had the effect of altering the remuneration payable under the contract". 54 We accept from the primary judge's unchallengeable findings that the subjective common intention of Mr Murphy and Astute was as the primary judge found – Mr Murphy would continue to be Astute's employee solely for the limited purpose of continuing to hold the licence required under the QBCC Act and would otherwise be an independent contractor for the purpose of all other work performed on behalf of Astute. 55 The real issue therefore is not that the primary judge erred in finding that all work which Mr Murphy performed other than continuing to hold the required licence was performed as an independent contractor and no work other than continuing to hold the required licence was performed by Mr Murphy as an employee. This finding precisely reflected the common subjective intention of Mr Murphy and Astute. The real issue in this regard is whether Astute is right that from January 2011 Mr Murphy was nothing but an independent contractor – that is, by oral agreement in January 2011 Mr Murphy's contract of employment ceased and was replaced by an oral contract for services under which Mr Murphy would continue to hold the required licence and would continue to perform the same work as he performed when an employee for the same overall pay to be paid in accordance with Mr Murphy's request as found by the primary judge at [19]. 56 Astute made this argument below. Astute can make this argument because, as we have already noted, the existence and terms of any contract are for objective, not subjective, determination: Personnel Contracting at [66]. 57 The fact that Astute (but not apparently Mr Murphy) signed a proposed contract of employment of Mr Murphy on 1 February 2011 is immaterial. In his further amended statement of claim Mr Murphy alleged only that, in the alternative and as part of his alleged misrepresentation case, Astute "purportedly" engaged Mr Murphy under a nominal employment contract. Given this pleading, Mr Murphy cannot rely on the 1 February 2011 letter from Astute as supporting the inconsistent proposition that "[a]t the least, there was continued employment under a written contract of employment dated 1 February 2011". 58 Further, and again contrary to Mr Murphy's submissions,: (1) it does not matter that there "was no evidence that either party gave notice of termination in accordance with clause 16 until 22 June 2018, and no evidence of payment in lieu until 29 June 2018". The parties were free to orally agree that the contract of employment ceased in January 2011 without any such notice or such payment; (2) there is evidence capable of supporting the conclusion that the contract of employment was abandoned by mutual oral assent by January 2011. The evidence is the subsequent conduct of the parties by which Astute paid the trust and Mr Murphy must be inferred to have directed and acquiesced in that payment; and (3) the primary judge's statement at [22] that the "work that he [Murphy] did and the way he did it did not change" does not support Mr Murphy's case. This is because it is also clear from [22] that the primary judge considered that the legal relationship had changed so that all of the work Mr Murphy did was under a contract for services as an independent contractor from January 2011 and not under a contract of services as an employee. The only thing he did under an employment relationship was continue to hold the required licence under the QBCC Act. 59 For these reasons, this aspect of Mr Murphy's case is untenable and provides no cogent answer to Astute's contention that the primary judge erred by not finding that from January 2011 Mr Murphy was solely an independent contractor. 60 Considered in accordance with the principles we have set out above, the primary judge's findings about the objective circumstances support his conclusions that the initial contract of employment was varied but did not cease as at January 2011. In circumstances where no party suggested to the primary judge that the contracts involved a sham, we are satisfied that the oral variation to the initial contract of employment was as found by the primary judge (described above). 61 The necessary consequences of the findings the primary judge made were that, under the continuing varied contract of employment (partly in writing and partly oral), Mr Murphy would be bound to do nothing other than continue to hold the required licence under the QBCC Act for which he would be paid the modest remuneration of $536.70 per month (and $48.30 in superannuation contributions). That is, it follows from what the primary judge did find (again, noting the lack of any argument that the contract of employment was a mere sham), Mr Murphy performed no other work under this contract of employment. He had no required hours under this contract of employment. No doubt there would be implied terms in this contract of employment (the scope of which need not be precisely identified) to the effect that he would continue to hold the required licence and to perform his separate contract for services by which he provided services to Astute as an independent contractor. But all of the work that he performed for Astute other than continuing to hold the required licence under the QBCC Act was work he performed under this separate contract for services as an independent contractor. It also follows from the primary judge's findings that another wholly oral contract came into existence by January 2011, the contract for services under which Mr Murphy agreed to provide services to Astute as an independent contractor. So much is apparent from the primary judge's findings irrespective of any brevity of expression in his Honour's reasoning. 62 This characterisation of the legal relationships, effectively as found by the primary judge (and, again, given the lack of any contention of a sham), accords with the objective circumstances also as found by the primary judge and the subsequent conduct of the parties (relevant to the variation of the contract of employment and the formation of the new contract for services which the primary judge also, implicitly at least, found). It is also consistent with: (1) Mr Murphy's status as the holder of the required licence under the QBCC Act; (2) Mr Murphy's obligation under s 30A(1)(a)(i) of the QBCC Act to "provide supervisory services for building work carried out", which involves the application of Mr Murphy's own skill, experience and expertise, and was always required to be performed other than under the control and direction of Astute (see s 30A(1)(b) of the QBCC Act); (3) Mr Murphy's establishment of the trust; and (4) Mr Murphy directing payments for his services to be paid to the trust. 63 This does not mean, however, that Mr Murphy was not also an employee of Astute for the limited purpose of continuing to hold the licence required by the QBCC Act. The circumstances (particularly the direct payment to Mr Murphy and the payment of superannuation on his behalf) demonstrate the common objectively determinable intention of Astute and Mr Murphy that he continue as an employee albeit for this limited purpose and not for the purpose of performing work. This is where ground 1 of the cross-appeal goes wrong. In this regard, it does not matter if the QBCC Act did or did not require Mr Murphy to be employed by Astute. What is relevant is that the common objectively determinable intention of Astute and Mr Murphy is that he continue to be an employee for that limited purpose only. For these reasons, the appeal and cross-appeal must be rejected to the extent they depend on the allegations of error by the primary judge in characterising the legal relationships from January 2011 as other than that described above. 64 We would also note that the contracts between the parties from January 2011 were fraught with potential legal difficulties (as this matter exposes). While we consider the primary judge was right to give effect to the objective contractual intentions of the parties, it is possible that the circumstances raise other potential issues which the parties have not put in issue in this case and which we need not explore. 6.3 Application to various grounds of appeal and cross-appeal 65 Once it is understood that Mr Murphy's claim that he continued in full-time employment working his usual hours for Astute after January 2011 was properly rejected by the primary judge, it is necessary to consider the various grounds of appeal (or parts of them) that proceeded on that false assumption. 66 Ground 1 must fail as all work performed by Mr Murphy for Astute was not performed under a contract of employment with Astute. 67 Ground 3 must fail because Astute did not contravene s 323(1) of the FW Act – payments that were due to Mr Murphy were due under his contract for services as an independent contractor for Astute and were made to the trust, as Mr Murphy required. 68 Ground 4(a) must fail because it wrongly assumes that all work performed by Mr Murphy for Astute was performed under a contract of employment with Astute and the sums claimed are not relevant. 69 Ground 4(b) must fail because the national minimum wage provision in s 285 and associated national minimum wage orders did not apply to Mr Murphy as an independent contractor and did not apply to Mr Murphy as an employee given that, as an employee, he had no obligation to work any hours and instead was obliged only to continue to hold the required licence under the QBCC Act and to provide services to Astute as an independent contractor. 70 Ground 5 must fail to the extent it depends on all work performed by Mr Murphy for Astute being performed under a contract of employment with Astute, as the obligation to pay termination benefits is connected to a contract of employment. 71 It also follows that all of Mr Murphy's claims based on payment to the trust instead of to him and the alleged contraventions of s 293 and/or s 323 of the FW Act, as well as continuation of his employment as a full-time employee (and various associated contraventions), must fail. 72 In this latter regard and as to annual leave, the cross-appeal does not include any ground that the primary judge erred in finding at [42] that there was no evidence that Mr Murphy took annual leave. In this circumstance it is not open to the respondents to argue that "Mr Murphy's claim for annual leave fails to have any regard to the evidence that showed that there were occasions during his time with Astute where payments were made to him while he was not providing any work to Astute". To make this argument the respondents had to directly challenge the primary judge's no evidence finding. The respondents did not do so. 73 The respondents also did not allege that the primary judge erred in his calculation of the annual leave payment owing. But it is a necessary consequence of our conclusion about the May 2012 oral variation to the contract of employment and the contract for services that the calculation ought to have been based on the reduced rate of payments from May 2012 (explained below). We note that the primary judge calculated the annual leave payment entitlement based on a presumed 40 hour working week as an employee: [43]. However, the primary judge found that Mr Murphy did no work as an employee other than hold the required licence. Section 90(2) of the FW Act provides that "if, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave". Section 87(1) provides that for "each year of service with an employer … an employee is entitled to" four weeks of paid annual leave. Although s 87(2) provides that an "employee's entitlement to paid annual leave accrues progressively during a year of service (other than periods of employment as a casual employee of the employer) according to the employee's ordinary hours of work, and accumulates from year to year" and Mr Murphy worked no hours as an employee from January 2011, the primary judge was nevertheless right to take the pragmatic approach he did to calculate the annual leave payment on a notional (not actual) 40 hour week given the entitlement itself depends on the year of service, not the hours worked. 74 Mr Murphy's claims in grounds 3 and 4 based on the national minimum wage in s 44(1) of the FW Act must also fail. Section 44(1) provides that an employer must not contravene a provision of the National Employment Standards. The National Employment Standards are prescribed by s 61(3) of the FW Act. It is not apparent that any contravention of these standards is alleged other than as to annual leave, but this is dependent on Mr Murphy's argument (rejected by the primary judge and by us above) that all work performed by Mr Murphy for Astute from January 2011 was performed under a contract of employment with Astute. Ground 5 of the appeal also fails for these reasons. 75 Otherwise all of Mr Murphy's contentions about his "base rate of pay", "full rate of pay", and "full pay" were based on his incorrect claim that everything agreed to be and in fact paid to the trust ought to have been paid to him for his continuous full-time 40 hours a week work for Astute. As explained, all of the assumptions underlying this contention are wrong. The primary judge's statement at [21] that "[i]n 2016 the parties agreed to increase the amount Mr Murphy was paid from $120,000 per annum to $150,000 per annum or $12,500 per month. The first respondent paid Mr Murphy $12,500 per month from June, 2016 to June, 2018 (except for January, 2017, when the first respondent paid $6,518.35)" should not be misunderstood. The primary judge was not suggesting that from then Mr Murphy was only an employee paid $150,000 per year. So much is clear from the subsequent statement at [24] that: Mr Murphy submits, somewhat disingenuously in my view, that subject to any variation of his original employment contract, the first respondent had to pay him at least $9,174.31 each month until June, 2018. His case is that the first respondent did not because it paid most of that amount to his family trust rather than to him. 76 It is this argument that the primary judge rightly rejected. 77 In consequence, Mr Murphy's proposition made by ground 4 that s 557C of the FW Act "also applied to [the] effect that [Mr] Murphy's allegations in relation to the matter of his rate of remuneration (including the allegations that Astute had to, and did, pay Murphy $150,000 per annum in salary) had to be upheld given that they had not been disproved" must be a form of wishful thinking. Mr Murphy's allegations in relation to his rate of remuneration were wrong because they denied the legal effect of his oral agreement with Astute in January 2011 that his contract of employment would continue solely for the purpose of his holding of the required licence, and he would otherwise be paid for all other work as an independent contractor under a contract for services with all such payments for his services to be paid to the trust. 7. Misrepresentation case 78 In ground 2 of the appeal Mr Murphy contends that the primary judge erred in failing to find and declare that Astute contravened s 357(1) of the FW Act by representing to Mr Murphy that the contract of employment under which he was employed by Astute from 1 July 2010 to 22 June 2018 (noting the qualification above about the way this ground was argued) was a contract for services under which he performed work as an independent contractor and that Mr Chapple and Mr Hook were involved in this contravention. 79 Section 357(1) of the FW Act provides that an employer must not represent to an individual that the contract of employment under which the individual is, or would be, employed by the employer is a contract for services under which the individual performs, or would perform, work as an independent contractor. 80 The problem for this claim is obvious. On the primary judge's unchallengeable findings, Mr Murphy wanted and knew that the work he would be performing for Astute from January 2011 would be under a contract for services as an independent contractor. As the primary judge said, Mr Murphy's evidence that he did not know that this misrepresented the situation could not be accepted, as while "Mr Murphy was not across the fine detail of the arrangements that he wanted put in place", he wanted and arranged for the establishment of the trust, and he did so on the basis of Mr McDonald's advice that Mr Murphy could then "distribute the trust income to members of his family" to reflect that he would remain an employee of Astute only for the purpose of the licence under the QBCC Act and would otherwise be an independent contractor: [13]–[17]. 81 It follows that it cannot be the case that, as claimed, Astute misrepresented to Mr Murphy that he was an independent contractor in contravention of s 357(1). Mr Murphy was an independent contractor. 82 In short, the primary judge disbelieved Mr Murphy's evidence that he did not know about the new legal relationship from January 2011. There is no challenge to that finding (nor could there be). The primary judge therefore rightly concluded at [26] that there was no misrepresentation as the "arrangements that were put in place were put in place at Mr Murphy's request so as to minimise his tax. The arrangements that were put in place in January, 2011 at Mr Murphy's behest were not a sham. They were legitimate arrangements that he wanted established for tax purposes". 83 The 1 February 2011 letter from Astute to Mr Murphy also did not misrepresent that Mr Murphy was an independent contractor. The letter attempted to identify the limited scope of Mr Murphy's continuing role as an employee for the purpose only of holding the licence required by the QBCC Act. Even if the letter did misrepresent that Mr Murphy had no entitlement to annual leave (presumably because it was understood that he would be working no hours as an employee), that does not involve a contravention of s 357(1) as pleaded. 84 Accordingly, ground 2 of the appeal must fail. 8. May 2012 orally agreed variation? 85 Astute contended by ground 1a of the cross-appeal that the primary judge erred in failing to find that on or about 14 May 2012 Astute and Mr Murphy orally agreed to vary the amounts paid to both Mr Murphy directly (under the contract of employment) and to the trust (under the contract for services). 86 Astute put this case to the primary judge, but the primary judge did not resolve this issue. This involves error. 87 The question is whether we should resolve this issue or include it in any remittal to the primary judge given that there remain outstanding issues below in any event (eg, penalties, if any). 88 There was clear and cogent evidence supporting Astute's contention. Mr Hook said that in May 2012 Astute was suffering cash flow problems and Mr Murphy agreed that the total amount payable to both him and the trust should be reduced from $120,000 to $100,000 (implicitly in the same proportions as otherwise applicable). A note from Mr Hook to Astute's bookkeeper records that Mr Murphy had dropped the total payment to $100,000. Mr Murphy agreed in cross-examination that he had lowered his pay but said this was on the basis it (the shortfall) would be paid back. 89 Relevantly: (a) there is no evidence of Astute agreeing to pay back the shortfall other than what Mr Murphy said in cross-examination, (b) the primary judge otherwise was not persuaded that Mr Murphy was a witness of credit (see above), (c) the primary judge otherwise was persuaded that Mr Hook was a witness of credit with respect to the January 2011 arrangements ([11]) and Mr Hook said there was no agreement for Astute to repay the shortfall, (d) subsequent conduct accords with the reduction in the total payment as per the variation for which Astute contends, and (e) it makes little sense for Astute at the time to have agreed to repay the shortfall to Mr Murphy, as Astute would continue to carry a debt owing to Mr Murphy for the shortfall amount. 90 These circumstances are sufficient to persuade us that this aspect of Astute's case on the cross-appeal must be accepted. It follows that to the extent that the primary judge calculated any shortfall in Astute's payments to Mr Murphy based on the total remuneration of $120,000 from May 2012, the primary judge erred. As we understand it this would be confined to the calculation of annual leave only. That entitlement may need to be re-calculated to take into account the reduced payment from May 2012. This re-calculation should be by the primary judge given that the matter needs to be remitted in any event for further hearing on matters such as penalty. 9. Industrial Relations Act 2016 (Qld) 91 There remains in ground 6 Mr Murphy's contention that the primary judge erred in failing to declare that Astute's contravention of s 95(3) of the Industrial Relations Act 2016 (Qld) also constituted a contravention of s 323(1) of the FW Act. 92 Section 95(3) provides that an employee who has completed at least seven years' continuous service is entitled to a proportionate payment for long service leave on the termination of the employee's service. Mr Murphy was such an employee. The primary judge's conclusion, accordingly, was that "Mr Murphy was entitled to a proportionate amount of long service leave namely, 7/10 of 8.6667 weeks. Accordingly, Mr Murphy was entitled to $819 by way of long service leave entitlement": [45]. The primary judge did not err in not declaring that Astute's failure to pay this amount involved a contravention of s 323(1) of the FW Act. Section 323(1) concerns the amounts payable to an employee "in relation to the performance of work", which must be paid "at least monthly". The payment of long service leave under s 95 of the Industrial Relations Act 2016 (Qld) is not such a payment. It is payable for continuous service, not the performance of work. It is not payable monthly, but on the termination of service. 93 Stratton Finance Pty Ltd v Webb [2014] FCAFC 110; (2014) 314 ALR 166 is not authority to the contrary as it concerned leave payments regulated by the contract of employment. Nor is Association of Professional Engineers, Scientists and Managers Australia v Bulga Underground Operations Pty Ltd [2019] FCA 1960 authority to the contrary. As the reasoning in [115]–[120] exposes, the employer in Bulga did not argue to the contrary and no argument was put to the primary judge about the proper construction of s 323(1) in respect of long service leave payable on termination under s 95(3) of the Industrial Relations Act 2016 (Qld). 10. Small business employer? 94 The primary judge rejected Mr Murphy's argument about being owed a redundancy payment in these terms at [40]: The first respondent is not liable to make redundancy payments if it is a small business employer: s.121(1) of the Fair Work Act. The respondents argue that the first respondent was a small business employer. The evidence of the third respondent as to the number of employees employed by the first respondent as at the date of Mr Murphy's dismissal demonstrates that the first respondent was a small business employer and s.121(1) of the Act was engaged. 95 According to Mr Murphy, as Astute bore the onus of proof, there was insufficient evidence to find, as a matter of fact and law, that, at the relevant time, Astute employed fewer than 15 employees as required to be a small business employer as defined in s 23(1) of the FW Act for the purpose of s 121(1). 96 We reject this argument. Mr Hook gave evidence that at the time Mr Murphy stopped working with Astute, the company had fewer than 15 employees and named those employees as at 21 June 2018. Mr Murphy's submissions to the contrary are not persuasive: (1) it is immaterial that Mr Hook's evidence naming the actual employees relates to 21 June 2018 whereas Mr Murphy ceased employment on 22 June 2018. The primary judge was entitled to infer that the circumstance remained the same on 22 June 2018 and, in any event, Mr Hook's evidence was also that "at the time Mr Murphy stopped working with Astute, the company had fewer than 15 employees"; (2) this is not a mere assertion – it is evidence from Mr Hook, found by the primary judge to be a director of Astute and involved in its day-to-day management. The question which arises is – why would Mr Hook, in this role and given the nature of Astute's business, not know exactly who was employed by Astute at all times; (3) the argument that the number of employees Astute had is a legal conclusion about which Mr Hook could not give evidence simply "asserting" the number of employees is unrealistic. There are some cases in which a person's status as an employee is contestable. There is no suggestion that this applied to any person involved with Astute other than Mr Murphy; (4) it does not matter if Astute conceded that it had previously employed more than 15 people. The respondents were not bound to prove that "at least two of the 15 named individuals were no longer employees at the relevant point in time on 22 June 2018" and certainly were not bound to adduce "evidence of the termination of the employment of at least two of those former employees, in the form of notices of termination and termination records"; (5) Mr Hook having given the evidence he did, it was a matter for Mr Murphy to undermine that evidence; (6) Mr Murphy did not undermine that evidence by proving that, contrary to the list of identified employees as at 21 June 2018, Mr Murphy was also an employee. The obvious inference is that Mr Hook did not include Mr Murphy as an employee due to his belief that Mr Murphy was only an independent contractor; and (7) Mr Hook was cross-examined about his evidence but was steadfast – Astute had four or five employees as at 21 June 2018 (excluding Mr Murphy whom Mr Hook understandably omitted). 97 For these reasons, ground 7 of the appeal must also be rejected. Mr Murphy had no entitlement to redundancy pay under s 119 of the FW Act given the operation of s 121 by which s 119 does not apply to a small business employer. 11. Other declarations concerning records 98 As noted, the primary judge found that Astute contravened ss 535(1)–(2) of the FW Act and regs 3.31–3.41 of the FW Regulations in respect of its failure to make and keep certain records relating to Mr Murphy's continued employment. As put for Mr Murphy: The primary judge correctly found that Astute contravened ss 535(1)–(2) of the FWA and regs 3.31 to 3.41 of the Fair Work Regulations 2009 (Cth) by failing to make and keep for 7 years employee records in relation to Murphy, in a legible form readily accessible to an inspector. The primary judge made some declarations in respect of that finding, but in terms which referred only to reg 3.33(2), and failed to make declarations in respect of the contraventions relating to records required by regs 3.31, 3.33, 3.36, 3.37, and 3.40. The primary judge also correctly found that Astute failed to make employee records available on request, in contravention of reg 3.42, and made a declaration in relation to that finding, but in terms which referred only to some of the records which Astute failed to make available. 99 This is not an issue involving appellable error. The primary judge said at [54] that "[h]aving regard to my findings above, it is appropriate to declare that the first respondent contravened in the Fair Work Act as set out above". If it is the case that the declarations made do not reflect the contraventions found then the issue needs first to be raised with the primary judge. This is particularly so in circumstances where the issues of penalty and interest (as well as, presumably, costs) remain outstanding before the primary judge. For example, the omissions may be a mere slip. They may reflect an unexplained discretionary exercise for which the only remedy in any event would be for the primary judge to give more reasons. Either way, this Court will not interfere when no attempt has been made to ascertain if the omissions are a mere slip. 100 For these reasons, ground 8 of the appeal must be rejected. 12. Payslip provision finding and declaration 101 Ground 9 of the appeal is that the primary judge erred in failing to find and declare that Astute contravened ss 536(1)–(2) of the FW Act on 68 occasions from October 2012 to June 2018 by failing to give the appellant any pay slips in relation to 68 payments made to Mr Murphy's business transaction account and that Mr Chapple and Mr Hook were involved in those contraventions. 102 It is apparent from what the primary judge said at [49] that Mr Murphy's real complaint is not that he was not given payslips, but that he was given payslips relating only to the $536.70 payment on account of his employment and not the other money which was paid to the bank account of the trust (described in appeal ground 9 as Mr Murphy's "business transaction account" when, in fact, it is the account of the trust). 103 Given the conclusions above, the primary judge did not err in this regard. Mr Murphy received the payslips which he was required to be given under ss 536(1)–(2) of the FW Act. Mr Murphy was not entitled to any payslip in respect of the work he performed for Astute as an independent contractor and the associated payments to the trust made on that account. 104 Accordingly, ground 9 of the appeal must be rejected. 13. Order fixing for hearing on penalty 105 Ground 10 of the appeal is that the: primary judge erred in ordering that the application be adjourned to a date to be fixed for a hearing as to penalty and interest, in circumstances where the primary judge had failed to make findings, declarations, and orders for compensation in respect of several contraventions which had been alleged and proven, and made errors in several declarations and orders as to compensation. 106 This relates to order 5 of the orders the primary judge made on 14 October 2021 that the "application is otherwise adjourned to a date to be fixed for a hearing as to penalty and interest". 107 This order cannot involve any separate error. The primary judge had a discretion to fix the proceeding for a further hearing. No separate error of principle is apparent in the exercise of that discretion. Accordingly, ground 10 adds nothing to the appeal. 14. Loss and causation 108 Ground 2 of the cross-appeal contends that the primary judge erred in finding that any loss was suffered by Mr Murphy, or that any loss found to have been suffered by him was caused by the conduct of the respondents. 109 The respondents' submissions in this regard are difficult to follow. In any event, the respondents cannot argue that the primary judge's reasoning about loss and causation is inadequate. There is no such ground of the cross-appeal. 110 Beyond this, the argument seems to be that because there was evidence that Mr Murphy obtained significant reductions in his tax liability in the years that he worked for Astute, Mr Murphy cannot prove that he suffered any loss caused by the respondents' conduct, which ought to have factored into the primary judge's discretionary exercise required by s 545(1) of the FW Act. This might have had some substance if we had accepted that the payments to the trust were not in consideration for Mr Murphy's work as an independent contractor and/or, if he were only an employee, could not be characterised as payments to his agent. Given our conclusions, the primary judge's approach to the calculations of the required payment in lieu of notice, annual leave payment, and the long service leave payment is correct (except that the annual leave payment may have to be re-calculated as explained above). 111 It may be accepted that s 545(1) of the FW Act (the court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision) involves a discretion and that s 545(2)(b) may be invoked where appropriate (the court may make an order awarding compensation for loss that a person has suffered because of the contravention). On our analysis Mr Murphy did suffer some loss – the non-payment of the required payment in lieu of notice, the underpayment of annual leave entitlements, and the underpayment of long service leave entitlements. Mr Murphy's tax gains have nothing to do with this loss. Mr Murphy was entitled to these payments and to the tax gains at least insofar as those gains simply reflected the legal relationship of Astute and Mr Murphy. 112 Accordingly, ground 2 of the cross-appeal must be rejected. 15. Discretion 113 Grounds 3 and 4 of the cross-appeal allege that the primary judge erred in the exercise of his discretion in making the declarations of contraventions and in ordering that Mr Hook and Mr Chapple pay the amounts ordered to Mr Murphy. 114 The primary judge did have a discretion to make or not make the declarations. The declarations made reflect the primary judge's findings (subject to the comments above in response to ground 8 of the appeal). The cross-appeal does not challenge the primary judge's findings about Astute contravening certain record keeping requirements in accordance with ss 535(1)–(2) of the FW Act and reg 3.33(2) of the FW Regulations. It is not apparent why the primary judge is said to have erred in some way as to the exercise of his discretion to make declarations consistent with his unchallenged findings or those findings we have found to be correct. In particular: (1) the tax benefits that accrued to Mr Murphy are immaterial, as explained above; (2) we cannot accept the invitation to go further than the primary judge did in rejecting Mr Murphy's evidence as untruthful – there is no such ground of the cross-appeal and even if there were, credit findings are uniquely for the primary judge (see Aldi as cited above); and (3) it is not unjust for Mr Murphy to obtain the extremely limited relief to which he is entitled. 115 As to the order that Mr Chapple and Mr Hook pay the amounts owing (as opposed to Astute which is in liquidation), the problem is that there is no challenge in the cross-appeal to the primary judge's finding of Mr Chapple's and Mr Hook's involvement in Astute's contraventions (minor as they might perhaps be described). According to the primary judge, no such argument was even put below: [52]. In these circumstances we cannot interfere with the primary judge's conclusion at [52], but no doubt it would be relevant to any penalty issue that involvement under s 550 of the FW Act requires intentional participation in the sense described in Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at 666–670 of knowledge of, and intention to, do the essential matters constituting the contravention. In this regard, potentially relevant to penalty, Mr Hook gave evidence (extracted from various parts of the transcript) that: • Vicki ran all that [payments and pay slips], and I believe she knew that. But I didn't have much to do with that side of things; • [before Vicki] We had a bookkeeper, Steve Martin and another accounts lady, I can't remember her name; • I signed off on the payments in the bank, in a bulk payment run; • our system tracked that [records of leave etc]. I didn't track any of that, but the system tracked it for that employee; • No, but you caused Astute to, what? Purchase this system so that you could record leave entitlements and things like that?---After we employed Vicki, yes. Before that Steve Martin managed all that for us; • Now, when you terminated the employment of a fulltime employee, you knew that they had to be paid their untaken leave entitlements, didn't you?---I didn't have anything to do with it, Vicki arranged all that. But I know there was entitlements that needed to be paid. Yes, and you ensured that Astute did pay those entitlements?---Yes; • Well, some employees ended their employment before Ms Herford took over, didn't they?---A lot of employees would have terminated, yes. As I said, our bookkeeper before that who did, basically, what Vicki did. Yes, so you ensured that when their employment was terminated that they were paid any untaken leave?---Yes, I trusted that the bookkeeper that we employed was doing the job, and there was no complaints from anyone who left; • And you knew that if his [Mr Murphy's] employment terminated, you would have to pay termination entitlements if he had accrued, but untaken leave?---Yes. And you also knew that you would have to create a PAYG employee termination payment record?--- I personally didn't know that, but I – I know that whoever was doing the accounts would have done the right thing by us. Because you ensured that Astute had a system which would comply with its obligations?---Well, at that point, we relied on external bookkeepers to make sure we were doing the right thing; • And Astute never made – sorry, never paid any amount for notice or annual leave entitlements?---I – I'm going to say I can't answer it, but I believe they would have. If we had have owed money at the time, we would have done that. We had never not paid anyone, subcontractors or employees. So if that's what we had to do, we – the bookkeeper would have done it. Okay. So if it didn't happen then he obviously wasn't terminated?---I just said I believe it would have happened; • So if it didn't happen then he obviously wasn't terminated?---I just said I believe it would have happened. Okay. Now, during the period from July 2010 to January 2011, you were involved in arranging for Astute to pay Mr Murphy's wages, weren't you?---Again, I would have been – in my process I would have signed off on the bank – on the file. Yes?---So the file was handed to me by the bookkeeper and then I would just sign off yes, it's okay to pay him; • Now, there's no expressed statement of the number of hours worked in that monthly period, but you can tell, can't you, that Mr Murphy was employed at the hourly rate of 52.92 for 173.33 hours, because if you – if you multiply 52.92 by 173, you arrive at that 9174 figure?---Sir, sorry, I will have to just say that the bookkeeper worked that out…; • Now, even after January 2011 until about June or July 2018, you continued causing Astute to make super contributions, didn't you?---For employees, yes. And that included Mr Murphy?---I'm not sure if we did for the – the extent that he worked. Vicki did all that – but, so, I mean, if I'm wrong, tell me, but I'm not sure if he earned enough to pay super, if you have to pay super on every cent, I'm not sure; Well, you can see next to "Holiday leave accrual", under the column "Hours" the figure is 12.66?---Yes, I – I – what's the question about it? I can see that it says 12.66. I don't know if that's correct or not. We – I know we had trouble along the line with the bookkeeper with how things were being presented and figures and things like that, so you would constantly be fixing it. That's why we ended up getting Vicki on board. Well, I put it to you that you recorded – you had a record somewhere of the accrual of leave entitlements, because you knew that you were required to by law, and when you added that 12.66 for that month of April 2011 to the total, you arrived at the year to date figure of 63.17, and that accrual rate was calculated to arrived at an annual total of 151.92 hours for 12 months work?---I can't answer it. I know that's what it says and I agree that's what it says, but I – I still believe that there might have been an issue with the bookkeeper with that because we weren't used to having someone employed as a nominee and then working in another part; • I put it to you that you realised that the payslip recorded the accrual of annual leave and then you amended it and gave Murphy an altered payslip which recorded no accrual of the leave, and this appears at page 648?---You – I'm not going to disagree with that. You would have to speak to Steve Martin, the bookkeeper, because he's the one who constantly had to fix them up. Yes, because you told him that there were errors?---Well, whether I told him or he saw it himself and then resent it, that happened multiple times throughout when he was employed by us or contracted to us; • So we've paid all our subcontractors on time, we've paid our employees on time for 10 years. … we've tried to do the right thing the whole time, unfortunately to our detriment in this case, as we're sitting here now; • Now, even after Ms Herford took over, you – sorry, took over the giving of the payslips to Mr Murphy, you continued to be involved in producing PAYG statements for Mr Murphy, didn't you?---Vicki Herford did that; • And what you were doing there, you were – there was an attachment to that email which was a PAYG summary for the year ending June 2016?---Yes, I distributed it, but you asked me if I raised it. I didn't raise it or create it. I just distributed it; • Now, you've never arranged for Astute to pay Mr Murphy any amount for approved, but untaken, annual leave, have you?---Mr Murphy was paid out for what I believe as – as an employee, he was paid out in full for everything that he was owed…; • Throughout the period from July 2010 to 22 June 2018, you never made a record of Mr Murphy taking any leave, did you?---No, and I asked Vicki why and she said because he wasn't an employee, so we tracked that, I believe; • But you didn't pay the full amount, because the full amount - - -?---As far as we – again, I didn't raise it, accounts did, and I didn't disagree with them because that's how it had been run for 10 years; • There wouldn't have been any records of that, because he wasn't classed as an employee. He didn't class himself as an employee. Well, that's wrong, because you already agreed that you continued to pay him superannuation up until June 2018?---And – and, again, as I said earlier, I would have to check with Vicki, but I don't know what he was being paid warranted any super. I don't know. I can't answer the question… But if there was something there to – to give to him, then Vicki would have sent – I would have passed this onto Vicki because I don't have the details, I didn't have access to the accounting side of Cheops which is the program we used. I only had access to the construction side, seeing that that's what we did…. I would have hired people because I'm not an accountant or anything like that; • I don't generate any of the documents. I don't have access to that side of the system, but that's where you can see the 536, I think, because he's paid double that, by accident he's paid twice…Again, I – I can only say that I was involved in distributing it, but I didn't raise it because I don't have access to that part of the system…It's password protected. I didn't need it. I never got it. I actually wasn't allowed to because Vicki was very controlling of all that; • I didn't believe at that time and I don't believe now that he's due it. 116 The reason we set out this evidence in detail is not because it is relevant to the issue of Mr Hook's involvement in Astute's contraventions (it is, but as we have said there is no challenge to that conclusion of the primary judge), but because it is relevant to the issue of any penalty that might be imposed as it exposes the extent of Mr Hook's culpability (or, arguably, possibly low level of culpability) for the contraventions of the FW Act which have been found. 117 In any event, grounds 3 and 4 of the cross-appeal must be rejected as no error of principle in the exercise of the primary judge's discretion is apparent. 16. Conclusions 118 The only error the primary judge made justifying appellate intervention is that the primary judge ought to have found that in May 2012 Astute and Mr Murphy varied the employment contract and the contract of services so that the overall payment under both contracts would be reduced from a total of $120,000 to $100,000 (reflecting the same proportions as the payments from January 2011 until that time). On this basis the underpayment of annual leave may need to be re-calculated to take into account this reduction. 119 We do not consider it necessary for this Court to be involved in that re-calculation (to the extent required). The matter remains incomplete before the primary judge in any event. The primary judge is able to require the parties to submit an agreed or disagreed re-calculation of the amount owing in respect of the underpaid annual leave consistent with our conclusion of the May 2012 oral variation to the contract. 120 Nor do we consider that our involvement in any calculation of interest is required. That is a matter best left to the primary judge. 121 Otherwise, the orders which should be made are as follows: (1) Leave to appeal be granted. (2) The appeal be dismissed. (3) Ground 1a of the cross-appeal be allowed. (4) The cross-appeal otherwise be dismissed. (5) The appellant pay the respondents' costs of the appeal as agreed or taxed. (6) Each party pay its own costs of the cross-appeal. (7) The matter be remitted to the primary judge for the purpose of: (a) re-calculating as necessary the amount of underpaid annual leave; and (b) such further hearing and orders as the primary judge thinks fit. 122 Mr Murphy should pay the respondents' costs of the appeal as Mr Murphy's appeal has been wholly unsuccessful. Each party should pay its own costs of the cross-appeal because Mr Chapple and Mr Hook succeeded only in respect of ground 1a of the cross-appeal. Ground 1a was not raised until during the course of the oral argument in the appeal. The cross-appeal has otherwise been unsuccessful. I certify that the preceding one hundred and twenty-two (122) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Jagot, Banks-Smith and Jackson. Associate: Dated: 28 September 2022