Federal Court of Australia Primerano v Schisan Investments Pty Ltd [2025] FCA 15 Appeal from: Primerano v Schisan Investments Pty Ltd [2023] FedCFamC2G 667 File number(s): Judgment of: HALLEY J Date of judgment: 22 January 2025 Catchwords: INDUSTRIAL LAW – appeal from decision of Federal Circuit and Family Court of Australia (Division 2) on separate question – whether applicant was engaged by respondents as a national system employee within the meaning of the Fair Work Act 2009 (Cth) (FW Act) – where primary judge answered separate question "no" – where contract between the parties not recorded in writing – ascertainment of the parties' legal rights and obligations – where satisfied primary judge erred in answering separate question in the negative – appeal upheld – separate question answered "yes" PRACTICE AND PROCEDURE – application for extension of time to seek leave to appeal and leave to appeal – application for extension of time not opposed – whether primary judgment attended with sufficient doubt and substantial injustice would result if leave were refused – where primary judgment has practical effect of being final determination of claims applicant seeks to bring under the FW Act – extension of time and leave to appeal granted Fair Work Act 2009 (Cth) ss 13, 14 Legislation: Federal Court of Australia Act 1976 (Cth) s 24 Superannuation Guarantee (Administration) Act 1992 (Cth) s 12 Aldi Foods Pty Ltd v Moroccanoil Israel Ltd (2018) 261 FCR 301; [2018] FCAFC 93 Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 Chiodo v Silk Contract Logistics [2023] FCA 1047 Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 275 CLR 165; [2022] HCA 1 Cases cited: EFEX Group Pty Ltd v Bennett [2024] FCAFC 35 JMC Pty Ltd v Federal Commissioner of Taxation (2022) 114 ATR 795; [2022] FCA 750 JMC Pty Ltd v Federal Commissioner of Taxation (2023) 297 FCR 600; [2023] FCAFC 76 Primerano v Schisan Investments Pty Ltd [2023] FedCFamC2G 667 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; [1986] HCA 1 ZG Operations Australia Pty Ltd v Jamsek (2022) 275 CLR 254; [2022] HCA 2 Division: Fair Work Division Registry: New South Wales National Practice Area: Number of paragraphs: 79 Date of last submissions: 12 December 2024 Date of hearing: 27 March, 6 December 2024 Counsel for the Applicant: Mr A Rogers Solicitor for the Applicant: Mitry Lawyers Counsel for the Respondents: Ms P Thew with Mr M Isaac Solicitor for the Respondents: Kent Attorneys ORDERS NSD 923 of 2023 BETWEEN: JOSEPHINE PRIMERANO Applicant SCHISAN INVESTMENTS PTY LTD T/AS TUTTI FRUTTI PROMOTIONS ACN 124 454 182 First Respondent AND: TUTTI FRUTTI CORPORATE PTY LTD ACN 634 131 187 Second Respondent SANTOS PAULO SCHINELLA (and another named in the Schedule) Third Respondent order made by: HALLEY J DATE OF ORDER: 22 January 2025 THE COURT ORDERS THAT: 1. The time by which the applicant had to file the application for leave to appeal be extended to 29 August 2023. 2. Leave to appeal be granted. 3. The appeal be allowed. 4. The answer given on 28 July 2023 by the Federal Circuit and Family Court of Australia (Division 2) to the question of whether or not the applicant was engaged by the first and second respondents as a national system employee for the purposes of the Fair Work Act 2009 (Cth) during the period 1 April 2019 to 26 May 2021 be set aside and in lieu thereof order that the answer to that question be "Yes". Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT HALLEY J: A. Introduction 1. The issue raised by this appeal is whether the applicant, Josephine Primerano, was a national system employee of the first respondent and second respondent in the period between 1 April 2019 and 26 May 2021 (relevant period), within the meaning of the Fair Work Act 2009 (Cth) (Fair Work Act). 2. On 11 August 2022, a judge of the Federal Circuit and Family Court of Australia (Division 2) made an order, by consent that the question of whether the applicant was a national system employee of the first respondent and second respondent pursuant to s 13 of the Fair Work Act during the relevant period be determined as a separate question. 3. On 28 July 2023, the primary judge answered that question in the negative. 4. The separate question was framed somewhat confusingly as whether the applicant was "engaged by the First and Second Respondents" as a national system employee. The first respondent is Schisan Investments Pty Ltd trading as Tutti Frutti Promotions ACN 124 454 182 and the second respondent is Tutti Frutti Corporate Pty Ltd ACN 634 131 187. Perhaps given the manner in which the question was framed, the primary judge used the terms "Tutti Frutti" and "Tutti Frutti Promotions" in his reasons for judgment to describe the putative employer. His Honour did not seek to draw any distinction between the first and second respondents. Given the approach of the primary judge and the order for the separate question was made by consent, I have used the generic term "Tutti Frutti" to describe the putative employer in these reasons without distinguishing between the first and second respondents. Having said that, it is relevant to observe that the second respondent could not have been a national system employer of the applicant at any time prior to it commencing to trade in September 2020 within the meaning of s 14(1)(a) of the Fair Work Act. 5. The applicant also joined Santos Paulo Schinella, the principal of the first respondent and second respondent, and Raeleigh Aston, a bookkeeper of the first respondent and second respondent, as the third and fourth respondents respectively, to the proceeding. 6. The applicant seeks leave to appeal the decision of the primary judge pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (Cth) as it is an interlocutory decision, and also seeks an extension of time for leave to appeal. The respondent did not oppose the application for an extension of time for leave to appeal, but opposed any leave to appeal being granted. 7. I am satisfied, for the reasons that follow, that (a) leave to appeal should be granted because the primary judge's decision is attended with sufficient doubt and substantial injustice would result if leave were refused, as the decision has the practical effect of being a final determination of the claims that the applicant seeks to bring under the Fair Work Act, and (b) the appeal should be upheld. 8. I am satisfied that the applicant was relevantly a national system employee of at least the first respondent in the period between April 2019 and September 2020 and the first or second respondent in the period between September 2020 and May 2021. B. Background 1. The business undertaken by Tutti Frutti was the supply of meat trays and raffle prizes to hotels and clubs and the supply of staff for promotional events at venues. 2. On or about 21 June 2017, Mr Schinella and Dana Younes became directors and shareholders of Creative Gifts Pty Limited (Creative Gifts). Mr Schinella and Ms Younes acquired their shares in Creative Gifts from Cathy Fazzalaro. At the time of the share acquisitions, Mr Schinella was already operating the business of Tutti Frutti out of the same warehouse at Hilton Street, Sydenham that Ms Fazzalaro was operating the Creative Gifts business. In or about December 2018, Mr Schinella moved both the Tutti Frutti and the Creative Gifts businesses to a different warehouse on the Princes Highway at Sydenham. 3. The applicant was one of the persons working for Creative Gifts at the time it was acquired by Mr Schinella and Ms Younes. Her role was to purchase gifts at wholesale prices, wrap the gifts and deliver them to various licensed clubs. The applicant continued to work for Creative Gifts until about April 2019. The applicant contends, but the respondents deny, that the applicant worked for both Creative Gifts and Tutti Frutti in the period between 2016 and April 2019. In any event, it is common ground that from April 2019, the applicant only worked for Tutti Frutti. The basis on which the applicant was engaged by Tutti Frutti from April 2019 was not documented. 4. The work undertaken by the applicant for Tutti Frutti included purchasing goods for Tutti Frutti to be used as raffle prizes. The applicant purchased the goods with her money and was then reimbursed by Tutti Frutti once the purchases had been authorised by either Mr Schinella or Ms Aston. It included wrapping the goods in hampers or in gift packs. The applicant was paid a weekly fixed amount of $1,500 from Tutti Frutti, equivalent to an annual payment of some $78,000. C. Relevant Principles 1. Section 13 of the Fair Work Act provides that the following definition of a national system employee: A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement. 1. Section 14(1)(a) of the Fair Work Act relevantly provides that a national system employer includes: a constitutional corporation, so far as it employs, or usually employs, an individual 1. The principles for determining whether there is an employment relationship have been conclusively stated by the High Court in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 275 CLR 165; [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek (2022) 275 CLR 254; [2022] HCA 2. Those cases established that where the rights and duties of the parties are "comprehensively committed to a written contract", the rights and obligations established by terms of that contract are decisive of the character of the legal relationship, and are to be construed in accordance with established principles of contractual interpretation: Personnel Contracting at [43]-[44], [59]-[60] (Kiefel CJ, Keane and Edelman JJ), [173], [183] (Gordon J, Steward J agreeing). 2. Where there is no written contract or specific evidence of conversations in which a contract was formed, the evidence of the parties' subsequent conduct must necessarily be considered in order to draw inferences "as to whether the meeting of minds necessary to create a contract has occurred and what obligations they have thereby undertaken": Chiodo v Silk Contract Logistics [2023] FCA 1047 at [9] (Kennett J) citing Personnel Contracting at [177] (Gordon J, Steward J agreeing). 3. A Full Court of this Court recently stated the principles for ascertaining the existence of an employment relationship where a contract is wholly oral in EFEX Group Pty Ltd v Bennett [2024] FCAFC 35 at [7]-[14] (Katzmann and Bromwich JJ), which principles for present purposes can be distilled as follows: 4. the identification of the parties' contractual rights where there is no written contract "must proceed somewhat differently", however, the fundamental task of ascertaining and characterising the parties' contractual rights and obligations remains the same: EFEX at [8] citing Chiodo at [9]; 5. the focus of the enquiry is on the ascertainment of the legal rights and obligations of the parties, not how they subsequently behaved in the performance of their contract: EFEX at [8]; Chiodo at [8]; 6. the terms of an oral contract may be inferred from the parties' conduct or a course of dealing between them, or implied where necessary for business efficacy: EFEX at [9] citing Realestate.com.au Pty Ltd v Hardingham (2022) 277 CLR 115; [2022] HCA 39 at [21]-[22] (Kiefel CJ and Gageler J); 7. the characterisation of the relationship depends on contractual rights, not circumstances, facts or events that do not affect those rights: EFEX at [10]; 8. the principles of contract interpretation remain applicable with respect to unwritten contracts, such that regard may be had to circumstances surrounding the making of the contract and events and matters known to the parties at the time of contracting if they assist in identifying the object or purpose of the contract: EFEX at [11]; 9. things said or done after a contract is made are generally not legitimate aids to the construction of the contract, unless it is concerned with the rights and duties established by the contract, as distinct from an aspect of how the parties' relationship played out in practice: EFEX at [11] citing Personnel Contracting at [61] (Kiefel CJ, Keane and Edelman JJ); 10. while the dichotomy between a person's own business and working in the putative employer's business may not be perfect, the approach is useful as it focuses attention on whether the putative employee's work was subordinate to the putative employer's business, such that it is not an independent enterprise, so as to avoid the danger of the impressionistic judgment or ticking off a checklist, which runs counter to the objective contractual analysis: EFEX at [12]; 11. once the contours of the legal relationship are identified, the characterisation of the relationship as one of employment often hinges on two considerations, namely, (i) the extent to which the putative employer has the right to control how, when and where the putative employee performs the work, and (ii) the extent to which the putative employee can be seen as working in their own business, as distinct from working in the putative employer's business: EFEX at [13] citing Personnel Contracting at [36]-[39] (Kiefel CJ, Keane and Edelman JJ); and 12. the proper analysis, however, may be more nuanced, and the correct focus may be better characterised as "if the contract does not lead to the conclusion that the person was working in the business of the asserted employer, then the person will not be an employee": EFEX at [14]. 13. A useful summary of the principles in Personnel Contracting and other leading authorities was provided by Wigney J in JMC Pty Ltd v Federal Commissioner of Taxation (2022) 114 ATR 795; [2022] FCA 750 at [17]-[27], which summary I respectfully adopt. His Honour's decision was overturned on appeal, but his Honour's summary of the relevant principles was stated to be accurate: JMC Pty Ltd v Federal Commissioner of Taxation (2023) 297 FCR 600; [2023] FCAFC 76 at [8]-[9] (Bromwich, Thawley and Hespe JJ). The principles summarised by Wigney J that are relevant for present purposes can be distilled as follows: 14. the contractual provisions that may be relevant in determining the nature of the relationship include, but are not limited to, mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work, the provision for holidays, the deduction of income tax, the delegation of work, and the right to exercise direction and control: JMC at [21] citing Personnel Contracting at [113] (Gageler and Gleeson JJ), [174] (Gordon J); 15. indicia which may suggest an employment relationship include "the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like": JMC at [22] citing Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; [1986] HCA 1 at 36 (Wilson and Dawson JJ); 16. indicia which may suggest a contract for services include "work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of goodwill or saleable assets in the course of his work, the payment by him from his remuneration of business expenses of any significant proportion and the payment to him of remuneration without deduction for income tax": JMC at [22] citing Brodribb at 36-37 (Wilson and Dawson JJ); 17. any attempt to list relevant indicia, however, may be misleading because they are no more than a guide, and the focus is on the parties' contractual rights and obligations relevant to those matters, not in the way in which the work was carried out: JMC at [22] citing Brodribb at 37 (Wilson and Dawson JJ); 18. a label which the parties may have used to describe their relationship is not determinative of the nature of the relationship, and will rarely assist the Court in characterising the relationship by reference to the parties' contractual rights and duties: JMC at [26] citing Personnel Contracting at [63]-[66] (Kiefel CJ, Keane and Edelman JJ); 19. the characterisation is ultimately an evaluative judgment that takes into account the totality of the parties' contractual rights and obligations, which may in some cases, point in different directions: JMC at [27]; and 20. the evaluative exercise must not be approached on the basis that there is "some checklist against which ticks and crosses may be placed so as to produce the right answer": JMC at [27]. D. Decision of the primary judge 1. The primary judge was not satisfied that the applicant had discharged her burden of proof that she was an employee of Tutti Frutti rather than an independent contractor. His Honour therefore answered the separate question in the negative. His Honour reached that conclusion after "[w]eighing up all the factual matters which the Court has determined". 2. The primary judge's dispositive reasoning is at [81]-[101] of Primerano v Schisan Investments Pty Ltd [2023] FedCFamC2G 667 (PJ). The primary judge's principal factual findings were limited to findings that (a) the applicant worked for Tutti Frutti during the relevant period and was paid an amount of $1,500 a week (at PJ [83]), (b) the applicant did not provide a tax file declaration or other paperwork to Tutti Frutti necessary for superannuation payments to be made (at PJ [84]), (c) the applicant had made claims to Centrelink that resulted in her receiving money to which she was not entitled (at PJ [85]), (d) the applicant had previously worked as an independent contractor for Creative Gifts (at PJ [88]), (e) the applicant did not request payslips or a group certificate (at PJ [89]), (f) Tutti Frutti operated on a cash basis and did not properly record income and expenditure (at PJ [93]), (g) Mr Schinella did not mind when the work was done by the applicant, only that it was done (at PJ [94]), (h) the applicant obtained the authority of the respondents to purchase goods for Tutti Frutti (at PJ [94]), and (i) the applicant had no apparent right to delegate work to other persons (at PJ [95]). E. Salient facts 1. The parties submitted that in the event that I granted leave to appeal and concluded that the primary judge's determination of the separate question must be set aside that I should then determine the separate question rather than remitting the question back to the primary judge or another judge of the Federal Circuit and Family Court of Australia (Division 2). 2. Given the limited factual findings made by the primary judge, at the conclusion of the hearing of the proceeding before me on 27 March 2024 I directed the parties to prepare a joint statement of agreed facts as to the primary facts established by the evidence before the primary judge, as undertaken by the parties before the Full Court in EFEX at [17]. The statement of agreed facts was ultimately filed on 20 September 2024. 3. The statement of agreed facts contained the following agreed facts as to the primary facts established by the evidence before the primary judge: Pre-contractual events and conduct 1. On 19 March 1999 Creative Gifts Pty Ltd was registered. 2. On 16 March 2007 the First Respondent was registered. 3. On 10 June 2016, the Applicant was engaged by Ms Fazzalaro on behalf of Creative Gifts Pty Ltd to work a few days a week. There was no written contract between Creative Gifts and the Applicant. 4. Creative Gifts did not deduct income tax from the Applicant's wages. 5. In June 2017, Ms Fazzaralo [sic] sold her shares in Creative Gifts to the Third Respondent. 6. On 14 June 2019 the Second Respondent was registered. 7. From about July 2019 the Fourth Respondent was engaged to provide bookkeeping services to the First Respondent. 8. The Second Respondent was not a 'constitutional corporation' within the meaning of section 14(1)(a) of the Fair Work Act 2009 (Cth) (the FW Act) until about September 2020 because it did not trade until that time. 9. [whether applicant ever engaged by the second respondent - not agreed] Post contractual events and conduct relevant to findings on the contractual terms Duration of engagement 1. From 1 April 2019 to 26 May 2021 the Applicant was engaged by the First Respondent and/or Second Respondent for the carrying out of services by the Applicant for reward (Contract). 2. The Contract was not in writing. Mode of remuneration 1. It was a term of the Contract that the Applicant would be paid $1,500.00 per week. There was no clear agreement during the Engagement whether this was a gross or a net amount. Provision and maintenance of equipment 1. [whether it was a term of contract that applicant pay her own expenses – not agreed] Obligation to work 1. It was a term of the Contract that the Applicant was not obliged to work within a particular span of hours so long as the work she was assigned was completed. [number of hours required to work – not agreed] Hours of work 1. It was a term of the Contract that the Applicant would work a certain number of hours over 5 days a week, but within no particular span of hours. [number of hours required to work – not agreed] 1. The Applicant did not work the hours that she claimed. The parties agree that it is unclear, on the evidence before Humphreys J, the hours that the Applicant in fact worked. [number of hours required to work – not agreed] Provision for paid leave, overtime or penalty rates 1. [applicant was not required to work overtime – not agreed] 2. The Contract was silent on the question of paid leave, and the payment of overtime or penalty rates. 3. There is no evidence that the Applicant made any claim to the Respondents for the payment of over time or penalty rates. 4. [whether applicant received paid leave – not agreed] Deduction of income tax 1. The Respondents made no deduction from the Applicant's wages in respect of tax. 2. In respect of the period of the Engagement, the Applicant's tax returns were submitted as nil. [whether applicant submitted her own tax returns – not agreed] 1. The Applicant did not complete or provide a tax file number declaration to Creative Gifts or to the Respondents. 2. The Applicant did not provide the Respondents with tax invoices, an Australian Business Number, any evidence that she was registered for GST, her tax file number, or a tax file declaration, despite the Respondents' requests for this information. [whether applicant provided her tax file number to Creative Gifts by text message in 2016 or at all – not agreed] The Respondents paid the Applicant during the Engagement in the absence of any such information. 1. During the engagement, the Applicant did not request the Respondents to provide her with her payslips or group certificates. 2. While working for Creative Gifts, Creative Gifts did not deduct tax from the Applicant's pay. 3. The Respondents did not deduct income tax from the Applicant's pay. 4. The Applicant did not complete or provide a tax file number declaration to the Respondents. 5. [whether applicant was aware that respondents did not, and were unable to, deduct income tax from fees paid to her – not agreed] Right to delegate work 1. There is no evidence that the Applicant had a right to delegate. Right to exercise direction and control 1. [whether respondents had right to exercise direction and control over applicant- not agreed] 2. The Third Respondent did not care when the Applicant worked, as long as the work was done. 3. The Applicant may have asked the Third Respondent to authorise purchases of goods sourced by the Applicant. Other matters – Centrelink benefits claimed 1. Throughout the Engagement, the Applicant claimed and received benefits from Centrelink (including JobSeeker payments of $500 to $700 per fortnight) to which she was not entitled. 2. The parties provided competing submissions, both in writing and in the course of a further oral hearing on 6 December 2024, with respect to the factual matters that could not be agreed. The parties included in the statement of agreed facts the evidence before the primary judge that was relied on in support of the findings that they sought in relation to the disputed factual matters. 3. I am satisfied that the parties approached the preparation of the statement of agreed facts with significant care and in a genuine effort to reach agreement on facts that reflect the evidence before the primary judge. 4. I am not satisfied, however, that the evidence before the primary judge on the factual matters not agreed between the parties is sufficient for me to make any material, additional or supplementary factual findings at the appellate level in relation to those disputed factual matters. The evidence was either inconclusive or did not arise beyond conflicting self-serving assertions by the applicant and the third respondent, unsupported by any contemporaneous documents. The resolution of much of the conflicting evidence given by the applicant and Mr Schinella, particularly the precise scope of the work undertaken by the applicant for Tutti Frutti and the extent to which Mr Schinella exercised control over the applicant, would require specific credit findings which the primary judge did not make (PJ [90]), and such findings cannot be made at an appellate level. F. Grounds of Appeal 1. The applicant initially advanced 12 proposed grounds of appeal in her draft notice of appeal. At the hearing, the applicant, by her counsel, advised that proposed ground 1 and proposed ground 7 were not pressed. 2. Given that I am satisfied that leave to appeal should be granted to advance the other proposed grounds of appeal, I will now refer to them as grounds of appeal rather than proposed grounds of appeal. 3. The applicant contends that the primary judge erred in: 4. inferring that her failure to complete tax file number declarations and superannuation documentation was indicative of her being engaged by Tutti Frutti as an independent contractor rather than as an employee (Ground 2); 5. inferring that her receipt of Centrelink benefits to which she was not entitled was indicative of the fact that she was self-employed rather than an employee of Tutti Frutti (Ground 3); 6. inferring that the fact that she worked excessive hours was more consistent with her being an independent contractor rather than an employee (Ground 4); 7. finding that the fact that she was not receiving superannuation payments and did not raise that matter with Tutti Frutti was more indicative of her being an independent contractor rather than an employee (Ground 5); 8. inferring that any failure by her to request payslips and a group certificate was more indicative of her being an independent contractor than of being an employee (Ground 6); 9. inferring that the fact that Tutti Frutti operated on a cash basis was indicative of her being engaged as an independent contractor (Ground 8); 10. failing to infer that she was required to obtain authorisation for the purchase of goods for the use of Tutti Frutti and failing to infer that was indicative of an employer/employee relationship. (Ground 9); 11. failing to recognise that the absence of a right to delegate work to other persons was indicative of an employer/employee relationship (Ground 10); 12. failing to infer that the reimbursement by Tutti Frutti of the running costs of her vehicle was indicative of an employer/employee relationship (Ground 11); and 13. treating any perception by her as to her status as conclusive (Ground 12). 14. The grounds of appeal are directed at the more significant aspects of the primary judge's dispositive reasoning. Two overarching observations must be made with respect to the grounds of appeal as formulated by the applicant. 15. First, the identification of discrete grounds of appeal seeking to identify error in the primary judge's conclusion that the separate question was to be answered in the negative has a tendency to focus attention away from the overall evaluative task of determining whether the applicant was an employee or an independent contractor. The grounds of appeal are perhaps best understood as "particulars" to an overarching ground that the primary judge erred in concluding that the applicant was not an employee of Tutti Frutti during the relevant period. 16. Second, perhaps in large part given the manner in which aspects of the primary judge's dispositive reasoning was expressed, some of the grounds of appeal have a tendency to misstate the reasons of the primary judge. G. Submissions G.1. The applicant 1. The applicant advances the following principal submissions in support of the grounds of appeal and her contention that she was an employee of Tutti Frutti. 2. First, the applicant submits that the primary judge did not give sufficient weight to the right of control that the respondents had over the manner in which the applicant performed work for Tutti Frutti. She submits that the real question is whether she was conducting business on her own behalf and there was nothing in the evidence to suggest that she was doing so. 3. Second, the applicant submits that where a company is operating a "cash business", the absence of payslips and taxation records cannot assist in determining whether a person received remuneration from a company as an employee or independent contractor. The applicant submits that in any event, she did not have an ABN, nor was she ever asked to supply an ABN, which would point against her being an independent contractor. 4. Third, the applicant relatedly submits that the absence of superannuation payments is neutral because pursuant to s 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth) she would equally have been entitled to superannuation if she were an independent contractor because her contract was for the supply of personal services. 5. Fourth, the applicant submits that rather than being neutral, her "incapacity to delegate her work to others" was decisive as to whether she was an employee of Tutti Frutti. She submits that work she undertook did not involve any specialised skills and it was only the existence of an employment relationship that interfered with any right of delegation. 6. Fifth, the applicant submits that her claims for Centrelink benefits to which she was not entitled may reflect on her credit but cannot be relevant to whether she was an employee or independent contractor. 7. Sixth, the applicant submits that the requirement that she obtain authorisation before purchasing goods for the respondents was "if anything, almost solely indicative of an employment relationship". She submits that if she had been an independent contractor it would be expected that she would independently source and purchase goods that she considered suitable for the respondents. G.2. The respondents 1. The respondents advance the following principal submissions in response to the applicant's submissions and grounds of appeal. 2. First, the respondents submit that Grounds 2, 4, 5, 6, 8 and 9 misstate the primary judge's findings. They submit that (a) the primary judge did not infer that the applicant's failure to provide a tax file number declaration by itself was indicative of the applicant being an independent contractor (Ground 2), (b) the primary judge did not make a positive finding that the applicant did work excessive hours (Ground 4), (c) the primary judge did not make any finding that the applicant failed to follow up the first respondent about her non-receipt of superannuation (Ground 5), (d) the primary judge only had difficulty accepting that if the applicant were an employee, she would not have requested her payslips and group certificate (Ground 6), (e) the primary judge made no finding that the respondents operated as far as possible on a cash basis nor that this indicated that the applicant was a contractor (Ground 8), and (f) the primary judge did not fail to infer that the applicant was required to obtain authorisation of the purchase of goods (Ground 9). 3. Second, the respondents submit in answer to Grounds 2, 6 and 8 that the implicit proposition that the absence of payslips, taxation records and an ABN cannot be relied upon as indicative of contractual terms because of the "doubtful accounting" of Tutti Frutti is unsustainable. They submit that the primary judge found that Ms Aston had expressly asked the applicant if she "wished to become an employee as compared to continuing the arrangements that she was currently on as an independent contractor" and Ms Aston had specifically requested that the applicant provide her with "documentation one way or the other … to enable [the applicant] to be paid as an employee or as [a] contractor". 4. Third, the respondents submit in answer to Ground 3, that the absence of "clear records" could not render the absence of superannuation payments or the applicant's receipt of Centrelink payments of "no importance". They submit that the primary judge "appropriately" treated the applicant's receipt of Centrelink payments as treating herself as self-employed and engaged as an independent contractor by Tutti Frutti. 5. Fourth, the respondents submit in answer to Ground 9, that the applicant "at times" seeking authorisation to make purchases was not indicative of being "subjected to the command of" Tutti Frutti, as that concept was explained in Brodribb at 35 (Wilson and Dawson JJ). 6. Fifth, the respondents submit in answer to Ground 10 that contrary to the wording of that ground the primary judge only found that there was no evidence that the applicant had a right to delegate, and his Honour did not make a positive finding that the applicant did not have a right to delegate. Moreover, there was no evidence that the applicant was prohibited from delegating. H. Consideration H.1. Appellate jurisdiction 1. It is well established that the appellate jurisdiction of the Court involves an appeal by way of rehearing and is directed at the correction of error: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 at [20], [22] (Allsop J, Drummond and Mansfield JJ agreeing). A finding of error is essential for an appeal to be successful: Aldi Foods Pty Ltd v Moroccanoil Israel Ltd (2018) 261 FCR 301; [2018] FCAFC 93 at [45] (Perram J, Allsop CJ and Markovic J agreeing). 2. In circumstances where there is an interplay between documentary evidence, fact finding by way of assessment and inference, and the application of the law to facts that are found, a finding of error is both factually and legally evaluative in nature, particularly when factors point to differing conclusions requiring the Court to determine which conclusion should prevail: EFEX at [37] (Katzmann and Bromwich JJ). The appellate task in that context, as stated in EFEX at [37], is that explained by Perram J in Aldi Foods at [49]: When an appellate court comes to review such conclusions it must be guided not by whether it disagrees with the finding (which would be decisive were a question of law involved) but by whether it detects error in the finding. On the one hand, error may appear syllogistically where it is apparent that the conclusion which has been reached has involved some false step; for example, where some relevant matter has been overlooked or some extraneous consideration taken into account which ought not to have been. But error, on the other hand, may also appear without any such explicitly erroneous reasoning. The result may be such as simply to bespeak error. Allsop J said in such cases an error may be manifest where the appellate court has a sufficiently clear difference of opinion: Branir at [29]. H.2. Grounds of appeal 1. The question of whether the primary judge erred in answering the separate question in the negative turns on the evaluative assessment that the primary judge made of competing criteria and the conclusion he reached that the applicant was not an employee of Tutti Frutti. Given the grounds of appeal are all directed at alleged errors of the primary judge in undertaking the evaluative exercise to determine whether the applicant had established that she was an employee of Tutti Frutti during the relevant period, it is convenient to address the appeal grounds together. 2. For the following reasons, I am satisfied that the primary judge has erred and I have reached a different conclusion. 3. First, the primary judge gave too much weight to the applicant's failure to complete tax file number declarations and superannuation documentation (Ground 2), non-receipt of superannuation payments and failure to raise that matter with Tutti Frutti (Ground 5), her failure to request payslips and a group certificate (Ground 6) and the fact that Tutti Frutti operated on a cash basis (Ground 8). 4. The absence of documents consistent with the applicant being an employee of Tutti Frutti, such as a tax file number declaration, payslips and group certificates would point towards the applicant being an independent contractor, but is of limited weight in the present case given the respondents paid the applicant on a cash basis, independently of any invoice or other documentation of information from the applicant that suggested that she was providing services to Tutti Frutti as an independent contractor. The applicant was not registered for GST, did not have an ABN and only purchased products for Tutti Frutti to use for its purposes. 5. The position was very different in EFEX in which the Full Court concluded that the relationship was one of independent contractor and principal, not employee and employer. In that case, the putative employee invoiced EFEX Group Pty Ltd (EFEX) for his fixed monthly income through a family trust, received payments of those invoices into the trust bank account and paid significant expenses out of the trust bank account, including tax, travel and food and beverages for potential clients without any reimbursement from EFEX: see EFEX at [24] and [47] (Katzmann and Bromwich JJ). 6. At PJ [87] the primary judge found it "difficult to accept" the applicant's claims that she never looked at her superannuation account. His Honour found it "incredible that if, the applicant was an employee, she would not have ascertained at an early point of time that she was not receiving superannuation payments and taken the matter up with her employer". The fact that Tutti Frutti did not pay the applicant any superannuation is indicative of an independent contractor relationship. The obligation to make superannuation payments, however, if the applicant were an employee, was on the putative employer, not the applicant to request the payments. The same applies to the primary judge's findings at PJ [89] that he had difficulty accepting that if the applicant were an employee she would not have requested payslips and a group certificate. 7. Contrary to the applicant's submissions, however, I do not accept that the effect of s 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth) would necessarily render the absence of superannuation documentation a "neutral" factor. Whether or not the applicant would have been entitled to superannuation as an independent contractor would depend on whether she was working under a contract that is "wholly or principally for [her] labour". Determining that matter would similarly require an objective assessment of the legal rights and obligations of the parties established by the contract: JMC Pty Ltd v Federal Commissioner of Taxation (2023) 297 FCR 600; [2023] FCAFC] 76 at [106] (Bromwich, Thawley and Hespe JJ). See also the approach taken by Wigney J at first instance in JMC at [28]-[31] and [186]-[191]. Given the views I have reached at [77] below, it is not necessary for me to make that assessment for present purposes. 8. The difficulty of attributing any significant weight to the absence of any documentation evidencing or otherwise consistent with an employment relationship is exacerbated, as the evidence of the bookkeeper, Ms Aston, makes plain, by the applicant's failure to respond to Ms Aston's contemporaneous requests for any documentation that might assist in determining whether she was an employee or an independent contractor and the applicant telling Ms Aston that she just wanted to be paid in cash. 9. The evidence of Ms Aston, which the primary judge preferred over the applicant's recollection of the conversation, was as follows: In about August 2020, I had a conversation with the Applicant at Tutti Frutti Promotions' factory in Marrickville to the following effect: Me: "What are these $1,500 payments being made to you?" JP: "That's my cash payments. They're not on the books." Me: "Well, no, it's gone though the company's bank account – you're either an employee or subcontractor. You can't be receiving cash payments of that amount of money. I need documentation, this is ridiculous." JP: "Well I'll just get him to pay cash.." Me: "I don't think that's a good idea." … In about March 2021, I said to the Applicant words to the effect of: "Josephine. Enough is enough. I need your details and documents. Anyone that is on the payroll I need the information. I either need your employee details or your subcontractor details." 1. The primary judge at PJ [98] found that "[h]aving accepted this conversation and preferring it to the account of the applicant, the Court is led to the conclusion that Ms Primerano always knew her status was that of an independent contractor and not an employee". 2. The primary judge also accepted Ms Aston's evidence that in September 2020, she had a conversation with the applicant to the following effect: JP: "I would like to take on the admin and accounts role and would consider being an employee. But I need to talk to my father and Alper as I do not understand all this. I would like to build up my super. How much tax would I have to pay and is there any way to reduce the tax?" Me: "I said I am not a tax accountant, so you need to check with your tax accountant. The only think [sic] I can suggest is salary sacrifice but still check." JP: "OK I will talk to my father or Alper." Me: "I need to know ASAP as I need to set up everything. I will also need your TFN details and super details. If you do not want to be an employee, you will need to submit all your tax invoices and invoices." 1. The primary judge at PJ [97] characterises this conversation as a "discussion …as to whether or not the applicant wished to become an employee as compared to continuing the arrangements that she was currently on as an independent contractor". 2. In my view, when the evidence is considered in context, it is apparent that both the applicant and Tutti Frutti had proceeded on an informal "cash basis" which did not conclusively point to an employment relationship or an independent contractor relationship. In those circumstances, and as I explain below at [70]-[71], the primary judge erred in placing significant weight on the applicant's perception or understanding of her status, as opposed to ascertaining and assessing the legal rights and duties of the parties established by the contract. 3. Second, the primary judge erred in giving any weight to the applicant's receipt of Centrelink benefits to which she was not entitled (Ground 3) as a factor pointing towards the applicant being an independent contractor. The primary judge's finding at PJ [85] does not explain why or how the Centrelink claims is relevant to the assessment of the legal rights and duties of the parties: The applicant conceded that during the relevant period, she made claims to Centrelink which resulted in her receiving benefits which she freely admits she was not entitled to. To the Court's mind, this fact points towards finding the applicant was in fact self-employed and worked for Tutti Frutti as an independent contractor rather than as an employee. 1. Irrespectively of whether the applicant was an employee or an independent contractor of Tutti Frutti, the applicant was required to declare all income she received and was not entitled to the Centrelink benefits that she claimed and was paid. 2. Likewise, submitting taxation returns showing nil income does not point towards the fact that the applicant was an independent contractor rather than an employee (at PJ [89]). Regardless of whether the applicant was an employee or an independent contractor, she was receiving income that should have been declared. The fact that she did not do so, as the primary judge found, "points towards the fact that she was prepared to misrepresent her income … to the Australian Taxation Office", but I do not accept that such a misrepresentation could logically be inferred as having been made by the applicant as a contractor rather than employee. 3. Third, the primary judge erred in giving any implicit weight to the "excessive hours" worked by the applicant as a factor that might point to the applicant not being an employee (Ground 4). 4. Ground 4 is directed at the following observations of the primary judge at PJ [86]: The applicant claims that she worked excessive hours and is entitled to payments in respect of overtime and otherwise in respect of those hours worked. It seems beyond credibility that she would have worked those hours in the manner in which she claims, if she was an employee and entitled to the payment of over time, penalty rates and paid annual and other leave. 1. It is not apparent what, if any, implicit finding the primary judge was making at PJ [86] as to the hours worked by the applicant. In context, given his ultimate conclusion that the applicant was an independent contractor, the primary judge appears to be relying on this finding or observation to support that conclusion. Namely, if the applicant worked the hours that she claimed it is implausible that she did so as an employee because she was not paid overtime or penalty rates and did not receive any paid annual or other leave. 2. The primary judge made no specific findings as to the hours that the applicant worked. His Honour, however, did refer to the evidence of (a) the applicant's father that she would come home to have a few hours of sleep after working all night and some of her shopping was done late at night (at PJ [17]), (b) the applicant's partner, Mr Alper, that she would work throughout the night from as early as midnight until the afternoon of the following day in order to meet delivery deadlines for the Tutti Frutti business and that Mr Schinella would call late at night, early in the morning and on weekends, requesting that the applicant go out and purchase prizes for a raffle at the last minute that needed to be delivered the following mornings (at PJ [23]), and (c) the applicant, that she was required to work on weekends in order to purchase prizes which required her to go to many different places (at PJ [43]). 3. Assuming for present purposes, the primary judge did implicitly find that the applicant worked "excessive hours" then the reasoning that it was "beyond credibility" that she did so as an employee and was thereby entitled to paid overtime, penalty rates and paid annual and other leave, with respect, rather inverts the entire analysis. The fact that she was not paid overtime, penalty rates and paid annual and other leave does not lead to the conclusion that she was not entitled to those payments and benefits nor does it carry with it a necessary inference that she was therefore not an employee. Moreover, the evidence of "excessive hours" referred to by the primary judge would appear, if anything, to suggest that the applicant was very much subject to the directions and instructions of Mr Schinella, evidence more consistent with the applicant being an employee, at the "beck and call" of an employer, rather than an independent contractor providing services to a principal. 4. Moreover, the number of hours worked and whether such hours were "excessive" cannot relevantly inform any evaluative assessment of the status of the applicant as an employee or independent contractor. The more relevant consideration is the mode and manner in which the applicant was remunerated for the work, which I address below at [74]. 5. Fourth, the primary judge gave too much weight to any perception by the applicant as to her status (Ground 12). The extent to which the primary judge attributed weight to the applicant's own perception of the basis on which she undertook work for Tutti Frutti is apparent from the following reasoning of the primary judge at PJ [88] and [98]: [88] The applicant agreed that whilst working for Creative Gifts, she was an independent contractor. It appears, even on her own evidence, that when she commenced work for Tutti Frutti, she was engaged in the same terms and conditions that she was working for Creative Gifts. This points towards the applicant remaining an independent contractor following commencing work with Tutti Frutti rather than as an employee. … [98] The Court also accepts the later conversation outlined by Ms Aston as regards the fact that the applicant needed to provide documentation one way or the other. That being documentation to enable her to be paid as an employee or as [a] contractor. The response that the applicant would just get Ms Schinella [sic] to pay her in cash has a ring of truth to it, in the particular circumstances of this case. Having accepted this conversation and preferring it to the account of the applicant, the Court is led to the conclusion that Ms Primerano always knew her status was that of an independent contractor and not an employee. 1. Neither the applicant's subjective belief as to whether she was an independent contractor when she worked for Creative Gifts nor her subjective belief that she might always have had that "her status was that of an independent contractor" can assist in the ascertainment of the relevant legal rights and obligations between the applicant and Tutti Frutti. Her employment status is an objective matter to be determined by having regard to the rights and duties established by the contract and things said or done after a contract is made that are concerned with the rights and duties established by the contract. 2. Fifth, the primary judge gave insufficient weight to the requirement that the applicant had to obtain authorisation for the purchase of goods for the use of Tutti Frutti (Ground 9). The primary judge did not explain why this factor is "neutral". The requirement that all of the applicant's purchases had to be "legitimately made and authorised" by Tutti Frutti before the applicant could be "reimbursed" is indicative of an employee/employer relationship. The requirement for an "authorised reimbursement" does not sit comfortably with the concept of an independent contractor procuring and selling goods to a business. It is evidence from which an inference can readily be drawn that the applicant was relevantly subject to the command of Tutti Frutti in the sense described in Brodribb at 35 (Wilson and Dawson JJ). 3. Sixth, the primary judge gave insufficient weight to the absence of any right to delegate work to other persons (Ground 10). The primary judge provided no explanation as to why "in the particular circumstances of this case the Court does not consider this points to the applicant being either a contractor or an employee". The applicant was engaged to procure products to be used as prizes for Tutti Frutti. It was not work of a character that required any skill or expertise unique to the applicant. It could in theory readily be delegated but there was no suggestion that the applicant had ever done so, or that the applicant or the respondents ever contemplated that the work would be delegated. The assistance that she received from time to time from her father in making late night deliveries was provided because her father was concerned with her personal safety and for which he received no payment. It cannot be evidence that the applicant had a right to subcontract the work to someone else. The absence of any evidence from which it could be inferred that the applicant had a right or entitlement to delegate or subcontract the work is a factor indicative of an employment relationship. 4. Seventh, during the relevant period, the applicant only purchased goods to be used as prizes for Tutti Frutti. The applicant claimed that she worked on a full time basis for Tutti Frutti and Mr Schinella gave evidence that the applicant was paid $1,500 a week on the basis that she would typically work approximately four to five hours per day for five days each week. There was no suggestion that she marketed herself or otherwise offered to purchase goods for any other business during the relevant period. Assisting her sister in her hairdressing business was of no probative relevance to the basis on which she purchased goods for Tutti Frutti, as the primary judge found at [91]. Moreover, the applicant was reimbursed for the goods she purchased. There was no suggestion in the evidence that she added any margin to the prices that she paid for the goods, the goods purchased were used exclusively for the business of Tutti Frutti and the applicant was paid a fixed weekly amount of $1,500 that did not vary by reference to the value or quantity of products that she purchased for Tutti Frutti. 5. The identification of the parties' contractual rights and obligations in this case is inherently challenging given the absence of any written contract, the limited evidence of any agreement reached prior to its formation, the dearth of any remuneration or taxation documentation, the limited and conflicting evidence of the extent to which Mr Schinella exercised any specific control over the applicant's work, the lack of findings made by the primary judge as to whose evidence is to be preferred, and the applicant's failure to respond to Ms Aston's requests for any documentation that might assist in determining whether she was an employee or an independent contractor. Necessarily, regard must be had to the limited evidence of the parties' subsequent conduct in order to draw inferences as to the obligations that each had agreed to undertake. 6. I accept that there are matters which weigh in favour of the applicant being an independent contractor, including the absence of any formalised paid leave accruals or overtime payments for working on weekends, the apparent absence of any reimbursement for petrol in collecting and delivering prizes and relevantly for control, the absence of fixed working hours or any requirement to work at Tutti Frutti's warehouse. The more critical issue for control, however, is the entitlement to control rather than the exercise of control, although the exercise of control may readily give rise to an inference of an entitlement to control. Here, relevantly for the question of the entitlement to control, both the applicant and Mr Schinella gave evidence to the effect that Mr Schinella had consented to the applicant working from home rather than at Tutti Frutti's warehouse, not that the applicant had informed him that she would be working from home. Equally, the absence of any specified working hours does not carry with it any necessary implication that Mr Schinella did not have an entitlement to impose a more formal structure if the applicant failed to procure in a timely fashion the quantity of prizes that Mr Schinella required for the Tutti Frutti business. 7. As I explain above, the absence of payslips, that Tutti Frutti did not deduct PAYG, and that the applicant was not paid superannuation are factors indicative of an independent contractor relationship. When those factors, however, are considered in the context of the evidence of the circumstances in this case, namely, the fact that the applicant was paid on a "cash basis" without having registered an ABN or submitting any invoices for her services and the evidence of Ms Aston requesting documentation "either way", the better view is that the parties proceeded on an informal "cash basis" as opposed to having come to an understanding that the applicant was engaged as an independent contractor. 8. On balance, I am persuaded that the correct characterisation of the relationship between the Tutti Frutti and the applicant is of an employer and employee, not of principal and an independent contractor. The combined effect of the payment of a fixed weekly amount, irrespective of the value of the prizes purchased and independently of the provision of any invoices from the applicant, the requirement to seek approval for reimbursement rather than being paid for the prizes that she purchased for Tutti Frutti, the applicant purchasing prizes exclusively for Tutti Frutti, essentially on a full time basis, Mr Schinella consenting to her working from home, together with the absence of any objective indicia that the applicant could be seen as undertaking a business independently of Tutti Frutti, outweigh the factors that support a contrary conclusion. I. Disposition 1. For the foregoing reasons I am satisfied that leave to appeal should be granted, the appeal should be upheld and the separate question should be answered in the affirmative. I certify that the preceding seventy-nine (79) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Halley. Associate: Dated: 22 January 2025 SCHEDULE OF PARTIES NSD 923 of 2023 Respondents Fourth Respondent: RAELEIGH ASTON