He was definitely an employee – not a contractor

Some industry sectors and some jobs allow for the ‘proper and legal’ engagement of contractors. This engagement was not one of them.

One Minute Summary

This decision examines the question of whether there was contractor or employee engagement as part of a jurisdictional argument over a termination.
In examining this question the Fair Work Act requires the Commission to examine ‘the real substance, practical reality and true nature of the relationship’.
This involves a range of indicators that include long established High Court cases that have examined this question.
This decision looks at 15 factors which can swing the pendulum between contractor and employee.
Ultimately, the Deputy President decided the applicant was an employee allowing their General Protections dismissal claim to proceed.

The Applicant, Mr Tzoutzidis, was terminated by Xenon Events Group on 5 December 2025. He lodged a Fair Work General Protections dismissal claim immediately thereafter. The Respondent, Xenon, raised a jurisdictional objection stating that there was no termination as Mr Tzoutzidis was not an employee but a contractor. The matter proceeded to arbitration hearing before Deputy President Mason on the question of whether there a termination at the initiative of the employer. In his decision the DP provides a useful examination of the various contractor/employee indicators.

As the lead up to the termination is best described as ‘messy’ at an interpersonal level, we will focus the decision’s analysis on the question of whether Mr Tzoutzidis was a contractor or employee.

The Fair Work Act (2009) states

‘For the purposes of this Act, whether an individual is an employee of a person within the ordinary meaning of that expression, or whether a person is an employer of an individual within the ordinary meaning of that expression, is to be determined by ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person.’

The focus is therefore on ascertaining ‘the real substance, practical reality and true nature of the relationship’. In doing so the Commission examines the terms of the contract governing the relationship as well as factors relating to the totality of the contract in practice. While a contract may state ‘contractor’ the practical reality may show quite the opposite.

The DP commences with the above section but also examines the various significant decisions which have long established case law around this question of contractor or employee.

1. The terms of the contract

Other than a series of Facebook and WhatsApp messages there was no written contract entered into between the parties. A contract of employment was offered to Mr Tzoutzidis in November but it was never executed. The absence of formal contract setting out the commercial arrangements is a negative indicator of a contractor relationship.

The communications between Mr Tzoutzidis and Xenon indicate a relationship where he was paid an hourly rate of pay.

2. Control

The extent of control is a significant practical indicator of the true nature of the relationship. Contractors are generally engaged at a low level of control over how they do the ‘work’ or ‘task’ while employees are generally controlled at higher level by the ‘employer’ on a day-to-day basis. In this case there was a significant level of control over the tasks of Mr Tzoutzidis.

3. Right to delegate or subcontract work.

Employees cannot delegate their work function and responsibilities to another external person. Contractors often can do so. The task can be subcontracted or they can engage persons as employees to perform the work.

The Decision indicates it was Mr Tzoutzidis who was contracted to provide the labour himself. He did not have any employees to carry out his tasks nor was there any discussion between the parties that he could subcontract his labour. This factor indicates a employer-employee relationship.

4. Hours of work

Contractors are usually employed to carry out a task/project and they can often determine when that task is undertaken. Employees are informed when they are needed to work and often have little flexibility around this.

In this case Mr Tzoutzidis was told when he was needed by message app and then later rostered via a Connecteam App. He was informed of the location, start times and estimated duration of the shift. While Mr Tzoutzidis could reject shifts his hours of work were of a casual nature.

5. A part of the respondent’s business

If someone were to come to the workplace Mr Tzoutzidis looked like he was part of the employer’s business being required to wear the employer’s branded clothing.

6. Commercial arrangements

Mr Tzoutzidis at times hired equipment from Xenon as a commercial arrangement following quotes. In the DP’s view this was separate from his labouring duties and did not indicate the main relationship was one of contractor where he was paid on an hourly basis.

7. Performing work for other entities.

Contractors often perform tasks for multiple clients. In this case Mr Tzoutzidis undertook other casual work in between working for Xenon. The Deputy President indicated that, in light of all the other factors, it was more akin to a casual employee working several casual jobs.

8. Providing significant tools or equipment

Contractors often provide specialist services and provide their own tools and equipment to undertake the task. In this matter Mr Tzoutzidis largely utilised the tools and equipment provided by Xenon.

9. The right to suspend or dismiss

Given the was no commercial arrangement which provided for a means to stop the relationship the DP indicated the arrangement was more akin to an employment relationship.

10. The provision of invoices for work done

Contractors are usually paid on the production of an invoice for the ‘task’. In this case the hourly payment and the absence of an invoice (despite the employer asking for one from Mr Tzoutzidis) supports an argument that Mr Tzoutzidis was an employee.

11. The deduction of income tax (PAYG)

The lack of income tax deductions would usually indicate the existence of a contractor arrangement. In this case there were no invoices. Tax deduction payments were not made by the employer due to their position that Mr Tzoutzidis was a contractor. However, employers are legally obliged to make payments for ‘employees’. They may end up arguing this point with the tax office.

12. Paid holidays and other leave

Of itself this would not indicate the existence of a contractor relationship as the same applies to casual employees. If a range of other factors supported a contractor relationship then not being paid holidays or other leave would support those factors.

13. The nature of the work

Contractor work often relates to specific task or project to be completed or a specialised skill that is required to be purchased by a business. In this case Mr Tzoutzidis was largely providing labour with some limited skills around events.

14. Superannuation or Insurances

Contractors usually carry their own insurance – a requirement of a commercial contract. Mr Tzoutzidis was never required to show he had insurance cover and was in fact covered by Xenon’s insurance.

Superannuation payments were not made by Xenon based on the basis that Mr Tzoutzidis was a contractor. Another argument Xenon may be having with the tax office.

15. Business expenses as a contractor

Contractors operate as a business and therefore have a larger number of expenses than that of an employee – where work related expenses are the responsibility of the employer.

In conclusion the Deputy President acknowledge that while there were a few factors that could support the argument that Mr Tzoutzidis was a contractor, there were many more that indicated he was an employee.

The DP decided that Mr Tzoutzidis was terminated at the initiative of the employer and that the employer’s jurisdictional argument was therefore dismissed. He directed that a conciliation conference be conducted in respect of the General Protections termination proceedings.

Some industry sectors and some jobs allow for the ‘proper and legal’ engagement of contractors. This engagement was not one of them. If you wish to examine the potential for engaging a person as a contractor please contact Hunter Employee Relations.

Kind Regards

Michael Schmidt

M 0438 129 728

[email protected]

www.hunteremployeerelations.com.au