Case: Moffet v Dental Corporation Pty Ltd [2019] FCA 344
Before: FLICK J
Keywords: Independent Contractor or an Employee- ABN, Tax, No term of direction in Contract?

Case Note:
This case concerns an applicant, Dr David Moffet, a registered dentist whom operated a dental practice in Parramatta between 1987 and 2007. The respondent, Dental Corporation Pty Ltd, bought that dental practice and executed agreements with the applicant that were:

• The Dental Practice Acquisition Agreement (sell of practice), and
• a Services Agreement with the applicant to provide dental service for a 5-year period.

The applicant is seeking primarily relief under the Fair Work Act 2009 (Cth) (“FWA”) in respect to long service leave and superannuation entitlements. To be entitled for such relief, the Federal Court had to determine the primary issue on whether or not the applicant was an employee or an independent contractor to the respondent.

Applicant’s Argument (Summarised)-

• The applicant is not an independent contractor, but rather an employee of the respondent. Further, he submitted the following; there was no control over the operation of the business, the dental work performed was subject to the supervision and control of the respondent, he was always held out by third parties to be a representative of the respondent and at all times he was remunerated for the performance of work by the respondent. [1]

Respondent’s Argument (Summarised)-

• The applicant was not an employee, but rather an independent contractor in respects to the Service Agreement. The respondent argued, there was no real control over the manner the applicant had performed the services he had agreed to provide and he heavily participated in the Goods and Services Tax (“GST”) system. For example, the respondents paid the applicant’s fees in full without deduction of the income or other taxes, [2] and a separate Australian Business Number (“ABN”) was used by the applicant to claim tax deductions due to his inability to generate profit. [3]

Ratio Decidendi – Federal Court
With respects to the financial arrangements, the Federal Court found the applicant participated in the GST system quite extensively. The applicant’s participation included the promotion of his dentistry services online, and used a separate ABN to claim deductions on his tax return due to his inability to produce profit for the respondents.[4]  With respects to the Service Agreement between the parties, there was no term of direction in relation to the hours that must be performed by the applicant, the days he was required to work, the nature of work to undertake, or the holidays he could take.[5] This was confirmed by the applicant during the cross-examination.

Ultimately, the Federal Court held, the applicant was an independent contractor. As an independent contractor, he cannot claim any leave entitlements because he falls short of the definition of an ‘employee’ prescribed by the FWA legislation. On the other hand, the applicant was entitled to superannuation contributions under the Superannuation Guarantee Act s 12 (3). He was entitled to superannuation contribution because he is a person whom worked under a contract (Services Agreement). [6]

Wazeem Kadir

Fifth Year Arts and Law student,

Western Sydney University