A recent Fair Work Commission decision (AB v Free Hearts Free Minds [2025] FWC 353) serves as a timely reminder of the importance of correctly classifying workers.
Case summary:
In this case, a worker engaged under a “subcontractor” arrangement claimed unfair dismissal after their engagement was terminated. The Commission found that the worker was, in substance, an employee and not an independent contractor, due to the level of control, integration into the organisation, and the absence of genuine business independence. As a result, the worker was entitled to bring an unfair dismissal claim.
Key points for employers
1. Legal Form vs. Reality: Labelling a worker as a subcontractor is not decisive — the Fair Work Commission will assess the actual nature of the working relationship.
2. Signs of Employment: Factors such as regular hours, limited autonomy, work performed personally, and integration into your operations may indicate an employment relationship.
3. Consequences of Getting It Wrong: Misclassification can expose you to unfair dismissal claims, underpayment liabilities, and penalties under the Fair Work Act.
Recommended actions
MBA ACT Workplace and Industrial Relations Team
Phone: 0261755900
Email: workplace@mba.org.au
