The Full Federal Court has dismissed an appeal by a company against a July 2012 decision of the Federal Court (Perram J) in ACE Insurance Limited v Trifunovski (No 2) [2012] FCA 793. The Federal Court had imposed a civil penalty on the company, Combined Insurance Company of America Ltd (“Combined”), for treating insurance agents as independent contractors instead of employees (as the Court had in 2011 found they were). The case concerned the employment relationship and the assessment of annual and long-service leave entitlements, but obviously the finding of an employment relationship has tax and superannuation implications.
ACE appealed the decision, arguing in part that Perram J had erred in finding the sales reps were employees not contractors because he failed to consider that working in another’s business was not inconsistent with working in one’s own business.
In its reasons for dismissing the appeal, the Full Federal Court noted that Perram J had found the agents had no business of their own and worked only at Combined. The Court said Combined had close control over the organisation of work and the deployment of sales agents. There was also no effective right of incorporation and no right to contract in partnership or appoint sub-agents.
(ACE Insurance Limited v Trifunovski & Ors [2013] FCAFC 3, Full Federal Court, Lander, Buchanan and Robertson JJ, 25 January 2013)
[LTN 18, 29/1/13]