In the recent case of Jensen v Cultural Infusion (Int) Pty Ltd  FCA 358, the Federal Court rejected the appeal by three actors to be deemed casual employees rather than independent contractors – a decision that will have wide-ranging implications for the live performance industry.
The actors were engaged by the production company Cultural Infusion to participate in a government-commissioned theatre production that subsequently performed at more than 100 venues over 100 days between July 2014 and June 2015.
During negotiations for contract renewal, the actors argued their roles were more similar to that of employees than independent contractors and engaged the Media, Entertainment and Arts Alliance (MEAA) to represent them in the Federal Circuit Court small claims procedures brought under the Fair Work Act 2009 (Cth) (FW Act).
The actors maintained they fell within the classification of casual employees under the Live Performance Award 2010 (Award) and were therefore entitled to compensation from Cultural Infusion for lost entitlements including wages, loading, rehearsal hours and cancellation of performances. The actors also raised other claims in written submissions filed in the Federal Circuit Court, which were dependent on a finding that they were employees, including that Cultural Infusion:
However, the above two claims were not substantiated or pressed any further by the actors and the hearing was confined to the preliminary issue of determining whether the actors were casual employees.
The Federal Circuit Court found that their 12-month contracts with Cultural Infusion contained an express declaration that the parties' relationship was that of independent contractor and principal. The primary judge stated that the indicia used to assess the independent contractor-employee distinction are not to be deployed as a checklist and that there is no determinative criterion to the exclusion of any other. The primary judge considered various indicia of the parties’ relationship and attributed weight to each of those indicia as either ‘neutral’, or as supporting a characterisation of independent contractor and principal, or of employee and employer. However, the Court found in the first instance that the actors’ work was "inherently freelance in nature" whereby the actors promoted their services and performed other work for other entities during the period of engagement with Cultural Infusion, which was indicative of a contractor relationship.
Backed by the MEAA, the actors appealed the decision of the Federal Circuit Court at first instance.
Primary judge’s decision appealed
The actors submitted that the primary judge erred in a number of ways in applying the multi-factorial approach, including by having insufficient regard to the features of casual employment in considering their submission that they were casual employees of Cultural Infusion.
However, on appeal, the Court found that while there were some specific errors made by the primary judge in the approach taken in assessing the indicium of control and delegation, based on a review of the evidence, the actors were, at all material times, independent contractors and not employees.
Applicable principles in determining a contractor relationship
The Court found that the determination of whether a person is engaged as an independent contractor or an employee requires the application of the multi-factorial approach. The Court must have regard to the totality of the relationship between the parties, including their actual work practices, and not merely the terms of their contracts. No single indicium is likely to be determinative and certain indicia will attract more weight in a particular case than in another case. The evaluation is a matter of fact and degree, and turns on the particular circumstances of the case.
In making an assessment as to the status of the employment relationship, the Court considered the actors’ proposed most important indicia, and other indicia that informed the evaluation of the parties’ relationship, including:
The Court also gave consideration to the following factors in making an assessment of whether the relationship was that of an independent contractor or a casual employee:
The Court further stated that it did not regard the consequential indicia of the actors submitting for payment by invoice, the respondent making payment to the actors without deducting income tax, and the actor not receiving paid leave entitlements as carrying much weight that was additional to the parties’ own characterisation of the legal nature of their relationship. Rather, those matters emphasised that the parties understood and agreed to their relationship being as independent contractors and principal, and to that limited degree, it found consequential indicia to be supportive of an independent contracting relationship.
While the Court found that this case was one in which the proper characterisation of the parties’ relationship was open to different views, and there were a number of indicia which pointed towards an employment characterisation, the overall appraisal of the totality of the parties’ relationship was that the actors were independent contractors of Cultural Infusion. The appeal was consequently dismissed.
In the engagement of actors where there is a fine line between the relationship being considered one of contractor-principal or employee-employer and the nature of the work that performers undertake, this case highlights the importance of looking at the totality of the relationship.
Practical tips for engaging contractors include:
A copy of the decision referred to in this article can be accessed here.
Authors: Louise Rumble & Georgie Richardson
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.
Published by Louise Rumble, Georgie Richardson