Australia Workplace Law
Johnny is one of five storemen working for Autumn Fashion Limited at their warehouse. He had a number of specialist licences for the operation of various loading machinery. Autumn Fashion had been giving loading and dispatch work to Johnny for over ten years, until recently. He usually worked from 6.30am to 4pm Monday to Friday and used the machinery owned by Autumn Fashion. Johnny invoiced the company at the end of each week according to the number of hours he worked and the weight of the stock he moved during that period. His contract stated a starting date, a job description outline and that he was hired on an ‘as needed’ basis.

Last Friday Johnny’s relationship with the supervisor was stressed when Johnny handed in his invoice explaining it was at a higher hourly rate to reflect increased cost of licences and the market value of his labour. The supervisor refused to pay it adding the basis of his denial was that the company could not afford any increased costs since the global financial crisis. He suggested Johnny focus on the benefits he enjoyed, including a bonus payment equivalent to two weeks pay while the warehouse was closed at Christmas, and the significant allowance he received when he moved more stock than the daily quota. Johnny thought about the fact he did not receive paid personal leave or annual leave, and didn’t feel any better about it.

Later that day Johnny approached the supervisor again, saying that he wore the safety wear the company required of him, he used the date collection sheets provided to him, and he followed the work allocation instructions given to him daily, even when he felt he could do a better job of getting the work done by adopting an alternative system, one which was more in line with industry standards. Johnny added that he had not increased his rate since 2009 and labour costs had increased significantly over the last three plus years. The supervisor agreed costs had risen. The discussion ended when Johnny mentioned the verbal promise he had from the supervisor when he started work with Autumn Fashion; that he would be eligible to increase his hourly rate annually, to keep it in line with the market rate. At this point the supervisor stormed off, yelling he had to get back to work and had no more time to waste. Unfortunately, the promise had not been converted to writing.

Advise Autumn Fashion whether Johnny is likely to be recognised as an employee or as a contractor at common law, and whether Johnny is able to rely on the verbal promise made about his ability to increase the hourly rate annually.