Walter Baden is pleased to have acted for Mind Matters Sydney Pty Ltd in Fair Work Commission proceedings concerning the employment status of a contractor. 

These proceedings arose in the fast-evolving and highly political area of law concerning whether a worker is an employee or an independent contractor and is one of the early contested cases following the extended statutory definition of ‘employment’ introduced by section 15AA to the Fair Work Act 2009 (Cth). 

This decision will be of particular interest to health and professional service providers navigating the evolving contractor/employee landscape. It reinforces that, even under the new definition, well-structured and consistently applied contractor arrangements remain capable of withstanding scrutiny. For principals, this highlights that early advice and high-quality contractual documentation remain critical to protecting contractor models. 

The history

Traditionally, the question had been governed by the common law ‘multi-factorial’ test reflected in authorities such as Hollis v Vabu Pty Ltd and Stevens v Brodribb Sawmilling Co Pty Ltd. That test required an assessment of the ‘totality of the relationship’ by reference to a range of indicia, including the degree of control exercised over the worker, whether the worker was conducting their own business or operating within the business of another, and whether or not the contractor had a right to delegate to others.  In 2022, the High Court decisions of Personnel Contracting and Jamsek marked a significant shift where a contract was wholly in writing, confining the analysis to the rights and obligations arising from that contract. The Albanese government enacted section 15AA in 2024 recalibrating that position and reintroducing a broader inquiry into the ‘totality of the relationship. This has created a degree of uncertainty for businesses engaging contractors. 

The decision

In this case, one of the first since the enactment, the Commission confirmed that even though section 15AA requires consideration of the totality of the relationship, a comprehensive and enforceable written contract remains a central consideration. Importantly, the task is not to disregard the contract, but to assess it alongside the practical reality of the relationship. Where the relationship operates consistently with the contract, as was found in this case, the contractual terms may remain decisive. 

The decision is of particular significance to medical and allied health practices, including psychology clinics, medical centres and other multidisciplinary practices, that have historical engaged professionals on a ‘fee split’ arrangement.  Deputy President Boyce made several industry specific observations recognising the commercial and professional realities of those practices, including:  

• That the concepts of goodwill and business independence operate differently in health practice settings. Drawing on authority including Dental Corporation Pty Ltd v Moffet, the Commission recognised that two distinct forms of goodwill may exist concurrently: that of the practice, and that of the individual practitioner. Health professionals frequently conduct their own practice while operating within a broader clinic or group environment. The fact that a practice owns the brand, controls premises, or facilitates client connections does not preclude a practitioner from developing and maintaining their own independent goodwill.  

• In professional practice settings, functions such as scheduling patients, allocating consulting rooms, and coordinating resources are often undertaken centrally by the practice. The decision makes clear that these features are often properly characterised as services provided by the practice to the practitioner, rather than as indicia of employment-type control. 

• Similarly, the existence of an industry regulatory compliance framework (as exists in psychology), and a principal’s insistence on a contractor complying with that framework as a service ‘deliverable’ was a question of professional responsibility, not in itself an indicator of control.  

• The importance of delegation should not be misconceived. In professions such as psychology, the essential clinical nature of the work limits the capacity to subcontract or delegate services. The Commission confirmed that such limitations arise from the nature of the profession itself, and the typical needs of patients, rather than from any control or demand for exclusivity exerted by the practice. As such, they do not point toward an employment relationship, nor do they detract from a practitioner operating an independent business. 

Applying these principles, the Commission found that the applicant, a registered psychologist engaged under a contractor arrangement on a fee split arrangement, was not an employee for the purposes of the Fair Work Act 2009. The respondent’s jurisdictional objection was upheld and the application dismissed. 

Our experience 

Walter Baden conducted the proceedings and the successful jurisdictional challenge, and also regularly assists clients in this industry with their practice set-up, contractual arrangements and other compliance advisory services.