Case note: Ms Jessica Dickson v Mr Felipe Cespedes & Susann Kovacs [2025] FWC 1218
The Fair Work Commission (FWC) has found a nanny who was paid cash-in-hand and who had agreed to be labelled as a contractor was an employee for the purposes of dealing with a general protections dismissal dispute. In the decision, Deputy President Butler examined the ordinary meanings of employee and employer and their relationships with the meaning of contractor.
Facts
Ms Kovacs and Mr Felipe (Respondents) hired Ms Dickson (Applicant) as a nanny for their two children in January 2023. Ms Kovacs began working five days a week with hours generally decided in advance around Ms Kovacs’ work arrangements, this was later reduced to two days a week. The engagement came to an end in October 2024.
Ms Dickson generally provided care for the children at the Respondents’ home and was also tasked with other duties including cleaning, folding washing, walking dogs and grocery shopping. Ms Dickson was paid $35 per hour cash-in-hand and agreed to administer her own superannuation. Ms Dickson had labelled herself a contractor in negotiations with the Respondents. However, there was no substantial written contract, only a handful of short text messages and an oral agreement between the parties.
Ms Dickson did not have an ABN and was not provided regular payslips by the Respondents.
Decision
In determining whether the FWC had jurisdiction to deal with the dismissal, Deputy President Butler had to consider whether the Applicant was an ‘employee’ under section 15AA of the Fair Work Act (Act). The Act requires an examination of the real substance, practical reality and true nature of the relationship between the parties. Deputy President Butler held that the correct approach was to consider the totality of the relationship between the parties, taking into account various factors — none of which were determinative on their own — and assigning different weight to each depending on the circumstances of the matter.
The FWC found the Applicant was an employee under section 15AA of the Act and indicated the following factors had led to that decision:
Separate entity
The FWC noted Ms Dickson did not render invoices, provide an ABN or engage with clients or receive payment through an incorporated entity. The FWC found the Respondents were not clients of a business of the Applicant.
Contract
The contract between the parties was vague and predominantly in a text message. Although in contractual discussions the Applicant labelled herself a contractor, the FWC found this did not provide sufficient reason for this label to be true.
Weekly hours
The Applicant’s hours were determined week to week, changing to meet the Respondent’s needs. The FWC found the Applicant could not set her own hours.
Payment based on hours worked
The Applicant was paid based on her hours worked, not on a task-by-task basis.
Workplace location
Although the Applicant had occasionally cared for the children at her home, Deputy President Butler stated it “could not seriously be argued that Ms Dickson could choose to care for the children at any place of her choosing” and that the Respondents had the right to direct her where she cared for the children.
Delegation of work
Evidence was provided that the Applicant could not simply have sent another person in her place. The FWC found that a nanny would not have unlimited authority to delegate the care of children.
Use of equipment and purchases
The Respondents provided supplies for their own children and reimbursed the Applicant for purchased goods.
Taxation
The FWC found the lack of taxation arrangements did not assist in the assessment of the employee/contractor relationship, only commenting that the parties had a disregard to taxation obligations.
Presentation to external parties
The display of the Applicant as an employee to a real estate agent and the issuing of fake payslips for the Applicant’s rental application were found to have limited application in determining the true nature of the relationship.
Considerations for employers
The FWC has indicated that an employee is to be determined by considering a wide range of factors rather than solely examining a contract. In light of this, employers should:
- Examine the true nature and practical realities of their relationship with contractors to determine if they are employees. This should involve considering the factors mentioned above.
- When engaging contractors, ensure they are operating using an ABN and preferably a corporate entity rather than an individual.
- Understand that a party or parties ignoring taxation requirements is unlikely to be considered in determining the nature of their employment relationship with the business.
Contact us
If you are an employer seeking advice on your employee or contractor relationships, please contact a member of our Workplace Relations group.
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