30 Mar 2026
The Australian workplace landscape has undergone significant transformation with recent and sweeping amendments to the Fair Work Act 2009 (Cth) (“FW Act”), introduced through the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 and the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (together, the “Amending Acts”). You can read more about the impact of the Amending Acts in our previous article on this topic.
Some time has passed since the Amending Acts were passed into legislation, and early decisions brought pursuant to the legislative changes are now being handed down by the Fair Work Commission (“FWC”). This article explores two of the key changes brought by the Amending Acts, being the instatement of a multifactorial test to determine whether a worker is an employee or a contractor, as well as the establishment of an ‘unfair deactivation’ jurisdiction to provide protections to ‘gig economy’ workers such as delivery drivers, and studies some of the earliest decisions made in relation to these changes.
The Multi-Factorial Test for Employee vs. Contractor Classification
The distinction between an employee and an independent contractor has long been a complex issue under the FW Act, often leading to disputes over entitlements, tax obligations, and workplace protections.
Historically, the Courts implemented a multi-factorial test when determining whether a worker was an employee or a contractor, looking at various considerations including the practical reality of a working relationship when making this determination. This approach was thrown out (and, some might argue, simplified) following the High Court decisions in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Pty Ltd v Jamsek [2022] HCA 2, in which the High Court held that when ascertaining whether the nature of a relationship is one of employment or principal and contractor, the rights and obligations expressed in a written contract is determinative as long as the parties act in accordance with the contract. These decisions drew the ire of the Albanese Government, who promised legislative reform in this regard.
In August 2024, the FW Act was amended to include a multi-factorial test to determine whether a worker is an employee or an independent contractor pursuant to section 15AA of the FW Act, essentially reinstating the previous common law approach. This test shifts the focus from the terms of any written contract between the parties, to an investigation of the “real substance, practical reality, and true nature” of the working relationship. Factors considered include the degree of control exercised by the principal, the worker’s ability to delegate tasks and determine the way in which they perform the work, the provision of tools and equipment, and the structure of remuneration.
The recent decision in Pascua v Doessel Group Pty Ltd [2024] FWC 2669, upheld on appeal in Doessel Group Pty Ltd v Pascua [2025] FWCFB 43 (“Pascua”), provides a practical demonstration of how the new multi-factorial test applies, particularly to overseas workers engaged by Australian companies. In this case, the Applicant, who resides in the Philippines, had been engaged as a contractor by the Respondent, an Australian-based law firm, to work remotely as a legal assistant. The engagement was subject to a written contract which asserted the principal-contractor relationship between the parties, under which the Applicant was paid $18 per hour.
When the engagement was terminated in March 2024 by the Respondent, the Applicant lodged an unfair dismissal claim in the FWC, asserting she was an employee and had been unfairly dismissed. The Respondent raised a jurisdictional objection to the application, arguing that the Applicant was an independent contractor and, as a Philippines-based worker, was not a “national system employee” pursuant to the FW Act, and thus unable to pursue her claim.
In its decision, the FWC applied the multi-factorial test, and found several indicators of an employment relationship:
- both pursuant to the contract and in practice, the Respondent monitored key performance indicators, regulated hours, gave daily instruction to the Applicant as to the work that was to be performed, and required the Applicant to notify a supervisor if tasks could not be completed, indicating significant control that was more consistent with an employment relationship;
- the Applicant’s duties, initially supervised by a lawyer and later performed independently as the sole investigator for credit claims, were integral to the Respondent’s business, not a distinct trade or profession.
- the hourly wage structure, which was significantly lower than minimum wage entitlements, mirrored those of a full-time employee.
- the contract did not allow the Applicant to delegate her work or have any real ability to dictate how the work was performed.
Further, the FWC dismissed the argument that the Applicant’s overseas location excluded her from the FW Act’s protections. The decision emphasised that the geographical location of a worker does not automatically exempt them from being classified as a national system employee, if the work is performed for an Australian business with sufficient connection to Australia. The FWC concluded that the Applicant was an employee for the reasons outlined above, allowing her unfair dismissal claim to proceed, and the Applicant was subsequently awarded $10,800, being 15 weeks’ pay, as compensation for being unfairly dismissed.
The Unfair Deactivation Jurisdiction for Employee-Like Gig Workers
The gig economy, characterised by platforms like Uber, has transformed how work is performed, but it has also raised concerns about the precarious nature of gig work. Prior to the Amending Acts, a number of cases had been brought in which applicants unsuccessfully challenged their status as a ‘contractor’. The second Amending Act introduced new protections under Chapter 3A of the FW Act for “employee-like” workers in the gig economy, particularly those performing digital platform work. These workers, while often classified as independent contractors, exhibit characteristics akin to employees, such as low bargaining power, limited control over how work is performed, and reliance on a single platform for income.
A key reform was the creation of the ‘unfair deactivation’ jurisdiction, which allows the FWC to hear disputes where a business operating a digital platform terminates or suspends a worker’s access to the platform in a manner deemed unfair. This jurisdiction aims to provide gig workers, such as Uber drivers, with protections analogous to those provided by the unfair dismissal regime. The FWC can order remedies, including ‘reactivation’ or compensation, if the deactivation is found to be unfair.
The decision in Application by Mr Mian Abu Bakar [2025] FWC 1874 (“Bakar”) marks the first known success for a worker in the unfair deactivation jurisdiction. In Bakar, a driver who performed work for both Uber and UberEats from July 2023 to March 2025, was deactivated from both Uber platforms following allegations of misconduct. He applied to the FWC, claiming that the deactivation was unfair, due to a lack of procedural fairness and inadequate evidence supporting the decision to deactivate his account. In this case, a jurisdictional objection was lodged by the both Uber and Uber Eats, on the basis that the Applicant had not performed work on a regular basis for the required minimum period of six months prior to the deactivation.
In this decision, the FWC considered two issues – first, whether the Applicant met the criteria of an ‘employee-like’ worker pursuant to the unfair deactivation regime, and secondly, whether work performed by the Applicant between the Uber and UberEats platforms constituted work ‘on a regular basis’.
In relation to the first issue, the FWC found that the Applicant met the criteria of ‘employee-like’ worker under the FW Act. The FWC made this determination with reference to factors such as the level of control that Uber had over his work, the lack of bargaining power to negotiate terms, and the worker’s reliance on the platform for income.
In relation to the second issue, the FWC rejected claims from the separate entities under which the Applicant received compensation, in relation to work on the Uber and UberEats platforms that this constituted separate contracts with separate entities to perform different work. The FWC found that the Applicant had performed work on a regular basis, including multiple times per week almost every week during the six-month period before the deactivation, across both of the platforms. As such, the FWC dismissed the jurisdictional objections of the paying entities – allowing the application to proceed to a final hearing on the merits of the claim, including whether the Applicant’s deactivation was unfair in the circumstances.
This decision constitutes the first occasion on which a worker has successfully overcome a jurisdictional objection in the new ‘unfair deactivation’ jurisdiction, and there will undoubtedly be a significant increase in the number of applications brought in this jurisdiction in the coming years.
Implications for Employers
The amendments to the FW Act through the Amending Acts are substantial, and the decisions in Pascua and Bakar demonstrate two of the first decisions made by the FWC in new jurisdictional areas. Employers, particularly those in sectors reliant on contractors or digital platform workers, face increased scrutiny and potential liabilities. The multi-factorial test requires a holistic assessment of working relationships, while the unfair deactivation jurisdiction imposes new obligations on platforms to ensure procedural fairness akin to the protections offered to employees under the unfair dismissal jurisdiction.
The Pescua decision is also a reminder that regardless of where the worker may be located, if the work is for the benefit of an Australian entity in Australia, the individual will have access to the Australian legal system.
If you wish to discuss any aspect of this client alert, require specialist advice, or assistance reviewing current employment practices or processes, please do not hesitate to contact us.