The Real Substance of the Relationship: Is Jamie Lee an Employee of SkyHigh
Introduction
Determining whether an individual is an employee or an independent contractor remains one of the most significant and contested questions in Australian labour law. This classification determines access to key employment protections, such as unfair dismissal remedies, minimum entitlements, superannuation, and collective bargaining rights. The Fair Work Act 2009 (Cth) (FWA) continues to rely on the ordinary meaning of “employee” and “employer” under section 15. However, the introduction of section 15AA through the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth) now requires decision-makers to assess the real substance, practical reality, and true nature of the working relationship.[1]
The question here is whether Jamie Lee’s engagement with SkyHigh Engineering Pty Ltd (SkyHigh) should be classified as employment or independent contracting. This issue will be assessed in light of the common law principles established in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 and Hollis v Vabu Pty Ltd (2001) 207 CLR 21, the subsequent developments in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2, and the legislative correction implemented by section 15AA.[2] This part also considers how recent Fair Work Commission (FWC) decisions, such as Dickerson v Kagura Games LLC [2025] FWC 2219 and Elezaj v Baldwin Care Group Pty Ltd [2025] FWC 2437, have applied the provision in practice.[3] Finally, the analysis applies these legal standards to the specific facts of Jamie Lee’s arrangement with SkyHigh to determine whether his relationship satisfies the statutory concept of employment.
Common Law Foundations: Control and the Total Relationship
The High Court’s reasoning in Stevens v Brodribb Sawmilling Co Pty Ltd established the modern basis for determining whether a person is an employee or contractor. The Court made it clear that no single test was determinative and that the totality of the relationship between the parties had to be considered.[4] The Court identified that the right of control remained a critical factor but emphasised that it was not conclusive.[5] Rather, other elements such as who provided and maintained the tools or equipment, who bore the risk of profit or loss, how payment was calculated, and the degree of integration within the business were all relevant.[6]
Mason J in Brodribb highlighted that the common law was flexible and capable of adapting to social and economic change, acknowledging that modern industrial relations required more nuanced assessments of work relationships.[7] The decision ultimately found that the sawmill’s log haulers and sniggers were independent contractors because they operated with their own trucks, carried their own insurance, and were responsible for their profit or loss.[8] However, the reasoning created a foundation for what became known as the multifactorial test, which evaluates the entire relationship rather than any one indicator in isolation.[9]
Fifteen years later, Hollis v Vabu Pty Ltd[10] reinforced and expanded the multifactorial approach. In that case, the High Court considered whether bicycle couriers engaged by Vabu were employees or contractors. Even though the couriers provided their own bicycles and were paid per delivery, the Court determined that they were in fact employees.[11] This conclusion rested on findings that Vabu exercised extensive control over their work by dictating how and when deliveries were performed, assigning jobs, setting remuneration, and requiring the use of uniforms bearing the company’s branding.[12] The Court found that the couriers were fully integrated into Vabu’s business and that their work represented the very service Vabu offered to the public.[13]
The Court reasoned that control should be interpreted broadly in the context of modern working relationships, focusing on the right to exercise control rather than its day-to-day use.[14] This broader view recognised that even when workers had some autonomy, they could still be part of the employer’s business if they lacked genuine independence.[15] The Court further observed that employment relationships should be evaluated in light of social and economic realities, recognising that many workers may appear independent on paper but are in fact economically dependent.[16]
The combined effect of Brodribb and Hollis was to establish a flexible but fact-intensive inquiry into employment status. It focused on the total relationship, control, integration, delegation, economic dependency, and business risk. These cases made clear that employment is defined by substance and dependency, not by contractual form or labels.
The Contractual Turn: Personnel Contracting and Jamsek
Prioritising the Written Contract
The High Court’s decisions in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 represented a major shift from this pragmatic, multifactorial approach towards one focused almost exclusively on the written contract.[17] In Personnel Contracting, the majority of the Court held that where the terms of a relationship were comprehensively committed to writing, those terms alone determined the legal character of the relationship.[18] The Court stated that subsequent conduct was only relevant if it established variation, waiver, or sham.[19]
Under this approach, an individual could be excluded from employee protections solely by the drafting of their contract, regardless of how the work was actually carried out. Mr McCourt was ultimately found to be an employee, but this was because the written terms gave the company the right to control his labour, not because of how he performed his work in practice.[20]
In dissent, Gageler and Gordon JJ argued that employment exists as a factual relationship that may be revealed through how the parties perform the contract.[21] They emphasised that the substance and practical reality of the relationship, not its contractual form, should determine employment status. This dissent directly foreshadowed the later legislative response embodied in section 15AA.[22]
The Outcome in Jamsek
In ZG Operations v Jamsek, the Court applied the same contract-based reasoning to find that two truck drivers who had previously been employees were independent contractors after restructuring their work as partnerships with their spouses.[23] The Court reasoned that because the contracts were between the company and the partnerships, and because the drivers supplied their own trucks and bore business risks, the arrangement was genuinely contractual.[24]
Personnel Contracting and Jamsek reoriented Australian employment law toward contractual formalism, making the written agreement the primary determinant of employment status. This emphasis on the document’s terms provided certainty but weakened the role of practical reality, allowing formal arrangements to override the substance of working relationships. The cases illustrate a doctrinal pivot from multifactorial evaluation to a strictly textual inquiry into rights and obligations.
Scholarly Critique
Legal scholars responded critically to this shift. Stewart, Irving and Bomball argued that the High Court’s approach undermined the protective purpose of labour law by enabling employers to avoid obligations through contractual drafting.[25] They contended that the majority’s reasoning ignored the inherent inequality of bargaining power between workers and employers.[26]
Scholars like Stewart et al, criticised the High Court’s reasoning for weakening labour law protections, arguing it let employers sidestep responsibilities through contract wording and failed to account for workers’ weaker bargaining power.
Legislative Response: The Closing Loopholes No. 2 Act and Section 15AA
The Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth) introduced section 15AA to reverse the formalism of Personnel Contracting and Jamsek.[27] Under this new provision, whether an individual is an employee must be determined by examining the real substance, practical reality, and true nature of the relationship, having regard to both the terms of the contract and how it is performed in practice.[28] The accompanying statutory note explicitly confirms that section 15AA was enacted in response to these High Court decisions.[29]
The Fair Work Ombudsman describes this as a “whole-of-relationship” test, which restores the traditional approach that considers both contract terms and post-formation conduct.[30] This means that tribunals must now evaluate all aspects of the relationship, such as control, integration, delegation, risk allocation, and dependency, rather than confining themselves to the written document.
Riley Munton explains that section 15AA effectively closes the loophole that had allowed employers to rely on legal drafting to avoid statutory duties.[31] However, she also observes that the amendment does not define employment. Instead, it tells decision-makers what evidence to examine but leaves discretion as to how to weigh competing factors.[32]
Munton identifies the key continuing inquiry as determining whose business the worker is serving.This “whose business” test, developed in Hollis and reaffirmed in Brodribb, focuses on whether the worker’s activities form part of the employer’s business or constitute a separate enterprise.[33] This test remains a powerful interpretive tool under the new framework. However, Munton notes that the rapid growth of digital platforms and algorithmic work allocation has blurred traditional notions of control, integration, and supervision.[34]
In summary, section 15AA rebalances the law by restoring substance over form in determining employment status. It directs attention to the realities of work performance rather than the language of the contract alone. While this change strengthens worker protections and curbs deliberate avoidance through drafting, it also leaves open questions about how courts will weigh evolving forms of control in modern, technology-mediated work relationships.
Fair Work Commission Applications of Section 15AA
Dickerson v Kagura Games LLC [2025] FWC 2219
In Dickerson v Kagura Games LLC, Deputy President Slevin characterised section 15AA as establishing a statutory test requiring assessment of the real substance and practical reality of the relationship.[35] The worker, a game tester for a U.S.-based developer, had been classified as an independent contractor but in practice was subject to close managerial direction. The company prescribed the tasks, required detailed weekly progress reports, set deadlines, and paid her a fixed monthly fee regardless of output.[36] The Commission found that these features reflected control, integration, and economic dependency consistent with employment.[37]
The Commission held that although the worker used her own equipment and worked remotely, the substance of the relationship showed that she was providing labour to the business rather than conducting her own enterprise.[38] Because her annual earnings were below the then high-income threshold of $175,000, she was entitled to pursue an unfair dismissal remedy.[39]
Elezaj v Baldwin Care Group Pty Ltd [2025] FWC 2437
In Elezaj, Commissioner Sloan reached the opposite conclusion. The applicant provided home care services through the “Mable” digital platform. She held her own Australian Business Number, set her own hourly rates, could accept or reject jobs, and was responsible for her own insurance.[40] The Commission found that Baldwin Care Group did not exercise control over her work but merely facilitated connections between carers and clients. These features demonstrated that she operated a genuine contracting business.[41]
Synthesis
These early applications illustrate the flexibility and limits of section 15AA. In Dickerson, the Commission applied the provision to recognise employment where contractual form masked subordination, reaffirming the centrality of control and dependency. In Elezaj, by contrast, the Commission accepted genuine entrepreneurial autonomy as evidence of independent contracting. Together, the cases show that section 15AA restores factual inquiry but leaves room for interpretive variation. Its effectiveness depends on how consistently tribunals distinguish economic dependence from genuine business operation in increasingly fragmented and technology-driven labour markets.
The High-Income Threshold
Under section 382 of the Fair Work Act 2009 (Cth), an employee is protected from unfair dismissal if they meet the minimum employment period and either are covered by a modern award or earn less than the high-income threshold. The threshold for 2024-25 was $175,000, increasing to $183,100 on 1 July 2025.[42]
According to the Fair Work Commission, earnings include wages, agreed monetary value of non-monetary benefits, and certain salary-sacrifice amounts, but exclude discretionary bonuses, commissions, and compulsory superannuation contributions.[43] In parallel, the contractor high-income threshold introduced alongside section 15AA mirrors these figures and limits access to the new unfair deactivation, termination, and contract term remedies available to regulated workers. Contractors earning above the threshold may opt out of the operation of section 15AA.[44]
The high-income threshold makes it clear who is covered by section 15AA, but it doesn’t always work fairly. It gives employers scope to adjust pay so that some workers fall outside the limit, even when they remain dependent on the business. In practice, it means protection can depend more on how pay is packaged than on how the job is actually done.
Applying the Law to Jamie Lee and SkyHigh
To determine whether Jamie Lee is an employee under section 15AA, the relationship must be examined in its entirety, considering both contractual terms and how it functioned in practice.
The written label “Contracting Agreement” is not decisive.[45]
If SkyHigh controlled the way Jamie performed his duties, such as setting key deliverables, requiring regular updates, or approving his work, this would indicate a level of control consistent with employment. These features mirror the control in Hollis and Dickerson, where workers were expected to follow managerial directions and report progress.[46]
If Jamie was integrated into SkyHigh’s operations by having access to internal systems, databases, and staff, and if his advice directly influenced company decisions and was implemented by employees, this suggests he formed part of the company’s core business.[47]
Where delegation rights are restricted, for instance, if Jamie could not subcontract work without consent, the relationship more closely resembles employment.[48] Likewise, if his remuneration was fixed at $165,000 per year rather than tied to project deliverables, and if he bore no commercial risk or potential for profit or loss, that financial dependency points strongly toward employee status.[49]
Considering all these factors, the practical reality is that Jamie’s work appears to have been central to SkyHigh’s operations. He worked under the direction of senior management, contributed to internal business transformation, and represented the company’s interests. His economic dependency and integration outweigh any contractual language describing him as a consultant. Under section 15AA, he should therefore be characterised as an employee.
Provided his annual earnings remain below the high-income threshold and no award exclusion applies, he would be eligible to pursue an unfair dismissal remedy under section 394 of the Fair Work Act 2009 (Cth).
Conclusion
The evolution of Australian employment law demonstrates a pendulum movement between substance and form. The earlier authorities of Brodribb and Hollis prioritised the factual reality of the working relationship, recognising that employment exists where a person is economically dependent and integrated into another’s business. The High Court’s later decisions in Personnel Contracting and Jamsek shifted focus to contractual form, allowing parties to define relationships in ways that excluded statutory protections. The enactment of section 15AA rebalanced the law by restoring attention to how work is actually performed.
Academic commentary and early FWC cases confirm that this legislative reform has successfully reinstated a reality-based approach. It enables dependent workers like Jamie Lee to obtain protection where the substance of their role demonstrates genuine employment. On the facts, Jamie’s duties, integration, control, and dependency indicate that he is an employee of SkyHigh. His contractual title as a “consultant” cannot overcome the practical reality that his labour formed part of the company’s business. Under section 15AA, Jamie should therefore be treated as an employee entitled to the protections of the Fair Work Act 2009 (Cth).
The Mirage of Certainty: Why Section 15AA Doesn’t End the Debate
Introduction
For decades Australian courts have grappled with defining the point at which work performed for another becomes employment rather than independent contracting. The problem has always been that “employee” is left to its ordinary meaning, forcing courts to rely on common-law tests that evolve with social and industrial change.[50] The multifactorial test articulated in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 and applied in Hollis v Vabu Pty Ltd (2001) 207 CLR 21 emphasised control, integration, and economic dependency.[51] Later decisions, CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2, shifted the focus almost entirely to the written contract.[52] The 2024 Closing Loopholes No. 2 Act inserted section 15AA to restore substance and practical reality.[53] This section evaluates whether that statutory reform has resolved the long-standing uncertainty surrounding employment status in Australia.
The Problem Before Section 15AA
In Brodribb, Mason J explained that employment status must be determined from the totality of the relationship.[54] The Court balanced multiple factors such as control, ownership of equipment, delegation, method of remuneration, and allocation of business risk, and acknowledged that the common law had to remain responsive to evolving industrial conditions.[55]
Two decades later, Hollis confirmed that approach by recognising that the couriers were economically dependent on Vabu’s enterprise. Their work formed part of Vabu’s business, and the company exercised organisational and economic control over how it was performed.[56] Together these decisions embodied a reality-based understanding of employment.
That balance was upended in Personnel Contracting and Jamsek. The majority in each case held that when parties have reduced their terms to a comprehensive written contract, the character of the relationship must be determined solely by those terms unless the contract is shown to be a sham or has been varied.[57] That reasoning effectively enabled businesses to avoid statutory obligations by careful drafting, a result widely criticised by scholars and unions alike.
What Section 15AA Changed
Section 15AA was enacted specifically to restore a factual, whole-of-relationship assessment. It directs tribunals to determine whether a person is an employee by reference to “the real substance, practical reality and true nature of the relationship,” taking into account both the contract and the conduct of the parties in performing it.[58] The statutory note confirms these provisions were enacted in light of the outcomes made in Personnel Contracting and Jamsek.[59]
According to the Fair Work Ombudsman, the provision requires consideration of all relevant circumstances, including control, delegation, financial risk, and dependency, rather than focusing on contractual wording.[60]
The reform also reflects the dissenting reasoning of Gageler and Gordon JJ in Personnel Contracting, who emphasised that the true character of a working relationship may only be revealed through how the contract operates in practice.[61]
Strengths of the Reform
Academic analysis by Munton identifies that the earlier common law created a loophole through which employers could sidestep employment obligations by constructing legally precise but substantively hollow contracts.[62]
The practical effect of this change is evident in recent FWC decisions. In Dickerson v Kagura Games LLC [2025] FWC 2219, the Commission treated a game tester as an employee because Kagura exercised consistent direction over her tasks, reporting structure, and remuneration.[63]
These indicia demonstrated dependency comparable to the couriers in Hollis.[64]
By contrast, in Elezaj v Baldwin Care Group Pty Ltd [2025] FWC 2437 the Commission upheld independent-contractor status because the worker maintained genuine autonomy over pricing, scheduling, and risk.[65]
International Alignment and Systemic Consistency
Munton notes that section 15AA aligns Australian law with comparative jurisdictions such as the United Kingdom and New Zealand, where tribunals evaluate the true substance of work arrangements rather than formal labels.[66] It also harmonises with new domestic categories introduced by the Closing Loopholes reforms, particularly “employee-like workers” and the parallel high-income contractor regime, which extend limited protections to individuals operating in quasi-employment situations.[67]
These developments strengthen doctrinal coherence across the labour-law system and reinforce Australia’s adherence to international labour-standards principles that prioritise fairness and dependency over formality.
The Limits: Why the Issue Is Not Fully Settled
Although section 15AA restores a realistic test, it does not provide a comprehensive definition of employment. Munton observes that the provision merely instructs tribunals on what to examine; it does not prescribe how the factors should be weighed.[68]
Platform Work and Algorithmic Control
A further challenge arises from the rise of digital platforms. Munton explains that algorithmic management systems can exercise substantial control without human supervision, thereby generating dependency that traditional tests fail to capture.[69] In cases such as Elezaj, apparent autonomy, being able to select clients or set rates, can mask underlying economic vulnerability where the platform controls visibility or access to work opportunities.[70]
Looking Ahead
The common law’s durability lies in its capacity to evolve with social and technological change.[71] Judges have long since emphasised that labour-law principles must adapt to modern work structures, rather than freeze in past industrial models.[72]
Section 15AA marks an important correction to the excesses of contractual formalism, yet it does not resolve every difficulty in defining employment. The provision restores attention to practical reality but leaves tribunals to decide how to weigh each factor, creating room for inconsistent interpretation. The rise of platform work has further complicated matters, as algorithmic systems can exert control without direct supervision, producing dependency that traditional tests struggle to recognise. The high-income opt-out reinforces these tensions by assuming that pay equates to autonomy, overlooking dependent high earners who remain exposed to unfair treatment. What emerges is a framework that points the law in the right direction but still demands active judicial development to keep pace with evolving work structures and the subtle ways power now operates in the modern labour market.
Conclusion
Section 15AA of the Fair Work Act 2009 (Cth) represents a significant realignment of Australian employment law. It overturns the formalism of Personnel Contracting and Jamsek and reinstates a factual inquiry grounded in the substantive characteristics of work relationships. Early FWC applications demonstrate that the amendment operates effectively in distinguishing dependent workers from genuine contractors. The reform strengthens coherence with international practice and promotes fairness by closing the contractual loophole that previously undermined labour protections.
Nevertheless, section 15AA does not completely resolve the question of employment. The absence of a precise statutory definition, the challenges posed by digital-platform control, ongoing divergence across legislative schemes, and the potential inequities of high-income opt-outs mean that uncertainty endures. The section’s success ultimately depends on future judicial interpretation and whether Parliament extends its principles to create a unified, economy-wide standard. For now, section 15AA provides a decisive corrective but not a final settlement of the employment and contractor divide in Australian law.
Fair Work Act 2009 (Cth) s 15AA (1)-(2)(a)-(b). ↑
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; Hollis v Vabu Pty Ltd (2001) 207 CLR 21; CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1; ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; Fair Work Act 2009 (Cth) (n 1). ↑
Dickerson v Kagura Games LLC [2025] FWC 2219; Elezaj v Baldwin Care Group Pty Ltd [2025] FWC 2437. ↑
Stevens v Brodribb Sawmilling Co Pty Ltd (n 2) 24-37. ↑
Ibid. ↑
Ibid. ↑
Ibid. ↑
Ibid. ↑
Ibid. ↑
Hollis v Vabu Pty Ltd (n 2) 1-2 [1-6]. ↑
Ibid 27 [61]. ↑
Ibid 43-45 [101-103]. ↑
Ibid. ↑
Ibid 19-20 [44]. ↑
Ibid 43-45 [101-103]. ↑
Ibid 27 [63]. ↑
CFMMEU v Personnel Contracting Pty Ltd (n 2); ZG Operations Australia Pty Ltd v Jamsek (n 2). ↑
Ibid (n 2) 26 [59]. ↑
Ibid. ↑
Ibid 26 [59]. ↑
Ibid 67 [174]. ↑
Ibid. ↑
ZG Operations v Jamsek (n 2) 23 [69-70]. ↑
Ibid 23 [69-70]. ↑
Andrew Stewart, Mark Irving KC and Pauline Bomball, ‘Shifting and Ignoring the Balance of Power’ (2023) 46(4) UNSW Law Journal 1214, 1234. ↑
Ibid 1233. ↑
Fair Work Act 2009 (Cth) s 15AA (n 1); CFMMEU v Personnel Contracting Pty Ltd (n 2); ZG Operations Australia Pty Ltd v Jamsek (n 2). ↑
Fair Work Act 2009 (Cth) s 15AA (n 1) (2)(a)-(b). ↑
Ibid. ↑
Fair Work Ombudsman, ‘Independent Contractor Changes’ (2024); Stewart (n 25) 1250-1251. ↑
Joellen Riley Munton, ‘Defining Employment’ (2024) 37(2) Australian Journal of Labour Law 99 1. ↑
Ibid 2. ↑
Ibid 7; Hollis v Vabu (n 2); Stevens v Brodribb Sawmilling Co Pty Ltd (n 2). ↑
Munton (n 31) 16. ↑
Dickerson v Kagura Games LLC 1. ↑
Ibid 7-8 [23-30]. ↑
Ibid 8 [30]. ↑
Ibid. ↑
Fair Work Commission, ‘High Income Threshold 2024-25’ 11 [45]; Fair Work Act 2009 (Cth) s 382. ↑
Elezaj v Baldwin Care Group Pty Ltd (n 3) 4-6 [15-26]. ↑
Ibid 2-3 [4-9]; 11. ↑
Fair Work Act 2009 (Cth) s 385; Fair Work Commission, ‘High Income Threshold 2025’. ↑
Ibid (n 39). ↑
Ibid. ↑
Hollis v Vabu (n 2). ↑
Ibid; Dickerson v Kagura Games LLC (n 3). ↑
Ibid (n 3). ↑
Hollis v Vabu (n 2). ↑
Ibid. ↑
Fair Work Act (Cth) s 15 (1)(a). ↑
Hollis v Vabu (n 2); Stevens v Brodribb Sawmilling Co Pty Ltd (n 2). ↑
CFMMEU v Personnel Contracting Pty Ltd (n 2); ZG Operations Australia Pty Ltd v Jamsek (n 2). ↑
Fair Work Act (Cth) s 15AA (2)(a)-(b). ↑
Stevens v Brodribb Sawmilling Co Pty Ltd (n 2) [24-37]. ↑
Ibid. ↑
Hollis v Vabu (n 2). ↑
CFMMEU v Personnel Contracting Pty Ltd (n 2); ZG Operations Australia Pty Ltd v Jamsek (n 2). ↑
Fair Work Act 2009 (Cth) s 15AA (n 1). ↑
CFMMEU v Personnel Contracting Pty Ltd (n 2); ZG Operations Australia Pty Ltd v Jamsek (n 2). ↑
Fair Work Ombudsman, ‘Independent Contractor Changes’ (2024). ↑
CFMMEU v Personnel Contracting Pty Ltd (n 2). ↑
Munton (n 31). ↑
Dickerson v Kagura Games LLC (n 3). ↑
Hollis v Vabu (n 2). ↑
Elezaj v Baldwin Care Group Pty Ltd (n 3). ↑
Munton (n 31) 17. ↑
Stewart (n 25). ↑
Munton (n 31). ↑
Ibid. ↑
Elezaj v Baldwin Care Group Pty Ltd (n 3). ↑
Stevens v Brodribb Sawmilling Co Pty Ltd (n 2). ↑
Ibid. ↑