FWC rules control and duties, not payment method, define employment relationship

22 Apr 2025

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The Fair Work Commission (FWC) recently dealt with a dispute around employment status after a worker was dismissed from his CEO position and filed a general protections application against his former employer.

The worker argued that despite becoming a principal (unitholder) in the business several years before his dismissal, he remained an employee throughout because he continued performing the same CEO duties under the direction and control of the board. He maintained that his status as a principal was in addition to, not instead of, his employment.

The employer objected to the application, claiming the worker ceased being an employee when he became a principal. They argued that when the worker acquired units in the trust, his employment relationship ended and was replaced by a different legal relationship, meaning he had no grounds to make a general protections claim under the Fair Work Act.

CEO's initial employment arrangement

The worker started employment with the management consultancy as CEO in August 2016. The company provided consultancy services to large-scale family and corporate farming operations. Before appointing the worker, the company had never previously had a full-time CEO.

During his initial job interview, the worker expressed interest in eventually becoming a unitholder in the business. This possibility was confirmed by the acting CEO at the time, who...

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