Company argues that the consultant was not an employee and therefore, not dismissed
The Fair Work Commission (FWC) examined whether a consultant was an employee after his engagement was terminated by an automotive group that had purchased his business under a business sale agreement.
The consultant entered into a consultancy agreement as a condition of the business sale, which operated for nearly two years before termination. The automotive group raised a jurisdictional objection that the consultant was not an employee and therefore not dismissed within the meaning of the Act.
The consultant claimed he was effectively engaged and treated as an employee on a salary despite the consultancy agreement terms.
The automotive group acquired the consultant's importing business which consisted of an importing operation and sub-distribution business with major tyre suppliers.
The acquisition was completed with earn out arrangements under which a combination of cash payments and shares in the automotive group were provided to the consultant's family business subject to defined performance criteria. The earn out period was for twelve months following completion of the sale.
Separate negotiations were conducted to develop the terms of the consultancy agreement, which was required as a condition of the business sale agreement. The services to be provided under the consultancy agreement were management, transition and consultancy...
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