Legal Right to Access Employee Share Scheme: A Workplace Law Case Study

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WORKPLACE LAW
Name
Course
Date

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Issue
 The first issue in this case is whether Max has a legal right to access the generous
employee share scheme immediately as promised by the company that he would do if he
accepted their offer to work for them.
 The second issue is whether Max has a legal right to access the general employee share
scheme immediately he is promised the benefit six months after working with Creative
Advertising Ltd.
Relevant Law
 Fair Work Act 2009
 Independent Contractor Act 2006
 Workplace Relations Act 1996
 Australian Consumer Law
Application
The nature of the working relationship depends on the overall circumstances of the
situation.1 A person can either be an independent contractor or an employee and the rules vary
between the two. The matter of the case Stevens v Brodribb Swamilling Co Pty Ltd describes the
test for determining the workplace relationship. Justice Mason explains that the existence of
control among other factors can determine the working relationship.2 He goes ahead to state that
other factors such as the mode of remuneration, the obligation of work, and others, can also
determine the kind of working relationship between the employer and the employee. According
1 Stevens v Brodribb Sawmilling Company Pty Ltd - [1986] HCA 1
2 Stevens v Brodribb Sawmilling Company Pty Ltd - [1986] HCA 1

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to Hollis v Vabu, the contracts signed for services are those done with the independent
contractors.3
Section 340(1) of the Fair Work Act 2009 indicates that a person has a legal right to any
benefit according to the order made by the industrial body. If an industrial body makes an offer
and another party accepts it, they form a contract in which each party must fulfill their
requirements failure to which they are punishable by law. A person is likely to get into a contract
for a particular interest. If the interest is however not met as promised in the contract, section
24(1) of the ACL clearly indicates that such a contract is unfair because it does not protect the
legitimate interest of the person.
Besides, section 18 of the Australian Consumer Law prohibits companies from engaging
in misleading and deceptive conducts or actions that are likely to deceive or mislead.4 When the
promise was made to Max that he will enjoy the benefit immediately he is employed, the
employer was aware that the company’s requirement will not allow that, unless he had worked
for 2 years with them. Therefore, the company knowingly made the misleading representation to
Max. In this case, the employer was engaging Max as an employee rather than an independent
contractor, which is against section 357(1) of the Fair Work Act 2009. The company, therefore,
goes ahead to benefit from what Max should be getting instead. The employer directly breaches
the employment laws relating to sham contracts. In the case Fair Work Ombudsman v Centennial
Financial Services Pty Ltd, the court rules that Mr. Mertes who was the sole director and
shareholder of the company was the principal beneficiary of the company. Thus, he gained the
advantage that the company got from failing to pay its employees full entitlements.5 As a result
3 Hollis v Vabu Pty Ltd [2001] HCA 44. 207 CLR 21
4 Competition and Consumer Act 2010 - Schedule 2 (Commonwealth)
http://www5.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html
5 Fair Work Ombudsman v Centennial Financial Services Pty Ltd (2010) 245 FLR 242