The Facts
Sex worker’s work arrangement covered by agency agreement
A sex worker commenced working at a Melbourne brothel in August 2019. Her work arrangement was set out in an agency agreement, which specified that she was not a partner, a joint venturer or an employee of the brothel.
The agreement further stated that the sex worker was free to refuse any client booking on any grounds, and that the brothel did not direct or control sex workers “in the nature or conduct of delivering their personal services”.
While the brothel was not able to produce a copy of the agency agreement that it claimed the sex worker had signed, the sex worker conceded that she had signed a contract during her initial interview at the brothel, although she too was unable to produce a copy of that document.
Relationship between sex worker and brothel deteriorates
In November 2021 the sex worker suffered an injury and was hospitalised. Upon her return to work in December 2021, she was limited in the services she could offer to clients due to her injury.
The sex worker became increasingly concerned about hygiene, health and safety at the brothel. She raised these concerns at a meeting with a manager in March 2022 and again at two subsequent meetings in June the same year.
Following the last of these meetings, the sex worker received a text message from the staff phone number, informing her that she had no more shifts at the brothel and could only attend the premises to collect her belongings.
Was the sex worker unfairly dismissed?
The sex worker made an application to the Fair Work Commission, claiming that she had been a casual employee of the brothel, had been unfairly dismissed and was therefore eligible for an unfair dismissal remedy.
In order to decide whether the sex worker was eligible for an unfair dismissal remedy, the FWC first had to determine whether or not she had been an employee.
Expert commentary on the court's decision
Court finds sex worker was an independent contractor
In Lucy Helft v Top Of The Town [2022] FWC 2656, the Fair Work Commission determined that the sex worker, Ms Lucy Helft, was an independent contractor in the work she undertook at the adult services venue Top of the Town.
As she was not found to be an employee, she was not eligible to apply for an unfair dismissal remedy and her application was dismissed.
Primacy of contract in ascertaining nature of relationship
The Commission noted the “primacy of the contract” in ascertaining the nature of the relationship between a worker and their work provider. Where such a contract exists, it is the rights and obligations under that contract which determine the nature of the relationship.
In so doing, the Commission relied on two decisions made in January 2022 by the High Court: ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2, and Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1. (For more information please see Independent contractor or employee? Why it’s a bit of a legal circus.)
Top of the Town pointed to the agency agreement which it claimed Ms Helft had signed, stating that it was a requirement for all sex workers to sign a copy of the agency agreement before they were permitted to work at the brothel.
The agency agreement explicitly stated that the Principal (as the sex worker was defined) was not an employee of the Agent (as the brothel was defined), nor was the Agent an employee of the Principal.
Absence of signed copy of agreement between parties
While Ms Helft agreed that she had signed a contract of some sort prior to starting work, Top of the Town was unable to produce a signed copy of the agreement that it claimed Ms Helft had signed – or, indeed, a copy of any agreement signed by any other sex worker.
In these circumstances, the Commission could not be satisfied that the contract Ms Helft had signed was the same as the version of the agency agreement which Top of the Town had presented to the Commission.
Since there was no written contract available to the Commission, it was necessary for it to “identify by way of inference from the dealings between the parties” what the nature of their relationship was.
No financial relationship between sex worker and brothel
On examining the dealings between Ms Helft and Top of the Town, the Commission concluded that Ms Helft had the right to negotiate the type of services she provided and the price for those services with any client.
The Commission found that there was no financial relationship between Ms Helft and Top of the Town, which merely provided administrative assistance to ensure Ms Helft was paid by the client. Top of the Town itself did not derive any material benefit from that transaction.
“Right to control” as indicator of employment relationship
The Commission noted that “the right to control” had historically been the most significant indicator of an employment relationship.
Ms Helft argued that Top of the Town controlled many aspects of her work, requiring her to perform shifts of a minimum length, wear clothing which conformed with a dress code and be present in the lounge area when clients attended the brothel.
According to Ms Helft, this control also meant she could not delegate her shifts to anyone else and had to refrain from taking a break or from using her mobile phone when clients were present.
However, these aspects were considered to be of marginal significance when compared to the rights of control retained by Ms Helft.
Sex worker retained right to refuse to provide services to any client
The Commission found that Ms Helft determined when she would work by notifying Top of the Town of her availability to work her preferred shifts. Any rostering arrangement was subject to her right to decline to perform a shift, even after it had been allocated to her.
Crucially, the Commission was persuaded that Top of the Town had “no right or responsibility in requiring, controlling or supervising” the sex work performed by Ms Helft. She retained the right to refuse to provide services to any client at any point and felt safe to do so.
Because of these factors, the Commission concluded that Ms Helft retained a right to control the fundamental elements of her relationship with Top of the Town.
The Commission stated that while the absence of a right to delegate work is indicative of an employment relationship, not an independent contractor relationship, in Ms Helft’s case this was not so, as she retained the absolute right to refuse to provide her services at any point.
The absence of a financial relationship between Ms Helft and Top of the Town, and the absence of any significant right of control by Top of the Town over Ms Helft, indicated that her relationship to the brothel was that of independent contractor.
Consequently, her application for an unfair dismissal remedy was dismissed.