Anna used to earn $150000 per annum, paid fortnightly. As a photographer, she worked with Max, producer and director of Creative Juices Pty. Ltd. Creative Juices began operation in 1996 with only Max and Anna, and saw $2 million gross profit last year. Anna enjoyed taking on jobs that challenged her to produce innovative television advertisements. She and Max had been friends since University and had developed an exciting work relationship involving Max’s production of her visual expertise. Max promised Anna, when they first started working together, that she would receive a large bonus payment when she left the company, at least 50% of the most recent annual profit made. Although, with the growth of the company, they now worked separately most of the time, they would meet frequently to discuss the income and expenditure of the company, and also to agree on her income increases, taxation contribution rates and insurance premiums. Max usually followed Anna’s advice on money matters, although he had to sign all formal documentation as the director of the company. No contract was ever written concerning Anna’s work with Max.
In March, when she was on an assignment in the Blue Mountains, New South Wales, Anna fell over her tripod and down a mountainside, injuring her back. She was not wearing climbing boots or a safety helmet and her injury was not minimised by their protection. There were no work policies on wearing safety equipment although Max had often reminded Anna to be careful, especially when she was trekking. Anna had to cancel the photo shoot at the time, and, while she has attempted short assignments since, has not been able to maintain a full time load of work. Anna has continued to receive her regular income since then, despite taking considerable amounts of time off to recover from her injury. Anna takes anti-inflammatory prescription drugs and has to see a physiotherapist twice a week to lessen her back pain.
Max has understood Anna’s intermittent absence at work is because of recurrent back pain. However, he recently asked Anna if she thought that they could meet to discuss the future of their working together. In the discussion that followed, Max got tense and advised Anna he no longer want to work with her, offering her 4 weeks’ notice paid in lieu. He said he was reflecting on the early days of the company when neither Max nor Anna took home any pay, to determine this period of notice. Anna considers 4 weeks is grossly inadequate and reminds Max of his promise about a bonus payment. Max doesn’t remember making such a promise.
(a) Discuss whether or not Anna is an employee.
(b) Assuming Anna is an employee, detail whether she could claim her contract has been breached on the basis she is entitled to a much larger termination payment.
(c) Assuming Anna is an employee, discuss whether Max has breached any contractual duty in relation to her injury.