Federal Court of Australia

Burt v University of Sydney (Common Question) [2025] FCA 601

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding, in so far as it constitutes the individual claim of Dr Burt against the University of Sydney and the Commonwealth of Australia, be dismissed with no order as to costs.

2.    The parties to this proceeding and any group member have leave to provide any submissions or evidence as to why any order under s 33ZB of the Federal Court of Australia Act 1976 (Cth) binding group members (s 33ZB order) should be made within 21 days of the revised reasons for judgment being published.

3.    Following the receipt of any evidence or submissions in accordance with order 2 of these orders, the Court determine whether to dismiss the proceedings generally, or make any s 33ZB order.

4.    Any time to appeal or time for leave to appeal relevant to Dr Burt be extended to expire 28 days following the making of any order as contemplated by order 3 of these orders.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

LEE J:

A    Introduction

1    The applicant, Dr Burt, has the high distinction of having had conferred upon him the degree of a Doctor of Philosophy by the University of Sydney. He studied in the Faculty of Arts and Social Sciences, School of Philosophical and Historical Inquiry. His thesis was entitled “Towards the formal restoration of Plato’s Republic: the text, the dialectic and Platonic education”. In his work, he explains that Plato wrote in a challenging format, but that the way Plato wrote was connected to what Plato was trying to convey and, by altering his mode of expression, we have now lost sight of the intended use of Platonic texts and started using them in a manner which undermines their content. He concludes that it is difficult to grasp the message of Platonic texts unless they are restored to their original format, thus encouraging philosophical education according to the Platonic model.

2    As any first year philosophy student would know, Plato’s Republic constitutes a detailed exposition of political and ethical justice in its account of the organisation of the ideal state. This central Platonic theme of justice and why being just is ultimately beneficial may perhaps have influenced Dr Burt to bring before the Court a class action in which he seeks relief not only on his own behalf, but also on behalf of others.

3    As representative applicant, Dr Burt brings a Pt IVA proceeding on behalf of domestic candidates for higher degrees by research (HDR) of the first respondent, the University of Sydney (University), who were recipients of Australian Postgraduate Award (APA) scholarships or Research Training Programme (RTP) scholarships (collectively, the Postgraduate Research Scholarships) between the period of 22 September 2015 to 22 September 2021 (Relevant Period).

4    In broad terms, and as explained below, Dr Burt asserts that he had an employment relationship with the University and that the University contravened s 50 of the Fair Work Act 2009 (Cth) (Act) by failing to pay the minimum entitlements under applicable Enterprise Agreements.

B    PROCEDURAL HISTORY

5    This proceeding was commenced as long ago as 2021. It became mired in unproductive interlocutory skirmishing and, when it came before me for the first time in April this year, I made orders facilitating opt out and then ordered an initial trial of a determinative common question. That question was whether, during the Relevant Period, an employment relationship arose between the University and Dr Burt and between the University and the Group Members (being the domestic candidates for HDRs who received and entered into an APA or RTP scholarship with the University). Put another way, the determinative question is whether the domestic candidates for HDRs are in a common law employment relationship with the University by reason of the fact that they were recipients of, and entered into, a relevant Postgraduate Research Scholarship.

6    The initial trial commenced on 2 June 2025 and lasted for two days, allowing me to deliver judgment on the third day. Several affidavits were read and there was a large documentary tender. As it happened, the evidence was largely uncontroversial and there was limited cross-examination of one witness, the Challis Professor of History and current Head of the School of Humanities at the University of Sydney, Professor Chris Hilliard. This is not a case so much about contested facts but about the appropriate characterisation of largely uncontested facts.

C     RELEVANT FACTS

C.1    Dr Burt

7    Dr Burt was a domestic candidate for the degree of a Doctor of Philosophy at the University between 1 July 2016 and 17 December 2019, during which time he was required to comply with the conditions of enrolment, including the University’s guidelines, regulations, policies and procedures.

8    More specifically, on 28 April 2016, Dr Burt received an unconditional offer of admission from the University for a full-time Doctor of Philosophy candidature to commence on 1 July 2016, which was to be supervised by University’s Department of Philosophy. He was allocated a place in the Research Training Scheme, and the course was “fee-free” for tuition, save for the requirement to pay a Student Services and Amenities Fee of $290.

9    On 28 April 2016, the evidence records that Dr Burt “Agreed to [the] University of Sydney Code of Conduct and Conditions of Enrolment” and accepted the offer to commence his HDR. It is common ground that this acceptance brought into being a contract between the University and Dr Burt rather than a non-contractual consensual relationship, the continuation of which was dependent upon the presence of mutuality. This common ground seems to me correct, but the precise private law characterisation of what I will describe as the Initial Arrangement is unnecessary to decide for the disposition of this case and raises issues which are not necessarily straightforward: see Griffith University v Tang [2005] HCA 7; (2005) 221 CLR 99 (at 107–109 [12] per Gleeson CJ and 121 [57] per Gummow, Callinan and Heydon JJ); Mbuzi v Griffith University [2016] FCAFC 10 (at [66]–[68] per Griffiths J, with whom Logan and Pagone JJ agreed).

10    From around 11 July 2016, that is, over two months after entry into the Initial Arrangement, the University offered APA scholarships, including to Dr Burt. On 20 July 2016, Dr Burt affixed his electronic signature to a box labelled “Acceptance” on page three of a document entitled “Conditions of Award: Australian Postgraduate Award (APA) Round 2, 2016”. By doing so, he confirmed that: “I accept the [APA] Scholarship in accordance with the letter of offer, conditions stated above and the APA/UPA conditions of Award”. All parties accept that the Scholarship Contract which thereby came into being governed the relationship between the University and Dr Burt, by mutual agreement, from 1 July 2016, which is when Dr Burt commenced work on the HDR on a full-time basis.

11    The APA scholarship was thereafter converted to an RTP scholarship with effect from 1 January 2017.

12    On 3 August 2020, the University conferred on Dr Burt his Doctorate.

C.2    The University and HDRs

13    The University, originally established in 1850 via the University of Sydney Act 1850 (NSW), is now governed by the University of Sydney Act 1989 (NSW) (University Act). As part of the Full Court in University of Sydney v National Tertiary Education Industry Union [2024] FCAFC 57; (2024) 304 FCR 18 (at 31 [50]), I referred to “the objects and functions of the intellectual community constituted by the University” and noted that s 6 of the University Act provides:

6 Object and functions of University

(1)     The object of the University is the promotion, within the limits of the University’s resources, of scholarship, research, free inquiry, the interaction of research and teaching, and academic excellence.

(2)     The University has the following principal functions for the promotion of its object —

(a)     the provision of facilities for education and research of university standard,

(b)     the encouragement of the dissemination, advancement, development and application of knowledge informed by free inquiry,

(c)     the provision of courses of study or instruction across a range of fields, and the carrying out of research, to meet the needs of the community,

(d)     the participation in public discourse,

(e)     the conferring of degrees, including those of Bachelor, Master and Doctor, and the awarding of diplomas, certificates and other awards,

(f)     the provision of teaching and learning that engage with advanced knowledge and inquiry,

(g)     the development of governance, procedural rules, admission policies, financial arrangements and quality assurance processes that are underpinned by the values and goals referred to in the functions set out in this subsection, and that are sufficient to ensure the integrity of the University’s academic program[me]s.

14    The central importance of research is evident from this object.

15    The practical reflection of the importance of this object is seen by the fact that in 2015, the University had an operating revenue of $2,030.2 million, of which $522.8 million was derived from research and consultancy activities.

16    It is also evident that research students are an integral part of the University’s overall research activity and, according to the University’s Strategic Plan for 2016–20, the University considers HDR candidates as “the future of [its] disciplines and a vital part of Australia’s innovation ecosphere” (whatever that expression means).

17    The University, of course, offered higher degrees by research and the University of Sydney (Higher Degree by Research) Rule 2011 (HDR Rule) was made under s 37 of the University Act. The HDR Rule applied to all domestic candidates for HDRs and provided that the University will not admit a person to a course unless the person: (a) is eligible for admission to the course; (b) applies for admission in accordance with the HDR Rule and the course resolutions; (c) accepts an offer made by the University for admission to the course; (d) completes, to the satisfaction of the University, all requirements for enrolment in the course; and (e) meets the University’s English language requirements.

18    Dr Burt, like all other applicants for admission to candidature for the degree of Doctor of Philosophy was required to submit to the relevant faculty: (a) a proposed course of advanced study and research, approved by the Associate Dean, in consultation with the Postgraduate Coordinator of the school in which the work is to be undertaken; (b) satisfactory evidence of the applicant’s eligibility for admission; and (c) a statement certifying the applicant’s understanding that, subject to the HDR Rule, if the candidature is successful, their thesis will be lodged with the University Librarian and made available for use.

19    It is also apparent from the materials in evidence that:

(1)    the thesis had to be the student’s own work, embody the results of the work undertaken by the student during their candidature, and form a substantially original contribution to the area of knowledge concerned;

(2)    HDR candidates were required to undertake their candidature wholly under the control of the University (see cl 2.8(1) of the HDR Rule);

(3)    failure to complete satisfactorily the training documented in the student’s progress plan would be considered evidence of unsatisfactory process and the faculty may decline to examine the thesis if the student had not satisfactorily completed the training documented in the progress plan;

(4)    the rules prescribe the location at which an HDR candidate could pursue their candidature at a time limit within which the student was required to complete their course;

(5)    HDR students would be supervised by a supervisory team consisting of at least two supervisors, of whom at least one would be a research supervisor, with the purpose of this supervision requirement being, among other things, to ensure that the HDR students were supported to produce research of a particular quality and to otherwise support the conduct of research;

(6)    the HDR students were required to attend the University for such face-to-face consultation as with their supervisors as was specified annually; and

(7)    at intervals of no longer than one year, postgraduate coordinators were to require students to provide evidence of satisfactory progress of their candidature and to participate in a progress evaluation meeting.

20    Also in evidence was the University’s Intellectual Property Policy 2016. In broad terms, this policy provided that the University owns intellectual property created by students where: (a) the student has entered into an agreement with the University which specifies University ownership of intellectual property related to or arising from their activities; (b) the student’s supervisor or other staff member has made a substantial contribution to the creation of the intellectual property; or (c) the intellectual property is created using University background intellectual property. Otherwise, the University does not assert any claim with respect to the intellectual property created by a student unless prescribed otherwise by a law or the student otherwise agrees. Having said this, HDR candidates were required to grant the University the non-exclusive perpetual licence to reproduce and communicate the work produced by their research activity by providing it to what was called the “Sydney eScholarship Repository”, and the HDR candidate did not receive any payment from the University for the grant of rights under this limited licence, and the licence created no termination rights.

21    Additionally, it should be noted that various enterprise agreements were in evidence which establish that the University employs persons in the position of “Research Academic Staff Level A”. This classification includes staff who typically conduct research-only activities under limited supervision, either independently or as a member of a team, and undertake administration primarily related to the staff member’s activities at the University. Professor Hilliard gave evidence that the research work performed by a person holding the position of Research Academic Staff Level A could be performed by an HDR candidate where the subject matter of the thesis aligned with the required work. Research academic staff normally work under the supervision of other academic staff at Level B or above, with an increasing degree of autonomy as the research academic staff member gains skills and experience.

C.3    Scholarships

22    Commonwealth scholarships are regulated by the Higher Education Support Act 2003 (Cth) (HES Act). Section 2-1 of the HES Act provides:

2-1    Objects of this Act

(1)    The objects of this Act are:

(a)     to support a higher education system that:

(i)    is characterised by quality, diversity and equity of access; and

(ii)    contributes to the development of cultural and intellectual life in Australia; and

(iii)    is appropriate to meet Australia’s social and economic needs for a highly educated and skilled population; and

(iv)    promotes and protects freedom of speech and academic freedom; and

(b)    to support the distinctive purposes of universities, which are:

(i)    the education of persons, enabling them to take a leadership role in the intellectual, cultural, economic and social development of their communities; and

(ii)    the creation and advancement of knowledge; and

(iii)     the application of knowledge and discoveries to the betterment of communities in Australia and internationally; and

(iv)    the engagement with industry and the local community to enable graduates to thrive in the workforce;

recognising that universities are established under laws of the Commonwealth, the States and the Territories that empower them to achieve their objectives as autonomous institutions through governing bodies that are responsible for both the university’s overall performance and its ongoing independence; and

(c)    to strengthen Australia’s knowledge base, and enhance the contribution of Australia’s research capabilities to national economic development, international competitiveness and the attainment of social goals; and

(d)    to support students undertaking higher education and certain vocational education and training.

23    In Division 3, which provides for an overview of the HES Act, s 3-1 notes that the HES Act “primarily provides for the Commonwealth to give financial support for higher education and certain vocational education and training: (a) through grants and other payments made largely to higher education providers; and (b) through financial assistance to students …”. Part 2-4 of the Act then provides for Commonwealth scholarships.

24    Section 46-1 is instructive. It is headed “What this Part is about” and contains the following box of text:

Note:     This Part does not apply to Table C providers: see section 5-1.

25    The Postgraduate Research Scholarships were part of the scheme created by the HES Act and, relevantly for the circumstances of this case, were to be administered by the University in accordance with the terms of the Commonwealth Scholarships Guidelines (Research) 2012 (2012 Guidelines) (in respect of APAs), and the Commonwealth Scholarships Guidelines (Research) 2017 (2017 Guidelines) (in respect of RTPs), made under s 238-10 of the HES Act for the purposes of s 46-20 (collectively, the Commonwealth Guidelines). The statutory scheme provided that the Minister was empowered to make the Commonwealth Guidelines, providing for matters required or permitted by Part 2-4 of the HES Act. The argument articulated before me proceeded largely by reference to the terms of the 2012 Guidelines.

26    The APA scholarships were “awarded to students of exceptional research potential undertaking a[n] HDR” and were provided “to assist with general living costs” (see cl 2.1.1 of the 2012 Guidelines). The University was a Higher Education Provider (HEP). The share of available grant moneys allocated to the University as an HEP was the sum of three performance components after each had been multiplied by a proportioning factor (see cl 2.5.5(1) of the 2012 Guidelines):

(1)    HDR student completions performance had a proportioning factor of 0.5;

(2)    Research income performance had a proportioning factor of 0.4; and

(3)    Research publications had a proportioning factor of 0.1.

27    It necessarily followed that increased success by HDR students in the completion of research outcomes increased the prospect of a greater proportion of Commonwealth grant monies being allocated to the University.

28    It was common ground that scholarships were treated as income within the meaning of the Income Tax Assessment Act 1997 (Cth) and were either exempt or not exempt from taxation, depending on the circumstances.

C.4     Benefits to University

29    Leaving aside the share of available grant monies allocated to the University, which was affected by the completion of candidatures and the ability to generate income from research, it was not seriously disputed by any party that the work of HDR candidates provides a real form of benefit to the University.

30    This benefit arises in manifold ways: it constitutes activity consistent with the objects of the University (as set out above); it adds to the store of knowledge housed within the repository of the University; it enhances the reputation of the University, thereby making it a more attractive intellectual community for new students; it potentially increases the prospect of obtaining additional grant money; and, more generally, it assists in deriving income from student fees and opportunities for commercialisation.

D    DR BURT’S ARGUMENT

31    The core contentions of Dr Burt can be summarised as follows.

32    First, the student’s promise to undertake and complete research work and thus maintain enrolment constituted work performed in return for the payment of a stipend by the University. This mutuality of promises created the necessary consideration for a binding contract. In the case of Dr Burt, this was constituted by the Scholarship Contract, and this contract, along with the others like it, is properly characterised as a contract of service. As the Supreme Court of the United Kingdom recently observed in Professional Game Match Officials Ltd v His Majesty’s Revenue and Customs Commissioners [2024] UKSC 29; [2025] 1 All ER 289 (at [24] per Lord Richards JSC, with whom Lord Hodge DPSC, Lord Leggatt, Lord Stephens and Lady Rose JJSC agreed), “[t]he common law has for many centuries recognised contracts of employment, or contracts of service as they used to be called, as a separate and particular type of contract with its own incidents”. The Supreme Court also noted (consistently with the argument of Dr Burt) that the starting point in deciding whether there is a contract of employment has often been taken to be the judgment of Mackenna J in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497. Indeed, in Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157, it was described (at 1163 [18] per Lord Clarke of Stone-cum-Ebony JSC) as “the classic description of a contract of employment”.

33    In Ready Mixed Concrete, MacKenna J considered what was meant by a contract of service (at 515):

A contract of service exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service.

34    Recently, in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 275 CLR 165 (at 185 [39] per Kiefel CJ, Keane and Edelman JJ), this passage was cited as a “cogent and coherent basis for the time-honoured distinction between a contract of service and a contract for services”.

35    Counsel for Dr Burt accepted, correctly, that the appropriateness of the characterisation of the Scholarship Contract as one of service is the determinative issue in this case.

36    Secondly, and relatedly, to the extent the University is providing “services” to HDR candidates in receipt of a scholarship, Dr Burt submitted that this provision of services is not inconsistent with the contractual relationship being one of service. In this regard, Dr Burt pointed to established categories of employment in which the employer provides services to its employees: master and apprentice being the most obvious example.

37    Thirdly, Dr Burt submitted that there is no legal principle that creates a dichotomy between legal relationships in which one party is being taught or educated, and contracts of service; it is possible for the two to coexist. In this regard he places reliance upon cases such as Rowe v Capital Territory Health Commission [1982] FCA 4; (1982) 29 ALR 39 (the Student Nurses Case), a decision upheld by the Full Court in Rowe v Capital Territory Health Commission [1982] FCA 106; (1982) 2 IR 27. There, the primary purpose of the contract was to teach student nurses an occupation but, in the circumstances of that case, the contract was found to be one of service.

38    Fourthly, Dr Burt submitted that an HDR candidate’s promise, as part of the bargain with the University, to complete research work (even if previously commenced as a voluntary undertaking) was pursuant to the terms of the Scholarship Contract. The Court is only to enquire into the existence and not the sufficiency of consideration, and here, with the payment by the University of the stipend, the necessary mutuality of obligations between the contracting parties is evident.

39    In amplification of these core contentions, Dr Burt asserts that it may be accepted that at least a purpose, even a significant purpose, of an HDR is education. He further accepts that an HDR student derives many benefits from their candidature for an HDR and the research work they perform. Notwithstanding this, these benefits do not gainsay the reality, established on the evidence, that the performance of research work by the candidate is a benefit to the University and, where done in exchange for a stipend, is a service being provided to it in exchange for remuneration, thus constituting a contract for service.

40    Importantly, Dr Burt contends that a person in his position is required to perform research work in accordance with the terms of this bargain. This can be seen from the fact that a stipend recipient must enrol in an HDR; devote a minimum number of hours each week to the advancement of their candidature, being at least two-thirds of the prescribed minimum hours to research work; and is exposed to the termination of the scholarship if these obligations are not met.

41    All research work that leads to the conferral of an HDR produces a product consisting of new knowledge. As noted above, this knowledge is real and not an insubstantial benefit to the University. It is knowledge that is publicly available, which can be used in further research and development work or otherwise put to valuable social use by private and public interests. This aspect of the activities of the University in offering HDRs is a central way in which the University gives effect to its statutory purpose of facilitating the creation of knowledge by research for the public good.

42    It is in this way that the University obtains a benefit from the work of HDR candidates. This general benefit to the University was accepted by Professor Hilliard during the course of his cross-examination. In short, Dr Burt says the creation of knowledge by HDR candidates is generated by the performance of research as part of the HDR candidates’ bargain with the University.

43    Finally, Dr Burt places importance on the notion that remuneration exchanged for work does not need to take the form of a salary or wage for a contract of service to arise. The “irreducible minimum” is that work is performed in exchange for remuneration. Further, the obligations that are imposed on an employer to pay a certain amount of remuneration (such as wages under an award or enterprise agreement) are not necessarily coextensive with the remuneration that supports the formation of the contract of service.

E    THE APPLICABLE PRINCIPLES

44    It is not, of course, in dispute that, as stated in Personnel Contracting (at 205 [104] per Gageler and Gleeson JJ), “[e]mployment is a voluntary relationship between an individual, the employee, and another person, the employer, within which the employee performs a genus of work for the employer – what was traditionally called “service” – in exchange for some form of remuneration”.

45    In recent times, there has been much discussion as to the legal principles of distinguishing between an employee and an independent contractor. The majority in Personnel Contracting rejected a multifactorial approach to the issue of characterising a person as an employee or independent contractor, indicating that, at least for written contracts, the issue was to be determined by reference to the terms of the contract (at 193 [59] per Kiefel CJ, Keane and Edelman JJ, 236–238 [187]–[189] per Gordon J and 243 [203] per Steward J).

46    The effect of Personnel Contracting was to reinforce the reality that the common law of Australia deals with the existence or otherwise of the employment relationship through the prism of the law of contract.

47    As Ian Neil SC, David Chin SC and Christopher Parkin explain in The Modern Contract of Employment (3rd ed, 2023, Lawbook Co at 1-3), there are essential features of a contract of employment, which may be summarised as follows.

48    First, the employment relationship with which the common law is concerned must be a legal relationship; it is not a social or psychological concept like friendship: Personnel Contracting (at 105 [44] per Kiefel CJ, Keane and Edelman JJ). Contract is the principal source of the legal relationship, and there can be no employment without a contract: Lister v Romford Ice and Cold Storage Ltd [1957] AC 555 (at 587 per Lord Radcliffe); Personnel Contracting (at 186 [40]–[41], 228 [172] per Kiefel CJ, Keane and Edelman JJ); R v Brown; Ex parte Amalgamated Metal Workers’ and Shipwrights’ Union [1980] HCA 42; (1980) 144 CLR 462 (at 475 per Murphy J); Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 (at 182–183 [16] per French CJ, Bell and Keane JJ); WorkPac Pty Ltd v Rossato [2021] HCA 23; (2021) 271 CLR 456 (at 477 [57]–[58] per Kiefel CJ, Keane, Gordon, Edelman, Stewart and Gleeson JJ).

49    Secondly, the contract must involve the performance of work: the first question in any enquiry as to whether a contract of employment exists is whether “work is being done by a person in performance of a contractual obligation to a second person”: Abdalla v Viewdaze Pty Ltd (2003) 53 ATR 30; (2003) 122 IR 215 (at 223 [23] per Lawler VP, Hamilton DP and Bacon C). As the High Court noted in Humberstone v Northern Timber Mills [1949] HCA 49; (1949) 79 CLR 389 (at 404–405 per Dixon J), “[t]he essence of a contract of service is the supply of the work and skill of a man”.

50    Thirdly, there must be a wage or other remuneration, otherwise there will be no consideration: Ready Mixed Concrete (at 515 per MacKenna J).

51    Fourthly, there must be an obligation on one party to provide, and the other party to undertake, work. The obligation required to constitute a contract of employment is that “the putative employer be obliged to pay the putative employee in accordance with the terms of the contract for services reasonably demanded under it” (see Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 342 per Meagher, Handley and Cripps JJA), and that “the putative employee be obliged to perform such services. That is as much so where the service consists of standing and waiting as where it is active”: see Forstaff Pty Ltd v Chief Commissioner of State Revenue (NSW) [2004] NSWSC 573; (2004) 144 LR 1 (at 20–21 [91] per McDougall J); Wilton v Coal & Allied Operations Pty Ltd [2007] FCA 725; (2007) 161 FCR 300 (at 376 [162] per Conti J).

52    Before leaving the subject of principle, it is worth emphasising the following four matters which were not the subject of any dispute.

53    First, where the relationship is recorded in a comprehensive written contract, as noted above, the characterisation of the relationship is to be undertaken solely by reference to the rights and obligations specified in that contract: Personnel Contracting (at 186 [40]–[62] per Kiefel CJ, Keane and Edelman JJ, 228–233 [172]–[178] per Gordon J and 243 [203] per Steward J); ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; (2022) 275 CLR 254 (at 261 [8]–[9] per Kiefel CJ, Keane and Edelman JJ).

54    Secondly, some caution is needed when characterising the relationship. The majority of the cases in this area concern making the distinction between an employee and an independent contractor. Whether a person is engaged as an employee or an independent contractor is, in truth, a binary question. As far as the common law is concerned, a person cannot be engaged as both at the same time when performing the same work under the same contract.

55    The usual matters considered relevant to the enquiry of determining whether a person has been engaged as an employee or an independent contractor assume somewhat less direct relevance in the current case. In this regard, of course, the legal right to control is often of central importance to the usual enquiry as the nature and basis of the right to control a putative employee’s activities is often determinative. However, control is only relevant if it is exercised by a person or entity qua employer, and not in another capacity in respect of a different relationship: Secretary of State for Business, Enterprise and Regulatory Reform v Neufeld [2009] EWCA Civ 280; [2009] ICA 1183 (at 1214–1215 [85]–[86] per Rimer LJ).

56    Thirdly, and related to the last point, in the context of providing education and training, a person said to be in the position of the employer may have the right to exercise control over the education and training concerned, even if it might be properly characterised as research work or practical training: Re Crown Employees (Technical Teachers) Award [1974] AR (NSW) 450 (at 467 per Beattie P, Sheehy and Sheldon JJ). This is an example of the putative employer exercising control as an education provider and not as an employer.

57    Fourthly, the question of whether the relationship is one between employer and employee involves consideration of what has sometimes been considered an “irreducible minimum of mutual obligation” requiring: (a) a putative employer to pay remuneration to the putative employee as consideration for the services reasonably required under a contract; and (b) the putative employee is obliged to perform such services when so required: Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435 (at 466 per Dixon J); Building Workers’ Industrial Union of Australia v Odco Pty Ltd [1991] FCA 96; (1991) 29 FCR 104 (at 114 per Wilcox, Burchett and Ryan JJ).

58    Put another way, the arrangements must be able to be characterised as a work-wage bargain; that is, “[t]he consideration for work is wages, and the consideration for wages is work”: Browning v Crumlin Valley Collieries [1926] 1 KB 522 (at 528 per Greer J); Professional Game Match Officials Ltd v His Majesty’s Revenue and Customs Commissioners [2024] UKSC 29; [2025] 1 All ER 289 (at [27]–[42] and [59]–[60] per Lord Richards JSC, with whom Lord Hodge DPSC, Lord Leggatt, Lord Stephens and Lady Rose JJSC agreed).

59    This task of determining whether a contract for service has been created will often require characterising the purpose for which work is required to be performed and the purpose of the payment received. Hence, for the circumstances of this case, determining whether a person is performing research work for the purpose of rendering service for the University rather than for the purposes of education and learning is critical. In this regard, it is relevant to consider the identity of the parties (being a university and a higher education student), the subject-matter of the Scholarship Contract, and the broader context of the relationship.

F    CONSIDERATION

60    Despite the clever and ably presented arguments of Ms Kelly on behalf of Dr Burt, the contention that a contract of employment was created by the Scholarship Contract cannot be accepted.

61    Often first and common-sense impressions are telling and are simply confirmed by closer analysis. This is such a case. In short, and shorn of unnecessary complication, Dr Burt’s argument must be rejected because, objectively analysed, a candidate’s enrolment as a postgraduate research student to undertake an HDR is best characterised as a voluntary undertaking by the student to complete an agreed, identified course of study or research in furtherance of their own education, with the objective of obtaining the distinction of conferral upon them of a higher degree or qualification. Further, the receipt of payments under the scholarship reflects the payment by the University of moneys granted to it under a statutory scheme, reflecting a public policy that it is worth encouraging such educational attainment. This scheme creates a payment in the nature of a stipend to assist with covering expenses incurred in undertaking the HDR and other living costs. Properly analysed, this is a mechanism for financial support to enable the HDR students to complete their educational endeavour with assistance and does not constitute payments as a reward for services in the nature of remuneration for the research work performed in the course of study or research to attain an HDR.

62    The starting point is that Dr Burt’s acceptance for the application to study to obtain a Doctor of Philosophy was not dependent on receipt of any scholarship. The offer of admission made no reference to the award or receipt of a scholarship. It was not a condition of the initial arrangement that Dr Burt be in receipt of a scholarship. As the facts disclose, Dr Burt did not apply for an APA scholarship until 16 May 2016, and he received an offer of the APA scholarship which he accepted by entering into the Scholarship Contract on 20 July 2016. Indeed, the experience of Dr Burt was not unique – the APA Conditions of Award 2015 (for domestic students) provide that eligibility for receiving an APA arises after enrolment in a full-time postgraduate research degree has occurred (APA Conditions of Award 2015 (for domestic students) at [3]).

63    In application of these conclusions, it is worth making further observations by reference to two subheadings.

F.1    The purpose or object of the alleged service

64    The whole point of the work done in connexion with the candidature is to complete independent, supervised study that produces a body of independent, worthwhile work constituting original research outcomes. This culminates in a thesis, which forms the basis of the award.

65    As is noted in the Progress Planning and Review for Higher Degree by Research Students Policy 2015 (at cl 4(1)), the whole aim of the HDR is to provide the student with a “quality researching training experience”, including “the development of skills and knowledge necessary to be a successful researcher in the chosen discipline …”. The same research work is required of all HDR students irrespective of whether they receive financial aid. The entire point of the process is that the student makes an independent and worthwhile contribution within the chosen discipline in the agreed area of postgraduate study.

66    Of course, research work is performed, and this is a necessary and integral part of the candidature. However, simply because this work is similar to work performed by other employees does not transform the purpose or object for which the research work is being done by the HDR students. The Scholarship Contract cannot be considered in a vacuum. It provides a benefit to a student who has already proposed, and has been accepted, to engage in a particular type of research work.

F.2    Research work not performed in exchange for the stipend

67    Relatedly to the above, the objective purpose of performing the research work was to obtain the qualification. It is unrealistic to conclude that, as a matter of objective intention, the research work was performed in consideration for, or in return for, the stipend.

68    The whole object of the postgraduate scholarships is not to provide a mechanism by which the University can reduce its employment bill by having students doing work that otherwise would be required to be undertaken by researchers. But, as s 46-1 of the HES Act makes plain, “[g]rants for scholarships are made to higher education providers who pay the scholarships to students for the purposes of the students’ education”, and “[c]ertain scholarships may be paid directly to students …”. This stipend is not calculated by reference to time worked or paid by reference to some rational assessment of the services to be provided. Instead, it is a payment made following a discretionary process to cover living expenses due to the perceived value of the postgraduate work by domestic students. Consistent with this characterisation of the stipend being for the purposes of the student’s education, the student must not be receiving other relevant income. As the 2017 Guidelines make clear, to be eligible for an RTP Stipend, “a student must not be receiving income from another source to support that student’s general living costs” in certain circumstances: see cl 1.5(2).

69    This is not to deny the force of the point (which recurred like a leitmotif in Dr Burt’s submissions) that the University obtains a benefit from the research work conducted. This is clearly the case. Universities gain and retain a reputation for, among other things, the quality of the output of their students undertaking postgraduate work. However, it strikes me as entirely artificial that this ought to be characterised in the way Dr Burt’s arguments seek to deploy it, as consideration for the payment of the stipend. This seems to me an example of overcomplication and distortion of a relatively simple set of facts. The notion, as pleaded by Dr Burt, that an HDR was not primarily for the educational benefit of group members simply because at least two-thirds of an HDR must comprise research work does not withstand analysis.

70    Much discussion occurred on the last day of the hearing as to the worth of the submission made on behalf of the University that if Dr Burt’s argument were correct, the Commonwealth Guidelines obliged the University to do the very things which Dr Burt alleges give rise to the contraventions of the Act. In this regard, reference was made to the Commonwealth Guidelines specifying:

(1)    the amount that must be paid to students under the Scholarships (being, for the 2016 year, $26,288 per annum, indexed annually on 1 January);

(2)    the payment period (being fortnightly); and

(3)    the provisions that provided for paid recreational, personal and parental leave entitlements, which are forfeited upon termination.

71    Dr Burt’s response was that this was a false analysis. The case of Dr Burt was that there were independent obligations that arose pursuant to the Enterprise Agreement upon the proper characterisation of the nature of the Scholarship Contract. The fact that the parties did not subjectively understand that they were entering into an employment contract, and that there may be unintended consequences that flow from the proper characterisation of the contract, is not to the point.

72    There is force in Dr Burt’s submissions in this regard. Unintended industrial consequences can often flow from a subjective misunderstanding of contracting parties. There have been a large number of cases where at least one party’s misunderstanding of whether an arrangement gave rise to an independent contractor or employment relationship created quite dramatic unforeseen economic consequences.

73    Having said this, it is notable that Dr Burt can point to no case in which a court of coordinate jurisdiction or a lower court or tribunal dealing with Australian industrial law has found that an HDR student in receipt of a scholarship has been found to an employee, including in different contexts such as unfair dismissal, workers compensation, social security or taxation. In this context, it is hardly surprising that it would seem an intuitively odd outcome for Dr Burt’s argument to be correct.

G    RELIEF AND ORDERS

74    The precise common question I identified for determination at the initial trial, which is essential to this judgment, follows my previous tracing of the history of Part IVA. In the early years of the development of class actions, judgments were delivered, and then the parties would thereafter pore over the reasons to identify common questions and for the Court to reflect the answers to those common questions in subsequent orders. In more recent years, following the decision of the Full Court in Merck Sharp & Dohme (Australia) Pty Ltd v Peterson [2011] FCAFC 128; (2011) 284 ALR 1, the usual approach has been to identify a common question well in advance of the initial trial with the intention of providing an answer to it.

75    Often, the reality is that, following service of submissions and the crucible of the hearing, the real questions emerge with some greater clarity and common questions are revised. This presents no difficulty because the identification of questions for future determination is, of course, an interlocutory order.

76    Answering a common question amounts, in substance and effect, to an order akin to a declaration. Questions of jurisdiction, judicial power, and the power and discretion to grant declaratory relief are often seen as intertwined: Forster v Jododex Australia Pty Ltd [1972] HCA 61; (1972) 127 CLR 421; Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334; National Australia Bank Limited v Nautilus Insurance Pte Ltd (No 2) [2019] FCA 1543; (2019) 377 ALR 627.

77    In this case, there is no issue as to jurisdiction per se. It is clear that an existing controversy between and among the parties arises from Dr Burt’s assertions. This calls for the application of federal judicial power to quell this controversy.

78    What distinguishes this case from many other class actions is that there is nothing before the Court to suggest a real, asserted controversy exists between any other person (in the position of Dr Burt) and the University and/or the Commonwealth. Put another way, it is unclear on the evidence that, leaving aside the individual position of Dr Burt, any immediate right, duty or liability arises for determination between any other person and the University or the Commonwealth.

79    I hasten to add that this does not mean there is not a valid class action. There has been no suggestion that “claims” within the meaning of s 33C of the Federal Court of Australia Act 1976 (Cth) were not in existence upon commencement to allow this proceeding to pass through the undemanding s 33C “gateway”. Rather, my comments are directed to a different point. The answering of a separate question following an initial trial, like the making of a declaration, is a discretionary remedy which involves consideration of questions of utility and hypotheticality. The mere mention of the word “hypotheticality” shows how the issue of power and discretion are linked when it comes to the principal exercise of Chapter III judicial power.

80    I do not think that there is a sufficient basis before me at present to be satisfied that answering the question, which would then form the basis of a s 33ZB order, would be utile. The dismissal of Dr Burt’s claim and the process of reasoning by which I reach that conclusion will necessarily bind the parties to this proceeding, being Dr Burt, the University, and the Commonwealth. That controversy will be quelled. Whether the making of an order that gives rise to a statutory estoppel binding non-parties is both necessary and appropriate is quite another thing.

81    All parties agreed that if the determinative question was answered adversely to Dr Burt, this would involve the dismissal of his individual claim in the proceeding. I do propose to make such an order, but when doing so, will give express leave to any party or any group member to provide to me, within 21 days of the publication of these reasons for judgment, any material they rely upon to contend I should answer the common question as phrased and make a s 33ZB order. Needless to say, that material, by way of evidence or submissions, will need to address questions of hypotheticality and utility.

82    The parties also agreed that, irrespective of the outcome of the claim, there should be no orders to costs. Accordingly, I make the following orders:

1.    The proceeding, in so far as it constitutes the individual claim of Dr Burt against the University of Sydney and the Commonwealth of Australia, be dismissed with no order as to costs.

2.    The parties to this proceeding and any group member have leave to provide any submissions or evidence as to why any order under s 33ZB of the Federal Court of Australia Act 1976 (Cth) binding group members (s 33ZB order) should be made within 21 days of the revised reasons for judgment being published.

3.    Following the receipt of any evidence or submissions in accordance with order 2 of these orders, the Court determine whether to dismiss the proceedings generally, or make any s 33ZB order.

4.    Any time to appeal or time for leave to appeal relevant to Dr Burt be extended to expire 28 days following the making of any order as contemplated by order 3 of these orders.

Associate:

Dated: 6 June 2025