The Case
A funds management firm, Whistle Funds Management Company, engaged a senior professional through his own consultancy company in 2012. By 2021, he had stepped into the role of Managing Director. Over the years, the financial reality of the relationship shifted significantly. He stopped taking outside clients, worked full-time from the company office, and drew a high fixed monthly salary that progressed from $250,000 to $300,000, finally reaching $350,000 by October 2023. This amount was paid regardless of whether he took leave or was absent due to illness, and he no longer had to invoice to be paid.
In March 2025, the company founder sent a series of emails issuing a strict directive: the Managing Director was to keep the founder informed of all conversations with a specific high-profile investor family, and he was explicitly barred from holding any discussions without the founder present under any and all circumstances.
Believing this directive placed him in an impossible position regarding his corporate and legal responsibilities, the Managing Director sent an email raising concerns and referencing legal advice. The founder immediately reacted with anger, and the Managing Director was terminated the following day. The company cited a broken-down working relationship. The Managing Director subsequently lodged a Federal Court claim alleging unlawful adverse action alongside claims for unpaid entitlements.
The Ruling
Justice Yaseen Shariff of the Federal Court ruled heavily in favour of the Managing Director in the case of Vize v Whistle Funds Management Company Pty Ltd [2026] FCA 831. The court first looked past the contractor label, using the dispute as a clean test of the statutory definition of an employee under Section 15AA of the Fair Work Act. Because of his $350,000 fixed salary, full-time integration, and lack of billing requirements, the court determined the arrangement had transitioned into an employment relationship back in July 2017.
On the adverse action claim, the founder admitted under cross-examination that he was “absolutely annoyed” by the email raising legal objections. The judge described parts of the founder’s account as “unimpressive, unsatisfactory, unreliable, combative and inconsistent”, concluding that this personal irritation was a substantial and operative reason for the termination. Sacking an employee because they made an inquiry or complaint in relation to their employment is a direct breach of section 340 of the Fair Work Act.
Because the worker was deemed an employee, the court declared that Whistle Funds breached the law by failing to pay out accrued annual leave on termination and failing to pay superannuation from January 2024. The court also ruled he was entitled to six months’ notice and back-dated long service leave under NSW law stretching back to 2017. While the company’s liability has been firmly established, the court has reserved the final multi-year calculations for damages, compensation, and statutory penalties, listing the matter for a case management hearing on 16 July 2026.
How to do it better
- Review high-level contractor structures regularly: Just because an executive is paid a high fee through an ABN and charges GST does not make them a contractor. If they work exclusively for your business, receive a regular fixed amount, and operate as part of the internal leadership team, the law will view them as an employee.
- Pause before reacting to pushback: When a senior leader objects to a business directive or mentions legal parameters, treating that complaint as insubordination or a culture problem is highly risky. Emotional or reactive terminations following a formal complaint almost always trigger adverse action risks.
- Document objective performance or structural issues early: If a relationship is genuinely breaking down, it must be managed through objective, documented communication over time, rather than a sudden termination immediately following a disagreement.
The Bloom HR Takeaway
This case is a stark reminder that the general protections framework protects everyone, from an entry-level trainee right up to a Managing Director drawing $350,000 a year. While the high-income threshold prevents top earners from filing standard unfair dismissal claims in the Fair Work Commission, there is no income cap on adverse action claims in the Federal Court.
Furthermore, you cannot contract out of Fair Work minimum entitlements, and you cannot rely on past contractor billing history to stop a worker from claiming employee rights later. When an executive is misclassified, the financial exposure for back-dated annual leave, long service leave, notice periods, and superannuation over multiple years can easily climb into the hundreds of thousands of dollars. Leaders must separate personal frustration from objective business decisions, ensuring that tough internal feedback is met with professional dialogue rather than a swift exit.