Employed or not employed…that is the question.

The courts have again been asked to determine a person’s employment status and the scope of their employment for the purposes of a copyright dispute.

Under section 35(6) of the Copyright Act, if an employee makes a literary, dramatic, musical or artistic work “in pursuance of the terms of his or her employment” the employer is deemed to own any copyright subsisting in the work.  In EdSonic Pty Ltd v Cassidy, the applicant, EdSonic was involved in publishing self-paced education and training materials.  The respondent, Ms Cassidy, had extensive expertise in this area and was engaged to work for EdSonic to assist with the development of vocational and educational training materials.  Subsequently, a dispute arose as to the status of Ms Cassidy’s employment and the ownership of certain works.   

EdSonic argued that Ms Cassidy was an employee of its business between 2001 and 2002, and in the course of that employment made certain works “in pursuance of the terms of her employment”.  These works included educational training materials titled “Developing Oral Communication Skills”, “Producing Simple Documents – Word Processing” and “Prioritising and planning in a legal practice”.  Ms Cassidy, on the other hand argued that she was not an employee of EdSonic and that she created the works before she began working for the applicant.  If an employment relationship did exist, she contended that it was limited to the creation of material for a third party, the Property Council of Australia. 

According to the evidence, the nature of the working relationship between EdSonic and Ms Cassidy was often unclear and appeared to change depending on the nature of the work involved.  Under the initial arrangement between the parties, Ms Cassidy was to receive 600 ordinary shares in the business as well as royalties for material she wrote which was sold to others.  Ms Cassidy did receive a wage for a portion of the work she completed but this was only in relation to a job for the Property Council of Australia.  For that work it was agreed that the Property Council of Australia would pay EdSonic a fee and 85% of that would be paid to Ms Cassidy.  When this job finished, so did the salary.    

To determine Ms Cassidy’s employment status, the court considered the circumstances surrounding her working relationship with EdSonic as well as whether payroll tax, workers compensation insurance and superannuation were paid.  The court also looked closely at the creation of the works in question.  Ms Cassidy testified that the works were created in 1998, and had only been slightly edited after commencing with EdSonic.  The court found that it was “tolerably clear that the works were started and substantially completed by Ms Cassidy while operating her own business and prior to any association with the applicant.”  It was also clear that these works had nothing to do with her work as an employee regarding the Property Council of Australia jobs. 

The Federal Court ultimately determined that even if Ms Cassidy was an employee, she was only an employee in relation to the work for the Property Council of Australia.  Therefore, as the works in question were unrelated to this, they were not made “in pursuance of the terms of her employment”.  The court found that any copyright claim by the applicant would be limited to the work produced for the Property Council of Australia. 

This case once again shows the importance of clarifying the employment relationship between parties before work is commenced.  Employers should ensure that an employment contract specifies when and whether a person is an employee, the scope of that employment and the obligations and rights regarding pre-existing works brought to the table by that employee.  If a person will be performing tasks while not an employee, a written contract should deal with ownership and use of any intellectual property.     

For a full text copy of this decision, click here.

Leave a Reply

Your email address will not be published. Required fields are marked *

16 + eight =