Fair Work Rejects AI CEO’s Dismissal Case
Synopsis
The commission found NeuraGPT's former CEO was a contractor rather than an employee, ending his unfair dismissal claim.
Key Highlights
- The Fair Work Commission ruled that the former NeuraGPT boss was an ‘independent contractor, not an employee.
- This ruling means he has no grounds for an unfair dismissal claim.
- The FWC found that Spangaro had voluntarily signed up to an independent contractor agreement.
A Fair Work Commission ruling found former NeuraGPT chief executive Justin Spangaro was actually an independent contractor and not an employee. The claim was lodged by Spangaro in April 2025, with him claiming that he had been wrongfully dismissed from the Melbourne-based generative AI healthcare startup.
The Contract at the Heart of Controversy
He entered into an independent contractor agreement with NeuraGPT via Spangaro Systems, of which he is a director, in mid-2023. He was asked how a CEO could be engaged as a contractor, told Australian law permitted a contractor to perform the functions of a company chief executive.
When he joined, NeuraGPT had no employees or customers along with zero revenues and assets and was a subsidiary of Innovative GPT Group. Spangaro was to be paid A$250,000 annually plus GST under the agreement and paid monthly on invoice.
Spangaro said he had not been paid from late 2023 until mid-March 2025; more than A$73,000 remained unpaid. He issued a notice of default in March 2025, and subsequently terminated the contract.
Spangaro claimed to the FWC that he had exclusively worked full-time for NeuraGPT, publicly represented himself as CEO of the business and argued that the contractor agreement was a sham.
FWC Decision
NeuraGPT argued that a contractor as the CEO was not uncommon for startups. Although some features of the relationship were consistent with that of employment, Fair Work Commissioner Mark Perica found Spangaro was in fact an independent contractor.
Spangaro’s 40 years of experience in the technology industry, both his MBA and his involvement in negotiating the contract indicated to Perica that he had a complete understanding of what the agreement was all about and he entered into it voluntarily.
The Commissioner stated that Spangaro had relied on the contract to terminate it, and could not reject its terms. The FWC concluded that Spangaro was not an employee under the Fair Work Act and dismissed his unfair dismissal application.
Source: Information Age
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