Agampreet Singh v Arief Family Trust T/A Arva Freight

[2019] FWC 8259

[2019] FWC 8259

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Agampreet Singh
v
Arief Family Trust T/A Arva Freight
(U2019/9384)

COMMISSIONER BISSETT MELBOURNE, 6 DECEMBER 2019

Application for an unfair dismissal remedy – minimum employment period – whether person was an employee or contractor – jurisdictional objection dismissed.

[1] Mr Agampreet Singh (Mr Singh) has made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (FW Act) alleging that he was unfairly dismissed from his employment with the Arief Family Trust T/A Arva Freight (Arva).

[2] Arva have raised a jurisdictional objection to the application of Mr Singh Arva said that Mr Singh had not been employed by it for more than 12 months at the time he was dismissed. Arva submitted that Mr Singh was engaged as an employee by it only from 28 August 2018 until 9 August 2019 when his employment was terminated. Arva submitted that prior to this date, he was a contractor. Arva stated, and it was not disputed, that Arva is a small business.

[3] Mr Singh submitted that he was actually an employee and not a contractor from 3 April 2017.

[4] The FW Act states:

382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

383 Meaning of “minimum employment period”

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.

[5] I am satisfied that Arva is a small business. If Mr Singh was a contractor from 3 April 2014 until 28 August 2018 (when he signed an employment contract) he will not have served a minimum employment period of 12 months and will therefore not be protected from unfair dismissal. If, however, Mr Singh was an employee from the time he commenced with Arva from 3 April 2014 (or some time later such that he completed 12 months as an employee) he will have completed the minimum employment period at the time of his dismissal and will be protected from unfair dismissal such that his application may proceed.

[6] I heard the jurisdictional objection of Arva on 29 November 2019. At the hearing of the matter I granted Arva permission to be represented by a lawyer, being satisfied that the requirements of s.596(2)(b) had been met. Mr Singh was assisted by his brother, Mr Gurpreet Singh.

[7] The matter proceeded by way of hearing.

Evidence

[8] Evidence was given in the proceedings by Mr Agustinus Arief of Arva and Mr Singh.

[9] Mr Arief gave evidence that he runs a small transport company. He said that all of the drivers are ‘sub-contractors’ (contractors) with their own Australian Business Number (ABN). He said he pays drivers for the hours worked.

[10] Mr Arief said that Mr Singh:

•  was advised each day of any jobs for the following day;

•  could refuse the work offered;

•  was not required to advise of absences in advance or seek approval for absences including when he was not available for over three months in early 2018;

•  could sub-contract work. If he could not finish a job he had committed to, he was asked if he had anyone who could finish the job for him;

•  did work long hours at times but by his own choice; and

•  was paid on invoice.

[11] Mr Arief said he was not aware if Mr Singh had personal liability insurance.

[12] Mr Arief agreed that he provided the trucks and paid for fuel for the trucks.

[13] Mr Arief agreed that any goodwill generated by Mr Singh accrued to the company and not personally to Mr Singh.

[14] Mr Arief said that in August 2018 Mr Singh asked to become an employee so an employment contract was negotiated with him.

[15] Mr Singh gave evidence that he could not recall signing an authorisation for ‘recipient created tax invoices’ 1 or a drivers’ code of conduct on 3 April 2017 when he commenced work for Arva. He said that he was never told he was a contractor, was not required to have any insurance, and was not told he could subcontract the work he was given to others.

[16] Mr Singh said that at the time he commenced driving for Arva he negotiated a rate of $28 per hour. He said all taxation arrangements and so on were dealt with by his accountant. He agreed that he did not have his own truck (although he had owned one previously).

[17] Mr Singh agreed that he gained the relevant licenses necessary to drive for Arva in his own time and at his own expense. He said he did not have any public liability insurance and that if he had an accident in the truck he was required to pay the excess on the insurance.

[18] Mr Singh said that in August 2018 he sought to negotiate an employment contract with Mr Arief as he wanted to borrow to buy a house. He negotiated a salary of $32 per hour at that time. Mr Singh agreed that when he signed the employment contract there were a number of obligations placed on him as an employee that were new and had not been placed on him previously.

[19] Mr Singh agreed that prior to signing the employment contract he was not required to give notice of or seek approval for leave. He agreed that when he travelled overseas for over three months in early 2018 he told Mr Arief a couple of weeks before he left that he would away for an extended period.

[20] Mr Singh agreed that he had an ABN which he has had for about five years. He agreed he was also registered by GST.

Employee or contractor?

[21] In On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) 2 (On Call Interpreters) his Honour Bromberg J posed the following question:

Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work, may be posed and answered as follows:

Viewed as a “practical matter”:

(i) is the person performing the work an entrepreneur who owns and operates a business; and,

(ii) in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?

If the answer to that question is yes, in the performance of that particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee. 3

[22] In Jiang Shen Cai trading as French Accent v Do Rozario 4 (French Accent)the Full Bench of the Commission detailed the common law approach to determining if a person is an employee or independent contractor. I have, with respect, adopted that approach in this matter and considered each of the indicia below.

Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like. 

[23] In this case it is apparent that Arva controlled the place of work and the way work was performed. In deciding so, however, it seems that the freight movement industry is such that if the work as required by Arva and its clients required freight moved from point A to B on a given day, then Arva would request Mr Singh to make such a movement. This would be true whether he was an employee or contractor.

[24] This weighs neither in favour a finding of employee or contractor and, in this regard, is a neutral factor in my consideration.

Whether the worker performs work for others (or has a genuine and practical entitlement to do so).

[25] Mr Arief said that Mr Singh was free to perform work for others. I am satisfied that Mr Singh could do so but chose to accept the amount of work offered by Arva which took much of his working time.

[26] This factor weighs in favour of a finding that Mr Singh was a contractor.

Whether the worker has a separate place of work and or advertises his or her services to the world at large.

[27] The evidence before me does not suggest that Mr Singh was restricted in terms of advertising his services. Mr Singh had previously owned a truck and provided services to another company. This had ceased before he commenced his relationship with Arva. Nothing suggests he could not advertise his services if he chose to do so.

[28] Mr Singh does own another business (removals business) with a relative. He also has his own ABN and is registered for GST.

[29] This factor is a neutral consideration.

Whether the worker provides and maintains significant tools or equipment.

[30] Mr Singh did not maintain his own equipment. The trucks he drove were supplied and, it appears, maintained by Arva. Fuel was paid for by Arva.

[31] That Mr Singh maintained his own mobile phone does not detract from this general finding that Mr Singh did not provide or maintain significant equipment, particularly when the size of the trucks is taken into account.

[32] This factor weighs in favour of a finding that Mr Singh was an employee.

Whether the work can be delegated or subcontracted.

[33] The evidence before the Commission is that Mr Singh could delegate work. Mr Arief’s evidence that he could do so was not disputed. Whilst Mr Singh said he was not aware that he could delegate his work the evidence of Mr Arief, which I accept, is that he had asked Mr Singh if he had anyone who could complete jobs where Mr Singh indicated he could not complete the work. It would appear that such conversations between Mr Arief and Mr Singh did not use terms such as ‘delegate’, but this does not support a finding that Mr Singh was prohibited from doing so.

[34] This factor weighs in favour of a finding that Mr Singh was a contractor.

Whether the putative employer has the right to suspend or dismiss the person engaged. 

[35] Arva had no right to ‘dismiss’ Mr Singh prior to him becoming an employee. I accept Mr Arief’s evidence that Mr Singh was advised each day what work was available the following day and asked if he would accept it. To this extent it would appear that if there had been dissatisfaction with Mr Singh’s work prior to the period he was employed Mr Arief would just not have offered work to Mr Singh.

[36] There is no evidence of a contract for services signed by Arva and Mr Singh such that the precise terms of the offering of work or provision of services is not known.

[37] This, however, weighs in favour of a finding that Mr Singh was a contractor.

Whether the putative employer presents the worker to the world at large as an emanation of the business.

[38] The evidence before me suggests that Mr Singh was presented as an emanation of Arva. He drove an Arva truck and, as Mr Arief agreed in his evidence, any goodwill generated by Mr Singh’s work accrued to Arva and not Mr Singh.

[39] This factor weighs in favour of a finding that Mr Singh was an employee.

Whether income tax is deducted from remuneration paid to the worker.

[40] Income tax was not deducted from the payments made to Mr Singh each week.

[41] I am satisfied that Mr Singh did sign a ‘recipient created tax invoice’ authority with Arva which meant he was not required to generate an invoice but rather allowed Arva to generate an invoice as the purchaser (of Mr Singh’s services).

[42] Mr Singh said he could not recall signing the authority although agreed that the signature was his. While I might accept that Mr Singh cannot recall signing the authority I am satisfied that he did do so at the time he was first engaged by Arva.

[43] This factor weighs in favour of a finding that Mr Singh was a contractor.

Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks.

[44] Mr Singh was paid weekly on the basis of the work completed. Payment was made following the generation of the recipient created tax invoice by Arva.

[45] A review of the payments made to Mr Singh each week (through the recipient created tax invoices) indicate:

•  the amounts paid varied week to week;

•  the payments were due to Mr Singh with his ABN; and

•  GST was included. 5

[46] This should be contrasted to the payslips Mr Singh received when he was on an employment contract with Arva. 6 These indicate:

•  Payment was made to Mr Singh;

•  An hourly rate of pay of $32 per hour and annual rate of $66,560;

•  Payment of superannuation; and

•  Deduction of PAYG withholding.

[47] This factor weighs in favour of a finding that Mr Singh was a contractor.

Whether the worker is provided with paid holidays or sick leave.

[48] Mr Singh did not receive any payments for sick leave or annual leave. I accept that in late December 2017 through until March 2018 Mr Singh was not available to provide any services to Arva. Mr Singh was apparently travelling overseas. He did not require approval of Arva to not be available to work and received no payment from Arva during this time.

[49] This factor weighs in favour of a finding that Mr Singh was a contractor.

Whether the work involves a profession, trade or distinct calling on the part of the person engaged.

[50] Mr Singh was a truck driver. I am not convinced that this is a ‘distinct calling’. Little evidence was given on this matter.

[51] This factor is a neutral consideration.

Whether the worker creates goodwill or saleable assets in the course of his or her work.

[52] As mentioned above, the evidence of Mr Arief was that any goodwill generated by Mr Singh accrued to Arva.

[53] This factor weighs in favour of a finding that Mr Singh was an employee.

Whether the worker spends a significant portion of his remuneration on business expenses.

[54] There is no evidence before me to suggest that Mr Singh spent a significant portion of his remuneration on business expenses associated with this particular business. Whilst he may well have spent money earned on his removals business, I do not consider that a relevant consideration in circumstances where the removal business bears no relationship to the work undertaken for Arva.

[55] This factor weighs in favour of a finding that Mr Singh was an employee.

Conclusion

[56] That Mr Singh did not provide his own truck in carrying out work for Arva and the goodwill from the work of Mr Singh accrued to Arva strongly supports a conclusion that Mr Singh was not a true independent contractor but rather was an employee. This must be balanced against the absence of paid leave and that Mr Singh could give one- or two-weeks’ notice that he would not be available for over three months and that this did not disturb the relationship between him and Arva. On his return from his absence Mr Singh took up where he had left off in performing work/providing services to Arva.

[57] A conclusion as to whether Mr Singh was an employee or contractor however is not a simple arithmetic consideration of how many of the indicia fall either way.

[58] As a ‘practical matter’, as put in On Call Interpreters, Mr Singh does not appear to have been operating his own business in the performance of services for Arva. That he did not have his own truck is telling of this. Whilst Mr Singh’s removal business did own vans these were not of the type used by Arva. Further, in carrying out work for Arva, on Mr Arief’s evidence, Mr Singh was seen as a representative of Arva.

[59] I have carefully balanced all of the evidence the parties have put before me. Taking into account the indicia and the practicalities and, considered objectively, I am satisfied that Mr Singh was an employee in undertaking work for Arva and not an independent contractor. Further, I am satisfied that he was an employee from April 2017.

[60] Having found that Mr Singh was an employee from April 2017, I am satisfied and find that he has completed the minimum employment period such that he is protected from unfair dismissal and the Commission has jurisdiction to hear his unfair dismissal application.

[61] The jurisdictional objection raised by Arva is therefore dismissed and an order 7 to this effect will be issued with this decision.

[62] The application will be subject to directions for the filing of materials. This will be sent to the parties in due course.

COMMISSIONER

Appearances:

G Singh for A Singh.

Y Ong of Eastern Bridge Lawyers for Arief Family Trust T/A Arva Freight.

Hearing details:

2019.

Melbourne:

November 29.

Printed by authority of the Commonwealth Government Printer

<PR714899>

 1   Exhibit R1.

 2 [2011] FCA 366.

 3 Ibid at [208].

 4   [2011] FWAFB 8307.

 5   Exhibit R3 attachment R3.

 6   Exhibit R3 attachment R4.

 7   PR714900.