Alan Elsegood v Douglas Sawtell - [2013] FWC 185

[2013] FWC 185

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 394 - Application for unfair dismissal remedy

Alan Elsegood
v
Douglas Sawtell
(U2012/7456)

DEPUTY PRESIDENT SAMS

SYDNEY, 25 JANUARY 2013

Application for unfair dismissal remedy - jurisdiction - whether applicant employee or independent contractor - whether employee dismissed - applicant a person protected from unfair dismissal - applicant dismissed by employer - jurisdiction of the Fair Work Commission enlivened - remittance for further proceedings.

INTRODUCTION

[1] This decision will determine two jurisdictional objections lodged by Mr Douglas Sawtell (the ‘respondent’) in respect to an unfair dismissal application lodged by Mr Alan Elsegood (the ‘applicant’) pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’). Mr Sawtell is the owner and operator of a cattle farm at Myleston (near Coffs Harbour), New South Wales. The applicant and his wife had been living in a cottage on Mr Sawtell’s property. The applicant had been performing work, without payment, on the cattle farm from 7 January 2010. He and his wife left the farm on 21 April 2012.

[2] The applicant filed an application for an unfair dismissal remedy on 24 April 2012. He does not seek reinstatement or re-employment, but compensation under the relevant provisions of the Act. The matter was not resolved at a conciliation conference on 24 May 2012 and was subsequently allocated to Fair Work Australia’s (now the Fair Work Commission (‘the Commission’)) regional jurisdictional roster in Coffs Harbour and listed for hearing on 29 August 2012. The hearing did not conclude in the estimated time and, due to the unavailability of relevant witnesses and the parties’ legal representatives, was relisted for further hearing on 8 November 2012.

Jurisdictional questions to be determined

[3] The two jurisdictional objections raised by the respondent are as follows:

1. The respondent was not the applicant’s employer. The applicant was an independent contractor who offered assistance on the farm in return for lodging.

2. In the alternative, if the Commission determines that the applicant was an employee, then the respondent maintains that the applicant was not dismissed, within the meaning of s 386 of the Act, because the applicant’s employment was not terminated at the employer’s initiative.

[4] At this juncture, I observe that s 396 of the Act requires certain jurisdictional matters to be determined by the Commission before considering the merits of the application. These are:

396 Initial matters to be considered before merits

FWA must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(d) whether the dismissal was a case of genuine redundancy.

THE EVIDENCE

[5] The following persons provided written and oral evidence in the proceedings:

● The applicant;
● Mrs Joan Elsegood, the applicant’s wife, who also lived in the cottage;
● Mr Peter Harvey, the applicant’s brother-in-law and Mrs Elsegood’s brother, who was staying at the cottage just prior to the applicant and his wife leaving the property; and
● Mr Douglas Sawtell, Farm owner and the respondent.

The applicant

[6] The applicant is in his fifties and suffers from a number of health problems, including diabetes, thyroid problems, fatty liver and a leaking heart valve. In his written statement, the applicant gave evidence that in December 2009, he saw an advertisement in the employment vacancies section of the Coffs Coast Advocate. The terms of the advertisement were as follows:

‘FARM HAND CARETAKER

Cattle and Tractor experience, 2 b/r Cottage, good location. Exc. opportunity! Available pre Christmas.’

[7] Shortly thereafter, the applicant made contact with the respondent and they met to discuss the terms under which work was to be performed (‘the December meeting’). The applicant’s evidence is that, at no time were the words ‘contractor’ or ‘independent contractor’ used. Nor did he recall the word ‘casual’ being used in the conversation.

[8] It was the applicant’s further evidence that there was no mention of standardised ordinary working hours at the December meeting. Rather, Mr Sawtell had said ‘If there is work to be done, then you do it. If there is no work to be done, then you have a day off’. He had also indicated that, because the employment was not full time, the applicant could attend to his ‘job club’ (his job network provider) and attendance obligations with Centrelink.

[9] The applicant said that, at the December meeting, Mr Sawtell asked him and his wife how much rent that they were paying for their current premises. Mrs Elsegood replied that it was $200 per week. Mr Sawtell responded in words to the effect of ‘that sounds about what this is worth’. At the time of this meeting, the applicant and his wife were unhappy with their current accommodation and were pleased that the ‘arrangement’ with Mr Sawtell involved ‘free accommodation’. They moved into the cottage shortly afterwards.

[10] The applicant’s evidence was that Mr Sawtell showed him how to operate various farm machinery and directed him as to what work was to be performed and when - including when Mr Sawtell was absent from the farm. The applicant said that Mr Sawtell had never asked him to provide an Australian Business Number (ABN) and that he had never created an invoice or sent a bill to Mr Sawtell for any of the work he performed.

[11] The applicant said that Mr Sawtell gave him and his wife gifts of $1000 cash on two occasions - on 10 December 2010 and at Easter 2011. He also gave the applicant $100 to clean the cottage when they moved in during January 2010. Mr Sawtell also paid for a trip to Broken Hill for the applicant and his wife and gave them $300 spending money, as well as a $200 bond for a rental car. As the rental company did not ask the applicant for this money, they gave it back to Mr Sawtell on their return. Mr Sawtell and his wife also took them out for dinner and drinks at the Urunga Bowling Club ‘every few months’.

[12] The applicant deposed that on two occasions, he had purchased some equipment he used during the course of his work on the farm. The first of these was on instruction by Mr Sawtell, who blamed him for damage to a vehicle’s lights. On the second occasion, the applicant damaged a hose pump while Mr Sawtell was on holiday - a piece of equipment that was required for use before Mr Sawtell’s return. The applicant said that he supplied his own boots and work clothes, which were provided to him by his job network provider.

[13] In November 2010, the applicant complained to his job network provider that he was working long hours, for no pay. His provider suggested that if Mr Sawtell paid him a wage, it would be subsidised by the Government. However, this would require Mr Sawtell to fill in some forms. When Mrs Elsegood approached Mr Sawtell in relation to wages and the Government subsidy, he told her that he was ‘not interested’. On being told this, the applicant did not attend for work for the next twelve days.

[14] Shortly after, on Monday 29 November, Mr Sawtell knocked on the cottage door and said ‘I’ve come for the rent’. The issue of subsidised wages was raised again during this conversation and Mr Sawtell said ‘I don’t want anything to do with it. If you don’t want to work, piss off.’ Because they had no place to live and no money, they had no choice but to remain on the farm and for the applicant to continue working for no pay.

[15] In other evidence, the applicant said that on one occasion, Mr Sawtell raised the issue of Mrs Elsegood working on the farm, saying:

‘When we are out in paddocks at lunchtime you should tell Joan to let the chooks out so you don’t have to go back. You should also tell her to chuck out that fucking computer and go and weed the vege garden. And when there are cattle in the home paddock, she should be checking the troughs. If you don’t tell her, I will. She’s part of the team.’

[16] The applicant said that on 20 April 2012, as he and Mrs Elsegood were seeing off Mr Harvey, who had been staying with them, Mr Sawtell drove up to the cottage and an exchange occurred to the effect of the following:

Sawtell:	‘Why don’t you start work before I come up? You don’t have to wait until I come up here to get out to work.’
Applicant:	‘I was seeing my brother in law off.’
Sawtell:	‘Fuck your brother in law.’
Applicant:	‘Fuck you too.’

The applicant said that as he started to walk away, Mr Sawtell called out to him, saying: ‘Have you got the shed keys?’ He walked back and handed the keys to Mr Sawtell, who was walking towards him. The applicant said he then went to the cottage to discuss with his wife and Mr Harvey what had just happened. He then walked back outside. Mr Sawtell was outside the shed and said to him: ‘Don’t come out here, go and hold your fucking brother-in-law’s hand. I want you off my property. I want you out this afternoon.’ The applicant understood this to mean that he was terminated. He went back to the cottage to tell his wife and Mr Harvey what had happened. Mr Harvey went out to speak to Mr Sawtell and when he returned, he said words to the effect of ‘I have got you a week before you have to go’.

[17] On Saturday 21 April, the applicant found a letter left on the front porch of the cottage which read as follows:

‘RE: Termination of caretaker ...

On the 23.12.2009 in reply to an advertisement in the Advocate your [sic] attended the farm property at 2pm to discuss your credentials, the property and general broad expectations associated with the position. You inspected the 2 bedroom cottage, being the accommodation provided. On 30.12.2009 I notified you of your acceptance to the position.

On the 7.1.2010 you moved into the cottage.

Occupation of the cottage is directly dependant on continuation in the position you accepted.

On 20.4.2012 as a result of an incident between you and the writer both mutually agreed to immediately terminate your position and responsibilities. You said that you were already looking for another place.

At time of vacating the premises ensure:

1. Remove all your property old/new in use or not from the property.

2. Leave the property in clean condition, inside and outside.

3. Repair or replace any damage to the property caused directly by you.

4. Hand all keys to the writer.

Inspection of and vacation of property

Vacate the property by 5pm on Friday 27th April 2012

Make yourself available for an inspection of the property at 3pm on 27.4.2012.

Regards and best wishes for your future.’

The applicant and his wife left the farm shortly afterwards.

[18] In cross-examination, the applicant admitted that although he could not recall whether the words ‘independent contractor’ or ‘casual’ were used at the December meeting, he also did not remember if Mr Sawtell had used the word ‘employee’. He admitted that, during these interviews with Mr Sawtell, he had only told him about his diabetes, and not about his other health conditions. This was because he did not think that they would affect his ability to do work on the farm.

[19] The applicant acknowledged that he was ignorant of the legal requirement for an employer to pay superannuation on his behalf and to report his employment to the Tax Office. He believed it was not necessary to report his employment to the Tax Office because he was not getting paid. However, he thought he was employed by Mr Sawtell and this included being able to live for free in the cottage.

[20] The applicant accepted that Mr Sawtell did not show him how to perform some tasks around the farm, such as harrowing, slashing and mulching. However, Mr Sawtell would always watch him to make sure that he was doing the work correctly. He did not need to be shown how to mow or use the whipper snipper, clear fallen trees, fire weeds, lantana or thistles. However, he was told when to do these tasks. Mr Sawtell had shown him how to do the troughs and tanks, how to build shelves, how to do the gardens, how to install and maintain fences and how to lay pipes.

[21] The applicant said that he understood that an employer was responsible for all expenses in an employment relationship, but he only bore expenses in the instance related to the trailer lights (see para [12] above) at the insistence of Mr Sawtell. He added that Mr Sawtell had left him a sum of money to cover expenses while he had been away, and asked him to keep receipts. He did not provide these receipts to Mr Sawtell, but kept them in a jar. He said that there was approximately $10 left over. He did not return it, because it was later spent on things like petrol.

[22] The applicant deposed that his hours of work were never discussed and that ‘after a time you know when he says you work on the farm, I wait for him to come up and then (indistinct) to go outside to work’. He said that, on most days, he never knew what he was going to do in advance until Mr Sawtell drove up to the shed near the cottage and he would then go to work.

[23] The applicant accepted that if he had been absent for twelve days (see para [13]) in any other job, he would have been fired. He agreed there were no set hours for his work. If he didn’t finish a specific job, he knew he would have to do it the next day. He asked, rhetorically, that if Mr Sawtell did not control his work, ‘Well who did then, because I didn’t know what to do half the time?’ When Mr Sawtell was away, he knew what needed to be done, because he had been shown before what was required. On one occasion, when Mr Sawtell was away for some weeks, Mr Sawtell gave him a list of tasks to complete in his absence. In addition to the list, he also contacted Mr Sawtell by email and telephone for instructions. In the applicant’s words, ‘He was running it, I wasn’t running the farm.’ When he was required to work at another farm by his job network provider, he did not ask permission from Mr Sawtell, because Mr Sawtell already knew that this was required by Centrelink.

[24] The applicant conceded that he said ‘I’ve been looking for another house’ during the argument on 20 April 2012,. However, this statement was not true and was said just to ‘get back’ at Mr Sawtell. He and his wife were in no position to move. However, being asked to leave was no real surprise to him, as tensions between him and Mr Sawtell were such that he expected things to ‘blow up’ soon. He also admitted that in the course of a hearing in other proceedings before the New South Wales Consumer, Trade and Tenancy Tribunal (CTTT), his solicitors had prepared a submission stating that their arrangement was terminated mutually. However, he explained that he had not known of that submission at the time.

Mrs Joan Elsegood

[25] In her written statement, Mrs Elsegood gave evidence that she was present at the meeting between her husband and Mr Sawtell in December 2009. She does not remember the use of the word ‘casual’ and there was no mention of the word ‘contractor’ or ‘independent contractor’. There was no mention of an ordinary working period of 2.5 days a week. Mr Sawtell had said ‘when there is work to be done on the farm it is to be done, and if not, there is no work’ and ‘I want someone to help so that I do not have to work 7 days a week.’

[26] Mrs Elsegood insisted that her husband worked for longer than 2.5 days a week, including work on weekends. A few months into the arrangement, when she saw Mr Sawtell sitting in the tractor near the garden, she asked him, ‘What happened to not working seven days a week, Doug?’, to which he responded, ‘I’m still trying to work that one out.’ She remembered an incident when they had been invited to a barbecue and friends had arrived to pick them up. Mr Sawtell had arrived and demanded that her husband work, meaning that they had to postpone attendance at the barbecue.

[27] Mrs Elsegood gave evidence that she had performed certain duties around the farm, such as watering the troughs and letting the chooks out, after learning of Mr Sawtell’s view that she should be doing some work around the farm.

[28] In November 2010, Mrs Elsegood had a conversation with Mr Sawtell about the possibility of him paying her husband wages, for which he would be fully subsidised by the Government. He refused to be involved. When her husband learnt of Mr Sawtell’s response, he did not work ‘for a week’. On Monday 29 November, Mr Sawtell came to the cottage and spoke to them about the time her husband spent working. In the course of this conversation, he said words to the effect of ‘If you ever leave here, you’ll realise how good you had it’ and ‘If you don’t want to work, piss off’.’ In re-examination, Mrs Elsegood said that her husband had asked Mr Sawtell three times when he wanted him to leave and that he ‘just sort of talked around it.’

[29] Mr Elsegood deposed that when her brother was leaving the farm 20 on April 2012, after spending a period staying at the cottage, Mr Sawtell drove past the cottage and parked near the shed. When her husband went out to work, she heard raised voices and swearing. Her husband then came back into the cottage and said words to the effect of: ‘Doug said “Why weren’t you out working” I told him I was seeing my brother in law off and he said fuck your brother in law”.' Her husband went back outside and when she looked out the window, she saw Mr Sawtell waving his arms. Her husband came back into the cottage and said words to the effect of: ‘Start packing, we’ve got to be out by tonight’. She replied, ‘How the heck are we going to do that, we have nowhere to go, nowhere to put our furniture.’

[30] Mrs Elsegood said her brother then went out and spoke to Mr Sawtell. When he came back to the cottage, he said: ‘I’ve talked to Doug. I told him it was unfair because you had no money and did not get paid by Centrelink for a couple of weeks. I asked him to give you two weeks and he said he’d give you a week.’

[31] Mrs Elsegood claimed that while she was not able to make out exactly what was said between her husband and Mr Sawtell from her view through the window, she could see that ‘there was something going wrong’.

[32] In cross examination, Mrs Elsegood agreed that her husband had never received any paid personal or annual leave. She acknowledged that what they had gained from the arrangement (accommodation in the cottage) did not change according to the number of hours that her husband worked. However, she noted that when her husband stopped working for twelve days, Mr Sawtell came and asked for rent. In re-examination, Mrs Elsegood agreed that they had once gone on a holiday to Broken Hill paid for and organised by Mr Sawtell.

Mr Peter Harvey

[33] Mr Harvey said that when he was preparing to leave the cottage on the morning of 20 April 2012 after having stayed with his sister for about four weeks, he observed Mr Sawtell drive past and park near the shed. He then observed his brother-in-law and Mr Sawtell in a ‘heated discussion’. His brother-in-law came back into the cottage and said that there had been an argument. Shortly thereafter, while moving his possessions between the car and the cottage, Mr Harvey observed his brother-in-law come out of the cottage and walk towards Mr Sawtell. At this time, Mr Harvey’s car was about 20 metres away from where they were standing. He heard Mr Sawtell say ‘Don’t come over here, go and hold your fucking brother-in-law’s hand’. His brother in law replied, ‘Fuck you’, and Mr Sawtell said, ‘I want you and Joan off my property tonight and gone by the morning.’

[34] Mr Harvey said he then approached Mr Sawtell and said words to the effect of ‘Mate, that’s a bit unfair, they’ve got nowhere to go, they’ve got no money, can’t you give them a couple of weeks?’ Mr Sawtell replied: ‘I’ll give them a week.’ Mr Harvey said that he and Mr Sawtell had a conversation lasting over thirty minutes, in which Mr Sawtell expressed his dissatisfaction in relation to the applicant, including the quality of his work, his lack of experience and the fact that he was never working before Mr Sawtell arrived at the cottage. Mr Harvey said that Mr Sawtell also told him that he had directed his brother-in-law to stay away from one assignment at another farm so that he could help him on the farm.

[35] In cross examination, Mr Harvey deposed as follows:

‘[T]he thing that I looked at is when ... Mr Sawtell comes to work then Alan goes out and starts doing what they have to do. That, for being the time that I had been there in that four weeks, that was the thing that Alan used to do, other than my sister letting the chooks out. But when Mr Sawtell would come up the driveway, here comes Mr Sawtell, okay, better go and put my boots on.’

Mr Douglas Sawtell

[36] In his written statement, Mr Sawtell said that in December 2009, he placed an advertisement with the Coffs Coast Advocate for a farm hand/caretaker (see para [6]). In the following days, he received a number of phone calls in response to the advertisement, one of which was from the applicant. During a conversation with him, Mr Sawtell had made it clear that the arrangement was not for a paid position, but was for assistance on the farm in exchange for accommodation. He subsequently met the applicant and Mrs Elsegood on 23 December 2009.

[37] Mr Sawtell keeps a detailed diary as part of his day to day management of the farm. Extracts were tendered as evidence. On the date of the meeting with the applicant and his wife, Mr Sawtell made the following note in the diary:

‘2pm meet with Allan and Joan ELSGOOD [sic] ... 55 old with 57 old wfie [sic]. Seems OK and willing. Provicded [sic] CV ...shows lots of experience. Renting now @ $200 p-w. Keen to start ASAP if accepted said they want to get out of the premises they are renting and Alan wants some exercise and likes field work. Said at the moment they have difficult neighbours. Shown through the house. Explained in detail that I was looking for only only [sic] casual assistance as I work full time on farm and if I were away to mainly look after general farm security. Alan asked how much work was expected. I explained that it was difficult to say as no set time or types of work and weather played a big part of access to flat river front land but expected about 2.5 days a week on average. My value of the hose was was minium [sic] of $280.00 pw and at current basic rate it equated to about 2.5 days a week. Alan was experienced in rental and I assumed made his own assessment of the package and weighed up the work-rent situation. Alan said they were on welfare benefits and that he would need to attend their offices regularly and that he was on job search program. I said that I had no problem with his obligations. I said that if he decided he did not like it he could leave anytime - no constraints. We discussed the need to look after lawns around the house and wipper snipping to the waterfront - They asked about vegi gardening and I told them plenty of room. They both seem very pleased with the situation when they left.’

[38] Mr Sawtell telephoned the applicant on 7 January 2010 and said ‘If you are still interested in the arrangement, I am prepared to give you a go.’ The applicant agreed and asked if he could come out the following day to tidy the house. This was agreed and the applicant and Mrs Elsegood moved in on 20 January 2010. In these early conversations, there was no discussion of tax, employment or superannuation. Nor did the applicant mention any of his medical conditions (see para [6]).

[39] Mr Sawtell deposed that the applicant never asked for, or discussed, hourly rates. He was never paid wages or a salary. Mr Sawtell had occasionally given the applicant cash gifts in the amount of $1,000 when he was concerned that they were low on money (4 May 2010, 8 December 2010, 13 April 2010, 27 July 2011 and 2 December 2011). Additionally, on hearing that the applicant and his wife wanted to go on holiday to Broken Hill, using their free pensioner rail travel ticket, Mr Sawtell paid for a number of expenses, including car rental at Broken Hill, two night’s accommodation in Sydney, and eight nights’ accommodation in Broken Hill. This amounted to $1,566.00in expenses, and he gave the applicant and his wife an additional $1,000 as a gift on 4 May 2010 (see above).

[40] Mr Sawtell said that at no time during the life of the ‘arrangement’, did he pay the applicant annual leave, personal leave or long service leave. He did not represent the applicant to anyone as his employee. Mr Sawtell was the farm’s external contact in relation to suppliers and cattle sale agents. He never paid tax on the applicant’s behalf, nor was he asked to do so. He was not aware if the applicant declared his accommodation as a fringe benefit.

[41] Mr Sawtell acknowledged that there were some times when the applicant worked more than others, especially during the warmer months. During these times, out of 30-35 hours per week worked on the farm, he had contributed 20-25 hours per week and the applicant 10-15 hours per week. During the colder months, the farm required approximately 12-15 hours per week. Mr Sawtell had contributed approximately half of these hours.

[42] Mr Sawtell claimed that the applicant set his own hours and the days he worked. He had the ability to take time away from the property, without reference to him, in order to attend welfare agencies, job interviews and work at other locations. The applicant would only advise him where his other appointment clashed with a predetermined job. Mr Sawtell noted that the applicant would occasionally decline to take on a job where it clashed with another appointment and on these occasions, the applicant was never required to seek permission from him. Mr Sawtell had recorded a number of these incidents in his diary. He said the applicant worked up to two days per week at Rose Farm in Nambucca from 21 March 2012.

[43] Mr Sawtell’s evidence was that where a job needed doing and he did not want to do it personally, he would ask the applicant if he could do it. If the applicant agreed, he would not offer him any further supervision or direction. He noted one occasion where the applicant agreed to wick-wipe a paddock. He observed the applicant driving the tractor erratically over the area, rather than by way of a methodical spiral from the boundary into the centre of the paddock. He did not correct or interrupt the applicant’s work. In oral testimony, Mr Sawtell deposed that he never showed the applicant how to operate anything, except the chemical mixture for the weed wick wiper. Mr Sawtell recalled two occasions when the applicant was using a trailer when the rear blinker lights were broken. The applicant had replaced them without reference to him.

[44] Mr Sawtell deposed that, sometime around the date when the applicant and his wife moved into the cottage, he had asked him if he had all he needed to do farm work. The applicant said that his job network provider supplied him with boots, gloves and work clothes. The applicant was not required to purchase any plant or equipment and did not, to Mr Sawtell’s knowledge, incur any expenses in the course of his work on the farm.

[45] Mr Sawtell deposed in oral evidence that he had never suggested that Mrs Elsegood should work on the farm. He had not said she was not capable of doing any work. He also did not accept that Mrs Elsegood ever queried him about her husband working ‘seven days’ a week. He denied the conversation deposed to by Mrs Elsegood in para [26] above.

[46] Mr Sawtell said in his written statement that on the morning of 20 April 2012, he arrived at the cottage to fulfil a previous arrangement with the applicant to refit a plate under the gearbox of the vehicle to be connected to the farm’s trailer. He had made the following diary note of what transpired:

‘Arrived farm 9:30am Alan came out shortly after and had not got Toyota and trailer ready to give cattle molasses - nor fixed the guard under the Toyota ... said he had been saying good bye to Joans brother and was annoyed that I had queried him - words started for both sides Alan clearly not happy with farm life and said he had been looking for another house - I said that he should leave ASAP - Joans brother had a lot to say and wanted me to pay Alan 2 or more days weekly to assist them and as he is not well not to work Alan excessively’

[47] Mr Sawtell said that he could not recall the exact words that were said during the altercation, but agreed he did raise the applicant’s poor performance in relation to certain tasks. In response, the applicant swore at him. Mr Sawtell insisted he did not indicate to the applicant that he was no longer welcome or that he wished to terminate the arrangement. The applicant said ‘I’ve been looking for another house. You can go to hell. I am out of here’, and threw the farm keys at him. As he headed towards the cottage, Mr Sawtell said, ‘Alan that’s OK with me, let’s call it quits’. He added that he wanted the applicant and his wife out of the cottage ‘ASAP’. When the applicant walked into the cottage, he violently slammed the door.

[48] In further oral evidence, Mr Sawtell said that he did not accept that the applicant’s contribution to the farm was ‘significant’ and said that he had not had any assistance on the farm since the applicant had left. He also said that as he had earlier refused permission for Mr Harvey to live in the cottage, he was angry because he had been there while he was away.

[49] In cross examination, Mr Sawtell stated that the advertisement he had placed in the Coffs Coast Advocate was not a job advertisement. It was placed under the heading of primary industry for that reason. He did not accept that the advertised position was for an employee.

[50] Mr Sawtell believed that although the applicant provided a CV rather than a tender, his purported status as an experienced renter meant that his acceptance of the accommodation constituted an indirect quote for his services. He admitted that he had previously employed other casual persons for wages, prior to the applicant coming to live on the property. He further admitted that he had referred to a person in his diary as a ‘contractor’ in relation to a roofing quote. When pressed to distinguish between the position of this person as a ‘contractor’ and that of the applicant, Mr Sawtell said:

‘The difference is that Alan was in occupation on the property on a basis of an agreement to provide services. The shed guy had nothing like that. He quoted for a shed along with other people quoting, to come in off the street as an independent person supply and install a particular product.’

Although Mr Sawtell subsequently referred to the applicant in a letter to the applicant’s solicitor as ‘a casual employee’ covered by the Pastoral Award 2010 [MA000035], he explained that this was because he was a layman and had used the incorrect terminology. He deposed:

‘I did not at that time and I still don’t know the legal difference between [an independent contractor and an employee]. I know the common meaning of a contractor as that shed guy.’

[51] In further cross-examination, Mr Sawtell did not accept that he had ‘trained’ the applicant as a farmhand. However, he conceded that the applicant may have gained experience over the two years that he worked on the farm. He agreed that he left a list of tasks for the applicant to complete when he went on holiday to Bali. This did not constitute a direction; rather it was intended to be a confirmation of discussions he had had with the applicant before he left, and a reminder of certain situations at the farm, noting that some of the tasks on the list had already been performed. Mr Sawtell said:

‘I’m saying to him, as I’ve said before, this whole document is purely a statement of a discussion that we’ve had in relation to the property whilst I’m away. You can see here that whilst I was away there was lots of time in there that nothing had to be done or looked at whatsoever. ... It’s a discussion of what was necessary, and it was a reminder so that he didn’t make any mistakes.’

Mr Sawtell was at pains to emphasise that he did not regard this list as supervision or direction; but rather as comment or reminders. He said if the applicant did not work, he was not going to make him work.

[52] Mr Sawtell was questioned as to why certain absences of the applicant were identified in his diary as ‘unnotified absences’ and some were ‘planned absences’. He did not accept that this reflected that the applicant was obliged to tell him when he would be away. Mr Sawtell said that references to the applicant as being a ‘no-show’ or references to absences merely reflected his habit of recording most things that happened on the property.

[53] Mr Sawtell did not accept that the applicant was asking to be paid wages when Mrs Elsegood approached him in relation to the job network provider’s proposal. He deposed:

‘It was nothing to do with the payment of wages at all. It was part of a scheme that he and the Key people were trying to get in vogue. I mean, if not - you know, if Alan was that way inclined at the time, which I’m sure he wasn’t, but if he was he could’ve simply left and got a job. He could’ve said to me, “I’ll move out of the house and come back and will you employ me?”’

Mr Sawtell denied that he had said ‘No, I don’t want to get involved with the government, and if you don’t like it you can piss off.’

[54] On the day of the confrontation on 20 April 2012, Mr Sawtell conceded that he was unhappy the applicant was ‘sub-letting’ the cottage to his brother-in-law. He also conceded that he was unhappy that the applicant did not have the Toyota ready for repairs that day, as it had been previously agreed between them that he would do so. Mr Sawtell now accepted that he had raised his voice and that he ‘probably’ had sworn at the applicant. However, he could not remember the details of the conversation.

[55] Mr Sawtell did not accept that the conversation with Mr Harvey went for half an hour - at most it was for one or two minutes. He also did not accept that he had told Mr Harvey that ‘Every morning when I drive up he is just sitting there on the computer’. He observed that, while he had not made this statement, it was a correct representation of the facts, as he saw them. Mr Sawtell did not accept that the applicant was compelled to work when he drove up to the cottage. He was always willing to do so and he was merely ‘prompting’ him, rather than controlling his working hours. He further denied that he had told the applicant that he needed him on a day that he had arranged to work at the Rose Farm. He denied being unhappy about that arrangement.

FIRST JURISDICTIONAL OBJECTION - DISTINGUISHING BETWEEN AN EMPLOYEE AND AN INDEPENDENT CONTRACTOR

SUBMISSIONS

For the respondent

[56] Mr J Clowes, Solicitor, referred in his written submissions to the relevant statutory provisions to argue that Mr Sawtell was not a national system employer within the meaning of s 380 of the Act. Even so, he said that neither the Act or the Regulations provide guidance on when a person employs an individual. In these circumstances, reference must be had to case law; See: Hollis v Vabu Pty Ltd (2001) 207 CLR 21 (‘Hollis v Vabu’).

[57] Mr Clowes submitted that on the evidence before the Commission, the relationship between the applicant and the respondent was best characterised as one of contractor/principal, rather than employee/employer. As such, the applicant could not have been dismissed by the respondent, pursuant to s 396 of the Act.

[58] In oral submissions, Mr Clowes criticised the applicant’s case and said that the task for the the Commission was to make findings of fact on each of the indicia identified in Hollis v Vabu and weigh or assess each finding in terms of the relationship viewed as a whole. Mr Clowes put that the Commission would prefer the evidence of Mr Sawtell over that of the applicant in circumstances where the applicant kept no records; whereas Mr Sawtell had kept detailed records. Mr Clowes said that the applicant’s evidence was often vague and uncertain. He had said that his relationship with Mr Sawtell had been good, but then that he had been ‘abused’ for two years. He had also said he had told Mr Sawtell of his medical conditions, but then admitted he had only told him of one. He had said he had been shown how to use the farm equipment, but then that he already knew how to operate such equipment.

[59] Mr Clowes submitted that if the issue of witness credibility and recollection were issues in this case, the applicant’s view of the relationship would not be accepted. Nevertheless, Mr Clowes said that in looking at the spectrum of the relationship, the significant indicia point to a contractor/principal relationship. These indicia included:

● on one occasion the applicant was left to manage the farm for seventy days;
● the applicant had minimal training;
● on one occasion, the applicant chose not to work for ten days;
● the applicant provided his services to other employers without requiring Mr Sawtell’s permission;
● Mr Sawtell did not represent the applicant as his employee;
● no tax or superannuation was paid on the applicant’s behalf;
● the applicant incurred expenses in the course of his work;
● the applicant was not involved in any risk. He was ‘paid’ accommodation at a set figure irrespective of whether he worked hard or not, or for how long;
● there was no expectation of ongoing work; and
● the applicant’s hours were variable.

For the applicant

[60] Mr S Howard, Solicitor submitted that the applicant was not an independent contractor and relied on the well known High Court authorities of Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 13 (‘Stevens v Brodribb’) and Hollis v Vabu as to the indicia of the relationship which distinguishes a true employee from an independent contractor. I shall return to these authorities shortly.

[61] Mr Howard emphasised the extent of control Mr Sawtell had in the supervision and direction of the applicant in his work. He put that Mr Sawtell:

a) trained the applicant and showed him how to use farm machinery;

b) managed the applicant’s hours of work;

c) directed what work was to be performed and when;

d) supervised the applicant at all times;

e) required the applicant to assist him with certain tasks; and

f) became annoyed and angry if the applicant did not perform the work according to his directions or was unable to do work when Mr Sawtell wanted it done.

[62] In addition to the control test, Mr Howard referred to Abraham Abdalla re Abraham Abdalla v Viewdaze Pty Ltd t/as Malta Travel [2003] AIRC 504 (‘Abdalla v Viewdaze’) for other indicia of determining the true nature of the employment relationship.

[63] Nevertheless, Mr Howard agreed the applicant had performed a few casual labouring jobs organised through his job network provider, Key Employment, as required by Centrelink. While Mr Sawtell had agreed to this, he still wanted the applicant ready and available to work for him when required. The applicant did not actively seek work as an entrepreneur or independent contractor and the other work, in any event, was not ongoing. The applicant had never advertised his services to the ‘world at large’, as it was very difficult for him to leave the farm. The few casual jobs he obtained were not sought by him, but required by Centrelink. Mr Howard added that all vehicles, machinery, tools and equipment were owned by Mr Sawtell. Owning and wearing work clothes and boots are a requirement for all jobs.

[64] Mr Howard submitted that, despite the exploitative nature of the employment relationship, there was no suggestion or possibility that the applicant could delegate or subcontract his work and he never did so. There was no evidence that the applicant presented himself to others as anything other than Mr Sawtell’s employee. Indeed, this was how third persons, including delivery suppliers, friends and neighbours viewed the relationship.

[65] Mr Howard noted that the applicant was not paid for his work and this was in breach of various laws and awards. It was perverse to argue that Mr Sawtell’s failure to comply with his legal obligations should, in hindsight, point to the applicant as an independent contractor. Mr Howard added that accommodation could not, in any way, constitute remuneration by means of wages or salary on completion of certain tasks. The same could be said of Mr Sawtell’s failure to provide proper sick pay or annual leave. While it was accepted that Mr Sawtell made occasional cash payments to the applicant and paid for some holidays, this cannot absolve him from his legal obligations, let alone establish a contractor arrangement.

[66] Mr Howard observed that there was no objective evidence pointing to the applicant as a contractor. There was no tender, quotes for work, contracts, leases or a tenancy agreement. The applicant had no ABN. He did not invoice Mr Sawtell, nor was he asked to. Mr Howard said the applicant had no trade or professional qualifications or licences. He was a farm assistant and could not possibly have created goodwill or saleable assets in the course of his work. He had no business expenses, except for paying for a broken light cover, which Mr Sawtell had blamed him for. Importantly, Mr Sawtell always treated the applicant as an employee under his direction and supervision and even said so. He now sought to change his position to avoid liability and penalties for breaches of various Acts and the Award.

[67] In oral submissions, Mr Howard described Mr Clowes’ approach to the respondent’s objection as overly technical. Historically, the Commission has merely applied the relevant indicia in a practical commonsense way to the particular facts of the case. The significant test in this case was the high level of control Mr Sawtell had over the applicant, as his own diary demonstrates. He appeared to be a very controlling person.

CONSIDERATION

Statutory context

[68] It is trite to observe that a person is only protected from unfair dismissal under the Act, if the person is an employee as defined. This notion is further qualified by the specific requirements of s 382 of the Act, which are expressed as follows:

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.

The meanings of ‘minimum employment period’ and ‘period of employment’ are defined at s 383 and 384 respectively.

[69] If I find that the applicant was an employee for the purposes of s 382, the evidence is that:

a) he would have completed a minimum employment period of at least 12 months;

b) he was likely covered by a modern award; namely, the Pastoral Industry Award 2010 [MA000035]; and

c) the applicant’s earnings were obviously less than the high income threshold.

The applicant would therefore be a person protected from unfair dismissal. I would wish to emphasise that the definition of an employee does not require an employer to pay wages to the person, albeit that such a scenario must be considered to be extremely rare.

[70] There is a well developed line of authority as to the principles to be applied by the Commission when determining whether a person is an employee or an independent contractor. In most cases, that assessment will not always be straightforward; indeed, it may be unclear or ambiguous. There will often be some indicia which point in one direction and other indicia which point to the alternative conclusion. An answer will be found, when balancing all of the indicia in the context of the relationship as a whole with particular reference to the nature of the work performed and the manner in which it is performed.

[71] A Full Bench of FWA in Jiang Shen Cai trading as French Accent v Do Rozario [2011] FWAFB 8307 recently summarised the general law approach to distinguishing between employees and independent contractors with particular reference to the High Court authority in Stevens v Brodribb. At para [30], the Full Bench, in a lengthy passage, said:

‘The general law approach to distinguishing between employees and independent contractors may be summarised as follows:

1. In determining whether a worker is an employee or an independent contractor the ultimate question is whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part? This question is concerned with the objective character of the relationship. It is answered by considering the terms of the contract and the totality of the relationship.

2. The nature of the work performed and the manner in which it is performed must always be considered. This will always be relevant to the identification of relevant indicia and the relative weight to be assigned to various indicia and may often be relevant to the construction of ambiguous terms in the contract.

3. The terms and terminology of the contract are always important. However, the parties cannot alter the true nature of their relationship by putting a different label on it. In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole: the parties cannot deem the relationship between themselves to be something it is not. Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.

4. Consideration should then be given to the various indicia identified in Stevens v Brodribb Sawmilling Co Pty Ltd and the other authorities as are relevant in the particular context. For ease of reference the following is a list of indicia identified in the authorities:

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.

Control of this sort is indicative of a relationship of employment. The absence of such control or the right to exercise control is indicative of an independent contract. While control of this sort is a significant factor it is not by itself determinative. In particular, the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where the work involves a high degree of skill and expertise. On the other hand, where there is a high level of control over the way in which work is performed and the worker is presented to the world at large as a representative of the business then this weighs significantly in favour of the worker being an employee.

“The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.” “[B]ut in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. That was made clear in Queensland Stations Pty. Ltd v Federal Commissioner of Taxation, a case involving a droving contract in which Dixon J observed that the reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.”

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

The right to the exclusive services of the person engaged is characteristic of the employment relationship. On the other hand, working for others (or the genuine and practical entitlement to do so) suggests an independent contract.

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

Whether the worker provides and maintains significant tools or equipment.

Where the worker’s investment in capital equipment is substantial and a substantial degree of skill or training is required to use or operate that equipment the worker will be an independent contractor in the absence of overwhelming indications to the contrary.

Whether the work can be delegated or subcontracted.

If the worker is contractually entitled to delegate the work to others (without reference to the putative employer) then this is a strong indicator that the worker is an independent contractor. This is because a contract of service (as distinct from a contract for services) is personal in nature: it is a contract for the supply of the services of the worker personally.

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

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

Typically, this will arise because the worker is required to wear the livery of the putative employer.

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

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

Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks. Obviously, in the modern economy this distinction has reduced relevance.

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

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

Such persons tend to be engaged as independent contractors rather than as employees.

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

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

It should be borne in mind that no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.

5. Where a consideration of the indicia (in the context of the nature of the work performed and the terms of the contract) points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. However, a consideration of the indicia is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The ultimate question remains as stated in (1) above. If, having approached the matter in that way, the relationship remains ambiguous, such that the ultimate question cannot be answered with satisfaction one way or the other, then the parties can remove that ambiguity a term that declares the relationship to have one character or the other.

6. If the result is still uncertain then the determination should be guided by “matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability” including the “notions” referred to in paragraphs [41] and [42] of Hollis v Vabu.

[72] Before dealing with the facts of this case in the context of the above indicia, I wish to make some preliminary comments.

[73] It seems tolerably clear that when entering into the relationship they did in 2009, both the applicant and Mr Sawtell understood the financial basis of that relationship, but misunderstood its practical application from the other’s point of view. Of course, this was a very unusual relationship; indeed, one might say, almost feudal. In exchange for working on the farm for no wages and the occasional cash gift, the applicant and his wife received free lodging, valued at around $200 a week.

[74] At this point, I do not accept the respondent’s submission which, I might observe, was contrary to his own evidence, that the applicant worked 2 ½ days a week (see para [41]). In my view, the evidence disclosed that Mr Sawtell was getting much more out of the relationship for his forfeiture of $200 rent than the applicant ever received in return. Incredibly, Mr Sawtell even required Mrs Elsegood to ‘pull her weight’ on the farm, and perform tasks as he directed. That is not to say that the applicant did not enjoy the work or that he did not initially enjoy a reasonable relationship with Mr Sawtell. Until the relationship soured and ultimately ended, it seems that both of them were willing to accept the mutuality of the relationship.

[75] There can be little doubt that Mr Sawtell was a firm and meticulous overseer of his property. He kept detailed records of daily events on the farm and in his personal life (perhaps understandably, given he was a former police officer). I have no doubt that he expected the farm to be run exactly as he wanted it and how he directed it to be run. With this in mind, I do not cavil at all with the applicant’s evidence that he was, at all material times, under the direction and supervision of Mr Sawtell. He did what he was told and when by him and was criticised by him if he made any mistakes or deviated from Mr Sawtell’s directions. Even when Mr Sawtell was away, he gave him directions before he left and the applicant told him what he was doing; including even inquiring of him as to how work might be affected if it was raining.

[76] It follows that, despite Mr Clowes’ valiant submissions to the contrary, I am in absolutely no doubt that the applicant was an employee and not an independent contractor. In so concluding, I make the following findings on the evidence:

● at all relevant times, Mr Sawtell had control over the manner in which the applicant worked on the farm, how and where the applicant worked and insisted on the completion of various tasks he directed the applicant to perform;
● while the applicant did perform work at other places for very short periods, it was at the direction of his employment network provider and not at his own initiative. In any event, Mr Sawtell made clear he was not happy with this interruption to his employee’s work;
● the applicant did not have a separate place of work and worked exclusively on Mr Sawtell’s property. There was no evidence that he ever did, nor was minded to advertise his services to ‘the world at large’;
● all tools and equipment used by the applicant were the property of Mr Sawtell. He received instructions from Mr Sawtell on how to use some machinery, but he was also familiar with, and had used other simple farm tools and equipment. The notion that a farmworker is an independent contractor because he/she acts on experience is a nonsense. The very reason a person is hired, indeed why Mr Sawtell hired the applicant, is because they have some experience in the work on offer. There is a fundamental distinction between knowing how to perform a task and being directed how and when to utilise that knowledge at the employer’s behest;
● there was no suggestion that the applicant could delegate or subcontract his work;
● as will be evident later, Mr Sawtell had the right to dismiss the applicant. I believe Mr Sawtell always accepted that he had such a right, and would willingly exercise it, if the circumstances warranted it;
● Mr Sawtell always believed the applicant was his employee. He gave no indication to the applicant that he could represent himself as anyone other than his employee. I have no doubt the applicant represented himself as being employed by Mr Sawtell as a farm assistant;
● the applicant was never paid a salary or wage, superannuation or paid holidays or sick leave. His only recompense was free accommodation on the farm and the occasional cash gift. The applicant had no ABN and had never invoiced Mr Sawtell for any work he performed. He paid no income tax;
● the applicant was not involved in a profession, trade or distinct calling. He created no good will or saleable assets in the course of his work; and
● the applicant spent no money on business expenses and was even required, on one occasion, to pay for a broken light on a vehicle.

[77] Two other matters are relevant to my conclusion that the applicant was an employee and not an independent contractor.

[78] Firstly, the advertisement in the Coffs Coast Advocate (see para [6]) can in no way be viewed as evidence that Mr Sawtell was seeking an independent contractor. The wording of the advertisement, while vague as to conditions, to the ordinary bystander, would leave little doubt that Mr Sawtell was seeking an employee, with terms to be discussed. This advertisement, far from assisting the respondent’s case, to my mind, does the opposite. To suggest that its placement in other than the employment section of the paper means it is something other than a job advertisement is meaningless and silly.

[79] Secondly, as I earlier mentioned, I have not a skerrick of doubt that Mr Sawtell, from the outset, believed the applicant was his employee and, importantly, for two years, treated him as such. In his communication with the Commission of 14 May 2012, Mr Sawtell said inter alia:

‘The applicant was and has always been employed as a casual farm assistant with no qualifications. I run a small cattle business in a private capacity. I completed formal requirements of the casual employment prior to the employment starting on 7.1.2010. I consider that the applicant was most likely covered as a ‘casual’ employee under the Pastoral Award 2010. As such, that was my understanding that as a casual employee, under the Award, I was not obliged to provide any formal dismissal notice.’

[80] Moreover, Mr Sawtell even professed his firm view that he was entitled to dismiss the applicant for a number of reasons set out in the above document as follows:

‘Other, but not exhaustive reasons I relied on to form the opinion that the Applicant was no longer suitable for the position of casual employee are:

1. Illegal use of a trailer on public streets, registered to the Respondent and kept in a locked shed at the premises admitted by the Applicant to ‘move his brother-in-law’ in his residence, whilst I was away from the property in Sydney.

2. Negligence in maintaining visual surveillance of cattle water tanks, casuing two to overflow causing substantial financial damage to the Respondent.

3. At the time of employment the Applicant provided a ‘CV’ up to 2007 which in part referred to his credentials, which I believe to be false and/or grossly misrepresenting his true experiences and values.

4. The applicant obtains source of social welfare as income and as a requirement he request to be away/unavailable from the property regularly, declaring himself not available for work.

5. The Applicant obtained outside work from some 15 hours or thereabouts over two days, preventing himself from being available for casual work.

6. The Applicant resides in a dwelling provided and owned by the Respondent and has not paid rent since 20.4.12 although requested.

7. The Applicant has not since 20.4.12 offered himself as available for casual labour.

8. The Applicant has refused to maintain grass areas around the dwelling he occupies, such as he has been doing since Jan 2010.’

[81] Mr Sawtell is no fool. His pleas of naivety and ignorance of the law were hollow and unconvincing. He knew exactly what an independent contractor was and even gave an example, in his evidence which contrasted sharply with how he viewed the applicant. In addition, Mr Sawtell gave evidence that he had, in the past, engaged workers as employees and that he knew the distinction. I do not accept that a dubious legal opinion to the contrary ever changed Mr Sawtell’s view, or qualified his actions in hiring the applicant as his employee in 2009 and how he treated him throughout the entire period of the employment relationship.

[82] That said, with respect, I am bound to say that much of Mr Sawtell’s evidence was self-serving, craftily altered and carefully delivered to create a sense of a relationship with the applicant which was not only legally wrong, but completely at odds with what he believed was the true relationship - that of master and servant; or to continue my earlier analogy - lord and vassal.

[83] For the aforementioned reasons, I find that the applicant was an employee and not an independent contractor. The respondent’s first jurisdictional objection fails and is dismissed. It follows that the applicant was a person protected from unfair dismissal within the meaning of s 382 of the Act.

SECOND JURISDICTIONAL OBJECTION - WAS THE APPLICANT DISMISSED?

SUBMISSIONS

For the respondent

[84] Mr Clowes said that even if the Commission finds the applicant was a person protected from unfair dismissal, he was not dismissed at the initiative of the employer; See: s 386 of the Act. By relying on the evidence of Mr Sawtell as to what occurred on 20 April 2012 during the verbal exchange between the applicant and Mr Sawtell, there was no termination at the employer’s initiative, or a forced resignation. Mr Clowes submitted that either:

● the applicant unilaterally terminated his arrangement with Mr Sawtell on 20 April 2012, without force; or
● the parties mutually agreed to terminate the arrangement on 20 April 2012.

In either case, there was no dismissal and, accordingly, the Commission has no jurisdiction to determine the applicant’s claim.

[85] In oral submissions, Mr Clowes observed that as the applicant claimed he was dismissed, this was not a case of constructive dismissal. Mr Clowes said that the only way to resolve this issue was to prefer one person’s version of the incident over the other. He submitted that the Commission would prefer Mr Sawtell’s version of events as more reliable in that the applicant made it clear to him, in no uncertain terms, that the arrangement was over. He threw the keys at Mr Sawtell and stormed off.

For the applicant

[86] Mr Howard submitted that Mr Sawtell dismissed the applicant, with immediate effect, on 20 April 2012. The evidence of the applicant, his wife and Mr Harvey should be accepted in that respect. There was no doubt that Mr Sawtell had withdrawn the availability of the cottage and this amounted to a dismissal at the employer’s initiative.

[87] Mr Howard said that the performance of work and accommodation were intrinsically linked in the employment relationship and one could not exist without the other. Once one was withdrawn, the employment relationship ceased to exist. When this happened, the applicant was entitled to consider his employment had been terminated by Mr Sawtell; See: Visscher v the Honourable President Justice Giudice [2009] HCA 34 (‘Visscher v Giudice’).

[88] Mr Howard added that this outcome could have been avoided if Mr Sawtell, having withdrawn the accommodation, offered to pay wages to the applicant instead. As nothing else was offered in lieu, this confirmed the applicant’s employment was at an end. The situation was analogous to an employer withdrawing payment of wages. It was unnecessary for words such as ‘dismissed’, ‘sacked’, ‘fired’ or ‘terminated’ to be used, as the significant feature was that the contractual terms were not being met. There was no mutual end to the arrangement.

[89] Mr Howard noted that submissions made by the Tenant’s Advocate on behalf of the applicant in proceedings before the CTTT do not evidence any mutual termination of the employment relationship. The Tenant’s Advocate was not a lawyer and she was unaware of the applicant’s employment rights. The submission (as to mutuality) was merely put to bring about a speedy end to a dispute between landlord and tenant.

[90] In oral submissions, Mr Howard observed that the applicant and his wife were in no financial position to leave the farm with no job to go to and no home. Mere unhappiness with one’s job does not mean an employee is in a position to resign. The applicant now had had to borrow money from, and stay with friends.

[91] Mr Howard noted that the applicant commenced proceedings soon after his dismissal. In his application, he used similar words that have been used consistently in his recent statements and oral evidence. There were contemporaneous recollections of Mr Sawtell’s words.

[92] Mr Howard submitted that each time Mr Sawtell had sought to justify his case, he had changed his position when he realised his earlier comments did not assist his case. His email to the Commission was most compelling, in that he sets up a number of reasons why he was justified in dismissing the applicant and asserts that he was a casual employee. In fact, this document corroborates the applicant’s claim that he was dismissed. Mr Howard said that later alterations made to Mr Sawtell’s diary do not go to his credit, including the entry concerning his first meeting with the Elsegoods, which appeared to have been created much later. It also seems the diary was altered to assist him in defending any later underpayment claims of the applicant.

[93] Mr Howard put that, given Mr Sawtell’s personality and contempt for the applicant, it was likely that on 20 April 2012 he lost his temper, swore and ordered the Elsegoods off his farm. This was enough to have brought the employment relationship to an end. Mr Howard added that it was consistent with Mr Sawtell’s behaviour that there was evidence that on other occasions he had said to the Elsegoods, ‘If you don’t like it, you can piss off.’

CONSIDERATION

Statutory Context

[94] s 385 of the Act defines when a person has been unfairly dismissed. Its terms are as follows:

385 What is an unfair dismissal

A person has been unfairly dismissed if FWA is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(d) the dismissal was not a case of genuine redundancy.

[95] The conjunction ‘and’ linking the four subclauses above means that each of the criteria must be met to, the satisfaction of the Commission, for the person to be unfairly dismissed. The first test - that the person has been dismissed - flows from the meaning of the word in s 386(1) as follows:

386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

[96] In addition to claiming he had been dismissed, the applicant further claims his dismissal was harsh, unjust and unreasonable. I note that no submissions were put as to whether the applicant’s dismissal was consistent with the Small Business Fair Dismissal Code, although it is plain that Mr Sawtell was a small business, as defined (s 388). Further, I note that this case is not one involving a case of genuine redundancy (s 389).

[97] The applicant insisted that he was dismissed by Mr Sawtell in the verbal altercation they had on 20 April 2012. He claimed that his dismissal was corroborated by his wife and brother-in-law. On the other hand, the respondent argued that the applicant unilaterally withdrew from their arrangement or alternatively that there was a mutual termination of the arrangement. I agree with Mr Clowes that there was no case put that the applicant was forced to resign and therefore considerations of constructive dismissal do not arise in this case. Both parties accept that to resolve this jurisdictional objection involves preferring one party’s evidence over the other. I agree with this assessment.

[98] Before resolving the evidentiary conflict as to what was said and what occurred on 20 April 2012, I refer to a number of authorities relevant to whether a termination occurs at the initiative of the employer.

[99] The definition of ‘termination at the employer’s initiative’ was considered by a Full Court of the Industrial Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 262 IR 200 at 205. This case has often been referred to by industrial tribunals in a line of consistent authority since 1995 and I refer to the following extract:

‘Viewed as a whole, the Convention is plainly intended to protect workers from termination by the employer unless there is a valid reason for termination. It addresses the termination of the employment relationship by the employer. It accords with the purpose of the Convention to treat the expression “termination at the initiative of the employer” as a reference to a termination that is brought by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. We proceed on the basis that the termination of the employment relationship is what is comprehended by the expression “termination of employment”: Siagian v Sanel (1994) 1 IRCR1 at 19; 54 IR 185 at 201. In many, if not most, situations the act of the employer that terminates the employment relationship is not only the act that puts in train the process leading to its termination but is, in substance, the entire process.

...

In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship. This issue was addressed by Wilcox CJ in APESMA v David Graphics Pty Ltd (unreported, Industrial Relations court of Australia, 12 July 1995, Wilcox CJ). His Honour at p 3, referred to the situation of an employee who resigned because “he felt he had no other option”. His Honour described those circumstances as:

“... a termination of employment at the instance [of] the employer rather than of the employee.”

And at p 5:

“I agree with the proposition that termination may involve more than one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions that constituted a termination of the employment.”’

[100] Three earlier decisions of the Australian Industrial Relations Commission (AIRC) are also worthy of mention, although they deal with resignation in the context of a constructive dismissal: In Stubbs v Austar Entertainment Pty Ltd [Print Q0008, 9 April 1998], the Full Bench said:

‘We do not doubt that Mr Stubbs believed he had good reason to resign. However, the fact that an employee has good reason to resign does not of itself establish that the employment is not voluntarily left by the employee. To constitute termination at the initiative of the employer the termination must be the direct or consequential result of ‘some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect . . .’[Rheinburger v Huxley Marketing, 16 April 1996 per Moore J].’

[101] A Full Bench of the AIRC in ABB Engineering Construction Pty Limited v Doumit [Print N6999, 9 April 1996] said:

‘Often it will only be a narrow line that distinguishes conduct that leaves an employee no real choice but to resign employment, from conduct that cannot be held to cause a resultant resignation to be a termination at the initiative of the employer. But narrow though it be, it is important that that line be closely drawn and rigorously observed. Otherwise, the remedy against unfair termination of employment at the initiative of the employer may be too readily invoked in circumstances where it is the discretion of a resigning employee, rather than that of the employer, that gives rise to the termination. The remedies provided in the Act are directed to the provision of remedies against unlawful termination of employment. Where it is the immediate action of the employee that causes the employment relationship to cease, it is necessary to ensure that the employer's conduct, said to have been the principal contributing factor in the resultant termination of employment, is weighed objectively. The employer's conduct may be shown to be a sufficiently operative factor in the resignation for it to be tantamount to a reason for dismissal. In such circumstances, a resignation may fairly readily be conceived to be a termination at the initiative of the employer. The validity of any associated reason for the termination by resignation is tested. Where the conduct of the employer is ambiguous, and the bearing it has on the decision to resign is based largely on the perceptions and subjective response of the employee made unilaterally, considerable caution should be exercised in treating the resignation as other than voluntary.’

[102] In P. O’Meara v Stanley Works Pty Ltd (Print PR973462, 11 August 2006), a Full Bench of the AIRC said:

‘In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.’

[103] More recently, in Elgammal v BlackRange Wealth Management Pty Ltd ACN 092 380 348 T/A Commonwealth Financial Planning [2011] FWAFB 4038, the Full Bench of FWA said:

‘It is adequate for us to indicate that we accept that when considering whether an employer has repudiated the contract the test is not the employer’s actual intention judged subjectively, but whether the conduct of the employer, judged objectively by reference to the effect on a reasonable person evidenced an intention to no longer be bound by the contract.’

[104] Mr Clowes submitted that the parties mutually agreed to terminate their arrangement. Even accepting the respondent’s version of events, it is difficult to see how this could be so. Mr Clowes said that after the verbal altercation, the applicant threw the keys at Mr Sawtell and stormed off. Mutuality is not how I would characterise this version of events. So it is that I am left with the alternative conclusion proposed by Mr Clowes, that the applicant unilaterally and willingly terminated his arrangement with Mr Sawtell.

[105] Even putting the parties’ opposing versions of what was said to one side, this is also a difficult proposition to accept. Given the applicant’s evidence that he and his wife had no money, no job, nowhere to go and the uncontested evidence of Mr Harvey that, after talking to Mr Sawtell, he secured a further week for them to vacate the cottage, it is highly improbable that the applicant would willingly have terminated the arrangement.

[106] The applicant’s version of events, corroborated by his wife and Mr Harvey, was that he was dismissed by Mr Sawtell and told to vacate the cottage immediately. I accept their evidence in preference to Mr Sawtell’s version of events. To be financially stressed, homeless and without a job is entirely inconsistent with a resignation, let alone a willingness to unilaterally terminate the arrangement.

[107] Having closely observed the witnesses giving their evidence, I found Mr and Mrs Elsegood and Mr Harvey’s evidence to be corroborative where it mattered, but not collusive. I found them honest, well meaning individuals of modest means and circumstances. By contrast, Mr Sawtell was forceful, dogmatic and insistent. He was not willing to surrender his position one inch and was fiercely convinced of the merits of his case. This is not to be critical of him, per se, but to my mind, it demonstrated an overwhelming power imbalance between him and the applicant which convinced me that he would not have hesitated in using the language attributed to him by the applicant in their verbal altercation on 20 April 2012.

[108] In particular, I find that Mr Sawtell said words to the effect of ‘Don’t come out here, go and hold your fucking brother in law’s hand’ and ‘I want you off my property. I want you out this afternoon.’ If this was not a dismissal of the applicant’s services, then, for my part, I cannot imagine what else it was. I also find that Mr Harvey spoke to Mr Sawtell about the Elsegoods’ dire circumstances and he returned and told them words to the effect of ‘I have got you another week before you have to go.’

[109] In my view, Mr Sawtell’s diary note of what occurred that day (see para [46] above) is a sanitised version of events designed to give the appearance of some mutuality of ending the relationship. It is curious Mr Sawtell does not mention the applicant throwing the keys at him and storming off (as Mr Clowes submitted). I believe this too is a later invention to put the worst possible light on the applicant. Like the first jurisdictional objection, Mr Sawtell became entangled with his own views of what the facts were and his subsequent reconstruction of events to suit an entirely different purpose. It did him little credit.

[110] As I said earlier, not only did Mr Sawtell believe the applicant was his employee, but he strongly believed he had exercised his right to dismiss him as a casual employee, without notice, and for cause. In his email to the Commission of 14 May 2012, he cites eight performance reasons why he was justified in dismissing him. Yet his case now is he had never dismissed him. Not only do I reject Mr Sawtell’s evidence, but I find it disingenuous and misleading. I agree with Mr Howard, that this email, rather than assisting the respondent’s case, supported the applicant’s contention that he had been dismissed. In this respect, I also agree that Mr Sawtell’s email was a crude attempt to reconstruct events, while the applicant’s version of events was entirely consistent with contemporaneous recollections of what he wrote in his application to FWA in the week after his dismissal and his later written statement and oral evidence.

[111] During the course of proceedings, some attention was given to submissions and proceedings before the CTTT. As I informed the parties at the time, I do not consider the submissions by the Tenancy Advocate, nor the somewhat bald statements of the CTTT, to be relevant to the matters I am required to take into account in this matter under the relevant provisions of the Fair Work Act 2009.

[112] There is no doubt, in my assessment, that the act of withdrawing the only recompense the applicant received for his labour, namely accommodation, constituted an action taken and comprehended by the employer to bring the employment relationship to an end. It was akin to withdrawing the payment of wages with the same intended result. It is not possible, in the circumstances of this case, to separate the grant of free accommodation from the ordinary held notion of payment, albeit very poorly, for work performed. Mr Sawtell’s actions evinced a classic intention by him to be no longer bound to any contract of employment with the applicant and was the ultimate exercise of his control over the applicant to dismiss him at will, and without notice. In my opinion, the conduct of Mr Sawtell, ‘judged objectively by reference to the effect on a reasonable person evidenced an intention [by Mr Sawtell] to no longer be bound by the contract’ (supra above).

[113] It follows that I am satisfied that the applicant was dismissed at the employer’s initiative and that he is entitled to pursue his application for a remedy from unfair dismissal.

[114] Both jurisdictional objections of the respondent must fail and are dismissed. This application shall be remitted to the Unfair Dismissal Unit for further programming. That said, in view of my comments during the course of this decision, I believe that this application screams out to be resolved through a conciliated outcome. Accordingly, I recommend that the parties undertake that course prior to any further proceedings before the Commission.

DEPUTY PRESIDENT

Appearances:

Mr S Howard and Ms S Bryant, Solicitors, for the applicant

Mr J Clowes, Solicitor, for the respondent

Hearing details:

2012

Coffs Harbour:

29 August, 8 November

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