Andrew Gautam v Preseight Pty Ltd T/A Tyrepower Diamond Creek

[2013] FWC 656

[2013] FWC 656

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Andrew Gautam
v
Preseight Pty Ltd T/A Tyrepower Diamond Creek
(U2012/10719)

COMMISSIONER RYAN MELBOURNE, 29 JANUARY 2013

Termination of employment - jurisdiction - minimum employment period and frivolous or vexatious, the applicant had entered into deed of settlement at conciliation.

[1] An application for an unfair dismissal remedy was filed by the Applicant with FWA on 21 June 2012 in relation to the alleged termination of the employment of the Applicant by the Respondent which was notified to the Applicant on 14 June 2012 and which was to take effect on 23 June 2012. The application asserted that the Applicant had been employed since January 2011.

[2] The Respondent filed an employer’s response to the application - Form F3 on 17 July 2012 and the Respondent asserted that the Applicant had only commenced employment on 1 June 2012 and was notified of the dismissal on 21 June 2012.

[3] The application was subject to conciliation by a Fair Wok Conciliator on 23 July 2012.

[4] On 9 October 2012 both Mr Russell Hayes, a Director of the Respondent, and Mr Ben Dormans, a Manager of the Respondent, filed objections to the application and Mr Hayes also filed an application for costs. The ground of objection was that the application was frivolous or vexatious as the Applicant had entered into a deed of settlement at the conciliation stage in which the Applicant agreed to accept a payment of 3 weeks pay to settle the Applicant’s unfair dismissal claim.

[5] On 12 October 2012 the Applicant filed an application for security for payment of costs pursuant to s.404 of the Act.

[6] Directions were issued in relation to the conduct of a hearing in relation to the objection lodged by the Respondent.

[7] The Respondent filed its submissions on 3 December 2012 and in those submissions the Respondent repeated its jurisdictional objection as to minimum employment period by asserting that the Applicant was not an employee for the first 16 months of working for the Respondent and that for that period the Applicant was a sub-contractor. Whilst not articulated in the written submission of the Respondent the effect of the assertion that the Applicant was a sub-contractor for the first 16 months of work meant that the Applicant would only have been an employee for the last 1 or 2 months of work. This effectively raised a jurisdictional challenge in relation to the Applicant not having been employed for the minimum employment period.

[8] The Applicant filed his written submissions on 17 December 2012

[9] A hearing took place on 18 January 2013 to deal with the 2 objections of the Respondent.

[10] At that hearing the Applicant represented himself and the Respondent was represented by Mr Russell Hayes and Mr Ben Dormans. Neither the Applicant nor the Respondent led any oral evidence at the hearing with both sides being content to rely upon their written material and upon their respective oral submissions.

The Respondent’s Case

Minimum period of Employment

[11] The Respondent contended that it first employed the Applicant on 1 June 2012 which was only some 21 days before the termination of employment occurred. The Respondent acknowledged that the Applicant had been working for the Respondent for approximately 18 months before that date but contended that such work was performed by the Applicant as an independent contractor.

[12] In support of its contention as to the Applicant’s status as an independent contractor the Respondent pointed to the following factors.

[13] The Respondent paid the Applicant the sum of $25 per hour which included GST.

[14] The Respondent did not deduct any tax from that amount.

[15] The Applicant wanted to be paid at the independent contractor rate.

[16] The Respondent acknowledged that Mr Hayes prepared the invoices for the Applicant to issue to the Respondent.

[17] Nothing was put to the Commission to establish the existence of any written contract between the Applicant and the Respondent. Nothing was put to the Commission to establish the terms of any oral contract between the Applicant and the Respondent.

[18] The nature of the work of the Applicant was that of a tyre-fitter and wheel-aligner. The Respondent acknowledged that the Applicant was one of a number of tyre-fitters and wheel-aligners working for the Respondent and that work was allocated by supervisors or managers as required.

[19] The Respondent contended that it was normal practice to engage some workers as independent contractors as this provided flexibility for those workers because they could choose when they worked. It also provided flexibility for the Respondent because the Respondent could call on the independent contractor workers to work when it was busy.

[20] The Respondent acknowledged that all workers whether independent contractors or employees were required to wear a company logoed shirt which was supplied by the Respondent.

Deed of Settlement

[21] During the conciliation phase of this matter a seed of settlement was entered into by both the Applicant and the Respondent. The deed provided for a number of things including that the Applicant would accept 3 weeks pay in settlement of his unfair dismissal claim. This amount was paid to the Applicant by the Respondent and therefore the Respondent contended that the Applicant could not now access the jurisdiction of the Commission for the purpose of having the unfair dismissal remedy determined.

The Applicant’s Case

Minimum Employment Period

[22] The Applicant contended that he had never been an independent contractor and that he had never had an ABN nor had he ever been asked by the Respondent to obtain or produce one. The Applicant contended that he simply did the work allocated to him by the supervisor or manager. The Applicant contended that he never discussed with the Respondent his status as a worker prior to commencing work. The Applicant was firm in his contention that he never agreed to nor sought to be an independent contractor. The Applicant contended that for the entire time he worked for the Respondent he did so as an employee and therefore his length of service exceeded the minimum employment period even if the Respondent was a small business employer.

Deed of Settlement

[23] The Applicant acknowledged that he had signed a deed of settlement after the conciliation before a Fair Work Conciliator. However the Applicant contended that he could not be held to be bound by the deed as a critical term of the deed had not been complied with by the Respondent.

[24] In particular the deed of settlement provided that the Respondent would reemploy the Applicant as from 2 August 2012 and this did not occur.

Consideration of the Case

Employee or Independent Contractor

[25] Determination of whether the Applicant was an employee of the Respondent or was an independent contractor between January 2011 and the end of May 2012 is resolved by asking the question: Was the Applicant a servant of the Respondent in the Respondent’s business or was the Applicant carrying on a trade or business on his own behalf? (Abdalla v Viewdaze 1) The answer to this question is had by viewing the totality of the relationship that existed between the Applicant and the Respondent as a practical matter.

[26] Many decisions of the Commission and its predecessor and of the courts have looked at a range of indicia to help answer the question. In cases where the facts can point either way the careful examination of a range of indicia can assist in obtaining the correct answer. However the elephant or duck test can be appropriate where the relationship is very clear. The elephant test is simple: "an animal too difficult to define but easy to recognise when you see it"!  2 The duck test is similar: if it quacks like a duck and waddles like a duck its most likely a duck! 3

[27] In the present matter the only indicators that the relationship is that of independent contractor are: (1) the contention of the Respondent that its non permanent full time workers are always engaged as independent contractors, and, (2) the fact that the Respondent paid the Applicant the hourly rate of $25 which included GST and that this rate was significantly higher than the rate of $17.62 per hour paid by the Respondent to its employees for the same work.

[28] The indicia which support a finding that the Applicant is an employee include: (1) the fact that the Applicant was required to wear a company logoed shirt while working for the Respondent, and, (2) that the allocation of work was controlled by the Respondent, and, (3) the fact that the Applicant worked interchangeably with employees performing the same work, and (4) that the Applicant did not have an ABN nor any other attribute of conducting his own business.

[29] Another matter which supports a finding that the Applicant was not conducting his own business is that the Applicant could not or would not prepare invoices for his work and that the Respondent prepared the invoices for the Applicant to give to the Respondent. This is very suggestive of a contrived arrangement for the benefit of and at the initiative of the Respondent.

[30] Nothing was put by either side about the supply of equipment used by the Applicant to perform his work. However, the very nature of the work of wheel-aligning and tyre-fitting would strongly suggest that the necessary equipment was supplied by the Respondent.

[31] The pattern of hours and days worked by the Applicant were at the demand or request of the Respondent. As the Respondent contended that whilst the Applicant may have worked essentially as a full time employee the offer of work was not guaranteed each week, “Sometimes it's an as-needs basis. If we didn't need him, we didn't have him.” 4 Even this indicia suggests a relationship of casual employment rather than an independent contractor.

[32] The nature of the work, the method of allocating work, the interaction between “employees” and “independent contractors” all strongly point to an outcome where the Applicant is nothing more than a servant of the Respondent. Calling the Applicant an ‘independent contractor’ is the same as calling a duck a rooster. The name cannot change the reality.

[33] I am satisfied that the Applicant has been an employee of the Respondent since January 2011. This means that the Applicant has served the minimum employment period specified in s.383, whether the Respondent is or is not a small business employer.

The Deed of Settlement

[34] The Applicant filed his unfair dismissal claim with FWA on 21 June 2012 and the matter was subject to conciliation before an FWA Conciliator on 23 July 2012. Terms of settlement were agreed between the Applicant and the Respondent and signed by the Applicant and Mr Dormans for the Respondent on 25 July 2012. The terms of settlement identified that payment of outstanding superannuation contributions had been paid on 24 July 2012 and that payment of accrued annual leave entitlements and an amount of compensation for unfair dismissal were paid on 23 July 2012.

[35] The terms of settlement provided that, “Tyrepower agrees to provide the position (job) back to Andrew Gautam on 2/08/2012.”

[36] As at the date of the execution of the Deed of Settlement the only aspect of the Deed that needed to be put in place was the return to work of the Applicant. This never eventuated and the reason it didn’t is quite relevant to the objection that I have to determine.

[37] The Respondent contended that the Applicant engaged in a course of conduct since he was dismissed which included harassing phone calls to the Respondent’s business and harassing the Respondent’s staff both during work hours and after work hours. In response to this alleged conduct Mr Dormans, on or about 27 July 2012, issued a summons to obtain an interim intervention order against the Applicant which prevented the Applicant from having any direct contact with Mr Dormans. The Summons was served on the Applicant on 28 July 2012. Mr Hayes also went to the new workplace of the Applicant “and warned him, if he did not cease doing this there would be legal ramifications”. 5

[38] In response to this action by Mr Hayes the Applicant made a formal complaint to the Police that Mr Hayes had threatened to kill the Applicant. Mr Hayes was arrested and interviewed by the Police but released without any charges being laid. In addition the Applicant also sought intervention orders against both Mr Hayes and Mr Dormans.

[39] A mediation was conducted at the Dispute Settlement Centre of Victoria on 21 September 2012 between Mr Hayes, Mr Dormans and the Applicant. The settlement agreed to by all three persons included the withdrawing of intervention orders or applications for intervention orders. The settlement agreement also contained the following:

“Andrew Gautam, Ben Dormans and Russell Hayes agree that there will be no contacting each other either through phone, email, facebook or any other electronic method or hard copy or face to face.

Agree to communicate only to each other through solicitor or official body.”

[40] What is apparent from the conduct of both the Applicant and the Respondent is that both engaged in conduct which frustrated the operation of the Deed made on 25 July 2012 which provided for the Applicant to return to work with the Respondent on 2 August 2012.

[41] Mr Dormans contended that the Respondent intended to take the Applicant back into the workforce even after the Interim Intervention Order had been sought. Even if I take this contention at face value, the reality is that whilst the Interim Intervention Order was in place the Applicant could not return to work.

[42] Whilst the existence of the Intervention Order prevented the Applicant from returning to work it is important to focus on the reasons why the Intervention Order was sought by Mr Dormans.

[43] Notwithstanding the denial by the Applicant that he did not make nuisance calls to the Respondent’s business, I consider on the balance of probabilities that the Applicant did engage in the conduct which was asserted by Mr Dormans in his application for an intervention order. I am also satisfied on the balance of probabilities that the Applicant also engaged in the further conduct alleged by the Respondent, namely making complaints to WorkSafe Victoria and the Department of Immigration and Citizenship which led to the Respondent’s business being investigated at least by WorkSafe which found the complaint to be unjustified.

[44] Whilst the Deed of Settlement has been frustrated in relation to the term which required the Applicant to be given his job back, I am satisfied that it is the actions of the Applicant which led to that frustration.

[45] The Applicant has contended that he wants his job back but it is his conduct that has led the Respondent to take out an intervention order against the Applicant. I also note that at the mediation in September that the Applicant specifically agreed that he would only communicate with the Respondent through a solicitor or through an official body.

[46] The overall conduct of the Applicant is not consistent with the Applicant’s contention that he wants his job back.

[47] Whilst one term of the Deed of Settlement has been frustrated the other terms were complied with by the Respondent even before the Deed was executed. In particular the Respondent paid to the Applicant an amount equal to 3 weeks wages for the alleged unfair dismissal.

Power to Dismiss an Application

[48] Section 587 of the Act provides the Commission with a power to dismiss certain applications as follows:

‘587 (1) Without limiting when FWA may dismiss an application, FWA may dismiss an application if:

(a) the application is not made in accordance with this Act; or

(b) the application is frivolous or vexatious; or

(c) the application has no reasonable prospects of success.

(2) Despite paragraphs (1)(b) and (c), FWA must not dismiss an application under section 365 or 773 on the ground that the application:

(a) is frivolous or vexatious; or

(b) has no reasonable prospects of success.

(3) FWA may dismiss an application:

(a) on its own initiative; or

(b) on application.’

[49] Recently in Howey v Mars Australia Pty Limited t/a Mars Petcare Australia Sams DP said of s.587:

“[74]In my opinion, the opening words of s 587 (1) provide the Tribunal with a broad discretion to dismiss an application in a range of circumstances, not necessarily restricted to the examples in the non exhaustive list in subparagraphs (a)(b) and (c). Other circumstances readily spring to mind; for example, where there is a failure by an applicant to prosecute their claim with due diligence or where an applicant seeks to withdraw a notice of discontinuance filed in FWA.”  6

[50] In similar vein in Tomas v Symbion Health[2011] FWA 5458 Gooley C observed at para 59, correctly in my view:

“[59] It is not necessary to make a finding that the application is frivolous or vexatious or that the application has no reasonable prospects of success as section 587 provides Fair Work Australia with a broad discretion to dismiss an application.”

[51] Where there is a binding settlement reached between the parties the Courts and this Commission and its predecessors 7 have taken the view that it is proper to hold the parties to their agreement and, where one party wants to walk away from the agreement and continue to pursue an arbitrated unfair dismissal remedy, to dismiss the application made by that party.

[52] In the present matter there is certainly a binding settlement agreement but there is a particular aspect of this matter which differentiates it from the norm. In other cases all of the elements of the binding settlement agreement were capable of being given effect to. In the present matter there is one important element of the binding settlement agreement which has been effectively frustrated and which cannot be given effect to.

[53] I am of the considered view that, as the Applicant in the present matter initiated the conduct that has led to the frustration of the Deed of Settlement in relation to the term concerning the Applicant getting his job back, the Applicant cannot walk away from the Deed of Settlement especially since the Applicant has already taken the benefit of the other terms of the Deed of Settlement.

[54] I intend to exercise my discretion under s.587 of the Act to dismiss the application.

[55] The only material before the Commission in relation to the respective applications for costs or security for costs is contained in the written material filed by both parties. There is nothing in that material that would justify the making of any orders as to costs. The respective costs applications are dismissed.

COMMISSIONER

Appearances:

A. Gautam on his own behalf

R. Hayes and B. Dormans for the respondent

Hearing details:

2013.

Melbourne:

January 18

 1   PR927971 [2003] AIRC 504

 2   Lord Wedderburn, The Worker and the Law, Third Edition, Sweet & Maxwell, 1986 at 116.cited by the Full Bench in J Treloar v Bearings Incorporated (Australia) Pty Ltd - [1999] AIRC 1537 at para 69

 3   "The parties cannot create something which has every feature of a rooster, but call it a duck and insist that everyone else recognise it as a duck" Re Porter (1989) 34 IR 179 at p. 184 per Gray J; Massey v Crown Life Insurance [1977] EWCA Civ 12; [1978] 2 All ER 576 at p. 579 per Lord Denningapproved by the Privy Council in AMP v Chaplin (1978) 18 ALR 385 at p. 389

 4   Transcript of proceedings at PN127

 5   Employer’s written submissions

 6   [2012] FWA 6259

 7   Howey v Mars Australia Pty Limited t/a Mars Petcare Australia[2012] FWA 6259 (15 August 2012) Sams DP and the cases discussed therein including Australian Postal Corporation v Gorman, Besanko J [2011] FCA 975.

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