Atanasio v BP Refinery (Kwinana) Pty Ltd
[2007] WADC 18
•9 MARCH 2007
ATANASIO -v- BP REFINERY (KWINANA) PTY LTD [2007] WADC 18
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WADC 18 | |
| Case No: | CIV:2391/2001 | 5 DECEMBER 2006 | |
| Coram: | COMMISSIONER ARCHER | 8/03/07 | |
| PERTH | |||
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Defendant was a deemed employer | ||
| PDF Version |
| Parties: | ANTONIO ATANASIO BP REFINERY (KWINANA) PTY LTD UNITED MAINTENANCE PTY LTD |
Catchwords: | Section 175 of the Workers' Compensation and Rehabilitation Act 1981 Deemed employer Execution of work "By or under" Level of control required of contractor |
Legislation: | Workers' Compensation and Injury Management Act 1981 (WA), s 93E, s 175 |
Case References: | Foster v Chief Executive Officer of the Department of Agriculture [2006] WASCA 95 Marsden v Unimin Australia Ltd [2004] WASCA 143 Hewitt v Benale [2002] WASCA 163 Jones v Wesfarmers [2003] WASCA 225 Minister for Education v Klein [2005] WASCA 185 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
BP REFINERY (KWINANA) PTY LTD
Defendant
UNITED MAINTENANCE PTY LTD
Third Party
Catchwords:
Section 175 of the Workers' Compensation and Rehabilitation Act 1981 - Deemed employer - Execution of work - "By or under" - Level of control required of contractor
Legislation:
Workers' Compensation and Injury Management Act 1981 (WA), s 93E, s 175
(Page 2)
Result:
Defendant was a deemed employer
Representation:
Counsel:
Plaintiff : Mr A D Gill
Defendant : Mr Schwikaard
Third Party : No appearance
Solicitors:
Plaintiff : Chapmans
Defendant : Jackson McDonald
Third Party : Not applicable
Case(s) referred to in judgment(s):
Foster v Chief Executive Officer of the Department of Agriculture [2006] WASCA 95
Marsden v Unimin Australia Ltd [2004] WASCA 143
Case(s) also cited:
Hewitt v Benale [2002] WASCA 163
Jones v Wesfarmers [2003] WASCA 225
Minister for Education v Klein [2005] WASCA 185
(Page 3)
- COMMISSIONER ARCHER:
Introduction
1 This trial involved the determination of a preliminary issue as to whether the defendant was a "deemed employer" of the plaintiff, under s 175 of the Workers' Compensation and Injury Management Act 1981 ("the Act"). The plaintiff has claimed damages against the defendant. The defendant asserts that it was a deemed employer. The defendant alleges that, therefore, as the plaintiff's disability did not result in a degree of disability required by s 93E(3)(a) or s 93E(4) of the Act, the plaintiff is not entitled to damages from the defendant.
2 There was little factual dispute between the parties.
3 The defendant operates a refinery at premises in Mason Road. The defendant's plant and equipment requires day to day maintenance and periodic overhauling. Periodic overhauling was variously referred to in the evidence as "turn around" or "shut down". The defendant has a schedule for overhauls. Every four to six years, a section of the refinery is taken off-line, made gas free and inspected. Any necessary repairs or part replacements are undertaken and the section is then re-commissioned.
4 Initially, the defendant entered into contracts with various maintenance companies to carry out the day to day and overhaul maintenance. However, in August 1997, the defendant entered into a contract with United Construction Pty Ltd for the performance of that work. That contract (Exhibit D1) was titled "Static Equipment and System Services Contract, Contract No.KWN864" ("the Contract"). United Construction Pty Ltd later created a company called United Maintenance Pty Ltd which was effectively the maintenance department of United Construction Pty Ltd. The evidence of the defendant's witnesses and the other documentary exhibits show that the Contract was extended from time to time and that its terms and conditions were operative between the defendant and United Maintenance Pty Ltd ("the contractor") on 31 March 2000, the date of the accident.
5 The plaintiff was employed by the contractor. On the date of the accident, the plaintiff was working at a particular location (designated as CR3-F393) on the overhaul of a particular area of the plant, called the Mogas Block. The project to overhaul the Mogas Block in 2000 was, predictably, called the Mogas 2000 Project. The unchallenged evidence was that the contractor was performing the overhaul work on the Mogas 2000 Project under the Contract.
(Page 4)
6 It was accepted on behalf of the plaintiff that the Contract was more than a labour hire contract. That was apparent from the Contract itself and the evidence of the witnesses. The Contract did not merely provide for the provision of workers, it was a contract for identified work, and the contractor also supplied plant and equipment.
7 The Contract provided that both the contractor and the defendant were responsible for the performance of maintenance works on the defendant's static equipment and systems through the Contract. Static equipment is equipment which is not rotating, such as pipelines, towers, vessels, heat exchanges and knock-out drums. The Contract provided that the defendant's "contractor owner" and the contractor's "project manager" (a representative of each, allocated and assigned the responsibility of the Contract operation) were jointly accountable for the effective executive of the Contract. The Contract provided that the contractor and the defendant must act as a single integrated team to maximise efficiency and productivity. The day to day operation, planning, execution, priority setting, the liaison and the administration of the Contract was the responsibility of that team (cl 1.3 of the Contract).
8 The Contract further provided that the contractor was "fully responsible for the safety management of all employees and any sub-contractors on site engaged on scoped work forming part of this Contract" (cl 1.8). Numerous other provisions of the Contract confirm it was much more than mere labour hire. These included:
(a) Site Attendance (p 4);
(b) Planning, Provisioning, Scheduling and Execution of Scoped Work cl 1.5 (p 4 and p 5);
(c) IR Management cl 1.10 (p 7);
(d) General Conditions of Contract cl 3 (Attachment 1)
(i) the Contract cl 2 (p 2 of 11);
(ii) Delivery and Acceptance cl 6 (p 3 of 11);
(iii) Invoices cl 7 (p 3 of 11);
(iv) Safety cl 11 (p 4 of 11);
(v) Work on the Site cl 13 (p 5 of 11);
(Page 5)
- (e) Special Conditions of Contract:
(i) Supply of Materials cl 4.6.3 (p 14);
(ii) Personnel, Clothing and Tools cl 4.6.4;
(iii) Site Offices, Amenities and Facilities cl 4.7 (p 14);
(f) Schedule of Rates cl 5;
(i) Reimbursable Labour Rates cl 5.2 (p 19);
(ii) Plant and Equipment Hire Rates cl 5.3 (p 24);
(g) Site Conditions for Contractors cl 7 (Attachment 2)
(i) Services and Equipment cl 5.1.7 (p 11 of 20);
(ii) Scaffolding cl 5.1.7.4 (p 12 of 20);
(iii) Protective Clothing cl 5.1.7.6 (p 12 of 20);
(iv) Damage to On Loan BP Equipment cl 5.1.7.7 (p 12 of 20)
(v) Fuel cl 5.1.7.8 (p 12 of 20);
(vi) Mobile or Portable Generators and Associated Electrical Equipment cl 5.1.9.3 (p 14 of 20);
(vii) First Aid cl 5.2.2 (p 17 of 20);
(h) Safety Management Plan (Attachment 3), United Construction Corporate Safety Philosophy, cl 1.0.
9 The unchallenged evidence was that employees of the contractor were supervised at first instance by its own employees. The evidence was that the leading hand, supervisor and area superintendent responsible for the plaintiff, and his work, were employees of the contractor. It is true that there was a BP area co-ordinator, and it was common ground that BP had some overall supervisory responsibilities. However, the first three tiers of supervision, and the direct supervision, of the plaintiff and his work was performed by the contractor.
(Page 6)
Deemed Employer
10 The relevant provisions of s 175 of the Act are:
"(1) Where a person (in this section referred to as the principal) contracts with another person (in this section referred to as the contractor) for the execution of any work by or under the contractor and, in the execution of the work, a worker is employed by the contractor, both the principal and the contractor are, for the purposes of this Act, deemed to be the employers of the worker…
…
(3) The principal is not liable under this section unless the work on which the worker is employed at the time of the occurrence of the injury, is directly a part or process in the trade or business of the principal.
…
(7) Where the injury does not occur in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management, subsections (1) to (6) inclusive do not apply."
11 The "contractor" for the purposes of s 175 was the third party and the "principal" was the defendant. It was clear that the plaintiff was, at the time of his injury, doing work that was directly a part or process in the trade or business of the principal. Further, the principal had control and management of the premises on which the injury occurred.
Execution of Work
12 In Foster v Chief Executive Officer of the Department of Agriculture[2006] WASCA 95, Wheeler JA with whom Steytler P and Pullin JA agreed, analysed when a contract could be described as being "for the execution of any work by or under the contractor" as required by s 175 of the Act. In Foster (supra), the chief executive officer of the Department of Agriculture entered into an agreement with UWA, CSIRO and Murdoch University for carrying out what the agreement described as a "joint venture" in the field of legume research.
(Page 7)
13 The agreement provided for the establishment and operation of a centre ("the Centre"), the establishment of a Board of Management ("the Board") and the appointment of a director. Under the agreement, each of the parties undertook to make various contributions as determined by the Board, in the manner determined by the Board, including seconding personnel to the Centre. The Board would determine the purposes for which the seconded personnel were made available, and the director would manage their day to day activities. Under the agreement, the appellant was seconded to the Centre.
14 Her Honour found that the agreement was not a contract "for the execution of work", but was a contract for the supply of workers. Her Honour said:
"It seems to me that there is a distinction to be drawn between a contract for the execution of work, which one would generally understand to be the execution of some particular task, even if broadly defined, and one for the temporary provision of workers for the purpose of assisting the principal to complete whatever tasks the principal has set itself." ([11]).
15 Her Honour compared the extended definition of "employer" in s 5 with the terms of s 175 of the Act. Her Honour noted that the definition in s 5 focused on the provision of the services of a worker. Her Honour noted that, in contrast:
"[t]he focus of s 175 is on the contract for the execution of work. It is, of course, possible to contemplate agreements which are agreements both for the provision of workers and for the execution of work; for example, where there is a contract for particular identified work and there is further an identification of the manner in which particular workers are to be made available to perform that task. However, the two concepts are distinct and very often an agreement will be able to be characterised simply as one or the other." ([12])
16 In Foster, Wheeler JA also considered Marsden v Unimin Australia Ltd[2004] WASCA 143. While her Honour doubted some of the reasoning in Marsden(supra), her Honour considered that Marsden (supra) may be explained on the basis that the contract in that case was both for identified work and for the provision of workers to perform the work. Her Honour referred to evidence which may have suggested that the contractor was asked to supply a person "to fulfil some
(Page 8)
- [presumably particularised] duties that were vacant at the time". Her Honour clearly contemplated that the evidence in Marsden (supra) may have been sufficient to characterise the contract as one for the execution of that work and that the work was "by or under the contractor". That evidence included the fact that the contractor was required to make an assessment of the employee's performance on the day of commencement, and was required to monitor the performance of the employee at regular intervals and provide adequate supervision. The contract in Marsden (supra) also required the contractor to replace an employee deemed unsatisfactory by the principal and to ensure that any particular site requirement such as safety equipment and clothing were met. The contractor was also obliged to maintain a signed record of the hours completed by all of its employees. Her Honour pointed out that the various obligations were set out in Marsden (supra) at [31], [40], [77] and [81]). ([16])
17 In this case, the evidence demonstrates that the Contract was a contract for the execution of work. Counsel for the plaintiff did not seek to argue otherwise. However, the issue that counsel for the plaintiff did dispute was whether the work was being done "by or under" the contractor.
By or under
18 In Foster (supra), Wheeler JA noted that, even if the agreement was a contract for the execution of work, it would still not be a contract for the execution of work "by or under" the contractor. Her Honour said:
"It seems to me that the words 'by or under' require some degree of control or supervision greater than that implicit in merely providing an employee for a task. If that were not the case, it is difficult to see what the words 'by or under' the contractor would add to the further requirement contained in s 175(1) that, in the execution of the work, the worker be employed by the contractor." ([18]).
19 Her Honour found that, while the appellant remained subject to the terms and conditions of his employment by UWA, his secondment under the contract was for the duration and for the purposes determined by the Board with the appointed director of the Centre having the day to day control of whatever activities he was required to carry out. Accordingly, her Honour found that the work was therefore either "by or under" the Board or the director, or perhaps whichever party the Board or director identified as the appropriate entity to carry out the task for which the
(Page 9)
- appellant was seconded. However, the work was not work "by or under" UWA.
20 This finding was an alternative reason for finding that s 175 of the Act did not apply to the facts in that case. Accordingly, it was obiter dicta. That said, it is obviously an opinion to which this Court must pay particular regard.
21 An application for special leave to appeal to the High Court against the decision in Foster (supra) was heard in October 2006. Many of the arguments raised turned on the unique circumstances in that case. However, it was submitted on behalf of the applicant that the court in Foster (supra) introduced the notion of the need for control or supervision of the worker by the contractor for the very first time. The High Court refused special leave, saying:
"The case would not provide a suitable vehicle for the examination of obiter dicta in par 18 of the leading judgment in the Court of Appeal."
22 I accept the obiter dicta of Wheeler JA in Foster's (supra)case.
23 Accordingly, in order for the work to have been "by or under the contractor", there must have been some degree of control or supervision by the contractor greater than that implicit in merely providing an employee.
Degree of control
24 Counsel for the plaintiff submitted that the critical (and only) issue in determining whether the defendant was a deemed employer was whether the contractor was exercising sufficient control to permit the work to be characterised as "by or under" the contractor. He conceded that it was not a situation merely of labour hire and that the contractor was exercising some control.
25 Accordingly, the critical issues are what level of control is required and was there such a level of control in this case.
26 As a matter of common sense, if there is a requirement of control, the degree would need to be greater than a nominal degree. In my view, it need not be any greater than something more than nominal. Adjectives are not always helpful, but it would need to be material or real, rather than nominal.
(Page 10)
27 In this case, the Contract and the evidence of the witnesses makes it clear that material and substantial control was exercised by the contractor over the work and over the plaintiff.
28 Under the Contract, the contractor had joint responsibility for the day to day operation, planning, execution, priority setting, liaison and administration of the Contract. The leading hand supervising the work of the plaintiff, the supervisor above the leading hand and the superintendent above the supervisor were all employees of the contractor. Further, under the Contract, the contractor was "fully responsible" for safety management of all employees engaged in site work under the Contract.
29 Counsel for the plaintiff sought to argue that the fact that the defendant exercised some control precluded a finding that the contractor was exercising sufficient control to permit the relevant characterisation to be made. In my view, that submission is without merit. I accept however that the fact that a principal is exercising some control may affect the assessment of the degree of control being exercised by the contractor.
30 In this case, the evidence was that the defendant oversaw the site in general terms, as it was inevitably required to do. It also was jointly responsible, with the contractor, for the day to day operation (etc) of the contract. However, in my view, that degree of control exercised by the principal does not impact upon the clear evidence that the contractor was exercising material and substantial control and supervision over the work and over the plaintiff. I am satisfied that the Contract was for the execution of work "by or under" the contractor.
31 Accordingly, I find that the defendant was the deemed employer of the plaintiff.
Consequences
32 The defendant submits that, if it is the deemed employer, the plaintiff's claim should be dismissed. The defendant argues that the plaintiff's disability did not result in the degree of disability required by s 93E of the Act. Therefore, if the defendant was his deemed employer, he is not entitled to damages from the defendant.
33 However, there is evidence that the plaintiff is trying to obtain evidence that he does meet the relevant thresholds. While the evidence is presently sparse, it is not possible to conclude that the plaintiff will be unable to obtain such evidence or unable to revisit the existing disability
(Page 11)
- findings. Accordingly, I do not consider it appropriate to dismiss the plaintiff's claim.
34 However, it is clear that the matter requires some attention to ensure that the defendant is not prejudiced by long delay. Both parties have expressed a preference for active case management, rather than particular orders.
35 Accordingly, I direct that this matter be listed for a direction hearing on a date to be fixed, but within four weeks.
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