Bennett v E Z Risdon Golf Club Inc
[1995] IRCA 391
•3 Aug 1995
CATCHWORDS
BENNETT v E Z RISDON GOLF CLUB INC
TI 95/1143
INDUSTRIAL RELATIONS - TERMINATION OF EMPLOYMENT - jurisdiction - whether the relationship between the parties was of employer and employee or principal and contractor - factors indicating nature of relationship - degree of control exercised over alleged employee - payment by alleged employer of superannuation, compensation insurance and tax - manner of payment
CASES CITED:
Stevens & Gray v Brodribb Sawmilling Co Pty Limited (1986) 160 CLR 16.
Re the Transport Workers' Union of Australia; ex parte Porter (1989) AILR 388.
LEGISLATION:
Industrial Relations Act 1988, Part VIA Div 3.
CORAM: RYAN J.
PLACE: HOBART
DATE: 03 AUGUST 1995
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) TI 95/1143
)
TASMANIA DISTRICT REGISTRY )
BETWEEN:
PETER GRAEME BENNETT
Applicant
AND:
EZ RISDON GOLF CLUB INCORPORATED
Respondent
CORAM: RYAN J.
PLACE: HOBART
DATE: 3 AUGUST 1995
MINUTE OF ORDERS
THE COURT ORDERS BY CONSENT:
That the respondent pay to the applicant compensation for unlawful termination of the applicant's employment agreed in the sum of $10,000.
It is declared that the applicant has not been guilty of conduct detrimental to the interests of the respondent.
IT IS FURTHER ORDERED that the respondent procure a resolution of its committee rescinding the resolution of 6 June 1995 expelling the applicant from membership of the respondent.
Note:Settlement and entry of orders is dealt with in O 36 of the Rules of the Industrial Relations Court of Australia.
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) TI 95/1143
)
TASMANIA DISTRICT REGISTRY )
BETWEEN:
PETER GRAEME BENNETT
Applicant
AND:
EZ RISDON GOLF CLUB INCORPORATED
Respondent
CORAM: RYAN J.
PLACE: HOBART
DATE: 3 AUGUST 1995
REASONS FOR JUDGMENT
RYAN J: The preliminary question raised by this application is whether the relationship between the applicant and the respondent ("the Club") was employee and employer or that of contractor and principal.
Mr Bennett was a member of the Committee of the Club in 1991 when the then Secretary relinquished responsibility for managing the bar. At that time, the Club employed a full-time and a part-time bar attendant and the Secretary received an additional honorarium of $500 for performing the duties of bar manager. The Committee was concerned to achieve an arrangement whereby the bar operations became autonomous in the sense that cheques in payment for staff and purchases and stock did not require to be signed by the Treasurer. There was also a concern that the liability for remuneration of a bar manager should be an identifiable, fixed, amount without the need to pay for annual leave, superannuation, tax and workers' compensation insurance. The minutes of the meeting of the Committee of the Club held on 4 February 1991 record a resolution that:
"P. Bennett be appointed manager on contract of $20,000 per year. This to be verified by a contract to commence 1 March. Also to be paid $400 for month of February."
In deference to what was believed to be the requirement of cl 6 of the Club's Articles of Association, Mr Bennett resigned from the Committee upon being appointed Bar and Club House Manager. That Clause provides:
"6.(1) The income and property of the Association, however derived, shall be applied solely towards the promotion of the objects and purposes of the Association and no portion thereof shall be paid or transferred, directly or indirectly, by dividend, bonus, or otherwise, to any member of the Association.
(2)The Association shall not:
(a)appoint a person who is a member of the committee to any office in the gift of the Association to the holder of which there is payable any remuneration by way of salary, fees, or allowances; or
(b)pay to any such person any remuneration or other benefit in money or money's worth (other than out-of-pocket expenses).
(3)Nothing in the foregoing provisions of this rule prevents the payment in good faith to a servant or member of the Association of:
(a)remuneration in return for services actually rendered to the Association by the servant or member or for goods supplied to the Association by the servant or member in the ordinary course of business;
(b)interest at a rate not exceeding seven and one-quarter per cent on moneys lent to the Association by the servant or member; or
(c)a reasonable and proper sum by way of rent for premises let to the Association by the servant or member."
A draft contract was brought into existence at or about the same time which, in the belief of its framers but unknown to Mr Bennett, was an adaptation of terms and conditions accorded by Australia Post to contractors engaged by it to deliver mail and parcels. The draft included these provisions which I have numbered for ease of future reference:
"1.Bar and Club House Manager .... Approved Committee meeting 4/2/91.
2.Salary .. Fixed contract to be reviewed in six months from 1/3/91. $20,000 pa. Contractor to provide for all his/her own sick leave, superannuation, accident insurance, annual leave etc.
3.Duties:-
Responsible to the E Z Risdon Golf Club Committee for the efficient and effective management of the bar and associated club house facilities.
4.Serve behind the bar as necessary, and at least up to the hours worked by the current part time bar attendant.
5.Maintain a "Bar Trading" bank account for the purpose of banking all monies received and for the payment of all accounts for bar and associated purchases by cheque.
6.Pay all bar staff and maintain associated records of hours worked, pay, taxation, and superannuation.
7.Responsible for the supervision of the cleaning of the club house and for payment to the contractor. Arrange additional cleaning of windows, curtains, carpets, etc. after approval by the committee. (club house includes B.B.Q. area).
8.Maintains beer ticket, and similar, machines and associated records.
9.Prepare and submit to the proper authorities all returns required in respect of the licensing laws and gaming laws.
10.Promote and foster a friendly and courteous environment in the club house.
11.Induct bar staff and cleaning contractors when necessary.
12.Report to the President or Captain any repeated breaches of the dress rules or visitor privileges.
13.Submit to the committee all applications, with a recommendation for approval or disapproval, for hire of the club house and its facilities.
14.With due regard to accepted club practices and with consideration of AHA recommendations fix prices for liquor and other products sold over the bar.
15.Maintain proper accounting records of all income and expenditure for audit and examination by the club Treasurer.
16.Transfer all surplus monies to the treasurer as requested by him, but at least once each month.
17.Responsible for the security of the club house and the assets therein.
18.Any other duties as approved by the Committee and directed by the Secretary.
19.Attend all committee meetings when requested."
Despite the stipulation in paragraph 2 "Contractor to provide for all his/her own sick leave, superannuation ..." Mr Bennett advised the Committee that the Club was obliged by law to make superannuation contributions in respect of him. That was confirmed by advice from "Club Plus", an entity which apparently administers a superannuation fund for registered clubs in Tasmania. Accordingly, the Club paid superannuation contributions in respect of Mr Bennett from the time when, or shortly after, he commenced to perform the functions of bar manager. Mr Bennett elected to, and did, make as well his own contributions to the same fund. It appears that a new contract was entered into between the Club and Mr Bennett with effect from 1 July 1992. That contract incorporated some of the draft provisions reproduced above with the following variations to paragraph 2:
"Salary to be a fixed contract of $22,000 per annum which will be reviewed in six monthly periods from 1/7/92, subject to the proviso that either party may determine the contract at any time upon fourteen (14) days notice in writing. Salary payable on the last day of each calendar month.
Contractor is to provide for all his/her sick leave, annual leave, taxation provisions etc at no additional cost to the club, however the club will make the 3% of salary payment, as required by law, to the "Club Plus" superannuation fund."
As well, paragraph 4 of the earlier draft was redrawn to read:
"Serve behind the bar as necessary, and at least up to the hours worked by the current part time bar attendant. Work whatever hours necessary to provide bar service during the hours the bar is open and whatever other hours necessary to efficiently and effectively carry out the duties of Bar/Club House Manager."
The word "bar" between the words "all" and "staff" in paragraph 6 of the first draft was deleted and other paragraphs in the statement of duties were varied or added as follows:
"11.Induct bar staff and cleaning contractors when necessary, and ensure that they perform their duties in a satisfactory manner.
15.Maintain proper accounting records of all income and expenditure for audit and examination by the club Treasurer, and facilitate this examination.
18.Any other duties as approved by the Committee and directed by the President.
19.Attend all committee meetings, when required, for the purpose of reporting on the management of the bar and club house.
20.Ensure that the Club standards of dress are observed and report to the committee any repeated breaches of the dress rules or visitor privileges.
21.Assist the treasurer with the stocktake of the bar and other assets.
22.In the event of sickness or other absence of the contractor, the contractor is to provide a replacement, who must be acceptable to the Committee, at no additional cost to the club.
23.The above forms the basis of the contract between Peter Bennett and the E Z Risdon Golf Club and is hereby agreed."
The Club received advice from the Australian Taxation Office that because 50% or more of the value of Mr Bennett's contract was in respect of the provision of labour, it was obliged to make PAYE deductions from his remuneration. It apparently did that from the commencement of his work as bar manager.
Shortly after the relationship with Mr Bennett commenced, the Club also paid workers' compensation premiums on the basis that it had four employees, a greenkeeper, the full-time bar attendant, Mr Bennett and Mr Freeman who was engaged as a cleaning contractor. The premium was calculated by reference to the total remuneration of those four persons.
Payments for the four persons just mentioned were recorded in a wages book kept by the Club which was filled in by Mr Bennett himself on instructions from the Club Treasurer. The entries for the greenkeeper and the full-time bar attendant disclose the hours worked daily by each of those employees, the gross wages for each of them and a net amount paid after deductions of tax and superannuation and, for the greenkeeper, a "housing payment".
Mr Bennett's own remuneration and that for Mr Freeman was recorded as paid monthly with deductions for income tax and, for Mr Bennett, superannuation. In lieu of a record of hours worked daily by Mr Bennett and Mr Freeman the hours and wages record has the following entries:
"Bennett P G Contract Payment Jan '94
Freeman SContract Payment Cleaner"
As well it seems that at the end of each calendar year during which the contract subsisted, Mr Bennett was paid pursuant to a resolution of the Committee a bonus of $100 or $200. The greenkeeper and full-time bar attendant were similarly favoured.
The evidence suggests that when he was unable himself to act as barman when the full-time bar attendant was absent, or rostered off duty, Mr Bennett arranged for a substitute to work voluntarily in his place. Usually that was a serving or former member of the Committee and Mr Bennett did not expressly seek the approval of the President or the Committee to make those substitutions.
There was some suggestion that Mr Bennett has been conducting a catering business under the name "A & B Catering". However, he has explained, and I accept, that on occasions he and another man, Mr Anning, provided catering services to the Club or to members of the Club who used its premises for functions for which payment was made separately and independently from his remuneration as bar manager. It is likely that the cheque butt recording one of those payments bears the legend "A & B (meaning Anning and Bennett) Catering".
At each meeting of the Committee, Mr Bennett gave a review of the bar trading figures. The Committee carried out stocktaking every three months. Mr Bennett was responsible for ordering stock. He was allowed some discretion in fixing bar prices although the Committee formulated a policy by which those prices were to bear a relation to prices recommended from time to time by the Australian Hotels Association. As well, Mr Bennett installed, and was responsible for monitoring, a security system. When activated, an alarm was set off at Mr Bennett's home and he was required to attend and investigate the disturbance. Mr Bennett was not required to work a specific number of hours each week but he has estimated that he devoted an average of eight hours a day to the Club. He was also a member of the Club and an active golfer and he has conceded that it was not always possible to draw a clear distinction between his activities as a member and those which he was required to undertake as part of his duties.
A bar trading account was established after Mr Bennett commenced those duties. That account was maintained at a bank different from that at which the Club's general account was kept. Mr Bennett was one of three signatories, any one of whom could operate the bar trading account.
Under his latest written contract, Mr Bennett's remuneration was $24,000 per annum together with a "travelling allowance" of $65 a month which was apparently intended to reimburse him for the cost of using his own car on Club business. Mr Bennett did not include that allowance as income in tax returns but claimed a deduction in an amount in excess of it as "work related motor vehicle expenses". That latest written contract substantially reproduced the document which had evolved to the form already described. Clause 2 had been further modified to read:
"2.Salary to be a fixed contract of $24000 per annum, plus CPI increases, which will be reviewed in February of each year from 1995, subject to the proviso that either party may determine the contract at any time upon fourteen (14) days notice in writing. Salary payable on the last day of each calendar month.
Contractor is to provide for all his/her own sick leave, annual leave, taxation provisions etc at no additional cost to the Club; however, the Club will make the 4% of salary payment, as required by law, to the "Club Plus" Superannuation Fund and cover workers compensation."
In the Club Treasurer's monthly statement of receipts and payments the money paid to Mr Bennett was recorded by two entries. The following entries, for example, occur in the report for January 1995:
"ChequePayee Amount Details Account
622896Contract $1471.00 P Bennett Wages
622809P Bennett $ 65.00 Travelling Expenses Bar Wages"
Corresponding weekly entries for Mrs Gillies, the full-time bar attendant and Mr Mallinson, the greenkeeper, and in respect of payment to Mr Freeman, who had been engaged as a cleaning contractor, were:
"Cheque Payee Amount Details Account
329961Payroll $372.00 Gillies Bar Wages
$370.00Mallinson Course Wages
622807Contract $316.00 Cleaning Cleaning"
On occasions, when Mr Bennett worked to cover the absences of Mrs Gillies, otherwise than for recreation leave, Mr Bennett claimed and was paid at the direction of the Treasurer, additional remuneration at an hourly rate calculated by dividing his fixed annual remuneration by 52 and then by 38 being the number of standard hours prescribed by the Licensed Clubs' Award to arrive at an hourly rate which was then loaded by any applicable penalty rate under the award for weekend work. Except for those occasions, Mr Bennett did not claim overtime or any other benefit available under the Licensed Clubs' Award. Nor did he keep a record of hours which he worked except when covering an unexpected absence of the full-time bar attendant.
Earlier authorities regarded as decisive of the question of whether a contract was "of service" or "for services", the extent to which the presumptive employer had control over the person claimed to be an employee. Later authorities refined that test and accorded it a less dominant place in the resolution of the ultimate issue. The modern approach has been authoritatively indicated by the High Court in Stevens & Gray v Brodribb Sawmilling Co Pty Limited (1986) 160 CLR 16, where Mason J observed at page 24:
"But the existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment. The approach of this Court has been to regard it merely as one of a number of indicia which must be considered in determination of that question: Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 C.L.R. 539 at p 552; Zuijs' case; Federal Commissioner of Taxation v Barrett (1973) 129 C.L.R. at p 401; Marshall v Whittaker's Building Supply Co. (1963) 109 C.L.R. 210 at p 218. Other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work, and provision for holidays, the deduction of income tax, and the delegation of work by the putative employee."
Of the other indicia suggested by his Honour in that passage, only the absence of a requirement to work a specific number of hours and of a specific provision for holidays tend against the conclusion that Mr Bennett was an employee. I also regard the degree of control which was exercised or exercisable by the committee over Mr Bennett's activities, having regard to the nature of those activities, as supporting the conclusion that the relationship was one of employer and employee. It is of the nature of the duties of a manager, even one who is indisputably an employee, that he or she will exercise a large discretion as to how and when the manager's own duties and those of others whom the manager is required to supervise will be performed.
Although Wilson and Dawson JJ in Stevens v Brodribb (supra) regarded the control test as the surest guide of whether a person is contracting independently or serving as an employee, their Honours went on at pages 36 and 37 to suggest those indicia which tend against the conclusion that a person is an employee. In that passage their Honours said:
"Those which indicate a contract for services include work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of goodwill or saleable assets in the course of his work, the payment by him from his remuneration of business expenses of any significant proportion and the payment to him of remuneration without deduction for income tax. None of these leads to any necessary inference, however, and the actual terms and terminology of the contract will always be of considerable importance."
Few if any of those contraindications of a contract of employment are present in this case. However, Mr Fitzgerald, for the respondent, has focused particular attention on the actual language of the written contract. He pointed to the use in paragraph (2) of the term "contractor" and the requirement that he or she is to "provide for all his/her own sick leave, annual leave, taxation provisions at no additional cost to the Club". The following reference to superannuation, however, was argued to have a concessive effect designed not to detract from the import of the earlier part of that paragraph, which was said to indicate prima facie that the Bar and Club House Manager was to be an independent contractor.
That indication was said to be reinforced by the distinctive treatment accorded to the bar manager and cleaning contractor in the wages records of the club, by contrast with the manner of recording wages paid to the full-time bar attendant and the greenkeeper. However, the force of that indication is diminished to some extent by the treatment of the same matters in the accounting records of the club where Mr Bennett's remuneration was posted to "bar wages". It is also not without significance that the written contract described Mr Bennett's remuneration as "salary", and contained a detailed specification of "duties" which he was required to perform. Ultimately, the approach to be taken to a case like the present has to be resolved by the impression which the court retains after balancing all of the factors tending one way or the other. As Gray J observed in Re election in the Transport Workers' Union of Australia; ex parte Porter (1989) AILR 388:
"A Court determining whether a particular relationship is that of employment or of some other kind can therefore only resort to the process of balancing all of the factors or, as they are called in Stevens and other cases, the indicia. In truth, the result may be a matter of impression. Although the parties are free as a matter of law to choose the nature of the contract which they will make between themselves, their own characterisation of that contract will not be conclusive. A court will always look at all of the terms of the contract to determine its true essence and will not be bound by the express choice of the parties as to the label to be attached to it."
It is conceivable that a person could be engaged to perform the duties of a bar and club house manager as an independent contractor. Such a person could, for example, contract to supply members with liquor or other drinks and snacks from his or her own resources, and could conduct the operation as an independent business employing his or her own staff and exercising complete autonomy as to how and by whom the operation should be supervised. However, the mere description of that possibility illustrates how far removed Mr Bennett and other club managers of the traditional kind are from any relationship with the Club which could be described as that of an independent contractor. A balancing of all of the factors which bear on the present question, on the impression which I have formed, is overwhelmingly in favour of the conclusion that Mr Bennett was an employee of the club. The preliminary question must therefore be resolved in his favour.
I certify this and the preceding twelve (12) pages are a true copy of the reasons for judgment of his Honour Justice Ryan.
Associate:
Date:
Counsel for the applicant: Mr D R Wallace
Solicitors for the applicant: Wallace Wilkinson and Webster
Counsel for the respondent: Mr W J Fitzgerald
Employer organisation representing
the respondent: Tasmanian Chamber of Commerce and Industry Ltd
Hearing dates: 02 and 03 August 1995
0
3
0