Boyar v The House of Life
[2011] FWA 7953
•21 NOVEMBER 2011
[2011] FWA 7953 |
|
DECISION |
Fair Work Act 2009
s.365—General protections
Elise Boyar
v
The House of Life
(C2011/5279)
COMMISSIONER RYAN | MELBOURNE, 21 NOVEMBER 2011 |
General protections dispute involving dismissal - jurisdictional objection as to whether applicant was an employee.
[1] The applicant, Dr Elise Boyar, on 28 July 2011, filed an application under s.365 of the Fair Work Act 2009 (the Act) for Fair Work Australia to deal with a General Protections Dispute involving the dismissal of the applicant from her employment with The House of Life (the respondent) on 30 June 2011. The application was made within the time limit set by s.366(1)(a) of the Act.
[2] The application was subject of a conference held under s.368 of the Act on 18 August 2011. Neither party was legally represented at the conference. At the conference the respondent raised a jurisdictional challenge to the application in that the respondent asserted that the applicant was not an employee of the respondent but was an independent contractor. The conference was abandoned and the application was subsequently listed for hearing of the jurisdictional challenge of the respondent on 13 October 2011.
Dealing with a Jurisdictional Challenge in a General Protections Application
[3] I am aware that there is a difference in opinion within the Tribunal in dealing with jurisdictional challenges to applications in relation to general protections disputes.
[4] This difference is most clearly articulated in the decision of Cribb C in Hansen v Apex Cleaning and Polishing Supplies P/L T/as Apex Cleaning Supplies[2011] FWA 1566. In that decision at [35] the Commissioner came to the conclusion that:
‘...it appears that the provisions of the Act, in terms of the functions of the Tribunal regarding general protections disputes under s.365, simply require the Tribunal to conduct a conference to deal with the dispute (s.368), to issue a certificate if the dispute is unresolved (s.369) and provide advice on a general protections court application if it considers that a court application would not have a reasonable prospect of success (s.370). This may be contrasted with the powers given to the Tribunal regarding unfair dismissal claims (Part 3-2 of the Act). Part 3-2 requires the Tribunal to, in addition to conducting a conference (s.398), determine a number of jurisdictional issues prior to determining the merits of an application.’
[5] The Commissioner’s reasoning was based upon both the wording of s.369 and the differences between Division 8 of Part 3-1 of the Act dealing with General Protections matters and the provisions of Part 3-2 of the Act dealing with Unfair Dismissal matters.
[6] The Commissioner in that matter noted two earlier decisions by Cloghan C which had decided jurisdictional objections in relation to general protections applications.
[7] I have come to a different conclusion to that of Cribb C in relation to the role of the Tribunal in dealing with a jurisdictional challenge to a general protections application.
[8] As Cribb C identified in Hansen v Apex Cleaning Supplies there is significant difference between the structure of Division 8 of Part 3-1 of the Act dealing with General Protections matters and the provisions of Part 3-2 of the Act dealing with Unfair Dismissal matters.
[9] The role of FWA under Division 8 of Part 3-1 of the Act dealing with General Protections applications is limited to conducting a conference of the parties with a view to assisting the parties to reach an agreed settlement of the matter in dispute.
[10] The language used in the Explanatory Memorandum to the Fair Work Act is clear in explaining the way in which general protections matters proceed:
‘Division 8 – Compliance
1475. This Division sets out the compliance framework for contraventions of Part 3-1. In most cases where there has been a dismissal, the dispute will be dealt with at first instance in a conference conducted by FWA. If the dispute remains unsettled after the conclusion of the conference, the dismissed employee can proceed to court. In all other cases, participation in an FWA conference is voluntary and a person can instead elect to proceed directly to court.’
[11] The merits of an application alleging breach of a general protections provision of the Act can only be considered and determined by a court. In contrast an application to FWA alleging unfair dismissal is a matter in which FWA decides the merits of the application.
[12] The structure of Part 3-2 of the Act dealing with Unfair Dismissal matters recognises that FWA must deal with both jurisdictional matters as well as the merits of an application and the Act provides in s.396 that FWA must deal with the jurisdictional requirements before considering the merits of the application. Importantly, s.396 of the Act sits within Division 5 - Procedural Matters within Part 3-2 of the Act.
[13] The requirement to consider jurisdictional issues before merit issues in relation to an unfair dismissal matter is merely a procedural matter. If s.396 was removed from the Act the only impact would be that FWA could consider jurisdictional matters at the same hearing in which it dealt with the merits of the application. If s.396 was removed from the Act it would not mean that FWA could ignore jurisdictional challenges to applications and simply consider the merits of an application. If s.396 was removed from the Act FWA would still have to decide on each of the jurisdictional matters identified in s.396 for the very reason that each identifies a jurisdictional fact the existence or absence of which has to be ascertained by FWA.
[14] Similarly the absence of any provision in Division 8 of Part 3-1 of the Act which requires FWA to consider jurisdictional matters does not mean that FWA is free to ignore the facts which found its jurisdiction.
[15] An application can only be made under s.365 if a person has been dismissed and if there is an allegation that the person was dismissed in contravention of Part 3-1 of the Act.
Whether or not a person has been dismissed is a jurisdictional fact. A person cannot be dismissed if the relationship between the applicant and the respondent in a s.365 matter is one in which it is not possible for the person to be dismissed.
[16] In R v Federal Court of Australia; Ex parte WA National Football League 1 Barwick CJ said:
‘Where constitutional competence to create the jurisdiction depends on the actual existence of some specific fact or situation the court or tribunal, though it may form a view as to whether the fact or situation exists, is not competent to decide that in truth either does exist: only this Court may conclusively determine the actual existence of the fact or situation which grounds the constitutional power.’
[17] Thus whilst the jurisdictional fact of whether a person alleging a breach of general protections provision has or has not been dismissed can only be conclusively determined by the courts nevertheless FWA must form a view as to whether the fact, i.e. the person has been dismissed, exists.
[18] In circumstances such as the present, where the respondent contends that Dr Boyar was not an employee but was an independent contractor and where Dr Boyar contends that she was an employee, FWA must form a view as to the jurisdictional facts referred to in s.365(a).
[19] This view accords with my understanding of the purpose of the Act.
[20] The very presence of the provision of paragraph 365(a) of the Act suggests that Parliament intended that FWA would not convene conferences merely because of the allegation that contravention of Part 3-1 of the Act occurred. Paragraph 365(a) of the Act has real work to do. It provides an essential starting point for the involvement of FWA in a general protections application in which dismissal is alleged to have occurred in contravention of Part 3-1 of the Act. The starting point is that involvement of FWA is triggered only if the jurisdictional fact of a person having been dismissed exists. Where the existence of that fact is challenged then FWA must in my view conduct a hearing to form a view as to the existence of that fact.
[21] To do otherwise would in my view simply invite applications to be made to FWA where the applicant alleged that ‘a person has been dismissed’ but where the jurisdictional basis for making an application, namely, that ‘a person has been dismissed’ was in fact absent.
Jurisdictional Challenge in the present matter
[22] At the hearing of the jurisdictional challenge neither party was legally represented. The Applicant represented herself and was assisted at the hearing by a friend, Ms Axford. The Respondent was represented by the owner Dr Marina Christov and was assisted by her partner Mr D Trpcevski and by her sister Ms A Christov. The applicant gave evidence on her own behalf and Dr M Christov gave evidence for the respondent.
[23] The Respondent is a Traditional Chinese Medicine Practice operated by Dr Marina Christov, a practitioner of Traditional Chinese Medicine and Acupuncture. The applicant, Dr Elise Boyar, was engaged by Dr Christov as a Locum on a part time basis to cover a period of maternity leave at The House of Life. At the conclusion of the period of maternity leave Dr Boyar was offered continued part time work by The House of Life on an ongoing basis. Dr Boyar is also a practitioner of Traditional Chinese Medicine and Acupuncture.
[24] In the course of proceedings I drew the attention of both parties to the decision of a Full Bench of the former Australian Industrial Relations Commission in Abdalla v Viewdaze Pty Ltd t/as Malta Travel 2 and to the decision of Bromberg J in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3)3, and I offered both parties an opportunity after the hearing to make any further submissions in the matter after having considered those cases. Each party took the opportunity of filing additional submissions.
[25] In Abdalla v Viewdaze the Full Bench said:
‘Summary of the law on distinguishing employees from independent contractors
[34] Following Hollis v Vabu, the state of the law governing the determination of whether an individual is an employee or an independent contractor may be summarised as follows:
(1) Whether a worker is an employee or an independent contractor turns on whether the relationship to which the contract between the worker and the putative employer gives rise is a relationship where the contract between the parties is to be characterised as a contract of service or a contract for the provision of services. The ultimate question will always be 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. This question is answered by considering 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 and must be considered. However, in so doing, it should be borne in mind that 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: that is, 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. If, after considering all other matters, the relationship is ambiguous and is capable of being one or the other, then the parties can remove that ambiguity by the very agreement itself which they make with one another.
(4) Consideration should then be given to the various `indicia' identified in Brodribb and the other authorities bearing in mind that no list of indicia is to be regarded as comprehensive and the weight to be given to particular indicia will vary according to the circumstances. Where a consideration of the `indicia' points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. For ease of reference we have collected the following list of `indicia':
· 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 independent contract. While control of this sort is a significant factor 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 their 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 weights 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, if the individual also works for others (or the genuine and practical entitlement to do so) then this suggests 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.
This list is not exhaustive. 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) If the indicia point both ways and do not yield a clear result the determination should be guided primarily by whether it can be said that, viewed as a practical matter, the individual in question was or was not running his or her own business or enterprise with independence in the conduct of his or her operations as distinct from operating as a representative of another business with little or no independence in the conduct of his or her operations.
(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 (see above).’
[footnotes omitted]
[26] In On Call Interpreters at paras 188 - 220, Bromberg J summarised the authorities and in doing so restated the legal principles in a simple and concise manner, Whilst Bromberg J referred to the outcome as a multifactorial totality test it is essentially the same as the test stated in Abdulla v Viewdaze, but Bromberg J stated the test in a more detailed manner than Abdulla v Viewdaze.
Consideration
[27] There are a number of factors which support the position advanced by each party. The factors which support Dr Boyar’s contention that she was an employee of House of Life are as follows:
● Dr Boyar provided her professional services at the consulting rooms of The House of Life.
● The business card Dr Boyar was required to use clearly identified Dr Boyar with The House of Life.
● Dr Boyar was required to provide the professional services herself and not through any other person.
● All major equipment and facilities used by Dr Boyar was provided for by The House of Life.
● The House of Life obtained the herbal medicines which were prescribed by Dr Boyar.
● Marketing pamphlets for The House of Life identified Dr Boyar with The House of Life.
● Dr Boyar was only paid for work actually performed and was paid a set commission for each patient seen.
● The contracts entered into by Dr Boyar with The House of Life did not identify the relationship as one of principal and contractor.
● Patients were patients of The House of Life and not of Dr Boyar
● Patient records and details were controlled by The House of Life.
[28] The factors which support The House of Life’s contention that Dr Boyar is an independent contractor are as follows:
● Dr Boyar was not paid wages or had PAYG tax deducted.
● Dr Boyar supplied The House of Life with her ABN.
● Dr Boyar paid for the business cards and her personal phone number and email address were also on the business card.
● The contracts issued by The House of Life to Dr Boyar were significantly different to the employment contracts issued to employees of House of Life.
● House of Life exercised no control over how Dr Boyar provided her professional services as a Traditional Chinese Medicine practitioner.
● Dr Boyar was paid a commission on profits generated from the dispensary of The House of Life.
[29] In the context of considering the totality of the relationship I now turn to a consideration of the following matters.
The Written Contracts
[30] Dr Boyar performed work under two separate contracts. The first was titled ‘Locum Practitioner Contract with Terms and Conditions and the second was titled ‘Renewal of Practitioner Contract with Terms and Conditions’. Each contract contained 17 dot points which were identical and in addition two additional paragraphs which dealt with hours of work and commission
[31] Most of the 17 dot points in the contracts could apply equally to either a contract of employment or a contract for services.
Control of Patients
[32] However, at least one of the dot points in each contract is supportive of a conclusion that the relationship between The House of Life and Dr Boyar was that of employer and employee.
[33] The second dot point on each contract provides as follows:
● ‘You may not use for your own personal use or give to any third party, patient details or lists, House of Life manuals, instructions, products, policies, any computer software, artwork (without permission from Dr. Marina Christov at The House of Life), intellectual property and/or procedures. You will not take or make copies of any of the aforementioned either in whole or in part and you will not adopt any of the above mentioned used by House of Life for your own use or any third party’s use.’
(emphasis and italics in the original)
[34] Control of patient records and details is a critical matter if Dr Boyar was conducting her own business. It is equally critical if The House of Life was conducting the business in which Dr Boyar worked.
[35] The evidence given by Dr Marina Christov under cross examination makes clear that patients and their records were those of The House of Life. When Dr Boyar ceased working at The House of Life, Dr Christov gave patients the option of staying with The House of Life or being given Dr Boyar’s personal email or telephone number if they wanted to follow Dr Boyar to wherever Dr Boyar would be working. 4 What is clear from Dr Christov’s evidence is that Dr Boyar did not have any control over the patients or their records. Whether or not a patient was given the option of following Dr Boyar was a matter that was totally determined by Dr Christov. The patients were patients of The House of Life and not patients of Dr Boyar.
[36] I also note that in relation to the first contract entered into between Dr Boyar and The House of Life Dr Christov’s evidence was as follows:
‘PN335. Ms Axford: Did you hire her as an employee?
PN336. Dr M Christov: No, she was given an opportunity as a subcontractor to look after my patients while I was on maternity leave.’
[37] The very essence of this evidence is incompatible with the notion of Dr Boyar being an independent contractor. Dr Boyar was looking after part of the business of The House of Life for and on behalf of The House of Life. The business (servicing the patients of Dr Christov during her maternity leave) was for the benefit of The House of Life. The work of Dr Boyar under the first contract is essentially that of a temporary employee.
Hours of Work
[38] Hours of work and the days on which those hours were to be worked were set out in the contracts as was the rate of commission to be paid to Dr Boyar for attending to existing or new patients and for a share of profits made from the herbal medicines prescribed and purchased by the client. Each contract does contain the following statement:
‘We look forward to a prosperous business relationship and hope you enjoy working with the House of Life.’
[39] This is the only statement within the contracts which refers to the relationship between The House of Life and Dr Boyar. It is suggestive of, but not conclusive of, a relationship other than that of employer and employee.
The Relationship between Dr Boyar and House of Life
[40] I prefer the evidence of Dr Boyar in relation to ascertaining the relationship that existed between Dr Boyar and the The House of Life.
[41] Dr Boyar’s very clear evidence was consistent with a relationship of employer and employee.
[42] Whilst Dr Boyar was entitled to and did introduce new patients for her to see at The House of Life the evidence is clear that the patients were patients of The House of Life and not patients of Dr Boyar. Dr Boyar’s evidence was that all patient records belonged to The House of Life. This evidence is consistent with the terms of both of the contracts entered into between The House of Life and Dr Boyar and which gave The House of Life control over patient records and details.
[43] The evidence of Dr Marina Christov supports the evidence and submissions of Dr Boyar.
[44] Under cross examination Dr Christov acknowledged that Dr Boyar was first engaged ‘to look after my patients while I was on maternity leave. Whilst Dr Christov described the engagement as, ‘she was given an opportunity as a subcontractor’, the fact that Dr Boyar was looking after Dr Christov’s patients for and on behalf of Dr Christov and at The House of Life is supportive of a conclusion that Dr Boyar was engaged on a contract of personal service for The House of Life.
Hours of Work
[45] In relation to the period of the second contract whilst The House of Life submitted that Dr Boyar had the freedom to set her own hours of work the evidence of Dr Christov was as follows:
‘PN347. Ms Axford: ...With this contract that’s here, which is Exhibit A1, you’ve got here, firstly, that there are set hours that Elise has to do. Is that correct?
PN348. Dr M Christov: Well, yes, there are set hours, but they’re the set hours that Elise requested.
PN349: Ms Axford: Okay, but they were set hours?
PN350: Dr M Christov: They were not set by me. They were requested by Elise, because that was her availability. During other days where I wanted her to work, she was not available because she was working in other clinics.’
[46] The evidence of Dr Christov does not support the general contention of the respondent that Dr Boyar had flexibility in setting her hours of work.
Use of Equipment
Dr Christov also gave evidence that Dr Boyar provided some of her own special equipment, a TENS machine, for the treatment of patients. In the written submissions of the respondent it was contended that:
‘6. Elise Boyar owns and operates invested business tools such as a costly TENS machine, which is deemed as a physical asset. This asset in particular is a risk for return, as any investment in any business. Elise also brought to the House of Life and consistently used her own laptop.
and
8. There certainly is a risk profile with Elise Boyar. The fact that Elise Boyar invested in a TENS machine to the tune of several thousand dollars and invested in a programme to educate her on its operation is a clear indication of a person who is investing in her business. This machine was used in The House of Life.’
[47] This contention appears to grossly overstate the value of a TENS machine which range from $100 to $400 and which are sold to the general public.
[48] Dr Boyar’s evidence was that she used the TENS machine once whilst working for The House of Life.
Business Cards
[49] In relation to the issue of business cards, the respondent contended in its written submissions as follows:
‘11.While Elise Boyar had business cards printed with The House of Life logo, these were her own business expense. In relation to the use of The House of Life logo, this was an option not a condition. By choosing to add her mobile number and her email address she is again promoting herself as a business.’
[50] The evidence of Dr Marina Christov under cross examination 5, and which I accept as being truthful, gives some support to the contention of the respondent that the practitioners were not employees. As Dr Christov’s evidence makes clear, control was exercised by Dr Christov over the business cards of each practitioner but that level of control did not extend to requiring practitioners to use the logo of The House of Life. Practitioners at The House of Life were permitted to use their own logo if they had one and if the practitioner’s own logo was ‘compatible with our look and feel’.6 This evidence makes clear that practitioners at The House of Life did not have an unfettered right to use their own logos on their business cards. If, as is normal in business, brand identification through logos is a very important aspect of running a business, then the actions of The House of Life in vetting the use of individual logos on business cards was not compatible with practitioners being independent businesses.
Decision
[51] Having considered the evidence and submissions of both parties in this matter I am of the considered view that Dr Boyar was an employee of The House of Life. The single most important factor in looking at the totality of the relationship between Dr Boyar and The House of Life is that at all times the patients were patients of The House of Life and not patients of Dr Boyar. The servicing of patients by Dr Boyar was performed as part of the business of The House of Life. Dr Boyar was merely providing personal service through a contract of service to The House of Life. The proceedings in this matter were conducted on the basis that The House of Life had conceded that the relationship between The House of Life and Dr Boyar was terminated at the initiative of The House of Life. As I have found that the nature of that relationship is one of employer and employee, then each of the prerequisites of s.365 have been met.
[52] A conference will be convened under s.366 of the Act.
COMMISSIONER
1 [1979] HCA 6; (1979) 143 CLR 190 (27 February 1979)
2 PR927971 [2003] AIRC 504
3 [2011] FCA 366
4 Transcript of proceedings at PN600
5 Ibid at PN379 to PN387
6 Ibid at PN386
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