Bradley Webster v Dickson Glass & Aluminium

[2013] FWC 2361

[2013] FWC 2361

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Bradley Webster
v
Dickson Glass & Aluminium
(U2013/380)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 18 APRIL 2013

Application for unfair dismissal remedy - jurisdiction - employer or subcontractor - minimum period of employment.

[1] On 11 February 2013 Mr Webster lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) through which he sought relief with respect to the termination of what he asserted was an employment contract with Dickson Glass and Aluminium Pty Ltd (Dickson Glass). Mr Webster's application was not settled through the Fair Work Commission (FWC) telephone conciliation process and was referred to me for consideration.

[2] Following consultation with the parties the application was the subject of a determinative conference on 15 April 2013. At this conference, Mr Webster appeared for himself while Dickson Glass was represented by Mr Earls of the Master Builders Association of South Australia.

[3] On 28 March 2013 I issued an Order requiring Mr Webster to provide to the FWC various documents relative to his standing as either an employee or an independent contractor. Mr Webster advised that he had not received that Order. I have accepted that advice and have not drawn any adverse inference from Mr Webster's failure to comply with that Order.

[4] Dickson Glass is a glazing and aluminium contractor involved in various building and construction projects.

[5] Mr Webster's application is made on the basis that he asserts that whilst he was engaged as a subcontractor, he was forced to work in the manner of an employee. 1 Mr Webster's evidence was that he worked for Dickson Glass for around 12 months from November 2011 when he was initially engaged on a labour only basis. He did not work for Dickson Glass between 7 July 2012 and 27 September 2012 but his evidence was that shortly before 7 July, he was told that Dickson Glass had won a major project referred to as the "Tonsley Project". Mr Webster asserts that he was told in July that he would shortly be told the date upon which he would start on that job. Mr Webster advised that he was available to work on that project immediately but that when the project start was delayed he undertook various other activities in the intervening three months. Mr Webster's evidence was that he started on the Tonsley Project on 27 September 2012 and worked regular hours plus overtime on that project until he was dismissed on 22 January 2013. He claims that this termination of his employment was unfair. Mr Webster advised that he provided invoices to Dickson Glass on a weekly basis and that these referred to his hours and to non-existent materials costs.

[6] The Dickson Glass position is that Mr Webster was not an employee but was an independent subcontractor. In the alternative, Dickson Glass asserts that Mr Webster had not completed the requisite minimum period of employment. Dickson Glass called a number of witnesses in support of its position.

[7] Mr Keogh is a Director and formerly the General Manager of Dickson Glass. His evidence went to Dickson Glass’ employment and contracting arrangements, to his involvement with Mr Webster and the actions he took to engage him as a subcontractor. Mr Keogh's evidence also went to the circumstances under which Mr Webster undertook contract work on the Tonsley Project. Mr Keogh detailed the differentiation between Mr Webster and certain other "subcontractors" as distinct from Dickson Glass employees.

[8] Mr Robinson is the Dickson Glass Project Manager for the Tonsley Project. His evidence went to his dealings with Mr Webster and other persons regarded as subcontractors on that project. He detailed the Dickson Glass approach to the supervision of those persons and the extent to which they undertook work at varying times, could undertake work for other entities and were paid only for the work done.

[9] Mr Hanlon's evidence was that he was a self-employed Glazier/frame fixer, engaged on the Tonsley Project. Mr Hanlon confirmed that his contract was in substantially similar terms to that of Mr Webster. Mr Hanlon detailed his payment and working arrangements.

Findings

[10] Section 396 requires that I reach conclusions with respect to a number of specified initial matters before considering the merits of Mr Webster's application.

[11] There is no dispute that the application was lodged within 21 days of the termination of the relationship between Mr Webster and Dickson Glass.

[12] This decision deals with a substantial difference between the parties in relation to whether Mr Webster was a person protected from unfair dismissal.

[13] There is no argument that Dickson Glass is not a small business and hence the small business fair dismissal code has no application. Similarly, the issue of redundancy does not arise in this situation.

[14] Section 382 states:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

Note: High income threshold indexed to $123,300 from 1 July 2012”

[15] Section 13 states:

“13 Meaning of national system employee

A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.

Note: Sections 30C and 30M extend the meaning of national system employee in relation to a referring State.”

[16] In Jiang Shen Cai trading as French Accent v Do Rozario 2 a Full Bench of the Commission considered various authorities relevant to contracting and employment relationships and summarised the distinction between employees and independent contractors in the following terms:

“[30] The general law approach to distinguishing between employees and independent contractors may be summarised as follows:

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

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

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

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

● Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like.

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

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

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

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

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

● Whether the worker provides and maintains significant tools or equipment.

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

● Whether the work can be delegated or subcontracted.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(references removed)

[17] I have applied this approach. It requires consideration of various indicia and the likely balancing of certain criteria which go to support a contracting arrangement with others that indicate employment.

[18] I have concluded that Mr Webster entered into a contract with Dickson Glass for his work on the Tonsley Project and that this contract described an arrangement consistent with a contracting arrangement. 3 Mr Webster worked and was paid under this contract.

[19] I have concluded that Mr Webster was able to elect to undertake glazing work on the Tonsley Project and that, subject to advance notice provided to Dickson Class, could undertake work elsewhere or elect not to work if he wished to do so. Mr Webster was free to, and may have worked elsewhere. I have reached this conclusion on the basis of the evidence of Mr Keogh and that of Mr Robinson. In terms of the manner of control by Dickson Glass, the evidence of Mr Robinson went to the manner in which Dickson Glass met its occupational health and safety obligations but, more particularly, to the extent to which Mr Dickson was responsible for the work allocated to him 4 and was not subject to close managerial supervision.

[20] I have noted that Mr Webster has promoted himself as a subcontractor on a publicly accessible web page. Mr Webster provided his own tools, which he took home every night, equipment and vehicle. That vehicle was arranged to facilitate Mr Webster's glazing contracting activities. It was equipped so as to be able to carry glass and Mr Webster's tools. It may be that Mr Webster reduced the extent of those contracting activities whilst working on the Tonsley Project, but this does not detract from the extent to which Mr Webster equipped himself to work as a subcontractor. Mr Webster was required to have various insurances. 5 The contract which Mr Webster operated under was not signed but nevertheless I am satisfied that Mr Webster did not dispute the terms of that contract. One such term allowed Mr Webster to engage labour himself. Further, the contract6 does not provide for dismissal rights consistent with an employment arrangement. Mr Webster did not wear any kind of uniform and was not provided with clothing identifying him as a Dickson Glass employee. Income tax was not deducted from the remuneration paid to Mr Webster. Further, Mr Webster was able to (and did) direct payments due to him so that they were paid to his wife. Mr Webster invoiced Dickson Glass for his time. The invoices Mr Webster provided to Dickson Glass were numbered but these numbers were not consecutive. Mr Webster's evidence was that he used, for at least some of the time, an invoicing system operated through his mobile telephone. Nevertheless, I am not satisfied that Mr Webster has provided accurate information which indicates that the only work for which he issued invoices was that undertaken for Dickson Glass. The component generally included in his invoices for materials reflected recognition by Dickson Glass of his operating costs as a contractor. I am satisfied that Mr Webster was advised of his capacity to include a materials component in those invoices to reflect those subcontracting operating expenses which covered, amongst other possibilities, the cost of his tools and vehicle. GST was added to those invoices. Mr Webster was paid according to the work he actually undertook. I am not satisfied that Mr Webster was paid an overtime rate of pay in the form of a loaded rate. Mr Webster was not paid holiday or sick leave and was not engaged under the terms of the Enterprise Agreement that applied to Dickson Glass employees. He was engaged as a specialist glazing tradesperson. I am not satisfied that, as a subcontractor, he created goodwill or saleable assets or that he included significant business expenses.

[21] On balance, and on the information available to me, I am satisfied that Mr Webster was engaged as a subcontractor under arrangements relatively common in some parts of the building and construction industry. On this basis I have concluded that Mr Webster was not an employee. Accordingly, Mr Webster is not a person who is protected from unfair dismissal and is not able to pursue this application.

[22] Notwithstanding this conclusion, I have considered whether, if in fact Mr Webster was an employee, he had completed the requisite minimum period of employment.

[23] Section 383 states:

“383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.”

[24] Section 384 states:

“384 Period of employment

(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee’s period of employment with the new employer.”

[25] The information available to me with respect to the arrangements applicable to Mr Webster when he worked with Dickson Glass on the project prior to the Tonsley Project does not enable an informed conclusion about whether, on that project, he worked as a subcontractor or an employee. However, irrespective of this, I prefer the evidence of Mr Keogh, to the effect that there was no guarantee given to Mr Webster of employment on the Tonsley Project 7, rather than Mr Webster's assertions to the effect that he was guaranteed employment on the Tonsley Project after a short break. I am not satisfied that Mr Webster was assured of employment on the Tonsley Project in any way.

[26] This means that Mr Webster had not completed the requisite six months employment at the time of the termination of his working arrangement with Dickson Glass. Accordingly, even if Mr Webster was an employee, he was not protected from unfair dismissal and cannot pursue this application.

[27] For the reasons I have set out the application must be dismissed. An Order [PR535787] to this effect will be issued.

SENIOR DEPUTY PRESIDENT

Appearances:

B Webster on his own behalf

T Earls for the Respondent

Hearing details (Determinative Conference):

2013.

Adelaide:

April 15.

 1   Exhibit W1, Outline of Submissions, para 1

 2   [2011] FWAFB 8307

 3   Exhibit DG4, Mr Keogh's Statement, attch BK1

 4   Exhibit DG2, paras 11-16

 5   Exhibit DG4, annexure BK1, para 14

 6   Exhibit DG4, annexure BK1

 7   Exhibit DG4, paras 9-19

Printed by authority of the Commonwealth Government Printer

<Price code C, PR535786>