Brock Plaster Pty Ltd v Jenkins

[2003] TASSC 96

[2003] TASSC 96

CITATION:              Brock Plaster Pty Ltd v Jenkins [2003] TASSC 96

PARTIES:  BROCK PLASTER PTY LTD (ACN 097 307 858)
  v
  JENKINS, Glenn Baden

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  APPELLATE
FILE NO/S:  LCA 52/2003
DELIVERED ON:  7 October 2003
DELIVERED AT:  Hobart
HEARING DATES:  18 September 2003
JUDGMENT OF:  Slicer J

CATCHWORDS:

Workers Compensation - Entitlement to and liability for compensation - Persons entitled to compensation - Who is a worker - Contract of service or independent contractor - Generally.

Vetter v Lake Macquarie City Council (2001) 202 CLR 439; Hollis v Vabu Pty Ltd (2001) 181 ALR 263, referred to.
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, applied.
Aust Dig Workers Compensation [87]

REPRESENTATION:

Counsel:
             Appellant:  S R Worsley
             Respondent:  B R McTaggart
Solicitors:
             Appellant:  Abetz Curtis & Worsley
             Respondent:  Ogilvie Jennings

Judgment Number:  [2003] TASSC 96
Number of Paragraphs:  22

Serial No 96/2003
File No LCA 52/2003

BROCK PLASTER PTY LTD (ACN 097 307 858)
v GLENN BADEN JENKINS

REASONS FOR JUDGMENT  SLICER J

7 October 2003

1. The appellant seeks review of the determination of the Workers Rehabilitation and Compensation Tribunal ("the Tribunal") that the respondent was at the material time:

"… working under a contract of service with the [appellant]."

1. The respondent, said to have been injured at work on 1 October 2002, made a claim for compensation in the appropriate manner and with the required certification.  The issue brought before the Tribunal, pursuant to the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s42, was whether the respondent:

"… had entered into a contract of service with the respondent so to be a worker within the meaning of s3(1) of the Act." (Reasons for decision [2003] TASWRCT 35)

1. There was no issue that the respondent was engaged in work being undertaken by the appellant at the "Odeon" building at the time of injury. The Tribunal determined that, on the evidence presented, the respondent was a worker within the meaning of the Act and not an independent contractor.

1. The findings of fact made by the Tribunal are not the subject of appeal.  The ground of appeal claims error in:

"That the learned Commissioner erred in law by failing to hold that the only conclusion reasonably open on the evidence was that he could not be persuaded that the Respondent was a worker and not an independent contractor for the purposes of the Workers Rehabilitation & Compensation Act 1988."

1. The appellant claims, correctly, that the respondent on the hearing of the application was required to prove on the balance of probabilities that he was a "worker" within the meaning of the Act and concedes properly that the determination upon appeal can only be correctly assailed if the appellant demonstrates legal error. The differing requirements are significant since the question of whether a particular person is or is not a "worker" remains a question of fact, dependent upon legal principle, in each case.

1. The respondent had worked with the appellant company for:

"… many years on and off depending on the period of time for work but I've worked for them for five or six years, probably longer."

The nature of the terms of work was significant as the following exchange with counsel during his evidence at the hearing indicates:

"What was the nature of when – what dictated when you'd work for Brock Plaster? … Phone calls from the leading hands or you'd ring them.  Most of the time they'd ring you if there was work available and say, 'Can you turn up such and such.  Are you working?  Do you want to work?'  And the answer would be, 'Yes', and you'd turn up and go from there.

During periods that you weren't working for Brock Plaster would you work for other people? … If there was work available otherwise you'd get a release form from Brock Plaster and have to go to Centrelink.

And who was your preference to work for? … Brock Plaster."

1. The significance of the above exchange is that on 17 May 2001, the employer had certified to the Department of Social Security that the employment of the respondent, as an employee, had been terminated because of "shortage of work".

1. On 6 October 2000, the appellant (referred to as the contractor) entered into an agreement with the respondent (referred to as the sub-contractor) which relevantly states:

"1   The Contractor agrees to employ the Sub-Contractor to carry-out the works shown in Item 1 of the Schedule at the site shown in Item 2 of the Schedule or such other sites as the parties agree.

2    The Sub-Contractor will carryout the works within the time prescribed by the Contractor, subject of course to allowance for inclement weather, availability of materials, strikes, co-ordination of other trades or other cause reasonably beyond the control of Sub-Contractor [sic].  Any works not done in good and workmanlike manner will be remedied by the Sub-Contractor to the Contractors satisfaction.

3    The Sub-Contractor shall carry out the works to a satisfactory standard but the manner of carrying out the works is in his discretion provided that other trades or components of the site and job are not adversely affected.

4    The Contractor agrees to pay the Sub-Contractor an hour rate of m² rate as set out in Item 3 of the Schedule and such rate includes an allowance for sick leave, long service leave, redundancy payments and holiday pay which will be paid as shown in Item 3.

…

6    The Sub-Contractor agrees to take out and maintain a sickness and accident insurance cover in case of his sickness or an accident preventing him carrying out the works.

7    The Sub-Contractor acknowledges he is an independent Sub-Contractor and has no entitlement to sick leave, long service leave, redundancy payments or holiday pay or holiday leave over and above the hourly rate mentioned in clause 4.

8    The Sub-Contractor agrees to supply his own tolls [sic] and implements of trade.

…

12  The Sub-Contractor agrees to comply with the Contractors Occupational Health and Safety policy and all legislation or regulations relevant to the works."

1. Concurrent with that agreement, the appellant had been engaged in negotiations with the Construction, Forestry, Mining and Energy Union of Australia (Tasmanian Branch) which resulted in the signing of an agreement, entitled "Trade Contractors Enterprise Agreement 2000 – 2003" ("the Agreement"), undated, which was accompanied by a Memorandum of Understanding made between the appellant and the Union.  The evidence suggests that the Agreement and Memorandum of Understanding were made on 6 November 2000.

1. The Agreement relevantly states:

"3.1     This Agreement covers all direct employees of Brock Plaster Pty Ltd in Tasmania engaged on civil and commercial building construction sites (excluding sites where residential buildings as defined under the Housing Indemnity Regulations (1993) are being constructed)."

and sets out rates of pay, hours of employment, superannuation entitlements, health and safety requirements, casual employment, and the like.

1. The respondent contends that the Agreement and Memorandum of Understanding ought be read in conjunction with the contract of service with the conclusion that the defined relationship was that of flexible employment which retained traditional protective rights.  The appellant contends that the argument is circular since the general agreement refers to "employed workers" and cannot be used to determine the status of the respondent.

1. The Tribunal accepted, at 8, that the agreement of 6 October:

"… clearly favours the conclusion that the applicant was retained as an independent contractor rather than a worker."

It also found other factors which supported that conclusion, namely:

·     the non-deduction of tax by PAYE, and the status recognised by the holding of an Australian Business number;

·     the capacity of the respondent to work for other persons and the minimal degree of control exercised by the appellant;

·     the nature of the business conducted by the appellant, particularly its retention of "core employees" supplemented by sub-contractors;

·     the employer's provision of distinctive clothing as a method of worker identification and general promotion of the appellant's business.

1. The Tribunal identified some 19 evidentiary matters which supported the conclusion that the respondent was a person to whom the Act applied. Much of the argument advanced at the hearing of this appeal was directed at the weight which could properly attach to each of those matters, but none was challenged as an impermissible finding.

1. The question to be answered by the Tribunal was not whether the respondent was at all times an employee, but whether at the time of the accident he was a "worker" within the meaning of the legislation, and entitled to its protection.  The Tribunal having made primary findings of fact, concluded that:

"… none of those factors itemized in the foregoing paragraph, by itself, conclusively establishes the applicant to be a worker and not an independent contractor. However, when considered collectively and weighed and assessed against all of those indicators to the contrary, including the agreement of 6 October 2000, I am satisfied that the applicant was, at the time of his shoulder injury, working for the respondent under a contract of service and hence qualifies as a worker within the meaning of s3(1)(a) of the Act. I determine accordingly."

1. That conclusion was permitted by the evidence and this Court ought not intervene if the challenge is to an exercise of judgment (State of Tasmania v Clark [2000] TASSC 126).

1. The Act affords a wide definition of the status of a worker within the meaning of the legislation. It does not purport to define the term by reference to other "industrial" legislation, nor impose its definition on other areas of contract or work related law. It addresses the nature of the relationship at the time of an event, namely injury. The Act, s3, defines a worker as:

"'worker' means ¾

(a)any person who has entered into, or works under, a contract of service or training agreement with an employer, whether by way of manual labour, clerical work or otherwise, and whether the contract is express or implied, or is oral or in writing; and

(b)any person or class of persons taken to be a worker for the purposes of this Act."

1. The High Court has afforded a liberal interpretation to the status of a person in relation to protective legislation (Vetter v Lake Macquarie City Council (2001) 202 CLR 439) and in the area of "vicarious liability" (Hollis v Vabu Pty Ltd (2001) 181 ALR 263).

1. In Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, the High Court, although concerned with a case involving vicarious liability, was required to consider the basis on which the status of an employee could be determined. In their joint reasons for judgment, Wilson and Dawson JJ stated, at 35:

"The classic test for determining whether the relationship of master and servant exists has been one of control, the answer depending upon whether the engagement subjects the person engaged to the command of the person engaging him, not only as to what he shall do in the course of his employment but as to how he shall do it: Performing Right Society Ltd v Mitchell and Booker (Palais de Danse) Ltd (1924) 1 KB 762. The modern approach is, however, to have regard to a variety of criteria. This approach is not without its difficulties because not all of the accepted criteria provide a relevant test in all circumstances and none is conclusive. Moreover, the relationship itself remains largely undefined as a legal concept except in terms of the various criteria, the relevance of which may vary according to the circumstances."

And continued at 36 – 37:

"In many, if not most, cases it is still appropriate to apply the control test in the first instance because it remains the surest guide to whether a person is contracting independently or serving as an employee.  That is not now a sufficient or even an appropriate test in its traditional form in all cases because in modern conditions a person may exercise personal skills so as to prevent control over the manner of doing his work and yet nevertheless be a servant: Montreal v Montreal Locomotive Works (1947) 1 DLR 161, at p 169. This has led to the observation that it is the right to control rather than its actual exercise which is the important thing (Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561, at p 571) but 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.

…

The other indicia of the nature of the relationship have been variously stated and have been added to from time to time.  Those suggesting a contract of service rather than a contract for services include the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like.  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.  Having said that, we should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the relationship of master and servant."

1. In this case, the Tribunal regarded the degree of control exercised by the appellant as a significant factor.  The form of control of the respondent and his own responsibility in the supervision of other employees of the appellant were not peripheral and consistent with the working structure used, which included a ratio of 18 trade apprentices to two "tradesmen employees".  The following evidence of Mr Ricky Dance, the business manager of the appellant, supported the findings relevant to control:

"When you were the commercial supervisor did that involve you actually attending onsite from time to time? … Yes, it would do.  Probably on major sites I'd be there on once a day, a minimum of once a day.

And with people, and again I ask you to confine comments to the question of these people you describe as sub-contractors, did you consider it part of your job to tell them how and what to do? … I'd explain to them what areas of work we needed to get done and they'd do it in their way, if you get what I mean.  They're the tradesmen they do it in the way they should do it.

So these are all plasterers? … Yeah.  Yeah, that's correct.  I'd go back and have a look at it later on to make sure the quality was okay.

If there was a problem with the quality what was Brock's way of dealing with that? … Oh, probably give them a stern talking to and then ask them to fix it up.

Right.  Would Brock expect to pay for that? … Yes, they would."

1. While the terms of the Agreement dated 6 October, in particular, cls 6 and 7, were cogent matters favouring an interpretation of "contractor", they were offset by the evidence relating to the status of the respondent comprised in an "Employment Separation Certificate" signed by the appellant on 17 May 2001 which described the respondent as an employee.  The form and nature of day to day work performed by the respondent and the degree of control exercised was similar then to that existing on the day of the accident.  The right of the respondent to seek other work was, in practice, exercised if there was no work required by the appellant.

1. The findings of the Tribunal were permitted by the evidence. Singly, they might not have been sufficient to warrant the conclusion reached but their totality entitled the Tribunal to determine that the respondent was a "worker" within the meaning of the Act.

1. The appeal is dismissed.