Brown and Secretary, Department of Employment
[2017] AATA 96
•27 January 2017
Brown and Secretary, Department of Employment [2017] AATA 96 (27 January 2017)
Division:GENERAL DIVISION
File Number: 2015/5283
Re:Darryl Brown
APPLICANT
AndSecretary, Department of Employment
RESPONDENT
DECISION
Tribunal:Deputy President Dr Christopher Kendall
Date:27 January 2017
Place:Perth
The decision under review is affirmed.
.......................[sgd]..................................
Deputy President Dr Christopher Kendall
CATCHWORDS
FAIR ENTITLEMENTS GUARANTEE — Claim for advance under Fair Entitlements Guarantee Act 2012 — whether applicant an employee or a contractor – insolvency event – termination of employment – meaning of effective claim — whether applicant filed form within relevant time period – whether applicant supplied documents in support of his claim within relevant time period — no discretion to extend time period — decision under review affirmed
LEGISLATION
Fair Entitlements Guarantee Act 2012 – sections 3, 5(1), 10(1), 14 and 35.
CASES
Hollis v Vabu Pty Limited [2001] HCA 44
Damevski v Giudice and Others (2003) 133 FCR 438
On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) (2011) 214 FCR 82
ACE Insurance Ltd v Trifunovski and Others (2011) 200 FCR 532
Browne and Secretary, Department of Employment [2015] AATA 978Paraponiaris and Secretary, Department of Employment [2015] AATA 895
SECONDARY MATERIALS
Explanatory Memorandum to the Fair Entitlements Guarantee Bill 2012 – clause 4
REASONS FOR DECISION
Deputy President Dr Christopher Kendall
27 January 2017
FACTS
This proceeding requires the Tribunal to determine whether Darryl Brown is eligible for an advance under the Fair Entitlements Guarantee Act2012 (the “FEG Act”).
The FEG Act provides a legislative safety net that allows financial assistance to be given to eligible employees who lose their job due to the liquidation or bankruptcy of their employer.
Relevantly, people may be eligible for FEG assistance if:
·They were an employee, as opposed to a contractor;
·They lost their job due to, or less than six months before, their employer’s liquidation or bankruptcy;
·They lodged an “effective claim” within 12 months (of either the date they lost their job or the date of the liquidation or bankruptcy of their former employer – whichever is later); and
·They were an Australian citizen or the holder of a permanent visa or special category visa that allowed them to stay and work in Australia at the time their employment ended.[1]
[1] See generally: Australian Government, Department of Employment, “Fair Entitlements Guarantee” at >
On 13 May 2014 Australian Bowls Constructions Pty Ltd (“Australian Bowls”) entered into external administration (T9 at 104). On that date James White and Atle Crowe-Maxwell of BDO were appointed Joint and Several Liquidators for Australian Bowls (T9 at 61).
A letter, dated 20 May 2014, sent to all creditors of Australian Bowls advised that all employees of the company were terminated from the date the liquidator was appointed – that being 13 May 2014 (T9 at 61).
On 1 August 2015, Darryl Brown lodged an application for a FEG advance for work undertaken with Australian Bowls (T4 at 26-35).
Mr Brown provided the following information on his online FEG claim form:
·He worked for Australian Bowls between 1 May 2006 and 14 May 2014 as a “General Labourer” who was “actively involved in the delivery and installation of woven carpet bowling greens; planning and logistics; Hiab crane installation; truck driving, laser grader”; and
·His working relationship with Australian Bowls at the time of the termination of employment was that of a “Subcontractor” (T4 at 28).
Mr Brown subsequently argued before this Tribunal that he was an “employee”, as opposed to a “contractor”, and was employed well beyond 14 May 2014. These submissions are addressed further below.
With his claim form of 1 August 2015 Mr Brown submitted an uncertified copy of a New Zealand passport (T4 at 31) with relevant visa. A certified copy of this passport was not provided until 19 August 2015 (T7 at 48). This is not in dispute.
On 10 August 2015 Mr Brown’s FEG application was rejected. Relevantly, the decision maker found:
Ineligible – effective claim not received within 12 months of the insolvency event
Subsection 10(1)(h) provides that in order to be eligible for an advance, an effective claim must be made. Pursuant to subsection 14(2), to be effective for the purposes of the FEG Act, a claim must be made before the end of 12 months after the later of the following events:
·an insolvency event happens to the employer;
·the person’s employment by the employer ends.
You have stated on your claim form that your employment with Australian Bowls Construction Pty Ltd ended on 14 May 2014.
The liquidator managing the affairs of your former employer was appointed on 22 May 2014.
Your FEG claim was made on 1 August 2015 which is more than 12 months after these dates.
In addition, pursuant to subsection 14(1), to be effective for the purposes of the FEG Act, a claim must be in a form approved by the Secretary (the FEG claim form) and be accompanied by any documents required by the Secretary.
To lodge an effective claim, a claimant must provide certified evidence to support that they were an Australian citizen or the holder of a permanent or special category visa under the Migration Act 1958. This evidence must be certified as a ‘true copy’ of the original document by a person authorised to do so.
The department notes that you submitted a copy of your New Zealand passport, however this copy was not certified as a ‘true copy’ of the original document by a person authorised to do so.
This means that you have not made an effective FEG claim for the purposes of the FEG Act and you are not eligible for FEG assistance.
Ineligible - not an employee
FEG is a basic payment scheme for employees only. Other classes of workers including contractors and subcontractors are not eligible for assistance under the FEG Act.
You state in your claim form that you were not an employee of Australian Bowls Construction Pty Ltd, but were engaged on a subcontract basis.
You did not attach any additional information with your FEG claim that might suggest otherwise.
Based on your response to the questions on your FEG claim is [sic] has been determined that you were a subcontractor.
This means that you are not eligible for FEG assistance because you were not an employee of Australian Bowls Construction Pty Ltd.
(T6 at 39)
Mr Brown sought a review of the original decision (T7). On 14 September 2015, the relevant review officer affirmed the original decision. The review officer found:
Eligibility under sub-section 10(l)(h) of the FEG Act
1.Section 10 of the FEG Act sets out all the criteria a claimant must meet in order to be eligible to receive an advance under the FEG Act. Sub-section 10(1)(h) provides that a claimant must lodge an effective claim order to be eligible for an advance under the FEG Act.
2.The requirements for making an effective claim are set out in section 14 of the FEG Act. In order for a claim to be effective, the claim must be lodged with documents as required by the Secretary of the Department of Employment. As is set out on the FEG form, the department requires claimants to provide certified evidence of their Australian citizenship or permanent residency status in Australia at the time the employment ended.
3.An additional requirement for lodging an effective claim is set out in section 14(2) of the FEG Act. Under this section, the claim must be made before the end of 12 months after the later of the below events:
a) an insolvency event happened to the employer;
b) the person’s employment by the employer ends.
4.Section 5 of the FEG Act defines an insolvency event to have happened to an employer of a person when a liquidator of the employer is appointed (provisionally or otherwise) under the Corporations Act 2001.
5.On 13 May 2014 a liquidator was appointed to Australian Bowls Construction Pty Ltd. As such, applying the definition of an insolvency event in section 5 of the FEG Act, the relevant insolvency event occurred on 13 May 2014.
6.You stated on your FEG claim form that you ceased with Australian Bowls Construction Pty Ltd ceased on 14 May 2014. [sic]
7.As such, in order to lodge an effective claim under the FEG Act, you were required to submit a claim that complied with the requirements set out in section 14 of the FEG Act by no later than 14 May 2015 (i.e. 12 months after last day of work for Australian Bowls Construction Pty Ltd ceased on 14 May 2014).
8.The department received a FEG claim form from you on 1 August 2015 – after the lapse of the relevant 12 month period. In addition, you did not provide any certified evidence to show that you were an Australian citizen or the holder of a permanent or special category visa under the Migration Act 1958 (i.e. a New Zealand citizen) at the time your employment ended. The copy of your New Zealand passport was not a certified true copy, and, furthermore, the date of issue of the passport was 13 March 2015 – some months after your employment with Australian Bowls Construction Pty Ltd had ended.
9.The failure to meet all of the requirements for lodging an effective claim by 14 May 2015 means you did not lodge an effective claim within the relevant 12 month period. You, therefore, have not satisfied the provision of section 14 of the FEG Act. Accordingly, you have not met the eligibility requirements set out in section 10(1)(h) of the FEG Act and you are not eligible to receive a FEG advance.
10.There are no provisions in the FEG Act to waive the application of the eligibility condition in section 10(1)(h) of the FEG Act.
11.In this respect, I note that under the FEG Act I have no discretion to alter this outcome for you. That is, once it is established as a fact that you have not lodged an effective claim within the relevant time period, your claim does not meet the conditions of eligibility for a FEG advance. As the facts currently stand, the department would also put forward this position in the event of any further review of this matter.
Eligibility under sub-sections 10(l)(a), (c) and (d) of the FEG Act
12.Sub-section 10(1)(a) requires that the person’s employment has ended; sub-section 10(1)(c) requires that the end of the person’s employment occurred under certain conditions connected with the insolvency of the employer; and sub-section 10(1)(d) of the FEG Act requires that the person must be owed one or more debts wholly or partially attributable to all or part of one or more employment entitlements. As such, it is a condition of eligibility under the FEG Act that a person must have been an employee.
13.On your FEG claim form, you stated that you were engaged on a subcontractor basis with Australian Bowls Construction Pty Ltd. At review, you have asserted that you were in fact, an employee of Australian Bowls Construction Pty Ltd. Whilst you have provided some documentation to support this assertion, the correspondence and printouts from the ATO do not conclusively establish that you were an employee. In addition, the insolvency practitioner has advised the department that from the limited books and records in their possession, it did not appear that you were an employee of Australian Bowls Construction Pty Ltd.
14.However, I note that even if evidence was provided to conclusively establish that you were an employee of Australian Bowls Construction Pty Ltd, you would nevertheless remain ineligible for FEG assistance because you did not lodge an effective claim within the relevant 12 month period as advised above.
(T1 at 4)
Mr Brown filed an application for review with this Tribunal on 8 October 2015 (T1). He asks this Tribunal to set aside the review decision of 14 September 2015 and, in effect, grant him access to entitlements under the FEG Act.
ISSUES
The central issue in this matter is whether Mr Brown is eligible for an advance under the FEG Act.
To determine this issue, the Tribunal must first determine:
(a)whether Mr Brown was an employee of Australian Bowls or whether he was engaged as an independent contractor – an issue that is relevant because assistance under the FEG Act is only available to employees; and
(b)whether (if he is found to have been an employee rather than a contractor), Mr Brown made an “effective claim” for the purposes of the FEG Act.
To determine whether Mr Brown made an “effective claim”, the Tribunal must determine:
(a)whether Mr Brown’s claim was made before the end of the required 12 month period; and, if so,
(b)whether Mr Brown’s claim was accompanied by the documents required by the FEG Act and provided within the relevant 12 month period.
LEGISLATIVE FRAMEWORK
There are two objectives of the FEG Act set out in section 3 of the Act. The first is to provide for the Commonwealth to pay advances on account of unpaid employment entitlements of former employees of employers in cases where:
(i)the employers are insolvent or bankrupt; and
(ii)the end of the employment of the former employees was connected with that insolvency or bankruptcy; and
(iii)the former employees cannot get payment of the entitlements from other sources.
The second core objective of the FEG Act is to allow the Commonwealth to recover advances through the winding up or bankruptcy of the employers and from other payments the former employees may receive for the entitlements.
A person is eligible for an advance under the FEG Act if the Secretary is satisfied of all of the matters listed in subsection 10(1) of the FEG Act. That section provides:
General conditions
(1) A person is eligible for an advance if the Secretary is satisfied of all of the following:
(a) the person's employment by a particular employer has ended;
(b) after the commencement of this section, an insolvency event happened to the employer;
(c)the end of the employment:
(i)was due to the insolvency of the employer; or
(ii)occurred less than 6 months before the appointment of an insolvency practitioner for the employer; or
(iii)occurred on or after the appointment of an insolvency practitioner for the employer;
(d)the person is (or would, apart from the discharge of the bankruptcy of the employer, be) owed one or more debts wholly or partly attributable to all or part of one or more employment entitlements;
(e)the person has taken steps, so far as reasonable, to prove those debts in the winding up or bankruptcy of the employer;
(f)if the person was owed any of those debts before the insolvency event happened, the person took reasonable steps before that event to be paid those debts;
(g)when the employment ended, the person was an Australian citizen or, under the Migration Act 1958 , the holder of a permanent visa or a special category visa;
(h)an effective claim (see section 14) that the person is eligible for the advance has been made to the Secretary by or on behalf of the person.
The terms “employee” and “employment” are not defined in the FEG Act. The term “employer” is simply defined in subsection 5(1) to include a former employer. However, clause 4 of the Explanatory Memorandum to the Fair Entitlements Guarantee Bill 2012 explains that for the purposes of the FEG scheme, the term “employee” refers to an employee at common law and does not include contractors.
It is not disputed that a critical threshold question to several of the conditions of eligibility under the FEG Act is whether Mr Brown was employed as an employee, as opposed to being employed as an independent contractor. This is addressed below.
Section 10(1)(h) of the FEG Act, in turn, requires that an applicant for FEG assistance make an “effective claim”. The requirements for making an “effective claim” are set out in section 14 of the FEG Act, which relevantly provides as follows:
14 Making an effective claim
(1)To be effective for the purposes of this Act, a claim that a person is eligible for an advance for the person’s employment by an employer must
(a) be in a form approved by the Secretary; and
(b)be accompanied by any documents required by the Secretary; and
(c)be made in accordance with subsection (2), and with subsection (3) if it applies.
(2)The claim must be made before the end of 12 months after the later of the following events:
(a) an insolvency event happens to the employer;
(b) the person’s employment by the employer ends.
(3)However, if the employer is or was a bankrupt, the claim must be or have been made before the discharge of the employer’s bankruptcy. ...
The term “insolvency event”, which is used in subsection 14(2)(a) of the FEG Act, is defined in section 5 of the FEG Act, which provides that an “insolvency event” occurs to an employer of a person:
(a)when a liquidator of the employer is appointed (provisionally or otherwise) under the Corporations Act 2001; or
(b) when the employer becomes a bankrupt under the Bankruptcy Act 1966; or
(c)if the person is or was employed for a partnership by 2 or more of the partners – at the first time an event described in paragraph (a) or (b) happens, or has happened, to all of the partners by whom the person is or was employed.
Finally, the Tribunal notes that section 35 of the FEG Act states:
Presuming accuracy of certain information
For the purposes of deciding:
(a) whether a person is eligible for an advance for the employment of the person by an employer; and
(b) the amount of such an advance;
the Secretary may presume that information relating to the person that is given to the Secretary by an insolvency practitioner for the employer is accurate.
WAS MR BROWN AN EMPLOYEE OR A CONTRACTOR?
Before this Tribunal the Secretary contended that Mr Brown was not an “employee” in relation to work undertaken by Australian Bowls. Rather, he was a “contractor”. As such, it was contended, Mr Brown was not entitled to an advance under the FEG Act.
Mr Brown, on the other hand, argued that he was an “employee” of Australian Bowls.
The leading authority in relation to the difference between an employee and a contractor is Hollis v Vabu Pty Limited [2001] HCA 44. Hollis concerned an accident caused by a worker in a bicycle courier business and whether the company was vicariously liable for the courier. Before the Court of Appeal, the company successfully argued that it hired its couriers as contractors and that they were thus liable for their own actions. The High Court held that the Court of Appeal erred by placing too much emphasis on the fact that the couriers owned their own bicycles, bore the expenses of running them and supplied many of their own accessories. Importantly, the High Court found that employment relationships should be “viewed as a practical matter” and, in practical terms, the couriers were not engaged in conducting their own business and did not demonstrate sufficient independence.[2]
[2] As summarised by Barrister Andrew Denton, Employee or Contractor: Look Beyond the Words ( February 2015.
Hollis has been the source of much discussion in a number of subsequent Federal Court cases: Damevski v Giudice and Others (2003) 133 FCR 438; On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) (2011) 214 FCR 82; ACE Insurance Ltd v Trifunovski and Others (2011) 200 FCR 532.
It is clear from the jurisprudence that there is no “one model fits all” approach to determining how to classify employment relationships. A number of core indicators for assessing the relationship between worker and his or her employer can, however, be identified. In that regard, the Tribunal notes the summary of relevant factors provided by the Commonwealth Fair Work Ombudsman:
Indicator
Employee
Independent Contractor
Degree of control over how work is performed
Performs work, under the direction and control of their employer, on an ongoing basis.
Has a high level of control in how the work is done.
Hours of work
Generally works standard or set hours (note: a casual employee's hours may vary from week to week).
Under agreement, decides what hours to work to complete the specific task.
Expectation of work
Usually has an ongoing expectation of work (note: some employees may be engaged for a specific task or specific period).
Usually engaged for a specific task.
Risk
Bears no financial risk (this is the responsibility of their employer).
Bears the risk for making a profit or loss on each task. Usually bears responsibility and liability for poor work or injury sustained while performing the task. As such, contractors generally have their own insurance policy.
Superannuation
Entitled to have superannuation contributions paid into a nominated superannuation fund by their employer.
Pays their own superannuation (note: in some circumstances independent contractors may be entitled to be paid superannuation contributions).
Tools and equipment
Tools and equipment are generally provided by the employer, or a tool allowance is provided.
Uses their own tools and equipment (note: alternative arrangements may be made within a contract for services).
Tax
Has income tax deducted by their employer.
Pays their own tax and GST to the Australian Taxation Office.
Method of payment
Paid regularly (for example, weekly/fortnightly/monthly).
Has obtained an ABN and submits an invoice for work completed or is paid at the end of the contract or project.
Leave
Entitled to receive paid leave (for example, annual leave, personal/carers' leave, long service leave) or receive a loading in lieu of leave entitlements in the case of casual employees.
Does not receive paid leave.
The Tribunal also notes a similar Guide provided by the Australian Tax office (the “ATO”).[3] The ATO Table outlines six factors that, taken together, aim to assist in determining whether a worker is an employee or contractor for tax and superannuation purposes. These broad principles also assist the Tribunal in determining the nature of an employment relationship for FEG purposes:
[3] See: cellpadding="0" cellspacing="0">
Employee
Contractor
Ability to subcontract/delegate: the worker can't subcontract/delegate the work – they can't pay someone else to do the work.
Ability to subcontract/delegate: the worker can subcontract/delegate the work – they can pay someone else to do the work.
Basis of payment – the worker is paid either:
o for the time worked
o a price per item or activity
o a commission.
Basis of payment: the worker is paid for a result achieved based on the quote they provided.
A quote can be calculated using hourly rates or price per item to work out the total cost of the work.
Equipment, tools and other assets:
o your business provides all or most of the equipment, tools and other assets required to complete the work, or
o the worker provides all or most of the equipment, tools and other assets required to complete the work, but your business provides them with an allowance or reimburses them for the cost of the equipment, tools and other assets.
Equipment, tools and other assets:
o the worker provides all or most of the equipment, tools and other assets required to complete the work
o the worker does not receive an allowance or reimbursement for the cost of this equipment, tools and other assets.
Commercial risks: the worker takes no commercial risks. Your business is legally responsible for the work done by the worker and liable for the cost of rectifying any defect in the work.
Commercial risks: the worker takes commercial risks, with the worker being legally responsible for their work and liable for the cost of rectifying any defect in their work.
Control over the work: your business has the right to direct the way in which the worker does their work.
Control over the work: the worker has freedom in the way the work is done, subject to the specific terms in any contract or agreement.
Independence: the worker is not operating independently of your business. They work within and are considered part of your business.
Independence: the worker is operating their own business independently of your business. The worker performs services as specified in their contract or agreement and is free to accept or refuse additional work.
The above Guides reflect the key factors emphasised by the courts. Broadly, no single indicator alone will determine if a person is a contractor or an employee. Each determination is based on the individual merits of the work arrangement in place. What the Tribunal is required to do is look at the totality of the relationship between the parties when determining the status of a person's employment.
In relation to Mr Brown’s working relationship with Australian Bowls, the Tribunal notes the conflicting submissions filed by the parties.
In a written statement dated 5 January 2016 (A1), Mr Brown argued as follows in relation to this issue:
7.The Applicant contends that he was an employee of the business Australian Bowls Construction Pty Ltd as per the sufficient relationship in Stevens & Broadribb [sic]. Further in the relationship in High Court Case of Hollis vs Vabu, the Court took a more comprehensive analysis and balancing a multi facet view to establish whether a worker is a fully-fledged employee (thus satisfying the requisite relationship). The Applicant meets these criteria established by the High Court in that:
a)He was employed in a role that involved a low level of skill (Construction Worker). ABC trained him. He did not operate an ABN, nor did he charge GST. He filled in 3 employment PAYG declarations for Australian Bowls Construction Pty Ltd and later with Australian Bowls Consultants at the request of both entities.
b)He had no control over how he did his job, nor hours of work or conditions i.e. no independence in the conduct of his work.
c)The Applicant was at all times wearing The ABC uniform, presented to the public as part of the ABC organisation. ABC paid for all operating costs including petrol for ABC equipment provided.
d)He was covered by ABC’s vicarious liability and insurances.
e)The Applicant’s work equipment was provided and maintained by ABC.
f)The Applicant continued to represent ABC and the new entity and the liquidators until the 2nd of March 2015 when last payment for work undertaken was made. Refer attached bank statement.
g)The work performed by the Applicant was not of a supplementary or side task. ABC was his sole source of employment and income in a full time capacity.
h)ABC had full control over the work hours (Stevens vs Broadribb [sic]; Cassidy vs Ministry of Health). ABC set and had full control over the rates of pay, the right to dismiss, had full control over who did the work. Only the Applicant could do the work, he did not have any other person that he could delegate to.
The Secretary, in turn, in a Statement of Facts, Issues and Contentions dated 22 April 2016, contended as follows:
16.At common law, to determine whether a person is an employee or independent contractor requires consideration of “… the totality of the relationship between the parties ...” by having regard to a number of factors. There is no exhaustive list of the factors to be considered or indication of the weight to be applied to any particular factor, as each case will turn on its own facts and circumstances.
17.In Brodribb, Mason J identified a number of (non-exhaustive) factors which may be relevant, including the degree of control which the putative employer can exercise over the worker, 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 employee.
18.The Applicant contends that he was an employee of Australian Bowls. His reasons are as follows (see Applicant’s Submissions at [7]):
(a)The Applicant claims that he was employed in a role that involved a low level of skill (a construction worker). The Respondent contends that the duties described by the Applicant in his FEG claim would require more than a low level of skill.
(b)The Applicant claims that Australian Bowls trained the Applicant. The Respondent notes no evidence has been provided of this.
(c)The Applicant claims that he did not operate an ABN or charge GST. The Respondent notes that the Applicant commonly purported to list an ABN on his invoices. Even though the Respondent’s ABN appears to have been cancelled in 2012 because he was not carrying on an enterprise (T7, pg 51), there is no indication that this was a voluntary cancellation and could have been done for a number of reasons, including, for example, a failure to submit relevant documents, rather than an intention on the Applicant’s part to not carry on a business (as a subcontractor).
(d)The Applicant claims that he filled in 3 employment PAYG declarations for Australian Bowls and later with Australian Bowls Consultants. The Respondent notes that no objective documentary evidence has been produced of this and according to information from the Australian Taxation Office, Australian Bowls never reported the Applicant as an employee in its “Pay As You Go Withholding Payment Summary Annual Reports” (see Attachment A).
(e)The Applicant claims that he did not have any independence in the conduct of his work. He says he had no control over how he did his job nor hours of work or conditions. The Respondent notes that the type of work the applicant was engaged in appears to have been task-focussed, that is, the construction and installation of bowling greens and related material. The Respondent contends that the performance of these tasks would have dictated the number of hours of work required, and the fact that the Applicant described himself as a subcontractor on his FEG claim (and was also described as a subcontractor by a third party who appears to know him) would indicate that this was the basis on which he was engaged to perform this work.
(f)The Applicant claims that at all times he wore the uniform of Australian Bowls and presented to the public as part of the Australian Bowls organisation. The Respondent notes there is no evidence of this, and in any event, contends this is not of significant weight in the circumstances, as the Applicant may have worn a uniform because of the ongoing and regular services he appears to have performed for Australian Bowls (as a contractor).
(g)The Applicant claims that work equipment was provided and maintained by Australian Bowls and that Australian Bowls paid for all operating costs including petrol. The Respondent notes there is some evidence of fuel costs being reimbursed. Again, the Respondent contends this should not be given significant weight in the circumstances. Even if the Applicant primarily used equipment supplied and maintained by Australian Bowls, this could be explained by the fact that Australian Bowls was in the construction business, and made a commercial decision to hold its own equipment, while subcontracting the provision of skilled labour to operate the equipment and undertake construction services, including those provided by the Applicant.
(h)The Applicant claims that he was covered by Australian Bowls’ “vicarious liability and insurances”. The Respondent notes there is no evidence of this.
(i)The Applicant states that he continued to represent Australian Bowls and the “new entity” and the liquidators until 2 March 2015 when “last payment for work undertaken” appears to have been made. The Respondent contends that, if anything, this supports the view that the Applicant was (and is) an independent contractor who is willing and able to perform services for different entities. There is also an indication in an email chain involving Paul Leslie and the Applicant last dated 28 May 2014 (see Applicant’s Submissions), that the Applicant may have performed services for an entity other than Australian Bowls (namely “Sportcrete Asia/Pacific P/L”).
19.The Respondent contends that the relationship between the Applicant and Australian Bowls is properly characterised as a contractual relationship rather than one of employment, having regard to the following factors:
(a)On his claim for a FEG advance, the Applicant listed his position as “Subcontractor’ (T4, pg 28). This indicates that the Applicant understood and regarded himself to be an independent contractor, not an employee.
(b)The Applicant issued invoices to Australian Bowls for payment. Further, where the kind of work listed on the invoices is discernible, it appears to be task-orientated work paid on an hourly basis. The hours of work appear to vary from time to time based on the relevant tasks, akin to work done under contract, as opposed to casual or other irregular employment.
(c)There is no conclusive evidence that the Applicant performed services solely and exclusively for Australian Bowls, and, even if he did, there is no evidence that he was in fact restricted from offering (and performing) his services to others.
(d)The Applicant was listed as an unsecured creditor on the liquidators’ list of company creditors (T9, pg 69) and it is the appointed Insolvency Practitioner’s opinion (based on the information available to it) that the Applicant was not an employee of Australian Bowls (ST1, pg 109).
(e)The Applicant appears to have continued to receive payment for invoices issued to Australian Bowls after Australian Bowls entered into external liquidation (see Applicant’s Submissions). It is unclear exactly what these payments were for and precisely who paid them, but their payment suggests they were for services rendered as a contractor, rather than as an employee. This is because if the Applicant was an employee, the appropriate avenue for compensating the Applicant for any unpaid wages or other entitlements would be through the liquidation process, including, if necessary, through the FEG scheme itself (not through the payment of invoices by some other party).
(f)Information provided by the Australian Taxation Office (see Attachment A, pg 2) indicates that Australian Bowls never reported the Applicant as an employee for taxation purposes. The Applicant appears to never have received any group certificate/PAYG summary from Australian Bowls which it may reasonably be expected would have been queried by an employee if he had submitted three PAYG declarations (as alleged by the Applicant). Further there does not appear to be any evidence containing any consideration of employee entitlements, such as superannuation or annual leave (or loading in lieu of annual leave in the case of a casual employee).
20.The Respondent contends that the Tribunal should, having regard to the available evidence, and considering the relationship in its totality, find that the Applicant was not employed by Australian Bowls at the relevant time. Accordingly, the Applicant is not eligible for an advance under the FEG Act and the Internal Review Decision must be affirmed.
There are gaps in the evidence before the Tribunal in relation to how Mr Brown was paid and whether or not he received superannuation or insurance protection from Australian Bowls. The Tribunal notes, for example, that Australian Bowls did not report Mr Brown as an employee in its Pay As You Go Withholding Payment Summary Annual Reports to the Australian Tax Office (Attachment A, Secretary’s Statement of Facts, Issues and Contentions). While problematic, this arguably says more about Australian Bowls reporting obligations than the nature of Mr Brown’s relationship with the company. Further, the Tribunal notes that while the Liquidator states (T8 at 54) that it does not appear that Mr Brown was an employee of Australian Bowls, the Liquidator also advises that this opinion is offered without the benefit of an audit and cannot be offered with any degree of accuracy.
Mr Brown struck the Tribunal as entirely honest and credible. This entire experience has been understandably complex and frustrating. To his mind, he was an employee who was very much dependent on Australian Bowls for his day to day work duties and pay. When asked why he had indicated on his FEG form that he was a sub-contractor, Mr Brown seemed perplexed that he had done so and advised that had little recollection of what he had been asked or why he had answered as he had. The Tribunal does not doubt Mr Brown in that regard.
Overall, the Tribunal is satisfied on the evidence before it that Mr Brown was engaged as an employee, and not as a contractor, by Australian Bowls. The Tribunal highlights the following in coming to this conclusion:
·Mr Brown had a long relationship with Australian Bowls and had an ongoing expectation of work from the company;
·Mr Brown’s tools and equipment were generally provided by Australian Bowls and he was reimbursed for petrol;
·Mr Brown did not subcontract or delegate the work done by him for Australian Bowls and there is no evidence that he paid anyone else to do the work he did for the company;
·Mr Brown does not appear to have worked independently of Australian Bowls up until the date of liquidation;
·Mr Brown worked within Australian Bowls and was considered part of the business. This is best evidenced by the fact that he wore clothing supplied by Australian Bowls, branded with the company’s logos etc. Publicly, he would have been identified with the company, rather than independent or associated with anyone else;
·Mr Brown had no ABN for at least a significant portion of the time he worked with Australian Bowls;
·Mr Brown was regularly paid for time worked – not for any specific result achieved or on the basis of quotes provided by him; and
·Mr Brown was not engaged to undertake a specific or highly skilled task. Rather, he was employed as a general labourer applying general skills as needed by Australian Bowls.
On the basis of the above, the Tribunal concludes that Mr Brown was an employee of Australian Bowls as opposed to a contractor. As such, he is entitled to an advance under the FEG Act provided he satisfies the other requirements of the Act. Relevantly, Mr Brown must prove that he made an “effective claim”.
DID MR BROWN MAKE AN “EFFECTIVE CLAIM”?
It is not disputed that Mr Brown submitted an electronic claim in a form approved by the Secretary (T4). What is disputed is whether the form was filed on time and was accompanied by all required documents as per section 14(1) of the FEG Act. In other words, did Mr Brown make an “effective claim”?
The 12 month time requirement
Pursuant to section 14 of the FEG Act, a claim must be made before the end of 12 months after the later of the following events:
(a) an “insolvency event” happens to the employer;
(b) the person’s employment by the employer ends.
The requirement to make a claim within the relevant period is a strict requirement. The Tribunal has no discretion to extend the legislative 12 month timeframe (Browne and Secretary, Department of Employment [2015] AATA 978; Paraponiaris and Secretary, Department of Employment [2015] AATA 895).
In relation to this issue, Mr Brown submitted as follows in a written submission to the Tribunal dated 5 January 2016 (A1):
4.The Applicant has complied with the requirements of the 12-month period contemplated and stipulated be subsection 14(2) of the Act.
5.The Material Facts as presented by the Respondent are in dispute. The facts as per the Applicant’s understanding are as follows:
13th May 2014 – 1st Liquidator appointed to Australian Bowls Construction Pty Ltd (ABC). There was never a formal Termination of Employment. He was advised at all times that his employment was continuing, despite liquidation of ABC as evidenced by attached emails and bank payment details.
2nd March 2015 – the Applicant received payment for work undertaken for Australian Bowls Consultants – Director L Morris, same Director as Australian Bowl Construction Pty Ltd transferred entity from Australian Bowls Construction Pty Ltd (Transmittee Effect).
1st August 2015 – Applicant lodges claim for FEG Assistance within the 12-month statutory timeline.
…
6.The Applicant states that passport requirements were met in good faith and in compliance with International Travel requirements. The applicant arrived on a 444 Visa in 1981. His last passport expired on 22nd of April 2015. He renewed his passport on the 15th of March 2015.
The Secretary, in turn, responded as follows:
27.Section 5 of the FEG Act relevantly provides that an “insolvency event’ happens to an employer of a person “... when a liquidator of the employer is appointed (provisionally or otherwise) under the Corporations Act 2001 …”.
28.A liquidator of Australian Bowls was appointed on 13 May 2014 (T7, pg 52; T9, pg 61 and 104; ST1, pg 109).
29.The Respondent contends that, if the Applicant was employed by Australian Bowls, his employment ended on 13 May 2014. This is because the liquidator has advised the Department that all employees were terminated on 13 May 2014 (T9, pg 101) and that all trading was ceased on 13 May 2014 (ST1, pg 109). In accordance with section 35 of the FEG Act, the Respondent, and the Tribunal standing in the shoes of the Respondent, is entitled to presume the accuracy of this information and there is nothing to indicate that it is not accurate. Further, the Applicant also initially stated in his FEG claim form that his employment ended on 14 May 2014 (which is only one day after 13 May 2014).
30.The Applicant now has changed his position and contends that his alleged employment with Australian Bowls continued past 13 May 2014. It is not clear exactly when the Applicant claims his employment with Australian Bowls ended, but it appears the Applicant may allege it ended on 2 March 2015, or at some time between 2 March 2015 and 1 August 2015 (i.e. the date the Respondent received the Applicant’s claim). This would appear to be on the basis that the Applicant claims (in the Applicant’s Submissions) that there was never a formal termination of employment and that he was advised at all times that his employment was continuing, despite the liquidation of Australian Bowls, which the Applicant claims is evidenced by certain emails and bank payment details he attached to his submissions.
31.With respect, the Respondent contends that this could not be the case. There is no evidence that the Applicant was performing any work for Australian Bowls as an employee beyond the date that a liquidator was appointed. The emails that the Applicant has provided show that he may have been performing services for certain entities in relation to the liquidation of Australian Bowls, but there is no evidence that these services were authorised by the liquidators, and moreover, that the services were performed pursuant to any employment arrangement with Australian Bowls.
32.It is not clear what the payments received by the Applicant in the bank statements he has provided were for, but they appear to be payments made pursuant to certain invoices that the Applicant issued. It is not clear whether the payments were for services purportedly rendered prior to or after the date that liquidators were appointed, or a combination of both.
33.The Respondent contends that nothing turns on the above matters. Any services that the Applicant was performing after 13 May 2014 appear to have been performed pursuant to a contracting relationship and were performed for SV Partners and others who may have been associated with Australian Bowls, but who would no longer have had authority to act on Australian Bowls’ behalf. In an email dated 24 May 2014 from Paul Leslie to SV Partners, Mr Leslie describes the Applicant as “the sub contractor in Perth”.
34.The Insolvency Practitioner has made it clear that on 13 May 2014, all employees were terminated and Australian Bowls ceased trading. Any services provided by the Applicant following that date could not have been as an employee of Australian Bowls.
35.Accordingly, if the Applicant was employed by Australian Bowls (which the Respondent contends he was not), the Respondent contends his employment ended on 13 May 2014. Therefore, an effective claim for an advance under the FEG Act must have been made by 13 May 2015, which did not occur. In fact, the Applicant made his FEG claim on 1 August2015 (T4, pgs 26 – 35).
Contrary to what Mr Brown may honestly believe, for the purposes of the FEG Act an “insolvency event” occurred in relation to Australian Bowls on 13 May 2014 when a liquidator was appointed to the company (T7 at 52 and T9 at 61). There is no evidence before the Tribunal that allows it to find otherwise.
In the circumstances, Mr Brown can only be found to have made an effective claim if he can satisfy the Tribunal that he was still an employee of Australian Bowls well after the insolvency date of 13 May 2014.
Unfortunately, there is no evidence to assist Mr Brown in that regard.
In hearings before this Tribunal, Mr Brown again stressed that his employment with Australian Bowls was not terminated in May 2014. Mr Brown believes he continued to work with and receive payments from the same people who he had always worked with and who had always paid him. When asked, Mr Brown stated that he was not entirely sure why he had written “14 May 2014” as the date of employment termination on his FEG claim form and, indeed, seemed surprised that he had done so.
As indicated above, Mr Brown struck the Tribunal as entirely sincere. The Tribunal does not doubt Mr Brown’s assertion that he was never advised of any termination of his employment by Australian Bowls and his belief that he was still working with the same group of people that he had always worked for.
Unfortunately, on the evidence, the Tribunal cannot find that Mr Brown continued to be “employed” by Australian Bowls post 13 May 2014. In this regard, the Tribunal agrees with the Secretary that there is no evidence that Mr Brown was performing any work for Australian Bowls as an employee beyond the date that a liquidator was appointed – that being 13 May 2014. The Insolvency Practitioner has made it clear that as at 13 May 2014, all Australian Bowls employees were terminated and Australian Bowls ceased trading. In the circumstances, any services provided by Mr Brown following that date could not have been provided as an employee of Australian Bowls. While Mr Brown may have received payments post insolvency from people who had previously been associated with Australian Bowls, in effect that entity ceased to exist once a liquidator was appointed. Unfortunately for Mr Brown there is simply no evidence that allows the Tribunal to find that Mr Brown continued to be paid as an employee of Australian Bowls post May 2014 regardless of what anyone might have told him or regardless of what he might, quite honestly and understandably, have believed.
Accordingly, even though the Tribunal has found that Mr Brown was an employee of Australian Bowls, his employment with that company ended on 13 May 2014 – the same date as an “insolvency event” occurred.
In the circumstances, Mr Brown needed to make an “effective claim” for an advance under the FEG Act by 13 May 2015. He failed to do so as he did not make an online FEG claim until 1 August 2015 (T4 at 26 – 35).
Was Mr Brown’s claim accompanied by documents required by the Secretary?
Had the Tribunal found that Mr Brown did file his FEG form on time (ie, by 13 May 2015), Mr Brown would still need to satisfy the Tribunal that his form was accompanied by the required documentation. One such document is a certified copy of his passport.
Mr Brown claims that he did file all required documents needed for an “effective claim”. The Secretary, on the other hand, contended as follows:
37.The claim form submitted by the Applicant describes certain documents required by the Secretary in relation to providing evidence of whether an applicant is the holder of a permanent visa or special category visa (T4, pg 27). Relevantly, the “Help Text’ for question 5.1 of Part B of the claim form used by the Applicant explained and required as follows:
[Question 5.1 of Part BJ Were you the holder of a permanent visa (ie your visa lets you live in Australia indefinitely), or Special category* visa (ie your visa lets you stay and work in Australia as long as you remain a New Zealand citizen) granted under the Migration Act 1958 at the time your employment ended?
[Help text to question 5.1 of Part B]
*A Special category visa is a type of Australian visa that is only available to New Zealand citizens. Section 32 of the Migration Act 1958 defines ‘Special category visa’.
If you answer ‘Yes’, acceptable evidence to provide your residency status includes a copy of at least one of the following categories of documents that has been certified as a ‘true copy’ of the original document by a person authorised to do so:
…
•where appropriate, for the purpose of proving you hold a Special category visa, a New Zealand passport.
[emphasis in original text]
38.The form further explains (emphasis in original text): “(It is mandatory that you provide certified documentary evidence to support your claim)”.
39.The Applicant provided a copy of a New Zealand passport with his claim with a date of issue of 13 March 2015 (T4, pg 31). The document was not certified as a true copy of the original document by a person authorised to do so, as required by the Secretary. It plainly does not meet the requirement in paragraph 14(1)(b) of the FEG Act.
40.On 19 August 2015, with his application for review of the Original Decision, the Applicant provided a document which appears to be a certified true copy of his New Zealand passport (T7, pg 48). The Respondent contends that, in any event, this document was provided out of time.
The Tribunal has found above that Mr Brown was obliged to file all required documents by 13 May 2015. Mr Brown did provide a certified copy of his passport on 19 August 2015. Unfortunately, this was after 13 May 2015.
The Secretary contends that the fact that a certified copy was provided late means that Mr Brown’s claim is ineffective. The Tribunal agrees. Unfortunately, the FEG Act requirements are strict and offer the Tribunal no flexibility to extend the required filing date. In the circumstances, the Tribunal cannot assist Mr Brown in relation to his late filing of a required document.
Mr Brown has not complied with the documentation and time requirements set out in the FEG Act and, as such, has failed to make an “effective claim”.
FINDINGS
Darryl Brown was formerly an employee of Australian Bowls. As such, he is eligible for an advance under the FEG Act if he satisfies the other core requirements of that legislation.
An “insolvency event” occurred on 13 May 2014 when a liquidator was appointed to Australian Bowls.
Mr Brown’s employment with Australian Bowls was also terminated on 13 May 2014.
In the circumstances, Mr Brown was required to file his FEG claim form by 13 May 2015. He failed to do so as he did not make an online FEG claim until 1 August 2015.
Mr Brown was also required to file a certified copy of his passport by 13 May 2015. He did not file a certified copy until 15 August 2015.
Hence, although Mr Brown was an employee of Australian Bowls, he failed to make an “effective claim” for the purposes of the FEG Act and, as such, cannot receive an advance under the FEG Act.
DECISION
For the reasons outlined above, the decision under review is affirmed.
I certify that the preceding 62 (sixty-two) paragraphs are a true copy of the reasons for the decision herein of Deputy President Dr Christopher Kendall.
...................[sgd]................................
Administrative Assistant
Dated: 27 January 2017
Date of hearing: 12 December 2016 Representative of the Applicant: Adrienne McNamara Representative of the Respondent: Mr K Powell Solicitors for the Respondent: Clayton Utz
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