CJM Innotrack Pty Ltd v Workers' Compensation Regulator - [2020] QIRC 171

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

CITATION: PARTIES:	CJM Innotrack Pty Ltd v Workers' Compensation Regulator & Anor [2020] QIRC 171 CJM Innotrack Pty Ltd (Appellant) v Workers' Compensation Regulator (First Respondent) and Follett, Jamie (Second Respondent)
CASE NO:	WC/2018/112
PROCEEDING:	Appeal against decision of the Workers' Compensation Regulator
DELIVERED ON:	25 September 2020
HEARD AT:	Brisbane
HEARING DATES:	27 November 2019 15 January 2020
MEMBER:	Hartigan IC
ORDER: CATCHWORDS:	1. The appeal is dismissed. 2. The Regulator's review decision dated 21 June 2017 is confirmed. 3. The appellant is to pay the first and second respondents' costs of and incidental to this appeal to be agreed or failing agreement, to be the subject of a further application to this Commission. WORKERS' COMPENSATION – APPEAL AGAINST DECISION – whether the appellant was a worker within s 11 of the Workers' Compensation and Rehabilitation Act 2003
LEGISLATION: CASES:	Workers' Compensation and Rehabilitation Act 2003 (Qld), s 11 ACE Insurance Ltd v Trifunovski [2011] FCA 1204; (2011) 200 FCR 532 ACE Insurance Ltd v Trifunovski [2013] FCAFC 3; (2013) 209 FCR 146 Aldi Stores (A Limited Partnership) v Workers' Compensation Regulator [2019] QIRC 51 Aus-Care Sports Medicine Pty Ltd as Trustee for Kelvin Grove Unit Trust v Simon Blackwood (Workers' Compensation Regulator) [2015] QIRC 182 Australian Mutual Provident Society v Chaplin [1978] UKPC 7; (1978) 18 ALR 385 Charters Tower Regional Council v Workers' Compensation Regulator [2019] QIRC 027 Church v Workers' Compensation Regulator [2015] ICQ 031 Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 Lopez v Deputy Commissioner of Taxation [2005] FCAFC 157; (2005) 143 FCR 574 Marshall v Whittaker's Building Supply Co [1963] HCA 26; (1963) 109 CLR 210 Re application by Donald Alexander Porter of an Inquiry in an Election in the Transport Workers' Union of Australia [1989] FCA 226 Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation [2010] FCAFC 52; (2010) 184 FCR 448 Toowoomba Demolition and Earthmoving Pty Ltd ATF Castle Family Trust v Workers' Compensation Regulator [2020] QIRC 030
APPEARANCES:	Mr P Travers of counsel instructed by Chris Toogood Lawyers for the Appellant Mr S P Gray of counsel directly instructed by Ms R. Moroney for the First Respondent Mr D J Kelly of counsel instructed by Kerin Lawyers for the Second Respondent

Reasons for Decision

Introduction

On 21 June 2018, the appellant, CJM Innotrack Pty Ltd ("CJM") filed a notice of appeal in relation to a decision made by the Workers' Compensation Regulator ("the Regulator"), which set aside a decision of WorkCover to reject Mr Jamie Follett's application for workers' compensation, and substituted a new decision that Mr Follett is a "worker" in accordance with s 11 of the Workers' Compensation and Rehabilitation Act 2003 (Qld) ("the Act").
On 25 January 2017, Mr Follett was performing carpentry work at a property located at Valencia Street, Sunnybank Hills ("Valencia Street"), when he fell off a ladder and injured himself. The site at Valencia Street was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] QIRC 171
Decision Date: 25 September 2020

CaseChat Overview and Summary

CJM Innotrack Pty Ltd brought an appeal against a decision by the Workers' Compensation Regulator, seeking to overturn a ruling that their employee, Mr. Follett, was entitled to workers' compensation. The crux of the dispute was whether Mr. Follett was a worker as defined under section 11 of the Workers' Compensation and Rehabilitation Act 2003. The appeal was heard by the Queensland Civil and Administrative Tribunal (QCAT).

The court had to decide whether Mr. Follett was an employee or an independent contractor for the purposes of workers' compensation. The legal issues involved assessing the nature of the employment relationship based on various indicia, including control, remuneration, provision of tools and materials, delegation of work, and the terms of the contract. The court also needed to determine if reliance on certain factors, such as the failure to deduct income tax, was appropriate.

The court concluded that Mr. Follett was an employee of CJM based on the totality of the evidence. The factors indicating an employer-employee relationship included the level of control and direction exercised by CJM over Mr. Follett's work, the hourly rate of payment, the provision of tools and materials by CJM, and the exclusivity of the work relationship. While CJM did not deduct income tax or provide superannuation or workers' compensation, these factors alone did not negate the overall evidence pointing to an employment relationship. The court dismissed the appeal and affirmed the Regulator's decision, ordering CJM to pay the costs of the appeal.

The court's reasoning was grounded in a multi-factorial analysis of the employment relationship. It rejected the notion that certain factors, like the failure to deduct income tax, were determinative. Instead, it considered the overall relationship between the parties, finding that Mr. Follett's work was integral to CJM's business, thereby classifying him as an employee. This conclusion led to the affirmation of the Regulator's decision and the dismissal of the appeal.

Orders

Orders of the court

1. The appeal is dismissed.

2. The Regulator's review decision dated 21 June 2017 is confirmed.

3. The appellant is to pay the first and second respondents' costs of and incidental to this appeal to be agreed or failing agreement, to be the subject of a further application to this Commission.

WORKERS' COMPENSATION – APPEAL AGAINST DECISION – whether the appellant was a worker within s 11 of the Workers' Compensation and Rehabilitation Act 2003

Background

Background to the litigation

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Evidence

Evidence Before The Court

The failure to deduct income tax from the payments made, does not necessarily support a finding that Mr Follett was an independent contractor.[44] To place too much reliance on the failure to deduct income tax from payments assumes that the payer has acted in accordance with the requirements of income tax legislation.[45] It is my view, that the same could be said in relation to placing too much reliance upon whether there has been provision for superannuation or workers' compensation.[44] Aus-Care Sports Medicine Pty Ltd as Trustee for Kelvin Grove Unit Trust v Simon Blackwood (Workers' Compensation Regulator) [2015] QIRC 182.[45] Re application by Donald Alexander Porter of an Inquiry in an Election in the Transport Workers' Union of Australia [1989] FCA 226.Totality of the evidence In my view, Mr Follett, at the date he was injured when working at Valencia Street, was an employee of CJM for the following reasons: (a)Mr Boakes, as the site supervisor employed by CJM, exercised control and direction over the work performed by Mr Follet, which I have concluded is indicative of Mr Follett being an employee of CJM; (b)Mr Follett was renumerated by payment at an hourly rate for this labour, as opposed to a fixed price contract for the work performed, which I have concluded is indicative that Mr Follett was an employee of CJM; (c)CJM provided all of the material to be used at the site and most of the tools used by Mr Follett, which I have concluded is indicative of Mr Follett being an employee of CJM; (d)Mr Follett was not able to delegate the work and was required to exclusively work for CJM to perform the work at the Valencia Street site, which I have concluded is indicative of him being an employee of CJM; (e)the hours of work performed by Mr Follett were agreed to between the parties in that Mr Follet and Mr Boakes agreed to a start time of 8:00am and it was expected Mr Follett would work a full day in order to complete the work required, which I have concluded is indicative of him being an employee of CJM;(f)CJM did not provide holidays to Mr Follett as he had only worked for several days at the time of the accident and there was an absence of evidence as to any agreement between the parties, accordingly, I make no finding with respect to this fact; and (g)CJM did not deduct income tax or provide for superannuation or workers' compensation, and these factors may support a finding Mr Follett was a contractor. In this appeal, the onus was on CJM to prove on the balance of probabilities, that Mr Follett was not a worker within the meaning of s 11 of the Act. For the reasons given above and in consideration of the totality of the evidence, I have concluded that Mr Follett was a worker within the meaning of s 11(1) of the Act. I dismiss the appeal. The decision of the Regulator dated 21 June 2017 is affirmed and CJM is to pay the Regulator's and Mr Follett's costs of and incidental to this appeal to be agreed, or, failing agreement, to be the subject of a further application to the Commission.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Having regard to the evidence as to formation of the contract, I have formed the view that Mr Follett worked under a contract between himself and CJM. In relation to the work, was Mr Follett an employee for the purpose of assessment for PAYG withholding under the Taxation Administration Act 1953 (Cth), Part 2-5?Was Mr Follett an employee at common law? Whether a worker is an employee or an independent contractor turns on the consideration as to whether the worker is serving another, in that other's business, or could be said to be conducting a business of his or her own. The question is to be answered by considering the totality of the relationship.[16] [16] Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21, [40] (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ citing Marshall v Whittaker's Building Supply Co [1963] HCA 26; (1963) 109 CLR 210, 217 (Windeyer J)). There is not one single test to be applied in determining whether a relationship is one of employee or independent contractor. Rather, instead, a multi-factorial approach is taken. Perram J summarised the position in ACE Insurance Ltd v Trifunovski [2011] FCA 1204 at [29], as follows:[29] With that in mind one can at least say this: first, the distinction between an employee and an independent contractor is "rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carries on a trade or business of his own" (Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 39 [40] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ citing Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210 at 217 per Windeyer J); secondly, the answers to that question are to be determined by reference to the 'totality' of the relationship (Hollis at 33 [24]); thirdly, a number of indicia have accreted over time in the authorities which are thought to throw light to varying degrees on the outcome without being determinative: the terms of the contract; the intention of the parties; whether tax is deducted; whether sub-contracting is permitted; whether uniforms are worn; whether tools are supplied; whether holidays permitted; the extent of control of, or the right to control, the putative employee whether actual or de jure; whether wages are paid or instead whether there exists a commission structure; what is disclosed in the tax returns; whether one party 'represents' the other; for the benefit of whom does the goodwill in the business inure; how "business-like" is the alleged business of the putative employee — are there systems, manuals and invoices; and so on — the list is neither exhaustive nor short: see Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24 per Mason J and 36–37 per Wilson and Dawson JJ; for application see Hollis at 42–45 [48]–[57] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ; Sweeney at 172–173 [30]–[33] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ. It will be necessary to refer to some of these factors later in these reasons and the authorities upon which they rest.