Cornwill v Rockwell T Security Pty Ltd
[1996] IRCA 517
•1 Nov 1996
DECISION NO:517/96
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - whether contract of service or contract for services - whether termination of employment at initiative of respondent
Industrial Relations Act 1988 s.170DC
Private Agents Act 1966 s.19I(1)
Income Tax Assessment Act 1936
CASES:Gurran v Tarbook Pty Ltd (unreported, Lee J, No. WI 1261 of 1995, 13 September 1996)
Re Porter; Re Transport Workers Union of Australia (1989-1990) 34 IR 179
Narich Property Limited v Commissioner of Pay-Roll Tax (1983) 50 ALR 417
ANTHONY JOHN CORNWILL - v - ROCKWELL T SECURITY PTY LTD
No. VI 5744 of 1995
Before: Judicial Registrar Millane
Place: Melbourne
Date: 1 November 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 5744 of 1995
B E T W E E N :
ANTHONY JOHN CORNWILL
Applicant
A N D
ROCKWELL T SECURITY PTY LTD
Respondent
MINUTES OF ORDERS
Judicial Registrar Millane 1 November 1996
THE COURT DECLARES THAT:
On 3 November 1995, the date of termination, the applicant was employed by the respondent.
On 3 November 1995 the respondent terminated the applicant’s employment in contravention of Division III Part VIA of the Industrial Relations Act 1988.
AND THE COURT ORDERS THAT within 21 days of the date of making these orders:
The respondent reappoint Anthony John Cornwill to the position in which he was employed immediately before his termination on 3 November 1995.
The respondent pay to Anthony John Cornwill the remuneration lost by him because of the termination.
AND THE COURT FURTHER ORDERS THAT:
The employment of Anthony John Cornwill be deemed to have been continuous for all purposes from 3 November 1995 to the date of reinstatement.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 5744 of 1995
B E T W E E N :
ANTHONY JOHN CORNWILL
Applicant
A N D
ROCKWELL T SECURITY PTY LTD
Respondent
Before: Judicial Registrar Millane
Place: Melbourne
Date: 1 November 1996
REASONS FOR JUDGMENT
Pursuant to a written contract between the applicant and the respondent executed on 19 June 1995, the applicant was engaged to perform services as a security guard. The applicant alleges that at the relevant time, despite the explicit wording of the written contract, he was engaged under a contract of employment; that is to say, a contract of service rather than a contract for the provision of services. He alleges that on 3 November 1995 that contract was terminated in contravention of Division III Part VIA of the Industrial Relations Act 1988 (the Act).
On its part the respondent defends the proceedings by arguing, first, that there was never any employment and, secondly, if such a relationship existed at the relevant time the applicant abandoned his employment and, therefore, there was no termination at the initiative of the respondent.
In all four witnesses gave evidence: two for each party. If I had any concerns at all about the forthrightness of any witness, it was Nigel John Fitten (Fitten), the respondent’s senior supervisor. His evidence was directed primarily to the question of whether there was termination at the initiative of the respondent. Despite his assertions to the contrary it was apparent that on 3 November 1995 after he heard from the applicant’s supervisor, Rodney Keith Mitchell (Mitchell), that the applicant had “walked off the job” during the previous evening’s shift and left Mitchell to complete it, Fitten set about removing the applicant from the respondent’s rosters for the evening shift that Friday and for all of the next week’s shifts without any discussion with the applicant. The inference I draw from his conduct is that he had then decided to and had already put in place plans to terminate the applicant’s work with the respondent well before the applicant telephoned him in the middle of the day and provided him with the applicant’s version of the events occurring in his last shift.
If the only issue between the parties was whether there was termination of the employment at the initiative of the respondent, I would have no hesitation in finding that there was and, further, in the absence of any conduct or performance issues, finding there was no valid reason for termination as well as a contravention of section 170DC of the Act by reason of the failure to afford the applicant a full opportunity to explain his conduct during the final shift on the evening of 2 November 1995.
THE CONTRACT
In deciding whether there was a relationship of employment it is perhaps appropriate to start by considering the observations of Justice Gray in his decision in Re Porter; Re Transport Workers Union of Australia (1989-1990) 34 IR 179 where he says at page 184:
“A court determining whether a particular relationship is that of employment or of some other kind can therefore only resort to the process of balancing all of the factors, or as they are called in Stevens and other cases, the “indicia”. In truth, the result may be a matter of impression. It is unfortunate that this is so. It should not be necessary for people to obtain a decision of a court, in order to know the true nature of their relationship. Unfortunate or not, that is the case. Although the parties are free, as a matter of law, to choose the nature of the contract which they will make between themselves, their own characterisation of that contract will not be conclusive. A court will always look at all of the terms of the contract, to determine its true essence, and will not be bound by the express choice of the parties as to the label to be attached to it. As Mr Black put it in the present case, the parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognise it as a duck.”
The abovementioned citation contains a graphic illustration of the problem confronting courts and parties when trying to identify the true legal relationship entered into. Notwithstanding the difficulties encountered, it is apparent that it is not enough for parties to execute a written contract describing the legal relationship as one thing when the nature of the relationship and the factors involved in that relationship point to the existence of a contract of service (see Narich Property Limited v Commissioner of Pay-Roll Tax (1983) 50 ALR 417).
The first matter to be considered is the written contract which plainly provides for a relationship of contractor where the applicant: (a) was given the right to employ other people; (b) was paid at a fixed hourly rate without the deduction of taxation and without the usual benefits accruing to employees such as holiday leave and long service leave, et cetera; and (c) specifically acknowledges that there was no relationship of employer and employee. Notwithstanding the wording of the contract which purports to characterise the contract as one for services, the circumstances of the case at hand must also be considered.
The security industry is regulated by the Private Agents Act 1966 Part IIA of which provides for the licensing of security firms and guards. It was agreed that the applicant was hired by the respondent company, which provides uniformed security guards for clients such as the Coles Supermarket Stores, and that when the applicant was hired he did not then hold a requisite licence.
David Graham Helman (Helman), an acting inspector of police operations, was called by the applicant to give evidence. He told the Court that he was in charge of the register of private agents maintained under the Private Agents Act 1966. Helman also identified Exhibit A6 which is a copy of a Statutory Declaration made by an “Employer of Private Agent” and bearing the title “Security Guard / Crowd Controller”. The document contains a declaration made by the respondent’s “Admin Manageress” on 16 June 1995; three days before the applicant executed the written contract. The statutory declaration bears the company seal and contains, amongst other things, the following declaration:
“The applicant Anthony John Cornwill D.O.B. 25.03.57 will be employed by this company.
I have made all reasonable enquiries and am satisfied that the applicant meets the criteria expressed in section 19G(3) of the Private Agents (Amendment) Act 1990.
That the company will provide adequate training to properly equip the applicant in the performance of his duties or arrangements will be made to provide such training by an accredited training agency.
I understand that the applicant will not be required to perform security duties until adequate training has been provided and that on-going supervision will occur until the employee is proficient in all aspects of his job description.
I make this solemn declaration conscientiously believing the same to be true and correct and by virtue of the provisions of an Act of Parliament of Victoria rendering persons make a false declaration punishable for wilful and corrupt perjury.”
Section 19I(1) of the Private Agents Act 1966 provides:
“(1) If an application for a security guard’s licence or a crowd controller’s
licence is accompanied by -
(a) a statutory declaration of a person employing, or intending to employ,
the applicant stating that after making reasonable inquiries the person
is satisfied that no objection to the application could be sustained on
any of the criteria listed in section 19G(3); and
(b) the prescribed fee for the licence -
the registrar may grant the applicant a provisional licence.”
Helman’s evidence was to the effect that a provisional licence was granted to the applicant on 19 June 1995 because the applicant was sponsored by the respondent as an employee. The provisional licence was granted on the condition that the requisite training be provided to the employee within two months of the commencement of his employment and that the registrar be notified of this to enable a grant of a full licence. Helman emphasised the importance of the employment and training requirements to the efforts being made to raise the level of professionalism in the security industry. The written application made by the respondent for a provisional licence for the applicant contains a clear representation on the respondent’s part that the applicant was to be employed by the company.
The provisional licence granted to the applicant on 19 June 1996 (Exhibit A8) requires the holder to, amongst other things, “Not employ another Private Agent”. This means that at the relevant time the applicant, despite the provisions of the written contract drafted by the respondent suggesting that the applicant retained the right to employ others to perform his contractual obligations, was precluded (and this must have been known by the respondent) from delegating the performance of his security guard duties.
In his recent decision in Gurran v Tarbook Pty Ltd (unreported, Lee J, No. WI 1261 of 1995, 13 September 1996) Justice Lee confirms that any direction for the receipt of remuneration and the manner in which the incidence of taxation is treated will not of itself determine the nature of the employment contract (see page 14 of the unreported decision). Accordingly, the fact that the applicant was paid a gross amount at an hourly rate without the additional financial benefits that usually accompany employment, should not be treated as being decisive of the issue.
This is a case where on the evidence the respondent retained and exercised a considerable degree of control over both the security guard and the way in which the applicant performed his work. It was said by the respondent that the applicant was left to exercise his own judgment and discretion when performing security guard duties at the Coles stores he patrolled in the period between June 1995 and November 1995. The difficulty the respondent has with this contention is that this argument is at odds with its undertaking given pursuant to the Private Agents Act 1966 to train the applicant who, whilst he had experience in crowd control, had not undertaken any of the necessary courses or obtained a full licence to perform security guard duties. On the job training and supervision is more consistent with a contract of service than a contract under which a person contracts to provide skilled services.
Mitchell was a supervisor who claimed that he attended to check on security guards at their various locations every two to three days and, although he chose to characterise any direction he gave to the applicant on the performance of his duties as “advice”, it was apparent that he expected the “advice” to be followed.
On the evidence it is also apparent that despite its undertaking the respondent did not devote any time or energy to training the applicant nor did it enrol him for attendance at appropriate courses. When a difficult situation arose whilst he was performing his duties at a Coles supermarket over a number of shifts, he was not sufficiently trained to know what power, if any, he had to refuse access to the premises and service to a troublesome customer. Because of this he called on the respondent for assistance. Mitchell responded to that call. He consulted with and obtained advice from Coles management and proceeded to instruct the applicant on the powers the applicant had but did so in a way which was both confusing and contradictory. On the one hand, the applicant was told he had power to refuse access to the premises and service to the person he complained about where that person had previously caused problems, yet, on the other hand, he was told to “ignore” that person unless he caused trouble. In view of a number of incidents over the days preceding this discussion where this particular person had made threats and had caused other customers to be concerned for their welfare, the instruction to the applicant was confused and confusing because it seemed to suggest that the applicant needed to wait for further trouble before he could take the steps he was told he had power to take. The applicant was so upset by this predicament that he left the shift to be completed by the supervisor, having first agreed to call Fitten the next day, which was the Friday. I accept the applicant’s evidence that because of the incidents with the customer and the confusion he felt when he left he was distressed.
It was the applicant’s uncontradicted evidence that he was required by the respondent to obtain the registration of a business name which he did on 4 July 1995 (Exhibit A5) registering the name “Tony Cornwill Securities”. The use of a business name or corporate identity is another matter which is not decisive of the issue, particularly where other indicia exist pointing to significant control. This is a case where there was a regular roster with uninterrupted periods of work between June 1995 and November 1995 during which time the applicant worked weekly shifts from thirty-two hours to sixty-five hours. In a seven week period the applicant worked consecutive weeks of sixty-five hours (Exhibit A2). The long rostered hours of shift work are inconsistent with any opportunity to pursue other employment activities. The applicant’s evidence is that he did not pursue nor was he able to perform work for any other entities. Each Friday the applicant was required to ring Fitten to determine the hours to be worked in the following week and the location of his duties. The evidence shows that before the events of the last shift on 2 November 1995 the applicant was rostered for further duties on the Friday and in the following week until Fitten removed him from the roster.
Prior to commencing his duties the applicant received from Fitten a copy of a document entitled “Rockwell T Security Pty Ltd, Security Guards Memo, Revised: 22nd May 1995” (Exhibit A3). He was informed that he should read this document thoroughly and comply with it. His evidence is that he did just that. Apart from the Security Guards Memo the applicant was also required to complete a log book at the locations at which he worked. The applicant’s work was performed at the Coles’ sites and at these sites there was a document entitled “Uniform Security Guards Function, Duties and Standards” which contained instructions for the security guards. This document was left with the log book. It was the applicant’s understanding that he was required to comply with the instructions contained in this document as well as the Security Guards Memo.
The Security Guards Memo contains detailed instructions on the security guards duties and the way in which the duties are to be performed, as well as setting out the requirements for the wearing of uniforms and personal grooming and appearance. Significantly, the document also contains details of circumstances which the respondent states will lead to termination or dismissal. For instance, security guards risk dismissal if they:
(a) 1. Sit Around
2. Make coffee for staff
3. Read newspapers, books, magazines/cross word puzzles etc
4. Chat up female staff
5. Stand around talking to staff, distracting yourself and staff from
their respective duties6 “CARPARK” duty Dandenong, sitting in your car is NOT
permitted at all;
(b) Fail to comply with the standing orders for the filling in of the log book;
or
(c) Make personal calls from the work site unless the call “is in the
interests of the company”.
All of the abovementioned matters strongly indicate the formation of a relationship of employment. Accordingly, my finding is that at the relevant time the applicant was an employee and because of the matters already discussed, his employment was unlawfully terminated; there being no valid reason proved by the respondent at hearing.
REMEDY
This applicant has not been successful in obtaining replacement employment since termination. I am satisfied that he has made attempts to find gainful employment and thereby mitigate his continuing loss of remuneration.
At the date of termination the applicant was earning an average of $543.02 gross per week over the 19.5 weeks worked until termination. The applicant has not had appropriate training for the purposes of obtaining a security guards licence and has not pursued this because when he applies for positions and informs the prospective employer that he has been sacked from his former security position, he has been refused employment in the industry.
When giving his evidence-in-chief the applicant stated that he had received some three to six months’ payments in sickness benefits. This issue was not pursued by the respondent even though the receipt of sickness benefits suggests incapacity for work for some period between November 1995 and the date of hearing.
The applicant seeks reinstatement. No evidence was called by the respondent to suggest that such a course is impracticable. This being so, I find that reinstatement is practicable in all the circumstances and I propose to make the appropriate order as well as an order for remuneration lost. The remuneration lost should be calculated by reference to the number of weeks between the date of termination and the date of reinstatement at the rate of $543.02 per week less any tax payable and actually paid by the respondent to the Commissioner of Taxation pursuant to the Income Tax Assessment Act 1936.
Following the hearing and without the leave of the Court being sought, the respondent purported to file a further submission. This course of action was objected to by the applicant. In these circumstances for the purposes of this judgment I have ignored any further evidence or submissions which could and should have been raised at hearing before the judgment in this matter was reserved.
MINUTES OF ORDERS
THE COURT DECLARES THAT:
On 3 November 1995, the date of termination, the applicant was employed by the respondent.
On 3 November 1995 the respondent terminated the applicant’s employment in contravention of Division III Part VIA of the Industrial Relations Act 1988.
AND THE COURT ORDERS THAT within 21 days of the date of making these orders:
The respondent reappoint Anthony John Cornwill to the position in which he was employed immediately before his termination on 3 November 1995.
The respondent pay to Anthony John Cornwill the remuneration lost by him because of the termination.
AND THE COURT FURTHER ORDERS THAT:
The employment of Anthony John Cornwill be deemed to have been continuous for all purposes from 3 November 1995 to the date of reinstatement.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
I certify that this and the preceding ten (10) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.
Associate:
Dated: 1 November 1996
Solicitors for the Applicant: Hughes
Counsel for the Applicant: Mr D. Staindl
Solicitors for the Respondent: Andrew Gray & Associates
Counsel for the Respondent: Mr D. Pannifex
Date of hearing: 9 October 1996
Date of judgment: 1 November 1996
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