COWLEY and WESTERN POWER - [2008] WASAT 312

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: HUMAN RIGHTS

ACT: EQUAL OPPORTUNITY ACT 1984 (WA)

CITATION: COWLEY and WESTERN POWER [2008] WASAT 312

MEMBER: JUDGE J ECKERT (DEPUTY PRESIDENT)

HEARD: 30 SEPTEMBER 2008

DELIVERED : EDITED REASONS DELIVERED ORALLY ON 30 SEPTEMBER 2008

FILE NO/S: EOA 24 of 2008

BETWEEN: NEIL COWLEY
Applicant
AND
WESTERN POWER
Respondent

Catchwords:

Contract worker Employer/employee Subcontractor Appropriate respondent Primary discriminator Secondary discriminator

Legislation:

Equal Opportunity Act 1984 (WA), Div 1 Pt IVA, Div 2, s 3, s 4(1), s 66, s 66A(3), s 89, s 90, s 160
Interpretation Act 1984 (WA), s 18
State Administrative Tribunal Act 2004 (WA), s 9, s 78

Result:

Held that the respondent for the proceedings is Western Power
Held that the applicant is not an employee of either Western Power or Underground Services Australia Pty Ltd

Category: B

Representation:

Counsel:

Applicant: Mr R Bower
Respondent: Ms M Ivanovski

Solicitors:

Applicant: Corser & Corser
Respondent: CCI Legal

Case(s) referred to in decision(s):

Aintree Holdings Pty Ltd and Commissioner of State Revenue [2008] WASAT 62
Articulate Restorations & Development Pty Ltd v Crawford (1994) 57 IR 371
Australian Timber Workers’ Union v Monaro Sawmills Pty Ltd (1980) 42 FLR 369
Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd (1944) 69 CLR 227

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

In response to a written notice pursuant to s 90 of the Equal Opportunity Act 1984 (WA), the Commissioner for Equal Opportunity referred a complaint by Mr Neil Cowley against Western Power to the State Administrative Tribunal.
As a preliminary issue, the Tribunal had to determine whether Western Power was the appropriate respondent in the proceeding. In making its determination, the Tribunal examined s 66B(2), s 66D(1) and s 160 of the Equal Opportunity Act 1984 (WA).
The Tribunal considered whether Mr Cowley was an employee of Western Power or Underground Service Australia Pty Ltd for the purposes of s 66B, or alternatively a contract worker for the purpose of s 66D. The Tribunal determined that Mr Cowley was not an employee of either Western Power or Underground Service Australia Pty Ltd, and for this reason could not bring an action against Western Power under s 66B. The Tribunal held that Mr Cowley was a contract worker of Underground Service Australia Pty Ltd, and accordingly he could rely on s 66D.
The Tribunal also considered whether, pursuant to s 160, Western Power could be named as the sole respondent without involving the primary discriminating entity. The Tribunal found that an action could be commenced under s 160 against the secondary entity without also bringing an action against the primary discriminator.
Accordingly, the Tribunal found that Western Power was an appropriate respondent in the proceeding.

Orders made 30 September 2008

On 30 September 2008, the Tribunal, after considering written and oral submissions made by counsel for Mr Cowley (the applicant) and Western Power, decided that Western Power was an appropriate respondent in the proceedings.
The Tribunal provided oral reasons for this decision. Subsequently, on 8 October 2008, the respondent sought written reasons for the decision pursuant to s 78 of the State Administrative Tribunal Act 2004 (WA) (SAT Act). These are those written reasons.

The issues

The preliminary issue to be determined by the Tribunal is whether Western Power is an appropriate respondent in these proceedings.
Success against Western Power in relation to discrimination under s 66B of the Equal Opportunity Act 1984 (WA) (EO Act) requires an employment relationship between Western Power and Mr Cowley (for primary liability), or an employment relationship between Underground Service Australia Pty Ltd (USA) and Mr Cowley (for liability under s 160 of the EO Act).
Success against Western Power in relation to discrimination under s 66D of the EO Act requires Mr Cowley to be a contract worker of Western Power (for primary liability), or of USA (for liability under s 160).
A further question arises, if the applicant relies on secondary liability under s 160, of whether an applicant can bring an action against the secondary wrongdoer without also bringing an action against the primary wrongdoer.

The complaint

The applicant, Mr Cowley, was the sole director of Aqualog Pty Ltd, trading as Cowley Mini Excavator Hire (Aqualog). On 8 September 2004, the applicant, through Aqualog, commenced work for USA who in turn contracted its services to Western Power.
At material times, Western Power had a safety policy which required contractors and visitors to wear long pants and shirts whilst on work sites. Western Power required its contractors to enforce this policy. The applicant claims that, due to a physical impairment and disability, he was unable to comply with this requirement.
The contract between USA and Aqualog was terminated on or about 25 August 2006.
The applicant contends that the termination resulted from his inability, due to a physical impairment and disability, to comply with Western Power's safety policy. Western Power contends that the contract came to an end because of commercial reasons.
On 12 June 2007, Mr Cowley filed a complaint with the Commissioner for Equal Opportunity (Commissioner). The Commissioner dismissed the complaint as being misconceived pursuant to s 89(1) of the EO Act. Mr Cowley issued a notice pursuant to s 90(1) of the EO Act and accordingly the Commissioner referred the complaint to this Tribunal pursuant to s 90(2) of the EO Act.

Grounds of the complaint

The applicant alleges discrimination under s 66A of the EO Act.
Section 66A (in Div 1 of Pt IVA) of the EO Act is descriptive of what constitutes impairment discrimination. Section 66A(3) of the EO Act describes indirect impairment discrimination. Division 2 of Pt IVA then provides the circumstances in which that discrimination is unlawful.
Section 66A is headed 'Discrimination on ground of impairment' and subsection (3) provides:
For the purposes of this Act, a person (in this subsection referred to as the discriminator) discriminates against another person (in this subsection referred to as the aggrieved person) on the ground of impairment if the discriminator requires the aggrieved person to comply with a requirement or condition -
(a)with which a substantially higher proportion of persons who do not have the same impairment as the aggrieved person comply or are able to comply;
(b)which is not reasonable having regard to the circumstances of the case; and
(c)with which the aggrieved person does not or is not able to comply.
The applicant alleges that the discrimination was unlawful under s 66B or s 66D of the EO Act or both.
Section 66B of the EO Act is headed 'Discrimination against applicants and employees' and subsection (2) provides:
It is unlawful for an employer to discriminate against an employee on the ground of the employee's impairment -
(a)in the terms or conditions of employment that the employer affords the employee;
(b)by denying the employee access, or limiting the employee's access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment;
(c)by dismissing the employee; or
(d)by subjecting the employee to any other detriment.
In particular, the applicant relies on s 66A(1)(a) and s 66A(1)(c) of the EO Act.
Section 66D of the EO Act is headed 'Discrimination against contract workers' and provides:
(1)It is unlawful for a principal to discriminate against a contract worker on the ground of the contract worker's impairment -
(a)in the terms or conditions on which the principal allows the contract worker to work;
(b)by not allowing the contract worker to work or continue to work;
(c)by denying the contract worker access, or limiting the contract worker's access, to any benefit associated with the work in respect of which the contract with the employer is made; or
(d)by subjecting the contract worker to any other detriment.
…
In particular, the applicant relies on s 66D(1)(a) and s 66D(1)(b) of the EO Act.
The primary basis of the complaint against Western Power is pursuant to s 160 of the EO Act, which provides:
A person who causes, instructs, induces, aids, or permits another person to do an act that is unlawful under this Act shall for the purposes of this Act be taken also to have done the act.
In reliance on s 160 of the EO Act, counsel for the applicant submit that Western Power caused, instructed, induced, aided, or permitted USA to discriminate against the applicant in the manner described in s 66A(3), s 66B(2) and s 66D(1) of the EO Act.
Alternatively, the applicant alleged Western Power to be the primary discriminator.

Employment relationship

For the purposes of reliance on unlawful discrimination under s 66B of the EO Act, the applicant submits that he was an employee of USA or Western Power or both.
Counsel for the applicant points to the fact that the applicant was the sole director, sole shareholder and sole employee of Aqualog, and submits that for this reason Aqualog and Mr Cowley were for practical purposes one and the same entity.
Counsel for the applicant notes that an overreaching feature of the applicant's employment was that he was paid a sum based on the number of hours of work completed, the substance of which was under the control of USA and/or Western Power. Counsel contends that this feature, regardless of any other characteristics of his employment, should indicate that a relationship of employer-employee exists. Further, counsel for the applicant contended that other indicia supported the existence of a relationship of employment, including:
•the applicant had no control over when work was to be performed as he was required to attend the sites at times dictated by USA and/or Western Power; and
•USA and/or Western Power had control over the applicant in the execution of his duties - with the requirement that he wear long trousers an example of such control - and taking into consideration that the nature of the work undertaken by the applicant was such that there could not have been greater control than that exercised by USA and/or Western Power.
In support of these submissions, counsel for the applicant relied on Articulate Restorations & Development Pty Ltd v Crawford (1994) 57 IR 371, Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd (1944) 69 CLR 227 and Australian Timber Workers' Union v Monaro Sawmills Pty Ltd (1980) 42 FLR 369.
In the alternative, counsel for the applicant contends that if the applicant cannot be characterised as an employee applying contractual principles, he should still be considered to be an employee for the purposes of the EO Act. Counsel referred to s 18 of the Interpretation Act 1984 (WA) which provides that a construction that would promote the purpose or object underlying the law shall be preferred to a construction that would not promote that purpose or object. Counsel further submits that s 18 is reinforced by the fact that the EO Act is beneficial legislation. Counsel submits that the objects of the EO Act outlined in s 3 support the proposition that it would be contrary to the intention of parliament that a person who is in substantially the same position as the applicant would be protected by s 66B of the EO Act, but that the applicant is not.
Counsel for Western Power submits that there was no employeremployee relationship between the applicant and either Western Power or USA, but that the applicant was a subcontractor of Western Power. Instead, counsel contends that the applicant was an employee of his own business, Aqualog. Aqualog was contracted to provide services to USA, who was in turn contracted to Western Power. To that end, Aqualog issued USA with invoices for services rendered. In support of the submission that the applicant was not an employee, counsel contends:
•the relationship between the applicant and USA, and the relationship between USA and Western Power, was not exclusive. In this matter, the applicant and USA could provide services to other persons;
•the applicant supplied his own equipment;
•the applicant organised his own insurance cover; and
•Western Power exercised no control on a day-to-day basis over the duties performed by the applicant.
Counsel for Western Power also point out that the authorities relied on by counsel for the applicant are not the leading authorities in the area of classification as an employeremployee relationship.
I find for the purposes of the EO Act and on the facts as presented by Mr Cowley that he is not an employee of either USA or Western Power.
I accept Mr Bower's contention that 'employer' and 'employee' can have different meanings depending on their legislative context, however, in this instance the legislative intent is clear.
Although 'employee' is not defined by s 4(1) of the EO Act, 'employment' is defined quite clearly under that section to include:
(a)part-time and temporary employment;
(b)work under a contract for services; and
(c)work as a State employee;
Equally, 'contract worker' is defined as:
a person who does work for another person pursuant to a contract between the employer of the first-mentioned person and that other person;
Contractors like Mr Cowley, who have their own limited liability companies, who provide their own machinery and insurance, pay their own tax and execute their work according to their own and to their contractual standards, are adequately covered by specific provisions in the EO Act. In this context, there is no need to stretch the meaning of 'employee' to cover independent contractors. The needs of independent contractors are separate and adequately met, although I do make the comment that in the growing commercial complexity of employment, and the way in which work is conducted and employers seeking always to limit their own liability, there is capacity for review of this, and that a 20‑odd year old Act is perhaps becoming inadequate. I believe that the Commissioner took this up with the previous parliament in any event.
Accepting that the meaning of 'employee' in the EO Act is used in the context of the 'employee'-'independent contractor' dichotomy, I am of the view that the applicant in this case was an independent contractor and not an employee. As explained by Barker J in Aintree Holdings Pty Ltd and Commissioner of State Revenue [2008] WASAT 62, there are various judicial statements concerning the proper characterisation of a relationship which serve to remind one that there is no single test or factor that enables one to decide whether or not a person is an employee or an independent contractor in a given relationship. While it remains helpful to consider the various indicia of employment, it is also necessary to remain aware that the ultimate determination does not simply involve a mechanical or quantitative exercise by reference to these various tests or factors, and the totality of the relationship between the parties must be considered. Ultimately, one must weigh all the factors and determine by reference to the facts as a whole whether the relationship is truly one of employment or not.
Weighing the factors in the current case, I am of the view that the applicant was an independent contractor. There was no evidence of control - of the ability of USA to direct Mr Cowley as to how he does his work - to the degree required by commercial law.
Further, the applicant could not have been an employee of Western Power, as there was no contractual relationship of any nature between them. The terms of appointment of the applicant's company are between Aqualog and USA - not Western Power. Western Power did not directly enforce any standards of conduct, policies, or specified duties of the applicant.

Contract worker

For the purposes of reliance on unlawful discrimination under s 66D of the EO Act, the applicant submits that he was a contract worker of USA or Western Power or both.
Counsel for the applicant argues that in order to give effect to the objects of the EO Act, 'contract worker' as used in s 66D of the EO Act should be construed as including subcontractors, and for this reason an action can be maintained against Western Power as the primary discriminator without reliance on s 160 of the EO Act.
In the alternative, counsel for the applicant submitted that the applicant should be 'deemed' a contract worker of USA by virtue of the contract for services between Aqualog and USA, and consequently an action can be maintained against Western Power under s 66D by reliance on s 160 of the EO Act.
I find that, for the purposes of s 66D of the EO Act, Mr Cowley was a contract worker of USA, but not of Western Power. The definition of 'contract worker' in s 4(1) in the EO Act, 'a person who does work for another person pursuant to a contract between the employer of the firstmentioned person and that other person', clearly defines the relationship to be between the individual and the entity one step removed. There is no reason why this definition should be extended beyond its natural meaning to include subcontractors and thus to include entities two steps removed. The inclusion of s 160 of the EO Act provides adequate protection against the actions of entities further removed from the relevant relationship. For this reason, the applicant can only maintain an action against Western Power in reliance on a breach of s 66D if he can also rely on s 160 of the EO Act.

Secondary liability under s 160

If the applicant relies on s 160 of the EO Act to establish a secondary liability of Western Power through a breach of s 66D by USA, a question arises as to whether the applicant can bring a claim against Western Power under s 160 without the primary entity who is liable for the unlawful behaviour under s 66D (USA) being a party to the proceedings.
Counsel for Western Power submits that before a finding could be made against Western Power under s 160 of the EO Act, there would need to be a finding that USA acted unlawfully. Counsel contends that given USA is not named as a party to this complaint, no such finding could be made, and thus there could not be any determination of Western Power's liability.
In relation to this point, C Ronalds, Discrimination Law and Practice (3rd ed, 2008) states regarding s 160 of the EO Act at p 152:
Overall, limited use has been made of this provision by itself and this may be because of the potential difficulties in establishing a positive causal link between the person doing the act and the person to whom the responsibility is directed through the aiding and permitting provision. The broader coverage of the vicarious liability provisions make that an easier route to follow for a complainant seeking to extend the range of persons or organisations against whom they seek recovery. Finding sufficient evidence to support an assertion that another person actually instructed or induced a person to act in a discriminatory manner may be difficult. If there are written memos or directives by a senior employee to a junior employee sending them down a path that may later be demonstrated to be discriminatory, a complainant may well prefer just to pursue the remedy against the employer rather than the individuals who made or implemented the decisions which form the basis of the discriminatory act.
I find that there is nothing express in the EO Act which provides that in order for s 160 to be utilised, the primary entity acting in a discriminatory fashion be a party. Further, the objects of the EO Act in s 3 to 'eliminate, so far as is possible, discrimination against persons on the ground of … impairment … in the areas of work …' and the beneficial nature of the legislation indicates the provisions should not be construed in an unnecessarily narrow manner. I am satisfied that there is nothing in the EO Act which requires s 160 to be construed as requiring that the primary entity be a party - all that is needed is for the applicant to satisfy the Tribunal that the primary entity, in this case USA, has acted unlawfully and is in breach of the EO Act. That is a matter for the applicant to prove. I say 'all that is needed', but it is often a difficult thing to prove.

As the Tribunal will have to be satisfied that USA breached s 66D of the EO Act, USA may very well, for insurance or other reasons, wish to be heard. Certainly USA has a right to know that the Tribunal may make finding against it and a right to be heard on whether it can become a party to the proceeding or make submissions without becoming a party. Whether USA has the right to be a party or to make submissions is an issue which I have not fully considered and need not be dealt with at this point.

Ability of applicant to prove case

A final issue to consider is the ability of the applicant to prove his case. The Commissioner dismissed the applicant's claim, because he was 'not convinced [the applicant] can show pursuant to s 160 of the EO Act that Western Power is liable for causing, instructing, inducing, aiding or permitting USA to breach the act because of your impairment'.
It might be that the emphasis was on 'because of your impairment' rather than proving the 'causing, instructing, inducing, aiding or permitting'. I do not know. However, it has raised the issue of whether there is evidence that was not before the Commissioner, but which could be brought before the Tribunal, to justify allowing these proceedings to continue, particularly in light of s 9 of the SAT Act, which sets out the principles and objectives by which this Tribunal always conducts proceedings.
Counsel for the applicant has indicated an intention to provide additional evidence by way of calling employees from USA as witnesses. Although Mr Cowley in his application to the Commissioner named the USA witnesses, I have no idea if the Commissioner pursued them or spoke to them or if any evidence was obtained from them - there is nothing in the reports to indicate if that occurred. The fact that perhaps that evidence was not brought before the Commissioner, though Mr Cowley had alerted her to it, should not necessarily unfairly prejudice him in these proceedings before this Tribunal which is the actual decisionmaking, fact-finding body. I do, however, suspect it might be a little difficult to get witness statements from the identified witnesses.
I have had to weigh unfair prejudice to Mr Cowley with possible unfair prejudice to Western Power. On balance, this weighs in Mr Cowley's favour. Western Power has always been on notice about these proceedings and about his claims. Whether or not this is just a proceeding that has been brought because Mr Cowley cannot bring an action directly against USA due to the terms of a settlement agreement is something that is not for me to determine. That would be an allegation of an abuse of process, and no such submission has been made.

Conclusion and order

For the reasons given above, the Tribunal will not entertain claims by Mr Cowley based on s 66B of the EO Act, which requires an employment relationship, but it will entertain the claim based on the secondary liability of Western Power pursuant to s 160 of the EO Act for the breach by USA of s 66D of that Act, on the ground that Mr Cowley was a 'contract worker' of USA.

Orders

The Tribunal therefore orders that:
1.The correct respondent for proceedings under s 160 of the Equal Opportunity Act 1984 (WA) is Western Power;
2.For the purposes of the Equal Opportunity Act 1984 (WA), the applicant is not an employee of either Underground Services Australia Pty Ltd or Western Power;
3.The matter is referred to mediation to commence at 10 am on 5 November 2008 before Member Ms Hawkins; and
4.The matter is listed for a directions hearing on 14 November 2008.

I certify that this and the preceding [57] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUDGE J ECKERT, DEPUTY PRESIDENT