Daykin v Neba International Couriers
[2002] WASCA 213
•8 AUGUST 2002
DAYKIN -v- NEBA INTERNATIONAL COURIERS & ANOR [2002] WASCA 213
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASCA 213 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:7/2002 | 16 JULY 2002 | |
| Coram: | MALCOLM CJ TEMPLEMAN J MATHEWS AJ | 8/08/02 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| A | |||
| PDF Version |
| Parties: | VERONICA FAYE DAYKIN NEBA INTERNATIONAL COURIERS WESTPAC BANKING GROUP |
Catchwords: | Workers' compensation Persons entitled to compensation "Worker" Appellant contracted to provide courier services for first respondent No contract of service Appellant not rewarded for her personal manual labour or services Appellant not required to accept any particular job and free to subcontract services to a third party If job took longer than time allocated there was an entitlement to an additional payment Appellant at liberty to accept courier jobs from other organisations Appellant provided her own vehicle at her own cost No uniform provided by the first respondent, except for an identification badge Couriers provided their own "uniforms" but the only requirement was that they dressed in blue Appellant not a "worker" as defined in either of the definitions in s 5 |
Legislation: | Workers' Compensation and Rehabilitation Act 1981 (WA), s 5 |
Case References: | Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 75 ALJR 1357 Humberstone v Northern Timber Mills (1949) 79 CLR 359 Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210 Summit Homes v Lucev & Ors (1996) 16 WAR 566 Wright v Attorney General for the State of Tasmania (1954) 94 CLR 409 Bednarczyk v Natcorp Investments Ltd, unreported; FCt SCt of WA; Library No 970363; 23 July 1997 Jenkins v WADOT, unreported; FCt SCt of WA; 11 October 1999 Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 539 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 Vabu Pty Ltd v Commissioner of Taxation (1995) 30 ATR 303 Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 33 ATR 537 Western Australian Planning Commission v Lillyville Pty Ltd, unreported; SCt of WA; Library No 990174; 9 April 1999 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : DAYKIN -v- NEBA INTERNATIONAL COURIERS & ANOR [2002] WASCA 213 CORAM : MALCOLM CJ
- TEMPLEMAN J
MATHEWS AJ
- Appellant
AND
NEBA INTERNATIONAL COURIERS
First Respondent
WESTPAC BANKING GROUP
Second Respondent
Catchwords:
Workers' compensation - Persons entitled to compensation - "Worker" - Appellant contracted to provide courier services for first respondent - No contract of service - Appellant not rewarded for her personal manual labour or services - Appellant not required to accept any particular job and free to subcontract services to a third party - If job took longer than time allocated there was an entitlement to an additional payment - Appellant at liberty to accept courier jobs from other organisations - Appellant provided her own vehicle at her own cost - No uniform provided by the first respondent, except for an
(Page 2)
identification badge - Couriers provided their own "uniforms" but the only requirement was that they dressed in blue - Appellant not a "worker" as defined in either of the definitions in s 5
Legislation:
Workers' Compensation and Rehabilitation Act 1981 (WA), s 5
Result:
Appeal dismissed
Category: A
Representation:
Counsel:
Appellant : Mr B L Nugawela
First Respondent : Mr R J L McCormack
Second Respondent : Mr P E Jarman
Solicitors:
Appellant : D'Angelo & Partners
First Respondent : B W Duckham & Co
Second Respondent : Jackson McDonald
Case(s) referred to in judgment(s):
Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 75 ALJR 1357
Humberstone v Northern Timber Mills (1949) 79 CLR 359
Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210
Summit Homes v Lucev & Ors (1996) 16 WAR 566
Wright v Attorney General for the State of Tasmania (1954) 94 CLR 409
(Page 3)
Case(s) also cited:
Bednarczyk v Natcorp Investments Ltd, unreported; FCt SCt of WA; Library No 970363; 23 July 1997
Jenkins v WADOT, unreported; FCt SCt of WA; 11 October 1999
Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 539
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
Vabu Pty Ltd v Commissioner of Taxation (1995) 30 ATR 303
Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 33 ATR 537
Western Australian Planning Commission v Lillyville Pty Ltd, unreported; SCt of WA; Library No 990174; 9 April 1999
(Page 4)
1 MALCOLM CJ: In my opinion this appeal should be dismissed for the reasons to be published by Mathews AJ with which I am in entire agreement.
2 TEMPLEMAN J: I have read in draft the reasons to be published by Mathews AJ, with which I agree.
3 I would also dismiss the appeal.
4 MATHEWS AJ: This is an appeal from the decision of a compensation Magistrate delivered on 12 October 2001. The background, very briefly, is as follows. In October 1998, the appellant commenced working with the first respondent as a courier. The first respondent had contracted with the second respondent to provide courier services for it. On 19 January 2000, whilst performing a delivery for the first respondent (and, by extension, for the second respondent), an incident occurred in which the appellant injured her right knee. She commenced proceedings seeking compensation for the injury pursuant to the Workers' Compensation and Rehabilitation Act 1981 (WA) (the Act). A conciliation conference was convened in relation to the matter. However, it remained unresolved and was referred to a review officer.
5 The central issue before the review officer was whether the appellant was a "worker" as defined by s 5 of the Act. The review officer took evidence on this matter both from the appellant and from a Mr Nell, a co-proprietor of the first respondent. In a reserved decision dated 18 December 2000 the review officer concluded that there was no contract of service between the appellant and the first respondent and that the appellant was not remunerated in substance for her manual labour. She was therefore not a worker under the Act. The application was dismissed.
6 The appellant appealed to the compensation Magistrates' Court claiming that the review officer had failed to take into account a number of relevant considerations and that he had failed to provide adequate reasons for certain of his determinations.
7 On 12 October 2001, the compensation Magistrate dismissed the appeal. Leave to appeal against this decision was granted on 7 December 2001. Subsequently a notice of appeal was lodged raising seven grounds of appeal. All were directed to the finding of the review officer, and later of the Magistrate, that the appellant was not relevantly employed by the first respondent when she sustained her injury. It was conceded that this finding, as to the appellant's relationship with the first respondent,
(Page 5)
- necessarily resolved the issue in favour of the second respondent, whose potential liability was derivative to that of the first respondent.
8 Section 5 of the Act, as relevant here, defines a "worker" as follows:
" 'worker' does not include a person whose employment is of a casual nature and is not for the purpose of the employer’s trade or business, or except as hereinafter provided in this definition a member of the police force, or except as hereinafter provided in this definition a member of the employer’s family dwelling in his house; but save as aforesaid, means any person who has entered into or works under a contract of service or apprenticeship with an employer, whether by way of manual labour, clerical work, or otherwise and whether the contract is expressed or implied, is oral or in writing;
…
the term 'worker' save as aforesaid, also includes —
(a) any person to whose service any industrial award or industrial agreement applies; and
(b) any person engaged by another person to work for the purpose of the other person’s trade or business under a contract with him for service, the remuneration by whatever means of the person so working being in substance for his personal manual labour or services,
and any reference to a worker who has suffered a disability shall, where the worker is dead, include a reference to his legal personal representative or to his dependants or other person to whom or for whose benefit compensation is payable."
9 It would be sufficient for the appellant's purposes to establish either that she was employed under a contract of service or, alternatively, that she was engaged by the first respondent for the purpose of its trade or business under a contract for service, and her remuneration was in substance for her personal manual labour or services (the extended definition of worker).
10 Before discussing the issues raised on appeal, it is appropriate to describe the evidence as to the appellant's working conditions with the first respondent. The evidence primarily came from Mr Nell and to a lesser extent from the appellant.
(Page 6)
11 Mr Nell told the review officer that before the appellant started working with the first respondent she completed an application form providing basic information about herself. Later an interview was conducted with her at which the first respondent's operations were explained. The terms and conditions of her agreement were oral, he said, and no formal contract was documented. She was engaged to undertake deliveries on the basis that she would be paid an hourly rate of $14 from which tax would be deducted at the rate of 20 per cent under the prescribed payment system (PPS). No annual leave, sick leave, long-service leave or superannuation benefits were payable. She was to provide her own vehicle and uniform. All vehicle operating expenses were to be her responsibility.
12 As to the appellant's work pattern, each day she and the other couriers were provided with a schedule setting out the courier runs they were to undertake and the time within which the deliveries were expected to be completed. If, due to circumstances which were not the fault of the courier, more time was needed to complete the deliveries, then an additional payment would be made. Whilst each driver was allocated a particular zone for their deliveries, they were at liberty to determine the route they took. They were under no obligation to accept any particular delivery job, but once accepted it was the driver's responsibility to complete it. Drivers were at liberty to undertake work with other organisations.
13 Finally, on the subject of uniforms, Mr Nell said that drivers were required to provide their own uniforms. The only part which was provided by the first respondent was an identification badge which couriers were requested to wear on their pockets.
14 The review officer, as indicated, found that the appellant was not a "worker" under the Act. In his decision he summarised the evidence given by the appellant and Mr Nell as to the terms of the appellant's engagement. He cited the relevant legislation and concluded that the appellant could succeed in her claim to be a worker if she was either employed under a master/servant relationship (a contract of service) or under the extended definition of worker in s 5.
15 The review officer then went on to discuss the concept of a contract of service, and cited a number of authorities on the issue. He noted that the appellant was not entitled to benefits usually associated with such a contract. He regarded the control test as being of "critical importance" on this issue, and concluded that the respondent exercised little control over
(Page 7)
- the appellant's work other than to issue the list of delivery jobs she was required to complete. The review officer went on to consider matters to be taken into account other than the control test, and concluded that the appellant was not employed by the first respondent under a contract of service.
16 The review officer then went on to consider whether the appellant fell within the extended definition of worker. This was dependent upon her establishing that she was remunerated in substance for her manual labour. On this issue the review officer quoted a number of authorities including Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210 and Summit Homes v Lucev & Ors (1996) 16 WAR 566. In the present case the appellant had provided, in addition to her manual labour, a motor vehicle which included the cost of motor vehicle insurance, maintenance and fuel. She had also provided a mobile phone and a uniform. On this basis the review officer concluded that she was not remunerated in substance for her manual labour.
The Grounds of Appeal
Grounds 1 and 2
17 The first and second grounds of appeal before this Court relate to what was said to be the review officer's failure to take relevant considerations into account. The relevant considerations were said to be:
(a) evidence concerning the compulsory use of uniforms (ground 1);
(b) the requirement of one week's notice of termination of the contract (ground 2).
18 These were also the subject of grounds of appeal before the Magistrate. The Magistrate reviewed the evidence relating to each of these topics. She concluded that they were of such little significance that she was unable to see how they "would have or should have" affected the review officer's finding that there was no contract of service.
19 Between the review officer's decision and the hearing before the Magistrate, the High Court had delivered its judgment in Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 75 ALJR 1357. In that case a bicycle courier, wearing an identifiable Vabu uniform, knocked down and injured the plaintiff, Mr Hollis. The majority of the High Court (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ) held that the relationship
(Page 8)
- between Vabu and the bicycle courier was that of employer and employee and that Vabu was vicariously liable to compensate Mr Hollis for his injuries. One of the matters regarded as significant by their Honours was the fact that Vabu had issued uniforms to the couriers containing the Vabu logo, which they were obliged to wear at all times when engaged in Vabu's activities. However, as the Magistrate here pointed out, the circumstances in Vabu were very different from those which applied in this case. According to Mr Nell, couriers who worked for the first respondent were asked to supply uniforms at their own cost. The only requirement, it seems, was that the uniforms be blue and presentable. The only portion of the uniform which was provided by the respondent was a badge bearing its logo and name which couriers were requested, but not required, to wear on their pockets. There were numerous other distinctions between the couriers in Vabu and the position of the appellant which are unnecessary to describe for the purpose of this ground.
20 The review officer in his decision referred to the wearing of uniforms by couriers, but failed to mention the fact that they were compulsory. This was a ground of appeal to the Magistrate. The Magistrate dismissed this ground, saying "I cannot see how [this] matter would have or should have altered his (the review officer's) finding that there was no contract of service." The appellant takes issue with the phrase "would have or should have altered his finding" saying that the relevant test was whether this matter "could or may" have resulted in a different finding.
21 I am unable to find any substance in this ground. Whatever terminology might have been used by the Magistrate in rejecting this ground of appeal, I am quite unable to see how the fact that the respondent requested its drivers to wear blue while they performed their courier duties could in any way have affected their status as employees or independent contractors.
22 The second ground of appeal raises a similar issue. It claims that the review officer failed to consider a relevant matter in his judgment, namely the fact that couriers were required by the first respondent to give one week's notice of intention to leave.
23 A notice about this matter was included on the appellant's interview sheet. It said:
"We require a minimum of 1 week's notice of intent to leave. Failure to provide sufficient notice may incur a training penalty on your final pay."
(Page 9)
24 Mr Nell, in his evidence before the review officer, said that this term had never been enforced. He had received legal advice that he had no right to deduct a levy if inadequate notice were given, and had therefore never sought to do so.
25 In my view, this would have been sufficient to dispose of this ground of appeal. But even without Mr Nell's evidence, it is difficult to see the relevance of this matter to the nature of the relationship between the appellant and the first respondent. As Dixon J pointed out in Humberstone v Northern Timber Mills (1949) 79 CLR 359, a term requiring reasonable notice of termination is a common feature of a contract for services. In my view, the existence of such a term in this case does nothing to advance the appellant's case that she was an employee of the first respondent.
26 The Magistrate, in the terms already quoted, found that this factor neither "would nor should" have altered the review officer's finding that there was no contract of service. I can discern no error in this finding.
Ground 3
27 The third ground of appeal is in the following form:
"3. The learned Review Officer erred in failing to take into account the run sheets or daily schedules generated by the First Respondent, which were relevant both to:
(a) the question of control;
(b) the question whether what the Appellant provided was in substance her labour or personal services.
The learned Magistrate erred in failing to conclude that these considerations were relevant to determining whether the Appellant was a worker within the primary and extended statutory definitions."
(Page 10)
29 The review officer referred to the daily schedules when describing the evidence of both Mr Nell and the appellant. Mr Nell's evidence was described in the following terms:
"Mr Nell said that the applicant was paid a set hourly rate to undertake courier delivery duties in a defined zone within a specific period of time. Each day the drivers were provided with the courier runs and the time allocated within which the delivery was to be completed. He explained that the time allocated to the various deliveries within a zone was based on an estimate of the time that it was expected the driver could complete the deliveries and that the payment rate at $14.00 per hour was applied accordingly. If there were some unforeseen circumstances, such as a delay caused by a client at time of pickup, then an additional amount would be paid to a courier driver to account for the further time required to complete the delivery.
…
Mr Nell said that whilst each driver was allocated a particular zone they were at liberty to determine the route to take and were under no obligation to except (sic accept) the particular delivery job offered to them. In addition, Mr Nell said that should a courier driver be unable to fulfil an allocated delivery for reasons such as a vehicle malfunction, then it was the driver's responsibility to obtain an alternative vehicle. If this was not possible then the contract would have been let to someone else. Drivers were also at liberty to undertake work with other organisations concurrent with the activities undertaken with the first respondent."
30 The review officer described the appellant as saying that the deliveries set out in the daily schedules were often difficult to achieve. He did not thereafter refer to the schedules when discussing the relevant legal issues in the case.
31 The appellant's submissions relating to this ground are essentially the same as under the first two grounds. It is submitted that this was material which the review officer should have "considered and critically evaluated". I assume this means that he should have referred to these schedules when reaching his decision on the matter, not merely when reciting the factual background. But it would impose an almost
(Page 11)
- impossibly onerous burden on decision makers if they were required, when reaching their decisions, to recite every facet of the evidence which might potentially be relevant to their findings. In this case, there was evidence from Mr Nell which greatly reduced the significance (if any) of the daily schedules, particularly in relation to the issue of control. This was Mr Nell's unchallenged evidence that it was open to couriers at any time to refuse to undertake any job or jobs and to seek changes in their schedules.
32 Even without Mr Nell's evidence on this matter, I would find against the appellant on this ground. In this regard, it is relevant to refer to the judgment of Fullagar J in Wright v Attorney General for the State of Tasmania (1954) 94 CLR 409. The issue in that case concerned the status of drivers who were engaged to carry gravel and fuel to a road construction project in trucks provided by themselves. The High Court found that they were independent contractors. Evidence had been given that the drivers were given directions as to what was to be carried, where it was to be picked up, and at what time and where it was to be delivered. It was left to the individual drivers to choose the route they took. Fullagar J said of this evidence (at 417):
"If de facto exercise of control is relevant in a case where the contract is so clear, it seems enough to say that the only directions given were directions to produce a result … and not as to the detailed manner in which that result was to be produced."
33 Precisely the same observation applies here. In my view, the review officer was entitled to treat the evidence as to the daily schedules as a neutral matter in determining whether the appellant was a "worker" under the Act.
34 In my view this ground of appeal has not been made out.
Ground 4.1
35 This ground relates to the review officer's alleged failure to take into account evidence concerning the appellant's income tax deductions in determining, pursuant to the extended definition of worker, whether what the appellant provided was in substance the provision of her labour or personal services.
(Page 12)
36 The review officer had before him a copy of the appellant's income tax return for the relevant financial year. This showed that the appellant's gross income for the nine months she worked for the first respondent was $13,400. Her net taxable income was a little over $8600. The balance, of approximately $4800, were business deductions consisting of vehicle expenses and depreciation.
37 The appellant's written submissions under this ground appear to be directed, not towards the review officer's failure to refer to this evidence, but rather to the manner in which he dealt with it. The submissions assert that the review officer "failed to consider, compare and contrast the extent of the expense on the one hand, with the extent of the personal or manual labour provided by the appellant"
38 The review officer concluded his findings as to the extended definition of worker in the following terms:
"38. In the matter before me the applicant provided, in addition to her manual labour, a motor vehicle, including motor vehicle insurance, maintenance and fuel, a mobile phone and a uniform. In my view the provision of these things could not be said to be comparatively so insignificant that in reality, or as one might say to all intents and purposes, it (the remuneration) is a return for manual labour." (Italics in the original)
39 The appellant apparently takes issue with the italicised phrase of the review officer's decision. However this was taken directly from the High Court judgment in Marshall v Whittaker's Building Supply Co. The court was there concerned with a legislative provision in identical terms with the relevant portion of s 5. The majority of the court (Kitto, Taylor, Menzies and Owen JJ) said in relation to the extended definition of a worker at 214:
" … its effect is that in the case as specified, where there is a contract for services providing for remuneration which appears in reality to be payment for manual labour, the person providing the services is a worker for the purposes of the Act. The words 'in substance' do not mean, as the Board appears to have thought, 'to any substantial extent'. Their function is to enlarge the description which the words immediately following provide, so that the definition may apply not only where the remuneration is a return for manual labour bestowed by a
(Page 13)
- person upon the work in which he is engaged and for nothing else, but also where, although the remuneration is a return for something else also, the something else is comparatively so insignificant that in reality, or as one might say to all intents and purposes, it is a return for manual labour so bestowed."
40 The appellant's business deductions relating to the use of her motor vehicle constituted well over one-third of her gross income, which is by no means an insignificant amount. If anything, the extent of these deductions supported the respondent's case on this issue. It is therefore difficult to see how the review officer's failure to refer to these figures could have amounted to a failure to consider relevant material favouring the appellant. I would dismiss this ground of appeal.
Grounds 4.2, 6.1 and 6.2
41 These grounds were argued together. They are closely related to ground 4.1. In essence, they claim that both the review officer and the Magistrate misstated the test to be applied in determining whether the appellant fell within the extended definition of a worker in that she was paid in substance for her personal manual labour. Alternatively, it is submitted, the review officer provided inadequate reasons for concluding this matter against the appellant.
42 In discussing this issue, the review officer first quoted from the decision of the majority in Marshall (see earlier in par 36). He also quoted at length from the judgment of Ipp J in Summit Homes. The review officer, on the basis of these two cases, said, "It is clear the appropriate test would be to ascertain what the applicant was remunerated for, ie was she remunerated in substance for her personal manual labour or services?" After citing yet another case, the review officer found, in terms already quoted in this judgment, that in addition to her manual labour, the appellant provided a motor vehicle (with its commensurate costs) a mobile phone and a uniform. He concluded, "In my view the provision of these things could not be said to be comparatively so insignificant that in reality, or as one might say to all intents and purposes, it (the remuneration) is a return for manual labour."
43 As Ipp J observed in Summit Homes, the correct question to ask is what is it that the individual was being remunerated for? Certainly the review officer did not in terms compare and contrast the extent of the personal labour provided by the appellant with the various material objects which she provided for the benefit of the first respondent.
(Page 14)
- However, the passage the review officer quoted from Marshall implicitly required that there be a comparison between the manual labour and the material resources provided by the appellant and an assessment of the relative significance of the latter in relation to the former. Whilst the words "substantial" or "in substance" were not used, the test involved was essentially the same. Moreover it is difficult to see how the review officer could have reached a different finding on this issue. What the appellant provided for the first respondent (and was herself remunerated for) was the means of achieving deliveries to and collections from clients. Her vehicle was an integral and indispensable part of this service. It was incumbent upon her not only to provide this vehicle, but also to pay for its operating expenses. These expenses, on the evidence, amounted to a significant proportion (over one-third) of her gross income. In these circumstances, it is difficult to see how a finding in favour of the appellant could possibly have been justified.
44 In my view, this ground of appeal has not been made out.
Ground 5
45 Ground 5 asserts that the Magistrate erred in law in failing to apply the decision in Vabuto the circumstances of this case. It was suggested that the Magistrate should have either remitted the matter to the review officer in the light of the High Court's decision, or alternatively should have reversed the review officer's decision.
46 It is unnecessary in my view to discuss this issue in detail. There are many differences between the position of the bicycle couriers in Vabu and that of the appellant here. Certainly the couriers in Vabu provided their own vehicles which they maintained at their own expense. However, as the majority of the court indicated, a different conclusion might well have been reached had the investment in capital equipment been more significant, and greater skill and training been required to operate them. Unlike the situation in this case, the couriers in Vabu were assigned a work roster over which they had no control. They were not able to refuse work. Vabu provided uniforms for the couriers which were to be worn at all times. Given the hours that the couriers were required to work, and restrictions on the granting of leave, the court found that there was limited scope for the couriers to pursue any real business enterprise on their own account.
47 In contrast, the evidence in this case indicates that the first respondent's couriers could consist of an individual, a partnership or a
(Page 15)
- business. They were at liberty to subcontract their services if they wished to do so. Very significantly, they had the right to control the amount of work they did. They could refuse to undertake particular jobs and could regulate their working hours. If they wished to combine their courier duties with other work, they were at liberty to do so and the work they were given would be adjusted accordingly.
48 In summary I consider that the Magistrate was correct in the approach she took to this issue. The decision in Vabu provided no basis for either remitting the matter to the review officer or reaching any different conclusion.
49 It follows that none of the grounds of appeal have been made out. I would therefore dismiss the appeal.
1
7
1