Decor Corporation Pty Ltd v Dart Industries Inc

Re: GEORGE WASON
And: ACT WATERPROOFING AND MAINTENANCE PTY LIMITED and DECATUR PTY LIMITED
No. ACT 4 of 1989
FED No. 655
Employer and Employee - Statutory Interpretation
(1991) 40 IR 279

COURT

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
INDUSTRIAL DIVISION
Neaves J.(1)

CATCHWORDS

Employer and Employee - Award - Proceedings for breach or non-observance - Whether relationship of employer/employee exists - Relevant indicia

Statutory Interpretation - Claim for penalty for breach or non-observance of Award - Repeal of legislation - Proceedings commenced after repeal - Transitional provisions not expressly preserving rights - Whether rights preserved by Acts Interpretation Act 1901 (Cth) - Whether contrary intention shown - Jurisdiction of Federal Court of Australia to entertain proceeding for penalty.

Conciliation and Arbitration Act 1904 (Cth), s.119

Industrial Relations Act 1988, s.178

Industrial Relations (Consequential Provisions) Act 1988, ss.8, 9, 67

Acts Interpretation Act 1901 (Cth), s.8

Long Service Leave (Building and Construction Industry) Ordinance 1981 (A.C.T.)

HEARING

CANBERRA

#DATE 7:11:1991

Counsel for the applicant: Mr D. Graham QC and Mr R. Thomas

Solicitors for the applicant: Gary Robb and Associates

Counsel for the respondents: Mr N. Green

Solicitors for the respondents: J.S. O'Connor Harris and Co.

ORDER

The Court orders that the application be dismissed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

By his amended application filed on 19 July 1990, George Wason, the Secretary of The Building Workers' Industrial Union of Australia, Australian Capital Territory Branch, seeks, pursuant to s.119 of the Conciliation and Arbitration Act 1904 (Cth), the imposition of penalties on ACT Waterproofing and Maintenance Pty Limited ("ACT Waterproofing") and Decatur Pty Limited ("Decatur") for the breach or, alternatively, the non-observance of the terms of the Building Industry Labourers (On-Site) A.C.T. Award 1986 ("the Award"). Although the proceeding, when instituted, also sought the imposition of penalties for the breach or the non-observance of the Award against Peter Voros and Deborah Jane Voros, the claims for the imposition of penalties on those individuals were not pursued.

ACT Waterproofing and Decatur are alleged to have breached, or failed to observe, the Award in relation to work performed by two individuals, Gerald Ian Rawnsley (referred to in much of the material as Ian Rawnsley) and Neil Johnson Clayton. ACT Waterproofing is alleged to have breached, or failed to observe, the Award "from in or about May 1986 until in or about November 1988". Decatur is alleged to have breached, or failed to observe, the Award "in or about the months of March, May, June, July and August 1987.
In addition to seeking the imposition of penalties, the amended application seeks an order, pursuant to s.119 of the Conciliation and Arbitration Act, that ACT Waterproofing and Decatur pay to Messrs Rawnsley and Clayton "any such amount in respect of the abovementioned breaches or non-observances of the Award to which each of them is entitled under the Award as may appear to the Court not to have been paid to each of them". The question whether any, and if so what, amount is payable to Mr Rawnsley or Mr Clayton was deferred pending a determination of the question whether, during the relevant period, the Award regulated the relations between the parties.
The Award was expressed (cl.2) to have come into operation from the first pay period to commence on or after 16 May 1986. Some amendments were made to the Award during the period with which this proceeding is concerned but it is unnecessary for present purposes to refer to them. Clause 5 of the Award was expressed in the following terms:
"(a) This Award shall be binding upon The Building Workers'

Industrial Union of Australia, The Federated Engine Drivers' and Firemen's Association of Australasia; and

(b) the Master Builders' Association of the Australian

Capital Territory and their members and the Confederation of A.C.T. Industry and their members in respect of their employees within the classifications contained in this Award."

On 15 December 1986, the Australian Conciliation and Arbitration Commission declared that from 4 November 1986 the whole of the terms of the Award be a common rule of the relevant industry in the Australian Capital Territory and binding on all employers in the industry in respect of the employment by them of employees in the classifications for which provision was made in the Award and binding on all such employees. It is common ground that neither ACT Waterproofing nor Decatur was bound by the Award prior to it being declared a common rule of the industry in the Australian Capital Territory. It follows that the amended application cannot succeed in so far as it alleges that ACT Waterproofing breached, or failed to observe, the Award prior to 4 November 1986.
The clauses of the Award identified in the amended application as having been breached or not observed are -

. Clause 9 providing for the payment of an industry allowance; . Clause 20 relating to entitlement to, and payment for, public holidays;

. Clause 22 relating to recreation leave on full pay; . Clause 23 prescribing certain entitlements to sick leave on full pay;

. Clause 29 prohibiting piece-work and providing that no employee is to accept any work for profit or reward at less than the rates and conditions prescribed by the Award; . Clause 32 relating to the provision of safety footwear and protective clothing;

. Clause 40 prescribing a fare and travelling allowance; and . Clause 44 prescribing the conditions to apply in relation to inclement weather as defined.

The amended application does not allege a breach of, or a failure to observe, cl.6 of the Award, that being the clause that prescribes the rates of weekly wage payable to employees falling within the classifications covered by the Award.

At the conclusion of the taking of evidence, the Court was informed that the applicant no longer contended that there had been a breach or non-observance of cl.32 of the Award.
The present proceeding was commenced by the filing in this Court on 21 December 1989 of an application on behalf of Peter Berry, then the Secretary of The Building Workers' Industrial Union of Australia, Australian Capital Territory Branch. That application was amended in a number of respects pursuant to an order of the Court made on 16 March 1990. On 21 May 1990 Mr Wason was substituted as applicant, he having, in the meantime, succeeded Mr Berry as Secretary of the Australian Capital Territory Branch of the Union. The application in its original and amended form nominated s.178 of the Industrial Relations Act 1988 (Cth) as the source of the Court's power to grant the relief sought. At the commencement of the hearing, the Court raised with counsel for the applicant whether this was correct as the events relied upon had all occurred prior to the coming into operation on 1 March 1989 of the Industrial Relations Act. Subsequently, counsel for ACT Waterproofing and Decatur submitted that the proceeding had been instituted without any foundation in law and that the Court had no jurisdiction to entertain it. He submitted that a proceeding could not be brought under s.178 of the Industrial Relations Act except in respect of a breach or non-observance of an award that took place after s.178 came into operation on 1 March 1989. He further submitted that the Industrial Relations (Consequential Provisions) Act 1989 (Cth), the substantive provisions of which also came into operation on 1 March 1989 and which repealed the Conciliation and Arbitration Act, made no provision for the institution, on or after 1 March 1989, of proceedings for the imposition of a penalty which, before that date, could have been brought under s.119 of the Conciliation and Arbitration Act. No reliance could be placed, so it was submitted, upon s.8 of the Acts Interpretation Act 1901 (Cth) for the reason that the provisions of the Industrial Relations (Consequential Provisions) Act, particularly ss.8, 9 and 67, evinced a contrary intention so as to oust the operation of that section.
Counsel for the applicant conceded that the application could only have its basis in s.119 of the Conciliation and Arbitration Act and could not be supported by reliance upon s.178 of the Industrial Relations Act. He submitted, however, that s.8 of the Acts Interpretation Act operated to preserve the liability for a breach or non-observance of the terms of an award that had occurred prior to the repeal of s.119 of the Conciliation and Arbitration Act and to enable a legal proceeding to be commenced to secure the imposition of a penalty in respect of such breach or non-observance. Counsel further submitted that the Industrial Relations (Consequential Provisions) Act was not exhaustive in relation to matters of transition and the preservation of existing entitlements, rights and liabilities. It did not operate, it was submitted, to oust the operation of s.8 of the Acts Interpretation Act. Leave was sought further to amend the application by substituting references to the relevant sections of the Conciliation and Arbitration Act for the references therein to the provisions of the Industrial Relations Act.
After a short adjournment, I announced that I proposed to follow the judgment of von Doussa J. in Australian Bank Employees Union v Australia and New Zealand Banking Group Limited (12 September 1989 - unreported) that s.8 of the Acts Interpretation Act operated to preserve such rights as had accrued under s.119 of the Conciliation and Arbitration Act prior to its repeal. I directed that the applicant have leave further to amend the application in the manner sought. It should be noted that, although the judgment of von Doussa J. was the subject of appeal, the question under which provision the proceeding was brought appears not to have been the subject of argument before, and was not the subject of comment by, the Full Court (see Australian Bank Employees Union v Australia and New Zealand Banking Group Limited (1990) 94 ALR 667).
It is convenient at this point to note a further submission put on behalf of counsel for ACT Waterproofing and Decatur that, as it was not until 26 February 1987 that the rules of The Building Workers' Industrial Union of Australia were amended to enable it to enrol builders' labourers as members (see Exhibit 16), the applicant was not empowered to sue for a penalty in respect of any breach or non-observance of the Award that occurred prior to that date. The submission was not strongly pressed and, in the light of the conclusions to which I have come, it is unnecessary to consider its correctness.
The critical question for determination is whether, at any relevant time, the relationship of employer and employee existed between ACT Waterproofing or Decatur on the one hand and Messrs Rawnsley and Clayton on the other. While it is the totality of the relationship between the parties that must be considered, a number of indicia are relevant to a determination of the question. As appears from the judgment of Mason J. (with whom Brennan and Deane JJ. agreed) in Stevens v Brodribb Sawmilling Co. Pty Ltd (1986) 160 CLR 16 at p 24, those indicia include, but are not limited to, the existence of control, 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 putative employee. In the same case, Wilson and Dawson JJ., after referring to the control test, said at pp 36-7:

"The other indicia of the nature of the relationship have been variously stated and have been added to from time to time. Those suggesting a contract of service rather than a contract for services include the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like. Those which indicate a contract for services include work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of goodwill or saleable assets in the course of his work, the payment by him from his remuneration of business expenses of any significant proportion and the payment to him of remuneration without deduction for income tax. None of these leads to any necessary inference, however, and the actual terms and terminology of the contract will always be of considerable importance. Having said that, we should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the relationship of master and servant. The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance."

Reference should also be made to the judgment of Woodward J. in Odco Pty Ltd v The Building Workers' Industrial Union of Australia (24 August 1989 - unreported) where his Honour analysed relevant decisions and set out a number of the indicia relevant to be taken into account in determining an issue such as arises in this proceeding. His Honour's judgment was the subject of appeal to a Full Court of this Court. At the date of the hearing of this proceeding, that appeal had been heard but judgment remained reserved. It seemed appropriate to await the result of that appeal before delivering judgment in the present matter. Judgment was delivered by the Full Court on 21 March 1991 (Building Workers' Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104) the appeal being dismissed. On 7 June 1991 an application to the High Court of Australia for special leave to appeal from the decision of the Full Court was dismissed.
ACT Waterproofing is a company incorporated in the Australian Capital Territory. At the relevant time it carried on business in the field of waterproofing new and existing buildings and maintenance, specialising in repairs and maintenance to sandstone and marble facades. Almost the whole of its business related to commercial and industrial buildings. During the relevant period much of its work was done under contracts with the Australian Government. There were two directors of the company, Peter Voros and Karl Fredericks.
Decatur is also incorporated in the Australian Capital Territory. At the relevant time it carried on a similar type of business to that carried on by ACT Waterproofing but on a much smaller scale, with the emphasis on waterproofing rather than facade repairs and maintenance. The directors of that company were Peter Voros and his wife, Deborah Jane Voros.
The principal actor in relation to the businesses carried on by both companies was Mr Voros. Mrs Voros appears to have carried out various clerical, secretarial and book-keeping duties, including arranging for the payment of amounts due to those working for the companies.
The contractual relationship between Mr Rawnsley and ACT Waterproofing and that between Mr Clayton and that company originated in two conversations with Mr Voros in May 1986. In neither case were the terms of the relationship reduced to writing. Those terms must, therefore, be found in what was said between the parties and from a consideration of their subsequent conduct. Unfortunately there is considerable disagreement between the parties as to what was said at the meetings in May 1986.
Mr Rawnsley and Mr Clayton were born in New Zealand. At the time of the events with which this proceeding is concerned, they had known each other for about 25 years. They had worked together on a number of occasions and were very good friends. For much of the time while they both worked for ACT Waterproofing they worked together as a team. After the events now relevant, they went into business in partnership carrying on the same type of business as was carried on by ACT Waterproofing. At the relevant time Mr Rawnsley held a scaffolding certificate and a rigger's certificate but had no other trade qualifications. Mr Clayton had no trade qualifications.
It appears that in May 1986 Messrs Rawnsley and Clayton were doing labouring and cleaning work as casual employees on a site in the Australian Capital Territory referred to as the Canberra Building Society site. As a result of a conversation they had with Messrs Paul Wiggins, Dean Chambers and Ross McFarlane who were carrying out waterproofing work on the building on the site for ACT Waterproofing, Messrs Rawnsley and Clayton became aware that ACT Waterproofing had been awarded a contract to carry out work on the Treasury Building at Parkes in the Australian Capital Territory. Either Mr Rawnsley or Mr Clayton telephoned Mr Voros and a meeting was arranged to take place at the site of the National Library.
Evidence as to what was said at that meeting and in a subsequent conversation was given by the three participants, Messrs Rawnsley, Clayton and Voros. Before referring to that evidence I should comment upon the credibility of those witnesses.
Neither Mr Rawnsley nor Mr Clayton, whose testimony is critical to the applicant's case, was an impressive witness. Neither had a very clear recollection of what was said during the discussions which took place between the parties admittedly some four years before they were giving their evidence. In the main, their responses were vague except as to specific matters which they perceived as supporting the case which the applicant was seeking to make. Their firm denials that certain matters were discussed were in sharp contrast to their failure to recall other topics of discussion or the details of what was said. Indeed, the distinct impression I formed was that, when confronted with an inconsistency in the evidence, each of them chose to shelter behind a statement that he could not recall what had occurred. In a number of instances Mr Clayton was evasive in his answers and, in my opinion, deliberately so.
Both Mr Rawnsley and Mr Clayton had on 14 March 1990 sworn affidavits for use in the proceeding. In the result, those affidavits were not received into evidence primarily for the reason that the deponents did not speak in terms of primary fact but in terms of the conclusions which they drew from unstated facts and which they wished the Court to accept. The significant matter for present purposes is that both affidavits were expressed in identical terms, even to the extent of including the same typographical errors. The events which led to this situation were not explored in evidence but the form which the affidavits took appeared to me to exemplify the approach which these deponents had to the proceeding.
I am, therefore, only prepared to accept their evidence where it is supported by other material or where their version of what took place exhibits a high degree of probability.
Although Mr Voros was a more impressive witness, the whole of his evidence cannot be accepted. In particular, the affidavit which he swore on 4 May 1990 in answer to those sworn by Messrs Rawnsley and Clayton to which I have already referred contains statements which are untrue and which an examination of the documentary material which was available to Mr Voros at the time would have shown to be untrue. There are other aspects in which his evidence is unsatisfactory. Nevertheless, with one qualification to which I will refer, I prefer his evidence to that of Messrs Rawnsley and Clayton concerning what was discussed and agreed between the parties in May 1986.

The first meeting took place when Messrs Rawnsley and Clayton approached Mr Voros at the National Library site, introduced themselves, expressed their understanding that Mr Voros had work available at the Treasury Building and said they were looking for work. A contract in respect of work at the Treasury Building had been awarded by the Australian Government to ACT Waterproofing. I interpolate that the work to be done under that contract may be described shortly as reconditioning work to the external panels and joints of the building. More particularly it included the removal of the existing sealant between the external panels, the insertion of polyethylene backing rods in the joints and the application of sealant, the re-attachment of loose or unsafe panels and the cleaning of the facade of the building. I am satisfied that what Mr Voros said at the meeting was said on behalf of ACT Waterproofing.
The vagueness of Mr Rawnsley's recollection of what occurred at the first meeting is illustrated by the answer he gave, in his evidence in chief, when asked what discussion took place. He said:

"It is a bit hard to remember it all but he just introduced himself as 'Peter Voros' and we sort of shook hands and he asked us what sort of work we had done and things like that and he asked us about if we could work in swinging stages and things like that and that he had a job coming up at Treasury building. It is a bit vague, I cannot remember everything but he did go on to mention that he had an awards wages structure system which we could work on (or) this other system which, at the time, named as PPS. I do not know exactly if that is what he said but that is sort of, it is in the same lines. He said, 'Go home and work it out and see which one you like the best.'"

Asked to clarify the alternatives to which he was referring, Mr Rawnsley said:

"The awards wages system which he said was just you get everything with your sickness, holidays, the general award wage system and another system which was hourly rate. And he said the hourly rate was $12.50 at the time to work on Treasury Building. And he said you get no holidays, sick pay, wet weather, things like that, and you get paid the workers' comp and long service."

Later in his evidence in chief Mr Rawnsley said that Mr Voros had said to Mr Clayton and himself that they were to give a week's notice if they wished to leave. That there was any discussion of that subject was denied by Mr Voros.

The reference to PPS is a reference to the provisions, known as the Prescribed Payments System, contained in Division 3A of Part VI of the Income Tax Assessment Act 1936 (Cth). That Division provides for the deduction from certain payments for work or services not covered by the P.A.Y.E. system of a percentage of the amount payable and the remittance of that amount to the Commissioner of Taxation to be credited against any income tax liability of the recipient of the payment. The percentage to be deducted was 10% before 1 July 1976, 15% from 1 July 1986 to 30 June 1989 and 20% from 1 July 1989.
I am satisfied that Mr Rawnsley was incorrect in saying that the rate of $12.50 per hour was mentioned at the meeting in May 1986 as being the rate payable for work on the Treasury Building. The rate of $12.50 per hour related to work at sites other than the site of the Treasury Building. As appears from the documentary material before the Court, the rate for work on the Treasury Building was $13.00 per hour.
In cross-examination, Mr Rawnsley gave the following evidence:

"Q. Is it true, or do you accept that it is true, that at the eastern side of the National Library Building a conversation was held between Mr Voros and Mr Clayton? A. Yes.

Q. Were you present at that conversation?

A. Yes.

Q. And it is true, is it not, that, Mr Clayton said to Mr Voros words to this effect: We are looking for work? A. Yes.

Q. Did you say something to that effect to Mr Voros? A. Yes.

Q. And Mr Voros said, did he not: 'I need some guys to work at the Cameron Offices?'

A. No, I do not believe that was said, I cannot recall that being said.

Q. Well, it is a fact, is it not, that Mr Voros said to you and Mr Clayton words to this effect: 'I am offering employment as an employee or as a subbie?'

A. No he did not say that, he said he was offering us work as an employee but not as a subbie, he said, hourly rates system. Q. What he said was this, was not it, words to this effect: 'I am offering either linear or hourly or both rates?' A. That is untrue.

Q. One of the two of you, that is either you or Mr Clayton said, did you not, or asked: 'What can I make on subbie work?' A. No, that is not true.

Q. Is not it true that Mr Voros said to the two of you: 'It depends on how hard you want to work, As an employee, you will be paid the award rates?'

A. That possibly was said, I cannot recall it. Q. Well, it is a fact, is it not, that you or Mr Clayton or both of you said to Mr Voros that you wanted some time to think about it, which basis on which you would take it on? A. He would give us time to think about it. Q. It is a fact, is it not, that your conversation with Mr Voros in May of 1986 would have lasted about half an hour? A. Possibly, yes, I did not keep a time on it. Q. Now, it is a fact too, is not it, that in this first conversation that you had with Mr Voros that he said words to this effect to you and Mr Clayton, 'If you go on wages and conditions there will be workers' comp?'? A. That is true, yes.

Q. And it is also true that he said this, did not he: 'If you go on as a sub-contractor there will be no workers comp.'? A. No, that is not true."

Mr Clayton's evidence in chief as to what occurred at the meeting was as follows:

"Q. Now as best you can, recognising that it is over four years ago, can you tell us what was said amongst the three of you? A. Well, it was - what we knew was that he had a job going at the Treasury from discussion with the blokes at CBS. He said that he needed people for that job, but - that would not be starting for a while. So for a small period of time we would be - he put us on and we would be working on other jobs up till then.

Q. I see?

A. And then he offered - told us how he paid people. Q. Yes. What did he say about that?

A. Well, he offered to, if we wanted to, we could go on wages. Q. Yes?

A. And he said that he had another system he paid people which was $12.50 an hour to $12 an hour but on Treasury because there were swinging stages it would be $12.50 a hour and he explained that we could - well, everything was not explained about the system there. It was just that you would be on - you would pay, I think it was 20 per cent tax or something like that at the time and your take home pay would be more. Q. Would be more what?

A. In your hand.

Q. If what happened?

A. That you went on this other way of paying because you would be - it was a - it worked out to $104 a day or something so it was $520 a week minus your 20 per cent was more in your hand than what you got on wages.

Q. I see. In the course of this first discussion, can you recollect if anything was said about other conditions of employment?

A. Yes, he said he would be paying our BUSS and long service and workers' comp."

The reference to "BUSS" is a reference to the Building Unions Superannuation Scheme. The reference to long service is a reference to the provisions relating to long service leave for employees and contractors in the building and construction industry then contained in the Long Service Leave (Building and Construction Industry) Ordinance 1981 (A.C.T.).
In cross-examination, Mr Clayton gave the following evidence:

"Q. Mr Voros said to you, did not he, I am offering employment as an employee or as a subbie, offering either linear or hourly or both rates?

A. He never mentioned linear, he never mentioned subbie. Q. It is not true that either you or Mr Rawnsley asked him - Mr Voros - 'What can I make on subbie work?'? A. I do not recall that, no.

Q. Well, if evidence is given by Mr Voros that one of you asked that question, working on your recollection are you in a position to contradict that?

A. What do you mean?

Q. If Mr Voros gets in the witness box in this case and says that one of you on this occasion asked him the question, 'What can I make on subbie work?' are you in a position, on your memory, to say whether that is right or wrong? A. I say it is wrong because subbie was never mentioned. Q. Well, how do you reconcile what you have just said with your answer before that you could not remember whether the question was asked by either you or Mr Rawnsley, 'What can I make on subbie work?'?

A. Because we never mentioned the word subbie. We did not - we had never been subbies so there would be no reason to mention it.

Q. Mr Clayton, I would just ask you, if you would, to put to one side whether there were reasons for saying things but just to address yourself to the question, it is a fact, is it not, that Mr Voros said to you and Mr Rawnsley, 'As an employee you will be paid the award rates'? A. Yes, I think.

Q. You understood, did you not, that he was saying to you that was a choice that he had on offer to you either you would get paid award rates as an employee or you would be engaged on some other basis?

A. Yes, I understood there was two choices. Q. And the other choice that you understood, I take it, from what you are saying is that if you did not go on award rates you would go on an hourly rate?

A. Yes.

Q. Is that your evidence?

A. Yes.

Q. And you said to Mr Voros on this occasion, did you not, that you wanted time to think about it, which of those two courses you would adopt?

A. Yes.

Q. And the conversation I am asking you about would have lasted about half an hour, is that not right?

A. I could not - I would not know. It is too long ago to say times like that.

Q. I beg your pardon? Too long ago?

A. To sort of put a time on it like that."

Mr Voros, in his oral evidence, said that Messrs Rawnsley and Clayton approached him at the site of the National Library seeking work. Asked what was said, Mr Voros replied:

"They said, first of all that they were seeking work and that they had heard that I had picked up - or my company I should say had picked up a rather large project, being Treasury building. And that they were only doing some casual work at the moment, so they were interested in something more on a permanent basis."

The following evidence was then given:

"Q. What did you say?

A. I mentioned to them that yes, it is correct, I have got this project across the road called the Treasury building, and I will be seeking manpower for that project. Q. What else did you say to them about their possible involvement in the project?

A. I asked them a couple of basic questions to start with, (a) have they had any experience in the type of work which we were going to be doing over there. One of the most important things I had to find out is if they have any reservations about working from swinging scaffolding, which probably about 90 per cent of their job was going to be done from. Q. What did you say to them?

A. First of all I asked them if they had any experience in that type of work, and they had not, no. And secondly I asked them if they had any problems or could they foresee any problems about working from a swinging scaffolding, to which their answer was no, they had no problem. Q. What else did you say to them?

A. After that they - I did not make a big fuss about whether they were experienced or not, because that was something we could pick up on the job, but I offered them two methods of payment that I had available and I had been practising at that stage with other people. The first method was to work for my company on wages on full award conditions and the second one was to work for my company as a sub-contractor carrying out work either on a lump sum hourly rate lineal metre, square metre rate whatever their situation may be. Q. What response did they make?

A. I am not sure which one of them it was, I think it might have been Mr Rawnsley, but I cannot remember which one, asked for more information about the sub-contracting system and also asked me a comparison of the sort of money they could make and I could not give them a true comparison apart from this fact, I said if you are prepared to work hard there is obviously the rewards there for more money. Q. What was their response to that comment? A. They initially looked at each other and not a great deal was said there. They wanted to go away and think about it and weigh up the pros and cons as to which way they were going to do it and they were going to get in touch with me later on.

Q. This conversation about which I have just been asking you, about how long did it last?

A. Approximately half an hour. The whole thing was covered fairly quickly."

Subsequently Mr Voros said that an hourly rate was specified during the first meeting. He said that rate was "about $12 an hour". He did not suggest that any amounts had been specified in relation to the other methods of payment to which he had referred in the evidence set out above.

Messrs Rawnsley and Clayton subsequently compared the two systems which had been offered to them and concluded that they would accept the alternative to being employed on a weekly wage. Approximately a week after the initial meeting, Mr Voros was informed that Messrs Rawnsley and Clayton wished to commence work on that basis. Mr Rawnsley and Mr Voros said that the information was conveyed to Mr Voros in a telephone call from Mr Rawnsley. Mr Rawnsley said that he informed Mr Voros that Mr Clayton and himself would go for what he referred to in evidence as "the PPS scheme". Mr Clayton's evidence was that their decision was conveyed to Mr Voros at a second meeting at the National Library site. It is common ground that shortly thereafter Messrs Rawnsley and Clayton commenced work at the National Library site, replacing brass flashings around the bottom of the building. They were told what to do by Mr Paul Wiggins who was then working at that site.
Messrs Rawnsley and Clayton thereafter performed work for ACT Waterproofing at various sites in Canberra and at the company's premises at Queanbeyan. After working at the National Library building, they worked on a number of buildings including the Treasury Building, the Cameron Offices at Belconnen, the Australian Defence Force Academy at Duntroon, Anzac Park East (BMR) Building at Parkes and the Alexander and Albermarle Buildings at Woden. There were others but it is unnecessary to detail them all.
Contracts between the Australian Government and ACT Waterproofing providing for the carrying out of work on some of these buildings are in evidence. Reference has already been made to the contract relating to the Treasury Building. The contract relating to the Cameron Offices was of a different order. It involved what was referred to as structural steel investigation. Unlike the other contracts, ACT Waterproofing was to be paid for the work done under that contract on a hourly basis and, because of the nature of the work, it was to be done under detailed and constant supervision by inspectors employed by the Commonwealth. Under another contract which is not in evidence, ACT Waterproofing was required to affix a rubber waterproofing membrane to the roof of part of the Cameron Offices and attach stainless steel flashings. The contract relating to the Anzac Park East (BMR) Building required work to repair and reseal the facade. The contracts relating to the Alexander and Albermarle Buildings required the sealing of window leaks and flashings, facade reconditioning, render repairs and cleaning.
There is considerable documentary evidence before the Court as to the method by which Messrs Rawnsley and Clayton were paid for the work they did and as to the amounts they received and the method of computation of those amounts.
There is no doubt that in the early stages Messrs Rawnsley and Clayton were paid at an agreed rate per hour for the work they did. The agreed rates were $12.50 per hour for work done at sites other than the Treasury Building site and $13.00 per hour for work done at that site. The system employed was that at weekly intervals they would each submit to Mr Voros what was referred to as an invoice showing the date on which the work was done, the place where the work was done, the number of hours worked on each day and the hourly rate. Mr Rawnsley was more meticulous than Mr Clayton in submitting invoices containing the information required. On many occasions Mr Clayton submitted invoices which showed only the total number of hours worked during the period covered by the invoice. Neither Mr Rawnsley nor Mr Clayton recorded their actual starting or finishing times. There appears to have been no independent check by anyone on behalf of ACT Waterproofing of the details shown on the invoices.
From the material contained in the invoice a payment advice document was prepared showing the gross amount payable, the amount deducted under the Prescribed Payments System and the net amount due. Payment of the net amount was then made by cash or cheque. Each payment advice document contained a certificate which was signed by the payee in the following terms:

"I hereby certify that all persons employed by me/us on this project have been paid their wages in full and are receiving all benefits prescribed by the relevant award."

The method of calculating the amounts payable to Messrs Rawnsley and Clayton in respect of work performed for ACT Waterproofing by applying the agreed hourly rate to the number of hours worked on a particular site continued to be the sole method of determining their remuneration in respect of all work done up to and including, in the case of Mr Rawnsley, 6 January 1987 and, in the case of Mr Clayton, 25 November 1986. After those dates, the remuneration continued to be calculated, in respect of work done on sites other than the Treasury Building by applying the hourly rate to the number of hours worked. However, in the case of work done at the Treasury Building site, some work was charged for at the hourly rates while the remuneration for other work was calculated by applying the agreed rates to the measurement, either in metres or square metres, of the work performed during the period covered by the payment. The latter method of remuneration was applied later in the case of work on some other buildings, including the Anzac Park East Building and the Alexander and Albermarle Buildings. In respect of work on the Anzac Park East Building, rates were agreed in respect of columns or bays of windows on which work was completed. Some invoices contained calculations on more than one basis.

In some instances, albeit a very limited number, Messrs Rawnsley and Clayton carried out work for ACT Waterproofing for which they were paid an agreed lump sum. One example of this is the work carried out by them at a site referred to in the evidence as the Kingston Flats.
I am satisfied that at the first meeting in May 1986, Mr Voros offered work to Messrs Rawnsley and Clayton and presented them with a choice whether to receive a weekly wage and the other benefits prescribed by the relevant award or to opt for an hourly rate of payment for work performed. I am also satisfied that they were then informed of the rate in money terms that ACT Waterproofing was prepared to pay. That this was done is supported by the evidence that Messrs Rawnsley and Clayton were able to, and did in fact, compare the amounts of remuneration they were likely to receive under each of the alternatives offered. No calculation could have been made unless the amount of the weekly wages that would be payable under the award and the hourly rates proposed were known. I am, however, not satisfied that reference was made at the initial meeting to the calculation of remuneration by reference to the measurement of the work completed either in terms of metres or square metres. It is more probable that remuneration on this basis, and the rates payable, were the subject of discussion at a time closer to their implementation. Mr Clayton's explanation that the reason for the introduction of those rates was Mr Voros' concern with the slow progress of the work being carried out on the Treasury Building has the ring of probability.
I am also satisfied that at the initial meeting Mr Voros informed Messrs Rawnsley and Clayton that, whichever of the two alternatives offered were chosen by them, they would be covered for long service leave and superannuation. I also find that he informed them they would be covered for workers' compensation only if they chose the alternative of being employed at a weekly wage and on award conditions.
It is, of course, by no means decisive of the issue, but I find, on the evidence, that Mr Voros believed, rightly or wrongly, that, if the alternative to employment on a weekly wage was accepted, the relationship between ACT Waterproofing and Messrs Rawnsley and Clayton would not be that of employer and employee. I infer from the evidence that that was also how Messrs Rawnsley and Clayton saw the choice that was presented to them at the initial meeting and the basis upon which they chose to accept the alternative to employment on a weekly wage.
That this was how Mr Rawnsley saw the position is confirmed by the basis upon which he gave instructions to the various accountants who prepared his income tax returns for the years ended 30 June 1987, 1988 and 1989. The two earlier returns described his occupation as "Maintenance Contractor" and referred to him as "trading as Rawnsley Maintenance Contractor". That was a business name which Mr Rawnsley registered shortly after commencing to do work for ACT Waterproofing. It must be said, however, that the name does not appear to have had extensive, if any, use. The return for the year ended 30 June 1989 gave his occupation as "Maintenance Contractor/Labourer" and stated that he "ceased contract work on 31 (sic) November 1988". Mr Rawnsley claimed various business expenses as deductions from his assessable income from the business of maintenance contractor being carried on by him. He acknowledged in cross-examination that those amounts were largely fictitious.
No similar comment can be made in the case of Mr Clayton as he did not lodge an income tax return for the years ended 30 June 1987, 1988 or 1989.
It is also of some significance that, until some time in 1989, the concern of the Australian Capital Territory branch of The Building Workers' Industrial Union of Australia was not that builders' labourers working for companies engaged in the building and construction industry in the Australian Capital Territory were employees who were not receiving full award wages and conditions. Its concern was that they were being employed as independent contractors. It is apparent from Mr Rawnsley's evidence that, when in late 1988 the branch of the Union called a meeting on the subject, his concern was that the Union might discover that he was, indeed, working otherwise than in an employer/employee situation and take some action against him.
Messrs Rawnsley and Clayton, while acknowledging that, in performing work where their remuneration was fixed by reference to the measurement of the work performed, they enjoyed a good deal of flexibility both as to the number of hours worked in a day and the time of commencing and finishing, asserted that, when their remuneration was fixed by reference to the number of hours worked, they worked regular hours, being the hours prescribed by the relevant award. I do not accept that assertion. An examination of the invoices submitted by Messrs Rawnsley and Clayton shows that on a significant number of days they worked less than 8 hours. The number of hours recorded as having been worked on any day varied from 2 to 8 hours. The structural investigation work at Cameron Offices appears to have been an exception. There the work was under the close supervision of inspectors appointed by the Australian Government and the need to integrate the work of the various participants made the working of regular hours by all concerned a necessity.
The evidence clearly establishes that both Mr Rawnsley and Mr Clayton were totally lacking in experience in carrying out certain of the types of work they were called upon to perform for ACT Waterproofing and that this was made known to Mr Voros at the first meeting in May 1986. This was true, for instance, of the work of replacing the joints between the panels on the facade of the Treasury Building and the laying of a waterproof membrane at the Cameron Offices. The situation appears to have been met by other workers on the various sites showing Messrs Rawnsley and Clayton how the work was done. The evidence suggests, however, that, some tasks at least were approached on a trial and error basis by all concerned.
Messrs Rawnsley and Clayton referred to the work being performed by them for ACT Waterproofing as being controlled by persons described as foremen or leading hands. They referred particularly to Mr Wiggins and Mr Ronning. Mr Voros denied that there was a foreman on the various sites except in the case of the Anzac Park East Building. Both Mr Wiggins and Mr Ronning denied that they had any authority over the other persons carrying out work for ACT Waterproofing. I accept their evidence.
The work required under a number of the contracts awarded by the Australian Government to ACT Waterproofing extended over a period of some months. At any given time work might be proceeding on more than one site. Those working for ACT Waterproofing, including Messrs Rawnsley and Clayton, moved from site to site as required. It must, I think be accepted that Mr Voros had overall control of the various work sites and deployed the available manpower to the various sites as he saw fit.
I find that there was a minimum of supervision of the work performed by Messrs Rawnsley and Clayton and then only as to whether it had been carried out in a workmanlike manner. According to Mr Voros, he endeavoured to visit each site on which work was progressing once each day to inspect the work being carried out. He could recall only one occasion on which work carried out by Messrs Rawnsley and Clayton was required to be rectified. They did not suggest otherwise.
The evidence establishes that Mr Rawnsley and Mr Clayton both equipped themselves with an appropriate tool for applying sealant. It must be accepted that, with the exception of that tool, all equipment and materials for the jobs on which they worked were supplied by ACT Waterproofing.
The evidence also establishes that ACT Waterproofing supplied some clothing and footwear to Mr Rawnsley and Mr Clayton.
I also find that Mr Rawnsley and Mr Clayton from time to time, though on a limited number of occasions, worked for other persons at the same time as working for ACT Waterproofing. In one instance, Mr Rawnsley and Mr Clayton carried out work on the Cameron Offices at Belconnen for a firm AM and DM Roofing. There were other instances. It was said that in such cases the work was only undertaken after the matter had been mentioned to Mr Voros and he had raised no objection. Mr Rawnsley also carried on, again for a limited time, some business activities under a business name "Sentry Metalcraft". That firm in April and May 1988 submitted quotations to ACT Waterproofing to carry out certain work for a fixed price. Mr Rawnsley asserted that all work performed as part of that business venture was done at week-ends. However, in his affidavit sworn on 4 May 1990, Dean Chambers stated, and I see no reason to disbelieve him, that on one occasion he and others working for ACT Waterproofing left the job on which they were engaged to assist Mr Rawnsley with work the firm was doing. He also said that there were other occasions when Mr Rawnsley left work at the Alexander and Albermarle Buildings to do other work on his own account. That evidence was not challenged.
Counsel for the applicant pointed to the provisions contained in the various contracts between ACT Waterproofing and the Australian Government providing that the work was not to be sub-contracted without consent and to the evidence given by Mr Voros that, at least in relation to the work performed by Messrs Rawnsley and Clayton, no consent was sought or given. This circumstance was said to support the conclusion that ACT Waterproofing regarded Messrs Rawnsley and Clayton as employees and not sub-contractors. I do not regard this as of any real significance in resolving the present issue.
It was submitted that that conclusion was also supported by the circumstance that ACT Waterproofing had made payments in respect of Messrs Rawnsley and Clayton to the Building and Construction Industry Long Service Leave Board pursuant to the Long Service Leave (Building and Construction Industry) Ordinance, 1981 (A.C.T.) and to the Building Unions Superannuation Scheme. The fact that those payments were made is, I think, equivocal. I accept Mr Voros' evidence that he arranged for those payments to be made in order to avoid industrial disputation with The Building Workers' Industrial Union of Australia, he holding the belief that the Union required every person engaged in the construction and building industry, whether an employee or a contractor, to be covered by those schemes. It should be noted, in passing, that there was at the time no legal obligation upon ACT Waterproofing to comply with the provisions of the Long Service Leave (Building and Construction Industry) Ordinance as the Building Industry Labourers (On-Site) A.C.T. Award 1986 was not a "prescribed award" for the purpose of that Ordinance until the notification in the Commonwealth of Australia Gazette on 21 September 1988 of the Long Service Leave (Building and Construction Industry) (Amendment) Ordinance (No. 3) 1988. The amending Ordinance inserted the following sub-section in s.3 of the Principal Ordinance:

"(3) For the purposes of the definition of 'building and construction work' in subsection (1), the Building Industry Labourers (On-Site) A.C.T. Award 1986 shall, in respect of the period commencing on 14 April 1986 and ending immediately before the commencement of the Long Service Leave (Building and Construction Industry) (Amendment) Ordinance (No.3) 1988, be deemed to have been a prescribed award."

Counsel for the applicant also sought to show that Messrs Rawnsley and Clayton were covered by the arrangements made by ACT Waterproofing with AMP Fire and General Insurance Co. Ltd in relation to workers' compensation. The evidence in relation to that matter is, however, inconclusive.
Some of the indicia to which I have referred support a finding that the relationship between ACT Waterproofing and Messrs Rawnsley and Clayton was, during the relevant period, that of employer and employee. Other of the indicia point clearly to the opposite conclusion. I have given the matter very careful consideration according to the applicable standard of proof (see Gapes v Commercial Bank of Australia Ltd (1979) 38 FLR 431: Briginshaw v Briginshaw (1938) 60 CLR 336). I have concluded, however, that the applicant has failed to satisfy me that either Mr Rawnsley or Mr Clayton was, at the relevant time, a party to a contract of employment with ACT Waterproofing.
So far as Decatur is concerned, the evidence has not established to my satisfaction what, if any, contractual relationship existed between that company and Messrs Rawnsley and Clayton. All that the evidence shows is that certain of the payments made to Messrs Rawnsley and Clayton were made by Decatur even though the invoices submitted by them were addressed to ACT Waterproofing. The applicant has certainly not established that there was a relationship of employer and employee between that company and the two individuals concerned.
The application is, therefore, dismissed.

[1991] FCA 655

07 NOVEMBER 1991