Digby v Hyspec Construction and Roofing Pty Ltd
[2018] NSWWCCPD 39
•13 September 2018
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||
| CITATION: | Digby v Hyspec Construction & Roofing Pty Ltd [2018] NSWWCCPD 39 | |
| APPELLANT: | Jaime-Lee Digby | |
| RESPONDENT: | Hyspec Construction & Roofing Pty Ltd | |
| INSURER: | Allianz Australia Workers Compensation (NSW) Limited | |
| FILE NUMBER: | A1-746/18 | |
| ARBITRATOR: | Ms C McDonald | |
| DATE OF ARBITRATOR’S DECISION: | 5 June 2018 | |
| DATE OF APPEAL DECISION: | 13 September 2018 | |
| SUBJECT MATTER OF DECISION: | Worker; s 4 of the Workplace Injury Management and Workers Compensation Act1998; deemed worker; cl 2 of Sch 1 of the Workplace Injury Management and Workers Compensation Act 1998; weighing indicia of employment; principles in Australian Air Express Pty Ltd v Langford [2005] NSWCA 96 and On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366 discussed | |
| PRESIDENTIAL MEMBER: | President Judge Keating | |
| HEARING: | On the papers | |
| REPRESENTATION: | Appellant: | Shine Lawyers |
| Respondent: | Hall & Wilcox | |
| ORDERS MADE ON APPEAL: | 1. The Arbitrator’s determination of 5 June 2018 is confirmed. | |
INTRODUCTION
This appeal concerns a claim for death benefits pursuant to s 25 of the Workers Compensation Act1987 (the 1987 Act). The deceased was a carpenter. He died when he was electrocuted whilst carrying out building work on the second day of his engagement with the respondent.
The only issue argued before the then Senior Arbitrator, and on appeal, concerns whether, at the time of his death, the deceased was a worker or a deemed worker under the terms of the Workplace Injury Management and Workers Compensation Act1998 (the 1998 Act).
BACKGROUND
On or about 19 February 2017, the deceased approached Hyspec Construction & Roofing Pty Ltd, the respondent, seeking work as a carpenter. He commenced work for the respondent from 20 February 2017, although the nature of that employment relationship is disputed.
The respondent commenced operation in 2015. It primarily specialises in construction, repairs, renovations, carpentry and roofing. Brett Anderson and Luke Walther are joint directors of the respondent. The respondent employs a metal roof tradesman, Sean O’Toole and formerly employed an apprentice carpenter, Tom Frost.
On 21 February 2017, the deceased was assisting the respondent to nail a rafter to a roof when he was fatally electrocuted when he came into contact with exposed wiring.
The deceased’s de-facto partner, Jamie-Lee Digby, made a claim for lump sum compensation for death benefits, pursuant to s 25 of the 1987 Act. On 15 May 2017, the respondent’s insurer, Allianz, issued a notice pursuant to s 74 of the 1998 Act disputing liability for the claim. It disputed liability on the basis that the deceased was not a worker or deemed worker within the meaning of s 4 and cl 2 of Sch 1 of the 1998 Act. Therefore, it determined that there was no entitlement to the compensation claimed.
On 13 February 2018, the appellant lodged an Application in Respect of Death of Worker (the Application), seeking lump sum compensation pursuant to s 25 of the 1987 Act. The Application records date of death as 21 February 2017 and the cause of injury and death is described as electrocution. The injury is described to have occurred while the deceased was working as a carpenter for and at the direction of the respondent. The deceased was in his second day of work when he was fatally electrocuted by exposed wiring in the roof of a house. The only dependant identified in the Application is Ms Digby, as “De Facto Partner/Sole dependant”.
On 6 March 2018, the respondent lodged a reply to the Application relying on the s 74 notice.
On 8 May 2018, the parties attended a conciliation and arbitration hearing. The Arbitrator reserved her decision.
On 5 June 2018, the Arbitrator entered an award for the respondent. She found that the relationship revealed few of the indicia of employment and many that mitigated against it. Weighing the indicia, she found that the deceased was not a worker employed by the respondent at the date of his death. Those factors which weighed against the deceased being a worker also led the Arbitrator to the conclusion that he was not a deemed worker. Accordingly, the Arbitrator entered an award for the respondent.
The appellant appeals the Arbitrator’s determination.
ON THE PAPERS
Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.
THRESHOLD MATTERS
There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the 1998 Act have been met.
EVIDENCE
Jamie-Lee Digby
In evidence are two statements prepared by Ms Digby, dated 25 May 2017 and 6 February 2018. In the first statement, Ms Digby states that she met the deceased when they were both working on a naval ship in October 2015. They formed a relationship in March 2016.
On 5 August 2016, Ms Digby and the deceased formally registered with the Department of Defence as being in a de-facto relationship.
Ms Digby states that the deceased finished his carpentry apprenticeship by 2011. He also underwent a Master Builders Business Management Course and got an ABN, so that he could sub-contract to other companies. She stated that this lasted for a period before he went back to “a wages job with Can Do Constructions.”
On 7 July 2014, the deceased joined the Royal Australian Navy as a Boatswains Mate. He was formally discharged on 20 January 2017.
In November 2016, the deceased began working in the construction industry in Sydney. The navy granted him leave so he could gain experience before leaving the Defence Force. The deceased commenced working casually as a carpenter for Matt BOERS Construction (Boers Construction) in Redfern, until mid-February 2017 when he left because of delays in being paid.
On 19 February 2017, the deceased met with Mr Anderson to discuss work. Ms Digby adds that:
“… on Monday, 20 February 2017 [the deceased] received a call from Brett Anderson asking if he could assist on a site in Carlton. He was to work doing something with the structure and the beams in a residential house. He arrived there at 11.00am as requested.”
Ms Digby discussed the deceased’s intentions regarding the respondent. The deceased had no intention of working anywhere else and had planned on working only for the respondent. They were both under the impression that it was to be fulltime work as indicated by Mr Anderson in a Facebook message to the deceased. She asked the deceased about the pay and the deceased said that the pay was going to be discussed at a later stage.
After the accident, the respondent paid Ms Digby $723 for the work undertaken by the deceased.
In the second statement, Ms Digby clarified that after the deceased completed his apprenticeship he registered an ABN for “Luke Bray Constructions”, so he could sub-contract to other companies.
Ms Digby states that she attended the meeting on 19 February 2017 at Boyles Hotel in Sutherland, with the deceased to meet Mr Anderson and his business partner, Mr Walther. She states that during the meeting Mr Anderson asked the deceased:
“‘what is your experience as a carpenter and what type of work are you after?’ [The deceased] said words to the effect ‘I am after fulltime work with [the respondent] as I want job security. We have just moved into a brand new apartment in Woolooware and due to the rent expenses I want to secure full time work so we can afford to live there.’” (emphasis in original)
Mr Anderson asked the deceased about his experience with tiling and bathroom renovations. The deceased responded that he had limited experience but was “happy to learn on the job”. Mr Walther referred to a job at Woolooware High School involving some roofing work and said he “would be happy for [the deceased] to start” work on 22 February 2018. (The evidence indicates that the Woolooware job fell through.)
Ms Digby states that she messaged the deceased on 20 February 2017 saying: “…have they discussed pay rates with you yet?” and the deceased respondent “not yet, I am sure that will be today.”
Brett Anderson
In evidence are several statements by Brett Anderson. In his statement, dated 26 March 2017, obtained by interview arranged by Allianz, Mr Anderson states that he is a director and 50% shareholder of the respondent company. The company is involved in “construction, repairs, renovations, carpentry and roofing.”
Mr Anderson states that just before the accident he received a message from the deceased on Facebook:
“… saying he had met me in Cairns when I was there on a gig as I was in a band. He said he had just got out of the Navy and he was a carpenter who was subbing to various people. He said he was sub-contracting to someone from Potts Point and as this person owed him for three or four invoices he was looking for more work.”
On 19 February 2017, Mr Anderson and Mr Walther met the deceased. Mr Anderson told the deceased about the job in Carlton. He had a verbal discussion where he told him that he:
“…was looking towards the future before [he] would employ anyone but three or four months down the track that may be an opportunity if everything works out. It would be a matter of me winning enough work a few months in advance to support a full time chippy but said any over flow work or any jobs [he] needed and extra hand [he would] be happy to call him up.”
Mr Anderson stated that he told the deceased that if he got the job “he would have to bring his own tools and he said he would and he also said he had his own ute.” Mr Anderson presumed the deceased was a certified carpenter. He informed him that he would be paid $45 per hour and that invoices are submitted by Thursday and payment made the following day. There was no discussion regarding superannuation or tax being deducted. No tax file number was provided nor was it discussed. He did not ask the deceased if he had any personal sickness or accident insurance.
On 20 and 21 February 2017, the deceased attended the Carlton job. The deceased had a full set of his own tools, as well as safety glasses, gloves and a safety jacket.
At 8.30 am on 20 February 2017, Mr Anderson arrived at the site. The deceased and Mr O’Toole were on site. Mr Anderson gave the deceased “his instructions” and then they all worked as a team. He told the deceased that the Carlton job was only for a maximum of two days, but if anything else came up he would use him and he was free to work for anyone.
On 21 February 2017, the deceased was on a ladder nailing a rafter to the roof of a building, when Mr Anderson “heard a sound like a frustrated moan”. He was able to remove the deceased from the ladder and commenced CPR, until an ambulance arrived on the scene.
Sometime after the accident, the respondent transferred $720 into a nominated bank account for two days’ payment for the work conducted by the deceased. There was no tax deducted from the payment.
In his statement dated 22 March 2018, Mr Anderson states that “… at no stage was any representation made to the deceased or the applicant when we met at a pub on 19 February [2017] that the deceased was to be an employee of our company.” It was a “meet and greet” and “… just an opportunity to get to know the deceased to see whether or not he would be suitable to work with us as an independent contractor.”
Mr Anderson added that he had “… hoped to be in a position to put on a full time employee at some time later in 2017” but he did “… not yet have sufficient jobs lined up to put on a full time employee”. He stated that he had communicated that position to the deceased.
Mr Anderson states that during the course of his business two employees have been retained. He adds that “[b]oth times we followed a formal process with a formal meeting after which I provided them with letters of employment.” A copy of those letters of employment were attached to Mr Anderson’s statement. Mr Anderson further states that “[t]here is no way that [he] would ever offer anyone a permanent role with our company on the basis of one casual meeting in a pub.”
Mr Anderson was extensively cross-examined on whether the deceased was a worker or a sub-contractor. Mr Anderson’s oral evidence largely confirms his statement evidence and will not be extracted. However, the following oral evidence is relevant.
The appellant’s counsel asked Mr Anderson “[n]ow, you were telling [the deceased] that you wanted to get a new carpenter on board who would be working fulltime…” to which Mr Anderson replied “[n]o”.[1]
[1] Transcript of Proceedings, Digby v Hyspec Construction & Roofing Pty Ltd (WCC, [2018] NSWWCC 151, Senior Arbitrator McDonald, 5 June 2018) (T), T 28.14.
When the appellant’s counsel sought clarification about what Mr Anderson meant by “fulltime” and that he “wanted to acquire a qualified carpenter who could work for [the respondent] Monday to Friday” [2], Mr Anderson responded:
“Yes, but you're not taking into consideration the fact that I - especially in a trade business there's no way that you would put someone on, especially from a subcontracting background, there's no way you would say to someone from a subcontracting background, ‘Hey, I don't know you, I don't know any of your skills no matter what you tell me’ and then offer them a fulltime position at a company …”[3]
[2] T 29.6.
[3] T 29.10.
The appellant’s counsel sought further clarification about what Mr Anderson meant by “fulltime”. Mr Anderson said:
“I was just going to say, like I was looking for someone for fulltime work but not in an immediate thing, like an immediate date. Like my next subcontractor or employee or whatever, there needs to be a trial basis, there needs to be a lot of things looked at before you offer someone wages and I think that's across the board in any job but yes, I have said I'm looking for someone fulltime and I am - I was looking, you know what I mean? Like I need to think of my future, I need to think of where I want to grow my business. That's - that's not saying, hey, come on fulltime, that's saying I'm looking for someone fulltime. If a subcontractor rang me up and said, ‘Hi Brett, can I - you know, can we work together, I've no intention of ever being on wages, I've got no intention of growing with your company’, I would not consider him.”[4]
[4] T 31.6.
The appellant’s counsel asked whether there was a likelihood that the deceased would have continued working for the respondent Monday to Friday. Mr Anderson responded:
“So the, the plan was if, if [the deceased] worked out to be a good worker, which initially he, he seemed like a great guy and knew what he was doing, 100% down the future where as soon as I got comfortable with the amount of work I had and, and the risk of me potentially having to say, you know what, I’m so sorry, I, you know, offered you full-time, I can’t now ‘cause I, I don’t want to be that guy, basically. I want to, if he wants job security I want to offer job security. And for me that’s about six months ahead of myself. And at the time I was probably about three. And still, now, I’m only about four months ahead of myself. So still haven’t offered anyone a full-time position on the building side of the company.” [5]
[5] T 60.1.
Mr Anderson confirmed that he agreed that the deceased would be paid $45 per hour, he said it was a “a general subbie wage”.[6] Mr Anderson added:
“I think on the 21st we were having a chat about what we’re going to do in the early stages and stuff like that but, I mean, I can’t guarantee that that conversation took place but with every other employee or subbie I've never [sic] had it normally happens in the first couple of days so - and to be honest, that - that day is a bit mess [sic] in my head, to be honest.”[7]
[6] T 42.25.
[7] T 42.32–43.4.
The appellant’s counsel suggested that Mr Anderson might be calling people “… a sub-contractor but in reality, they actually are employees” and in response, Mr Anderson said “[n]o”.[8]
[8] T 62.1.
The respondent’s counsel asked Mr Anderson why he would use a subbie if he was considering putting someone on as an employee. Mr Anderson responded:
“Basically the, the time that they’d be with me as a subbie would be a way for me to trial them and, and see what they’re like - personality and work ethic and skill level without any commitment. And many, many companies do it.”[9]
[9] T 69.23.
Luke Walther
Mr Walther provided a statement dated 23 March 2018. He was present at the hearing. However, he was not called to give evidence.
Mr Walther states that he is a company director for the respondent. He states that he met the deceased on one occasion at a pub on 19 February 2017. It was an informal meeting with the aim of “getting to know each other”. At no stage during that meeting was the deceased “offered any formal employment with us or any full time work.” The respondent was “not in a position to put on any employees” as it did not have the work but it was in a position to call on an independent contractor to help when busy. The deceased had been performing contract work locally and that is why they met with him.
Mr Walther confirms that if the respondent “were to formally employ anyone” it would “meet in a formal environment and go through the terms and conditions as we have done with the only two employees we have ever had”. This would not occur in a pub. The conversation with the deceased in the pub was of a general nature, including the type of work performed by the respondent and the deceased’s skill set. There was no “…intention, or representation made on our part, to employ [the deceased] or provide him full time work” as the respondent was not in a position to do so.
Sean O’Toole
In evidence is a statement by Mr O’Toole, conducted by interview arranged by Allianz, dated 2 April 2017. He recalls Mr Anderson showing him a Facebook page from the deceased asking for work, the details of his experience and that he has his “own tools, my own ute, own insurance”. On 20 February 2017, the deceased said that “he had been doing a bit of subbie work and that the last person he worked for owed him a bit of money”.
Mr O’Toole states that at the time the deceased commenced working for the respondent, there were four people employed by the respondent. He stated those people to be the two directors, Mr Frost and himself. He also stated that he was paid a wage and superannuation by the respondent, tax was deducted.
In evidence are a series of Facebook messages between Mr Anderson and the deceased, from early February 2017. Those messages commence with the deceased stating:
“I’ve just recently left the navy after 3 years and am now living down Woolooware, I’ve been back on the tools since December last year. ATM I’m just doing some renovations and extensions in Redfern. the drive every day into the city is taking its toll. Specially coming from a small town like cairns. I’ve got my own work ute and tools as I worked as a sole trader prior to joining the navy and am currently doing the same again. Just inquiring on how the work situation looks down in the Sutherland shire and if you have any contacts down here that I could possible help out with and obtain some constant work …”
In response, Mr Anderson said, that he was “[a]ctually looking for someone to start up pretty soon as [he was] taking on more work” than he could “handle”. He asked the deceased for his phone number and the work he was “confident in”. The deceased replied. Following some further exchanges, Mr Anderson asked whether the deceased was looking for full-time or subbie work and the deceased replied “[f]ull time work if you could, just want some security to help me get back on feet after transitioning out of the military.” Mr Anderson replied stating “…I’m looking for full time. Want someone to run my jobs and build a good relationship with”. The deceased added, on 5 February 2017, that he is “ready to go from Tuesday onwards for any full time work you have got going”. Further exchanges took place leading to the meeting on 19 February 2017.
Text messages
In evidence are a series of text messages between Mr Anderson and the deceased on 20 February 2017. At 9.51 am Mr Anderson provided the deceased with the address at Carlton. At 9.51 am the deceased replied and said he would “jump in my ute now and see you soon”. At 10.26 am, the deceased told Mr Anderson that he was “at the job, just looking for a park near by”. Mr Anderson asked the deceased if he had a ladder and the deceased said he only had a “4 step” ladder. As that ladder was too small, Mr Anderson said that he would be able to “grab a ladder” at Bunnings when he bought timber. A further series of text messages followed regarding access to the roof, measurements and timber sizes.
Other documents
In evidence are several tax invoices from the deceased’s company to Boers Construction for carpentry work dated 13 December 2016, 7, 14, 21, 28 January 2017 and 4, 11 February 2017. A further tax invoice from the deceased’s company to ETM Holdings dated 19 November 2016, is in evidence.
In evidence are several tax returns for the deceased. A copy of the deceased’s tax return for 2015 attaches a depreciation schedule, which records his ute and carpentry tools but a notation that he did not claim any depreciation in that year.
In evidence are identical letters to Mr Frost and Mr O’Toole, regarding engagement of employment with the respondent dated 8 July 2016 and 5 February 2017 respectively. Those letters detail employment duties and obligations, probation, termination and notice, and confidentiality. There is also a letter of termination of employment addressed to Mr Frost, dated 17 April 2017.
ARBITRATOR’S REASONS
The Arbitrator concluded that much of Ms Digby’s evidence was in a general form and was reflective of impressions that she and the deceased formed rather than providing conversational context. Where Ms Digby’s statements conflicted with the evidence of Mr Anderson, the Arbitrator preferred Mr Anderson’s evidence. She noted that Mr Anderson’s evidence was consistent with Mr Walther’s evidence.
The Arbitrator accepted Mr Anderson’s evidence that the meeting in the hotel on 19 February 2017 was an informal opportunity for him and Mr Walther to talk to the deceased. She accepted that despite the references to full-time work in his communications with the deceased, Mr Anderson did not offer him a full-time position on that day. The Arbitrator formed the impression that Mr Anderson was a carpenter who takes pride in his work and is a careful business owner. She concluded that his evidence as to the planning he undertakes in his business was credible.
The Arbitrator considered the relevant statutory provisions and relevant authorities including Stevens v Brodribb Sawmilling Co Pty Ltd.[10]
[10] [1986] HCA 1; 160 CLR 16 (Stevens).
As to the question of control, the Arbitrator concluded that it was inevitable that Mr Anderson would exercise a level of control over the work which had to be done at the site at Carlton, because his company was contracted to perform the work. The Arbitrator accepted Mr Anderson’s evidence that he expected the deceased would know how to perform the tasks required of him and that they worked as a team. The fact that Mr Anderson was in control of the site, so the Arbitrator concluded, did not inevitably lead to the conclusion that the deceased was a worker. The Arbitrator had regard to Mr Anderson’s evidence that he retained the deceased as a subcontractor. In respect of other subcontractors, Mr Anderson offered them work when it was available, but if the contractor was not available to undertake the work there were “no hard feelings”. He did not expect exclusivity.
The Arbitrator accepted that the employer’s right to control the person performing the work or exercise authority over him or her was a significant factor. Other relevant indicia include those set out in Stevens.
The Arbitrator expressed the difficulty in balancing the indicia in this case because of the very short period of time for which the deceased worked with the respondent and the lack of information about the circumstances under which the deceased worked before 20 February 2017. She concluded that the 2015 tax return was of little assistance because during that tax year the deceased remained in the employ of the Department of Defence and did not claim any depreciation of his vehicle or tools for that reason.
The Arbitrator concluded that it was clear that the deceased was a sole trader before 20 February 2017. That was because he was providing his services to Boers Construction in the week before 20 February 2017. The provision of invoices, the use of the business name “Luke Bray Constructions” and the fact that the deceased held an ABN were factors that supported the contention that he was a sole trader while providing services to Boers Construction.
There were numerous reasons, so the Arbitrator concluded, to explain the absence of any claim for goods and services tax (GST) on the invoices to Boers Construction. That may have been because the deceased considered that the turnover of his business would not be sufficient to satisfy the threshold required to collect GST. Because there were a number of possibilities to explain the failure to include GST, that omission did not assist in the determination of the deceased’s employment status.
With reference to the text messages between the deceased and Mr Anderson, the Arbitrator concluded that the deceased considered himself to be a sole trader at the time. That was evidenced by the fact that he said that he had his own ute and tools and that he had worked as a sole trader prior to joining the navy and was again doing so. His request for information about contacts in the building industry suggests that he intended to work as a subcontractor.
The references to full-time work in the text exchanges were written about two weeks before the meeting in the hotel on 19 February 2017. Those references were explained by Mr Anderson in that he was considering taking on a full-time employee at some point in time in the future. However, he considered that he needed to be confident that he had at least six months’ work ahead of him before he would take on a permanent employee. The reference to full-time work was only in the context of considering the possibilities that may present in the future if the deceased proved to be suitable.
Both Mr Anderson and Mr Walther described the meeting at the hotel as informal. It was a casual conversation, not a job interview. The Arbitrator held that the employment of Mr O’Toole and Mr Frost supported Mr Anderson’s evidence that no offer of employment had been made to the deceased. Had such an offer been made, it would have followed the same formal process in respect of Mr O’Toole and Mr Frost’s employment. The offer of employment to Mr O’Toole was made only two weeks before the meeting on 19 February 2017.
The Arbitrator considered it unsurprising that Mr Anderson would have a “blurred recollection” of the events of 21 February 2017. He believed he had a conversation with the deceased about payment of an hourly rate consistent with that paid to other subcontractors. He expressed his caution regarding entering into a permanent employment relationship, bearing in mind the obligations to provide benefits such as sick leave and annual leave that came with it and the requirement to make superannuation contributions.
The Arbitrator considered Ms Digby’s evidence of her discussions with the deceased about the terms of payment. The Arbitrator concluded that there was nothing in her statements that would cause the Arbitrator to doubt Mr Anderson’s evidence.
The absence of any livery on the deceased’s vehicle was considered by the Arbitrator to be a neutral factor. There was no livery on Mr O’Toole’s vehicle but there was on Mr Anderson’s vehicle. Similarly, she concluded that the purchase of the ladder to perform the work on 20 February was a neutral factor. The respondent owned ladders but they were being utilised on other sites. Whilst Mr Anderson did not require the deceased to purchase a longer ladder, it was likely, so the Arbitrator found, that if he had possessed one it would have been utilised.
The Arbitrator concluded:
“The relationship reveals few of the indicia of employment and many that mitigate against it. If the relationship had continued, [the deceased] may have become an employee and therefore a worker within the meaning of the legislation. However, weighing the indicia, I am satisfied that [the deceased] was not a worker employed by [the respondent] at the date of his death.”[11]
[11] Digby v Hyspec Construction & Roofing Pty Ltd NSWWCC 151 (Reasons), [100].
Further the Arbitrator concluded that the deceased was not a deemed worker and was satisfied that the deceased was regularly carrying out a trade or business in his own name. The reasons for that finding are referred to in detail below (at [188]).
For those reasons, the Arbitrator entered an award in favour of the respondent.
GROUNDS OF APPEAL
The appellant alleges that the Arbitrator erred:
(a) in law when she failed to correctly apply the law relating to the task of weighing the indicia of employment;
(b) in her fact finding when she concluded there were “few” indicia in favour of worker and “many” in favour of independent contractor;
(c) in law when she failed to correctly apply the law relating to the task of weighing the indicia of employment, to her apparent determined relevant indicia;
(d) in law when she failed to correctly apply the law relating to the task of weighing the indicia of employment by applying a numerical approach rather than a weight approach;
(e) in fact and law when she proceeded on the basis that Geraghty CCJ in the first instance in the matter of WorkCover Authority of NSW v Mackley[12] held that someone who performed work under a casual and fleeting arrangement was not a worker;
(f) in her fact finding by failing to determine the canvassed issue that the deceased was a casual employee and hence a worker for the purposes of the legislation;
(g) in the exercise of her discretion by taking into account an irrelevant matter being the business name on invoices previously sent to different organisations;
(h) in respect of her further determination with respect to the alternative assertion of deemed employment by concluding that there was no evidence of the end of the deceased’s relationship with Boers Construction, and
(i) in respect of her further determination with respect to the alternative assertion of deemed employment by incorrectly using a discretion in failing to take into account the absence of GST charges and giving inappropriately excessive weight to the use of a business name and ABN.
[12] [2006] NSWCA 204; 66 NSWLR 305; 5 DDCR 41 (Mackley).
CONSIDERATION
The issues in this appeal concern, among other things, whether the deceased was a “worker” or an independent contractor. It concerns an examination of the indicia of employment and in particular the significance of the so called “control test”. However, before dealing with the appellant’s grounds of appeal, it is worth noting some general principles that guide an appeal of this kind.
First, as this is an appeal under s 352 of the 1998 Act, the appeal is characterised by the identification and correction of error. The appeal is not a review or a rehearing.
Secondly, it is worthwhile to keep in mind the observations of McColl JA in Australian Air Express Pty Ltd v Langford.[13] Referring to the approach an appellate court should take to reviewing an exercise whose resolution is “one of ‘fact and degree’ in respect of which views might legitimately differ”,[14] her Honour said that:
“It is not enough that an appellate court might have come to a different conclusion - before an appellate court will intervene the appellant must show error on the part of the primary judge: JA & BM Bowden & Sons Pty Limited v Chief Commissioner of State Revenue (2001) NSWCA 125; (2001) 105 IR 66 at 68 [14] per Ipp JA.”[15]
[13] [2005] NSWCA 96, [15] (Langford).
[14] Roy Morgan Research Ltd v Commissioner of State Revenue (1997) 37 ATR 528, 533.
[15]Langford, [15].
Her Honour added:
“The second observation concerns the distinction between an employee and an independent contractor. That distinction has been said to be ‘rooted fundamentally in the difference between a person who serves his employer in his, the employer’s business, and a person who carries on a trade or business of his own’: Marshall v Whittaker’s Building Supply Co [1963] HCA 49; (1963) 109 CLR 210 at 217 per Windeyer J. Although this statement was criticised by Wilson and Dawson JJ in Stevens (at 34) as ‘posing the ultimate question in a different way rather than offering a definition which could be applied for the purpose of providing an answer’, it was referred to with approval by the majority in [Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21] (at 38 – 39 [39] – [40]).”[16]
[16]Langford, [16].
Third, as the Arbitrator appropriately referred, Bromberg J observed in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3):[17]
“Despite the earlier preoccupation of the law with the degree of control exercised by the putative employer as defining an employment relationship, the modern approach is
multi-factorial. As the majority said in Hollis at [24] it is ‘the totality of the relationship’ which is to be considered. A range of indicia may be examined. Some will be more useful than others in some work arrangements but less useful in other work arrangements. Because of the multiplicity and diversity of work arrangements and the ingenuity of those fostering disguised relationships, there is value in a multi-factorial test which recognises that one spotlight will not necessarily adequately illuminate the totality of the relationship. Such an approach also involves what may be described as a ‘smell test’, or a level of intuition. The majority in Hollis (at [48]) described the notion that bicycle couriers were each running their own business as ‘intuitively unsound’.” [18][17][2011] FCA 366; 279 ALR 341 (On Call Interpreters).
[18]On Call Interpreters, [204].
Justice Bromberg referred to the High Court decision in Hollis v Vabu Pty Ltd[19] and said:
[19][2001] HCA 44; 207 CLR 21 (Hollis).
“207. In the pursuit of greater simplicity and clarity it is of assistance that the majority in Hollis, whilst applying a multi-factorial approach, provided a focal point around which relevant indicia can be examined. That focal point has been elsewhere expressed as the ‘ultimate question’ posed by the totality approach: Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215 at [34] (referred to with approval by Crispin P and Gray J in Yaraka Holdings Pty Ltd v Gilgevic (2006) 149 IR 339 at [303]); and see Sappideen C, O’Grady P and Warburton G, Macken’s Law of Employment, (6th ed, Lawbook Co., 2009), at [2.80]. As Wilson and Dawson J in Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 observed at 35 ‘the ultimate question’ was posed by Windeyer J in Marshall v Whittaker’s Building Supply Co Ltd [1963] HCA 26; (1963) 109 CLR 210 at 217, in a passage which the majority in Hollis strongly endorsed at [40]. The majority in Hollis (citing Windeyer J) said, the distinction between an employee and an independent contractor is ‘rooted fundamentally’ in the fact that when personal services are provided to another business, an independent contractor provides those services whilst working in and for his or her own business, whereas an employee provides personal services whilst working in the employer’s business: at [40]. Unless the work is being provided by an independent contractor as a representative of that entrepreneur’s own business and not as a manifestation of the business receiving the work, the person providing the work is an employee: Hollis[39], [40], [47], and [57] and see Sweeney v Boylan Nominees Pty Ltd[2006] HCA 19; (2006) 226 CLR 161 at [30]-[32]. The English courts have taken a similar approach. There the ‘entrepreneur test’ seems to be the dominating feature: Selwyn NM, Laws of Employment (2006) Oxford University Press at [2.34].
208. Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work, may be posed and answered as follows:
Viewed as a ‘practical matter’:
(i) is the person performing the work an entrepreneur who owns and operates a business, and,
(ii) in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?
If the answer to that question is yes, in the performance of that particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee.
209. The question which this approach poses appears to me to be the central question in the application of the totality test. The question provides the focal point around which the indicia thrown up by the totality test may be examined. The central question has two elements. The first is whether the person has a business. The second is whether the work or the economic activity being performed is being performed in and for the business of that person: Sweeney at [31].”[20]
Ground one – The Arbitrator erred in law when she failed to correctly apply the law relating to the task of weighing the indicia of employment
[20]On Call Interpreters, [207]-[209].
Appellant’s submissions
The Arbitrator referred to the degree of control to which the person performing work is subjected as a “significant factor”. The appellant submits that the control issue is a “prominent indicia”[21] and was not mentioned by the Arbitrator at all in her ultimate discussion of indicia. It is submitted that the Arbitrator in her reasons stated that there were “few of the indicia of employment” without explaining what indicia of employment she had concluded existed.[22] Further, it is submitted that the analysis of the “indicia matters” does not mention control at all, which, the appellant submits, “suggests” that the Arbitrator did not take the control issue into account in her final weighing exercise.[23]
[21] Citing Connelly v Wells [1994] 10 NSWCCR 396.
[22] Citing Reasons, [100].
[23] Referring to Reasons, [91]-[99].
If the Arbitrator failed to take control into account it constitutes a legal error by failing to correctly consider the prominent factor of control in the required exercise.
Respondent’s submissions
The respondent disputes that the Arbitrator was unaware of the significance of the “control” indicia, nor that she did not accord it the weight it deserves.
The Arbitrator specifically considered the issue of “control” that Mr Anderson exercised at the Carlton site, concluding that it was inevitable that Mr Anderson would exercise a level of control over the work being done because his company was responsible for it. The Arbitrator concluded that Mr Anderson expected the deceased to know how to perform the tasks required of him and acknowledged the evidence that they worked as a team.
The respondent submits that the Arbitrator correctly weighed the indicia of control by saying, that it did not inevitably lead to the conclusion that the deceased was a worker. It submits that after considering the issue the Arbitrator did not accept that control was a significant factor, which the respondent submits was not an unreasonable conclusion given the view she took of the evidence.
The respondent submits that it is not only wrong to say that the Arbitrator failed to properly consider the significance of “control” as an indicia because she clearly did, but it is also incorrect to state that she fell into an error of law in the way she approached the issue.
In any event, the allegation cannot amount to an error of law. At best, the Arbitrator’s determination on this question is a question of fact and even if an appellant tribunal may come to a different conclusion, the finding is not appealable.
Consideration
The gravamen of the appellant’s complaint is that the Arbitrator failed to have regard to the existence of control over the deceased as the “prominent indicia” and failed to take it into account in her final weighing exercise. I do not accept that submission.
The appellant’s own submissions refer to the Arbitrator having identified the degree of control as a “significant factor”. The Arbitrator said “[t]he employer’s right to control the person performing the work or exercise authority over him or her is a significant factor. Other relevant indicia are set out in Stevens.”[24]
[24] Reasons, [89].
The Arbitrator correctly identified that in Stevens, Mason J said:
“... the existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment. The approach of this court has been to regard it merely as one of a number of indicia which must be considered in the determination of that question.”[25]
[25] Reasons, [82] citing Stevens (with whom Brennan and Deane JJ agreed) [9].
The Arbitrator referred to the criterion by which to gauge whether a relationship is one of employment, as stated in Stevens. Justice Mason listed other additional criteria, to “control”, as follows:
(a) the mode of remuneration;
(b) the provision and maintenance of equipment;
(c) the obligation to work;
(d) the hours of work and the provision of holidays;
(e) the deduction of income tax, and
(f) delegation of work by the putative employer.
Justices Wilson and Dawson added the following additional criteria:
(a) the right in the employer to have a particular person do the work;
(b) the right to suspend or dismiss the person engaged;
(c) the right to the exclusive services of the person engaged, and
(d) the right to dictate the place of work, the hours of work and the like.
It has long been established that, especially in the case of employees who have specialised skills that “…there may be little room for direction or command”.[26] It will be enough that the employer retains “lawful authority to command so far as there is scope for it… if only in incidental or collateral matters”.[27]
[26]Zuijs v Wirth Bros Pty Ltd [1955] HCA 73; 93 CLR 561 (Zuijs), 571.
[27]Zuijs, 571.
The evidence established that Mr Anderson had asked the deceased to turn up to the Carlton site on 21 February 2017 at a particular time, namely 7.30 am. Mr Anderson stated that he would have expected that, to an extent, the deceased would have supervised Mr O’Toole, the latter being a roofer rather than a carpenter. Mr Anderson satisfied himself that the site had been adequately “set up”. That is, that the appropriate tools and machinery were available on site for the tasks to be completed. The Arbitrator accepted that Mr Anderson said that he was in charge of the job at the Carlton site. Mr Anderson also agreed that he gave some instructions to the deceased and Mr O’Toole and that he worked with them “as a team”.[28] The Arbitrator recorded this evidence in her reasons.
[28] Mr Anderson’s statement dated 26 March 2017, [29]; T 103.26.
Having considered the decision in Stevens, the Arbitrator found:
“It is inevitable that Mr Anderson would exercise a level of control over the work which had to be done at the site at Carlton because his company was performing the work. He expected that [the deceased] would know how to perform the tasks required and they worked as a team. The fact that Mr Anderson was in control of the site does not inevitably lead to the conclusion that [the deceased] was a worker.”[29]
[29] Reasons, [85].
The Arbitrator again noted that the employer’s right to control the person performing the work or exercise authority was a significant factor but observed that there was other relevant indicia as set out in Stevens.[30] She then proceeded to consider the relevant indicia (which is further discussed under ground two below).
[30] Reasons, [89].
The Arbitrator was conscious that the level of control was a significant indicia in determining whether or not the deceased was a worker as defined in s 4 of the 1998 Act. Whether she described the level of control as a “significant factor” or a “prominent indicia”, as the appellant submits, is immaterial. It is the totality of the relationship that must be considered.[31] This “recognises that one spotlight will not necessarily adequately illuminate the totality of the relationship”.[32] The Arbitrator weighed the evidence concerning the level of control and correctly concluded that it was inevitable that the respondent would exercise a level of control over the work at the site at Carlton but that did not necessarily lead to the conclusion that the deceased was a worker. That was because it was the totality of the relationship that had to be considered.
[31]On Call Interpreters; Hollis.
[32]On Call Interpreters, [204].
Although the Arbitrator did not specifically refer to the control issue in her ultimate discussion, she clearly had regard to it in formulating her conclusion that the deceased was not a worker employed by the respondent at the date of his death.
It follows that ground one fails.
Ground two – The Arbitrator erred in her fact finding when she concluded there were “few” indicia in favour of worker and “many” in favour of independent contractor
Appellant’s submissions
If it is assumed that the Arbitrator took control into account as an indicia, her reasons taken as a whole reveal that she considered the following indicia and reached the following conclusions about whether they were in favour, neutral or against the existence of a contract of employment:
Neutral indicia
- Tax returns
- Not charging GST on previous invoices
- The appearance or absence of business names on the vehicles
- The provision of ladders
In favour of worker indicia
- Control
In favour of independent contractor indicia
- Previous invoices to another concern using a business name and an ABN
Seemingly, so it is submitted, the Arbitrator found that there was only one indicia in favour of worker (control) and one indicia in favour of contractor (previous invoices) hence, so it is submitted, her conclusion that there were “few” indicia in favour of worker and “many” in favour of independent contractor is erroneous on her own reasoning.[33] It is submitted that this is “an error of fact finding exercise” which has affected her decision.
[33] Citing Reasons, [100].
Respondent’s submissions
The Arbitrator correctly considered a wide range of indicia, however it is the totality of the relationship which is to be weighed and this is the approach the Arbitrator took.[34] This approach was not criticised by the appellant.
[34] Citing Reasons, [87]–[89].
In any event, the appellant’s submissions are factually incorrect because it fails to refer to the indicia noted by the Arbitrator that the deceased described himself as a sole trader when he sent a message to Brett Anderson in which he said “I’ve got my own work ute and tools as I worked as a sole trader prior to joining the Navy and am currently doing the same again”.[35]
[35] Citing Reasons, [94].
The appellant’s submissions do not refer to the Arbitrator’s factual finding, which is not criticised, that Mr Anderson’s evidence was preferred and therefore despite what the appellant thought was represented to the deceased at the pub meeting in February, it was Mr Anderson’s evidence that employment was not offered.
Consideration
As the respondent submits, the appellant’s submissions selectively summarise the Arbitrator’s reasons, ignoring the other indicia considered in determining the ultimate question.
For the reasons discussed above, the Arbitrator considered the control issue, concluding that it was a significant factor but not determinative of the issue of whether the deceased was a worker at the time of his death. In addition to the control test, the Arbitrator considered other indicia. However, before turning to the indicia the Arbitrator was required to resolve the conflicting evidence concerning the deceased’s employment status. That is, Ms Digby’s evidence that she believed the deceased was offered full-time work by the respondent whereas Mr Anderson’s evidence was to the contrary.
Resolution of conflicting evidence
Having heard Mr Anderson give evidence, the Arbitrator concluded that she preferred Mr Anderson’s evidence over Ms Digby’s evidence.
In Midcoast County Council t/as Midcoast Water v Reed Constructions Australia Pty Ltd[36] Meagher JA (Basten and Beazley JJA agreeing) said:
“The relevant principles as to fact finding on appeals by way of rehearing are not in dispute. This Court must set aside challenged findings of fact which are shown to be wrong. When addressing those challenged findings, the court must weigh conflicting evidence and draw its own inferences and conclusions from that evidence, giving due regard to the fact that it has not seen nor heard the witnesses. Specifically, if a finding might be affected by the trial judge’s impression about the credibility of a witness or witnesses, this court should respect the advantage of the trial judge in that regard. Usually such a finding should stand unless it is shown that the trial judge ‘has failed to use or has palpably misused his advantage’ or acted on evidence which was ‘inconsistent with facts incontrovertibly established’ or ‘glaringly improbable’: Devries v Australian National Railways Commission[1993] HCA 78; (1993) 177 CLR 472 at 479, 480–481; Fox v Percy[2003] HCA 22; (2003) 214 CLR 118 at [25]–[27].”[37]
[36][2011] NSWCA 268 (Midcoast County Council).
[37]Midcoast County Council, [32].
In the present proceedings, the Arbitrator had the advantage of seeing and hearing Mr Anderson give evidence. She preferred Mr Anderson’s evidence, which was consistent with Mr Walther’s evidence, over Ms Digby’s evidence. The Arbitrator described Ms Digby’s evidence as general in form and impressionistic, rather than providing a conversational context. That was a matter which went to the weight to be attached to Ms Digby’s evidence and was a matter the Arbitrator was entitled to take into account when determining the claim.
The appellant has not advanced any submission to support a conclusion that the Arbitrator failed to use or palpably misused her advantage, of seeing and hearing Mr Anderson give evidence. The Arbitrator weighed the conflicting evidence and drew her own inferences and conclusions from that evidence, to find that she preferred Mr Anderson’s evidence over Ms Digby’s evidence where there was a conflict. That was a finding of fact that was open on the evidence and disclosed no error.
The deduction of income tax
The deceased’s 2015 tax return was considered. The Arbitrator noted that it included a depreciation schedule which was suggestive of claims for depreciation of the deceased’s vehicle and tools when the deceased was working as a carpenter before he enlisted in the navy. However, the Arbitrator concluded that it did not assist in determining his status in 2017. That was a finding of fact that was open on the evidence and disclosed no error.
Past employment and remuneration
The Arbitrator considered that the evidence established that the deceased worked as a sole trader before 20 February 2017. That was evidenced by the services he provided to Boers Construction in the week before 20 February 2017.
Invoices in business name
The Arbitrator also concluded that the deceased had been in the practice of issuing invoices in his business name, Luke Bray Constructions, and citing an ABN which the Arbitrator concluded supported the contention that he was a sole trader.
GST
The Arbitrator found that the deceased’s invoices made no claim for goods and services tax (GST). The Arbitrator concluded that this was a neutral factor because there were a number of possibilities which could explain the absence of any claim for GST. One possibility being that the deceased considered that his turnover would not be sufficient to satisfy the threshold required to collect GST.
Text and Facebook messages
The Arbitrator concluded that the text and Facebook messages exchanged between the deceased and Mr Anderson were indicative of him being a sole trader. The deceased considered himself to be a sole trader. He actually said in the messages “I’ve got my own work ute and tools as I worked as a sole trader prior to joining the Navy and am currently doing the same again”. The respondent made much of the references to full-time work in the text messages. Mr Anderson’s evidence, which the Arbitrator accepted, provided a satisfactory explanation for the reference to full-time work. He explained that he was considering taking on a full-time employee but not immediately. He wanted to be certain that he had at least six months’ work before he would take on another employee. The discussion regarding full-time work would only have been relevant if the deceased had, after working as a sub-contractor, proven to be suitable. Mr Anderson’s evidence, which the Arbitrator accepted, was that he did not have six months’ work available; he only had three months’ work at hand which was insufficient to consider employing more staff. That evidence was corroborated by Mr Walther. A party’s subjective belief as to whether the relationship is one of employment or contract cannot be determinative of the “worker” issue. The evidence referred to above strongly pointed to the deceased being an independent contractor.
The messages indicate that the deceased was seeking to build up contacts in the Sutherland area for whom he could supply services as a carpenter. The Arbitrator concluded that those references suggested that the deceased was intending to build up contacts to assist his business as an independent contractor carpenter.
Pub meeting
The Arbitrator considered the meeting in the pub. She accepted that, as Mr Anderson and Mr Walther described, it was an informal meeting. Much of the discussion at the pub was of a social nature. The Arbitrator accepted that no offer of employment had been made at that time. That conclusion was supported by the fact that the respondent was in the practice of issuing formal letters of employment to permanent employees. Those letters referred to a range of employment factors which were never discussed with the deceased. The casual nature of the discussion at the pub and the absence of formality, including a letter confirming the terms of employment (as was the case with Mr Frost and Mr O’Toole), was consistent with the contention that the deceased was an independent contractor.
Ladder and livery
The Arbitrator considered the evidence in relation to the purchase of the ladder and the absence of any livery on the deceased’s vehicle as neutral indicia. She correctly found that those factors did not assist in the resolution of the issue of whether the deceased was a “worker”.
Conclusion
Having considered the Arbitrator’s analysis, the appellant’s submission that she found only one indicia in favour and only one indicia against the proposition that the deceased was an independent contractor cannot be accepted. The Arbitrator correctly and carefully weighed a range of indicia identified from the evidence and reached a conclusion that was open to her on the evidence, namely that the deceased was not a “worker”. It follows that the Arbitrator did not err in her fact finding when she concluded that there were “few” indicia in favour of worker and “many” in favour of independent contractor.
It follows that ground two fails.
Ground three – The Arbitrator erred in law when she failed to correctly apply the law relating to the task of weighing the indicia of employment, to her apparent determined relevant indicia
Appellant’s submissions
The indicia of control is “prominent” or as the Arbitrator stated, a “significant factor”.
In the weighing of the evidence, it is submitted that a single “prominent” or “significant” indicia has to outweigh a single other indicia. Therefore, so it is submitted, control carries greater weight in the weighing exercise than other indicia “if the other side of the scales merely involve one other indicia”. As a significant factor, it is submitted that, control can outweigh a number of other less significant indicia, if there actually were others.
It is submitted that the Arbitrator concluded that another indicia, in the form of prior invoices, outweighs the significant indicia of control. That, it is submitted, involves an error of law in failing to accord proper weight to the indicia of control.
Respondent’s submissions
The appellant’s submissions propose that it is an error of law not to give extra weight to the indicia of “control” over other indicia. It is submitted that the indicia of “control” and its significance can vary from factual circumstance to circumstance. It is a question of fact for the Arbitrator to give due consideration.
The Arbitrator gave the indicia proper attention knowing its importance but concluded that in this instance it was not as important as it might be in some other cases.
Consideration
I do not accept the appellant’s submission that the Arbitrator should have given extra weight to the indicia of control over other indicia. No authority or reasoned argument was provided to support that submission.
The submission is inconsistent with the authorities. As demonstrated in On Call Interpreters and in Hollis, a consideration and balancing of the indicia is critical, but the focal point around which one examines the indicia is whether the deceased was working in the business of another or in his own business. That question is not to be answered by giving “weight” to one indicia, even if it is a prominent or significant indicia.
As the respondent submits, it cannot be an error of law not to have given extra weight to the indicia of control. The indicia of control and its significance can vary from factual circumstance to circumstance. As discussed above, it is the totality of the relationship that must be considered.[38] It is a question of fact for the Arbitrator to give due consideration. The Arbitrator weighed the indicia and concluded, correctly, that although there was a measure of control, it did not inevitably lead to the conclusion that the deceased was a worker.
[38]Hollis; On Call Interpreters.
As demonstrated by the consideration in ground two, the Arbitrator dealt with a range of indicia in determining the ultimate question. The deceased’s invoicing practices immediately prior to his death was a relevant factor in determining that question but it was not determinative. In any event, there is no evidence to suggest that the Arbitrator gave more weight to the form of the prior invoices than she did to the control issue.
It follows that ground three fails.
Ground four – The Arbitrator erred in law when she failed to correctly apply the law relating to the task of weighing the indicia of employment by applying a numerical approach rather than a weight approach
Appellant’s submissions
The Arbitrator concluded:
“The relationship reveals few of the indicia of employment and many that mitigate against it … weighing the indicia, I am satisfied that [the deceased] was not a worker employed by [the respondent] at the date of his death.”[39]
[39] Citing Reasons, [100].
The appellant submits that the use of the word “few” in comparison with the word “many” illustrated that the Arbitrator approached the task as being one which involved a mere numerical analysis. That involved legal error. That is because control as an indicia is significant and carries more weight in the exercise than other indicia, which are not required to be regarded as significant. It is submitted that this was an error of law.
Respondent’s submissions
The respondent submits that the appellant’s submission is clearly incorrect because the Arbitrator referred to the facts and the submissions of the parties in relation to the various indicia relied upon by the parties and then deals with those indicia in her reasons. For example, this is the approach the Arbitrator took in relation to the control issue.
In any event, so it is submitted, the use of the words “few” and “many” is not a numerical approach on the Arbitrator’s part but simply a statement of fact after she had considered the importance or otherwise of the various indicia available.
Consideration
I do not accept the appellant’s submission that the use by the Arbitrator of the word “few” in comparison with the word “many” illustrated that she approached the task of weighing the indicia of employment as a “mere numerical analysis”.
For the reasons that I identified in dealing with ground two, the Arbitrator clearly took into account a range of factors which she weighed in determining the question of whether the deceased was a worker. The use of the words “few” and “many” is not, as the respondent submits, a numerical approach but simply a statement of fact after she had considered the various indicia available.
Further, as discussed above, the appellant’s submission is based on a fundamental error in that the indicia of control is the prominent factor and carries more weight than other indicia. For the reasons discussed above, that is not an accurate statement of the law.
It follows that ground four fails.
Ground five – The Arbitrator erred in fact and law when she proceeded on the basis that Geraghty CCJ in the first instance in the matter of Mackley held that someone who performed work under a casual and fleeting arrangement was not a worker
Appellant’s submissions
Mackley is authority for the proposition that a person can be held to be a “worker” despite the fact that the arrangement that led him to be an employee “was very casual and lasted at most a matter of hours on one day”.
The Arbitrator referred to the submissions in relation to the decision in Mackley stating that it was authority for the proposition that someone who performed work under a casual or fleeting arrangement was not a worker.[40]
[40] Citing Reasons, [76].
The appellant submits that the Arbitrator erred in fact and law in wrongly interpreting and applying the decision in Mackley. Further, it is submitted that the error affected the Arbitrator’s decision because she concluded that if the deceased’s relationship had continued, he may have become an employee and therefore a worker within the meaning of the legislation.[41]
[41] Citing Reasons, [100].
The appellant also submits that the Arbitrator gave weight to the likely fleeting nature of the work on the Carlton site which only involved a few days of work as being a factor of relevance. She submits that:
“[t]he reasoning process being that a fleeting short period is inconsistent with the existence of a contract of employment and that a longer period would be consistent with a contract of employment.”
The appellant submits that this reasoning was inconsistent with the authority in Mackley.
Respondent’s submissions
The respondent submits that at no point did the Arbitrator refer to the decision in Mackley, nor did she find that the deceased’s shortness of time with the respondent was a factor against him being considered as a “worker”.
The Arbitrator’s reference to Mackley at [76], is, so it is submitted, likely to be a simple typographical mistake in the transcription of the Arbitrator’s reasons. That is because the Arbitrator would have taken the use of the case by the appellant’s counsel as being supportive of his argument not against it.
Further, the content of the Arbitrator’s Reasons relied upon in support of this ground, is simply a statement of her acceptance of the evidence of Mr Anderson which was open to her on the evidence.[42]
[42] Citing Reasons, [100].
Consideration
Pursuant to Practice Direction 6 – Appeal Against a Decision of the Commission Constituted by an Arbitrator (Practice Direction No 6) “[t]he full and correct name and citation of each authority must be given. If the matter is unreported, a full copy of the decision must be attached to the submissions.” Contrary to the Practice Direction, the unreported authority to which the appellant’s counsel, Mr Stanton, referred was not placed before the Arbitrator nor before me on appeal.
On 27 August 2018, the appellant was directed to lodge a copy of the unreported decision in Mackley on which the appellant relied. In purported compliance with the direction a “draft” copy of a decision of Geraghty J in matter No 7756 of 2002 was lodged. Those proceedings concern an application by the WorkCover Authority seeking an order for reimbursement by Mr Mackley of compensation paid on his behalf as an uninsured employer. It refers only tangentially to the “worker” issue which was the subject of an earlier unreported decision (the decision relied on).
In subsequent proceedings in the Commission, Mr Mackley sought an order under s 145 of the 1987 Act, relieving him from liability to reimburse the WorkCover Authority. Exercising the discretion under s 145 the Commission made the order sought. WorkCover appealed that decision to the NSW Court of Appeal.
The reported decision of the Court of Appeal decision Mackley revealed the facts in the first instance proceedings before Geraghty CCJ in which the “worker” issue was decided. It stated that Mr Mackley was a carpenter doing carpentry work on a house at Manilla in New South Wales. He had no employees; however, on one particular occasion he sought the assistance of Mr McLeod who lived nearby. Mr McLeod assisted Mr Mackley with certain tasks for a short period of time before he was injured. The extract from the decision of Geraghty CCJ of the decision in Mackley indicates that, on the facts of the case, his Honour was in considerable doubt as to whether the injured Mr McLeod was a worker. It appears that the determination that he was a worker was finely balanced and depended on the facts of that case.
It appears that in the recording of Mr Stanton’s submission, the Arbitrator mistakenly referred to the first instance decision of Geraghty CCJ as providing authority for the proposition that someone who performed casual labour or fleeting employment was not a worker. The import of Geraghty CCJ’s decision was to the contrary.
The appellant submits that that error affected the Arbitrator’s decision which is revealed by the analysis of her ultimate conclusion and reasoning.[43] I do not accept that submission, primarily because the Arbitrator did not rely on the decision in Mackley. She recorded the appellant’s submission on Mackley, albeit incorrectly, but it did not form part of her analysis and did not affect the ultimate conclusion.
[43] Reasons, [100].
It is submitted the reasoning process indicates that the Arbitrator concluded that a fleeting or short period is inconsistent with the existence of a contract of employment and that a longer period would be consistent with a contract of employment. I do not accept that that is the import of the Arbitrator’s findings. Reading the Arbitrator’s decision as a whole, it reflects a conclusion, consistent with the evidence, that if the deceased had proven to be a suitable worker, subject to the availability of sufficient work, the relationship may have become one of employer and employee in due course. That was consistent with the accepted evidence of Mr Anderson and Mr Walther. However, that was not the case on the date of the deceased’s death.
As I have said, Geraghty CCJ’s decision appeared to turn on its own facts. It does not appear to identify any statement of principle other than depending on the facts, that fleeting or short term employment may satisfy the definition of “worker”. The application before the Arbitrator failed, not because the engagement was fleeting, but because a careful weighing of the evidence favoured the conclusion that the deceased was not a “worker”.
For these reasons, I am not satisfied that even though the Arbitrator wrongly recorded the submission that it affected her reasoning or that it affected the outcome. It follows that ground five fails.
Ground six – The Arbitrator erred in her fact finding by failing to determine the canvassed issue that the deceased was a casual employee and hence a worker for the purposes of the legislation
Appellant’s submissions
A failure to engage with the evidence and determine the issues in dispute can amount to an error of fact finding.[44]
[44] Citing Maclean and District Bowling Club Co-operative Ltd v Green [2014] NSWWCCPD 53, [108].
The appellant’s case was that the deceased was a casual employee of the respondent on the two days that he worked for it at the Carlton site. It was submitted that the terminology used by Mr Anderson of a “subbie” was a term he was using to describe what was actually a casual employee. It was submitted to the Arbitrator that Mr Anderson’s own evidence compared this type of engagement to that of an independent contractor when he gave the example of engaging a plumber. The appellant submits that Mr Anderson said:
“If you need a hand or got a job you get a subbie. Its not like a plumber who gives a price to do his trade. You add them to your team. It’s a flexible way to get extra skilled labour.” (emphasis in original)
The appellant further submits that the Arbitrator’s reasons do not refer to this significant aspect of the appellant’s case and this is a further error in fact finding.
Respondent’s submissions
The case presented and argued before the Arbitrator was on the issue of a “worker”, casual or otherwise. It was not disputed that the task being undertaken by the deceased at Carlton would be completed in a short period.
The reference to “subbie” used by Mr Anderson can also mean an independent contractor which is the meaning that Mr Anderson, on any analysis of his accepted evidence, clearly meant.
It submitted that it cannot be said that the Arbitrator failed to engage with the evidence and therefore did not properly determine the issues in dispute.
Consideration
The appellant’s submissions conflate the concept of “a casual employee” with a “worker” for the purposes of the legislation. “Worker” is defined in s 4 of the 1998 Act to mean:
“… a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing) …”
The compensation in issue is claimed under s 25 of the 1987 Act. The lump sum compensation available under that section is payable to the dependants or in the absence of dependants to the legal personal representative of the deceased worker. Thus, the entitlement to the compensation turns on whether the deceased was a “worker”. That is how the Arbitrator approached the claim. She considered whether the deceased was a “worker”, casual or otherwise.
The appellant did not source the reference to the use of the word “subbie”. However, having regard to the appellant’s submissions and the appellant’s apparent paraphrase of Mr Anderson’s evidence, I infer it is a reference to Mr Anderson’s oral evidence where he said:
“[i]f you need a hand or you got a job that, that your sort of own crew can’t handle then you’d get in sub-contractors of the same trade. Not so much like a, you know, sub-contracting a, a plumber or anything like where they come in, they give you a price and they do their trade. This is more adding to your team where you can easily, you know, let them go when the work dries up, etcetera. So it’s, it’s extra skilled labour, really that, that is flexible.”[45]
[45] T 62.17.
Contrary to the appellant’s submission Mr Anderson did not use the term “subbie” he used the term “sub-contractor”. It is apparent from the actual extract from Mr Anderson’s evidence, as opposed to the appellant’s paraphrase of the evidence, that he was seeking to distinguish between a sub-contractor and “your own crew” which I infer is a reference to his employed workers. I reject the submission that Mr Anderson equated “subbie” or “sub-contractor” with a casual employee. The evidence referred to above must be read with the totality of Mr Anderson’s evidence. Although some ambiguity may arise from the plumber example provided by Mr Anderson, his example is more consistent with the term “subbie” referring to a sub-contractor.
Notwithstanding a vigorous cross-examination, it was clear from the oral evidence that Mr Anderson did not offer the deceased employment, casual or otherwise. That evidence was corroborated by Mr Walther. I do not accept that the quote cited by the appellant above was intended to give any contrary impression.
The issue before the Arbitrator was whether the deceased was a worker under the legislation. She was not required to consider whether he was a causal employee. A “casual” employee is not a concept recognised under the legislation. Therefore, the Arbitrator did not err in not dealing with the appellant’s submission that the deceased was a casual employee.
It follows that I do not accept the appellant’s submission that the Arbitrator failed to determine an issue in dispute. Therefore, ground six fails.
Ground seven – The Arbitrator made an error in the exercise of her discretion by taking into account an irrelevant matter being the business name on invoices previously sent to different organisations
Appellant’s submissions
Taking an irrelevant matter into account involves a failure to properly exercise a discretion.[46] An invoice sent to another organisation about different work at a different time and place cannot be relevant to whether the deceased was a casual employee of the respondent on the day he was electrocuted. The Arbitrator used the invoices to consider the employment issue “and it ended up being the only indicia she eventually clearly articulated as being in favour of [the deceased] being an independent contractor”.[47]
[46] Citing House v The King [1936] HCA 40; 55 CLR 499, 504–5.
[47] Citing Reasons, [93].
Respondent’s submissions
It was not disputed that the deceased provided invoices to prior employers and that he did so under Luke Bray Constructions which identified an ABN.
It was the evidence of Mr Anderson that the deceased told him that he was sub-contracting to other parties and that he told the deceased to invoice by Thursday.
It is submitted therefore that it can comfortably be assumed that had the deceased not died, any invoice he provided to the respondent would have been under the name of Luke Bray Constructions and in a similar format to those provided to other organisations in the past.
The provision of invoices and the operation of a business under a business name with an ABN are all relevant indicia that were properly before the Arbitrator to be considered.
No objection was taken by the appellant during the hearing to the admission of the invoices into the body of evidence to be considered by the Arbitrator.
Consideration
Given the circumstances and short relationship with the respondent, it was relevant to consider the deceased’s history of employment relationships. To that limited extent, it was a relevant matter that the deceased had issued invoices in a business name, quoting an ABN, to organisations that he had contracted to immediately prior to his relationship with the respondent.
The manner in which the deceased invoiced organisations that he worked for including Boers Construction may not be determinative of the employment relationship with the respondent. However, it was open to the Arbitrator to conclude, as she did, that the use of the business name Luke Bray Constructions and the use of an ABN were factors in support of the contention that the deceased was an independent contractor while providing services to Boers Construction. The Arbitrator’s findings went no further than that. It was a relevant consideration in the ultimate question before the Arbitrator, namely whether the deceased was a worker at the time of his death. I do not accept the appellant’s submission that it was an irrelevant matter, nor that the Arbitrator’s consideration of that evidence involved an error in the exercise of her discretion.
The Arbitrator’s treatment of the evidence in relation to the use of the business name was supported by the fact that it was not disputed that the deceased had issued invoices to other organisations in the name of his construction company, Luke Bray Constructions, quoting the company’s ABN. It was also consistent with Mr Anderson’s evidence that he invited the deceased to submit an invoice by Thursday of the week that he died so that payment could be made by the following day. There was no challenge to that evidence. That was the practice he requested the deceased to follow.
As the respondent submits, no objection was taken by the appellant during the hearing to the admission of the invoices into the body of evidence to be considered by the Arbitrator. As the Arbitrator correctly identified, balancing the indicia of employment was complicated by the short period of time the deceased did work for the respondent. The time did not allow for an invoice to be sent by the deceased to the respondent for the work he completed, therefore it was relevant for the Arbitrator to have regard to the deceased’s usual practice and the respondent’s usual practice with regard to billing.
It follows that ground eight fails.
Ground eight – The Arbitrator erred with respect to her further determination with respect to the alternative assertion of deemed employment by concluding that there was no evidence about the end of the deceased’s relationship with Boers Construction
Appellant’s submissions
There was evidence that the deceased was “having difficulty with being paid” for work done for Boers Construction. There was also evidence that the deceased was seeking alternative “full time work”.
It is submitted that this evidence creates a fairly clear inference that the deceased was in the process of ending his relationship with Boers Construction. Hence it is submitted that the Arbitrator’s conclusion that there was no evidence about this involves an error of fact finding.
Respondent’s submissions
It was not disputed that the deceased had invoiced Boers Construction and that he was owed money by Boers Construction.
The appellant maintains that an inference should have been drawn that the deceased was in the process of ending his relationship with Boers Construction.
Whilst there is evidence that the deceased said that he was looking for full-time employment, there was also evidence that he was conducting a business under the name Luke Bray Constructions with a registered ABN and regarded himself as a sole trader.
It is reasonable to infer that he might equally have continued to work with Boers Construction until he secured full-time work, assuming that payment from Boers Construction was forthcoming.
Whether or not the deceased would have continued to engage with Boers Construction specifically as opposed to other construction companies had he not died is not known. However, the respondent submits that whether or not he did is irrelevant to the issues in the present application and therefore the appellant’s submission has no merit.
Consideration
This ground deals with the Arbitrator’s determination that the deceased was not a deemed worker.
Clause 2 of Sch 1 to the 1998 Act provides:
“(1) Where a contract:
(a)to perform any work exceeding $10 in value (not being work incidental to a trade or business regularly carried on by the contractor in the contractor’s own name, or under a business or firm name), or
...
is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, taken to be a worker employed by the person who made the contract with the contractor.”
There was no dispute that the deceased had entered into a contract to perform work exceeding $10 in value. The issue in dispute was whether the deceased was performing work that was “incidental to a trade or business regularly carried” out under his name or business.
The Arbitrator said that the “factors which weigh against [the deceased] being a worker employed by [the respondent] also lead to the conclusion that he is not a deemed worker.”[48] She added:
“There is no evidence about the end of [the deceased]’s relationship with [Boers Construction] and the amount in Invoice #8 suggests that he had worked a full week in the week before that commencing 20 February 2017. He presented invoices to [Boers Construction] bearing a business name and an ABN. He told Mr Anderson that he was working as a sole trader and looking for contacts in the Sutherland Shire.”[49]
[48] Reasons, [102].
[49] Reasons, [103].
Ms Digby stated that the deceased rendered three invoices to Boers Construction dated 4 and 11 February 2017 and a further invoice which she did not hold. She said that, “because of the delay in payment, [the deceased] decided to leave.”[50]
[50] Ms Digby’s statement dated 9 February 2018, [24].
In addition to Ms Digby’s evidence, the deceased’s initial Facebook contact with Mr Anderson made reference to being owed money, which I infer was a reference to the money owed to the deceased by Boers Construction.[51]
[51] See [28] above.
It follows that the Arbitrator’s finding that there was no evidence about the end of the deceased’s relationship with Boers Construction was an error. However, for the following reasons, it is not an error that would have affected the result. The evidence favours the inference that the deceased had ended his relationship with Boers Construction. The Facebook exchanges demonstrate difficulties with being paid by Boers Construction as a factor that influenced the deceased’s decision to seek other work. That evidence confirmed Ms Digby’s evidence of the deceased’s intention to leave Boers Construction. However, the evidence went no further.
The evidence does not support an inference that the deceased decided to stop working as an independent contractor in favour of taking up full-time paid work as an employee of the respondent. Rather, the evidence supports an inference that the deceased elected to contract with parties other than Boers Construction as an independent contractor. That is not proof of an employment relationship of the nature of a “worker” with the respondent. The evidence does not establish that the deceased stopped trading in his business name or as a sub-contractor, as the appellant seeks to suggest. To make such a finding would require the drawing of an inference which is not available on the evidence presented.
It follows, while the Arbitrator erred in her consideration of the evidence of whether the deceased ceased working for Boers Construction, that error did not affect the outcome. Ground eight fails.
Ground nine – The Arbitrator erred with respect to her further determination with respect to the alternative assertion of deemed employment by incorrectly using a discretion in failing to take into account the absence of GST charges and giving inappropriately excessive weight to the use of a business name and an ABN
Appellant’s submissions
The absence of GST charges is indicative of a person simply selling his labour rather than carrying on a business. This was seemingly ignored by the Arbitrator which involved an error of discretion.[52]
[52] Citing Raulston v Toll Pty Ltd [2011] NSWWCCPD 25; 10 DDCR 156, [27].
In a similar vein, simply relying on a business name and an ABN on a form (whilst at the same time ignoring the absence of the ABN collecting any GST) it is submitted results in excessive weight being given to the mere name and ABN. This was also an error in the exercise of the Arbitrator’s discretion.
For these reasons, the appellant submits that the Arbitrator’s findings with respect to the deemed employment issue are affected by the erroneous use of a discretion and hence an error for the purposes of s 352(5) of the 1998 Act.
Respondent’s submissions
The Arbitrator did in fact consider the lack of GST charges in the invoice but concluded there were a number of possible explanations for the failure to include GST and therefore the omission was not of assistance to her.[53]
[53] Citing Reasons, [93].
The appellant’s submissions make no reference to the observation of the Arbitrator that the deceased informed Mr Anderson that he was working as a sole trader and looking for contacts in the Sutherland Shire and to other factors which weighed against the deceased being a worker employed by the respondent.
Clearly the use of a business name and ABN were relevant factors to weigh when the Arbitrator considered the issue of whether the deceased was a “deemed worker” carrying on work incidental to a trade or business regularly carried out by him. They were not the only indicia and it cannot be said that the Arbitrator gave “excessive weight” to those indicia.
The respondent submits that even if the Arbitrator gave extra weight to the business name and ABN indicia (which the respondent does not accept), the Arbitrator would be entitled to legitimately do so when considering the issue of “deemed worker” and that had she done so it would not have resulted in an erroneous exercise of her discretion.
Consideration
On a fair reading of the Arbitrator’s decision as a whole, I do not accept that she failed to deal with the GST issue, when determining whether the deceased was a deemed worker. The Arbitrator stated that the factors which weighed against the deceased being a worker employed by the respondent also led to the conclusion that he was not a deemed worker.[54] In dealing with whether the deceased was a worker the Arbitrator considered several indicia of employment, including the absence of GST on the deceased’s billings.
[54] Reasons, [102].
The Arbitrator made specific reference to the deceased’s invoices noting that the reference to GST at the foot of the invoice form was crossed out.[55] Further, the Arbitrator found that there was no evidence to explain why an amount for GST was not included in the invoices.[56] As I have said, the Arbitrator speculated that one possibility may have been that the deceased considered his business turnover would not be sufficient to satisfy the threshold required to collect GST. Further, the Arbitrator concluded that because there were a number of possible explanations for the failure to include GST, the omission of claims for GST did not assist in the determination of the deceased’s status. In other words, the Arbitrator clearly had regard to GST as a relevant factor. The appellant’s submission that the Arbitrator “ignored” the GST issue is simply wrong.
[55] Reasons, [53].
[56] Reasons, [93].
I accept that the “indicia of employment” are relevant to the question of whether the deceased was a worker under s 4 of the 1998 Act as distinct from the question of whether the deceased was a deemed worker pursuant to cl 2 of Sch 1. However, there will be aspects of the evidence dealing with the worker issue that are relevant to a determination of whether the deceased was engaged in work that was incidental to a trade or business regularly carried on by the deceased in his own name or a business name. The appellant’s complaint is not whether the Arbitrator applied the wrong test but whether she failed to consider GST in her analysis of the deemed worker issue and the weight she attached to the ABN evidence in that analysis. Therefore, in dealing with this ground, I have restricted my reasons to the particular challenges to the Arbitrator determination on those matters.
It is also wrong to assert that the Arbitrator gave excessive weight to the use of a business name and ABN. No reasoned analysis was provided to support that submission and I reject it. There can be no doubt that the Arbitrator regarded the use of the business name and ABN as important evidence favouring the conclusion that the deceased was carrying on business as an independent contractor. However, for the reasons dealt with above, specifically in dealing with ground two, the Arbitrator analysed a number of factors in reaching her ultimate conclusion. There is no evidence to support the submission that she placed excessive weight on any factor, including the evidence regarding the use of a business name and ABN.
As the respondent submits, the use of the business name and ABN were relevant factors to be weighed by the Arbitrator when considering whether the deceased was a deemed worker carrying on work incidental to a trade or business regularly carried on by him.
It follows that the submission that the Arbitrator erred in the exercise of her discretion is not made out. Ground nine fails.
ORDER
The Arbitrator’s determination of 5 June 2018 is confirmed.
Judge Keating
President
13 September 2018
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