Djukic v Tactical Cargo Solutions Pty Ltd (under external administration) - [2010] NSWWCCPD 123

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		Djukic v Tactical Cargo Solutions Pty Ltd (under external administration) [2010] NSWWCCPD 123
APPELLANT:		Slobodan Djukic
RESPONDENT:		Tactical Cargo Solutions Pty Ltd (under external administration)
INSURER:		GIO General Limited
FILE NUMBER:		A1-3303/10
ARBITRATOR:	Ms F Robinson
DATE OF ARBITRATOR’S DECISION:		16 August 2010
DATE OF APPEAL DECISION:		22 November 2010
SUBJECT MATTER OF DECISION:		Section 4 of the Workplace Injury Management and Workers Compensation Act 1998, definition of worker; Schedule 1 clause 2 of the Workplace Injury Management and Workers Compensation Act 1998, deemed worker
PRESIDENTIAL MEMBER:		Deputy President Kevin O’Grady
HEARING:		On the papers
REPRESENTATION:		Appellant:	M D Di Re Solicitor & Attorney
Respondent:		Hicksons
ORDERS MADE ON APPEAL:		The decision of the Arbitrator dated 16 August 2010 is confirmed.

BACKGROUND TO THE APPEAL

Mr Slobodan Djukic, who is 51 years of age, is an electrician by trade. He completed his trade education in the former Yugoslavia and was there employed as an electrical mechanic with a state owned company. Following the civil unrest in that region Mr Djukic relocated to Subotica, Serbia where he remained until 1996. Mr Djukic arrived in this country in February 1996 as a refugee in the company of his wife and daughter.
In 1997 Mr Djukic’s qualifications were, following completion by him of a refresher course at Granville College TAFE, recognised by the authorities in this State. He obtained an electrician’s license in 1998 and commenced work with an organisation known as Stowe Australia.
In May 2000, whilst employed by Stowe Australia, Mr Djukic established a business known as Hoxton Communications, which business provided the services of an electrician. He worked in that business after his normal hours of work and on weekends as a sole trader.
The position held by Mr Djukic with Stowe Australia was made redundant in March 2003 following which he continued conducting his own business as an electrician.
In February 2007 Mr Djukic entered into an arrangement with Tactical Cargo Solutions Pty Limited (the respondent) concerning the performance of electrical work at the respondent’s premises at Botany. The detail of that arrangement and its duration is addressed hereunder. In February 2008 agreement was reached between Mr Djukic and the respondent concerning the performance of electrical work at the respondent’s new premises at Milperra. The terms of that agreement are addressed hereunder. That work commenced on 25 February 2008 and Mr Djukic, from time to time, forwarded an invoice to the respondent in respect of work done.
On Saturday 10 March 2008 Mr Djukic was injured whilst working at the respondent’s premises when he fell from a ladder. He was transported to hospital and has since undergone medical treatment for his injuries including surgery to his cervical spine.
In August 2008 Mr Djukic made a claim against the respondent for workers compensation benefits. That claim was declined on behalf of the respondent by its insurer. A notice of that decision was given to Mr Djukic in correspondence dated 3 September 2008 being a notice under s 74 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act). That notice identified the “principle matter in dispute” as being a denial by the respondent that Mr Djukic was at relevant times a “worker” or a “deemed worker” within the meaning of the Workers Compensation Act 1987 (the 1987 Act) and the 1998 Act.
A dispute arose concerning Mr Djukic’s entitlement to compensation benefits and an Application to Resolve a Dispute was registered with the Commission on 27 April 2010. That application came before an Arbitrator of the Commission on 16 June 2010 at which time each party was represented by counsel. It was agreed by the parties, and accepted by the Arbitrator, that the hearing of the dispute was to be restricted to a determination as to whether Mr Djukic was, at the relevant time, a worker in the employ of the respondent or, in the alternative, was a deemed worker within the meaning of clause 2 of Schedule 1 to the 1998 Act. The matter proceeded to hearing on that basis and the Arbitrator reserved her determination. A Certificate of Determination issued on 16 August 2010 which was accompanied by a Statement of Reasons. The Arbitrator rejected Mr Djukic’s submissions that he was at the relevant time either a worker or a deemed worker within the meaning of the legislation.

THE DECISION UNDER REVIEW

The Certificate of Determination, dated 16 August 2010 records the Arbitrator’s orders as follows:
“The determination of the Commission is:
1. Award for the Respondent in respect of claims by the Applicant for payment of workers compensation benefits pursuant to the Workers Compensation Act 1987.
2. No order as to costs.”

ON THE PAPERS REVIEW

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.”

It is submitted on behalf of the respondent that the appeal may be conducted on the papers without there being any conference or formal hearing. The appellant has submitted that in the present circumstances it is appropriate that an oral hearing be conducted. I reject that submission. There is before the Commission all that documentary evidence which was produced before the Arbitrator and I note that no oral evidence was given at the hearing. A transcript (T) of those proceedings has been produced and made available to the parties. That transcript records those submissions put on behalf of each party at the hearing. In the circumstances, and having regard to practice directions numbers 1 and 6, 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.

LEAVE

Before leave may be granted to proceed with this appeal the appellant must satisfy the requirements of s 352(2) which provides:
“The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:
(a) at least $5,000 (or such other amount as may be prescribed by the regulations), and
(b) at least 20% of the amount awarded in the decision appealed against.”
There is no dispute between the parties that the monetary threshold specified in s 352(2)(a) is met. Whilst no amount of compensation has been awarded in the decision against which the appeal is brought the provisions s 352(2)(b) have no application (Mawson v Fletcher International Exports Pty Ltd [2002] NSWWCCPD 5).
There is no dispute concerning the threshold requirements as to time specified by 352(4). In the circumstances, and having regard to the arguments raised on appeal, I conclude that it is appropriate leave be granted to proceed with the appeal and I so order.

THE ARBITRAL PROCEEDINGS

As noted above (at [8]) the hearing before the Arbitrator concerned the determination of preliminary issues, those being whether Mr Djukic was either a worker or a deemed worker within the meaning of the legislation. In the circumstances it is proposed to summarise that evidence which was before the Arbitrator relevant to those questions alone.
The documentary evidence before the Arbitrator was summarised by her at [7] of Reasons.

Mr Djukic’s evidence

Mr Djukic relied upon a statement made by him on 16 November 2009. That statement exceeds 11 pages in length and contains considerable detail concerning his background, personal and work history, detail concerning his dealings with the respondent, the circumstances of the subject injury and his subsequent treatment. The following is a summary of those matters relevant to the question as to whether, at the relevant time, Mr Djukic was a worker or, in the alternative, a deemed worker in the employ of the respondent:
(a)   Mr Djukic arrived in this country from the former Yugoslavia on 8 February 1996. He had obtained his qualifications as an Electrical Mechanic in his native country. He studied English following his arrival in Australia and attended a refresher course at Granville College of TAFE in his trade for the purpose of obtaining local recognition of his qualifications.
(b)   In 1997 Mr Djukic’s qualifications were recognised and he obtained an Electrician’s Licence in 1998. He then commenced employment with Stowe Australia, as a licenced electrician.
(c)   In May 2000, whilst still employed by Stowe Australia, Mr Djukic commenced conduct of a business which was known as Hoxton Communications. He worked as an electrician in that business after his normal working hours and on weekends as a sole trader.
(d)   Mr Djukic ceased employment with Stowe Australia in March 2003 at which time his position was made redundant. He continued to conduct his business as an electrician, trading as Hoxton Communications. In the course of conducting that business Mr Djukic, on occasions, engaged Mr Milan Petrovich, a relative by marriage, to assist with heavier jobs or in circumstances where there were time constraints.
(e)   In January 2007 Mr Djukic’s business was recommended to a supervisor employed by the respondent by a Mr Mitrovich, an employee of the respondent who was acquainted with Mr Petrovich and Mr Djukic. A meeting was arranged for 1 February 2007 between Mr Djukic and two representatives of the respondent being Mr Chris Brooks, the proprieter of the company, and Mr Mark Lowrey, the respondent’s Group General Manager. This meeting took place at the respondent’s Botany premises. Mr Djukic attended that meeting with Mr Petrovich. The premises were inspected by all present and it was explained that the respondent was relocating from Botany to new premises at Milperra. The work required of Mr Djukic was relocation of lighting, switch boards, cameras and cables fixed at the Botany premises to the new warehouse at Milperra. The task included the need to disconnect the existing cables, appliances, lights and cameras following which they were to be installed, as directed, at the new site.
(f)    Mr Brooks invited Mr Djukic to indicate an hourly rate for the work. Mr Djukic requested time to consider that proposal. Later that afternoon Mr Djukic telephoned Mr Brooks and offered to do the work for $50 per hour plus GST. Mr Djukic’s statement includes the following – “It was understood that it would be $50 per person plus GST. Chris Brooks accepted this offer”.
(g)   Mr Djukic started the dismantling work at the Botany site on 9 February 2007 it was a big job and there were time constraints and included some heavy work which led Mr Djukic, as usual, to engage Mr Petrovich to assist. The work was usually performed for eight hours per day, three or four days per week, as required.
(h)   Work was carried out both at Botany and Milperra between February 2007 and February 2008. Mr Petrovich accompanied Mr Djukic when the nature of the work required his assistance. During that time Mr Djukic issued 28 invoices for payment concerning work performed and, on occasions, materials supplied to the respondent for payment. Those invoices are fully described in Mr Djukic’s statement and it appears that they related to 53 days during that period on which work was performed either by Mr Djukic alone or in company with Mr Petrovich. Each of those invoices included a charge in respect of GST for labour costs. Materials were charged to the respondent inclusive of GST.
(i)     On 20 February 2008 a meeting took place between Mr Djukic, Mr Brooks and Mr Lowrey at the Milperra site. This meeting had been arranged by Mr Brooks for the purpose of showing Mr Djukic “a new job which he required me to do”. Mr Djukic was informed that there had been a robbery at the Milperra site and that the respondent wanted security equipment installed, being lights and cameras, to prevent further robberies. Mr Djukic indicated that he would “be organising all of the material necessary, mainly the lights, cables et cetera”. Mr Lawrey stated to Mr Djukic that, before materials were purchased Mr Djukic would require approval from him. Mr Djukic was to pay for the material after obtaining permission and seek a refund from the respondent.
(j)     The job was different to earlier work in that it was “lighter and less cumbersome” and Mr Djukic could manage to perform the work without the assistance of Mr Petrovich. It is stated that “it was implied in our conversation that they would still continue to pay me $50 plus GST per hour”. Mr Djukic commenced the work on 25 February 2008 on which day he worked eight hours. Thereafter, until 10 March 2008, being the date of the subject injury, he worked on seven days, but on each such day he performed five hours work or less. On 6 March 2008 Mr Djukic did not attend the premises because he had “another job”. On the day of the injury he commenced work at 9:30am and suffered his injury at 1:00pm.
(k)   Mr Djukic, whilst working at the Milperra site was often joined by Mr Brooks and Mr Lowrey “to ensure that I was doing what they wanted me to do”. During that time Mr Djukic was occasionally asked to do additional work concerning security installation which had not previously been discussed.
(l)     At approximately 1:00pm on 10 March 2008 Mr Djukic was fixing a cable between a switchboard and floodlights which he had earlier installed. This work was performed whilst standing on his own ladder. As he performed this task he lost his balance and fell to the cement floor striking his head and briefly lost consciousness. Mr Djukic’s statement goes on to describe his subsequent treatment. He has not returned to work since the injury.
Mr Djukic relied upon a number of documents relating to his claim for compensation against the respondent, including a copy of his claim form dated 6 August 2008. Attached to his application were a number of letters received from the respondent’s insurer including one dated 3 September 2008 which gave notice of the insurer’s decision to decline the claim. That notice was given pursuant to s 74 of the 1998 Act. The correspondence particularises a denial that Mr Djukic was either a worker or a deemed worker of the respondent. It is asserted in that correspondence that – “we believe the contract was one for supplying (sic) of electrical services rather than a contract for (sic) service”. It is further stated that “it is apparent you were undertaking work incidental to a trade or business regularly carried on by you under a business name”. That notice also included a notation that records indicated that Mr Djukic “employed another worker” which fact would exclude Mr Djukic from being a deemed worker as provided by the legislation.
Copies of Mr Djukic’s tax returns between the years ending 30 June 2003 and 30 June 2009 inclusive are in evidence before the Commission. The income and deductions noted in those returns relate to the earnings of Mr Djukic in his electronic/electrical installation and communications business identified as Hoxton Communications. The only record in those tax returns of income other than that generated by the business are amounts in the years ending 30 June 2008 and 30 June 2009 received by way of income protection insurance. The content of those returns, where relevant, is more fully addressed hereunder.
A large volume of medical evidence being reports from treating doctors and hospital notes are in evidence. Those documents are not directly relevant to the issues which were, by consent, dealt with at arbitration.

Respondent’s evidence

The respondent relied upon a report compiled by M and A Investigations being a factual investigation concerning the business dealings between Mr Djukic and the respondent. Attached to that report was a copy of a Business Names Extract from the records of ASIC relating to the business name “Hoxton Communications”. That business name was first registered on 12 May 2000. The nature of the business is described in that extract as being “telecommunications installation and service, electrical installation and service”. The registration of the business was noted to be current as at 26 August 2008. The principle place of business was recorded as being 8/53-59 Windsor Road Merrylands NSW 2106. The person carrying on business was recorded as being Mr Djukic.
Attached to the report of M and A Investigations were a number of statements by employees of the respondent including a statement dated 28 August 2008 made by Mr Mark Lowrey, Group General Manager of the respondent. Mr Lowrey described the nature of the respondent’s business as being customs brokers and freight forwarders. Mr Lowrey stated that the company also conducted a trucking business. The respondent, at the time of the statement, employed approximately 100 individuals. It is stated that the respondent does not “have any sub contractors”. The following matters were stated by Mr Lowrey concerning the issues which were dealt with by the Arbitrator at the hearing:
(a)   Mr Djukic had been recommended to the respondent by one of its employees. Mr Djukic had done work for the respondent at the Botany site before relocation to Milperra. It is stated that Mr Djukic “has a company known as Hoxton Communications”. When Mr Djukic worked at the respondent’s premises “he always had one assistant working with him who we understand was the uncle of the person who referred him to us”. Mr Lowry did not engage the services of Mr Djukic, that had been done by the Managing Director Mr Chris Brooks. There is no written agreement with Mr Djukic. Whenever he was needed the respondent would contact him and he would attend the site to do the work following which he would present his invoice for which he would be paid. Once work was performed by Mr Djukic it was “signed off” by him and certification was given that it had been done by a qualified electrician. There is no set time for Mr Djukic to start or complete a job and he programs himself and advises the respondent as to when he can start and complete the job. Work with Mr Djukic is not ongoing, he is only called in whenever his services are needed. On occasions Mr Djukic would provide materials for the work to be done. Mr Djukic had his own van and equipment. Mr Djukic had in the past brought along an assistant to work with him. The directions given to Mr Djukic by the respondent concern the scope of the work required. Once that was understood Mr Djukic gave a time frame in which the work was to be completed and was performed by him without supervision. Mr Djukic “works totally autonomous (sic) and we do not control any aspects of his work”. GST is charged in all Mr Djukic’s invoices and his ABN appears on each of his invoices.
(b)   A statement by Mr Patrick Brooks dated 28 August 2008 is attached to the investigation report. Mr Brooks is employed by the respondent as a wash bay supervisor. Mr Brooks is acquainted with Mr Djukic and is known to him as an electrician who “has his own company know as Hoxton Communications”. Mr Djukic had performed work at the Milperra premises. Occasionally Mr Djukic came on site with an off-sider. He had a van which occasionally he would bring into the yard. Mr Djukic would report at the front desk on arrival and the person who had summonsed him was contacted and Mr Djukic was shown to the relevant area where he was to work. Mr Djukic “always worked on his own and we never supervised his work and we would check on him from time to time to ensure he was doing the job”.
(c)   A statement by Mr Rodney Thorne dated 28 August 2008 is attached to the investigation report. Mr Thorne states that he is the Transport Manager of the respondent. Mr Thorne is acquainted with Mr Djukic who is known to him as Bob. Mr Djukic attended the premises, usually with an off-sider, to carry out electrical contract work. The balance of Mr Thorne’s statement addresses circumstances relating to Mr Djukic’s injury. He states that following the injury he, assuming that the ladder being used at the time of the injury belonged to Mr Djukic, placed the ladder in his van.
(d)   A number of tax invoice/statements were attached to the investigation report. Those invoices were addressed to the respondent by Hoxton Communications and recorded an ABN (of Supplier) as being 11 103 851 060. Those invoices, where relevant, are addressed more fully below.
(e)   An extract from the records of the Australian Business Register concerning ABN 11 103 851 060 was attached to the report. That named Mr Djukic as “entity name” and Hoxton Communications as “trading name”.

Mr Djukic’s submissions

Counsel appearing on behalf of Mr Djukic suggested in argument that the only evidence as to the terms of Mr Djukic’s engagement in February 2008 is to be found in Mr Djukic’s statement. The point was made in argument that there was no evidence concerning the circumstances of his engagement on that occasion from Mr Chris Brooks, the representative of the respondent with whom, Mr Djukic states, the engagement was arranged. Counsel submitted that an appropriate inference should be drawn having regard to the absence of evidence from Mr Chris Brooks.
It was accepted in the course of submissions that the work done by Mr Djukic in the earlier period of engagement by the respondent involved performance of the work with the assistance of Mr Petrovic. It was put that the evidence established that the involvement of Mr Petrovic finished “towards the end of 2007”. It is also put that the arrangement between the respondent and Mr Djukic entered into in February 2008 was a separate and distinct contract to that which regulated the commercial arrangement earlier pursued by Mr Djukic. That new contract was said to have come into being on 20 February 2008. It was noted in the course of submissions that Mr Djukic was paid an hourly rate; he was specifically directed “what had to be done”; it concerned a specific job concerning installation of lights and security cameras; approval was necessary before Mr Djukic obtained any materials which he would purchase and he would later be reimbursed in respect of his expenditure and Mr Djukic performed the work alone. Mr Djukic then worked “on a consistent basis of five to eight hours a day for which he rendered invoices and got paid, and continued same until he had his fall on 10 March 2008”.
It was argued, having regard to the matters summarised concerning the terms of engagement, that Mr Djukic was a worker “in the ordinary sense”. It was put it was a “personal contract”. Reference was made to “a control test”. It was put that the contract “has all the characteristics of being a contract for personal services or of personal service”. It was put that the method of payment and absence of taxation deductions are not, alone, determinative of the question as to whether the contract was one of service or otherwise.
Counsel proceeded to argue, in the alternative, that should a conclusion be reached that Mr Djukic was not a worker within the meaning of the legislation, he was a deemed worker within the meaning of Sch 1 to the 1998 Act. Attention was drawn to the amendment of that Schedule and short reference was made to the circumstances giving rise to that amendment including the existence of a report to Parliament by Justice Macken. Counsel’s argument, having regard to the Schedule in its amended form, was that the Commission may disregard that which appears in cl 2(1)(a) and proceed to consider the facts in the light of that which appears following the repealed sub-cl (b) being the words “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.” In support of that argument counsel relied upon the decision of Arbitrator McManamey in Uzabeaga v Dennis Larson Pty Ltd t/as Midwest Transport Services (WCC6160-2006) (Uzabeaga). Counsel also made reference to a decision of Arbitrator Rimmer in Djuric v Kia Ceilings Pty Ltd (WCC4391-2009) (Kia). It was noted by counsel that the reasoning in Kia concerning the proper construction of the Schedule in its amended form “contrasts” with the reasoning as found in Uzabeaga. It was argued that the reasoning in Uzabeaga is to be preferred. Counsel argued that the Schedule in its amended form made grammatical sense. The thrust of submissions was that the Schedule should be construed literally. If that be done Mr Djukic, a contractor who did not sublet the contract, nor did he employ any worker, should thus be taken to be a worker employed by the respondent.

Respondent’s submissions

Counsel appearing for the respondent submitted that, having regard to Mr Djukic’s statement which is in evidence, it is established that between the date of his redundancy in 2003 up until the date of the subject injury Mr Djukic was “conducting a trade regularly carried out by him under a business name”.
Counsel drew attention in the course of submissions to the contents of Mr Djukic’s taxation return in respect of the financial year ending 30 June 2008. It was put that “nothing in that tax return is consistent with the proposition that the applicant worked any part of that financial year as an employee”. It was put that the contents of the tax return were “entirely consistent” with the evidence of Mr Djukic being that he was operating his own business. Counsel also argued that the records of ASIC are “consistent with [Mr Djukic] carrying out (sic) a business as a sole trader as he described in his statement and using a business name”. Attention was drawn by counsel to the invoices which were in evidence, and it was put that those invoices were “completely consistent with a person carrying on his own business”.
Counsel drew attention to the evidence in Mr Djukic’s case that on Thursday 6 March 2008 he worked at “another job” following which he returned to work at the respondent’s Milperra premises. It was put that such conduct “is entirely consistent with an independent contractor going away to work somewhere else and then when he decides to do so, returns back to the respondent’s premises”. It was further put that there was no “real evidence” that the respondent exercised any relevant control over how Mr Djukic did the work. It was argued that the arrangement was that Mr Djukic was engaged to do the work, he was left to do it in his own time using his own equipment and that he should be seen as being an independent contractor.
It was further argued that the respondent supplied nothing for the work performed by Mr Djukic. The respondent did not supply a vehicle nor did it supply tools nor provide an assistant. It was argued that there was no substantial difference between the manner of performance of work from February 2008 as compared to the earlier performance of work for the respondent.
Counsel proceeded to put submissions concerning the proper construction of cl 2 of Sch 1 to the 1998 Act. Counsel indicated that the amendments had the effect of removing those provisions concerning outworkers from cl 2 and further that the amendment had created a new clause 1A. It is in that latter clause that the question of outworkers is addressed by Parliament. It was put that the word “or” which appears “after the comma at the end of 2(1)(a) is superfluous.” It was put that such a conclusion may be seen in the Commission’s decision in Kia. Reliance was placed upon that decision, in particular that which appeared at [49] of that decision where it was stated by Arbitrator Rimmer:
“the reading speech does not support the conclusion that the amendments were intended to significantly change the scope of the individuals being covered by the provisions of Sch 2 [sic, 1]”.
It was put that Mr Djukic’s argument, if accepted, “would mean that any sole trader in New South Wales carrying on their own business is deemed to be a worker for the purposes of the workers compensation legislation as long as they didn’t employ someone when they were performing the relevant contract work in question”. Having regard to the significance of such a construction, described in submissions as “an enormous step which required coverage for hundreds of thousands of sole traders”, such cannot have been the intention of Parliament.

Submissions in reply

Attention was drawn by counsel to the form of invoices which post-dated entry of, what was described as, the “new contract” after January 2008. One such invoice included a charge in respect of material provided. That amount specified included GST. It was submitted that the manner in which the invoice was computed supported the argument that the contract was one “solely for the supply of service”.
Counsel proceeded to draw attention to the form of the Schedule to the Act following the relevant amendment as certified by the Parliamentary Counsel. It was argued that the approach adopted by the Commission in Uzabeaga is to be preferred, that is a literal application of the words appearing in the Schedule. If that is done, it was put, the suggested inconsistency raised in the decision of Kia “does not even arise”.

THE ARBITRATOR’S REASONS

The question as to whether, on the evidence, Mr Djukic was at relevant times a worker was addressed at [23] and [24] of Reasons. Reference was made by the Arbitrator to relevant authority following which the conclusion was expressed that “the work undertaken by [Mr Djukic] did not serve the employer [sic] in his, the employer’s own business. The evidence of [Mr Djukic], read in conjunction with the evidence of the respondent, does not support the claim the applicant was a worker as defined…”. The Arbitrator found that Mr Djukic was “clearly a contractor carrying on a trade or business of his own”.
The Arbitrator proceeded to consider those arguments raised concerning the proper construction of cl 2 of Sch 1 to the 1998 Act and the question as to whether, on the facts, Mr Djukic should be found to be a deemed worker of the respondent.
The wordage and form of cl 2 of Sch 1 both before and after the amendment, which became operative on 1 January 2006, was noted in the course of Reasons. Reference was then made by the Arbitrator to the reasoning expressed by Arbitrator Rimmer in the matter of Kia. The conflict between that line of reasoning with that as expressed by Arbitrator McManamey in Uzabeaga and an earlier decision of Hopley v Vogue Air Conditioning (WCC3635-2008) was noted, as was the fact that appeals had been lodged in Kia and Uzabeaga. The Arbitrator noted that the appeal against the decision in Uzabeaga had been withdrawn and that the appeal in Kia did not raise any challenge concerning the construction of the relevant clause which gave rise to the conflict in those cases.
Consideration was given to the content of a speech given by the responsible Minister before Parliament when the subject amendment was being proposed. An extract of that speech is quoted by the Arbitrator at [30] where reference is made to the report to Parliament of the Hon Dr James Macken which had been compiled following his role as facilitator of an advisory panel concerning the subject matter “Definition of a Worker” (the Macken report).
The Arbitrator, at [34] of Reasons, rejected the line of reasoning as expressed in Uzabeaga and expressed agreement with the reasoning as found in the decision of Kia. The Arbitrator proceeded to state her acceptance that Mr Djukic neither sublet the contract nor employed any worker, however found he was injured whilst performing work incidental to a trade or business regularly carried out by him in his own name. Having regard to the preferred construction of the relevant clause, Mr Djukic was found not to be a deemed worker of the respondent. The Arbitrator proceeded to make the award and order as noted at [9] above.

SUBMISSIONS, DISCUSSION AND FINDINGS

As earlier summarised, Mr Djukic argued, in the alternative, that he was, on the facts, a worker of the respondent or, upon application of the provisions of cl 2 of Sch 1 to the 1998 Act, a deemed worker of the respondent. It was faintly argued that the work being carried out by Mr Djukic at the relevant time was “not work incidental to his trade or business”. That submission is noted by the Arbitrator at [17] of Reasons. I make the observation that, as recorded, it was not an argument clearly enunciated by counsel. It is clear that the Arbitrator did not require the respondent to address on that particular issue. That was a course with which I respectfully agree and, as the Arbitrator has plainly found, the work performed at all times falls within the description of work ordinarily performed by an electrical tradesman. It is proposed to deal with the two remaining issues in turn.

Was Mr Djukic a worker?

Mr Djukic had dealings with the respondent between 9 February 2007 and 10 March 2008. It is Mr Djukic’s case that the contractual relations between himself and the respondent altered in the month of February 2008. It seems to be accepted by Mr Djukic, at [2] of submissions, that work performed by him prior to 15 February 2008 had been performed as an independent contractor. Such a concession is reasonable and proper given all the facts and circumstances. Mr Djukic had been introduced to the respondent by an intermediary who was aware of his trade activities. The work was performed by Mr Djukic and his offsider, Mr Petrovic. Mr Djukic utilised his own equipment, provided his own transport and attended the premises on a variety of dates on each of which he worked variable hours. The work was charged out at an hourly rate and charges were made in respect of materials provided. The work performed concerned the removal of electrical fittings from the respondent’s former premises and relocation of those fixtures at Milperra. The work performed was specialist electrical installation and was plainly work performed in the course of conduct by Mr Djukic of his trade or business. Whilst it is correct that the work performed by Mr Djukic was prescribed by the respondent it cannot be said that the respondent in any manner exercised control over him with respect to the performance of the work. There is no evidence, in my opinion, that establishes that the respondent had a right to control Mr Djukic which would lead to a conclusion that the relationship was then one of master and servant. Having regard to the undisputed facts I conclude that relevant indicia which require consideration when determining the nature of the relationship between Mr Djukic and the respondent, including the question of “control”, leads inevitably to the conclusion that, certainly up to 15 February 2008, Mr Djukic was an independent contractor performing work for the respondent.
It is Mr Djukic’s case that on 20 February 2008 a new contract came into being as between himself and the respondent which concerned installation of lights and security cameras at the Milperra premises. That argument was accepted by the Arbitrator (at Reasons [15]). The respondent has not, in submissions on this appeal, addressed the question as to whether a new or separate agreement came into being in February 2008.
The evidence reveals that there was at no time any written document recording the terms of agreement reached between the parties concerning the work performed by Mr Djukic. It is Mr Djukic’s evidence that, following presentation of his invoice on 15 February 2008 he was contacted by Mr Chris Brooks who requested a meeting for the purpose of discussing “a new job”. That meeting was arranged for 20 February 2008 on which occasion it was agreed that Mr Djukic would carry out the work concerned being installation of lights, cables and cameras. It was agreed, as stated by Mr Djukic, that he would “pay for the material upfront, however, before buying them, I would have to seek approval from [the respondent]”. The agreement was that the respondent “would still continue to pay me $50 + GST per hour”. There is no evidence before the Commission of Mr Chris Brooks. None of the statements relied upon by the respondent cast any doubt upon those matters which I have summarised concerning the discussions in February as described by Mr Djukic.
I am of the opinion that the Arbitrator’s conclusion that the arrangement entered into between Mr Djukic and the respondent in February 2008 was a “stand-alone” arrangement was correct. It is clear that, whilst there had been a course of dealings between Mr Djukic and the respondent over the previous 12 months concerning conduct of electrical work, the agreement reached in February concerning the installation of the security equipment was plainly a separate and discrete contract entered into by the parties. The question remains as to whether such an arrangement was a contract of service or a contract for services.
Matters relevant to a consideration as to the existence or otherwise of a relationship of master and servant were considered by the High Court in Stevens v Brodribb Sawmilling Co. Pty Ltd [1986] HCA 1; 160 CLR 16 (Stevens). That case concerned the characterisation of the relationships between an incorporated timber mill and individuals who were engaged by it to move felled trees to a loading zone and to transport them to the mill. It was stated by Wilson and Dawson JJ when that question was considered (at 35):
“The classic test for determining whether the relationship of master and servant exists has been one of control, the answer depending upon whether the engagement subjects the person engaged to the command of the person engaging him, not only as to what he shall do in the course of his employment but as to how he shall do it; Performing Right Society Ltd v Mitchell and Booker (Palais de Danse) Ltd. The modern approach is, however, to have regard to a variety of criteria. This approach is not without its difficulties because not all of the accepted criteria provide a relevant test in all circumstances and none is conclusive. Moreover, the relationship itself remains largely undefined as a legal concept except in terms of the various criteria, the relevance of which may vary according to the circumstances.”
Mr Djukic, in submissions provided in support of this appeal, at [7], enumerates seven “criteria” which, it is put, suggest that the contract between him and the respondent was one of service. Mr Djukic appears to have adopted a number of those criteria identified by Wilson J and Dawson J in the course of their joint reasons in Stevens (at 36). It is put that such criteria are to be found in the relationship between himself and the respondent, and that the conclusion should be that there was a relationship of master and servant. The criteria nominated are:
“a.The right to have a particular person do the work (the arrangement in this case was for the Appellant SOLELY to carry out the installation of the security cameras and lighting);
b.The right to suspend or dismiss (the Appellant’s services could be dispensed with at any time by the Respondent);
c.The right to dictate the place of work (this work had to be done at the Respondent’s premises);
d.Whether the worker provides materials for installation as part of an overall quote for the work (in this case, all purchases had to be approved by the Respondent and the Appellant was merely reimbursed for them);
e.The method of remuneration (in this case, the Appellant was paid on an hourly rate basis no (sic) inconsistent with many modern casual employment practices, rather than on an overall quotation basis).”
Mr Djukic, in addition to his reliance upon the criteria enumerated in the course of submissions, also relies upon the “control test”. Reliance is placed upon the decision of Ipp JA in Boylan Nominees Pty Ltd t/as Quirks Refrigeration v Sweeney [2005] NSWCA 8. It is put by Mr Djukic that the Arbitrator has failed to consider either the “control test” or those indicia which it has enumerated in the course of submissions. That submission by Mr Djukic must be rejected. I accept the respondent’s submission that it is clear that the Arbitrator has had regard to various indicia of the relationship between Mr Djukic and the respondent, in particular at [10] of Reasons. It is also clear that consideration had been given by the Arbitrator to the question of “control”. It appears that the matters considered by the Arbitrator were taken from Mr Djukic’s own evidence and it was stated by her in summary (at [10]):
“Details of that agreement and of the work performed are contained in the statement. I note in particular Mr. Djukic:
·        worked alone;
·        provided his own tools and equipment
·        was paid an agreed hourly rate
·        submitted invoices (including GST) for payment.
·        purchased materials but required pre-approval for any expenditure;
·        commenced the job on 25 February 2008 and attended on 9 days up to and
including 10 March 2008
·        with two exceptions worked 5 hours per day
·        on 6 March 2008 worked “another job”
·        there is no evidence he had assistance from any employees/workers on site
·        there is no evidence he worked under the direction and control of the
Respondent”.

Mr Djukic is correct in his assertion that the respondent directed him “where he was to place the cameras and lighting” and “had to give pre-approval regarding the purchase of materials”. It is clear that the ambit and detail of the work required of Mr Djukic needed to be defined by the respondent. The matters concerning pre-approval of the purchase of materials, considered together with the description of the work, do not constitute “control” of Mr Djukic by the respondent in any relevant sense. The course of dealings between the parties up until February 2008 had concerned performance by Mr Djukic of contract electrical work. Whilst it is true that the work to be performed following the separate agreement reached in that month was of a relatively light nature and was able to be performed by Mr Djukic without the assistance of Mr Petrovic, or any other helper, there is, on balance, nothing in the evidence concerning that new arrangement which suggests that there had been a change in the relationship from one for services to one of service.
Mr Djukic asserts that the Arbitrator has “misapplied the test that she did choose to apply”. That argument appears to be founded upon the Arbitrator’s conclusion as stated at [24] of Reasons that Mr Djukic did not “serve the employer in his, the employer’s own business”. I accept the respondent’s argument that the Arbitrator’s use of the word “serve” is likely a reference to its use as adopted by McColl JA in Australian Air Express Pty Limited v Langford [2005] NSWCA 96 (Langford) to which she had earlier referred. As noted by the respondent, McColl JA was there making mention of the term “serves” in the context of the relationship of master and servant. Mr Djukic’s submission that there has been a misapplication by the Arbitrator of the relevant test must be rejected.
Mr Djukic submits that the Arbitrator failed to give any or any sufficient reasons for her decision concerning the question of “worker”. It is true that those reasons given by the Arbitrator are briefly stated (at [23] and [24]). Notwithstanding the brevity of those reasons it is to be noted that the Arbitrator had earlier thoroughly summarised the submissions put on behalf of each party and it is plain that the Arbitrator’s view was that the evidence overwhelmingly supported a conclusion that Mr Djukic was an independent contractor at the relevant time. That is a conclusion with which I agree and it is plain that the Arbitrator had considered not only the control test but “all the necessary criteria” (at [24]) in reaching her conclusion. The tax returns of Mr Djukic, referred to by the Arbitrator in her summary of the evidence, represent compelling evidence that, certainly up until February 2008, he conducted a business being that of an electrical contractor. In the financial year ending 30 June 2008 Mr Djukic’s gross income received from the respondent, net of GST, was $13,448. That figure is but a fraction of his gross earnings net of GST for the year (shortened by reason of injury) being approximately $55,000. Nothing in that return suggests that Mr Djukic had worked as an employee during the year in question. There is no evidence, as the Arbitrator has found, to suggest that the relationship between Mr Djukic and the respondent was in any relevant sense altered when agreement was reached with respect to the work following the February 2008 meeting. As the Arbitrator has found, it is inevitable that the conclusion is drawn that Mr Djukic remained an independent contractor after that meeting up until the date of his injury. Mr Djukic’s argument concerning the inadequacy of the Arbitrator’s reasons must be rejected.

Was Mr Djukic a deemed worker of the respondent?

The legislative provision relevant to a determination as to whether, on the present facts, Mr Djukic is to be treated as a deemed worker is to be found in cl 2 of Sch 1 to the 1998 Act. That provision was amended following the passage of the Workers Compensation Legislation Amendment (Miscellaneous Provisions) Act 2005. The relevant amendment commenced operation on 1 January 2006. Mr Djukic’s argument, which suggests that he should be “deemed” to be a worker, is founded upon a literal construction of the amended form of cl 2. To enable a clearer understanding of the argument advanced on his behalf it is necessary to contrast the form of that clause both pre and post that amendment.
The form of cl 2 prior to amendment was as follows:

“(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
(b) to perform any work as an outworker,

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.”

The form of clause 2 following amendment is as follows:

“(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

(b) [repealed]
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.”

It may be seen that, prior to the amendment, Mr Djukic would not qualify as a deemed worker given that the work performed by him was incidental to a trade or business regularly carried on by him under his business name Hoxton Contractors. It is Mr Djukic’s argument that, since the amendment, the word “or” which appears at the end of cl 2(1)(a) which remained in place notwithstanding the amendment, has the literal effect of rendering as disjunctive that sub-clause and those words which appear at the end of the clause commencing “is made with” an ending “Contractor”. Mr Djukic argues that, whilst he may not be entitled to rely upon cl 2(1)(a), the evidence establishes that he has made a contract with the respondent and that he has neither sublet the contract nor employed any worker and is thus entitled to be deemed to be a worker employed by the respondent.
In the present matter there has been considerable debate as to what constitutes the true form of cl 2 to Sch 1 following the amendment which took effect on 1 January 2006. The form of the clause as it appears on the New South Wales Government’s legislation website is as appears in [53] above. That form has been certified by Parliamentary Counsel in accordance with the provisions of s 45C of the Interpretation Act 1987 (Interpretation Act). It was noted by Arbitrator Rimmer in the course of her reasons in Kia that the form of the clause addressed by her colleague Arbitrator McManamey did not conform to that form as published and certified. It may be seen that, in the form of the clause as noted and considered by the Commission in Uzabeaga, the word “[repealed]” does not appear. The absence of that bracketed word is a point of difference between that considered by the Arbitrator in Uzabeaga and the form of the clause in its amended form as published.
Mr Djukic in submissions on this appeal suggests that “certification” by Parliamentary Counsel carries no force. That submission must be rejected. Section 45C(5) of the Interpretation Act, which came into force following enactment of the 2006 amending Act provides:
“(5) The Parliamentary Counsel is to compile and maintain a database of legislation published on the NSW legislation website, and may certify the form of that legislation that is correct.”
Among the purposes of the amendments to the Interpretation Act at that time were to provide a statutory basis for the New South Wales Government website and to provide a statutory basis to enable Parliamentary Counsel, rather than the Attorney General, to be responsible for authorising reprints. It is legitimate when considering the purpose of an Act of Parliament to take into account extrinsic material to confirm its meaning (s 34 Interpretation Act). Such material would include the second reading speech made before Parliament. That speech, delivered on 6 June 2006, included the following statement made on behalf of the Minister:
“This bill seeks also to provide a statutory basis for the New South Wales Government web site and allows for the provisions of the Reprint Act to be updated and transferred to the Interpretation Act. Currently the Attorney General is responsible for authorising reprints, but this function is actually exercised by Parliamentary Counsel under delegation. The changes proposed in this bill will enable Parliamentary Counsel to certify that the form of legislation downloaded from the site is correct. This will prevent the need for courts and government agencies to rely on paper reprints as authoritative versions of the law, and will dispense with the need for Parliamentary Counsel to be acting under delegation. The publication of authoritative, up-to-date statutes, regulations and rules on an official web site, with comprehensive search capabilities, will significantly improve public access to legislation as well as enhance efficiency and accuracy.”
The form of the 1998 Act as it appears on the website, including its form following the amendments affected by the 2005 amending Act, is the “authoritative version of the law” given its certification by Parliamentary Counsel. Accordingly, construction of the clause in its amended form needs to be conducted with the Commission being mindful that the previous sub-clause addressing outworkers is noted as having been repealed. The word “or” appearing immediately before cl 2(1)(b) originally operated to render as disjunctive both sub-cls (a) and (b). The question raised in argument is whether retention, following amendment, of the word “or” has the effect, as put by Mr Djukic, of making sub-cl (a) and the final words of the clause disjunctive.
The amendments to the schedule were effected following recommendations made by the Macken report. That report was requested by Parliament to enable an informed amendment of certain aspects of the workers compensation legislation. Nothing to be found in the recommendations made in the Macken report suggests that there be some extension, or expansion, of the concept of “deemed workers” as provided by the Schedule. The matters addressed in that report concerned the position of “outworkers” and “on-hire deeming provisions”. These matters were canvassed generally by the responsible Minister during the course of the second reading speech delivered to the Legislative Assembly as recorded in Hansard. As noted by Arbitrator Rimmer in Kia that speech included the following statement:
“Schedule 2 of the bill refines the deemed worker provisions to improve clarity without changing the scope of individuals to be generally covered”.
The question which arises for determination is whether the construction of cl 2 in its repealed form has the effect that a contractor, who neither sublets the contract nor employs any worker is, for the purposes of the workers compensation legislation, taken to be a worker employed by the person who made the contract with the contractor. If that be the proper construction of the clause, it would have a very significant effect in terms of extending the definition of a deemed worker. As earlier observed, such an intention on Parliament’s part cannot be inferred from the extrinsic material available including the second reading speech and the Macken report.
I have reached the conclusion that adoption and application of the construction which is pressed by Mr Djukic does not reflect the intention of Parliament in making the amendment. It is stated in the text, Statutory Interpretation in Australia, Pearce and Geddes 6th Ed, LexisNexis Butterworths, 2006 (at 96) that it is “permissible to look at repealed provisions to assist in determining the scope of unrepealed provisions”. The learned authors cite various authorities including the recent decision of the High Court in R v Lavender [2005] HCA 37; 222 CLR 67 (per Gleeson CJ, McHugh, Gummow and Hayne JJ (at 80).
The repealed provision relates to “outworkers”. Whilst it is true, as argued on behalf of Mr Djukic, that the word “or” remains in the text of the provision, Parliamentary Counsel has certified that the proper form of the legislation includes “(b) [Repealed]” following the retained “or”. In its original form the word “or” rendered sub-cls (a) and (b) disjunctive. It is, in my view, appropriate that the repealed sub-cl (b) be taken into account when construing the clause. The relevance of that former disjunctive sub-clause, may be demonstrated by a consideration of the wording which is pressed in argument by Mr Djukic, that being “Where a contract is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, to be taken to be a worker employed by the person who made the contact with the contractor”. The strictly literal construction asserted in submissions prevents reference to sub-cl (a) to ascertain the nature and value of the contract. It cannot, in my view, have been intended by Parliament to extend the benefits of the Acts to a party to a contract, the nature and value of which has not been described.
It is also proper when construing such a provision, to have regard to the context of the clause as it is found in the Schedule and the Act generally. I have earlier noted that the main purpose of the amending Act was to address the position of outworkers and on-hire contractors, and their entitlement to the benefits of the legislation. It was to this end that the reference to outworkers was removed from the clause in question. Provisions relating to outworkers were included in the amending statute and now appear at cl 1A of the Schedule. Contractors under labour hire services arrangements are addressed by cl 2A of Sch 1. In its amended form the Schedule has clear provision in respect of outworkers. Those provisions concerning contractors (not involving labour hire) remain, in my view, as found in cl 2, undisturbed. A contractor will have the benefit of the legislation in the case of a contract exceeding $10 in value, if it is not work incidental to a trade or business regularly carried on by the contractor and the contractor neither sublets the contract nor employs any worker. As was stated by Dixon CJ in Commissioner for Railways (NSW) v Agalianos [1955] HCA 27; 92 CLR 390 at 397 (Agalianos):
“[T]he context, the general purpose and policy of the provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed.”
Mr Djukic submits that the purpose of the amendment to the Schedule intended by Parliament may in part be gleaned from that which is to be found in the Macken report concerning “certainty and clarity” in definitions. It is argued that the literal construction contended by Mr Djukic leads to such certainty and clarity. What is certain and clear following adoption of such a construction is that there would be an enormous extension of the class of persons who would qualify as deemed workers, an object which was, I have concluded, not intended by Parliament. Such an extension to the class of persons included would lead, in my opinion, to an absurd result. Such an absurdity is avoided by the adoption of the construction as outlined in the decision in Kia. Such construction attains the purpose of the legislation as ascertained by reference to extrinsic materials. Mr Djukic’s argument concerning the suggested certainty and clarity should be rejected.
There have been occasions when absurdity has resulted from a grammatical mistake which has found its way into the wordage of legislation. Such absurdities may be overcome, and the intention of Parliament attained, by a particular construction of those words used. In Director of Public Prosecutions (Nauru) v Fowler [1984] HCA 48; 154 CLR 627 the High Court determined that it was appropriate to relocate the word “either” to be found in a provision of the Appeals Act 1972 in order to attribute to that provision the meaning intended by the legislature. Whilst the present facts do not involve a grammatical mistake or omission, it is clear that the presence of the word “or” cannot have been intended by Parliament to render the earlier and latter parts of the clause as being disjunctive. I conclude that the clause in its amended form operates concerning contractors in no manner different to that in which it operated prior to the amendment.
In a late submission Mr Djukic has drawn the Commission’s attention to the decision of the Court of Appeal in Taylor v Centennial Newstan Pty Ltd [2009] NSWCA 276 (Taylor). That matter concerned an apparent oversight by Parliament at the time of the dis-establishment of the Compensation Court when various amendments to a number of legislative enactments was effected which substituted “District Court” for “Compensation Court”. The oversight was that such an amendment was not made to s 151A of the Workers Compensation Act 1987. The Court of Appeal overruled the decision made at first instance to substitute “District Court” for “Compensation Court”. That decision concerned the “filling of a gap in legislation” which was found to be impermissible. The Commission in the present matter is not dealing with a case of oversight, omission or inadvertence on the part of the legislature. The construction of the Schedule in its amended form as adopted in Kia, with which I have expressed agreement, takes into account all those words present as well as the grammatical and physical form of the clause in its amended form and has required no substitution or insertion of material as is suggested in Mr Djukic’s submission. I conclude that nothing stated by the Court in Taylor would prevent the manner of construction as adopted. Mr Djukic faintly suggested in that submission that the length of time the decisions in Hopley and Uzabeaga have stood suggests some “correctness” given that Parliament has not seen fit to correct any perceived error. Such an inference cannot be drawn and that submission is rejected.
Mr Djukic was injured whilst performing work that was incidental to a trade or business regularly carried on by him under a business name, Hoxton Communications. In the circumstances, he is not entitled to the benefits of the legislation as a deemed worker. It may be seen that I agree with the Arbitrator’s preference for the reasoning in Kia to that as expressed in Uzabeaga. Having conducted a review on the merits I have reached the view that the Arbitrator’s determination concerning those issues argued before her are true and correct. The orders made by the Arbitrator in the Certificate of Determination dated 16 August 2010 are to be confirmed.

ORDERS

The determination of the Arbitrator as it appears in the Certificate of Determination dated 16 August 2010 is confirmed.

COSTS

No order as to costs of this appeal.

Kevin O’Grady
Deputy President
22 November 2010

I, PENELOPE FLEMING, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE