Eastern Van Services Pty Ltd v Victorian WorkCover Authority

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2019 0112

EASTERN VAN SERVICES PTY LTD (ACN 090 167 552)	Applicant
v
VICTORIAN WORKCOVER AUTHORITY	First Respondent
GEORGE JAMES BARCA	Second Respondent

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JUDGES:	TATE, KYROU and NIALL JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	27 April 2020
DATE OF JUDGMENT:	12 June 2020
MEDIUM NEUTRAL CITATION:	[2020] VSCA 154
JUDGMENT APPEALED FROM:	[2019] VSC 581 (Cavanough J)

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WORKCOVER – Appeal – Whether second respondent was a ‘worker’ as defined in Workplace Injury Rehabilitation and Compensation Act 2013 s 3 and entitled to compensation for personal injury – Contract between applicant and RACV – Contract between applicant and second respondent – Second respondent provided roadside assistance to RACV customers – Second respondent held to be employee of applicant – Issue on appeal whether second respondent was employee of applicant or independent contractor – Leave to appeal granted – Appeal allowed.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr R Merkel QC with Mr E Nekvapil and Ms R Amamoo	JRT Partnership
For the First Respondent	Ms R Orr QC with Ms E Bennett	Corrs Chambers Westgarth
For the Second Respondent	Mr M L Felman	CIE Legal

TATE JA
KYROU JA

NIALL JA:

Introduction

Between November 2008 and December 2015 or January 2016, George Barca, the second respondent, performed work for the applicant, Eastern Van Services Pty Ltd (‘EVS’). Barca, a qualified mechanic, operated a mobile roadside assistance van. The van Barca used and his uniform were Royal Automobile Club of Victoria (‘RACV’) branded and he provided emergency roadside assistance (‘ERA’) services to RACV members or customers. Barca had no direct legal relationship with RACV. RACV had a contract with EVS for it to provide ERA services and, in turn, EVS had a contract with Barca.

The issue in this application for leave to appeal is whether, as the judge found,[1] Barca was an employee of EVS or, as EVS contends, its independent contractor. The issue arises in the following way.
[1]Eastern Van Services Pty Ltd v Victorian WorkCover Authority [2019] VSC 581 (‘Reasons’).

On 20 January 2016, Barca lodged a claim form under the Workplace Injury Rehabilitation and Compensation Act 2013 (the ‘Act’) in relation to an injury he sustained when he was providing ERA to an RACV member on 2 October 2015. In the claim form, Barca identified ‘Nation Wide Towing’ as the ‘employer responsible for this workplace’ and ticked the boxes next to the words ‘Full time’ and ‘Contractor’. EVS is part of the Nationwide Group, being wholly owned by Nationwide Towing & Transport Pty Ltd.

On 16 February 2016, EVS was notified that QBE Workers Compensation (VIC) Limited, an authorised agent of the first respondent, Victorian WorkCover Authority (’VWA’), had accepted Barca’s claim for compensation.

On 14 April 2016, pursuant to s 79(1)(a) of the Act, EVS lodged an objection to liability with VWA on the ground that Barca was not a ‘worker’ within the meaning of the Act.

On 11 July 2016, pursuant to s 84(1)(a) of the Act, VWA determined in writing that Barca was a ‘worker’ of EVS as defined in the Act. VWA concluded that the contract between Barca and EVS was a contract of service and he was thus an employee. In addition, Barca was deemed a worker and EVS an employer under cl 9(5) of sch 1 to the Act.

On 5 August 2016, by originating motion, EVS appealed to the Trial Division under s 85 of the Act. A judge in the Trial Division made an order dismissing the appeal. It is from that order that EVS seeks leave to appeal. It contends that the judge should have concluded that Barca was not an employee and not a worker within the meaning of the Act. VWA and Barca were separately represented on the application and both sought to uphold the reasons and decision of the trial judge.

For the reasons that follow, leave should be granted and the appeal allowed. Barca was not an employee of EVS. He was engaged by EVS under a contract for services. On the basis of how the case was conducted at trial, it must be held that he was not a worker for the purpose of the Act.

The statutory provisions

Section 3 of the Act defines ‘worker’ to mean an individual:

(a)       who —
(i)        performs work for an employer; or
(ii)       agrees with an employer to perform work —
at the employer’s direction, instruction or request, whether under a contract of employment (whether express, implied, oral or in writing) or otherwise; or

(b) who is deemed to be a worker under this Act.

The definition of ‘employer’ is in corresponding terms, including:

(a)       a person —
(i)        for whom a worker works; or
(ii)       with whom a worker agrees to perform work —
at the employer’s direction, instruction or request, whether under a contract of employment (whether express, implied, oral or in writing) or otherwise; and

(b) a person who is deemed to be an employer under this Act; and
(c)if the services of a worker are temporarily lent or let on hire to another person by, or with the consent of, the person with whom the worker has entered into a contract of employment or apprenticeship or otherwise, the last mentioned person, while the worker is working for that other person; and
(d)the legal personal representative of an employer who is dead.

Nature of the task at trial

Apart from a submission made by EVS that the definition of ‘worker’ was narrower than the common law, which was rejected by the judge and not renewed in this Court, the parties proceeded on the basis that the definition of ‘worker’ in s 3 of the Act picks up the common law test of employment. That was the approach adopted by the judge once he had rejected EVS’ submissions, and no party thereafter sought to essay a different test.[2]
[2]Reasons [95].

The agreed summary filed in this Court states that the ‘dispositive question’ on appeal is (as it was before the judge) whether, applying the common law test, the judge was correct to conclude that Barca was a worker of EVS at the time of injury. Subject to one footnote in each of the respondents’ written cases, the written cases also proceed on this basis.

In adopting this approach, the parties did not suggest that the purpose of the Act bears upon the meaning of ‘worker’ or that the Act modifies the common law test. On that approach, the observations of Stephen J in Commissioner of Taxation (Cth) v Barrett can be paraphrased to apply here:

The Act thus employs the term ‘employee’, unaffected by statutory definition, as the ultimate touchstone of liability of tax; it relies for its operation upon the meaning of this term of art in the law and in doing so necessarily refers to a concept which owes its origin and refinement to the common law and the meaning of which is to be found in the decisions of the courts and cannot be divorced from them. So long as those decisions are not affected by special statutory context they will be decisive of the meaning of ‘employee’ or of its more ancient but now somewhat anachronistic synonym, ‘servant’.[3]

[3](1973) 129 CLR 395, 403; [1973] HCA 49 (‘Barrett’).

Where the common law is the basis for the characterisation, there must be less scope for having regard to the purpose, protective, beneficial or otherwise, of the particular statutory setting.[4] It would be wrong to assume that various statutory protections are only available to common law employees and for that reason a more generous approach towards a conclusion of employment should be adopted. The Act, like many other statutes, provides for obligations, responsibilities and benefits in relation to both common law employees and deemed employees.
[4]Pauline Bomball, ‘Statutory Norms and Common Law Concepts in the Characterisation of Contracts for the Performance of Work’ (2019) 42(2) Melbourne University Law Review 370.

Notwithstanding the common position that the common law test applied, VWA sought to introduce a degree of nuance by reference to the text of the statutory definition. VWA said:

The parties agreed below that the principles for identifying a ‘worker’ within the meaning of s 3 of the … Act were the same as the common law principles for the identification of an ‘employee’.

The accompanying footnote states as follows:

Judgment, [91]. The trial judge queried whether this was the correct approach (T29 L17–31 and T30 L1–6). It may be that the terms of the statutory definition call for greater emphasis on the aspects of the common law test which relate to whether work was performed at the ‘direction, instruction or request’ of the putative employer.

Similarly, a footnote in Barca’s written case noted:

It is accepted that this Court ought apply the ‘common law test’ to determine whether Barca was a worker for the purposes of s 3 of the Act. However, consideration must also be given to the actual words of the section (see recently The Queen v A2 [2019] HCA 35 at [40] (Kiefel CJ and Keane J). The use of the words ‘direction, instruction or request’ in the definition of worker bespeaks of a legislative intention that the power to control a worker is an important consideration.

This tension also emerged in oral submissions. VWA adhered to the common position of the parties that the common law test applied, while at the same time submitting that it is necessary to pay close regard to the parts of the common law that Parliament has chosen to enshrine in the statutory definition. It submits that the statutory definition gives prominence to control and that the judge was correct to put that factor at the forefront of the analysis.

The qualification suggested by VWA did not rise to a submission that this Court should not apply the common law test. It went no higher than a submission that the Act reinforces the importance of control and that this was recognised by the judge. VWA submits that there is no challenge, by either party, to the legal principles applied by the judge, which were avowedly based on the common law.

EVS submits that any departure from the common law test would be inconsistent with the way the matter was run below and ought not be entertained in this Court.

The respondents were correct to draw attention to the statutory context. However, given the parties’ agreed position and the way the case proceeded before the judge, we shall approach the question of Barca’s status by reference to common law principles — which require a multi-factorial approach of weighing various indicia — and on the basis that the statutory question may, in this case, be answered by asking whether Barca was an employee at common law. However, we will also consider the particular submissions of VWA that s 3 supplies emphasis to particular components of the common law test.

VWA did not rely on that part of the definition of worker that expressly contemplates that the worker can perform work ‘under a contract of employment … or otherwise’ to submit that the definition would relevantly also extend here to a person who is not retained under a contract of employment. It is not necessary to determine whether, and in what circumstances, a person may be a ‘worker’ within the statutory definition but not a common law employee engaged under a contract of service.

We should also add that neither party submits that the provisions providing for deemed employment are relevant to this appeal.[5] Those provisions extend the definition of ‘worker’ to a person who enters into a contractual relationship with a sole principal for the provision of services, and meets certain threshold requirements relating to income and services, but not if VWA determines that the person is carrying on an independent trade or business. The working out of those provisions implies that a person could be engaged under a contract for the provision of services but not operating an ‘independent trade or business’. Although VWA originally relied on these deeming provisions as an alternative basis for concluding that Barca was a ‘worker’, their application was not pressed either before the judge or in this Court.
[5]Section 4(3) of the Act states that pt 1 of sch 1 provides that certain persons are deemed to be workers or employers for the purposes of the Act. See BSA Ltd v Victorian WorkCover Authority [2018] VSCA 265.

Nature of task on appeal

The decision of the judge was not discretionary but it was evaluative. Apart from one matter, which the judge resolved, the facts were not in dispute,[6] and for relevant purposes, the judge enjoyed no advantage over this Court in the determination of the issue of Barca’s employment status or in the assessment of the weight to be accorded to the relevant indicia. Although it may be a matter of difficulty, the ultimate question of the legal status of the relationship has a unique legal answer.[7] The duty of this Court is to determine whether the answer given by the judge was the correct one.[8]
[6]Reasons [18]. The matter in dispute related to whether Barca had carried on a mobile mechanics business continuously from June 2001 to the date of trial and whether he had used various media outlets to promote the business throughout that period. The judge relied on the joint chronology which stated that Barca’s mobile mechanic business had had little or no work since Barca had heart surgery and it was unclear when that surgery occurred. The only evidence of advertising related to April 2016 by which time Barca had ceased to work for EVS.
[7]Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541, 557–563 [35]–[50]; [2018] HCA 30 (Gageler J).
[8]Jensen v Cultural Infusion (Int) Pty Ltd [2020] FCA 358, [38] (Wheelahan J).

For completeness, we should note that in Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic), Winneke P (with whom Phillips and Kenny JJA agreed), addressing the evaluative process of determining whether a person was an employee or contractor, said the resolution of the question is one of ‘fact and degree’ in respect of which views may legitimately differ and it is difficult for an appellant who cannot identify specific error to demonstrate any error on the part of the trial judge.[9] However, the jurisdiction of the Court there exercised was an appeal on a question of law from VCAT. That is very different to the present case which is, subject to a grant of leave, an appeal by way of rehearing exercisable where an appellant demonstrates some legal, factual or discretionary error.[10]
[9](1997) 37 ATR 528, 533–4; (1997) 12 VAR 314, 320.
[10]Allesch v Maunz (2000) 203 CLR 172, 180–1 [23]; [2000] HCA 40 (Gaudron, McHugh, Gummow and Hayne JJ).

This Court is required to conduct a full review.[11] If this Court is of the view that error is shown, including in the result, then it is the duty of this Court to give effect to its own views, make its own findings, draw its own inferences and conclusions to determine whether or not Barca was an employee of EVS.[12]
[11]Fox v Percy (2003) 214 CLR 118, [25]–[29]; [2003] HCA 22 (Gleeson CJ, Gummow and Kirby JJ).
[12]Devries v Australian National Railways Commission (1993) 177 CLR 472, 479–81; [1993] HCA 78 (Deane and Dawson JJ), cited in Robinson Helicopter Company Co Inc v McDermott [2016] HCA 22, [43] (French CJ, Bell, Keane, Nettle and Gordon JJ).

The common law approach

The common law process of determining whether someone is an employee or an independent contractor is a process of characterising a legal relationship for the purpose of determining which of two, mutually exclusive, legal categories should be ascribed to the relationship. It is often the case that significant legal consequences flow from the nature of the relationship.

The two categories are different but share many common features. Both are contractual in nature. An employer and a principal both seek to engage another under contract and stand to benefit from the engagement and from the labour.

Although it does not serve to identify a bright line test or dictate which side of the line a given set of facts fall, it is perhaps useful to articulate in a broad sense the different nature of the two relationships. In a passage later endorsed by a majority of the High Court in Hollis v Vabu Pty Ltd,[13] Windeyer J encapsulated that difference. He said that the distinction between an employee and an independent contractor is ‘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’.[14]
[13](2001) 207 CLR 21, 39 [40]; [2001] HCA 44 (‘Hollis v Vabu’).
[14]Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210, 217; [1963] HCA 26.

There are a number of matters that arise from that observation.

First, an employee is engaged in providing personal service to his or her employer. It has been said that an employment contract is the only type of contract that requires at least one of the parties to be a natural person, other than a contract for marriage.[15] This may be an overstatement but at least, as observed by the Privy Council in Australian Mutual Provident Society v Chaplin, ‘[i]t may not be impossible for a body corporate to be a servant but the concept is certainly unfamiliar’.[16] By contrast, a contractor acts on his or her own account. This difference is recognised in the dichotomy between a contract for service and a contract of services.
[15]Mark Irving QC, The Contract of Employment (Lexis Nexis Butterworths Australia, 2^nd ed, 2019) 1.18.
[16](1978) 52 ALJR 407, 410; (1978) 18 ALR 385, 392 (Lord Fraser of Tullybelton).

In ACE Insurance Ltd v Trifunovski, Buchanan J observed:

Contracts of employment (contracts of service traditionally so-called) are contracts for personal service. Beneﬁts and obligations of contracts of individual service of this kind are not unilaterally assignable by either party. The requirement for personal service has the effect that a contract which truly permits discharge in another fashion or by another person, is not a contract of employment. Thus, contracts with corporations, contracts with partnerships, contracts permitting unlimited delegation and contracts which do not actually compel the performance of work but pay only on results, are each prima facie not contracts of the necessary quality (although the last category is more contestable than the ﬁrst three).[17]

[17](2013) 209 FCR 146, 150 [25]; [2013] FCAFC 3 (‘ACE Insurance’) (citations omitted).

Second, the question of independence from control and from the organisation of the principal is important. To put it the other way, control, and this may embrace ‘[t]he notion of ultimate, or reserve, authority’, is a hallmark of employment.[18]
[18]Ibid [43], [49] (Buchanan J).

The notion that an employee represents or is a representative of the employer and a contractor is independent is reflected in what Dixon J said in Colonial Mutual Life Assurance Society Ltd v The Producers and Citizens Co-operative Assurance Co of Australia Ltd:

[t]he work [of an independent contractor], although done at [the principal’s] request and for his benefit, is considered as the independent function of the person who undertakes it, and not as something which the person obtaining the benefit does by his representative standing in his place and, therefore, identified with him for the purpose of liability arising in the course of its performance. The independent contractor carries out his work, not as a representative but as a principal.[19]

[19](1931) 46 CLR 41, 48; [1931] HCA 53.

Third, asking whether the worker is engaged in his or her own business may simply be restating the ultimate question in a different way. Similarly, asking whether the person is operating as an ‘entrepreneur’ may suggest, wrongly in our view, an archetype of an independent contractor or suggest a single test or universal criterion.

In light of those general precepts, the correct method is to examine and weigh various indicia or criteria in a multi-factorial analysis.[20] Inevitably, those matters will be interrelated and do not carry a fixed weight. Although the relationship is contractual, the inquiry is to the nature of the contract, which involves a question of substance rather than nomenclature.[21] Relevant factors include the terms of the engagement, the nature, extent and use of control, the degree of integration into the business of the principal, the method of remuneration, the use of the hallmarks of business by the person engaged, including the provision of capital, tools and equipment, invoicing, the incurring of expenses and the taxation treatment of income and outgoings.
[20]Tattsbet Ltd v Morrow (2015) 233 FCR 46, 59 [53]; [2015] FCAFC 62 (Jessup J, with whom Allsop CJ and White J agreed) (‘Tattsbet’); Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2019] FCA 1806, [115] (O’Callaghan J).
[21]On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation [No 3] (2011) 214 FCR 82, 119 [189]–[190]; [2011] FCA 366 (Bromberg J) (‘On Call Interpreters’), citing Curtis v Perth and Fremantle Bottle Exchange Co Ltd (1914) 18 CLR 17, 25 (Isaacs J); Hollis v Vabu (2001) 207 CLR 21, 33 [24], 45–6 [58]; [2001] HCA 44 (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ); ACE Insurance (2013) 209 FCR 146, 149 [11]; [2013] FCAFC 3 (Buchanan J).

The RACV agreement with EVS

Although Barca is not a party to it, it is convenient to start by considering the agreement between EVS and RACV.[22]
[22]The agreement is between EVS and RACV Road Service Pty Ltd. Although the agreement in evidence is dated 1 October 2011, it was agreed that EVS commenced providing services to or for RACV from 1999 under similar arrangements: Reasons [19].

In the RACV agreement, EVS is described as the ‘Contractor’ and agrees to provide to the RACV services as described in an attached specification.

Under the RACV agreement, EVS warrants that in providing the services it will satisfy the specification and comply with all technical and procedural specifications and any applicable statutory requirements. It further warrants that it is properly licensed, equipped, organised and financed to perform the obligations, will use all due care, skill and diligence in providing the services, the services provided will be fit for purpose and performed in accordance with the highest Australian professional standards and best industry practice.

Clause 2.2 provides:

The Contractor must ensure that all of the Contractor’s personnel or subcontractors working on an RACV site or otherwise providing services in accordance with the Contract are suitably qualified and certified for the task that they are carrying out and have an appropriate level of supervision for both personnel and/or sub-contractors.

The RACV agreement did not make EVS the sole or exclusive supplier of the services and RACV made no representations as to the volume of services to be provided. Clauses 4.5 and 4.6 provide:

4.5The Contractor must comply with all policies and procedures communicated to the Contractor by RACV and applicable to the performance of this Contract. The Contractor must notify RACV immediately of any breaches of those policies and procedures of which it becomes aware.
4.6The Contractor agrees to communicate and work with the RACV Representative on a regular basis or as required by RACV at its sole discretion to review the supply and delivery performance of the Services. This will include performance criteria described in the Specification or subsequently agreed to.

The RACV agreement provides that RACV would issue a monthly tax invoice in respect of taxable supplies provided by the Contractor to RACV under the contract.

By cl 15, EVS agrees to carry minimum levels of insurance in respect of public and products liability, professional indemnity, workers compensation and third party motor vehicle property damage.

By cl 20, EVS agrees that it is an independent contractor and not an agent of RACV. The RACV agreement allows for assignment and sub-contracting but states that EVS may not assign the contract or sub-contract any or all of the work of the contract without the prior written consent of RACV.

The specifications for the services are set out in sch B and relate to the provision by EVS of ERA. Clause 4 of the specifications provides:

The Contractor will provide all Services in accordance with the specifications of services in the Road Service Contractors Procedure Manual and the Metropolitan Road Service (MRS) Operations Manual as amended from time to time by RACV.

The specifications provide that EVS will perform the majority of its services within a contracted dispatch group referable to a particular geographic area.

Clause 7 provides:

PERSONNEL
All Contractors or sub-contractors performing ERA must consistently exhibit a professional standard of work and conduct, be appropriately qualified and trained. RACV may require the Contractor, staff and sub-contractors to undertake training to ensure a high skill level.
The Contractor must wear any uniform provided or required by RACV at all times when providing the Services and comply with the code of conduct (refer to Part D Schedule 2 — Code of Conduct).

Clause 10 provides that EVS can invoice RACV for any parts or petrol supplied to a member/customer in the course of providing the service if the member/customer is entitled to receive them free of charge or is unable to pay for them at the time of service. RACV will reimburse up to the value of $33. Where the member/customer is not entitled to receive the parts supplied free of charge, EVS must seek payment directly from the member/customer in the first instance.

Clause 11 provides for EVS to collect payments on behalf of RACV from members/customers in relation to services provided.

Clause 15 provides:

The Contractor and its agents, employees or other persons supplying the services on behalf of the Contractor, must undertake both ERA Service Provider Induction training and ongoing training in the areas, including but not limited to:
·RACV and NAP product training
·Appropriate training in the provision of all Service competencies
·Equal Opportunity and Harassment training
·Occupational Health and Safety [‘OHS’] training.

The specifications provide that RACV must supply EVS with communications equipment. They also provide specifications in relation to the vehicles provided by EVS for the provision of ERA.

The EVS agreement with Barca

The agreement refers to EVS as ‘Eastern Vans’ and Barca as the ‘Contractor’. RACV is not named in the agreement but is one of EVS’ ‘clients’ and is a ‘Principal’, a term which is used throughout the agreement.[23] In its terms, the agreement is apt to cover ERA services that are not provided under the RACV brand. However, it appears that the EVS agreement with Barca was only ever applied in the RACV setting.
[23]For ease of reference, other than in direct quotes, we will refer to EVS, Barca and RACV.

The recitals record that EVS has arrangements with its clients, each a Principal (relevantly, RACV) for providing ERA and repair services to the public, who are referred to as ‘Customers’. It further recites that the Contractor (relevantly, Barca) wishes to provide ERA services to the customers and has agreed to operate a van provided to him by EVS to provide the services. It defines ‘Driver’ to mean those representatives of the Contractor (Barca) who from time to time drive the ‘Vehicle’ and who have been accredited and approved by EVS and the Principal (RACV). The ‘Vehicle’ is defined to mean the van (as described in the recital).

Responsibilities and covenants of Barca

Clause 4 enumerates Barca’s responsibilities and together with cl 7, which provides for covenants given by Barca, records the main contractual obligations imposed on him. By cl 4.1, Barca warrants that he must (amongst other things):

(a) perform the services (described in recital B) with due skill and care to the best of his ability;

(b) comply with the reasonable requirements of EVS and RACV as advised from time to time in connection with OHS, quality control, performance standards and its compliance with the terms of the EVS agreement;

(c) provide the equipment specified in item 4 of sch A for the provision of the services and keep the equipment in good and safe working order;

(d) comply with all the policies, procedures, rules and manuals relating to Work Health and Safety, quality control, professional conduct and standards and Vehicle standards (as amended from time to time) and such other policies and procedures, rules and manuals that EVS or RACV may issue from time to time in relation to these matters; and

(e) provide EVS with his preferences as to when he wishes to perform the ERA services in order that EVS can prepare a Work Offer to meet the requirements of RACV in relation to the business.[24]

[24]‘Business’ is defined as the business of providing emergency roadside repair services.

Clause 4.2 provides that Barca may delegate the carrying out of the services to a person other than the Driver (‘Delegatee’) provided that the Delegatee has been accredited and approved by RACV and EVS in writing. Where there is a delegation, Barca remains liable for the provision of services by the Delegatee on behalf of Barca in accordance with the terms of the agreement.

Clause 4.3 provides that Barca is responsible for: (a) the cost of all damage caused by him (and his employees, representatives, agents and officers, including any Delegatee) or by the van or by any customer’s vehicle in respect of which Barca is providing the services; and (b) for the cost of losses and damage (other than fair wear and tear) to all safety and operating equipment provided with the van.

By cl 4.5, the indemnity in cl 4.3 appears to be limited to indemnifying the insurance excess in respect of the relevant loss.

Clause 4.4 provides that Barca must ensure that the van is in a fully operational state to perform the services and that the van and the Driver bear the specific colour schemes, symbols and logos nominated by RACV for the purposes of the business and the van, colour schemes, symbols and logos be kept clean and in good order and condition at all times. If the van, colour schemes and logos are not in good working order or condition, Barca is required to immediately report this to EVS.

Clauses 4.7 to 4.10 deal with documentation. Clause 4.7 requires Barca to record particulars of services provided in a ‘Shift Worksheet’, containing details requested by EVS or RACV, and provide EVS and/or RACV with a copy after completion of the job. Clause 4.8 requires Barca to issue a confirmation of service signed by the customer at the completion of all service requests and to make them available to EVS or RACV as required. Clause 4.9 requires Barca to receipt any money collected from the customer. By cl 4.10, Barca agrees to provide EVS with an invoice summarising the services provided during the relevant invoicing period, supported by the Shift Worksheets.

Clauses 4.12 to 4.16 provide:

4.12Subject to clause 18 the Contractor and Eastern Vans acknowledge and agree that this Agreement does not require the Contractor to provide Services exclusively to Eastern Vans and nothing in this Agreement prevents the Contractor engaging or being concerned in any other business or providing services to other businesses.
4.13The Contractor will pay Eastern Vans’ reasonable expenses incurred in or as a result of the exercise of any right or remedy of Eastern Vans against the Contractor.
4.14The Contractor will comply at his own cost and expense with all laws including Statutes (including, but not limited to Victorian road regulations and all relevant Workplace Health and Safety laws and guidelines), Regulations, By-laws, Orders and all requirements of any Federal, State, Municipal, Public, or other authority so far as they apply to the Contractor in providing Services pursuant to this Agreement.
4.15 If the Contractor is planning or has experienced changes to the way it conducts its business that may significantly affect the business of Eastern Vans, the Contractor must inform Eastern Vans of those planned changes or changes as soon as reasonably practicable. The Contractor is not obliged to disclose any incomplete proposal or negotiation, or any trade secret or commercial-in-confidence matter.
4.16The Contractor may at its own discretion incorporate a company to provide the Services under this Agreement and shall notify Eastern Vans of that company’s details, including name, ACN, ABN and registered office. Upon receipt of that notification by Eastern Vans, the company shall be deemed to be a party to this Agreement and shall be bound as it if it were the Contractor. However, this does not release the Contractor from any of its obligations under this Agreement nor prejudice or waive any rights of Eastern Vans against the Contractor.

It is convenient, next, to set out cl 7 in full:

COVENANTS OF THE CONTRACTOR

7.1The Contractor hereby covenants with Eastern Vans that it and each Driver and Delegatee:
7.1.1is licensed and will maintain an appropriate license [sic] to drive the Vehicle under the relevant rules and regulations of the State in which he is to perform Services in accordance with this Agreement;
7.1.2 has not been the subject of conviction for any criminal offence in any Court of Law other than as disclosed to Eastern Vans in writing prior to execution of this Agreement. Should any criminal proceedings be instituted against the Contractor which may result in conviction and therefore affect the legal right of the Contractor to properly and legally drive the Vehicle, the Contractor undertakes to immediately notify Eastern Vans of all relevant details relating to the proceedings. The Contractor acknowledges that certain Principals have specified that no person who has been convicted of a criminal offence can be engaged for Services;
7.1.3 will provide Services pursuant to this Agreement in a proper and workmanlike manner in accordance with the terms of this Agreement and will at all times exercise proper care and control of the Vehicle in it’s [sic] care and will ensure that he operates the Vehicle within the limits and safety standards specified by the manufacturers;
7.1.4 unless authorised in writing by a Customer or an authorised representative of Eastern Vans, will not remove articles, parts, fuel or any other property belonging to a Customer other than for the purposes of undertaking repairs to the Customer’s Vehicle;
7.1.5 will note and report any dispute with a Customer to Eastern Vans’ control centre. The Customer of [sic] the public should be referred to the Manager of the control centre to record his or her complaint. Upon a complaint being made, the Contractor should not enter into discussion regarding the matter in dispute;
7.1.6 will not at any time whilst providing the Services, or within 10 hours before providing the Services, consume and/or be under the influence of alcohol or any drug, legal or otherwise, which may affect his ability to drive and work safely;
7.1.7 consents to random testing by Eastern Vans with respect to drugs and alcohol;
7.1.8 will not smoke in the Vehicle or on Eastern Vans’ property other than in selected reserved areas;
7.1.9 will ensure that:
a) the Principal’s representatives who allocate the work are aware of its readiness to accept work at all times while signed on. This includes the Contractor ensuring that it is contactable by phone if away from the Vehicle;
b) the Vehicle is returned to Eastern Vans to enable inspection of the Vehicle, equipment and tools at regular intervals, when requested by the Contractor or Eastern Vans and to enable proper maintenance of the Vehicle to be carried out by the Contractor;
c) all mechanical problems with the Vehicle are immediately reported to Eastern Vans in order that it may effect repairs;
d) the Vehicle is in a safe and roadworthy condition at all times when he is operating the Vehicle and that the correct plant, safety items and equipment are on the Vehicle at all times and are used when appropriate;
e) there are no discharges of pollutants from Customers’ vehicles or equipment under the control of Customers. If discharges can be identified by the Contractor, the Contractor should immediately report these to the Manager of the Eastern Vans’ control centre;
f) the interior and exterior of the Vehicle are kept in a clean and tidy condition at all times;
g) decals, stickers or other advertising material, including football stickers and streamers are not attached to any Vehicle belonging to Eastern Vans unless specifically authorised by Eastern Vans;
h) all plant, equipment and safety items provided with the Vehicle are functional and are properly maintained;
i) he will wear any approved safety uniform of the Principal (if applicable) at all times;
j) he maintains the uniform in a clean condition, wears clean shirts and trousers every day, and that, other than the items of clothing mentioned above in Clause 7.1.9i), no other piece of clothing is visible;
k) he complies with all safety procedures provided by Eastern Vans and wears the Safety Uniform of the Principal’s [sic] at all times while working outside the Vehicle; and
l) where possible, the owner or agent of the owner to which the Contractor is providing the Service is provided with a completed service report after completion of the Vehicle service.

7.1.10 will use his best endeavors [sic] to promote the interests of the Principal and any parts, products and recommended repairers of the Principal.

7.2 For the avoidance of doubt the Contractor remains liable for the provision of all Services delivered by any Driver or Delegatee on behalf of the Contractor.

Responsibilities and covenants of EVS

Clause 3 provides for the responsibilities of EVS under the agreement. They include the provision of a van and the allocation of a fleet number to it. Clauses 3.3 and 3.4 provide:

3.3Eastern Vans acknowledges that the Contractor and the Contractor agrees that, it is not obliged to accept any Work Offer to provide the Services. However, the Contractor shall give Eastern Vans not less than 24 hours’ notice of any Services which it has agreed to supply, but can no longer do so.
3.4If Eastern Vans is planning or has experienced changes to the way it conducts its business that may significantly affect the business of the Contractor, Eastern Vans must inform the Contractor of those planned changes or changes as soon as reasonably practicable. Eastern Vans is not obliged to disclose any incomplete proposal or negotiation, or any trade secret or commercial-in-confidence matter.

Clause 8, which records the covenants imposed on EVS, is brief. EVS agrees to provide Barca with a vehicle suitable to enable him to adequately provide the services to members, including service information by radio transmission and ensure that the van is registered, comprehensively insured, roadworthy and is and will be maintained in accordance with the relevant regulations governing such vehicles.

Remuneration

Clauses 5 and 6 deal with remuneration and invoicing, respectively.

Clause 5, headed ‘Fees’, provides for Barca to be paid by EVS ‘an agreed job rate for each completed job’. Item 5 of sch A prescribes a rate for each job depending on where and when the service is provided. There are different rates for normal hours (between 0600 and 1800 hours weekdays); after hours (all other hours including weekends and public holidays); and a night rate. The night rate is expressed as a shift rate and provides for $220 or $255 for up to 10 jobs and thereafter at the appropriate job rate. So, for example, EVS would pay Barca $12 for each job in the ‘Bays, City & Knox’ areas during weekdays, and $16 outside of those hours. Anomalously, cl 5.1 also provides that the rates may be amended by EVS from time to time but cl 5.6 provides that the fees may be reviewed from time to time and may be varied by agreement.

Payment is subject to Barca providing a properly completed Shift Worksheet and invoice.[25] Payments are required to be made monthly in arrears or on about the 15^th of the month following that to which the fees relate.
[25]Clauses 5.2, 5.4, although the position in relation to invoicing is varied to provide for recipient created invoices if Barca is registered for GST and cl 6 applies.

By cl 5.7, Barca acknowledges that the fees paid by EVS ‘incorporates a charge for the use of the Vehicle [the van]’.

Clause 6 applies in the event that the Contractor is registered for GST. As will appear, Barca was not registered for GST. However, it is relevant to note that where the Contractor is registered, EVS will issue a Recipient Created Tax Invoice.

Suspension and termination

Clauses 10 to 13 deal with suspension and termination:

(f) Clause 10 permits EVS to suspend the agreement by notice in writing in the event that Barca breaches any term or condition of the agreement (‘Notice of Suspension’);

(g) Clause 11 permits EVS to immediately terminate the agreement by notice in writing if Barca:

(i) commits any breach of any of the ‘essential terms’ of the agreement, being cl 7.1.9 (set out at [61] above), cl 15 (no assignment without written consent of EVS) or cl 16 (indemnity and release)[26];
[26]See [70] below.

(ii) is suspended 3 times for breach of any other terms of the agreement; or

(iii) commits an illegal act or breach of the law.

(h) Clause 12 permits Barca to immediately terminate the agreement by notice in writing (‘Notice of Termination’) if:

(i) EVS goes into external administration; or

(ii) EVS commits an illegal act or breach of the law.

(i) Clause 13 enables EVS to recover the van following service of a Notice of Suspension or a Notice of Termination by EVS.

Clause 16, which is one of three ‘essential terms’, is drafted in broad terms and essentially provides that Barca indemnifies and releases EVS from all loss, demands, claims, charges, liability and actions incurred by it in connection with the agreement and the provision of the services, including but not limited to any claim for superannuation, workers compensation or leave entitlements.

Express statement of nature of relationship

Clause 17 is an express statement as to the nature of the relationship of the parties and is as follows:

17.RELATIONSHIP OF PARTIES
17.1 The Contractor’s relationship with Eastern Vans shall be that of independent contractor. The Contractor shall not have the power, right or authority to bind or create any obligation or responsibility on behalf of Eastern Vans. Nothing stated in this Agreement shall be construed as constituting the Contractor and Eastern Vans as partners, or as creating the relationship of employer and employee, master and servant, principal and agent, contractor and sub-contractor, principal or agent (otherwise than as specifically provided herein), or joint venturers.

Clause 18 imposes a restrictive covenant on Barca in the following terms:

18. RESTRICTIVE COVENANT
18.1 In consideration of Eastern Vans providing the Vehicle to enable the Contractor to provide the Services, the Contractor agrees and covenants with Eastern Vans that during the Term of this Agreement, he will not engage, either directly or indirectly, or be concerned with or provide Services to any other business using the Vehicle or the uniform.
18.2 Notwithstanding the provisions of Clause 18.1 above, Eastern Vans may authorise the Contractor to provide Services to other businesses or authorise independent use of the Vehicle by the Contractor. Any such authority will only apply to the circumstances for which the authority was sought and shall not be construed as an authority beyond those circumstances.
18.3 The Contractor acknowledges that the restriction in Clauses 18.1 and 18.2 is necessary, fair and reasonable in order to protect the Business of and reputation of Eastern Vans and the Principal.

As contemplated by the contract, there are a number of procedures and policies that governed the performance of the work, authored by both RACV and EVS.

RACV procedures

RACV’s procedures manual is prescriptive. By way of example, VWA pointed to the detailed instructions on the correct method for towing vehicles and for a wheel change. As recorded by the judge:

(c)The RACV Operations Manual specified a set of detailed procedures for the performance of emergency roadside assistance to RACV customers, including:
(i) the correct use of RACV administration forms and processes in respect of membership entitlement and payment; instructions for ascertaining the validity of motorists' membership; following the instructions of the Assistance Centre if membership is not current; the requirement to verify membership before provision of service; procedure for the acceptance of [cheques] and credit cards and issuing of tax invoices;
(ii) the method for providing ‘RACV Parts and Battery Service’, including the requirement to generate a ‘parts job’ in the RACV management system and generating specific paperwork;
(iii) the rules and procedure for the supply of fuel to motorists including instructions for refilling with diesel fuel;
(iv) the requirement to ‘standby’ after completing a job;
(v) instructions for rope-towing motorists’ vehicles, allowing no discretion to rope-tow, permitting it only where access is required to perform breakdown duties, expressly forbidding it in any other circumstances and forbidding towing for more than 500 metres;
(vi) the requirement to complete a ‘service indemnity card’ where a vehicle cannot be repaired to a satisfactory condition and is unsafe to drive but the motorist wishes to drive the vehicle;
(vii) the requirement that when carrying out diagnosis and repairs under the bonnet, the engine oil and water level must be checked;
(viii) the procedure for arranging wheel-changes and tows for heavy vehicles;
(ix) the procedures for wheel-changes;
(x) rules for supplying parts and collecting payment from motorists;
(xi) the requirement to provide assistance to non-RACV members (women alone; and the elderly; disabled drivers; vehicles on emergency calls; emergency services);
(xii) the procedure to be observed when attending a job if the motorist or vehicle is not at the expected location.[27]
[27]Reasons [40(c)].

EVS procedures

EVS also required compliance with its own written procedures, which extended to grooming and a Nationwide Group Code of Conduct.

We shall refer to aspects of the procedures manuals and matters of practice such as rostering, allocation of work, remuneration timing and other matters under the various headings to which they relate.

The reasons of the judge

Having set out the relevant facts and context, the judge set out his conclusions in relation to the various factors or indicia under the following headings: the EVS agreement;[28] tax arrangements;[29] control;[30] risk borne by Barca;[31] mode of remuneration;[32] provision and maintenance of equipment;[33] level of skill required;[34] and acquisition of goodwill.[35]
[28]Ibid [100]–[107].
[29]Ibid [108]–[110].
[30]Ibid [111]–[119].
[31]Ibid [120]–[121].
[32]Ibid [122]–[123].
[33]Ibid [124].
[34]Ibid [125].
[35]Ibid [126]–[127].

In relation to the EVS agreement, the judge concluded that the express characterisation of the relationship of Barca to EVS as an independent contractor in cl 17 was not determinative. He drew little from the fact that Barca had entered into the agreement in the business name of ‘BARCA, GEORGE trading as ALL DISTRICTS MOBILE MECHANIC ^ JIMS MOBILE MECHANICS’. He noted that the agreement was in a standard EVS form, and Barca had signed it as an individual. The judge referred to Barca’s obligations to comply with the reasonable requirements of both EVS and RACV and comply with policies, procedures, rules and manuals issued by EVS and RACV. He concluded:

Thus, what the contract itself required Mr Barca to do was to provide very specialised services to nominated persons. Those services were so specialised and confined that they cannot really be treated as something that Mr Barca did in his capacity as the proprietor of a general (mobile) mechanics business. There was really a vast gulf between Mr Barca as an RACV service man and Mr Barca as the proprietor of a mobile mechanics business.[36]

[36]Ibid [107].

Although EVS relied heavily on Barca conducting his tax affairs as if the RACV income was business income, the judge gave it less significance. The judge noted that Barca was not registered for GST and there was no evidence as to whether he filed business activity statements. The judge distinguished the judgment of Jessup J in Tattsbet,[37] noting that unlike in that case, Barca had not claimed large deductions for wages paid to his own staff.
[37](2015) 233 FCR 46; [2015] FCAFC 62.

On control, the judge acknowledged that under cl 3.3 Barca was not obliged to accept any work offer made by EVS but observed that he was required to give EVS not less than 24 hours’ notice of any services he had agreed to supply but could no longer supply; he could not simply decline to supply services he had agreed to supply and he was issued with three month rosters in advance.

The judge noted that Barca was obliged to go to the places ‘where he was called by RACV an EVS to go’ and, although he exercised his technical skill, training and expertise at each job, there were many significant ways in which his work ‘was controlled by EVS or by EVS and RACV in combination’.[38] The judge had earlier set out a list that included:
[38]Reasons [118].

(j) Barca worked clothed in the branded uniform that EVS prescribed. The purpose of the uniform was, in EVS’ view, to project and protect the brand and reputation of EVS (including to its client, RACV) and in RACV’s view, to promote its corporate brand;

(k) EVS imposed a work system on Barca through its contract, which required him to comply with the procedures, rules and policies of itself and of RACV. EVS was able to impose disciplinary consequences in performance reviews for failures to follow EVS directions on matters such as uniform standards;

(l) the RACV Operations Manual specified a set of detailed procedures, including those set out at [74] above); and

(m) it was not practicable for Barca to delegate work or, given the long hours, work for anyone else.[39]

[39]Ibid [40].

The judge concluded that there was very little (if any) scope for Barca to sell parts or equipment to RACV members or others at a profit as supplies were subject to RACV-prescribed prices and policies.[40]
[40]Ibid [119].

On risk and reward, the judge concluded that there was little in the agreement to indicate that Barca had an allocation of risk or reward based on profit rather than payment in return for particular services rendered by him. The judge noted that two terms of the agreement which dealt with risk and liability (damage to an RACV customer’s vehicle or to the van, and the agreement to indemnify EVS in relation to damage to vehicles) would have applied to an employee.[41]
[41]Ibid [121].

In relation to remuneration, the judge noted that EVS prepared monthly recipient created tax invoices, which recorded a number of variables, including monthly or quarterly bonuses, and there was some variation in the monthly amounts for ‘gross payment/job fees’. However, his Honour concluded that these variations did ‘not detract much from the overall impression generated by the documents, namely that Mr Barca was earning a reasonably predictable, regular amount of remuneration from his ERA work for EVS’.[42]
[42]Ibid [123].

On the last three matters, the judge concluded as follows. The provision of the van by EVS and EVS’ responsibility for the cost of maintaining the van and for the cost of all fuel used, indicated an employment relationship.[43] Barca needed to be a reasonably skilled mechanic but this elevated level of skill was not a strong indicator of being an independent contractor.[44] There were significant limitations on delegation which meant that Barca could not engage sub-contractors and have a saleable business with goodwill.[45] The judge noted that any delegation could only be to a person accredited and approved in writing by both RACV and EVS. Even then, Barca would have remained liable for the provision of the services by the delegatee.[46]
[43]Ibid [124].
[44]Ibid [125].
[45]Ibid [126]–[127].
[46]Ibid [127].

In summary, the judge concluded that, having regard to all of the evidence, Barca’s work for EVS had little or nothing to do with any business of Barca’s own and he was firmly of the view that Barca was in an employer/employee relationship with EVS at the time of his alleged accident.[47]
[47]Ibid [128]–[129].

Grounds of appeal

Given the nature of the appellate task applicable here, the grounds of appeal are commendably brief. The applicant contends that the judge erred in law and fact by holding that Barca was an employee of EVS, and that based on the totality of their relationship, he should have found that Barca was not an employee of EVS.

The applicant does not contend for any specific error of fact or law.

The relevant business

There can be no doubt that both RACV and EVS conducted their own businesses. RACV has a large number of members to whom it provides services, including ERA. It provides ERA services on a substantial and repetitive basis and deploys detailed and sophisticated systems and procedures for the provision of those services. As evidenced by its contract with EVS, it provides services to its members through contractors. It is not clear to what extent, if any, its own employees provide ERA in addition to operatives engaged by contractors. Similarly, EVS had a substantial business.

The question whether Barca operated his own business, in relation to the RACV ERA services which EVS provided to RACV, is one way of viewing the ultimate question. The answer to it cannot be given without regard to the various factors that are relevant to the characterisation of the relationship between Barca and EVS.

The parties recognised that Barca had provided mobile mechanical repair services using his own trading name ‘All Districts Mobile Mechanic’ and his own van (distinct from the van provided to him by EVS under his agreement with EVS). Barca submits that he had only one business, which comprised a brand and some equipment, none of which was used in the RACV work and therefore he was not operating his own business when doing that work and that this answered the case in full. We do not accept that submission. The answer does not lie simply in asking whether Barca used his own brand or assets when undertaking RACV work. There is nothing inherently incompatible with a contractor being integrated into the business of a principal, for example by uniform or equipment, but still working under a contract for services. Nor can a person work in only one autonomous business. The contrast between Barca working under the business name ‘All Districts Mobile Mechanic’ and providing roadside assistance under that banner and providing ERA services in an RACV uniform is a factor to be balanced. It might suggest that the work done for RACV is not part of his more general roadside assistance business and it might suggest that his relationship with EVS is one of employment. But it does not carry the dispositive weight that Barca seeks to attribute to it.

Although it is important to keep sight of the overarching differences between an independent contractor and employee, it is necessary to look at the various constituent parts of the relationship in order to reveal the full picture. To do otherwise is simply to replace one difficult question (is Barca an employee?) with another (is Barca conducting his own business?).[48]
[48]Tattsbet (2015) 233 FCR 46, 61 [61]; [2015] FCAFC 62 (Jessup J).

Control

The extent to which a putative employer is entitled to exercise, and in fact exercises, control over the putative employee in the allocation and performance of work has always been seen as an important indicator of an employment relationship.[49]
[49]Hollis v Vabu (2001) 207 CLR 21, 40–1 [43]–[45]; [2001] HCA 44 (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ); Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 24 (Mason J), 36 (Wilson and Dawson JJ); [1986] HCA 1 (‘Broadribb’); Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561, 571; [1955] HCA 73 (Dixon CJ, Williams, Webb and Taylor JJ); Humberstone v Northern Timber Mills (1949) 79 CLR 389, 404 (Dixon J); Queensland Stations Pty Ltd v The Federal Commissioner of Taxation (1945) 70 CLR 539, 552; [1945] HCA 13 (Dixon J).

At least since Brodribb,[50] the importance of control has become more nuanced in at least a couple of ways. First, given the diverse nature of work and the need for specialisation and skills, there is a recognition that an employer may not always direct the employee in the manner in which the task is performed, and may often be prepared to leave those aspects to the judgment of the employee. As Mason J observed in Brodribb, in such cases the right to control may assume greater significance than the frequency with which it is exercised:

… the common law has been sufficiently flexible to adapt to changing social conditions by shifting the emphasis in the control test from the actual exercise of control to the right to exercise it, ‘so far as there is scope for it’, even if it be ‘only in incidental or collateral matters’: Zuijs v Wirth Bros Pty Ltd. Furthermore, control is not now regarded as the only relevant factor. Rather it is the totality of the relationship between the parties which must be considered.[51]

[50]Brodribb (1986) 160 CLR 16; [1986] HCA 1.

[51]Ibid 29 (citations omitted).

The second aspect, explored in Hollis v Vabu, is the relationship between control and vicarious liability. In that case, the plurality noted the general rule that an employer is vicariously liable for the tortious acts of an employee but that a principal is not liable for the tortious acts of an independent contractor.[52]
[52]Hollis v Vabu (2001) 207 CLR 21, 36 [32]; [2001] HCA 44 (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ). As a general rule, it may admit of exceptions: Day v The Ocean Beach Hotel Shellharbour Pty Ltd (2013) 85 NSWLR 335, 342 [15]; [2013] NSWCA 250 (Leeming JA).

The vicarious liability of an employer for the acts of its employees is perhaps the most important consequence that the common law imposes on the employment relationship.[53] Although the rationale underpinning vicarious liability is not clear cut, the fact that the employer is able to control the exercise of the employee’s duties is undoubtedly important. To view it from the other perspective, it would be anomalous to impose vicarious liability on an entity that cannot control the person who engages in the offending conduct, even though the entity stands to profit from the activity.
[53]The common law also recognises certain implied terms by reference to the class of contract: Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24; Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; [2014] HCA 32.

Accordingly, in assessing whether a person is an employee:

… guidance for the outcome is provided by various matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability. These include, but are not confined to, what now is considered ‘control’.[54]

[54]Hollis v Vabu (2001) 207 CLR 21, 41 [45]; [2001] HCA 44 (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ).

For this reason, it may be relevant to know the nature and extent of the control, including the reason for its imposition and the mechanisms by which it is maintained. An employer may seek control because of the responsibility or liability it may bear if something goes wrong because the employee will represent, and be seen to represent, the employer and, in part, because employees will very often be integrated into the business of the employer, requiring a degree of coordination. The ability to organise and harness the labour and skills of a workforce will often be central to the success of an enterprise.

Commonly, the area of control extends to the performance of the work that the worker does for the employer. It may cover the hours, place and roster of work, the presentation of the worker (including grooming and uniform requirements), OHS requirements and control and supervision in relation to the actual duties performed by the worker.

The manifestations of control are not immutable. The content of the exercise of control is usually able to be changed at the instance of the employer as a reflection of the ability of the employer to deploy the labour in the manner which it considers to be most beneficial to the enterprise. This is reflected in the general notion that an employer can give lawful and reasonable directions to its employees.

The mechanism by which control is enforced may be left to contractual consequences for non-performance of terms or by the inclusion of specific disciplinary terms calibrated to reflect the nature of the employment relationship, including matters such as investigation, suspension, warnings or termination.

Although a measure of control is the hallmark of an employment relationship, it does not follow that principals are not able to maintain control over independent contractors without the contractual relationship becoming one of employment.[55]
[55]Personnel Contracting Pty Ltd (t/as Tricord Personnel) v Construction, Forestry, Mining and Energy Union of Workers [2004] WASCA 312, [40] (Steytler J) (‘Personnel Contracting’); Gupta v Portier Pacific Pty Ltd [2020] FWCFB 1698, [66] (Ross J and Hatcher VP).

Control in multi-party relationships

The existence of control, and the rationale for its significance as an indicator of employment, is most easily seen in a bilateral relationship. The ability or authority of the employer to control the employee’s performance of work will often mark the employee as representing his or her employer and justify the imposition of vicarious lability and other statutory liabilities and responsibilities on the employer.

Control may be less significant, or be reflected in different ways, in trilateral or multi-party arrangements such as labour hire arrangements. Typically, in those situations, the principal retains a contractor to provide labour in the operation of the principal’s business. The principal/client may exert a high degree of practical control over the worker but the contractor may be responsible for allocating work and remuneration. Where the relationship between the worker and the principal is ongoing, the principal may have a very high degree of control over hours of work, allocation of duties, how work is to be performed and matters of OHS. On the other hand, questions of performance and discipline may be a matter for the contractor to take up with the worker. The question of whether the worker continues to work in the principal’s business may be entirely a matter for the principal and contractor to determine.

In such circumstances, the issue may arise as to whether the worker is an employee of the principal, the contractor or neither. On those questions, the issue of control is inevitably more complex than in a bilateral setting. The degree of control exercised by the principal over the worker may share many of the hallmarks of employment. On the other hand, control may ultimately rest in the ability of the contractor to deploy and control the worker who has been engaged.

In Forstaff Pty Ltd v Chief Commissioner of State Revenue, McDougall J, in the context of a labour hire relationship said:

It may be acknowledged readily, as the cases that I have referred to indicate, that the control test is in many cases dispositive and in most, if not all, cases significant. However, historically, the control test has been considered in the context of a bilateral, rather than trilateral (or multilateral) relationship. Significantly, in the cases that do involve a trilateral relationship (ACC v Odco, BWIU v Odco and Brook Street), the control test has not been regarded as dispositive. That, I think, reflects the reality that in a changing workforce, with evolving relationships, including those of the kind presently under consideration and those considered in the cases just referred to, the concept of control is not readily susceptible of analysis according to the traditional master/servant matrix. The true meaning and nature of the relationships that are embodied within the word ‘control’ will vary, of necessity, according to the factual and contractual context within which control is located and exercised.[56]

[56][2004] NSWSC 573, [114].

The arrangement between EVS and RACV was not a labour hire arrangement. However, it was a multi-party relationship in which, to the extent that there was control, it rested in an immediate sense with RACV. Apart from the formulation of the availability roster, RACV allocated work, was in direct contact with Barca and obtained and collated the information about the services provided. As noted, many of the obligations reinforced the position of Barca as a representative of RACV.

Under the broad rubric of control, it is convenient to deal with a number of different aspects: allocation of work, including hours and place of work, and the manner of performance of work.

Allocation of work

At its broadest, RACV allocated geographic areas for EVS to cover.

In order to be allocated work, Barca would advise EVS of his availability for a period and be issued with a three month roster in advance. The drivers were expected to fulfil their obligations under the rosters.[57] EVS took into account leave periods where a driver was not available.
[57]Reasons [115].

The evidence did not suggest any obligation on Barca to make himself available for any minimum period of work. And there was no impediment to Barca working for himself outside the rostered time, provided that he did not use the RACV branded van. It is noted that the RACV van used by Barca was also used by at least one other person engaged by EVS.

When on duty, Barca would advise RACV of his readiness to accept work, no doubt to allow RACV to despatch jobs to him. RACV would allocate the particular job. RACV would also record each job and provide to EVS a record, on a monthly basis, of the jobs that had been undertaken by Barca. The electronic record provided by RACV set out for each day worked the time each job started and finished.

As the judge found, Barca was required to give EVS not less than 24 hours’ notice of any services which he had agreed to supply but could no longer supply and it followed that Barca was not free to simply decline to supply services that he had previously agreed to supply.[58]
[58]Ibid [115].

Manner in which work is performed

Although, as the judge noted, Barca relied on his own skill and training as a mechanic to fix, or at least render mobile, cars on the roadside, there was also a high degree of control reflected in the RACV manuals and, to a lesser practical extent, the EVS manuals.[59]
[59]Ibid [40], [117]–[118].

VWA submits that clauses 4.1.3 and 4.1.5 of the EVS agreement were critical, noting that Barca was required to comply with the reasonable requirements of EVS and RACV as advised from time to time in connection with OHS, quality control, performance standards and compliance with the agreement. Further, Barca was required to comply with all policies, procedures, rules and manuals issued by EVS or RACV from time to time relating to workplace health and safety, quality control, professional conduct and standards and vehicle standards.

VWA also pointed to the obligation imposed on Barca under cl 7.1.5 to note and report any dispute with a customer to the EVS control centre.

By way of example, VWA relied on requirements relating to towing, wheel replacement and the offering of fuel or replacement parts such as a starter motor or alternator.

In addition to compliance with RACV manuals and work procedures, Barca was required to comply with Nationwide group or EVS policies. They include prescriptive obligations in relation to uniform and hygiene. EVS audited compliance with uniform, hygiene and the condition of the vehicles.

Non-compliance

Pursuant to cl 11.1.1 of the EVS agreement, EVS and Barca agreed that Barca’s obligations under (amongst others) cl 7.1.9 were essential terms. VWA submits that given the nature of the obligations in cl 7.1.9, the power to terminate immediately is a compelling indicator of the type of control that characterises employment relationships. Similarly, it submits, the power to suspend, and the rights of EVS to reclaim the vehicle, are also redolent of employment.

Conclusion on control

Both EVS and VWA sought to make something of control by, or for the benefit of, RACV. VWA submits that the control over the allocation and manner of performance of work is consistent with employment and, although it emanated from RACV, it was the EVS agreement, especially clauses 4.1.3 and 4.1.5 that gave rise to the obligation on Barca. In other words, EVS retained legal control and chose to adopt the RACV procedures for its own reasons, informed by its obligations to RACV. In this respect, the judge was correctly influenced by the extent to which both EVS and RACV exerted control over Barca.

On the other hand, EVS said that the judge’s approach evidenced error because it was not control, in a practical sense, exercised by EVS but by RACV, and this said nothing about the relationship between EVS and Barca. It submits that the control which RACV exerted over Barca was positively inconsistent with EVS being Barca’s employer.

In our view, the prescriptive obligations imposed on Barca to comply with RACV procedures governing the performance of work were inconclusive on the critical issue. That is so for the following reasons.

First, the purpose of RACV’s control was to ensure that its members were served in a consistent, professional and appropriate way. Many of the controls related to the safety and presentation of the work being done. They were for the benefit of RACV. Many of EVS’ procedures were of a similar kind. As explained by Mr Re, managing director of EVS, in his evidence at trial:

We have procedures on safety. … And so, we’re really big on safety. But, as far as them doing their job, um, they’re motor mechanics. They’re qualified.

Second, the outward manifestation of control showed that Barca was a representative of RACV, not EVS. Indeed, under cl 7.1.10, Barca was required to use his best endeavours to promote the interests of RACV and also any parts, products and recommended repairers of RACV. In Colonial Mutual Life Assurance Society Ltd v The Producers and Citizens Co‑operative Assurance Company of Australia Ltd, Dixon J fixed upon the absence of representation and of identification with the alleged employer as indicative of a relationship of principal and independent contractor.[60]
[60](1931) 46 CLR 41, 48; [1931] HCA 53.

Third, the RACV contract contemplates that the ERA services could be provided by EVS through its employees, agents or subcontractors. VWA accepts that the RACV contract did not preclude EVS from engaging the personnel who would actually perform the roadside function as independent contractors. Implicit in this is an acceptance that the application of the prescriptive obligations discussed is consistent with the status of the personnel as independent contractors; this is not to say that those obligations are a neutral factor but they are far from determinative.

No party suggested that Barca was an employee of RACV. As noted, there was no contract between RACV and Barca. There was no dispute that RACV could retain a large measure of practical control over the allocation and performance of work, could integrate the motor mechanics into the RACV enterprise by branding, and operational control, yet without the need for an employment relationship with them. It looked to EVS to supply the mechanic. As a matter of logic, there does not seem to us to be any impediment to EVS also securing the services it has agreed to provide to RACV through contracts with various motor mechanics as independent contractors and ensuring control by a similar mechanism to that adopted by RACV, ie requiring the services to be provided according to certain contractual prescriptions.

VWA submits that ultimately, in order to secure the level of control found here, it may be necessary that it be done through an employment relationship at some point in the supply chain. According to VWA, that is what was done in this case, as between EVS and Barca.

VWA sought to draw comparisons with the situation in Hollis v Vabu. That case concerned unskilled bicycle couriers who had little control over the manner of performing their work. The courier signed on each day and was unable to refuse work. The majority observed:

Finally … this is not a case where there was only the right to exercise control in incidental or collateral matters. Rather, there was considerable scope for the actual exercise of control. Vabu's whole business consisted of the delivery of documents and parcels by means of couriers. Vabu retained control of the allocation and direction of the various deliveries. The couriers had little latitude. Their work was allocated by Vabu's fleet controller. They were to deliver goods in the manner in which Vabu directed. In this way, Vabu's business involved the marshalling and direction of the labour of the couriers, whose efforts comprised the very essence of the public manifestation of Vabu's business. It was not the case that the couriers supplemented or performed part of the work undertaken by Vabu or aided from time to time; rather, as the two documents relating to work practices suggest, to its customers they were Vabu and effectively performed all of Vabu's operations in the outside world. It would be unrealistic to describe the couriers other than as employees.[61]

[61]Hollis v Vabu (2001) 207 CLR 21, 44–5 [57]; [2001] HCA 44 (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ) (citations omitted) (emphasis in original).

In our view, that passage does not support VWA’s position. It is inapt to apply that passage as if RACV and EVS were indistinguishable and without regard to the fact that Barca was engaged to provide skilled labour in RACV’s business and was not the public manifestation of EVS. VWA elides the distinction by noting that it was EVS that chose to provide services to RACV and that Barca did not have real independence of action or true independence of organisation.

The submission of VWA is correct to an extent. Barca was subject to quite detailed control. However, in this context, as mentioned, this was not determinative. Many of the provisions of the EVS agreement could apply to both employees and independent contractors and would not be out of place in a contract for services. For example, those requiring the worker to undertake the work with due care, and skill, to adopt safe work practices, to wear a uniform and to report disputes with customers.[62]
[62]Personnel Contracting [2004] WASCA 312, [40] (Steytler J).

Although EVS needed to retain a degree of control over the mechanics in order to discharge its contractual obligations, there is nothing in the nature of the services themselves that required an employment relationship with them. There was nothing in the type of work that meant that it was more readily rendered by employees or required a contract of service. The work: involved individual skill, was episodic (each job being self-contained), was performed alone (although with administrative support) without the need for any collaboration with fellow workers, was typically paid on a per job basis with a limited exception for night work, utilised the tools of the worker, required a roster to ensure coverage but did not require fixed hours or times of work, was undertaken outside rather than in the employer’s place of work and, subject to availability, could be performed by any trained and qualified mechanic engaged by EVS as a substitute for another. Indeed, that array of factors about the nature of the work lends itself quite easily to an independent contracting arrangement.

Nor was the control retained by EVS for the purpose of ensuring that Barca outwardly presented as an emanation of EVS. In order to meet its contractual obligations with RACV, EVS did not need to retain workers that were under its day to day control, or who outwardly manifested a relationship with EVS and represented EVS to the public.

The fact that Barca exercised skill and judgment in providing the services is also important. The examples in the manuals to which we were taken largely centred around presentation, safe work practices and ensuring consistency of service, rather than being a constraint on the exercise of Barca’s skill and judgment. They are equally apt to apply to employees or independent contractors engaged to provide the RACV services. As a practical matter, Barca was not subject to daily control in the allocation and performance of work by EVS. Indeed, EVS was dependent on RACV for monthly reports, after the event, as to the work that had been carried out and the time that had been spent by Barca. Until EVS received a monthly report from RACV as to the work carried out by each contractor, it did not know when they had been rostered, how many services they had provided and how long they had spent doing so. This strongly tells against an employment relationship.

The freedom of Barca to decline work is also relevant.[63] The freedom to provide ERA or other mobile mechanical services outside of the RACV setting, subject to not using the RACV van, was also relevant because it facilitated the ability of Barca to use his skills entirely outside of the EVS contract. Of course, that aspect has to be seen, as do all other aspects, in the context of other factors.[64]
[63]Clause 3.3 provides that Barca is not obliged to accept any work offer to provide the services but shall give EVS not less than 24 hours’ notice of any services he has agreed to supply but can no longer supply.
[64]Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2010) 184 FCR 448, 466 [49]; [2010] FCAFC 52 (Keane CJ, Sundberg and Kenny JJ) (‘Roy Morgan’); On Call Interpreters (2011) 214 FCR 82, 97 [55], 105–6 [102], 136–7 [267]; [2011] FCA 366 (Bromberg J).

The power of EVS, pursuant to cl 10, to suspend the contract with Barca for non-compliance with the conditions is suggestive of employment in the sense that it imports a disciplinary tone. The notion of suspending the contract, as opposed to suspending the worker, perhaps diminishes the force of this aspect to some degree.[65]
[65]Cf cl 11.1.2.

In our view, consistently with the authorities in relation to multi-party arrangements, the extent to which EVS retained ultimate authority or control is inconclusive on the critical issue. The distinction between control by or for the benefit of RACV on the one hand and EVS on the other is, to our mind, important. It was not a factor to which the judge gave weight. In his reasons, the judge pointed to the control of EVS and the combined control of EVS and RACV.[66] In our opinion, RACV exerted a high degree of practical control and was closely associated with the services provided by Barca. That served to diminish the weight that control has in the characterisation of the relationship between EVS and Barca.
[66]Reasons [118].

We do not consider that the definition of worker in s 3 of the Act, insofar as it refers to a person who agrees to perform work at the employer’s direction, instruction or request, takes the argument very far. Most of the direction and instruction emanated from RACV. We accept that control is a very important indicium. However, in this case, with the interposition of RACV, we are not persuaded that the extent of control, the reasons for its imposition and its nature ultimately point strongly one way or the other in the assessment of whether Barca is an employee of EVS.

Finally, we do not consider that the designation of cl 7.1.9 as an essential term is of much assistance. For the reasons given, that Barca should observe the RACV manuals and instructions was very important to EVS. It was an essential aspect of its contractual obligations to RACV.

Delegation / incorporation

The judge considered delegation in the context of control but it is relevant in a number of ways. As Buchanan J observed in ACE Insurance, delegation is inconsistent with the rendering of personal service.[67] It is also relevant to control because it allows the worker an important degree of control in the allocation of work to the delegate.
[67](2013) 209 FCR 146, 150 [25]; [2013] FCAFC 3.

Here, the ability to delegate was limited by a requirement that RACV and EVS accredit and approve the delegate. Where delegation was permitted, Barca remained personally liable for the work.

The power to delegate and to interpose a corporate entity both tend against a conclusion that the EVS agreement was solely one for the provision of service by a specific worker. The requirement for accreditation and approval was not surprising given the skilled nature of the services, the reputational risk to RACV and the contractual risk to EVS.

We would not regard the power to delegate as illusory or contrived. It is an important factor in the mix. It suggests that EVS primarily wanted an entity to provide mechanical services, rather than a particular individual that it had chosen to integrate into its business.

In addition, the restrictive covenant contemplates that Barca is free to provide ERA not using the van or uniform without any geographic limit. That would permit Barca to compete with RACV.

Further, with the permission of EVS, Barca could use the RACV van and uniform. Presumably this would, with EVS’ permission, allow him to provide services to RACV directly or to other contractors of RACV. It may be accepted that the circumstances in which EVS would provide consent may be limited but there is no blanket non-compete clause as is often found in employment contracts.

Remuneration

In some cases, a distinction has been drawn between earning wages or salary and earning on the basis of results. The latter is said to be more consistent with an independent business. The distinction should not be taken too far. Many employees are paid per piece of work or on a commission basis.[68]
[68]Barrett (1973) 129 CLR 395, 405; [1973] HCA 49 (Stephen J); Roy Morgan (2010) 184 FCR 448, 463 [42]; [2010] FCAFC 52 (Keane CJ, Sundberg and Kenny JJ); On Call Interpreters (2011) 214 FCR 82, 100 [73]; [2011] FCA 366 (Bromberg J).

Under cl 5, when read with sch A, EVS was required to pay Barca regularly on the 15^th day of each month. In order to be paid, Barca was required to submit the shift worksheet that recorded the work he had done.

The evidence showed that Barca received a relatively stable income, generally in the vicinity of $4,000 to $4,600 per month.[69] No payments were made for leave or other employment type entitlements.
[69]Reasons [123].

There was, as the judge found, very little opportunity for Barca to earn a profit from the provision of parts.[70] Where the customer required a replacement battery, alternator or starter motor, the RACV manual obliged the service provider to offer the member RACV parts.
[70]Ibid [119].

The frequency and form of payment is a factor that is relatively neutral and was of a kind that might commonly be seen in both contracts of employment and contracts for services. Certainly, the absence of a fixed wage and the risk borne by Barca as to the volume of work are factors that point away from an employment relationship.

There is nothing to suggest that the piece rates in the EVS agreement were the product of any negotiations between EVS and Barca. EVS was constrained by its contract with RACV which set the price that RACV would pay. In the circumstances, we suspect that both employees and independent contractors would be price takers in any arrangement with EVS that was premised on its contract with RACV.

Risk

The EVS agreement contains a number of clauses providing indemnities from Barca in favour of EVS.

In an employment context, the employer is vicariously liable for the acts of the employee. That does not prevent the employee from also being liable for the same acts. However, the strict liability that the indemnity imposes is different to the liability of an employee at common law based on fault.

The indemnities and obligations to provide insurance reflect a shifting of risk from EVS to Barca. They point to a level of independence between the two contracting parties.

Provision and maintenance of equipment

VWA relied on the fact that EVS provided Barca with a van, which it warranted was suitable to provide the services, and which was registered, comprehensively insured, roadworthy and maintained in accordance with relevant regulations. Barca was not permitted to use the van to provide services to any other business unless, as mentioned, he was specifically authorised to do so by EVS. The provision of the van, which is essential to the provision of the ERA services, does suggest that Barca is engaged in the business of EVS rather than on his own account. Certainly, it is difficult to see how an ERA business could be conducted without a van.

Barca also had responsibilities in relation to the vehicle. Under cl 4.4, he was required to ensure that the vehicle was fully operational, and that he and the vehicle were in the specific colour schemes, symbols and logos nominated by RACV.

Clause 5.7 also recorded that the fee paid to Barca included a component for the provision of the vehicle. The invoices in evidence had an item for ‘van’ but no payments recorded against that item.

It is notable that Barca provided, and was responsible for, his tools of trade.

The provision of the van is an important factor in favour of a conclusion of employment. It is tempered, to an extent, by the fact that Barca was required to keep it operational and provide other equipment.

Tax arrangements

There is to some degree a difference of approach in the authorities as to how this factor is to be treated. For example, in Tattsbet, Jessup J said:

… in contemporary Australia, it is impossible to ignore, and difficult to depreciate, the taxation implications of the mode of operation which parties to a relationship have voluntarily adopted. In the past, the deduction of what are now called PAYG instalments was always treated, uncontroversially, as indicative of an intention that the relationship in question was one of employment. To any suggestion that the absence of such instalments tended to point to the relationship being one of principal and independent contractor, it was often rejoined that such an argument was circular, in the sense that a consequence of the relationship being one of employment was, under legislation, that such instalments had to be deducted. In contemporary times, however, there are legislative markers on both sides, as it were. It is no longer just the absence of PAYG deductions that may make it more difficult to characterise the relationship as one of employment, it is the presence of GST collections by the putative contractor, and his or her compliance with the regulatory requirements which apply to the provision of services by persons who are not employees, that point quite strongly against the relationship being characterised in this way. These observations are made, of course, in the context of the present case, where there is no suggestion that the respondent's participation in the GST system did not reflect her own conscious, well-informed, intentions.[71]

[71](2015) 233 FCR 46, 63–4 [70]; [2015] FCAFC 62 (emphasis in original).

On the other hand, in ACE Insurance, Buchanan J considered that less weight should be accorded to taxation because it reflected no more than one party’s treatment of the arrangements. He said:

It is also difficult, in my view, to give much independent weight to arrangements about taxation, or even matters such as insurance cover or superannuation. These are reflections of a view by one party (or both) that the relationship is, or is not, one of employment. For that reason, in my view, those matters are in the same category as declarations by the parties in their contract (from which they often proceed). They may be taken into account but are not conclusive. These matters are less important than the adoption by the parties (where this occurs) of rights and obligations which are fundamentally inconsistent with basic requirements of a contract of employment, such as the ability to delegate the discharge of obligations under a contract to another person, or where there is a lack of control over how work is done.[72]

[72](2013) 209 FCR 146, 153 [37]; [2013] FCAFC 3.

With respect, as a matter of principle, there is much to commend the approach taken by Jessup J. The assessment of the character of the relationship is not confined by the objective theory of contractual interpretation. The task is to be approached as a matter of substance, having regard to the terms of the contract, properly construed. There is little reason to downplay how the parties to the contract have acted and how they have treated the relationship in regulatory or revenue contexts.

If the parties to the contract have sought to acquit their regulatory and taxation obligations on a particular basis, and there is no contrivance in them doing so, then there is no good reason to treat those matters as no more than a reflection of self-interest or convenience.

Although the line between employee and contractor is not always a clear one, the two types of relationship are well understood and carry their own obligations, responsibilities and entitlements. A conscientious approach to regulatory compliance on the basis of a particular approach should not be deprecated as showing no more than one view of the relationship. In many cases, a party will have deliberately chosen the particular type of arrangements for his or her own reasons and ought bear the consequences of that election.

The evidence showed that Barca treated the EVS income as business income in a personal services business. Correspondingly, EVS did not withhold tax from the payments it made to Barca.[73] Barca’s tax returns show that he claimed deductions against the EVS income.
[73]Reasons [108].

The judge noted that Barca was not registered for GST and there was no evidence that he submitted business activity statements.[74] Based on the recorded income, we accept, as Barca submits, that there was no obligation on him to register for GST, to charge GST on his services or to submit a business activity statement.
[74]Ibid [110].

The judge also distinguished the facts in Tattsbet on the basis that in that case there were substantial deductions for wages to other staff.[75] Plainly, the fact that Barca did not have any employees is an important matter about the scale and also the nature of his undertaking. However, we would not diminish the significance of the taxation treatment to the extent that the judge did. The question is not the scale of the undertaking but its nature. The quantum of expenses is not as important as the fact that they were deductible as business expenses.
[75]Ibid.

We regard the taxation arrangements as relevant and of some weight. They point away from employment.

Clause 17 and the intention of the parties

An express contractual statement as to the nature of the relationship cannot be determinative. However, when the competing indicia are reasonably evenly balanced, as they are in this case, the parties’ own genuine understanding of their relationship will usually be very instructive.[76]
[76]Fair Work Ombudsman v Ecosway Pty Ltd [2016] FCA 296, [75] (White J); Australian Mutual Provident Society v Chaplin (1978) 52 ALJR 407, 409; (1978) 18 ALR 385, 389 (Lord Fraser of Tullybelton).

As Woodward J observed in Odco Pty Ltd v Building Workers’ Industrial Union of Australia, the intention of the parties ‘is obviously a very important consideration in most cases.’[77] His Honour went on to say:

The only reason it is not as decisive in determining the nature of the contract as it is in determining its content is that the parties may intend to create one type of contract, but include in it provisions which require the law to classify it differently. Allowance must also be made for the fact that the expressed intention of the parties may be a sham, designed to achieve some taxation or other advantage; but in that case the real intention of the parties is to be ascertained from material other than their declared intentions.
However, where the parties are behaving honestly, and where the nature of their proposed relationship is such that it could become that of either employer/employee or principal/contractor, then it is open to them to mould their legal relationship in either form. Their intentions will then tend to influence the details of their agreement, and any apparently contrary indicia would need to be closely examined against the background of the parties’ intentions.[78]

[77][1989] FCA 483, [135].

[78]Ibid [135]–[136] (citations omitted).

It has been said that confining the examination to contractual descriptions would place many workers who are in truth employees beyond the protective reach of the law.[79] No doubt there are cases where parties to a contract have chosen labels in order to produce, or avoid, certain legal consequences. However, the consideration of contractual documents that provide for an individual to work for another should not be informed by undue scepticism. The form of the contract will often cast light on the ‘truth’ of the situation. That is so where there is no suggestion of dissimulation. Suspicion may be justified in some cases, for example, where an employment relationship suddenly changes with the imposition of a new corporate entity and a rebadging of the same work and conditions, but it should not unduly cloud the exercise of interpreting the nature of the relationship.
[79]On Call Interpreters (2011) 214 FCR 82, 121 [200]; [2011] FCA 366 (Bromberg J).

There is no suggestion of contrivance, artificiality or avoidant behaviour on the part of EVS in proffering the EVS agreement. The EVS agreement was relatively longstanding and both parties took the benefit of it.

In our opinion, cl 17 of that agreement is important and we do not accept that it is no more than a self-serving label. It fits harmoniously with the agreement as a whole.

Conclusion

When EVS engaged Barca to discharge its contractual obligations to RACV and supplied him with a van for that purpose, the arrangements carried a high degree of control over the presentation of Barca and integration into the RACV network. However, Barca retained a significant degree of control in how he utilised his skills in providing each service.

At the same time, the contractual arrangements with EVS provided Barca with a degree of independence and exposed him to a degree of risk that are atypical for an employee. Barca had the capacity to interpose a company, could delegate work with EVS’ approval, could work for himself or others, including RACV (again with the approval of EVS), and was not required to commit to minimum work levels. He was typically paid per service provided and did not receive annual leave, sick leave or other typical employee benefits.

Both EVS and Barca proceeded on the basis that the relationship was not that of employer and employee over a long period of time. In the claim form competed in respect of the injury for which he sought compensation, Barca identified himself as a contractor.

We have come to the conclusion that the parties to the EVS agreement accurately proceeded on the basis that the agreement did not render Barca an employee of EVS. To the extent that facts pointed towards employment and gave rise to any ambiguity, the status was clarified by the parties through the agreement. The parties were entitled to achieve that result. Barca did not give evidence in the proceeding. Accordingly, he did not give evidence that the agreement was other than as it appeared or was unduly or unfairly imposed on him.

It follows, Barca was not an employee of EVS.

Accordingly, we would grant leave to appeal and allow the appeal. Barca was not a common law employee and, given the way the matter was conducted at trial, he did not come within the definition of ‘worker’ in the Act. EVS should have succeeded in its appeal under s 85 of the Act and orders should be made to reflect that result.

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[2020] VSCA 154

12 June 2020