Fair Work Ombudsman v Windaroo Medical Surgery Pty Ltd
[2015] FCCA 554
•17 March 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v WINDAROO MEDICAL SURGERY PTY LTD & ORS | [2015] FCCA 554 |
| Catchwords: COERCION – Whether failure to make payments under contract of services was cessation of work under the contract – whether done with intent to coerce other party to contract not to pursue a complaint to Fair Work Ombudsman. |
| Legislation: Fair Work Act 2009 (Cth), ss.12, 19, 340, 341, 342, 342(1) item 3, 342(1) item 6, 342(2)(a), 343, 361(1), 550 |
| Cases cited: World Book (Australia) Pty Ltd v Commissioner of Taxation (1992) 27 NSWLR 377 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | WINDAROO MEDICAL SURGERY PTY LTD |
| Second Respondent: | SHEILA PATHMANATHAN |
| Third Respondent: | TAM THI THANH TRAN |
| File Number: | BRG 525 of 2011 |
| Judgment of: | Judge Jarrett |
| Hearing dates: | 14 March, 9, 10, 11, 12 July, 20 August 2012 |
| Date of Last Submission: | 25 September 2012 |
| Delivered at: | Brisbane |
| Delivered on: | 17 March 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Pratt |
| Solicitors for the Applicant: | Corrs Chambers Westgarth |
| Counsel for the First, Second and Third Respondents: | Mr Merrell, directly instructed by each respondent |
ORDERS
Direct that the parties bring in, on the next court date, minutes of the declarations to be made consequent upon these reasons;
Adjourn the application to 11 May, 2012 at 9.30am for the hearing of any submissions relating to, and the determination of, pecuniary penalty, compensation and any consequential orders.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 525 of 2011
| FAIR WORK OMBUDSMAN |
Applicant
And
| WINDAROO MEDICAL SURGERY PTY LTD |
First Respondent
| SHEILA PATHMANATHAN |
Second Respondent
| TAM THI THANH TRAN |
Third Respondent
REASONS FOR JUDGMENT
Dr Venkata Kaza is a medical practitioner, qualified as such in India, who decided to migrate to Australia with his family. He intended to practice as a medical practitioner in this country. In pursuit of that objective he took up an engagement with the first respondent, Windaroo Medical Surgery Pty Ltd. I use as neutral a term as I can because the nature of the engagement is one of the matters of contention between the parties in this application.
The engagement, however, did not go as well as Dr Kaza had hoped. It resulted in Dr Kaza making a complaint to the Fair Work Ombudsman about his treatment by those who were the human faces of the first respondent.
By this application, the Fair Work Ombudsman alleges that on two occasions the first respondent (by the second and third respondents) contravened s.343 of the Fair Work Act2009 (Cth) by threatening to take action against Dr Kaza so as to coerce him into not pursuing the complaint he had made to the Fair Work Ombudsman about the first respondent.
The Fair Work Ombudsman also alleges that on three occasions the first respondent contravened s.340 of the Act by taking adverse action against Dr Kaza because he had exercised a workplace right, namely the right to make the complaint to the Fair Work Ombudsman referred to above. Two of those contraventions arise from the threats that are alleged to constitute the contraventions of s.343 of the Act and to which I have already referred. The third alleged contravention arises from the first respondent ceasing to make certain payments to Dr Kaza allegedly because Dr Kaza failed to withdraw the complaint that he made to the Fair Work Ombudsman.
The Fair Work Ombudsman seeks orders for the imposition of civil penalties on the first respondent and compensation for loss allegedly suffered by Dr Kaza. The second respondent, Ms Pathmanathan, and the third respondent, Dr Tran, are alleged to be liable to civil penalties and for compensation for Dr Kaza’s losses on the basis that they were involved in the relevant contraventions within the meaning of that term as used in s.550 of the Fair Work Act.
Each of the respondents deny the alleged breaches on the basis that:
a)the nature of the relationship between Dr Kaza and Windaroo was not such as to attract the operation of Part 3-1 of the Act; and
b)even if the operation of Part 3-1 of the Act is engaged, there was no coercion or adverse action as alleged by the applicant.
In broad terms, the first issue for determination concerns the nature of the relationship between Dr Kaza and the first respondent. In that respect the case is a little out of the ordinary. Rather than the contest between the parties being whether the relevant engagement was a contract of service or a contract for services, here the contest is such that the respondents contend that the engagement met neither description and was something more akin to a joint venture type arrangement. The nature of the relationship between Dr Kaza and the first respondent will determine whether the Fair Work Act is engaged at all.
If I determine that it is, the second general issue for determination arises, namely whether the Act has been contravened by the respondents in the way alleged by the applicant.
I should make it clear from the outset that the evidence of many of the witnesses is rife with disagreement regarding factual matters that are of no consequence to the proceedings at hand and, to that extent, I have ignored such matters. There are, however, some factual disagreements that are important. I have not only had recourse to the transcript of the hearing of this matter, I have also reviewed relevant parts of the audio recordings of the hearing.
Some background
The first respondent has premises in Loganholme, Queensland that are fitted out so that medical practitioners can provide general practice services to the public. The nature of the arrangement between the medical practitioners that provide that service and the first respondent is perceived by the parties to be, perhaps, the principal issue in this case. I say no more about it at this point.
The second respondent is an accountant by profession. At relevant times, she was the manager of the Loganholme Medical Surgery. She was a director of and shareholder in the first respondent. She is not a medical practitioner.
The third respondent is a qualified medical practitioner who provides general practice services to members of the public from the premises operated by the first respondent. She too, is a director of, and a shareholder in the first respondent.
At times that are relevant to these proceedings, another medical practitioner, Dr Jeyanth Kumar also provided general practice services to members of the public from the premises operated by the first respondent. He is a director of and a shareholder in the first respondent. He is married to the second respondent.
Dr Kaza graduated with a Bachelor of Medicine and Bachelor of Surgery from University J.N. Medical College, Karnatak, India in 1987. He has worked as a medical practitioner in India in the past.
Dr Kaza is married and he and his wife have one daughter. Some years prior to 2006, Dr Kaza and his wife resolved to come to Australia to start a new life with their daughter. They took advice and saved their funds to advance their aspirations.
Dr Kaza and his family came to Australia in the middle of 2006. He came to Australia on a student visa and went to Adelaide with his wife and daughter. He commenced a Masters of Health Service Management at Flinders University, Adelaide. For some of the time that he was studying, he also worked as a carer in an aged care facility. For some months Dr Kaza’s wife worked as well.
Dr Kaza successfully completed his study at Flinders University in December, 2007.
After his student visa expired, Dr Kaza took up a tourist visa whilst he set about looking for work.
On or about 11 September 2007, Dr Kaza made an enquiry of Qantum Recruitment Pty Limited (now known as Medacs Healthcare Australia Pty Limited), a specialist general practitioner recruitment agency, about obtaining employment as a medical practitioner, and in particular a general practitioner, in Australia. The managing director of that company is Mr Ron Crause. He gave evidence (both by affidavit and in cross-examination) in the proceedings.
A few days later Dr Kaza received a reply from Mr Crause. The reply outlined a number of matters that Dr Kaza needed to complete to obtain a role as a general practitioner in Australia. Mr Crause suggested that there were certain Government programs available that would assist Dr Kaza to work and live in Australia.
Mr Crause’s evidence explains that due to the requirements set by the relevant State Health Departments and the Federal Department of Health and Ageing, before a general practice could employ or engage an overseas-trained general practitioner under what he called the “Strengthening Medicare” scheme, the general practice was required to:
a)hold an “Area of Needs” certification - a certification issued by the relevant State health department to general practices that have not been successful in securing the services of a locally-trained general practitioner;
b)be in a “District of Workforce Shortage”, which is a specific geographical area identified by the Federal Department of Health and Ageing as lacking sufficient numbers of locally-trained general practitioners per head of population; and
c)be approved as eligible to sponsor overseas-trained general practitioners by the Federal Department of Immigration and Citizenship.
Additionally, the overseas-trained general practitioner must have:
a)not worked in Australia in the 12 months prior to becoming employed or engaged under the “Strengthening Medicare” scheme; and
b)obtained a Medicare provider number to enable them to commence seeing patients and accessing Medicare rebates for patient consultation.
In December, 2007 Mr Crause presented to Dr Kaza an opportunity to work on the Gold Coast, Queensland as a general practitioner. However, that position did not come to fruition. To work anywhere in Australia, Dr Kaza needed to be registered with the relevant state based medical board. The Medical Board of Queensland would not give Dr Kaza an unrestricted registration, but only a registration on terms that his work was supervised. The position on the Gold Coast was for an after-hours medical practice and there would be no-one present to supervise his work. He could not take up that opportunity.
On 14 February, 2008 Dr Kaza’s wife and daughter returned to India. They planned to return to Australia once Dr Kaza had secured a position as a general practitioner.
Quite independently of Dr Kaza’s enquiry, the second respondent had also made contact with Qantum Recruitment. She told Mr Crause that the “Loganholme Medical Surgery” had been granted a preliminary assessment of a “District of Workforce Shortage” and that she was looking for an overseas-trained doctor. That seems to have occurred in late 2007 or early 2008.
Sometime in 2008, and probably about 28 May, 2008, Mr Crause told the second respondent about Dr Kaza. He told her about his difficulty in securing the position on the Gold Coast, but assured her that Dr Kaza would get the necessary registration to work as a general practitioner if he was in a group practice environment. He sent the second respondent Dr Kaza’s curriculum vitae and passed on Dr Kaza’s contact details. Mr Crause told Dr Kaza of the opportunity at Loganholme with the first respondent.
On about 29 May, 2008 the second respondent and Dr Kaza had their first contact with each other. It was a telephone conversation. The second respondent purports to have a precise recollection of the conversation, but Dr Kaza does not. He recalled some matters put to him by counsel for the respondents that the second respondent alleges were said in that conversation and not others. He specifically denies the suggestion that the other doctors in the practice were described as “contracted” medical practitioners.
A couple of days later, the second respondent made telephone contact with Dr Kaza again. They made arrangements for Dr Kaza to travel from Adelaide to Loganholme for a more formal interview. Dr Kaza thought that the second respondent was one of the medical practitioners at the Loganholme Medical Surgery. He knew that she was a director of the surgery and was “in charge”. It was not until sometime later that he became aware that she was not a medical practitioner.
On 7 June, 2008 Dr Kaza attended at the first respondent’s premises in Brisbane. He arrived at about 1.00pm and left late in the afternoon – probably about 4.30pm.
Initially he met with the second respondent. The parties are in dispute about what was said at that time, and I will return to that dispute later in these reasons. At some point, however, Dr Kumar attended the meeting and later in the afternoon, Dr Kaza spent some time alone with Dr Kumar.
Following the interview, Mr Crause had a conversation with Dr Kaza. Mr Crause says that Dr Kaza expressed his approval of “the arrangement”. Mr Crause consequently contacted the second respondent via email who also expressed her approval with “the arrangement” and a wish to proceed to the next step.
On 13 June, 2008 Dr Kaza received and signed a document provided to him by the second respondent described as a “Letter of Appointment”. The letter was printed on Loganholme Medical Surgery letterhead and listed the terms and conditions of his “appointment”. It purports to set out various matters relating to Dr Kaza’s engagement by the first respondent. No commencement date is set out, but it is expressed to be “For the duration of the visa granted under Visa Class 422 and subsequent renewal thereof (if permitted)”.
The letter of appointment is a confused and confusing document. Whilst on the one hand it refers to the position to which Dr Kaza is appointed is a “contracted medical practitioner”, it also refers to his “Employment Status” and “Duration of Employment”. The parties are in dispute about the proper construction of this document. I will return to an analysis of this document later in these reasons, but for present purposes it is sufficient to record that Dr Kaza received, signed and returned the document to the second respondent.
Dr Kaza, with the assistance of Mr Crause set out securing the appropriate registration with the Medical Board of Queensland.
On 30 July, 2008, Dr Kaza returned to India. His tourist visa that had permitted him to remain in Australia was due to expire the next day. However, he continued to work on the various requirements necessary to take up his engagement from India.
Whilst the area of Loganholme was classified as a District of Workforce Shortage on 19 July, 2007, and the classification was extended on a number of occasions thereafter, it was not until 20 August, 2008 that another part of the “Strengthening Medicare” scheme fell into place for the parties. On that day an “Area of Needs” certification was received by the first respondent.
On 10 October, 2008 Dr Kaza received notification from the Medical Board of Queensland that his application for registration had been approved subject to certain conditions. The period of registration was from 6 October, 2008 to 5 October, 2009. One of the conditions imposed by the Medical Board was that Dr Kaza could only practice “the profession only in accordance with the supervised practice plan approve by the Board”. A supervised practice plan had been submitted to the Board with Dr Kaza’s application for registration. It provided for a two week period of orientation at the commencement of his engagement with the first respondent.
Dr Kaza initiated an application for a Medical Practitioner (Temporary) (subclass 422) visa. The first respondent sponsored the application.
On 22 December, 2008 the first respondent’s sponsorship of Dr Kaza’s visa application was approved and on 2 February, 2009 Dr Kaza and the second respondent were notified that Dr Kaza was granted a Medical Practitioner (Temporary) (subclass 422) visa. Dr Kaza’s wife and daughter were also granted visas.
After approval of his visa, Dr Kaza made application for a Medicare Provider Number, something necessary for him to work in Australia as he proposed.
It appears that there may have been some confusion as to when Dr Kaza was to begin his orientation period at the practice. Ultimately however he departed India, bound for Australia on or about 14 March, 2009. He arrived in Brisbane on or about 16 March, 2009. He came alone, preferring to settle in first and organise accommodation for his family before they joined him from India.
Dr Kaza applied for and was issued with an Australian Business Number on 17 March, 2008. Next to the heading “Type of Entity” in the extract form the Australian Business Register that is annexed to Dr Kaza’s principal affidavit, appeared the words: “Sole Trader”.
Dr Kaza commenced his orientation period at the Loganholme Medical Surgery on 24 March, 2009. During the orientation period he attended at the practice Monday to Saturday inclusive. There is a dispute about a number of days that the second respondent submits that Dr Kaza was not in attendance during this period however such dispute is of little consequence.
On 1 April, 2009 Dr Kaza executed a confidentiality agreement given to him by the second respondent on behalf of the first respondent. In it, he is described as a “contracted medical practitioner”. I have set out the terms of this agreement in greater detail below.
On 9 May, 2009, Dr Kaza’s wife and daughter arrived in Brisbane from India.
On 20 May, 2009 a conversation occurred between Dr Kaza and the second and third respondents. The respondents suggest that this conversation constituted an oral agreement between Dr Kaza and the first respondent that, together with the letter of appointment, dictated the terms of the engagement between the parties. What was said during this conversation is in dispute and will be discussed in greater detail where necesssary.
Dr Kaza did not commence to see patients until 10 June, 2009. Why that is so is the subject of dispute between the parties. Dr Kaza suggests that he was ready to commence, but that the respondents kept delaying the commencement of him seeing patients on his own. The applicant suggested that the respondents wished to delay his commencement until after the completion of an accreditation process that the first respondent needed to complete in early June. The applicant suggested that if Dr Kaza was not seeing patients, he would not have to be interviewed by the accreditation auditor and his inexperience would not be evident.
The practice’s accreditation was scheduled for 9 June, 2009. The exact terms of the conversations that took place between Dr Kaza and the second respondent in relation to Dr Kaza’s attendance at the practice that day is in dispute, however, it is accepted that for whatever reason, whether by instruction or on his own volition, Dr Kaza did not attend the practice on 9 June and in no way participated in the accreditation process.
Dr Kaza began seeing patients on 10 June, 2009, some two and a half months after the commencement of what was to be a two week orientation period. The parties are also in dispute regarding the reason for the extension of the orientation period. I do not think it coincidental that Dr Kaza commenced seeing patients on the day following the visit by the accreditation auditor.
The evidence suggests that when it was time to bill a patient that had consulted Dr Kaza:
a)they would be billed under Dr Kaza’s Medicare provider number;
b)the Practice’s reception would process any payment received from the patient on that day and deposit the monies into the bank account in the name of Dr Kaza; and
c)if a claim was to be submitted to Medicare it would be processed under Dr Kaza’s provider number and payment would be received into a bank account in the name of Dr Kaza.
However, while the bank account into which the relevant fees were deposited was in the name of, and presumably owned by Dr Kaza, he was not a signatory to the account. He was unable to transact on the account. The only person who could transact on the account was the second respondent.
Dr Kaza was paid for the patients that he saw from 10 June, 2009 to 12 August, 2009. He was paid in accordance with the letter of engagement. However, Dr Kaza did not receive his fortnightly payment as scheduled on 12 August, 2009. The second respondent said that was because Dr Kaza had not provided the second respondent with proof of his private health insurance. This problem was rectified and payments resumed on 26 August, 2009.
On 4 November, 2009 Dr Kaza was due to receive a fortnightly payment for the patients he saw during the period of 14 September, 2009 to 26 September, 2009. That payment was withheld and no further payments were made to him until 26 February, 2010 when Dr Kaza received the amount of $19,719.78 for the period 14 September, 2009 to 16 January, 2010.
Dr Kaza contacted a number of people regarding the failure of the first respondent to pay him:
a)on 27 November, 2009 he emailed Medacs (previously known as Quantum) raising issues of non-payment and compensation;
b)on 2 December, 2009 he contacted Dr Viney Joshi of the Australian Doctors Trained Overseas Association for guidance;
c)on 6 December, 2009 he emailed the second respondent asking what further paperwork was required;
d)on 10 December, 2009 he emailed the High Commission of India in Canberra as well as the Medical Board;
e)on 30 December 2009 he lodged a complaint with the Fair Work Ombudsman; and
f)on or about 11 January, 2010 he contacted the Prime Minister of Australia.
In January, 2010 Dr Kaza’s wife and daughter returned to India.
In February, 2010 a number of telephone exchanges took place between the second respondent and Ms Renee Corney, an investigator from the Fair Work Ombudsman. The content of these conversations are in dispute, but again, the resolution of those disputes are of little consequence for these proceedings.
On or about 24 February, 2010 an exchange took place between the third respondent and Dr Kaza. It is this exchange that the applicant contends constitutes the first threat constituting the first claims of coercion and adverse action. Exactly what was said and the implication of such is in dispute and will be explored in more detail later in these reasons.
On 10 March, 2010 the first respondent made a further payment to Dr Kaza of $780.25 for the period 18 January to 30 January, 2010. No further payments were made to Dr Kaza and it is this cessation of payments that constitutes the second adverse action claim.
Dr Kaza and the third respondent had further conversations on 19 and 20 April, 2010. The applicant contends that these exchanges constitute the second act of coercion and the third act of adverse action at issue in these proceedings. Exactly what was said and the implications of such are in dispute and will be detailed below.
On 18 April, 2010 Dr Kaza submitted his resignation effective from 27 April, 2010. However as his medical registration had been renewed he continued at the practice and submitted a further resignation on 5 May, 2010. Dr Kaza’s last day at the practice was 6 May, 2010. This is also the last day that his medical registration was valid.
Dr Kaza returned to India on 17 May, 2010.
The legislative framework: the adverse action claims
Section 340 of the Act provides that:
(1)a person must not take adverse action against another person:
(a)because the other person:
(i) has a workplace right; or
(ii) has, or has not exercised a workplace right; or
(iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b)to prevent the exercise of a workplace right by the other person.
To engage s.340 of the Act, there must be adverse action taken by one person against another. The circumstances in which one person will be said to have taken adverse action against another are set out in s.342 of the Act. The circumstances commence by identifying the relationship of the parties. It is only if the parties to the relevant action are within one of the defined relationships set out in the items in the table to s.342 of the Act that the actions complained of might become actionable.
The applicant primarily relies upon item 3 of the table in s.342 of the Act. That item provides that:
Adverse action is taken by…
a person (the principal) who has entered into a contract for services with an independent contractor against the independent contractor, or a person employed or engaged by the independent contractor
if…
the principal:
(a) terminates the contract; or
(b) injures the independent contractor in relation to the terms and conditions of the contract; or
(c) alters the position of the independent contractor to the independent contractor’s prejudice; or
(d) refuses to make use of, or agree to make use of, services offered by the independent contractor; or
(e) refuses to supply, or agree to supply, goods or services to the independent contractor.
In the alternative, the applicant argues that item 6 of the table in s.342 of the Act would apply. By that item:
Adverse action is taken by…
an independent contractor against a person who has entered into a contract for services with the independent contractor
if…
the independent contractor:
(a) ceases work under the contract; or
(b) takes industrial action against the person.
Insofar as the coercion claims are concerned, s.343 of the Fair Work Act is relevant. It provides:
343 Coercion
(1) A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to:
(a) exercise or not exercise, or propose to exercise or not exercise, a workplace right; or
(b) exercise, or propose to exercise, a workplace right in a particular way.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(2) Subsection (1) does not apply to protected industrial action.
What constitutes a workplace right is relevantly defined in s.341 of the Act:
341 Workplace Right
(1)A person has a workplace right if the person:
(a)is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
(b)is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
(c)is able to make a complaint or inquiry:
(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii) if the person is an employee – in relation to his or her employment.
Meaning of process or proceedings under a workplace law or workplace instrument
(2)Each of the following is a process or proceedings under a workplace law or workplace instrument:
(a)a conference conducted or hearing held by the FWC;
(b)court proceedings under a workplace law or workplace instrument;
(c)a protected industrial action;
(d)a protected action ballot;
(e)making, varying or terminating an enterprise agreement;
(f)appointing, or terminating the appointment of, a bargaining representative;
(g)making or terminating an individual flexibility arrangement under a modern award or enterprise agreement;
(h)agreeing to cash out paid annual leave or paid person/carer’s leave;
(i)making a request under Division 4 of Part 2-2 (which deals with requests for flexible working arrangements);
(j)dispute settlement for which provision is made by, or under, a workplace law or workplace instrument;
(k)any other process of proceedings under a workplace law or workplace instrument.
The Fair Work Act is a workplace law: s.12 of the Act
The nature of the relationship between the first respondent and Dr Kaza
The respondents submit that the business of the first respondent was to provide services to medical practitioners so that the medical practitioners could conduct their medical practices from the first respondent’s premises in return for a service fee for the provision of those services. They point out that the business of the first respondent was not to operate a medical practice or provide medical services, but its business was the provision of the following services to individual medical practitioners:
a)the provision of consulting and treatment rooms;
b)reception staff;
c)office and medical equipment;
d)bookkeeping and record keeping facilities;
e)fee remittance and collection services;
f)medical and non-medical consumables;
g)computer equipment including hardware and software; and
h)administrative services.
The evidence bears out that the first respondent did, in fact, supply those services to the medical practitioners who provided medical services to patients at the first respondent’s premises.
I accept that the first respondent did not at any relevant time operate a general medical practice because the first respondent did not and was not permitted to have a Medicare Australia provider number and patients were unable to assign their Medicare Australia benefits to the first respondent.
However, the second respondent accepted during the course of cross-examination that:
a)although many patients associated the Loganholme Medical Surgery with the individual doctors, patients were not privy to the nature of the business relationship between the first respondent and the doctors at the surgery;
b)members of the public would see the first respondent, under its trading name Loganholme Medical Surgery, as a provider of medical services rather than an administrative service provider to the relevant doctor;
c)it is not the services of individual doctors that are advertised to the public but Loganholme Medical Surgery as a whole;
d)if a doctor at Loganholme Medical Surgery generated no fee income, the first respondent would generate no income.
Clearly, the first respondent operated a medical clinic, described as Loganholme Medical Surgery, at which members of the public could receive advice and treatment from general medical practitioners. Those that managed and controlled the first respondent took the view that the patients seen by the doctors at Loganholme Medical Surgery, were patients of “the practice” – that is to say, the Loganholme Medical Surgery. An email from the second respondent (who was not a medical practitioner) to the Medical Board of Queensland illustrates the point:
Dear Katrina,
I would appreciate it if you could please let me know when the Medical Board will be considering Dr. Kaza Rao’s application for registration.
We are really anxious to find out the outcome, as we have been down 1 doctor since June 2008 and it is having a severe impact on our patients as numerous patients are being turned away on a daily basis. It has been especially difficult in the winter months and as yet, the pressures on our existing 2 doctors have not eased up. As you would appreciate, doctors are restricted by Medicare as to the number of patients that they can see on any given day. As such, we are in desperate need of another doctor at our Surgery and we would appreciate it if Dr. Kaza Rao’s application for registration is given due consideration expediently.
We were very fortunate to have conducted a face-to-face interview with Dr. Kaza Rao whilst he was in Australia and in the process, a medical interview was also conducted, whereby, he was asked to present several medical case scenarios to our doctors and it was consequently established that his medical knowledge was satisfactory. He was also given several medical journals to take away with him for further reading and was given a list of common and uncommon medical presentations in a General Practice setting for him to prepare for his eventual return to Australia.
In light of the above, I would appreciate it if you could forward this e-mail to the persons involved in Dr. Kaza Rao’s registration for their due consideration.
I look forward to a favourable reply from you as soon as possible.
Thank you and kind regards,
Sheila Nathan.
Loganholme Medical Surgery
(my emphasis)
Neither party suggests that Dr Kaza was an employee of the first respondent.
Whilst the applicant contends that the first respondent was either a principal or, alternatively, an independent contractor for the purposes of engaging s.342 of the Act, the respondents contend that the relationship between the first respondent and Dr Kaza was nothing more than a “commercial arrangement” whereby the first respondent provided certain facilities and assistance to Dr Kaza to enable him to carry on his own business as a medical practitioner for a fee. The relationship, they argue, was analogous to a partnership: see Ashcoast Pty Ltd v Whillans [1998] 2 Qd.R 1. The respondents submit that on no view of the evidence can it be said:
a)that the first respondent was in the position of a principal and Dr Kaza was an independent contractor for the purposes of item 3 of the table in s.342 of the Act ; or
b)that the first respondent was in the position of an independent contractor pursuant to a contract for services with Dr Kaza for the purposes of item 6 of the table in s.342 of the Act.
Before proceeding further, it is necessary to observe that I found the second and third respondents’ evidence generally unhelpful. Their written evidence, in particular, demonstrated a proclivity for taking every available opportunity to make self-serving statements about the nature of the legal relationship between Dr Kaza and the first respondent. However, as their own written submissions made at the close of the trial point out, the words given by the parties to a relationship are not generally decisive. The true relationship between the parties cannot be altered by putting a different label upon it: Curtis v Perth and Fremantle Bottle Exchange Co Limited (1941) 18 CLR 17 at 25.
I have no doubt, having regard to the evidence of Dr Kaza, that the notion that he was operating his own business with the assistance of the first respondent would be very surprising for him. His evidence was that he was looking for a job. He was looking for employment and to that end, he contacted Mr Crause’s organisation. Moreover, in light of the position of the Medical Board of Queensland that he could not practice medicine except in a supervised capacity, it would be surprising perhaps, to conclude that in the circumstances Dr Kaza was carrying on his own practice.
Moreover, to be present in Australia and work, Dr Kaza required a visa. Two classes of visa were available at the time. The visa applied for was a Medical Practitioner (Temporary) (Class UE) (subclass 422) visa. Although the criteria applicable to the grant of that visa set out in schedule 2 to the Migration Regulations1994 speak of a visa applicant’s employment and employer, the evidence secured by Fair Work Inspector Corney (who gave evidence in this case) makes it clear that the policy of the Department of Immigration at the relevant time was to approve an application for such a visa in circumstances where the overseas trained doctor was to be an independent contractor rather than an employee.
Consistently with the Department’s approach, the visa conditions attached to Dr Kaza’s subclass 422 visa contemplate the visa holder being engaged in activities other than employment. It was a condition of Dr Kaza’s visa (provided for in schedule 8 to the Migration Regulations) that:
Mandatory conditions for main applicant:
8107
As a person who has been granted a UE 422 visa that person must not:
(a) if the visa was granted to enable the holder to be employed in
Australia:
(i) cease to be employed by the employer in relation to which the visa was granted; or
(ii) work in a position or occupation inconsistent with the position or occupation in relation to which the visa was granted; or
(iii) engage in work for another person or on the holder’s own account while undertaking the employment in relation to which the visa was granted; or
(b) in any other case:
(i) cease to undertake the activity in relation to which the visa was granted; or
(ii) engage in an activity inconsistent with the activity in relation to which the visa was granted; or
(iii) engage in work for another person or on the holder’s own account inconsistent with the activity in relation to which the visa was granted.
With those general matters in mind, it is necessary to consider the terms of the only written agreement between Dr Kaza and the first respondent. That is the letter of appointment signed on or about 12 June, 2008. The first page of the document is in the following terms:
LETTER OF APPOINTMENT
We are pleased to confirm your appointment as a contracted medical practitioner with Loganholme Medical Surgery.
The appointment is conditional upon you obtaining registration as a medical practitioner with the Medical Board of Queensland and you must possess an appropriate and valid visa, under Visa Class 422, issued by the Department of Immigration and Citizenship. In addition, you must obtain a Medicare provider number, a Tax File Number (TFN) and an Australian Business Number (ABN) as a sole trader.
Listed below are the terms and conditions of your appointment:
Position: Contracted medical practitioner
Place of Work: Loganholme Medical Surgery
Loganholme Shopping Village
37 - 59 Bryants RoadLoganholme, Qld 4129
Employment Status: Full-time
Duration of For the duration of the visa granted
Employment: under Visa Class 422 and subsequentrenewal thereof (if permitted).
Remuneration: 70% of gross receipts for the first 3
months and 60% of gross receipts thereafter.
Goods and Services Tax (GST) will applyaccordingly.
Payment Method: Fortnightly by cheque/EFT into an
account of your choice.
On the following pages of the document appear provisions relating to various matters. An obligation of confidentiality was imposed upon Dr Kaza. He was to be responsible for his own medical indemnity insurance, health insurance and taxation liabilities and obligations. He was to return any property of the first respondent’s upon the termination of the agreement and make reparations for damage to property owned by the first respondent. The final clause was a restraint of trade clause which on its face prevented Dr Kaza from practicing medicine in an area within a radius of 5 kilometres of the Surgery and for a period of 24 months following the end of the agreement.
The “Letter of Appointment” leaves much unsaid. There is nothing in the document that deals with the obligations cast upon the first respondent by the relationship. In that way and by the use of terms such as “Employment Status”, “Duration of Employment” and “Remueration” the agreement looks very much like an employment agreement. But the parties agree that it is not.
It is useful to compare the position of the other two medical practitioners in the first respondent’s surgery with the position of Dr Kaza. The evidence shows that each of those medical practitioners has a comprehensive service agreement with the first respondent that spells out the obligations of both the first respondent (called the “contractor” in the document) and the “practitioner”. When Dr Kaza and the second respondent met on 7 June, 2008, the second respondent says that she had a draft service agreement to discuss with Dr Kaza and that she discussed with him the services that the first respondent would provide to him and the basis upon which those services would be provided. She swears in her first trial affidavit that she did not get Dr Kaza to sign the service agreement “because of work pressures and time constraints on my part to furnish him with a final copy of the document”. The copy of the draft service agreement annexed to her affidavit appears to be in the same form as that signed by Dr Tran (by her medical company) and Dr Kumar (by his medical company). The only items missing from the draft was Dr Kaza’s name and the “applicable percentage” in the schedule to the service agreement. If there were “work pressures and time constraints” the missing items could have easily been inserted by hand and the document executed if it, in truth, represented the agreement between the parties.
The second respondent’s evidence about the draft service agreement is not credible in my view. Dr Kaza denied that he was shown such a document at the meeting on 7 June, 2008. I accept his denials about that. I am not satisfied that on 7 June, 2008 the second respondent had with her or showed to Dr Kaza the draft service agreement as she claims.
Moreover, to the extent that the second respondent gave evidence that she discussed the “provision of services on the part of Dr Kaza”, I reject her evidence. She gave no specificity about the nature and the extent of the services to be provided, or the discussions that she had with Dr Kaza about those matters. The form of her evidence, both in her affidavits and her cross-examination detract from its probity to such an extent that I am not satisfied that her generalisations are accurate.
More specificity was put to the relevant conversations by the questions asked of Dr Kaza in cross-examination, but it is only those propositions that were accepted by Dr Kaza that constitute the relevant evidence. The questions themselves do not. Relevantly, Dr Kaza accepted that he was told by the second respondent that he would be provided with a chamber, which he explained was a consultation/treatment room and a chair, but beyond that he denied that the second respondent gave him any other information about the services that he would be provided.
I accept that the second respondent did inform Dr Kaza “that the first respondent would provide him with the required services to enable him to carry out” his work, although I do not accept that the second respondent told Dr Kaza that he would be carrying on his own medical practice.
The respondents do not suggest in their lengthy written submissions what findings ought to be made about the terms of the contract that came into being between the first respondent and Dr Kaza. Neither does the applicant. That is to say, neither party spells out the terms of the agreement which they contend comprise the agreement between the first respondent and Dr Kaza.
There is no doubt on the evidence that whatever label might be attached to the relationship between Dr Kaza and the first respondent, at the very least:
a)it was contractual in nature;
b)it provided for the first respondent to provide facilities and to render administrative services to Dr Kaza; and
c)it required Dr Kaza to pay for the services he received from the first respondent.
I am satisfied that the parties reached a concluded contract about Dr Kaza’s engagement. It was partly contained in the letter of appointment signed on 12 June, 2008. Further, there was an express oral term to the effect that the first respondent would provide Dr Kaza with the required services to enable him to carry out his work of seeing patients at the first respondent’s premises. Alternatively if there was no such express oral term, by implication, it must have been a term of the engagement that the first respondent would provide the necessary facilities and consumables so as to permit Dr Kaza to practice as a general practitioner at Loganholme Medical Surgery.
There seems to be no dispute that the required services, or the necessary facilities and consumables included, at the least:
a)the provision of consulting and treatment rooms;
b)reception staff;
c)office and medical equipment;
d)bookkeeping and record keeping facilities;
e)fee remittance and collection services;
f)medical and non-medical consumables;
g)computer equipment including hardware and software; and
h)administrative services.
Those services are consistent with the services provided by the first respondent to the other doctors at the surgery (via their associated medical companies) as set out in their service agreements.
There is no dispute that the first respondent would receive a fee for the services that it provided.
Neither the term principal nor independent contractor is defined in the Fair Work Act in any meaningful way. Those terms, however, have traditionally been considered in the context of contest about whether a person is in an employment relationship with another. The Oxford English Dictionary defines an independent contractor as, “A person or company providing a service or goods on a contractual basis, and not regarded as the legal responsibility of those with whom the contract is made, or formally accorded employee status”.
Traditionally, one of the distinctions between an employee and an independent contractor is that an independent contractor contracts to produce a result, the completion of which is usually, but not always, seen as a condition precedent to payment: World Book (Australia) Pty Ltd v Commissioner of Taxation (1992) 27 NSWLR 377 ad Hollis v Vabu Pty Ltd (2001) 207 CLR 21.
Assuming the parties’ agreement that the relationship between the first respondent and Dr Kaza is not an employment relationship, it is clear that the terms of the Letter of Appointment do not impose any obligation upon Dr Kaza to perform any work. As disingenuous as it is, the second respondent’s explanation that she used the phrase “Employment Status: Full-time” so as to satisfy requirements of the Department of Immigration reveals that there was no intention on the part of the first or second respondent to burden Dr Kaza with a positive obligation to perform any work at all in the practice. The second respondent gave evidence that Dr Kaza was able to fix his own hours of work and surprisingly, she seemed to suggest that Dr Kaza was not obliged to see any patients at all.
However, in the circumstances, it is difficult to conclude that there was a contract between Dr Kaza and the first respondent that obligated Dr Kaza to see any patients at the first respondent’s surgery. The implication of such a term is not necessary to give business efficacy to the contract. The second respondent’s evidence tells against the implication of such a term. It was only if Dr Kaza saw patients at the surgery did an obligation to pay a fee to the first respondent arise. Accordingly, in my view, there was no contract whereby Dr Kaza agreed to produce a result for the first respondent or from which the first respondent derived a benefit (other than the receipt the fees).
Accordingly, I am not satisfied that Dr Kaza was an independent contractor and the first respondent a principal for the purposes of s.342 of the Fair Work Act.
However, the first respondent was an independent contractor for the purposes of item 6 of s.342 of the Fair Work Act. By the contract contended for by the first respondent, the first respondent was obliged to make available to Dr Kaza the services necessary to enable him to earn an income as a general medical practitioner. Beyond the provision of premises, plant and equipment, the agreement, by implication, required the first respondent to provide work in the nature of record and account keeping for Dr Kaza. It provided him with banking services and organised the distribution of his practice income to him. It provided a receptionist to answer telephone calls (to a common number for all doctors at the surgery), receive patients and then attend to patients at the conclusion of their consultation with Dr Kaza. The first respondent’s employees performed the work necessary to ensure that each patient seen by Dr Kaza was billed, the appropriate Medicare and Department of Veterans’ Affairs rebates claimed and processed and Dr Kaza’s accounts were paid. It was, I am satisfied, a contract for services for the purposes of item 6 in the table that forms part of s.342(1) of the Fair Work Act.
The first respondent contends that whilst there was an agreement between it and Dr Kaza, it was not for the performance of work. Nor did it require the production of a particular result. Thus, whatever the first respondent might have been, it was not an independent contractor for the purposes of the Fair Work Act.
However, I disagree. The work described above was work performed by the first respondent for Dr Kaza. It produced a result, namely the smooth running of his practice (as the respondents would have it), the timely payment of his accounts and the distribution to him of his fee income, less the fee to which the first respondent was entitled under the parties’ agreement.
Moreover, to the extent that the respondents’ submissions suggest that a person in the position of the first respondent cannot be an independent contractor unless the relevant contract provides for the dong of “work”, the submission is inconsistent with the terms of item 6 of the table to s.342(1) of the Act. That item speaks of action by an independent contractor against a person who has entered into a contract for services with the independent contractor (my emphasis).
Accordingly, I find that:
a)the first respondent is not a principal and Dr Kaza is not an independent contractor for the purposes of item 3 of s.342 of the Fair Work and that section is not engaged on the facts of this case; and
b)the first respondent is an independent contractor and Dr Kaza is a person who has entered into a contract for services with the independent contractor for the purposes of item 6 of s.342 of the Fair Work Act.
The alleged contraventions
Three things flow from the findings that I have just made. First, the first respondent will have taken adverse action against Dr Kaza if I find that it has ceased work under the contract or taken industrial action against the Dr Kaza. Secondly, Dr Kaza has a workplace right arising under the Fair Work Act to make a complaint to the Fair Work Ombudsman. Third, if a person has taken or threaten to take any action against Dr Kaza with intent to coerce him to not exercise a workplace right, they will have contravened s.343 of the Fair Work Act.
The claims of adverse action in breach of item 6 of the table in s.342 of the Act
I am satisfied that Dr Kaza exercised a workplace right by making a formal written complaint on 30 December, 2009 to the applicant about his terms and conditions and treatment generally by the first respondent and the second respondent. The outcome of the complaint is irrelevant to the existence of the workplace right. To the extent that the respondents seek to suggest otherwise, I reject their submissions.
I accept that the content of the workplace right exercised by Dr Kaza was to engage the applicant and seek to have his complaints against the first and second respondent investigated by the applicant. The workplace right was a right to request the applicant to use its powers under the Fair Work Act to establish the validity of Dr Kaza’s concerns.
It is not to the point for the respondents to point out that the investigation undertaken by the applicant in the first instance was directed to a matter which is different to that pursued in these proceedings. Initially the applicant investigated what it considered to be “sham contracting” on the part of the first respondent in respect of its engagement of Dr Kaza. That investigation eventually led to the present proceedings. But that it did so, and not to proceedings for contravention of the sham contracting provisions of the Fair Work Act, does not mean that Dr Kaza did not exercise a workplace right when he first made his complaint to the applicant.
The applicant alleges that there were three occasions of adverse action against Dr Kaza, namely:
a)a threat of action against Dr Kaza made by the Third Respondent on or about 24 February, 2012;
b)ceasing payments to Dr Kaza from 11 March 2010 to the remainder of Dr Kaza’s engagement which ended on 6 May, 2010; and
c)comments made by the Third Respondent on or about 19 or 20 April, 2010.
The applicant alleges two counts of coercion in contravention of s.343 of the Act, namely:
a)a threat of action against Dr Kaza made by the Third Respondent on or about 24 February, 2012;
b)comments made by the Third Respondent on or about 19 or 20 April, 2010.
The conversations of 24 February, 2010
Conversations between Dr Kaza and the third respondent that took place on 24 February, 2010 are said by the applicant to be the source of the first contravention of s.342 (adverse action) and s.343 (coercion).
In order to understand the conversations in question, a conversation of 16 November, 2009 must first be reviewed to gain context. It is the evidence of the second respondent that Dr Kaza requested a meeting with her on 16 November, 2009. A meeting occurred between Dr Kaza and the second respondent occurred at about 6.00pm on that day. Soon after it commenced, Dr Kumar joined the meeting.
The parties differ about the margins of the conversation, but for their part, both the second respondent and Dr Kumar are in agreement about the content of the meeting. They contend that during the course of the meeting Dr Kaza expressed a wish to leave Australia and return to India, predominantly due to stress and not having sufficient skills to operate as a general practitioner in Australia. In response the second respondent and Dr Kumar raised the issue that the Federal Government had paid roughly $15,000 to the recruitment agency that secured his appointment at the surgery and he would probably have to pay any subsequent recruitment fee for a replacement should the government be disinclined to do so. The second respondent says that she impressed upon Dr Kaza that:
a)he told her that he was committed for the duration of his visa; and
b)he had agreed and initially requested a contractual term that was as long as possible.
The second respondent says that Dr Kaza said that he would seek legal advice regarding the issues and raised an issue of compensation for him. The second respondent claims that she replied:
Compensation? You want compensation? What about me and all the stress, grief and anxiety that you have caused me from day one? I have put in so much effort and my personal time to help you on weekends and public holidays. I want compensation too. Furthermore, if you leave before the agreed 4 year term, you would be breaching the contract. You have to realise that both parties are bound to each other for that same time frame. [para 178 of her trial affidavit]
During cross-examination of the second respondent she rejected the proposition that Dr Kaza’s referral to compensation in this context was merely a referral to being provided with the monies owing to him.
Dr Kaza’s recollection of the events is significantly different. He claims that the conversation was informal in nature and took place in the corridor after the conclusion of work. It took place in circumstances where the first respondent had not passed on any money to Dr Kaza from the fees he had earned since. He claims that he said to the second respondent:
I have not been paid for a very long time. I do not understand why I have not been paid. It is very difficult for me and my family to survive without my payments. I am having mentally a very tough time and I want to resign.
To which the second respondent replied:
As long as you have your registration with the Medical Board of Queensland, you cannot leave LMS. If you leave LMS, I will make a compensation claim against you for the money that I spent to recruit you. We can make a case in court against you so you cannot go back to India. As long as you have your registration, you have to work at LMS.
I know that you do not have any friends or relatives in Australia, so who is going to help you. Because you don’t have any friends to relatives in Australia, it will be difficult for you to get help in Australia.
Dr Kaza denied that the reason for his wanting to resign related to his professional abilities (as the second respondent claimed), instead deposing that it was due to the fact that he had not been paid. This position was canvased during the course of cross-examination. It was put to Dr Kaza that his email to Dr Joshi (referred to above) is in direct conflict with the proposition as he states in that letter that:
I could not tolerate the mental and financial strain and that I’m finding it difficult to manage the patients because of the lack of sufficient skills and knowledge. So I would like to resign and go back to India. She said, she will initiate a compensation claim of $15,000 against me if I resign, which she has spent in the process of getting me to Australia…
In response, Dr Kaza contended that while he accepts that there were a number of reasons for his wanting to resign some of which related to his medical skills and his ability to save money, the main reason he wished to resign centred on the fact that he was not receiving payments from the second respondent.
He further denies requesting compensation stating that he only sought to be paid that money that he was currently owed.
Moving forward to the conversations of the first claims of contravention, all parties accept that an initial conversation commenced between 5.30pm to 6.00pm on 24 February, 2013, between Dr Kaza and the third respondent. However they agree on little else.
Dr Kaza’s affidavit evidence suggests that on 24 February, 2013 the third respondent entered his treatment room and stated words to the effect:
I have had a telephone discussion with Sheila and Sheila asked me to tell you that she is going to transfer into your bank account the money owed to you but she wants you to withdraw the case and give her a copy of an email as proof that the case is withdrawn.
It will be a waste of time to continue with your case and you will have more problems as the case goes on. It will be good for you and us if the case is closed.
Sheila has already had to provide a lot of documents to Fair Work.
Sheila is not going to become rich by keeping your money. She will make a compensation case on you after you resign or fix you in some court cases.
In reply to those statements Dr Kaza said words to the effect that, “Once I see the money in my bank account, I will withdraw the case.” He stated that he replied in that manner because:
…I did not trust that Sheila would make payment to me if I withdrew my case first. All I wanted was to be paid what I was due so that I could return to India.
The third respondent gave evidence that she went to see Dr Kaza on the night in question as the second respondent had informed her that all the documentation that the first and second respondent insisted upon Dr Kaza providing to them had been provided and his outstanding payments could therefore be processed.
The third respondent’s recollection is that during the course of the conversation Dr Kaza made comments to the effect that:
a)he was not happy and wanted to go back to India due to the stress he was experiencing at home and at work;
b)he just wanted to get his money and go back to India, however he was not sure about leaving due to his contractual commitments and possible compensation claim of the first respondent; and
c)he commenced the claim to the Fair Work Ombudsman so that his payment would be processed.
The third respondent’s evidence is that in response she stated words to the effect that:
a)if he was to leave the practice he would technically be in breach of contract;
b)it was Dr Kaza who had first asked for compensation;
c)because of the complaint they had to wait for the completion of the applicant’s investigation and determination which could take some time;
d)his payment was not contingent on the applicant’s investigation but on his providing the relevant documentation and as that had been provided payments would resume from 25 February, 2010;
e)the second respondent had been under a lot of extra stress due to his claim;
f)the second respondent was likely to have documents to defend the claim that he was appointed under a sham contracting arrangement, however the long process would be time consuming and stressful; ad
g)if it is determined that he is an employee his agreement will need to be renegotiated to determine his wage.
After her conversation with Dr Kaza the third respondent suggests that she had a telephone conversation with the second respondent and informed her of Dr Kaza’s wish to leave the surgery. After the second respondent originally stated in the telephone conversation that the parties were bound for four years, she telephoned the third respondent back asking for her opinion on whether they should allow Dr Kaza to leave. After this conversation, the third respondent contends that she advised Dr Kaza, who was still in the room, “Well, we have all just agreed that you can leave as it is what you want to do”.
A second, later, conversation occurred between Dr Kaza and the third respondent on 25 February, 2010. It is the evidence of the third respondent that she went to speak to Dr Kaza of her own volition on that day in order to raise concerns she had about patient complaints for the purpose of providing him with feedback and to explain that such complaints could come to the attention of Medical Board of Queensland and affect his registration.
Her affidavit evidence is that she said words to the effect of:
If the medical board investigates you, they will ask for written submissions from me. Sheila too could be asked to hand in something and your life will be miserable. And if they de-register you for whatever reason then you can’t work anywhere in Australia. This could also happen if you don’t pass your exams.
She further advised Dr Kaza:
a)the Fair Work Ombudsman had stated that the first respondent should pay him the lump sum but they felt he should be paid fortnightly as per the agreement; ad
b)“if you want to go back to India and had to withdraw the complaint then I will get Sheila to pay you the lump sum otherwise we will stick to the two-weekly payments as per the letter of appointment”.
During the course of cross-examination the third respondent sought to deviate from this evidence. She suggested that she had said that she could not guarantee that if the complaint was withdrawn she would be able to arrange for payment to be made in a lump sum, she stated that she merely wanted to convey that if he were to withdraw the complaint and return to India she might be able to convince the second respondent to make a lump sum payment.
When asked in cross-examination why the patient complaints were raised with Dr Kaza at that time and in the way that they were, the third respondent admitted that she expected Dr Kaza to be leaving Australia and in such circumstances the complaints would be of little or no consequence to him. She further admitted that it was her understanding that if he returned to India the complaint would be finalised and if he remained in Australia the complaint would be pressed.
The third respondent accepted in cross examination that generally the third respondent had stated to Dr Kaza that if he remained in Australia his outstanding payments could only be made to him fortnightly. She believed that if Dr Kaza remained in Australia the complaint that he had made to the Fair Work Ombudsman could succeed, but it could not if he left Australia.
Dr Kaza contends that during the conversation the third respondent said words to the effect that:
You will only be paid the total amount if you say in writing that you have withdrawn your case with Fair Work. Otherwise, you will only be paid every fortnight which will take around 6 months to get your money.
If you do not withdraw your case, you will have many problems.
We have documents from patients who have complained about you and we will send these to the Medical Board of Queensland and if we do that, it will be impossible for you to get a new job and medical registration from the board. You will not be able to come to Australia for a job.
I prefer the evidence given by Dr Kaza to the evidence of the third respondent about these conversations. At the time the conversations took place, Dr Kaza was owed money by the first respondent. He had complained to the Fair Work Ombudsman about various matters and the Fair Work Ombudsman had engaged the first and second respondent over the complaints. I accept that Dr Kaza had indicated that he wished to resign, for whatever reason, in his earlier conversation in November, and he was still of that mind in February. All he wanted to do was to be paid what he was owed and to return to India. In that context, it is entirely likely that the second respondent attempted to turn those circumstances to her advantage by seeking to have Dr Kaza withdraw his complaint to the Fair Work Ombudsman in return for payment to him of what was otherwise due to him and putting him in a position where he could return to India. As an inducement to have him withdraw his complaint and make his return to India easier, the third respondent told Dr Kaza that he would only be paid what was owed to him on a fortnightly basis until he was paid out. It was only if he withdrew his complaint that he would be paid what he was owed as a lump sum.
I do not accept the evidence of the third respondent that she made the comments she did based on her view that:
a)Dr Kaza wanted to return to India; and
b)the only thing stopping him from returning to India was the fact that he had not received his payments.
I do not accept the evidence of the third respondent that she raised the patient complaints with Dr Kaza in order to provide him feedback and to better his medical skills. In the context of the conversations that she had been having with Dr Kaza regarding withdrawing his complaint, those matters can only be viewed as a threat to injure his ability to practice medicine should he choose to remain in Australia and continue with the complaint process. They were designed to encourage him to withdraw his complaint and leave.
In light of those findings about the conversations that occurred on 24 February, 2010, and taking into account the gravity of the matters alleged, I am satisfied on the balance of probabilities that the conversations contravened s.343 of the Fair Work Act in that the words spoken in the first conversation had on that day:
I have had a telephone discussion with Sheila and Sheila asked me to tell you that she is going to transfer into your bank account the money owed to you but she wants you to withdraw the case and give her a copy of an email as proof that the case is withdrawn.
It will be a waste of time to continue with your case and you will have more problems as the case goes on. It will be good for you and us if the case is closed
and the words spoken in the second conversation had on that day:
You will only be paid the total amount if you say in writing that you have withdrawn your case with Fair Work. Otherwise, you will only be paid every fortnight which will take around 6 months to get your money
were threats to take action against Dr Kaza with the intention to coerce him to not exercise his workplace right constituted by the complaint to the Fair Work Ombudsman instituted by him on 30 December, 2009.
Although the words were conveyed by the third respondent, I am satisfied that she conveyed those words on behalf of the first respondent, the entity which bore primary responsibility for the payments to Dr Kaza and by which Dr Kaza was engaged.
I am also satisfied on the balance of probabilities that the words were conveyed at the suggestion of the second respondent. Both the second and third respondents were involved in the first respondent’s contravening conduct for the purposes of s.550 of the Fair Work Act.
I am not satisfied that the words spoken in the two conversations of 24 February, 2010 as I have found above constitute the taking of adverse action against Dr Kaza. To constitute adverse action in the circumstances where I have found that the first respondent is an independent contractor for the purposes of item 6 of the table in s.342 of the Fair Work Act, the action must be either:
a)a cessation of work under the contract; or
b)the taking of industrial action against Dr Kaza.
A threat to do either of those things will also constitute adverse action: s.342(2)(a) of the Fair Work Act.
However, the words that I have found were spoken do not constitute a cessation of work by the first respondent under the contract with Dr Kaza, or a threat to cease work. Further, they do not amount to industrial action having regard to the definition of that term as set out in s.19 of the Fair Work Act.
The cessation of payments
The last payment made to Dr Kaza by the first respondent was on 10 March, 2010. The payment related to patients seen between 18 January and 30 January, 2010. It is agreed that Dr Kaza has not received any remuneration for patients that he treated from 31 January to the day that he ceased working at the first respondent’s premises on 6 May, 2010.
The basis upon which the first respondent withheld payments from Dr Kaza was said to have its genesis in the “requirement” that Dr Kaza provide certain documents to the first or second respondents. The second respondent swears that on 20 May, 2009 she and the third respondent had a conversation with Dr Kaza in which she and the third respondent:
a)explained how the healthcare system in Australia worked;
b)went through the documents that Dr Kaza would have to provide periodically, namely:
i)evidence of him and his dependents having met their income tax obligations;
ii)evidence of currency of his health insurance policy;
iii)evidence of currency of his medical indemnity insurance;
iv)evidence that he had updated his medical registration details with Medicare Australia when required to do so;
v)evidence that he had extended his Medicare provider number with Medicare Australia in relation to the section 19AB exemption
c)explained that all medical services provided by him would be billed under his Medicare provider number and that at any time he could nominate to change the bank account that his gross receipts were paid into;
d)explained that should he fail to provide the required documents at the required time payments would be withheld and would resume fortnightly upon receipt of the documents.
The third respondent’s recollection of the meeting of 20 May, 2009 essentially agrees with the evidence of the second respondent.
The second and third respondents maintain that Dr Kaza made detailed notes during the course of this conversation and understood and agreed to those requirements by nodding as the items were explained and saying ‘yes’.
Dr Kaza admits that the documents listed above were discussed by the second and third respondents and him but denies that it was explained that claims could not be transmitted to Medicare if his medical registration details had not been updated or that payment would be withheld until the required documentation had been provided to the second respondent.
During the course of cross-examination Dr Kaza departed from his affidavit evidence. He accepted that he had been told by the second respondent that if he failed to provide the required documents his payments would be withheld and he assured the second and third respondents that he understood and fully agreed to those terms.
In the context of this claim, the specific terms of the conversation relied on by the respondents are that:
a)Dr Kaza was required to provide evidence that he had updated his medical registration details with Medicare Australia when required to do so; and
b)if such documentation was not provided to the first or second respondents payments would be withheld until the documentation had been provided. Once provided the payments would resume on a fortnightly cycle.
Dr Kaza’s evidence was that he was too scared to talk to the second respondent directly regarding the cessation of payments but had talked to the third respondent about it on a number of occasions and had received responses to the effect that:
I do not know why Sheila is not paying you; Maybe some documents are required before payment will be made; You should withdraw your case because sheila is very angry and upset; If your contract proves you are an employee, then Sheila has to pay your tax and so she is withholding your payment.
The second respondent claims that payments were not able to be made to Dr Kaza during the period from 31 January to 6 May, 2010 as the first respondent was not able to transmit the Medicare claims on his behalf because his medical registration details had not been updated with Medicare Australia. The second respondent gave evidence that in the absence of a letter from Medicare Australia stating that the registration details had been updated no claims could be submitted. This evidence is however in direct conflict with her previous conduct. She admitted in cross-examination that she had previously transmitted claims on two separate occasions despite receiving only verbal clarification that Dr Kaza had updated his medical registration details. It was never contended that Dr Kaza did not possess the required medical registration.
She also admitted that she contacted Medicare on a previous occasion to confirm that Dr Kaza’s medical registration details were current in order to submit claims on his behalf.
Her contention that she needed Dr Kaza to update his medical registration details with Medicare is also inconsistent with evidence of the third respondent. The third respondent deposes to a conversation occurring between herself and Dr Kaza on 19 April, 2010 in which Dr Kaza told her that he had withdrawn his complaint and was returning to India to which she responded with words to the effect:
That’s good. Your money is with held to pay for income tax if you are found to be an employee. But look, I don’t want to get involved or speak to you about administrative matters as you got all confused when I tried to explain last time.
The second respondent claims that the relevant payments were withheld for the period 21 April, 2010 to 6 May, 2010 as Dr Kaza had not complied with Medicare Australia’s requirement to keep adequate and contemporaneous medical records for each patient. In that respect she gave evidence that on 19 April, 2010 Dr Kaza informed her that the computer screen in his patient rooms had broken on 17 April, 2010. The second respondent admitted that the computer screen had not been repaired. Instead, Dr Kaza was told to make arrangements with the administrative staff to use one of their computers over their lunch break. The second respondent’s affidavit evidence is that he input the patient records on only a couple of occasions and declined to make arrangements to input the records after 6 May, 2010.
Dr Kaza’s evidence is that every day that his computer was broken he asked the reception staff to use their computer during their lunch break but was always told that the computer was locked or the staff was too busy. He claims that the second respondent threatened to advise Medicare that patient records were not being entered daily and as a result, on 5 May, 2010, he contacted Medicare to advise them that no computer was available to him and as such he had been maintaining handwritten patient notes.
The cessation of payments to Dr Kaza was the ceasing of work under the contract that he had with the first respondent. Part of the work that it undertook to do for him was to arrange for him to be paid the patient fees and Medicare rebates to which he was entitled. It was not payment for work done by Dr Kaza for the first respondent, but rather the processing of payments to which Dr Kaza was entitled by reason of his work with patients.
The failure to make payments to Dr Kaza was not the cessation of all work under the contract. The first respondent continued to provide other work and services. But I do not think that item 6 of the table in s.342 requires the cessation of all work. It is benevolent legislation designed to secure the rights and obligations of parties who are in certain defined relationships. It ought to be construed liberally. There is no warrant, in my view, to read down item 6 so as to confine its operation to the cessation of all work under a contract. On that basis, the taking of the action constituted by the cessation of payments was the taking of adverse action by the first respondent against the applicant.
If the adverse action is taken because of a proscribed reason, there is a contravention of s.340 of the Fair Work Act. Dr Kaza establishes sufficient facts from which a prima facie case of contravention arises. By the operation of s.361(1) of the Fair Work Act it is presumed that the action (here the cessation of payments) was taken for the reason that Dr Kaza had exercised a workplace right unless the first respondent proves otherwise.
In my view, the first respondent does not discharge the onus of proof upon it. I do not accept the second respondent’s evidence as to why she caused the payments to Dr Kaza to cease.
To the extent that the second respondent suggested that the first respondent had a right to withhold payments until the provision of certain documents to her, I reject that argument. Although Dr Kaza accepted that there was a discussion on 20 May, 2009 about the provision of certain documents about various matters to the second respondent, there was no contractual obligation on him to provide those documents to maintain his right to payment of his earnings from “his” practice. To the extent that he agreed to provide the documents to the second respondent at the meeting of 20 May, 2009, the agreement was not a contract, nor was it, in my view, a variation of the agreement entered into on 12 June, 2009. There was no consideration given for Dr Kaza’s promise. The first respondent agreed to do nothing more than it was already contractually obliged to do.
Moreover, the second respondent’s evidence about the requirement of Medicare Australia was inconsistent with her own previous conduct and with the statements made by the third respondent recorded above.
Finally, in respect to the claim by the first respondent that the relevant payments were withheld because Dr Kaza did not fulfil his obligation to keep appropriate patient records, I am satisfied that his failure to do that, if indeed that occurred, was because the first respondent itself was in breach of the contract it had with Dr Kaza by not providing him with the equipment it agreed to supply him so that he could carry out his work. His broken computer was not fixed and the first respondent’s staff did not permit him to use their equipment except on a few small occasions.
Further, even if s.361(1) had no application, I am satisfied that the first respondent ceased paying Dr Kaza in an effort to convince him to cease his complaint to the Fair Work Ombudsman.
The applicant has proved on the balance of probabilities, bearing in mind the gravity of what is alleged, that the first respondent took adverse action against Dr Kaza by ceasing payments to him to which he was otherwise entitled pursuant to the contract of services entered into between them on 12 June, 2009.
On the facts as I have found them, the second respondent was involved in that contravention for the purposes of s.550 of the Act. I am not satisfied that the third respondent was involved in the contravention for the purposes of that section.
The second coercion claim and the third adverse action claim
It is accepted that conversations took place between Dr Kaza and the third respondent on 19 and 20 April, 2010. Dr Kaza contends that on or about 20 April, 2010 the third respondent walked into his rooms and said words to the effect that:
Sheila will only pay you if you withdraw the case. Sheila is not paying you because if it turns out that you are an employee, not a contractor, then she will have to pay income tax for you and so that is why she is keeping the money.
Sheila is going to pay you if you withdraw the complaint from fair works.
Dr Kaza claims that in response he stated that “If LMS pays me my dues, I will withdraw my case”.
During the course of cross-examination, Dr Kaza seemed to somewhat confuse this evidence however ultimately emphatically stated that the conversation had occurred as stated above and importantly, the third respondent had stated that should the complaint be withdrawn he would be paid.
The third respondent on the other hand contends that on 19 April, 2010 Dr Kaza came to her rooms and informed her that he had withdrawn his complaint and intended to return to India. However, upon speaking with the second respondent it became clear that Dr Kaza had submitted a letter of resignation but nothing had been received from the Fair Work Ombudsman to state that the complaint had been withdrawn. As a result the third respondent entered Dr Kaza’s rooms on 20 April, 2010 and stated that the second respondent had not received any notifications regarding his complaint being withdrawn and that, “no one will believe you unless it is in writing” to which he replied “so what I write?”.
It seems that there were a number of further exchanges that took place between Dr Kaza and the third respondent regarding how to withdraw the complaint and Dr Kumar became involved by drafting a letter of withdrawal of the complaint.
Additionally, in a conversation that the third respondent deposes to having had with Dr Kaza in the second week of April. The third respondent deposed to Dr Kaza saying to her that his payment had been suspended and that he was not sure why but suspected that it was due to the Fair Work complaint. She replied with words to the effect that:
…I did not know the reason, but may be the Second Respondent needed to make adjustments to his income and in my opinion it might be possible that she is withholding some money to pay for his income tax in case he is found to be an employee by the Applicant.
I accept Dr Kaza’s evidence that the third respondent said to him on 20 April, 2010 that:
Sheila will only pay you if you withdraw the case. Sheila is not paying you because if it turns out that you are an employee, not a contractor, then she will have to pay income tax for you and so that is why she is keeping the money.
I am not satisfied, however, that that statement was made with the knowledge or consent of the second respondent. Although the third respondent was a director of the first respondent, there is nothing from which I might infer that the first respondent had anything to do with the making of the statement.
Whilst the complaint was not withdrawn, the payments never resumed and in my view there was no justification for the withholding of the payments, I can draw no inference that the statement by the third respondent was authorised by either the second respondent or the first respondent or made on the part of either of them.
In light of that, I am not satisfied on the balance of probabilities that the first respondent contravened s.343 of the Fair Work Act as the applicant alleges by reason of these conversation and statements.
Moreover, I am not satisfied that the action I have found above constitutes the taking of adverse action against Dr Kaza in the way pleaded by the applicant in the statement of claim. To constitute adverse action in the circumstances where I have found that the first respondent is an independent contractor for the purposes of item 6 of the table in s.342 of the Fair Work Act, the action must be either:
a)a cessation of work under the contract; or
b)the taking of industrial action against Dr Kaza.
The action was not a cessation of work, the work having ceased sometime before the relevant conversation. Further, they do not amount to industrial action having regard to the definition of that term as set out in s.19 of the Fair Work Act.
Conclusion
In summary, I am satisfied that the first respondent contravened the Fair Work Act in that it breached s.343 of the Act on the single occasion set out above. It also contravened the Act by taking adverse action against Dr Kaza on one occasion as set out above.
The second respondent was involved in each of those contraventions for the purposes of s.550 of the Act. The third respondent was involved in the first contravention of s.343 of the Act for the purposes of s.550 of the Act.
Accordingly declarations should be made consistent with these reasons. The parties will be directed to bring in a minute of the declarations said to be appropriate. Otherwise the application will be adjourned to a fixed date for the taking of submissions on penalty and compensation.
I certify that the preceding one hundred and seventy-eight (178) paragraphs are a true copy of the reasons for judgment of Judge Jarrett
Associate:
Date: 17 March 2015
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