Fenwick v World of Maths
[2012] FMCA 131
•2 March 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FENWICK v WORLD OF MATHS | [2012] FMCA 131 |
| INDUSTRIAL LAW – Allegation of contraventions Fair Work Act 2009 – question of whether applicant an employee or independent contractor – whether he was dismissed – whether he was subject to adverse action – whether arrangement a sham arrangement. |
| Fair Work Act 2009, ss.340(a)(1), 342(1) (Item 1)(a) and (b), 342(1) (Item 2)(a) and (b), 343, 344(a), (b) and/or (c), 345, 352, 356, 357 Independent Contractors Act 2006 Workplace Relations Act 1996 |
| Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215 Curtis v Perth and Fremantle Bottle Exchange Co Ltd (1914) 18 CLR 17 Derry v Peek (1889) 14 App Cas 337 Hollis v Vabu Pty Ltd (2001) 207 CLR 21 On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation(No.3) [2011] FCA 366 Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 |
| Applicant: | BRENDT FENWICK |
| Respondent: | WORLD OF MATHS |
| File Number: | BRG 707 of 2010 |
| Judgment of: | Burnett FM |
| Hearing dates: | 3 and 4 May 2011 |
| Date of Last Submission: | 4 May 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 2 March 2012 |
REPRESENTATION
| The Applicant appeared on his own behalf |
| The Respondent appeared on his own behalf |
ORDERS
That the application filed 4 August 2010 be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 707 of 2010
| BRENDT FENWICK |
Applicant
And
| WORLD OF MATHS |
Respondent
REASONS FOR JUDGMENT
Introduction
In late July 2008 the applicant Brendt Fenwick entered into an arrangement with the respondent, World of Maths to supply services as a “presenter” of the respondent’s educational maths program in various schools in Queensland and New South Wales. The arrangement was said to be one of contractor and independent contractor and their association ensued for approximately 18 months. Issues arose between the applicant and respondent following a tax audit of the respondent’s business and shortly thereafter their relationship was terminated.
During the course of that tax audit the issue of whether or not the applicant was an independent contractor or employee was considered and although ultimately dismissed by the tax office it gave rise to concerns by the applicant. The applicant made his own enquiries and formed the view he was in fact an employee and not a contractor and that by reason of that matter he was entitled to a myriad of benefits which were not otherwise incorporated into the contract rate which had been negotiated between he and the applicant. As a consequence he brought this application seeking declarations of contravention of a general protections provision of the Fair Work Act 2009 (FW Act) and claiming for compensation.
Alleged Contraventions
The particular provisions it is alleged have been contravened were:
a)s.340(a)(1): adverse action against another because the other person has a workplace right and preventing the exercise of a workplace right;
b)s.342(1) (Item 1)(a) and (b) in that the respondent took adverse action against him by dismissing him and/or injuring him in his employment;
c)s.342(1) (Item 2)(a) and (b) in that the respondent took adverse action against him by refusing to employ him or discriminated against him;
d)s.343 alleging that the respondent took or threatened to take action against him with intent to coerce him to exercise or not exercise a workplace right;
e)s.344(a), (b) and/or (c) in that the respondent in contravention of those sections sought to exert undue influence or undue pressure on him to make or not make an agreement under the National Employment Standards or under a modern award or enterprise agreement or an individual flexibility arrangement;
f)s.345 in that the respondent knowingly or recklessly made false and misleading representations about the workplace rights of the applicant;
g)s.352 in that in contravention of that provision the respondent dismissed him because of his temporary absence from work because of illness or injury;
h)s.356 seeking declarations in respect of the term of workplace instrument or agreement or arrangement which was objectionable;
i)s.357 in that the respondent represented to him that the contract of employment concerning him was a contract for services under which he would perform work as an independent contractor;
j)s.358 in that the respondent dismissed the applicant who was an employee in order to engage the applicant as an independent contractor to perform the same or substantially the same work under a contract for services; and
k)s.359 in that the respondent employed the applicant to perform particular work by making a statement that the respondent knew was false in order to persuade or influence the applicant to enter into a contract for services under which the applicant performed as an independent contractor the same or substantially the same work for the employer.
The applicant’s application can broadly be seen as a ‘grab bag’ of alleged contraventions of the FW Act. However at its essence is the question of whether or not the applicant was an employee or an independent contractor together with the circumstances surrounding that arrangement and whether or not in putting such an arrangement in place the respondent acted in contravention of the FW Act.
Facts
Broadly there is not a lot of disagreement between the parties concerning the facts of this case. The applicant exhibited a somewhat more hostile attitude to the respondent in the delivery of his evidence and made some accusations which will be the subject of express findings. Nevertheless what follows is essentially not in dispute.
The respondent has conducted the business of “World of Maths” for about 17 years and been the owner of it for the past 15 years. The World of Maths is a hands-on travelling maths show for students and schools which involves workshops and activities. The respondent contracts with schools for the provision of these activities and in turn engages presenters such as the applicant to deliver the service; this forms the subject of the primary contract between the individual schools and the respondent. The respondent owns the equipment which incorporates the activities including a trailer on which the equipment is transported from site to site. The arrangement between the applicant and the respondent required among other things that the applicant would supply a vehicle capable of towing the respondent’s equipment from site to site. While the respondent bore the cost of supplying and maintaining the educational equipment and trailer the applicant bore the cost of running his own vehicle including any additional costs associated with maintaining its capacity to tow the respondent’s trailer.
The formal relationship between the applicant and the respondent commenced on or about 28 July 2008. The respondent by its principal Timothy Tritton said that he explained to the applicant that he would be engaged as a contractor including the manner in which work was allocated. For instance when work was received by the respondent it would be booked into a diary, a photocopy of which would be forwarded to the applicant identifying the itinerary of schools which had been assigned to him. It was unclear how much notice the applicant would receive of any booking. It was incumbent upon the applicant to call for the diary which was marked up progressively as schools requested the respondent’s service. Plainly however the service was only ever to be provided in school terms and could vary from week to week. On some occasions the respondent would be booked to provide its service on every school day of a week and on other occasions only on some or one day. The diary, exhibit 1, evidences those matters.
Upon engagement the respondent says the applicant was told he was engaged as a contractor and would be responsible for his own tax and superannuation. He was also informed he would only ever be required to provide services periodically and through the course of school terms. That is to say, he would only be required on those days when the respondent was booked by a school to provide services and he would not be required to provide services in periods covered by school holidays. The arrangement was that he was to be paid a percentage of the bookings which were completed. Initially the percentage was set at 35% such that on any one occasion when the applicant attended an assigned school he would record the attendance and the number of students who participated in the activity. He would prepare an invoice on behalf of the respondent in an invoice book provided to him by the respondent and upon completion of the activity at the school would leave the invoice at the school for their attention. He would subsequently prepare an invoice on a weekly basis in respect of services provided by himself.
The invoices tendered (exhibit 3) indicate that they were in two forms. The first was an invoice prepared and directed to the relevant school payable to the respondent apparently delivered on the day of the service. The second form of invoice was prepared somewhat more periodically and was an invoice directed to the respondent from the applicant which would incorporate an amalgam of the preceding invoices directed by the respondent to the individual schools. The invoices in each instance were prepared by the applicant.
The applicant was also told that he would not be paid during holiday time and he was to be paid only a percentage of the bookings which were completed. In other words he would not be paid for days upon which bookings were not made. He was also informed that he was free to undertake other work to fit around services provided by him to World of Maths.
No formal agreement appears to have been recorded between the parties although the respondent contends that the oral exchanges between the applicant and the respondent addressed all relevant matters. The principal terms alleged to be agreed included the following:
a)Term of appointment – subject to termination upon 30 days notice by either party;
b)Services – the applicant’s retention on a non-exclusive “when needed” basis during school terms;
c)Displays – the respondent would provide all displays which were to be kept in excellent condition by the applicant and in respect of which the applicant would be responsible for loss;
d)Trailer – the respondent would supply a fully insured trailer for the exclusive use of presentations to schools;
e)Fees – the applicant would receive commission at the rate of 35% of the net amount received from each invoice issued by the applicant plus GST where an ABN is provided; in addition the respondent would reimburse the applicant $65.00 for each night when overnight accommodation was properly and necessarily incurred in the performance of services under the agreement.
f)Relationship – the applicant would not be an employee of the respondent and that the arrangement between them would not constitute a contract of employment but rather a payment for services and that accordingly the company would not be liable for any PAYE tax or superannuation;
g)Confidential information – the parties agreed to keep secret and confidential the company’s intellectual property.
Although the applicant was not party to or had knowledge of other arrangements entered into between the respondent and other presenters, this form of contract governed the arrangements between other presenters engaged by the respondent and I have no reason to doubt the respondent’s evidence that they also formed the basis of the agreement with the applicant – that is irrespective of the applicant’s denial.
There was some dispute between the parties concerning whether or not the applicant supplied an ABN. In my view nothing turns on the matter and is only relevant as an indicator of whether the respondent was required to credit GST. As the applicant was only supplying labour there would have been no GST input credits claimable. It is however worthy of note that in each invoice issued by the applicant his claim was for a sum inclusive of GST.
It is apparent from a review of the respondent’s diary that the applicant was not fully employed. Aside from standard school holidays and weekends the respondent’s diary indicates that in many weeks the applicant was employed for less than the full five days of the ordinary school week. However it is apparent from the diary that work was available to the applicant in each school week and usually for at least three and more often four or five days out of such weeks.
Was the applicant a contractor or employee?
The principles governing the issue of whether or not a person is employed under a contract of employment or is an independent contractor have been the subject of considerable judicial examination. The two leading cases on the subject include Hollis v Vabu Pty Ltd (2001) 207 CLR 21 and Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16. The relevant principles have recently been restated and summarised by Bromberg J in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation(No.3) [2011] FCA 366 (13 April 2011). In that decision his Honour commenced by noting that in determining the issue the Court must look to the real substance of the relationship in question and not merely form.[1] In making that observation he followed the observations of Isaacs J in Curtis v Perth and Fremantle Bottle Exchange Co Ltd (1914) 18 CLR 17 where at [25] Isaacs J said:
“Where parties enter into a bargain with one another, whereby certain rights and obligations are created, they cannot by a mere consensual label alter the inherent character of the relations they have actually called into existence. Many cases have arisen where Courts have disregarded such labels, because in law they were wrong, and have looked beneath them to the real substance.”
[1] At [189].
In this case notwithstanding the dispute between the applicant and respondent concerning the label attached to describe their relationship it is self-evident that that dispute is barren. Here there must be an examination of the real substance of the relationship in question.
Commencing at para [201] his Honour examined the basis for distinguishing between an employee and an independent contractor. He noted that the analysis must commence with a proper identification of the parties to that relationship, their role and function and the nature of the interactions which constitute their relations. His Honour noted that the law had moved beyond the “degree of control” test formally accepted and that the modern approach was “multi factorial” and that a range of indicia may be examined although that approach was not always useful because while there was value in a multi factorial test, it may not always adequately illuminate the totality of the relationship. He considered as appropriate a text which may be described as a “smell test or a level of intuition.” In summarising the principle in Hollis v Vabu Pty Ltd (2001) 207 CLR 21 which provided for the application of a multi factorial approach his Honour noted that it provided a “focal point around which relevant indicia can be examined.” That focal point has been elsewhere expressed as the “ultimate question” posed by the totality approach; Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215 at [34]. His Honour noted that the “ultimate question” was posed by Windeyer J in Marshall v Whittakers Building Supply Co Ltd (1963) 109 CLR 210 at page 217 in a passage which the majority in Hollis strongly endorsed at page 40. His Honour continued at [207]:
“…The majority in Hollis (citing Windeyer J) said, the distinction between an employee and an independent contractor is “rooted fundamentally” in the fact that when personal services are provided to another business, an independent contractor provides those services whilst working in and for his or her own business, whereas an employee provides personal services whilst working in the employer’s business; at [40]. Unless the work is being provided by an independent contractor as a representative of that entrepreneur’s own business and not as a manifestation of the business receiving the work, the person providing the work is an employee.”
and further:
“[208] Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work may be posed and answered as follows:
Viewed as a “practical matter”:
(i) is the person performing work an entrepreneur who owns and operates a business; and
(ii) in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work.
If the answer to the question is yes, in the performance of that particular work, the person is likely to be a contractor. If no, then person is likely to be an employee.
[209] The question which this approach poses appears to me to be the central question in the application of the totality test. The question provides the focal point around which the indicia thrown up by the totality test may be examined. The central question has two elements. The first is whether the person has a business. The second is whether the work or the economic activity being performed is being performed in and for the business of that person.”
Concerning the first element, that is, to carry on a business, his Honour noted that it was to “conduct their commercial enterprise as a going concern”; at [210]. His Honour noted that usually that would involve the acquisition and use of both tangible and intangible assets in pursuit of profit and that the desire to make profit was an important element. His Honour noted that generally a business would enter into transactions on a continuous and repetitive basis in pursuit of profit and that a business typically has, or at least aspires to have, value (constituted by either goodwill or realisable assets) which extends beyond its physical assets. His Honour noted that a common intangible asset of a business is its “name, brand, reputation or goodwill” and that typically the activities of a business will be organised in a business-like manner including the use of systems. His Honour considered that the word “business” imports the notion of system, repetition and continuity and it normally ought be operated in a “business like way”: (At [210]).
At [211] his Honour observed that the nature of business will vary and some of the typical indicia that he identified may be less important in some settings than in others. For instance he noted that the characteristics of a share trading business would be different to those of a retail business and again to those of a business selling personal services. Respectfully, so much is self evident. However in respect of a personal services business his Honour specifically stated:
“[212] A personal services business is a business which is likely to involve system, repetition and continuity in the pursuit of profit. A genuine personal services business will aspire to make profits and not simply be paid remuneration as is an employee. Such a business will seek to be remunerated not simply for the provision of the labour of the self employed entrepreneur that provides the personal services, but also for the risks involved in that person being an entrepreneur.”
His Honour continued:
“[213]…By its very nature, a genuine commercial enterprise is an undertaking which involves risk. Business risk is a product of a need for a business to invest (either in physical assets, time or effort) at a cost and without any certainty or assurance of that cost being recovered and any profit being made. Unlike an employee who generally seeks security, and is not risk-tolerant, a personal services business is prepared to invest time, money and effort with little or no certainty that such investment will be rewarded with a financial return. All of that is done in the hope of making a profit. It is in that sense, that an entrepreneur operating a personal services business seeks profit and not simply remuneration, for the personal services provided.
[214] A genuine independent contractor providing personal services will typically be: autonomous rather than subservient in its decision-making; financially self-reliant rather than economically dependent upon the business of another; and, (as I have said), chasing profit (that is a return on risk) rather than simply a payment for the time, skill and effort provided.
[215] In an employment relationship, there will typically be an entrepreneur, but that will be the employer, it will never be the employee. The employer will take the risk of profit or loss. The employee seeks the security of fixed and certain remuneration. Unlike the independent contractor, the employee has no business, and typically will have no interest or desire, in exposure to the risk of loss in return for the chance of profit.”
In considering his Honour’s remarks against the background of this case I am of the view that the applicant was in fact an employee and not an independent contractor. Although purportedly contracting the applicant was not conducting business in the sense in which his Honour has articulated the definition of that term. For instance the risks to the applicant in the conduct of the operation if it were to be a business were two-fold:
a)First, that he would not be paid by the respondent and perhaps incur the risk of being an unsecured creditor pending payment. In that regard the risk that he bore was no different to the risk he would have incurred as an employee because the system for payment provided that the applicant submit an invoice which included the particulars of the duties undertaken by him and in respect of which he claimed recompense. Against that background the risk was the same in either event and accordingly that risk could not be said to favour the conduct of the business in the sense it would for instance if the invoices were rendered monthly rather than weekly as was broadly the case here.
b)Secondly there was the performance risk. That is to say that if the applicant was unable to attend damage to reputation was caused to the goodwill of “World of Maths”. The applicant was minimally exposed to that risk. That is because unless the applicant regularly failed to attend (and arrange for substitutes in his absence), the loss of reputation would be suffered by the respondent and not by the applicant. Although as between the applicant and the respondent the applicant’s failure to attend as arranged may have caused inconvenience it probably would not have caused their arrangement inter se to be terminated. Accordingly there would have been no transfer of the risk borne by the respondent to third parties onto the applicant. As a corollary of that matter any goodwill generated by the applicant in his attention to the performance of his duties would not have accrued to his benefit. Goodwill would accrue to the respondent through the growth in demand for its services, services which were in turn not necessarily required to be provided by the applicant. Given the confined nature of the general service provided by the respondent it is unlikely that if the applicant was, for instance, a superlative performer he could capitalise on his ability by providing those services to another contractor. It follows in this case that the applicant could not be seen to be chasing profit that represented a return on risk but rather simply was receiving payment for time, skill and effort provided.
The matter of risk and profit feeds into the other indicia which were identified by his Honour. For instance given the applicant’s reliance upon the submission of weekly invoices he was not financially self reliant and was largely economically dependent upon the respondent. It is not to the point that the respondent only engaged the applicant on a part time basis and that the applicant was free to undertake other employment and enjoy other income earning opportunities. Given that at its essence the applicant was selling his time which in the operating system was incapable of being leveraged it is plain that he was not financially self reliant. In other words he could not look to other sources of cash flow generated by his services to ensure his economic independence from the respondent.
Furthermore the provision of his service was not autonomous in its decision making. The service provided was provided essentially at the direction of the respondent in a format designed and largely prescribed by the respondent. The only factor which appears to favour the conclusion that the applicant conducted a business is that his services required such skill as to be suggestive of the pursuance of a profession or trade through a business.
On balance I consider that for the reasons noted above the applicant did not conduct a business.
The next matter to be considered is for whom was the economic activity being performed. As noted above the applicant’s activity for the respondent did not appear to constitute the provision of an economic activity involving an opportunity for profit and a risk of loss, at least between the applicant and the respondent. It was an activity that involved the payment of money consistent with the remuneration that an employee would receive for providing labour. Furthermore any risk from the applicant’s perspective was minimal and directed to the performance of the service arguably as an employee. He was entitled to be paid irrespective of how poorly the service was delivered. Although he could suffer for the poor provision of the service as was illustrated on the occasion that Mt St Michael’s made a deduction on account of his late arrival on one occasion. Given the arrangement between the applicant and the respondent the deduction applied by Mt St Michael’s flowed through to him. However that occasion represented an exception.
On the other hand, the risks associated with the provision of equipment and assets required for the performance of the economic activity lay entirely with the respondent, not with the applicant. The applicant was provided the necessary tools by the respondent and could only be said to have assumed any risk insofar as that if the tools had not been fit for purpose. Had this occurred and the third party contractor refused to pay for the non-performance the applicant too would have suffered. However the applicant had some control over this matter insofar as it was incumbent upon the applicant to ensure that the materials provided to him by the respondent were suitable and where they were not to have them replaced, in which event they would be replaced at the respondent’s cost. The respondent’s directions to him on this matter were clear and I do not think it is correct that the respondent was to provide the necessary equipment. However it was incumbent upon the applicant to advise the respondent if the equipment was out of order. Furthermore the activity provided to the third parties was represented or portrayed as the activity of the respondent and not that of the applicant thereby ensuring any goodwill accrued to the benefit of the respondent and not the applicant.
Although the applicant was required to provide his own vehicle the applicant’s vehicle itself was not seminal to the provision of the service; what was seminal was the trailer and activities provided by the respondent.
It follows that I consider the applicant was an employee and not an independent contractor. Given the circumstances of his employment governed by those terms which remained alive; given his status as an employee; and also evidence of the manner of performance; I also conclude that the applicant was employed casually and on a part time or periodic basis.
Given the arrangement were there any contraventions as alleged?
The applicant’s claims are prosecuted as contraventions of Fair Work Australia Act 2009. It is apparent from the facts that much of what occurred between the applicant and the respondent preceded the introduction of the Fair Work Australia Act 2009 which relevantly commenced on 1 July 2009. Schedule 2 of the Fair Work (Transitional Provisions and Consequential Amendments) Act provided in clause 11(1) for conduct before the repeal it provided:
“11(1) The WR Act continues to apply, on and after the WR Act repealed, in relation to conduct that occurred before the WR Act repeal day.”.
The applicant has not made any allegations concerning contraventions of the WR Act. Furthermore insofar as the facts of this case may give rise to consideration of issues under the Independent Contractors Act 2006 no allegations are made. For reasons which follow the conduct complained of would not give rise to any ground for relief. If it did a further question would arise as to jurisdiction. It is not apparent from the material whether the respondent is a constitutional corporation or an incorporated body, a matter going to jurisdiction in respect of complaints under those provisions.
Dealing specifically with the applicant’s allegations as particularised in part G of Form 2 of his claim alleging contraventions of a general protection, his first complaint concerns s.340(1)(a)(i) and s.340(1)(a)(ii) and s.340(1)(b).
That provision provides:
“(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
…
(b) to prevent the exercise of a workplace right by the other person.”
The adverse action relied upon by the applicant is that alleged in s.342(1) Item 1(a) and (b) and Item 2(a) and (b). They define adverse action to mean action by the employer in dismissing an employee or injuring the employee in his employment, and action by a prospective employer in refusing to employ or discriminating against a prospective employee.
In this case for reasons that I have outlined above I am satisfied that the applicant was an employee. I am also satisfied that his employment was part time and casual. As a part time casual employee he was not subject to the requirement for notice of termination as provided for in s.117 FW Act.
Furthermore the evidence does not demonstrate that the applicant was dismissed. The circumstances surrounding the applicant’s cessation of employment with the respondent appear to have had their genesis in the tax audit of the respondent’s business but were unrelated to it. There is no dispute between the parties that the applicant did not provide further services to the respondent after about 15 April 2010.
His termination coincided with advice by the applicant to the respondent that he was unable to work because of a virus. A comment during the course of text message exchanges between he and Mr Tritton suggests that in fact the applicant indicated he would not be providing further services. After being so advised the respondent secured another person to undertake the following week’s work which had been assigned to the applicant. The applicant responded noting, inter alia, “I expect I’ll need something to give Centerlink as required to say that I used to be in the capacity of a presenter from … date and until …. date which I suppose is 2day 16th April”. He continued, “I would like to take the opportunity just 2thank you for the work and the laughs and for your consideration in all matters and which you all the best.” There was nothing in the earlier exchange of texts to suggest that the respondent had terminated the applicant, but to the contrary the subsequent texts suggested that the applicant had decided he no longer wished to work for the respondent.
Coincidentally at the same time the respondent had formed the view that the applicant may not have been an appropriate presenter for him because it had come to his attention that the applicant had some unsuitable video material in his possession which had been included in the kit which was transported from school to school. While the respondent noted that matter as another basis for not wishing to further engage the applicant, it was apparent that that matter was entirely incidental to what was plainly the applicant’s intention to no longer provide services to the respondent.
Having regard to the facts I am satisfied the applicant was not dismissed or threatened with injury as either an employee or a prospective employee of the respondent. Accepting that position there is in my view no basis to find that the respondent took adverse action against the applicant at any time after the commencement of the FW Act.
Even if I were wrong in my finding on that matter the complaint of the contravention must fail for the applicant’s failure to prove any adverse action in respect of a workplace right. Plainly the applicant is entitled to the benefit of a workplace law.
The particular workplace rights that give rise to other protections which were alleged concern allegations of dismissal because of temporary absence for illness (s.352) and objectionable terms (s.356).
For reasons outlined above I do not consider the applicant was dismissed. If I were wrong in my finding on dismissal I do not accept in any event he was dismissed because he was ill.
I do not consider any of the terms of the applicant’s employment were objectionable.
A final question arises however as to the relevant workplace law applicable and to a quantification of his entitlements such as to determine whether or not there has indeed been a failure to afford the applicant the benefit of a workplace law. For his part the applicant submitted that he was entitled to the benefit of the Commercial Travellers Award. Respectfully I do not agree. The award covers “…employers throughout Australia with respect to Commercial Travellers Advertising Sales Representatives and those employees unless any other modern award contains classifications that apply to such persons…” The term commercial travellers is defined to mean:
“A person employed, substantially away from the employee’s place of business, for the purpose of soliciting orders for, or selling articles, good, wares, or merchandise or material for wholesale, for resale or for use in connection with the production and/or preparation and/or distribution of commodities for sale by the customer.”
The applicant does not fall within the definition of commercial traveller and is not covered by the award. No evidence of any other appropriate award was provided leaving the applicant subject to the extant Australian Fair Pay and Conditions Standard minimum entitlements. The applicant has simply failed to place sufficient information before the Court to enable such an assessment to be effected. The applicant bears the onus of proof. It has failed to discharge its onus on this matter and for that reason its claim under s.340 also fails.
The applicant’s next complaint is in respect of s.343. Relevantly it provides:
“343(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.”
From my view of the evidence there is nothing either before or after the commencement of the Fair Work Act to support any contention that the respondent has organised, threatened or taken any action against the applicant with intent to coerce him not to exercise a workplace right. This complaint fails.
Next the applicant complains of a contravention of s.344. Relevantly s.344 provides:
“344 An employer must not exert undue influence or undue pressure on an employee in relation to a decision by the employee to:
(a) make, or not make, an agreement or arrangement under the National Employment Standards; or
(b) make, or not make, an agreement or arrangement under a term of a modern award or enterprise agreement that is permitted to be included in the award or agreement under subsection 55(2); or
(c) agree to, or terminate, an individual flexibility arrangement; or
(d) accept a guarantee of annual earnings; or
(e) agree, or not agree, to a deduction from amounts payable to the employee in relation to the performance of work.”
At the outset it must be restated that the applicant’s arrangement was concluded before the Fair Work Australia Act. On any version there is no evidence of any exertion of pressure or undue influence by the respondent upon the applicant to make or not make an agreement or arrangement under the National Employment Standards, or a modern award or an individual flexibility arrangement. In essence there is simply no evidence to support the complaint.
Next the applicant complains of a contravention of s.345. Relevantly s.345 provides:
“345(1) A person must not knowingly or recklessly make a false or misleading representation about:
(a) the workplace rights of another person; or
(b) the exercise, or the effect of the exercise, of a workplace rights by another person.”
The substance of the applicant’s complaints concern the representation by the respondent of the applicant as a contractor to the Australian Tax Office. While I have determined that matter against the respondent which prima facie makes its representations false, the issue for resolution here is whether or not the respondent made those representations “knowingly or recklessly.”
I am satisfied that the respondent did not knowingly make a false representation concerning the employment arrangement between itself and the applicant. If for no other reason that is because the respondent believed from its interaction with the Australian Tax Office that the arrangement was a proper and legitimate arrangement. Plainly the Court’s view differs to that of the Australian Tax Office but that is not to the point. As to being reckless, it is well settled that for a representation to be reckless it must be one made carless or indifferent as to its truth; Derry v Peek (1889) 14 App Cas 337 at 374. In this instance I am not satisfied that there is any basis to support a finding that the respondent was reckless in its representation to the Australian Tax Office concerning its view on the employment status of the applicant. It follows that the applicant’s complaint concerning this contravention fails.
Finally the applicant contends that the arrangement was a sham arrangement in contravention of Division 6 s.357 to s.359 of the Fair Work Act.
As earlier noted the Fair Work Act came into effect on 1 July 2009. Nothing in the Act suggests there is any intention for its effect to be retrospective. Similar processes existed under the WR Act. However for reasons which follow I consider the claim whether it relates to past or recent conduct fails on either basis.
The manner in which the applicant prosecutes this alleged contravention is that on 15 April 2010 when the respondent falsely represented to him that he was a contractor responsible for the costs of towing his equipment and that the respondent should give him an ABN. For reasons that I have earlier outlined I am satisfied that s.357(1) does not apply because the respondent has proven that if such representation was made he reasonably did not know it was false and was not reckless as to whether the contract was a contract of employment rather than a contract for services. The reasons for that conclusion are outlined above.
Likewise concerning the complaints of dismissal contended to have occurred in contravention of s.358; for reasons which I have earlier outlined. I reject that complaint. In any event I am of the view that the section is not engaged because evidence does not demonstrate that the threat to dismiss was “in order to engage [the applicant] as an independent contractor to perform the same or substantially the same work under a contract for services.” If there was a dismissal (and I do not accept that there was) then it was a dismissal simpliciter. Plainly the wording of s.358 requires the dismissal to be with an intent to subsequently engage which is not the case here. For like reasons s.359 has no application in the present case.
Conclusion
In conclusion I am satisfied that the applicant was an employee of the respondent and not an independent contractor. In my view he was employed on a casual part time basis. The applicant has failed to demonstrate any contravention because notwithstanding my finding on the issue of the employer/employee relationship the respondent’s conduct cannot be characterised as knowingly false or reckless and more generally the relationship between the parties was not terminated by dismissal but rather by the applicant indicating he no longer wished to provide further part time casual services.
Order
Application dismissed.
I certify that the preceding fifty-seven (57) paragraphs are a true copy of the reasons for judgment of Burnett FM
Date: 1 March 2012
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