Fox v Aggforce Concreting
[2005] NSWWCCPD 47
•1 June 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Fox v Aggforce Concreting [2005] NSW WCC PD 47
APPELLANT: Brian Fox
RESPONDENT: Aggforce Concreting
INSURER:Employers Mutual Indemnity (Workers Compensation) Ltd
FILE NUMBER: WCC13294 - 2003
DATE OF ARBITRATOR’S DECISION: 17 February 2004
DATE OF APPEAL DECISION: 1 June 2005
SUBJECT MATTER OF DECISION: Whether the Appellant was a ‘worker’ or ‘deemed worker’ pursuant respectively to section 4, and section 5 and Schedule 1, clause 2 of the Workplace Injury Management and Workers Compensation Act 1998.
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: Hayden Fowler Corbett Jessop, Solicitors
Respondent: Vandervords, Solicitors
ORDERS MADE ON APPEAL: The decision of the Arbitrator is revoked and the following decision is made in its place:
The Appellant is deemed to be a ‘worker’ pursuant to section 5 and Schedule 1, clause 2 of the Workplace Injury Management and Workers Compensation Act 1998.
The Respondent is to pay the Appellant’s costs as agreed or assessed.
BACKGROUND TO THE APPEAL
On 11 March 2004, the Appellant, Brian Fox sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) in respect of a decision dated 17 February 2004.
The Respondent to the Appeal is Aggforce Concreting (‘the Respondent’).
Mr Fox was born on 23 July 1956 and is aged 48. His work history is largely in the construction industry: he is a qualified plumber but, more recently, until a previous injury on 11 March 2001, he had worked for about six years as a driver or offsider for concreting businesses. On 11 March 2001, Mr Fox suffered injury to his left elbow after an electric shock while working for Dragon Concrete Pumping Pty Ltd, a concrete pumping company. He was off work until being certified fit to return to work around October/November 2002, after which he began looking for concrete labouring work.
About early February 2003, he contacted John Martin of Aggforce Concreting, whom he had known for about fifteen years, and asked Mr Martin whether he had any work for him. Mr Martin subsequently asked him to turn up for work on particular jobs that he had on. Mr Fox first worked for Aggforce Concreting on 8 February 2003. On 10 February 2003, he obtained Australian Business Number (‘ABN’) registration as a sole trader. On 13 February 2003, he submitted a tax invoice to Aggforce Concreting for work performed between 8 and 13 February 2003, and later submitted three further invoices for work performed between 14 February and 4 March 2003. On 7 March 2003, Mr Fox sustained injuries to his neck and back in an industrial accident at the Hilton Hotel in Sydney. Aggforce Concreting denied liability.
On 12 August 2003, Mr Fox lodged an ‘Application to Resolve a Dispute’ with the Commission in respect of his claim for weekly compensation of $700 from 7 March 2003, and for medical, hospital and related expenses then amounting to $7,000. Aggforce Concreting lodged a ‘Reply’ on 29 August 2003 stating that Mr Fox “was not a worker to whom the Act applies” or, in the alternative, that he was “not incapacitated as result of an injury arising out of or in the course of his employment with the Respondent” and that “the section 60 expenses claimed were not incurred as a result of injury arising out or in the course of the Applicant’s employment with the Respondent”.
Following a teleconference on 11 December 2003, and a conciliation conference on the morning of 11 February 2004, the parties were unable to resolve their dispute and the Arbitrator proceeded to conduct a hearing.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 17 February 2004, records the Arbitrator’s orders as follows:
“The respondent is not liable for the applicant’s claim for weekly compensation. The application is therefore dismissed.”
The Arbitrator gave an ex tempore decision at the conclusion of the hearing on 11 February 2004. She applied the indicia listed by Mason J in Stevens v Brodribb Sawmilling Pty Ltd (1986) 160 CLR 16 (‘Stevens’) at 24, concluding that there was no contract of employment between the parties and that Mr Fox was not a ‘worker’ within the meaning of the definition in section 4 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). She also decided Mr Fox was not a ‘deemed worker’ pursuant to section 5 and Schedule 1, clause 2 of the 1998 Act. Thus, the Respondent was not liable to pay Mr Fox compensation under the Workers Compensation Act 1987 (‘the 1987 Act’) in respect of the injury suffered by Mr Fox.
ISSUE IN DISPUTE
The issue in dispute in the appeal is whether Mr Fox is a ‘worker’ as defined in section 4 of the 1998 Act or, alternatively, a ‘deemed worker’ pursuant to section 5 and Schedule 1, clause 2 of the 1998 Act. At the arbitration hearing, Aggforce Concreting’s solicitors acknowledged that the dispute was as to liability and not as to the quantum of the compensation sought by Mr Fox.
ON THE PAPERS REVIEW
Section 354(6) of the 1998 Act provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
I have had regard to Practice Directions Numbers 1 and 6, the documents that are before me, and Mr Fox’s solicitors’ submission that the appeal can proceed to be determined on the basis of these documents. I also note Aggforce Concreting’s solicitors state that “[i]n the event that the Commission is considering allowing the Appeal, the respondent would wish to make oral submissions”. However, given the parties’ agreement on the issue in dispute and the relevant law to be applied, the parties’ solicitors having made written submissions, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act, which states:
“352Appeal against decision of Commission constituted by Arbitrator
(1)A party to a dispute in connection with a claim for compensation may, with leave of the Commission constituted by a Presidential member, appeal to the Commission as so constituted against a decision in respect of the dispute by the Commission constituted by an Arbitrator.
(2)The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:
(a)at least $5,000 (or such other amount as may be prescribed by the regulations), and
(b)at least 20% of the amount awarded in the decision appealed against.
(3)If the Commission refuses to grant leave to appeal, the Commission must state reasons for the refusal in writing to the parties.
(4)An appeal can only be made within 28 days after the making of the decision appealed against.
(5)An appeal under this section is to be by way of review of the decision appealed against.
(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.
(7)On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.
Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission.
(8)In this section, decision includes an award, interim award, order, determination, ruling and direction.”
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. With regard to section 352(2)(a), the compensation sought by Mr Fox exceeds $5,000. With regard to section 352(2)(b), no award of compensation was made by the Arbitrator, although the amount in dispute comprises 100% of the amount claimed. However, as Deputy President Byron held in Mawson vFletchers International Exports Pty Ltd [2002] NSW WCC PD 5, at paragraph 22, and for the reasons he stated, the subparagraph (b) “qualification or condition does not and cannot meaningfully apply to a decision” where an award of compensation has not been made. Thus, I am satisfied I should grant leave to appeal and leave is granted.
FRESH EVIDENCE
Fresh evidence on appeal is governed by section 352(6) of the 1998 Act, which provides as follows:
“(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”
Practice Direction No. 6 sets out the process for seeking leave of the Commission to give ‘fresh evidence’ on appeal. This requires that the party seeking to rely upon the new evidence must also file in the Commission and serve on the other parties “a brief outline of the new evidence and the reasons why it was not given in proceedings before the Arbitrator, and submissions as to why the new evidence should be admitted.”
Mr Fox’s solicitors seek leave to introduce ‘fresh evidence’ in these proceedings. They identify the fresh evidence as:
(1) Statement of Mr Fox dated 10 March 2004.
(2) Tax returns of Mr Fox for the years ending 30 June 2000, 2002 and 2003.
(3) Duplicate invoices 555506, 555507, 555508 and 555509.
(4) Mr Box’s ABN Certificate.
Mr Fox’s solicitors state:
“The new evidence in the Applicant’s statement which is not in the Respondent’s investigative report concentrates on the employment/business history of the Applicant before his engagement by the Respondent. The Tax Returns could have been produced at the hearing but is [sic] was not considered that the Respondent was genuinely (or at all) asserting that the Applicant regularly carried on a business (which he clearly never has).”
As to why the fresh evidence should be admitted, Mr Fox’s solicitors said:
“The Applicant relied largely on the Respondent’s extensive investigative reports to supply the factual matters in the proceedings. There were some deficiencies in that report when it became clear during the hearing that the focus was on the Applicant’s prior employment/business history. The date of the ABN Certificate is also of relevance in the proceedings. The fresh evidence ought to be admitted to do justice between the parties. It is submitted that the Respondent is not prejudiced thereby.”
The Respondent’s solicitors submit that the material in question is not ‘fresh’:
“it was material always available to or known to the appellant …
It is hardly appropriate that a party should be allowed to run and close its case, get a result it is unhappy with and then seek on appeal to introduce evidence which it could (and should if it so wished) have tendered at the arbitration.
The respondent has been deprived of any opportunity to meet this evidence, to cross-examine on it (if so advised) and to consider calling counter evidence if appropriate.”
Practice Direction No 6 states that:
“In general, the Commission will allow new evidence to be introduced only where it can be demonstrated that the new evidence could not reasonably be obtained by and tendered in proceedings before the Arbitrator and that failure to allow the new evidence would cause a substantial injustice in the circumstances of the individual case.”
The admission of new or fresh evidence in an appeal has been considered by the Commission in a number of cases and the principles are well established: see, for example, Shipman Pty Ltd v Matters [2003] NSW WCC PD 19, McMahon v Laguna and Lavella t/as the Vessel “Nimble II” [2003] NSW WCC PD 22. The factors that weigh in favour of the exercise of the discretion to admit fresh evidence in an appeal include:
• if the request is refused, a substantial injustice will result to the party who seeks to have the evidence admitted
• the evidence could not have been discovered, with reasonable diligence, at the time of the original proceedings
• the evidence is of such probative value that there is a high degree of probability that it would lead to a different outcome in the case.
Factors weighing against the exercise of the discretion include:
• the interest in the finality of the litigation and the importance of the successful party being able to rely on the outcome of the proceedings
• the prejudice, if any, that may result to the other party, particularly if the fresh evidence raises new arguments in the appeal
• the intention of the legislative scheme in relation to the nature of the proceedings.
With regard to the intention of the legislative scheme, it should be noted, in particular, that section 352(5) of the 1998 Act provides that “[a]n appeal under this section is to be by way of review of the decision appealed against” – the appeal is not a rehearing of the matter. The Presidential member’s role is to review the decision of the Arbitrator and the Presidential member may only revoke, substitute or remit in relation to that decision (section 352(7)) where it can be demonstrated that the decision is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172, Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6).
I note that Mr Fox’s tax returns for the years ending 30 June 2002 and 30 June 2003, the invoices and a copy of his ABN Certificate are already in evidence before the Commission. The two tax returns and the ABN Certificate were filed by the Respondent prior to the conciliation/arbitration with a covering letter dated 4 February 2004. The new evidence appears to be his tax return for the year ending 30 June 2000 and his statement dated 10 March 2004. It is clear that this evidence was or should have been available to Mr Fox’s solicitors before the arbitration.
Given the availability of other material evidence, in particular Mr Fox’s statement of 23 June 2003 and his evidence at the arbitration hearing, for which a transcript is available, I am not satisfied by Mr Fox’s submissions that a substantial injustice will result to Mr Fox if the evidence is not admitted or that the evidence is of such probative value that there is a high probability that it would lead to a different outcome in the case. The admission of such evidence could prejudice Aggforce Concreting in a situation where the legislature intended the appeal to be a review and not a rehearing. It is neither fair to Aggforce Concreting nor appropriate in the circumstances to allow the fresh evidence to be admitted. Leave to admit such evidence tendered by Mr Fox that is fresh is therefore refused.
PRINCIPAL SUBMISSIONS
Mr Fox’s solicitors’ submissions suggest that the Arbitrator made factual errors in reaching her decision. While the submissions state “the Arbitrator did not properly exercise her discretion in determining that the Applicant was not a worker” pursuant to sections 4 or 5 of the 1998 Act, the submissions go principally to her findings of fact. The submissions also discuss the relevant law, but there is no suggestion that the Arbitrator made an error of law. The issue for this review is, therefore, whether the Arbitrator made a factual error in reaching her determination, noting that, as Deputy President Fleming recognised in Qantas Airways Ltd v Campisi [2005] NSW WCC PD 13 (‘Campisi’) at paragraph 20:
“fact finding by the Arbitrator inevitably involves the exercise of discretion. Findings relative to the credit of a witness and the relevance and weight of evidence are for the Arbitrator, who has heard or considered the whole of the evidence at first hand, to determine. It is only where the Arbitrator can be said to have failed to exercise his discretion fairly and according to law that his decision should be overturned. This occurs where the Arbitrator has acted upon a wrong legal principle, allowed irrelevant considerations to influence the decision, made a material mistake as to the facts or failed to take into account relevant and material considerations.”
In this case, Mr Fox’s solicitors submit, in particular, that the Arbitrator “failed to give sufficient weight to the fact that the Applicant had not regularly carried on any business prior to contracting with the Respondent”.
Mr Fox’s solicitors submit that Mr Fox was a ‘worker’ to whom the 1998 Act applies. Aggforce Concreting’s solicitors dispute this.
EVIDENCE
In his statement dated 23 June 2003, Mr Fox said before his accident (on 11 March 2001), he did concrete labouring work for various concreting businesses either as a driver or offsider. He was working for Dragon Concrete Pumping Pty Ltd at the time of the accident. Their insurer, GIO, accepted his workers compensation claim and he was paid weekly compensation until being certified fit for work in about October/November 2002. Mr Fox’s tax return for the year ending 30 June 2002, confirms that Mr Fox received “salary or wages” from Dragon and subsequently from the “Statutory Fund of GIO Workers Comp NSW Limited”, both of whom withheld tax. His tax return for the year ending 30 June 2003, shows that he received “salary or wages” from GIO and also Centrelink sickness allowance.
Mr Fox’s invoice number 555506, dated 13 February 2003, shows that he first worked for Aggforce Concreting on 8 February 2003. Thereafter, he worked for Aggforce Concreting on 10, 11, 12 and 13 February 2003 (included in invoice number 555506, dated 13 February 2003), 14 and 20 February 2003 (invoice number 555507, dated 20 February 2003), 26 and 27 February 2003 (invoice number 555508, dated 28 February 2003) and 28 February and 4 March 2003 (invoice number 555509, dated 6 March 2003). He was injured while working on 7 March 2003.
On 10 February 2003, Mr Fox obtained Australian Business Number registration as a sole trader. His first invoice to Aggforce Concreting was dated 13 February 2003.
In his statement dated 23 June 2003, Mr Fox said:
“12. With respect to my current employment, I am a sole trader, … working exclusively for John Martin who is the owner of Aggforce Concreting (John A and Deborah L Martin), since 8 February 2003 …
19. Aggforce Concrete is a business where John has about a dozen employees on and off, sometimes more, being formworkers, concreters etc, doing house slabs, multi storey buildings, supply and finish concrete. His business had been going for many years.
20. I rang John one day in February 2003 and asked him if he had any work. My elbow was right by then and I had a full clearance to go back to work. I was looking at concrete labouring work. John indicated that there was work for me and told me to turn up or be at a certain job.
21. There was no discussion about money or anything as I had known him for years. I was aware that I was not to be a direct employee, rather a sub-contractor. I was never asked by John if I had any accident and sickness policy or any type of workers compensation cover. I do not have any policy of my own in this regard.
22. I was paid by the job and I would present John with an invoice at the end of the week. I would give this to Debbie and she would give me cash in the envelope at the end of the week over a couple of beers. To do a full day’s work I received $180. Half a day was $90.”
Mr Fox stated that he “worked as required” for Mr Martin. At the arbitration hearing (transcript page 7 to 8), Mr Fox said he did not make himself available for anyone else because that was the way Mr Martin and the “other blokes that worked for them” operated:
“If there was plenty of work on, you worked. If there was no work, I didn’t work. You know, I’d just stay home and wait for the phone to ring …”
Sometimes they would work in the mornings, while at other times they would not start until mid-day.
Mr Fox stated (statement dated 23 June 2003, paragraph 31) that Mr Martin did not provide him with any training because Mr Fox knew what to do: he was confident with his work duties and his ability to perform them, and if he did not know what to do, he would ask.
THE ARBITRATOR’S FINDINGS
As stated above, the issue in dispute is whether Mr Fox was a ‘worker’ or deemed a ‘worker’ pursuant to the 1998 Act. The Arbitrator first considered whether Mr Fox was a ‘worker’ within the section 4 definition. This states:
“worker means a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing) …”
The definition goes on to exclude certain categories of persons, none of which are relevant here.
There was agreement between the parties and the Arbitrator confirmed that in order to determine whether Mr Fox was a ‘worker’ within the section 4 definition, she should consider the indicia identified by Mason J in the High Court decision in Stevens at 24, with a view to balancing those indicia which suggest the existence of an employment contract with those that do not. Mason J, with whom Brennan and Deane JJ agreed, identified ‘control’ as an important criterion and the following as a non-exclusive list of additional indicia:
• mode of remuneration
• the provision and maintenance of equipment
• the obligation to work
• the hours of work and provision for holidays
• the deduction of income tax
• delegation of work by the putative employee.
The Arbitrator looked first at the mode of remuneration. There was no dispute that this was in response to an invoice submitted by Mr Fox and that no income tax was deducted. The Arbitrator noted that both parties agreed that “the mode of remuneration goes against the presumption that the applicant is a worker” (transcript page 14). She next considered the right to delegate. Aggforce Concreting said Mr Fox had no right or opportunity to delegate; Mr Fox’s evidence did not establish whether, if he got a call asking if he could work on a particular day, he could propose someone else. The Arbitrator concluded that this did not assist her in coming to a decision one way or the other. So also with regard to the provision and maintenance of equipment, the Arbitrator found while Aggforce Concreting supplied Mr Fox with a hard hat, safety boots, and gum boots, these were clothing and not tools of the trade or equipment.
With regard to hours of work and holidays, obligation to work and capacity to dismiss, the Arbitrator said she was looking at the basis of the agreement between the parties and trying to make an assessment of what they considered it to be. She considered paragraphs 20 and 21 of Mr Fox’s statement (see paragraph 32 above) to be compelling evidence going against the establishment of an employment relationship (transcript page 15 to 16):
“it is clear, I think, if you read that paragraph, that the applicant and the respondent agreed that the legal relationship they were entering into was one of contractor, not employee-employer, and Mr Fox is under no illusions. He knows he is not an employee, that he is a contractor.”
With regard to obligation to work, the Arbitrator said Mr Fox’s evidence indicated that he believed there was an unspoken agreement that he should be available for work although there was no guarantee of work or of set times or days (transcript page 16):
“[w]ork was arranged as work was available and hours varied daily. The applicant was paid half a day or a daily rate, and I note from the applicant’s submissions that he didn’t work every day within the period that he was working for the respondent.”
While the Arbitrator said she accepted that Mr Fox believed that he should be available to work, there was nothing in the evidence to convince her that he was under any obligation to be available every day: “Each day, each job was a new arrangement and the applicant would be available or not available”.
The Arbitrator also found that Mr Fox had no paid leave entitlements such as sick leave or holiday pay, and there was no power of dismissal on the part of Aggforce Concreting (transcript page 16):
“He may not offer him work but certainly dismissal is not part of the contemplation of either party. If work was there, the applicant would do it if he was available.”
Having concluded that Mr Fox was not a ‘worker’ as defined in section 4 of the 1998 Act, the Arbitrator went on to consider whether he was a ‘deemed worker’. Under the heading “deemed employment of workers”, section 5 of the 1998 Act states merely: “Schedule 1 has effect”. Schedule 1, clause 2(1) states relevantly:
“ Where a contract:
(a) to perform any work exceeding $10 in value (not being work incidental to a trade or business regularly carried on by the contractor in the contractor’s own name, or under a business or firm name), or
(b) to perform any work as an outworker,
is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, taken to be a worker employed by the person who made the contract with the contractor.”
Mr Fox’s solicitors submitted to the Arbitrator that Mr Fox performed work in excess of $10, which was not incidental to the “Respondent’s” [sic] business and Mr Fox neither sublet nor employed any other worker. Thus, the exceptions do not apply and Mr Fox should be considered a ‘deemed worker’. Aggforce Concreting’s solicitors submitted that the work being performed by Mr Fox was work incidental to his labouring business, which business was carried on in his own name, registered with the Australian Taxation Office.
Unfortunately, the Arbitrator’s ex tempore statement of reasons on this issue are very brief. She considered (transcript page 16):
“the business carried on by Mr Fox for which he had an ABN was exactly the sort of work he was carrying out for the respondent. So I don’t consider that that section [section 5 and Schedule 1, clause 2] is relevant to these proceedings.”
The Arbitrator concluded that (transcript page 16 to 17):
“having taken everything into account, having balanced the indicia, I do not consider that there was an employment contract between the parties. I do not consider that the applicant was a worker within the meaning of the Act. Clearly, he was a contractor. He knew that. He was aware that that was the relationship.”
DISCUSSION AND FINDINGS
In Mr Fox’s submissions on the appeal, repeat those made to the Arbitrator. His solicitors submitted that Mr Fox was effectively under the control of Aggforce Concreting: he was essentially a labourer who “was told by the employer the date, time, location and hours of work to be performed. There was no prospect of flexibility …”. By contrast, Aggforce Concreting’s solicitors submitted Mr Fox was engaged to perform work within his knowledge and expertise after many years in the construction industry. Aggforce Concreting did not exercise any control over the manner in which he performed the work assigned to him.
Deputy President Byron reviewed the relevant law in Zhao v Monlea Pty Ltd t/as Nordex Interiors [2003] NSW WCC PD 11 (‘Zhao’). He noted, at paragraph 44, that:
“in Hollis v Vabu Pty Ltd (2001) 207 CLR 21, the High Court agreed with Mason J in Stevens v Brodribb Sawmilling Pty Ltd (supra) that the test was not the exercise of control per se, but the right to exercise control, and further, that control is not the only relevant factor. Rather it is the totality of the relationship between the parties that must be considered.”
This was emphasised by Walker J in Cartner v Barclay [2002] NSW CC 9 in his summary of the applicable principles, and, recently, by Deputy President Fleming in her decision in Campisi.
In my view, there is nothing to indicate that the Arbitrator erred in finding that Mr Fox was not a ‘worker’ pursuant to the section 4 definition. Her fact-finding, balancing of the relevant indicia and consideration of the totality of the relationship between the parties, support her conclusion. I note, in particular, that she found nothing in the evidence to convince her that Mr Fox was under any obligation to be available every day, and that Mr Fox knew that he was entering into a relationship with Aggforce Concreting as a contractor. There being, in my opinion, no legal, factual or discretionary error in relation to the Arbitrator’s determination concerning the application of the section 4 definition of ‘worker’, this part of the decision should be confirmed.
The second part of the Arbitrator’s decision concerns whether Mr Fox was a ‘deemed worker’ pursuant to Schedule 1, clause 2 of the 1998 Act. The former, but essentially similar, version of this clause - Schedule 1, clause 2 of the 1987 Act, was considered by Bainton AJA in Scerri v Cahill (1995) 14 NSW CCR 389 (‘Scerri’):
“On its proper construction cl 2 of Sch 1 requires an applicant who relies on it to establish each of the ingredients, both positive and negative, to identify the relevant ‘work’. What he must establish is:
(a) that he was a party to the contract with the respondent to perform work;
(b) that the work exceeds $10 in value;
(c) that the work is not incidental to a trade or business regularly carried on by the applicant in his own name or under a business or firm name;
(d) that the applicant has neither sublet the contract nor employed workers in the performance of it.”
In Mr Fox’s case, as in Zhao, there is no dispute that paragraphs (a), (b) and (d) are satisfied. The critical question is whether paragraph (c) is also satisfied. In Zhao at paragraph 63, Deputy President Byron referred to Dixon J’s discussion of this in Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 401-2:
“Dixon J said that the provision was intended to draw a distinction between two classes of independent contractors. These are on the one hand those whose relation to the principal is special or particular, and on the other hand there are those who perform contract work successively for customers or others. The first class is a contractor whose contract with the principal stands outside the course of the general business of the contractor or the general practice of his trade. This class is outside the statutory exclusion and, therefore, obtains the protection of the Act. The second class is a contractor who conducts as a matter of course a definite trade or business that he carries on systematically, or a contractor who holds himself out as ready to do so. This class comes within the statutory exclusion and does not have the benefit of the protection provided by the Act. To be excluded from the benefits of the Act, the applicant must have had at the date of entering into the contract with the person engaging him or her, an existing business in the course of which he carried on his trade regularly, either in his own name or under a firm or business name. His Honour went on to say at 402 that;
‘… these all indicate a business or trade conceived as independently existing or exercised by a person holding himself out to the public under that name or style. No doubt the policy is a matter of inference but it seems reasonable to suppose that it was considered proper that a person conducting a business in the course of which he contracted to perform work should carry the risk of personal injury as one of the hazards of his business, while the man who worked under contract but only for the employer or without any trade or business or outside his trade or business should, like an ordinary employee, be insured against the risk of injury in his work.’”
The facts of Zhao were that the Appellant was a plasterer. When considering the facts of that case, Deputy President Byron said, at paragraph 64:
“While the evidence was that he did not in fact work for anyone else during the time that he was periodically engaged by the Respondent (apart from undertaking work for friends at no cost), there was no reason why he could not do so, given that he was in business as, and held himself out to be, a contract plasterer. In the circumstances and facts of this case, test (c) above is not satisfied and consequently, the Appellant is not a ‘deemed worker’ within the meaning of Schedule 1 of the Act.”
Mr Fox’s solicitors submitted that his work for Aggforce Concreting was not incidental to a trade or business regularly carried on by Mr Fox either under his own name or under a business or firm name. Mr Fox had never carried on business in the concreting industry before contracting with Aggforce Concreting. He obtained his ABN two days after commencing work for Aggforce Concreting at, Mr Fox’s solicitors allege, Aggforce Concreting’s request. I note there is no evidence currently before the Commission to support this. His solicitors go on to say that prior to his working for Aggforce Concreting, Mr Fox had been unemployed for about 17 months and prior to that he had worked for Dragon Concreting for eight months, having previously been an employee of various other businesses for some years. Mr Fox’s solicitors concluded that there is no evidence of Mr Fox having an existing business at the date of entering into the contract, nor any evidence that he had, at that time or earlier, regularly carried on a trade or existing business.
Aggforce Concreting’s solicitors submit that the Arbitrator’s conclusions in relation to this issue were correct and appropriate to the submissions made to her which were that Mr Fox’s business was the supply of labouring services. They submit Mr Fox’s case is wholly consistent with that of Zhao.
I can find no evidence that Mr Fox was carrying on a business in the years prior to his working for Aggforce Concreting. His tax returns for the years ending 30 June 2002 and 30 June 2003 indicate that he was an employee in the period prior to the injury he suffered from an electric shock while working for Dragon Concrete Pumping Pty Ltd on 11 March 2001. Mr Fox’s evidence is that after he had been certified fit for work following his recovery from that injury in about October/November 2002, he looked for concrete labouring work by phoning around among the contacts he had made having worked in the construction industry for some years. He obtained his ABN registration as a sole trader on 10 February 2003, two days after he commenced work for Aggforce Concreting. I do not accept the submission made by Aggforce Concreting’s solicitors that Mr Fox was in the business of supplying labouring services. The facts of Mr Fox’s case can be distinguished from those of Zhao. Unlike Mr Zhao, Mr Fox did not have an existing business at the time he began working for Aggforce Concreting in which he regularly carried on his trade, and there is no evidence that Mr Fox held himself out as being in business.
Thus, in my view, paragraph (c) of the “ingredients” identified by Bainton AJA in Scerri is satisfied and Mr Fox should be taken to be a worker employed by Aggforce Concreting pursuant to Schedule 1, clause 2 of the 1998 Act. Having erred in her findings of fact with respect to the second part of her decision, the Arbitrator’s decision must be revoked and a new decision substituted.
DECISION
The decision of the Arbitrator is revoked and the following decision is made in its place: The Appellant is deemed to be a ‘worker’ pursuant to section 5 and Schedule 1, clause 2 of the Workplace Injury Management and Workers Compensation Act 1998.
COSTS
The Respondent is to pay the Appellant’s costs as agreed or assessed.
Robin Handley
Acting Deputy President 1 June 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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