Greige v Fort Street Public School Parents and Citizens' Association

[2013] FCCA 1505

FEDERAL CIRCUIT COURT OF AUSTRALIA

GREIGE v FORT STREET PUBLIC SCHOOL PARENTS & CITIZENS’ ASSOCIATION [2013] FCCA 1505

Catchwords:
INDUSTRIAL LAW – Whether applicant was employee or independent contractor.

Legislation:

Education Act 1990 (NSW), s.116

Cases Cited:
ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532
Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2010) 184 FCR 448

Applicant: STEPHEN GREIGE

Respondent: FORT STREET PUBLIC SCHOOL PARENTS & CITIZENS’ ASSOCIATION

File Number: SYG 471 of 2013

Judgment of: Judge Cameron

Hearing date: 19 July 2013

Date of Last Submission: 19 July 2013

Delivered at: Sydney

Delivered on: 3 October 2013

REPRESENTATION

The Applicant appeared in person

Counsel for the Respondent: Mr M. Easton

Solicitors for the Respondent: Herbert Geer

ORDERS

1. The question ordered to be determined separately be answered as follows:

   The applicant was not employed by the respondent.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYG 471 of 2013

STEPHEN GREIGE

Applicant

And

FORT STREET PUBLIC SCHOOL PARENTS & CITIZENS’ ASSOCIATION

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 11 March 2013 the applicant, Mr Greige, commenced proceedings alleging that the respondent, Fort Street Public School Parents & Citizens’ Association (“P&C”), had breached the National Employment Standards and the Children’s Services Award 2010 (“Award”) by failing to pay him several of his entitlements.  Mr Greige claimed that he was employed by the P&C as the team leader of the Fort Street Public School out of school hours care program (“OOSH”).

2. The matter is before the Court at this point for separate determination of the question whether Mr Greige was in fact employed by the P&C.

Evidence

Stephen Greige

1. Mr Greige stated that he worked casually as a teacher’s aide at Fort Street Public School until March 2011.  He stated that in late 2009 the then-principal of Fort Street Public School, Tracy Gray, told him that the school was setting up its own OOSH because it was losing students as a result of the lack of local OOSH places.  He stated that he decided to help with the OOSH but told Ms Gray that he did not want to be the team leader.

2. Mr Greige stated that on 18 January 2010 he attended an interview with Chantelle Shackleton, who had also been asked to run the OOSH, and Ms Gray.  He stated that during the interview Ms Gray agreed to pay them $22 an hour and stated that if things went well they would receive a pay rise in the future.  (At the start of 2011 Mr Greige received a pay rise of $3 an hour).  Mr Greige stated that Ms Gray told them that they would be employed on a casual basis for six to twelve months until the school put the program out to tender.  He stated that he was surprised to learn that the P&C would be in charge of the OOSH because in his earlier conversations with Ms Gray she had not mentioned the P&C’s involvement.  Mr Greige stated that Ms Grey agreed to their request to use the school’s equipment, such as the computer and art rooms, board games, arts and craft supplies and sporting equipment.  He stated that Ms Gray also agreed to help them by purchasing some food, cutlery, plates and cups.  Mr Greige stated that at the interview he, Ms Shackleton and Ms Gray agreed that the OOSH would operate on weekday mornings from 6:30 to 8:30 and that, in order to save money, only one person would work at that time.  They also agreed that the afternoon shift would commence at 2:30 and end at 6:00.  By agreement between Mr Greige and Ms Gary on the last day of the first term in 2010, the operating hours subsequently changed to 7:00 to 9:00 in the morning with one staff member commencing at 2:00 in the afternoon.  Mr Greige stated that at the conclusion of the interview Ms Gray asked him to make a program which would be placed in the weekly school newsletter.  He stated that he did so and gave it to Ms Gray once the first term started.

3. Mr Greige stated that after the first week, he started purchasing food with his own money but was not reimbursed until the final few days of the term.  He stated that for the whole of 2010 he was not compensated for the money he spent and the time it took him to travel to and from Millers Point to buy groceries or DVDs.  Mr Greige stated that in the lead-up to the school holidays in 2010 he organised the vacation care program by telephoning companies, using his own phone, and doing risk assessments at venues on weekends.  He stated that in late 2010 he asked to be reimbursed for this work but was told that he did not have enough proof that he had done it.  Mr Greige stated that during the first term of 2010 he always worked thirty minutes of unpaid overtime in the mornings, packing away equipment and cleaning, and again in the afternoon, setting up. 

4. Mr Greige stated that during the first term of 2010 he and Ms Shackleton were rarely paid and that the only time they received money was when parents paid their fees in cash.  He stated that because Ms Gray’s administrative manager, who was also the P&C treasurer, fell ill, invoices were rarely sent out in the first term of 2010.  Mr Greige stated that by late March 2010 he and Ms Shackleton were becoming frustrated because they were not being paid.  He stated that Pauline Gramellini, the relief administrative manager, made enquiries of various organisations about how they should be paid.  In late March Ms Gramellini told Mr Greige and Ms Shackleton that their best option was to apply for an Australian Business Number (“ABN”).  Mr Greige stated that although both he and Ms Shackleton did not like the idea, they nevertheless applied for ABNs because they wanted to be paid and because, based on their conversations with Ms Gray, they did not expect to be running the OOSH program for long.  Mr Greige applied for an ABN on 29 March 2010 then invoiced the P&C and was paid in the final days of the first term of 2010.

5. Mr Greige stated that in May 2012 he made some enquiries about his entitlement to receive a split shift allowance since he worked two separate shifts a day.  He stated that he telephoned the Fair Work Ombudsman and the person he spoke to told him that his entitlement to a split shift allowance depended on whether he was an employee or independent contractor and suggested that he use the “contractor decision tool”.  Mr Greige stated that on 9 and 11 May 2012 he used the tool and on both occasions thirteen of sixteen indicators suggested that he was an employee.  He stated that he then obtained a copy of the Award and was surprised to learn of entitlements which he had not received or been told about.  Mr Greige stated that when he told Ms Shackleton about the results of his enquires she asked him to delay approaching Pania Haerewa, the P&C president, until she had  left for Europe.  He stated that he agreed and in the meantime obtained the previous year’s wages books in order to calculate how much he was owed.

6. Mr Greige stated that on 4 June 2012 he approached Ms Haerewa with his concerns who, after reading his claim, told him it was “bollocks”.  Mr Greige told Ms Haerewa that if the P&C did not pay him what he was owed he would take the matter to Fair Work Australia and the Australian Taxation Office (“ATO”).  Mr Greige stated that after his conversation with Ms Haerewa, his relationships with some staff members, particularly the (new) principal, Michele Peel-Yates, changed.  He stated that not long after his conversation with Ms Haerewa, his school keys were changed and his computer and email access restricted.  Mr Greige stated that on 13 June 2012 Ms Peel-Yates shouted at him for using the printer and told him that he was not an employee.  He stated that she later apologised for her outburst and blamed it on her poor health.

7. In his oral evidence Mr Greige said that he and Ms Shackleton made the decisions about the program offered at the OOSH and were the bosses of the OOSH, although administration was undertaken by others.  He agreed that they did not take direction from others about what was offered in the OOSH’s program and decided whether the OOSH would operate during school holidays.  It was also his and Ms Shackleton’s responsibility to arrange relief staff at the OOSH.

Chantelle Shackleton

1. Ms Shackleton stated that in mid-December 2009 Ms Gray told her that Fort Street Public School was starting an OOSH and asked her if she was interested in joining Mr Greige in running it.  Ms Shackleton stated that at the time she was employed on a permanent basis by the City of Sydney Council, working at the Woolloomooloo children’s program.  She stated that Ms Gray told her that she would receive the same entitlements she had been receiving from the city council.

2. Ms Shackleton stated that on 18 January 2010 she attended an interview with Ms Gray (and Mr Greige) and was surprised to learn that the OOSH would be run by the P&C rather than by the school.  She stated that Ms Gray told her and Mr Greige that they would be employed on a casual basis but would work permanent shifts five days a week for between six and twelve months until the school could put the OOSH out to tender.  Ms Shackleton stated that Ms Gray agreed to pay them $22 an hour, with a pay rise in the future if things went well, and told them that the P&C was required by law to pay them a minimum of two hours a day.  Ms Gray also said that they would receive sick pay and superannuation benefits which, Ms Shackleton stated, enticed her to work at the OOSH.  Ms Shackleton stated that there was no mention at that meeting of them obtaining an ABN.  She stated that she resigned from the Woolloomooloo children’s program the next day.

3. Ms Shackleton stated that she was not paid for most of the first term of 2010.  She stated that the first time she and Mr Greige were told that they had to obtain ABNs was in March 2010 when Pauline Gramellini, Fort Street Public School’s administrative manager, told them that she had spoken to the ATO and had been told that if they obtained ABNs they would be paid quickly.  Ms Shackleton stated that they were told that they had to pay their own taxes but were not told about obtaining their own insurance or providing their own superannuation.  She stated that they did not know until 2011 that they had to provide for their own superannuation.  Ms Shackleton stated that she was unhappy about obtaining an ABN but was told that that was the only way they could get paid.  She stated that she and Mr Greige just did what they were told because they did not think that they had a choice.  Ms Shackleton stated that she thought that they could renegotiate but that that did not happen and having ABNs proved to be expensive for them in terms of tax. 

4. Ms Shackleton stated that during the school holidays in 2010 she and Mr Greige worked for nine to ten hours a day without being paid overtime or having lunch breaks.  She stated that until 2011 they were mostly paid by cheque on Friday afternoons.

5. Ms Shackleton stated that although the P&C made Mr Greige and her obtain ABNs, the business they ran was not their own.  She stated that the OOSH was not in their names, that they had no power and that they had to seek permission for everything they did.  Nevertheless, in her oral evidence Ms Shackleton confirmed that she and Mr Greige had control over the program offered by the OOSH.

Tracy Gray

1. Ms Gray was the Principal of Fort Street Public School from 2006 until the end of the first term of 2010.  She deposed that in late 2009 she became aware that many of the school’s students attended the nearby King George V care program before and after school hours, but that that program had become full and could not accept more students.  Ms Gray deposed that as a result she contacted the Department of Education and Communities to enquire about Fort Street Public School establishing its own OOSH.  She deposed that the person she spoke to told her that the school could not establish an OOSH until it had a sufficient number of students.  Ms Gray deposed that she subsequently informed the P&C of her enquiries and asked if it could establish an OOSH.

2. Ms Gray deposed that Mr Greige was known to her at that time because he had been employed at the school as a teacher’s aide.  She deposed that she also knew that he and Ms Shackleton were employed by the King George V after school care program.  Ms Gray deposed that because of her good relations with the King George V after school care program, she approached its manager, Colin Huxley, and sought his permission to approach Mr Greige and Ms Shackleton about setting up a business to run the OOSH.  Mr Huxley agreed.  Ms Gray deposed that after that conversation, someone from the P&C approached Mr Greige in relation to setting up a business to run the OOSH.

3. Ms Gray deposed that at the beginning of 2010 she had about three or four conversations with Mr Greige during which she said to him:

   Steve, I will need you to provide the P&C with police checks for any casual staff you employ in the OOSH.

   You will also have the responsibility to organise and run the OOSH completely.  You will need to prepare the program, make it available to the parents, bill the parents, and make sure you arrange resources, food for the children and activities.  We can offer you space on the school’s newsletter to keep parents up to date.

4. Ms Gray deposed that she had another conversation with Mr Greige during which she told him that he needed to obtain an ABN and organise his own tax as he was running his own business.  She deposed that Mr Greige agreed and said that Ms Shackleton had shown him how to do an ABN application and that his accountant would assist him with his tax.  Mr Greige subsequently provided the P&C with his ABN application, a copy of which was annexed to Ms Gray’s affidavit.  In that application Mr Greige stated that he was a sole trader, that he was applying for an ABN in order to operate as a contractor and that his agreement allowed him to pay another person to perform work on his behalf.  Ms Gray deposed that the P&C was also provided with any police checks for the casual staff Mr Greige employed.

5. Ms Gray deposed that she was a member of the Millers Point Youth Partnership and that in that capacity she had had a discussion with Mr Greige and Ms Shackleton about the possibility of the Youth Partnership providing them with a mentor to help them set up and run their business.  Mr Gray deposed that Mr Greige said in response that he would be running the OOSH as a business and hoped to build it up, employ people and offer it as a service to other schools.  She deposed that although she offered Mr Greige a referral to the Millers Point Youth Partnership on several other occasions, he did not take up the offer.

6. Ms Gray deposed that at no time were Mr Greige and Ms Shackleton employed by the Department of Education and Communities to run the OOSH at Fort Street Public School.

Submissions

1. Mr Greige submitted that he believed that he and Ms Shackleton had been employed by the P&C and that had they been told that they would have to attend to their own tax, leave, insurance and superannuation they would never have worked at the OOSH at Fort Street Public School.  In any event, he submitted, Ms Shackleton’s evidence was that they had been told by Ms Gray that sick pay and superannuation would “get sorted” and he submitted that “[i]f someone mentions to you about super and sick pay, it’s safe to assume that you think you’re in an employment relationship”.  He also submitted that he only obtained an ABN because it was the only way to be paid without further delays.  He submitted that he had not wanted the OOSH business for himself and had not intended to tender for it when it went to tender.

2. The P&C submitted, referring to s.116 of the Education Act 1990 (NSW), that it was not a business in any sense. It submitted that the Fort Street Public School OOSH arose out of oversubscription to the nearby King George V after school care program. The P&C submitted that although it had facilitated the service Mr Greige was engaged to provide, the OOSH was not its business. It submitted that, therefore, Mr Greige’s work in running the OOSH was work in Mr Greige’s own, separate business.

3. The P&C submitted that there was no written contract between the parties.  It submitted that the verbal agreement reached between Ms Gray and Mr Greige was that he would conduct and be completely responsible for the running of the OOSH and would do it as his business.

4. The P&C submitted that Mr Greige had not only accepted responsibility for conducting the OOSH, but was also required to have an ABN, organise his tax arrangements, prepare the program, bill parents and arrange resources, food and activities for the children.  It submitted that Mr Greige’s acknowledgment to Ms Gray that he intended to run the OOSH as a business, build it up and offer it as a service to other school confirmed the mutual intention that the relationship not be one of employment.

5. The P&C referred to Mr Greige’s tax returns for the financial years 2009-10, 2010-11 and 2011-12 which did not nominate the P&C as his employer.  In the latter two financial periods, Mr Greige nominated the Department of Education and Communities as a “payer”.  The P&C submitted that Mr Greige’s declared personal services income for those years was consistent with income received as an independent contractor.  In relation to the 2009-10 financial year Mr Greige was paid $10,691.33 by the P&C and declared $11,889 of personal income.  The P&C submitted that this indicated that Mr Greige had personal services income in that year from other sources.  It submitted that it appeared that for significant periods Mr Greige performed work at the OOSH while at the same time working as an employee elsewhere.  It submitted that the contrast between these two types of arrangements evidenced a conscious decision by the parties to enter into a contract for services.  The P&C submitted that Mr Greige retained control over the running of the OOSH and operated the facility as his own enterprise and that, to the extent that there was any goodwill in the business, it inured to Mr Greige.  It submitted that any goodwill was linked to Mr Greige’s identity and to his conduct of the OOSH.

6. The P&C submitted that Mr Greige’s answers to the questions in his ABN application confirmed that he understood and agreed with Ms Gray’s intention to create a principal and independent contractor relationship.  It submitted that those answers evidenced Mr Greige’s clear and unequivocal intention to operate the OOSH as a sole trader and contractor rather than as an employee.  The P&C pointed to Mr Greige’s answers that he would pay others to perform work on his behalf and that the intention of his application was to receive payment for services.

Consideration

1. Matters which can be relevant to deciding whether a relationship is one of employer and employee or principal and independent contractor were discussed in the first instance decision of ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532 at 543 [29]. There Perram J said:

   … one can at least say this: first, the distinction between an employee and an independent contractor is “rooted fundamentally in the difference between a person who serves his employer in his, the employer’s, business, and a person who carries on a trade or business of his own” (Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at [40] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ citing Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 at 217 per Windeyer J); secondly, the answers to that question are to be determined by reference to the “totality” of the relationship (Hollis at [24]); thirdly, a number of indicia have accreted over time in the authorities which are thought to throw light to varying degrees on the outcome without being determinative: the terms of the contract; the intention of the parties; whether tax is deducted; whether sub-contracting is permitted; whether uniforms are worn; whether tools are supplied; whether holidays permitted; the extent of control of, or the right to control, the putative employee whether actual or de jure; whether wages are paid or instead whether there exists a commission structure; what is disclosed in the tax returns; whether one party “represents” the other; for the benefit of whom does the goodwill in the business inure; how “business-like” is the alleged business of the putative employee – are there systems, manuals and invoices; and so on – the list is neither exhaustive nor short: see Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 at 24 per Mason J and 36-37 per Wilson and Dawson JJ; for application see Hollis at [48]-[57] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ; Sweeney at [30]-[33] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ. …

1. In Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2010) 184 FCR 448 the Full Court of the Federal Court said:

   Roy Morgan Centre 37 ATR 528 involved issues and facts very like those in the present appeal. Winneke P, with whom Phillips and Kenny JJA agreed, quoted with approval at 533 a passage from Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 at 944 where Mummery J, speaking of a determination whether a person was a servant or independent contractor, said:

   This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation.  The object of the exercise is to paint a picture from the accumulation of detail.  The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole.  It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details.  Not all details are of equal weight or importance in any given situation.  The details may also vary in importance from one situation to another.

   Winneke P went on to say (at 533):

   Although technically it remains true that the question whether a person is engaged on a contract of service or for services is one of mixed law and fact, in reality the task of the trial judge in determining that question, in a case like the present one, involves an assessment and evaluation of evidence for the purpose of identification and isolating factors or indicia which are capable of pointing in one direction or the other, and then weighing or balancing those factors in accordance with established principles, none of which is conclusive, in order to reach a conclusion.

   His Honour added that where, as in that case, the resolution of the question is one of “fact and degree” in respect of which views may legitimately differ, it is difficult for an appellant who cannot identify specific error to demonstrate any error at all on the part of the trial judge. (at 460 [31] - [32])

2. In his application for an ABN, Mr Greige stated that he was applying in order to “[Establish] an enterprise” and that he had started his business and was working as a contractor.  He also stated that his “work agreement” would allow him to pay “another person” to work for him.  The address of the business was stated to be in Lower Fort Street which, according to Mr Greige’s tax returns which were in evidence, was Mr Greige’s home address at the time.

3. Mr Greige’s tax returns show that in addition to wage and salary income earned as a child care worker, in 2009-10, 2010-11 and 2011-12 he also derived personal services income from providing child care services. Given the contents of two invoices for that service which were admitted into evidence, the earning of that latter income probably reflects Mr Greige’s operation of the Fort Street Public School OOSH.

4. This evidence suggests that, contrary to his claim in these proceedings, Mr Greige understood that his activities in the OOSH were undertaken not as an employee of the P&C, but as an independent contractor.  However, the subjective understanding which parties to an industrial relationship may have of that relationship is not determinative.  The matter is one for objective assessment.

5. Mr Greige’s account of his discussions with Ms Gray does not persuade me that her reported comments amounted to an offer of employment.  Mr Greige’s account of the 18 January 2010 conversation with Ms Gray is one of a potential contractor discerning the manner in which his business might operate and the support that might be provided to it, not one of a potential employee being told how the owner of the business intended to operate it, even after taking advice from the potential employees.  

6. In any event I consider that Ms Gray’s account of her conversations with Mr Greige and Ms Shackleton is more plausible than their accounts and I prefer it.  I consider it inherently unlikely that Ms Gray would be hiring staff for the P&C as its representative and I am not persuaded that she had that authority, or would have purported to have had it if she did not.  Further, the accounts given by Mr Greige and Ms Shackleton of a conversation on 18 January 2010 strike me as imperfect recollections of a conversation or conversations whose substance and implications they grasped imperfectly.

7. Also of considerable importance in identifying the nature of the relationship is the fact that Mr Greige was not paid wages or salary but was paid on invoice.  While such conduct would not prevent a finding of an employment relationship, for instance in a circumstance of sham contracting, in the present case I am not persuaded that it is not indicative of a genuine contracting relationship.

8. It was clear that the P&C had some role in the OOSH’s operation but it appears to have been one which involved collecting fees and making payments to Mr Greige and Ms Shackleton.  While such activities are not inconsistent with an employment relationship, they are insufficient on their own to prove the existence of one, particularly when it is clear that Mr Greige and Ms Shackleton were paid as contractors not employees.

9. Importantly, it did not appear from the evidence that the P&C played any role in the day to day operation of the OOSH, much less the role of an employer which gave Mr Greige and Ms Shackleton directions.  Rather, the evidence indicated that Mr Greige and Ms Shackleton had a relevantly free hand in the operation of the OOSH, a strong indication that they were running it as an independent enterprise, not as employees of the P&C.  Although Ms Shackleton’s evidence was that she and Mr Greige had no power and had to seek permission for everything they did, that does not necessarily demonstrate an employment relationship.  In this regard it should be kept in mind that the OOSH did not operate from its own premises or, apparently, with its own equipment and that its role was to provide a particular service to a narrow and defined cohort of parents and children.  In such circumstances, Mr Greige and Ms Shackleton would undoubtedly have been expected to meet the requirements of the body of parents and to fit around the school’s operations.  The absence of complete freedom of action in such circumstances does not demonstrate an employment relationship.

Conclusion

1. Considering all the evidence as a whole, I find that Mr Greige was not an employee of the P&C and that he was, in fact, an independent contractor running his own business, even if he did not appreciate that.  In this regard, giving them the benefit of the doubt, it appears that neither Mr Greige nor Ms Shackleton had a clear or correct understanding of their relationship with the P&C.  Their evidence indicated that they paid inadequate attention to the legal basis of the arrangement and that they assumed it to have a character which it did not have.

2. The question ordered to be determined separately will be answered accordingly.

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Judge Cameron

Associate: 

Date: 3 October 2013