Jamsek v ZG Operations Australia Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Jamsek v ZG Operations Australia Pty Ltd [2020] FCAFC 119

Appeal from: Whitby v ZG Operations Australia Pty Ltd [2018] FCA 1934
File numbers: NSD 495 of 2019
Judges: PERRAM, WIGNEY AND ANDERSON JJ
Date of judgment: 16 July 2020
Catchwords:

INDUSTRIAL LAW – whether two truck drivers were employees for the purposes of the Fair Work Act 2009 (Cth) (FW Act) and the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGA Act) – whether drivers were workers for the purposes of the Long Service Leave Act 1955 (NSW) (LSL Act) – assessment of the totality of working relationship – consideration of multi-factor test – drivers derived sole income working for same business for nearly 40 years – drivers were required to purchase a truck to retain work – drivers contracted with company through family partnerships – trucks were owned by family partnerships – drivers were required to be available to work during set hours – company logo was displayed on drivers’ trucks for majority of relevant period – company branding on drivers’ clothing – capacity of drivers to generate goodwill

PRACTICE AND PROCEDURE – application for extension of time to file a notice of appeal – application lodged after costs judgment at first instance – consideration of length of, and explanation for, delay – consideration of prejudice to respondents and prospects of success of the appeal

Held: appeal allowed – application for extension of time granted – truck drivers were employees for the purposes of the FW Act and SGA Act and workers for the purposes of the LSL Act
Legislation:

Fair Work Act 2009 (Cth) ss 11, 13, 44, 45, 87(1), 90(2), 96, 116, 118, 335, 342(1), 357, 550(2)(c)

Federal Court of Australia Act 1976 (Cth) Div 2 of Pt III

Long Service Leave Act 1955 (NSW) s 3(1)

Superannuation Guarantee (Administration) Act 1992 (Cth) ss 12(1), 12(3)

Federal Court Rules 2011 (Cth) r 36.03
Cases cited:

ACE Insurance Limited v Trifunovski [2013] FCAFC 3; 209 FCR 146

Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; 261 FCR 301

Australian Air Express Pty Ltd v Langford [2005] NSWCA 96; 147 IR 240

Australian Mutual Provident Society v Allan (1978) 52 ALJR 407

Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385

Australian Securities and Investments Commission v Kobelt [2018] HCA 19; 93 ALJR 743; 368 ALR 1

Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] 4 All ER 745; [2011] ICR 1157

AZAEY v Minister for Immigration and Border Protection [2015] FCAFC 193; 238 FCR 341

Barro Group Pty Ltd v Fraser [1985] VR 577

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424

BVG17 v BVH17 [2019] FCAFC 17; 268 FCR 448

Climaze Holdings Pty Ltd v Dyson (1995) 13 WAR 487

Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia [1931]…

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Details
Case
[2020] FCAFC 119
Decision Date

CaseChat Overview and Summary

In the case of Jamsek v ZG Operations Australia Pty Ltd, the appellants, Jamsek and Whitby, challenged the decision of the primary judge in Whitby v ZG Operations Australia Pty Ltd. They contended that they were employees of ZG Operations Australia Pty Ltd and its subsidiary for the purposes of the Fair Work Act 2009 (Cth) (FW Act), the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGA Act), and the Long Service Leave Act 1955 (NSW) (LSL Act). The respondents, ZG Operations Australia Pty Ltd and its subsidiary, argued that the appellants were independent contractors. The appellants also sought an extension of time to appeal the primary judge's decision, which had been made after the costs judgment at first instance.

The primary legal issue before the court was the characterisation of the employment relationship between the appellants and the respondents. The court had to determine whether the appellants were employees for the purposes of the FW Act and SGA Act and workers for the purposes of the LSL Act. This involved assessing the totality of the working relationship and applying a multi-factor test. The court also had to consider the application for an extension of time to appeal, evaluating the length of the delay, the explanation for the delay, the prejudice to the respondents, and the prospects of success of the appeal.

The court found that the appellants were employees for the purposes of the FW Act and SGA Act and workers for the purposes of the LSL Act. The court's reasoning was based on the totality of the working relationship between the appellants and the respondents, which showed a high degree of control and subordination. The fact that the appellants derived their sole income from working for the respondents for nearly 40 years, were required to purchase trucks to retain their employment, and were bound by strict availability requirements, among other factors, supported the conclusion that they were employees. The court also granted the application for an extension of time to appeal, considering the length of the delay, the explanation provided, and the prospects of success of the appeal.

The final orders of the court included setting aside the orders made by the primary judge, declaring that the appellants were employees for the purposes of the FW Act and SGA Act and workers for the purposes of the LSL Act, remitting the matter to the primary judge to determine the contraventions of the FW Act and LSL Act, the quantum of compensation, and the long service leave entitlements, and ordering the respondents to pay the appellants' costs of the appeal.

Orders

Orders of the court

1. The orders made by the primary judge on 4 November 2018 in relation to the first applicant and Robert William Whitby are set aside.

2. The first applicant and Robert William Whitby were between about 25 August 1993 and about 1 October 2015 employees of the first respondent:

(a) within the meaning of s 335 and item 1 in the table at s 342(1) of the Fair Work Act 2009 (Cth); and

(b) for the purposes of s 12(1) of the Superannuation Guarantee (Administration) Act 1992 (Cth).

3. The first applicant and Robert William Whitby were between about 25 August 1993 and about 1 October 2015 employees of second respondent:

(a) within the meaning of s 335 and item 1 in the table at s 342(1) of the Fair Work Act 2009 (Cth); and

(b) for the purposes of s 12(1) of the Superannuation Guarantee (Administration) Act 1992 (Cth).

4. The first applicant and Robert William Whitby were between about 1 January 1977 and 20 January 2017 workers in the service of the second respondent for the purpose of s 3 of the Long Service Leave Act 1955 (NSW).

5. The matter be remitted to the primary judge to:

(a) determine what, if any, contraventions of the Fair Work Act 2009 (Cth) and Long Service Leave Act 1955 (NSW) have been effected by the respondents;

(b) determine what quantum of compensation of entitlements the respondents are liable to pay the applicants under the Fair Work Act 2009 (Cth);

(c) determine what long service leave entitlements the respondents are liable to pay the applicants under the Long Service Leave Act 1955 (NSW); and

(d) conduct a hearing on penalties.

6. The respondents pay the first applicant’s costs of and incidental to the application for an extension of time to appeal (and subsequent appeal) to the Full Court.

7. The parties otherwise bear their own costs of the proceeding.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The relevant background, which was largely not in dispute on appeal, was set out in the primary judge’s reasons: Whitby v ZG Operations Australia Pty Ltd [2018] FCA 1934 (Primary Judgment) at [13]–[120]. Borrowing from those reasons, a summary of the background facts is set out below.Chronology of key events Mr Jamsek and Mr Whitby left high school when they were 14 years old and 15 years old respectively. Neither has any formal education or qualifications. Both have only ever worked in jobs requiring manual labour.Commencement of working relationship Mr Jamsek started working as an employee of ALI on 7 September 1977. He was then about 22 years old. He was a driver for the company at the latest by 1980. Mr Whitby began working for ALI in October 1977, initially in the company’s paint shop. He was then about 17 years old. He became a delivery driver in 1980. For most of the relevant period during which the applicants were drivers, warehouse staff “picked and packed” the orders for delivery and moved them to a despatch area of the relevant warehouse. They were sorted in that area before being loaded into the trucks. While the products were being “picked and packed”, the drivers would wait in a canteen and have a cup of tea or something to eat. The applicants would then move the products around on the back of their trucks using a pallet jack to ensure their safe transit. There was no dispute that, at least up until the events next described (in late 1985 and early 1986), the applicants were employees of the company.Establishment of partnerships Mr Jamsek, on the advice of his accountant, set up a partnership, MJ & PT Jamsek (Jamsek Partnership), with his wife in late 1985 or early 1986. His income was received and declared as partnership income until his working arrangement with the company ceased in 2017. Around the same time, Mr Whitby, on the advice of his accountant, also set up a partnership, R&D Whitby (Whitby Partnership), in which he and his wife were partners. (It was an agreed fact at trial that the partnership existed from 1 January 1986, and that Mr Whitby was a member.) Mr Whitby was advised that one of the advantages of setting up a partnership was the tax advantages of splitting the income of the partnership between himself and his wife. The income generated from Mr Whitby’s activities was received and declared as business income of the partnership up until 30 June 2012. From 1 July 2012, his income was declared as business income personally derived from a transport operation or courier service business. The Jamsek Partnership and the Whitby Partnership are collectively referred to below as the “Partnerships”.The 1986 Contract In late 1985, the company was looking to move the NSW branch of its business to Silverwater, a suburb in Western Sydney. Mr Jamsek and another driver, Mr Robinson, asked the company’s manager, Mr Vittens, for a pay rise to compensate them for the extra travel time. The request was rejected. Mr Jamsek and Mr Robinson (who were members of the Transport Workers’ Union) reported this rejection to the remaining drivers, including Mr Whitby. At the time there were five drivers working for the business.

Ratio Decidendi

Legal Principle Established

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