Jayson Deslandes Lawrence v Colin Nicholas Constantine and Maxine Constantine t/as Carls Milk Supply

[1995] IRCA 416

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
WESTERN AUSTRALIA
DISTRICT REGISTRY
  WI 1441 of 1995

B E T W E E N:

Jayson Deslandes LAWRENCE
Applicant

A N D

Colin Nicholas CONSTANTINE & Maxine CONSTANTINE
t/as CARLS MILK SUPPLY
Respondent

REASONS FOR DECISION

29 August 1995  PARKINSON JR

This is an application made pursuant to S170EA of the Industrial Relations Act 1988. The applicant alleges that his employment was terminated by the respondent in contravention of the Act.

The applicant appeared on his own behalf in the proceedings, and the respondents, who trade in partnership under the name of Carls Milk Supply, appeared by Mr Colin Constantine.  The notice of appearance filed in the proceedings by the respondents identified the employer as being properly named as Colin Nicholas Constantine and Maxine Constantine, trading as Carls Milk Supply. This is consistent with the application filed by the applicant in accordance with the rules.

The applicant submitted that his employment was terminated without notice, and further that the reason for the termination of his employment was his absence from work due to illness.  The respondent submitted that the termination was as a result of the applicant failing to attend for work.

The applicant was employed as a driver on 13 February 1995 by the respondent in its milk distribution business. His employment was terminated on 12 April 1995. During the course of his short period of employment the applicant was not absent from work on any occasion other than on 12 April 1995.   The evidence established in my view that the applicant performed his duties efficiently and was willing to work long and additional hours as the need arose.

There is a preliminary matter in these proceedings which I now turn to consider. At the outset of the proceedings the respondent submitted that the applicant was not an employee but a sub-contractor, and thus was not able to bring this application.  The basis of this submission was as a result of there being a deduction of taxation by the respondent pursuant to the Prescribed Payments System from the payments made to the applicant. The respondent further deducted from the applicant’s pay each month a sum of $100.00, described by the respondent as being deductions for lease of the motor vehicle the applicant drove to deliver the milk on behalf of the respondent.  Even in this context, however, the weekly payments made to the applicant were described by the respondent in various documentation as “normal weekly pay” and “3 days pay” (Exhibits A4 and A5). No invoices or statements were required to be provided by the applicant to the respondent on account of the work he performed on behalf of the respondent.

In my view this arrangement does not constitute an independent contractor or sub-contractor arrangement in any real sense. There was nothing “independent” in the manner in which the applicant performed his work. He was subject to the rostering and distribution arrangements made from time to time by the employer and, despite Mr Constantine’s evidence, was in my view required to attend work at particular and regular times. Further, there was no document before me establishing any terms of engagement as a sub-contract, nor any contractual entitlements in that regard.  Finally and relevantly, the applicant’s understanding and belief was that he was employed by the respondent and was subject to his direction and control.

The vehicle “lease” arrangement could not truly be described as a lease in any sense of that word, either legally or even as it might be understood in common usage.  The applicant had no control over the vehicle. It was garaged at the respondent’s premises. There was no insignia on the vehicle identifying the applicant as being a cartage contractor on behalf of the respondent. The vehicles on the respondent’s evidence were all fully owned by the respondent and registered in the name of the respondent. The applicant had no access to the vehicle other than in the circumstances of performing the duties prescribed by the respondent. There was no evidence of any requirement for the applicant to take out insurance on the vehicle or to in any other manner take responsibility for the vehicle, other than due care in its usage as an employee.

The arrangement was a sham and the applicant was in all senses of the word an employee of the respondent, despite the arrangements put in place by the respondent’s to avoid such a  characterisation of the relationship. The respondent tendered in proceedings a letter from a Department of State  which informed him of that Department being satisfied that the applicant, together with two other employees, was in a sub-contract arrangement (Exhibit R2).  I am not informed as to what information or material was relied upon by that Department, but suffice to say on the evidence before me in these proceedings I am satisfied that, however the respondent may characterise the relationship, it was nevertheless an employment relationship.  I reach this decision having regard to the reality of the relationship between the parties, and in this regard have been guided by the matters identified in the decision of his Honour Gray J in Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179 and the indicia discussed by the Full Court of the Federal Court in Building Workers’ Industrial Union of Australia and Others v Odco Pty Ltd (1991) 29 FCR 104 as being relevant to such a characterisation.

In Re Porter his Honour Gray J said (at page 184):

A court determining whether a particular relationship is that of      employment or of some other kind can therefore only resort to the process of balancing all of the factors, or as they are called in Stevens        and other cases, the ‘indicia’. In truth, the result may be a matter of     impression. It is unfortunate that this is so. It should not be necessary for people to obtain a decision of a court, in order to know the true nature of their relationship. Unfortunate or not, that is the         case. Although the parties are free, as a matter of law, to choose the   nature of the contract which they will make between themselves, their      own characterisation of that contract will not be conclusive. A court      will always look at all of the terms of the contract, to determine its true essence, and will not be bound by the express choice of the        parties as to the label to be attached to it. As Mr Black put it in the          present case, the parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else   recognise it as a duck.

As is indicated by the passages in Stevens to which I have referred,          there is no prescribed list of factors which will be examined in      determining whether a contract is one of employment. Any         circumstance which may shed light on the nature of the contract will          be taken into account. Some difficulty may arise where practical     constraints on a party conflict with the express stipulations in the        contract. For instance, a party may be described as an independent    contractor, and the contract may even provide expressly that he or she         is at liberty to provide services to other persons, outside of the      contract. The reality may be that economic considerations dictate that       work will only be accepted from the other party to the contract....In   such circumstances, there is no particular reason why a court should        ignore the practical circumstances, and cling to theoretical niceties.          The level of economic dependence of one party upon another, and the      manner in which that economic dependence may be exploited, will        always be relevant factors in the determination of whether a particular       contract is one of employment.   

In many respects, the balancing of various factors once they are     assembled is difficult. This is because many of the factors commonly    relied upon prove to be of insubstantial weight upon proper analysis. For instance, a factor relied on commonly is whether or not income       tax is deducted from the remuneration of a person before being paid       to him or her. In the resent case, reliance was placed on the fact that     tax was deducted at the rate of 15 per cent of the gross earnings of      some owner-drivers, pursuant to the prescribed payments scheme. No          instalments were deducted from the remuneration of those persons          under that pay as you earn taxation system. To place heavy reliance       of this factor, however, is to assume that the payer has acted in        accordance with the requirements of income tax legislation
         in choosing one type of deduction, rather than another.  

I am satisfied that the applicant was an employee of the respondent and is entitled to bring these proceedings. I turn now to consider the application pursuant to S170EA.

S170DE & S170DF(1)(a)

The circumstances of the termination were that the applicant worked his normal delivery shift on 11 April 1995.  On that evening he was ill, suffering from what an upper respiratory tract infection. It was submitted by the respondent that this was as a result of the applicant’s suffering from an underlying asthma condition. Whilst the applicant and his mother volunteered that the illness may have been worsened by this propensity to asthma, the medical certificate (Exhibit A1) makes no mention of asthma.

In any event, despite the respondent submitting in the proceedings that the applicant would never have been employed if it had been known that he had suffered from asthma, it is apparent that the propensity to asthma, under which disability the applicant had suffered since childhood, had long been under control and that it did not interfere with his normal functioning as an employee. I find this on the evidence of the applicant, and as a result of the contents of Exhibit A2.

In view of his illness, and having been advised by his doctor to remain at home, the applicant attempted to ring and inform his employer of this fact.  A doctor’s certificate describing his condition was obtained (Exhibit A1).  Being unable to contact the employer personally, the applicant arranged for his mother  to make the contact. His mother then contacted the respondent at approximately 12.00pm to advise of the applicant’s illness, the doctor’s certificate and the applicant’s intended absence from work that evening. 

The applicant was due to commence his shift  in the evening at 9.30pm. Advice was given of the absence early in the afternoon of that same day. I am satisfied that more than sufficient notice of the absence was given to the  respondent to enable arrangements to be made for another driver to cover the applicant’s absence.

The applicant gave evidence that he was informed by his mother, Mrs Lawrence, that Mr Constantine had advised her that if the applicant was not able to work his shift that evening then he was no longer required. Mrs Lawrence also gave evidence to this effect. This evidence was not contradicted by the respondent, save for evidence from Mr Constantine that there were aspects of the applicant’s work performance which were unsatisfactory, and that the fact of his propensity to asthma made it unsatisfactory that he remain in the employ of the respondent. However, these were not stated to have been the reasons for the termination of the employment. The respondent’s own document, which is Exhibit R3 in the proceeding, states: “ Carls Milk did not terminate Jason (sic) for being ill but it did for non attendance at work.” The reason for the non-attendance, of which the respondent was notified, was because of his illness. This is precisely the circumstance contemplated by S170DF(1)(a) of the Act.

In these proceedings S170EDA provides that the onus rests with the respondent to establish that the reason for the termination of the employment did not include the short term absence from work of the applicant on account of illness or injury, this reason being one which is precluded from ever being a valid reason for terminating a person’s employment. I am not satisfied that this was not the reason for the termination. Further, it is clear that the short term absence of the applicant on account of his illness was the reason for the termination. I do not accept the respondent’s evidence as to the applicant’s work performance. I am of the view that these expressed concerns, even if correct, were not matters of account in the decision to terminate the employment. Nor am I satisfied that it was ever a matter raised with the applicant during the course of his employment. In any event, nothing as to work performance was put to the applicant at the time of the termination of the employment in accordance with the requirements of S170DC of the Act.

Finally, the termination of the employment was summary and without notice being paid. In the circumstances of the length of the employment, the applicant was entitled pursuant to S170DB(2) of the Act to one weeks notice of termination of employment or payment in lieu thereof.

For all of the above reasons, it is my finding that the respondent in terminating the employment of the applicant contravened S170DB, S170DC, S170DF(1)(a), and S170DE(1) of the Industrial Relations Act 1988. I turn now to consider the remedy appropriate in the circumstances.

Remedy- S170EE

The evidence was that the applicant has recently obtained alternative employment. This employment is apparently for a short time with a possibility of extension. Having regard to this fact, and to the hostile relations between the parties during the course of these proceedings, it was apparent that the applicant was not pursuing reinstatement and I am satisfied that it would be impracticable to make such an order. It is appropriate, however to compensate the applicant for losses incurred as a result of the termination of the employment.

In determining the amount of compensation ordered it is appropriate to have some regard to the length of the employment, which had been for a relatively short period of time, and the likely length of any ongoing employment having regard to the circumstances of the employment. I am satisfied that the applicant ought be compensated in relation to the loss of income sustained between the date of the termination and the likely length of the employment, whilst having regard to the fact that he has obtained new employment.

Having regard to these factors, I am satisfied that but for the circumstances of the termination, it is reasonable to assume that the employment would have continued for at least two months beyond the date of termination. The weekly wage earned by the applicant was the sum of $525.00 per week. I propose to order compensation based upon this amount equivalent to a period of a further two months employment, being the sum of $4,200.00. Further, the applicant is entitled to an amount in damages pursuant to S170EE(5) as a result of the failure of the respondent to provide one weeks notice pursuant to S170DB of the Act.

The orders of the court shall be:

1. That the respondent pay to the applicant the sum of $4,200.00 in
            compensation.

2. That the respondent pay to the applicant the sum of $ 525.00 in
            damages.

3. That time for payment be 21 days from the date of this order.

I certify that this and the preceding ten (10) pages
are a true copy of the reasons for judgment of
Judicial Registrar Parkinson.

Associate:
Dated:  29 August 1995

Applicant in person
Respondent in person

Date of hearing:  10 August 1995

Date of judgment:  29 August 1995

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
WESTERN AUSTRALIA
DISTRICT REGISTRY
  WI 1441 of 1995

B E T W E E N:

Jayson Deslandes LAWRENCE
Applicant

A N D

Colin Nicholas CONSTANTINE & Maxine CONSTANTINE
t/as CARLS MILK SUPPLY
Respondent

MINUTES OF ORDERS

29 August 1995  PARKINSON JR

THE COURT ORDERS THAT:

1. That the respondent pay to the applicant the sum of $4,200.00 in
            compensation.

2. That the respondent pay to the applicant the sum of $ 525.00 in
            damages.

3. That time for payment be 21 days from the date of this order.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

C A T C H W O R D S

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - complaint of UNLAWFUL TERMINATION - JURISDICTION - whether employee or sub-contractor - whether employee terminated for prohibited reason of TEMPORARY ABSENCE  - whether employee terminated for VALID REASON based on CONDUCT OR PERFORMANCE    

Industrial Relations Act 1988, ss. 170DE(1), 170DE(2), 170DC, 170DF(1)(a), 170EE

Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179
Building Workers’ Industrial Union of Australia and Others v Odco Pty Ltd (1991) 29 FCR 104

JAYSON DESLANDES LAWRENCE v COLIN NICHOLAS CONSTANTINE and MAXINE CONSTANTINE  t/as CARLS MILK SUPPLY
WI 1441 of 1995

Before:       PARKINSON JR
Place:         MELBOURNE
Date:          29 AUGUST 1995