Keady and Repatriation Commission
[2000] AATA 300
•18 April 2000
DECISION AND REASONS FOR DECISION [2000] AATA 300
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N1997/1674
VETERANS' APPEALS DIVISION )
Re BERNARD KEADY
Applicant
And REPATRIATION COMMISSION
RespondentDECISION
Tribunal The Hon Mr R N J Purvis, QC, Deputy President
Date18 April 2000
PlaceSydney
Decision The decision under review is affirmed.
[Sgd R N J Purvis]
Deputy President
CATCHWORDS
VETERANS' AFFAIRS – disability pension – special rate – last paid work – continuos period of ten years – capacity in which work undertaken – relationship one of employer and employee or principal and independent contractor – written agreement – control – provision of equipment – mode of remuneration – obligation to work – hours of work – holiday and sick pay – superannuation – freedom to work elsewhere
Veterans' Entitlements Act 1986, s24 (2A)
Thompson v Repatriation Commission, Federal Court, 7 March 2000, T29/99
Grant v Repatriation Commission (1999) FCA 1629
Stevens and Brodribb Sawmilling Company Pty Ltd; Gray and Brodribb Sawmilling Company (1986) 160 CLR 16
Massey v Crown Life Insurance Co (1978) WLR 679
REASONS FOR DECISION
The Hon Mr R N J Purvis, QC, Deputy President
THE APPLICATION
This is an application for review of a decision made by the Veterans' Review Board on 5 November 1997 which affirmed a decision of the Respondent dated 4 July 1996 assessing pension payable to the Applicant at 80 percent of the General Rate. The issue now before the Tribunal is whether the Applicant is entitled to the Special Rate of pension payable to a veteran who is over the age of 65 years and who satisfies the requirements of sections 24 and 24(2A) of the Veterans' Entitlements Act 1986 (Cth) ("the Act").
The application for the Special Rate of pension was made on 18 June 1996 and if applicable is to apply from that date.
THE HEARINGAt the hearing of the application the Applicant was represented by Ms Buss, advocate for the Legal Aid Commission, the Respondent by Mr D E J Ryan of counsel.
There was placed before the Tribunal as Tribunal exhibits the documents produced by the Respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975. The following written material was tendered and marked as indicated as an exhibit:
Exhibit Description
A B C D E F G H J K L M One Two Letter from Ms J Buss to Dr G W T Jackson dated 20 July 1998 Report of Dr G W T Jackson dated 7 August 1999 Statement of Mr B Keady dated 14 August 1998 Letter from Mr N O'Brien, General Manager, Dalgety Farmers Limited, to Mr B Keady dated 19 January 1995 Business card of B T Keady Letter from Dalgety Winchcombe FCG to Mr B Keady dated 11 July 1990 Facsimile Transmission from Williams Reilly Chartered Accountants to Ms J Buss dated 8 March 1999 Letter from Westfarmers Dalgety Limited to Mr B Keady dated 24 June 1997 Letter on letterhead Williams Reilly Chartered Accountants dated 21 January 1999 Statement of Mr J Seale dated 8 June 1999 Statement of Ms M Nisbet dated 5 June 1999 Statement of Mr B Keady dated 9 December 1999 Bundle of documents attached under cover of letter from LFD Limited to the Department of Veterans' Affairs dated 24 May 1999 Respondent's supplementary bundle of documents
Oral evidence was given by the Applicant, Mr Seale and Ms Nesbit.
THE ISSUE FOR DETERMINATIONThe criteria relevant to this application and required to be satisfied by the Applicant are contained in section 24(2A) of the Act which so far as here relevant provides:
"(2A) This section applies to a veteran if:
(a) the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of pension that he or she is receiving; and
(b) the veteran had turned 65 before the claim or application was made; and
(c) paragraphs (1)(a) and (1)(b) apply to the veteran; and
(d) the veteran is, because of incapacity from war caused injury or war caused disease or both, alone, prevented from continuing to undertake the remunerative work ("last paid work") that the veteran was last undertaking before he or she made the claim or application; and
(e) because the veteran is so prevented from undertaking his or her last paid work, the veteran is suffering a loss of salary or wages, or of earnings on his or her own account, that he or she would not be suffering if he or she were free from that incapacity; and
(f) the veteran was undertaking his or her last paid work after the veteran had turned 65; and
(g) when the veteran stopped undertaking his or her last paid work, the veteran:
(i) if he or she was then working as an employee of another person – had been working for that person, or for that person and any predecessor or predecessors of that person; or
(ii)if he or she was then working on his or her own account in any profession, trade, employment, vocation or calling – had been so working in that profession, trade, employment, vocation or calling;
for a continuous period of at least 10 years that began before the veteran turned 65; and
(h) section 25 does not apply to the veteran."
It was common ground between the parties that the Applicant satisfied the applicable requirements other than those contained in subsections (2A)(d) and (g) even be it that so far as subsection (2A)(d) is concerned, the argument was more as to the commonality of the "last paid work" as an ingredient in identifying the capacity in which it was carried out by the Applicant rather than in identifying the nature of the work itself, the specific remunerative activity.
The issue then before the Tribunal is as to the particular capacity in which the work was undertaken and whether it had been so undertaken in that relevant capacity for a continuous period of at least ten years. If the capacity is as an employee, the veteran must have been employed by the same employer (or a predecessor) continuously for a ten year period. If the capacity be that of being self-employed, then the last paid work must have been undertaken in that capacity continuously for the ten year period (see Thompson v Repatriation Commission, Federal Court, 7 March 2000, T29/99, paras 9, 10 and 15; Grant v Repatriation Commission (1999) FCA 1629, at para 9).
THE FACTUAL SITUATION
NATURE OF THE REMUNERATIVE WORKThe Applicant was born on 16 October 1922. At all relevant times he carried on work -related activities in association with stock and station agents and as a rural property salesman, auctioneer valuer and adviser to rural property owners.
From 1946 to 1961 the Applicant was employed by Winchcombe Carson Limited as a Branch Manager and later as a Head Company Auctioneer Valuer and property sales adviser. During the years from 1962 to 1971 he carried on business of a like nature but on his own behalf, this until his operation was taken over by Pitsson and Badgery Limited, the Applicant then being employed as New South Wales Manager rural property livestock, Chief Auctioneer and Valuer. In 1982 the Applicant accepted a position with Dalgety Limited (later known as Dalgety Farmers Limited and still later as Westfarmers Dalgety Limited), providing professional expertise to the company and its clients in the area of rural land valuation, sales and livestock agency services. Whilst laterly employed the client contact was unrelated to fixed working hours and more to direct client contact and liaison, based on building up a relationship over a long period of time. The Applicant continued in this employment beyond the retiring age.
According to Mr J M Seale, one time General Manager of Dalgety Farmers Limited (later Westfarmers Dalgety Limited):
"…
It was common practice in the industry to retain former employees after they had to leave the Company's employ, for whatever reason. Dalgety Farmers Limited then had a retiring age of 62, at management's discretion. Thus a person with good client contact and whose services it was advantageous to retain would be approached and asked to go on to a retainer. That was the case with Mr Keady, who was approached because his declining health, specifically his irritability, had indicated that he was no longer capable of working to the extent expected of a full-time employee.
After the change in Mr Keady's circumstances, which occurred in the financial year 1990/1991, he carried out the same work. He looked after the needs of his regular client base and was called on, for example, by younger and less experienced valuers, as his expertise was needed.
…In accordance with our agreement, after 1990 Mr Keady was obliged to direct all his activities towards the welfare of existing Dalgety's clients and to the acquisition of new clients as relevant. Of the 8 clients, targeted for acquisition in the period between 1988 and 1993, Mr Keady had been successful in introducing seven of them to the company. While most of these introductions occurred prior to 1991, several occurred after that time. However, in his later years, Mr Keady's work was mostly concerned with his regular existing clients.
..." (Exhibit K)
From 1990 to 1995 the Applicant worked flexible hours from his home base, travelling to country centres and transacting business by telephone. His attendance at the office of Westfarmers Dalgety was limited and the actual number of hours worked by him was not relevant to his remuneration.
The Applicant divided his work history into two periods, that is, prior to 1990 and from 1990 to 1995. He said:
"…
Before 1990 I was occupied principally in livestock and property auctions and valuations. The livestock (sheep and cattle) auctions could number 40 major auctions in a year and some 15 or 20 lesser auctions. At a major auction I was responsible for inspecting the stock on the properties where they were held, valuing them, arranging advertising and promotion of the auction, drafting and penning sheep and delivering them to the purchaser and checking buyers' records and payments.
This was both physically and emotionally demanding work. Apart from the many hours spent travelling (on average, 100,000 kms per annum), the livestock and property auctions regularly required three days hard work, mostly on my feet, and only some 50% of which could be delegated…my work also entailed many hours telephone and personal contact with clients…
From 1990, in response to my increasing irritability and its effect on my efficiency, my employers arranged for me to work in what was hoped would be the less stressful areas of consultation and rural property sales and evaluations. A typical evaluation took up to three weeks – conducting searches, research into market trends and sales in the region, inspections, evaluations and reporting - and I carried out about ten evaluations per year. This work also entailed a "consultancy" role, as the clients discussed various problems associated with financial and other management of their rural activities. Rural property sales also required inspections and advice to clients as to market trends and buyers' needs.
In addition to the above work I was asked to counsel debtors and, in extreme cases, negotiate with them.
Throughout my work it has been essential that I be respected by, and have the confidence of clients, many of whom were of many years standing and well known to me…
…" (Exhibit C)
The Applicant said that after the 1990 agreement came into operation he was able to be "a bit more choosy. It was mostly my decision. It was basically two days a week but with telephone it could be much more".
By 1995 the Applicant had reduced his work commitments and in December of that year the 1990 agreement was terminated. The Applicant thereafter was retained as a consultant for the company, and carried out any work on a daily fee for service basis. He performed five major pastoral valuations during 1996 and conducted two livestock consultations, working in all during that year for about 300 hours.
CAPACITY IN WHICH THE REMUNERATIVE WORK WAS CARRIED OUT
As earlier mentioned, the Applicant was employed by various pastoral companies as well as carrying on business on his own behalf over the period 1946 to 1989. On 15 July 1985 the Applicant formally commenced his employment with Dalgety Farmers Limited (later Westfarmers Dalgety Limited) as a Consultant/Senior Salesman Rural Division on a commencing salary of $21,000 per annum, he then being eligible for entry to the Dalgety Farmers Retirement Fund (Exhibit One). In a memorandum of 14 November 1988 to the personnel officer, Mr Seale wrote:
" Thank you for your memo dated 7th November advising that there is no need for a break in employment, as Mr Keady is not in the retirement fund.
My Keady has continued working, but not on the same formalised basis where he spent a good deal of his time in Sydney office. He will continue to work for the Company, but mainly through country trips, and attending major functions around the State. The same basis of employment that was in force up to the time of his official retirement, namely 26 /10/88, has and will continue from 27 October.
The current arrangement is for one year only when it will be reviewed…
…" (Exhibit One)It was in 1989, according to Mr Seale, that concern arose as to the "job" the Applicant was doing being
"…
too demanding and, rather than risk losing his services altogether we subsequently agreed on an arrangement whereby Mr Keady worked part-time…Our agreement was for Mr Keady to make his services available as and when required.
…" (T8, p78)Agreement was reached with the Applicant and reduced to writing in a letter of 11 July 1990 duly signed by Mr Seale and the Applicant so far as here relevant the letter read as follows:
"Dear Bernie,
I confirm our conversation of today's date and now list the details of the agreement reached;1. Your employment with Dalgety Farmers Limited will finish on 31 July, 1990 at which time you will receive any outstanding entitlements.
2. You will purchase the company vehicle for a sum of $11,000, half of which will be paid by 1 August, 1990 and the balance by 30 September, 1990. Registration due in August will be your responsibility.
3. From 1 August D.F.L. will retain B.T. & M.E. Keady as consultants on the following basis:-
(a) $20,000 paid per annum paid in monthly instalments that includes motor vehicle expenses.
(b) The Company will pay 85 % of your telephone expenses.
(c) The company will reimburse you for air fares, meals, accommodation and entertaining expenses incurred while on D.F.L. business (car running costs are specifically excluded).
(d)B.T. and M.E. Keady to submit an invoice on a monthly basis covering items (a), (b) and (c) above. Please submit to the N.S.W. State Accountant for processing by the 15th of each month.
In consideration of the above you will continue to influence rural business to the Company with all commission earnings directed to D.F.L. Your expertise in property and livestock sales will be available to D.F.L. and this document acknowledges that the intention is to average around two days per week consulting for D.F.L. It is also acknowledged that, in your consulting role, attendance at the Sydney office is not required on a regular basis. However we ask that you call at this office approximately once per month for discussions/briefing with P. Garry, P. Debnam, K. Prosser or the writer. Contact should also be made with Barry Blakely.
This arrangement is subject to review at 30 June, 1991 or earlier should health reasons affect your ability to carry out the consultancy role.
An extra copy of this letter is enclosed. If you are in agreement with the conditions outlined please sign one copy and return to the writer.
Thank you for the wonderful contribution you have made to this Company and for the encouragement and support extended to so many Company representatives. You have been an exemplary model for our agents to follow and a real credit to the Agency, profession and yourself
…" (Exhibit F)
The agreement was carried into effect, a "termination" referable to the Applicant's employment being executed on the same date. According to Mr Seale the company had been looking for a way to retain the Applicant's services and considered that the agreement had achieved this object. Mr Seale recognised that the retainer saved the company paying payroll tax, it involved Mrs Keady as well as the Applicant, with a consequent reduction in income tax. No provision was made for sick leave. Whilst the nature of the Applicant's work did not in essence change, there was less emphasis on his obtaining new clients and more on managing and retaining those that were already having their interests taken care of by the company. Mr Seale acknowledged that the company had acted honestly in entering into the agreement and that it intended to put the arrangement in place. There was not anything improper intended by the agreement. Further he did not believe that there was a significant change in the Applicant's activities other than a reduction in the time required of him "in the office", whilst the time with clients would remain much the same, even be it that by July 1990 the Applicant had largely achieved the targets set some years before; thereafter it was more a matter of retaining the clients than obtaining new ones.
Subsequent to the 1989/1990 financial year, the Applicant in his income tax returns described his profession as that of a commission agent.
Consequent upon the entering into of the 1990 agreement, the Applicant was not as before a member of Westfarmer Dalgety's company medical scheme (Exhibit One) and monies due under the company superannuation scheme were paid out to him.
According to the Applicant, by the agreement the company management had decided to change his conditions of employment from permanent salaried to contract staff and this had mutually beneficial tax advantages, but entailed nevertheless almost the same hours and the same type of work. The major advantage to him, he said, was that he could be more flexible in his work commitment thus allowing him to be less stressed and better able to avoid embarrassment caused by his medical condition.
The reason behind the "retention" of the Applicant's services after 1990 and "beyond what would be considered a normal retiring age" was explained in greater detail by Mr Seale in these words:
"An explanation may be helpful as to why I and subsequent managers wished to retain the services of Mr Keady beyond what would be considered a normal retiring age. In our rural service industry a close personal relationship often develops between producers and their advisers. It is usually a question of respect for the person's judgement and advice and their ability to add value for the producer. Mr Keady developed very strong ties and trust with his clientele and earned the reputation as one of the most respected agents the industry has seen in NSW. With an ageing producer profile such an agent is invaluable in maintaining the business association with the person on the land and that is why there are a number of instances of respected agents being retained in employment well beyond a normal industry retirement age."
He further said:
"…
Mr Keady is of unquestionable integrity and his obligation to work only for Dalgety Farmers Limited, and to work the hours he was required to work was based on trust. Mr Keady's hours from mid - 1990 onwards were to be flexible and on an as needs basis, and were based on the assumption that they would generally approximate half of a normal working week…
His position in relation to the reimbursement of expenses was essentially the same as that of a full time employee.
Mr Keady's hours of work were flexible and not dictated by the Company. Nor were his methods. Nevertheless, that was because of Mr Keady's exceptional abilities and trustworthiness. The Company always retained the right to dismiss him. Similarly while we did not need to exercise any control over the manner of his work, we retained the right to do so.
As far as Mr Keady's complete and sole association with Dalgety's was concerned, he was regarded generally in the industry and by our clients as a 'Dalgety's person'. His book work and accounting were done within the company and he used Dalgety's letterhead stationery.
Our reasons for changing the arrangement under which Mr Keady was employed related primarily to his war-caused ill health but also took into account, I believe, matters such as the cessation of the Company's obligation to pay payroll tax and management's desire to reduce the number of employees on our books (a result of continuing downsizing exercises)…
…" (Exhibit K)
According to Ms M Nisbet, a one time General Manager of the company:
"…
Mr Keady's circumstances after 1990 indicate that he was not a "regular employee" and must have been involved in consultancy arrangements. I say this for two reasons: every employee, regardless of age, was a beneficiary of the firm's superannuation arrangements because of an industrial award. Mr Keady, I am told, had no Company superannuation after 1990; secondly the monthly instalments of his fixed annual salary, after 1990, would not have gone through the pay office and would have been an irregular arrangement.
…" (Exhibit L)
In the latter part of 1995 the Applicant was experiencing difficulty with personal relationships and his hearing, and was showing impatience and intolerance towards clients and staff of the company, this condition consequent upon his accepted disabilities. The 1990 agreement was then terminated, the Applicant nevertheless being retained as a consultant and valuer on a casual basis, his remuneration to be on a daily fee for service rendered and expenses.
On 19 January 1995 the then General Manager Rural Operations of Dalgety Farmers Limited wrote to the Applicant stating inter alia:
"Dear Bernie,
Kerry and I were pleased to catch up with you yesterday to review your existing agency consulting arrangement for 1995.
We are pleased you are keen to continue in this role and look forward to your assistance and expertise in the particular areas of livestock, property and wool. As previously discussed it is intended you will provide consultancy services to "Dalgety" for an average of two days per week.
It is not necessary to spend your time in Sydney office on a regular basis as we see the major benefits in gaining business and affecting sales through the branch network from your regular contact and communication with clients, per phone, in the field and attending sales.
It was agreed greater input and liaison from our key activity people in utilising your services would be beneficial. Therefore, in line with good business practise and to stay informed with various business dealings, we ask that you liase regularly with Keith Prosser, Livestock, Peter Gary, Property and Rodney Pegler, Wool and also provide me with a monthly update of contacts and business transactions.
Attached is a "sample copy" of a monthly report which should assist you in this regard to record appropriate events and this should be forwarded with your expense/account reimbursement to me at the end of each month.
…" (Exhibit D)
SUBMISSIONS AND DISCUSSION AS TO CAPACITY IN WHICH THE REMUNERATIVE WORK WAS CARRIED OUT
As has been earlier indicated in these reasons, evidence as to the nature of the work carried out by the Applicant before and after the agreement of July 1990 was adduced more in aid of establishing the capacity in which the same was performed, this by way of its commonality, than the fact of the last paid work being that which he had performed for a continuous period of at least ten years. The Tribunal is satisfied on the basis of the material before it that the Applicant did perform work of the nature of the last paid work for the relevant continuous period of at least ten years.
The question remains however as to the capacity in which that work was performed, that is whether it was performed as an employee of Westfarmers Dalgety Limited or a predecessor of that company, in which case the ten year period is available to the Applicant, or on his own account, in which case the ten year period is not available. The capacity in which the work was undertaken is to be treated as a matter separate from the work that was undertaken.
It was submitted by Ms Buss on behalf of the Applicant that "in reality" the Applicant was an employee of the same company over the whole period up until 1995 and the facts should be construed in this context. It is the intent of the legislation, according to the Applicant, to prevent non-genuine cases from obtaining the Special Rate, but it needs to be looked at nevertheless as beneficial statutory material and so construed. The Applicant's work was of such a particular kind and of such value to the company that management did not want to let him go and devised a means to ensure that this did not occur. The three arrangements that were entered into namely that in 1985 when he was 62 year of age, that in 1988 when he was 66 years of age and that in 1990, all sought to quarantine that the Applicant was engaged in much the same work. He was, so the submission went, at all relevant times, an employee of Westfarmers Dalgety Limited or of a predecessor and did not work on his own account. It was said the company had the right to review the 1990 employment arrangement, on a yearly basis, this being indicative of an employer/employee relationship.
The Tribunal was referred by both parties to Stevens and Brodribb Sawmilling Company Pty Ltd; Gray and Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16, where at paragraph 9 in his reasons for decision, Mason J had said:
"The first question to determine is whether the relationship between Brodribb and Gray was one of employer and employee or one of principal and independent contractor. It will also be convenient at this point to consider whether Stevens was an employee of Brodribb or an independent contractor, for, although not directly relevant to the matter presently under consideration, both issues arise from a common factual foundation. A prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter. It has been held, however, that the importance of control lies not so much in its actual exercise, although clearly that is relevant, as in the right of the employer to exercise it…But the existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment. The approach of this court is to regard it merely as one of a number of indicia which must be considered in the determination of that question…Other relevant matters include but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and the provision for holidays, the deduction of income tax and the delegation of work by the putative employee."
At paragraphs 9, 11 and 12 of their reasons for decision in Stevens v Brodribb Sawmilling Company Pty Ltd (supra), Wilson and Dawson JJ said:
"…the first question which arises is whether Gray was acting as the servant of Brodribb at the time of the accident so as to render Broadrib liable for his negligent behaviour. That question falls to be determined upon the facts found by the learned trial judge. The classic test for determining whether the relationship of master and servant exists has been one of control, the answer depending upon whether the engagement subjects the person engaged to the command of the person engaging him, not only as to what he shall do in the course of his employment but as to how he shall do it…The modern approach is, however, to have regard to a variety of criteria. This approach is not without its difficulties because not all of the accepted criteria provide a relevant test in all circumstances and none is conclusive. Moreover, the relationship itself remains largely undefined as a legal concept except in terms of the various criteria, the relevance of which may vary according to the circumstances…the test of being a servant does not rest nowadays on submission to orders but 'depends on whether the person is part and parcel of the organisation'…We would be doing no more ourselves if we were to suggest that the question is whether the degree of independence overall is sufficient to establish that a person is working on his own behalf rather than acting as a servant of another but putting it that way does at least indicate that the question is one of degree for which there is no exclusive measure.
…
The other indicia of the nature of a relationship have been variously stated and have been added to from time to time. Those suggesting a contract of service rather than a contract for services include the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like. Those which indicate a contract for services include work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of good will or saleable assets in the course of his work, the payment by him from his remuneration of business expenses of any significant proportion and the payment by him of remuneration without deduction for income tax. None of this leads to any necessary inference, however, and the actual terms and terminology of the contract will always be of considerable importance.
Having said that we should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of a relationship of master and servant. The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance…"
Reliance was placed by the Applicant upon the following factual situation as being sufficient to satisfy the above mentioned test and establish the relevant relationship as that of an employer and employee, namely:
· Control: it was said that the company had the right to direct the Applicant as to how his job was to be performed, regardless of whether he exercised it or not. As the Tribunal understands the factual situation the extent of direction was as set forth in the written arrangement. The exercise of the work to be performed was to be at the discretion of the Applicant.
· Provision of equipment: even be it that the company provided stationery and there was a reimbursement of expenses, the latter was in the first instance still funded by the Applicant.
· Mode of remuneration: reliance was placed on payment being by way of a yearly figure regardless of the work done.
Obligation to work: it was said that the Applicant continued working even after his retirement. There was however no obligation placed on the Applicant beyond that contained in the July 1990 consultancy agreement.
Hours of work: it was acknowledged that these were dictated by the nature of the activities that attracted the attention of the Applicant.
Holiday pay, sick pay, superannuation: it was acknowledged that there was no provision whereby the Applicant was entitled to any of these benefits nor was income tax deducted from payments made to him.
Freedom to work elsewhere: it was recognised that there was not anything in the arrangement that precluded the Applicant from working elsewhere. Consistent with his work pattern in the past, this was not likely.
Involvement with company: it was said that the Applicant was still regarded as a "Dalgety man".
On behalf of the Respondent, it was contended that the importance of the July 1990 agreement could not be understated. Nevertheless it is the totality of the relationship that has to be considered even be it that the written agreement was implemented "to the letter". The parties cannot alter the truth of a relationship by later putting a different label upon it. The agreement itself is the best material from which to gather the true legal relationship between the parties (Massey v Crown Life Insurance Co 1978 WLR 679). It was submitted that there is no issue in this matter that both the Applicant and the company intended the written July 1990 arrangement to be a genuine transaction to be complied with by both parties.
The Respondent further submitted that the Applicant was declaring himself to be a consultant, as did the company. The latter doing all possible to ensure that the employer/employee relationship did not continue. The Applicant had freedom to accept or not accept work and there was no right in either party to terminate the arrangement other than as provided by its terms. There was "an extraordinary lack of control" by the company over the Applicant and this was consistent with the contractual obligation imposed upon him to merely "influence rural business". The work to be done by the Applicant was as he decided and to be consistent with the activity that he assumed.
DECISIONThe Tribunal is satisfied that the relationship existing between the Applicant and Westfarmers Dalgety Limited, or its predecessor after July 1990, was not that of an employee/employer. The written agreement of July 1990 is basic to this finding, even be it that the writing is to be seen in the context of all other relevant factors, that is the totality of the relationship is to be considered. Both parties declared the Applicant to be a consultant, the company moreover seeking to disclaim the Applicant as an employee. The Applicant had complete freedom to accept or reject work, even be it that the company was of the belief, reasonably founded, that he would continue in his work with similar dedication to that in the past. That might have been another issue.
The written agreement clearly designated the consultants as the Applicant and his wife and the terms and conditions provided for remuneration and reimbursement of expenses. The latter were to be detailed on an invoice and submitted to the company each month. The Applicant was "to influence rural business" and "his expertise" was to be available, application of which was expected to take up to days each week. The arrangement was said to be subject to review, although not specifically so specified by either party. The contribution made by the Applicant to the company and its business in times passed was acknowledged.
Even be it that the arrangement was reviewable, dismissal as such was not open to the company. Minimal, if any, control was expressed or envisaged, merely an obligation by contract to "influence rural business". The work to be done by the Applicant, whilst of the same or a similar nature to that in the past, was to be at his discretion and with whom he chose. He was not in a position where his activities were to be the subject of direction. Holiday pay, sick pay, long service leave and superannuation were all entitlements of the past pre-July 1990. There was to be no deduction on account of income tax. There was merely an obligation upon the Applicant to apply himself to the interests of the company, but in such manner as he considered appropriate and not as may be directed by the company.
The Tribunal is satisfied that the degree of independence afforded to the Applicant was sufficient to establish that he was working on his own behalf rather than acting as an employee of the company. The arrangement was one for services and not of service. The work to be done by the Applicant involved the exercise by him of his professional skills, the provision of his own place of work and equipment (other than a business card showing him as Consultant), the payment by him of business expenses (subject to some reimbursement) and no deduction by way of income tax. There was not a right to suspend or dismiss (other than a review of the agreement by either party) and there was not a right to dictate a place of work, hours of work and the like. Two days per week were anticipated.
On the basis of the above findings of fact and having in mind the relevant test the Tribunal is satisfied that after July 1990, the Applicant was acting on his own behalf if not on behalf, of himself and his wife, and that he had not been working on that account in his profession for the requisite period of 10 years.
For the above reasons, the decision under review is affirmed.
I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of:
The Hon R N J Purvis, QC, Deputy President
Signed: .....................................................................................
AssociateDate of Hearing 16 December 1999
Date of Decision 18 April 2000
Solicitor for the Applicant Ms J Buss, Legal Aid Commission of NSW
Counsel for the Respondent Mr D E J Ryan
Solicitor for the Respondent Mr I Williams, Department of Veterans' Affairs
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