King v Lloyd Drilling Constructions

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	King v Lloyd Drilling Constructions [2022] NSWPIC 177
APPLICANT:	Shane King
RESPONDENT:	Lloyd Drilling Constructions
SENIOR MEMBER:	Kerry Haddock
DATE OF DECISION:	26 April 2022
CATCHWORDS:	WORKERS COMPENSATION - Applicant claimed weekly benefits for closed period; and general order for medical expenses pursuant to section 60 of the Workers Compensation Act 1987 (1987 Act); dispute as to whether applicant was a worker, pursuant to section 4 of the Workplace Injury Management and Workers Compensation Act 1998 (1998 Act), or a deemed worker, pursuant to Schedule 1, Clause 2 of the 1998 Act; consideration of Stevens v Brodribb Sawmilling Company Pty Limited; Colonial Mutual Life Assurance Society Limited v Producers and Citizens Co-operative Insurance Co of Australia Limited; Humberstone v Northern Timber Mills; Hollis v Vabu Pty Ltd; Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd; ZG Operations Australia v Jamsek; Turner v Stewardson; Higgins v North Coast Theatres & Drive-ins Pty Ltd; Pasqua v Morelli Constructions Pty Ltd; Davis v Pioneer Concrete; and Scerri v Cahill & another; Held- applicant was a worker employed by the respondent, or in the alternative a deemed worker; award for applicant of weekly benefits pursuant to sections 36 and 37 of the 1987 Act; and medical expenses pursuant to section 60 of the Act.
DETERMINATIONS MADE:	1. That there is an award for the applicant of weekly benefits as follows: (a) from 12 March 2019 to 11 June 2019 at the rate of $2,112.80 per week, pursuant to section 36 of the Workers Compensation Act 1987; and (b) from 12 June 2019 to 30 April 2021 at the rate of $1,779.20 per week, pursuant to section 37 of the Workers Compensation Act 1987. 2. That there is an award for the applicant for medical, hospital and related expenses, pursuant to section 60 of the Workers Compensation Act 1987.

STATEMENT OF REASONS

BACKGROUND

I have set out the background to this matter in my first determination, dated 3 February 2022. The determinations should be read together.

ISSUES FOR DETERMINATION

In respect of this determination, the issue in dispute is:
(a) whether Shane King (the applicant) was a worker employed by Lloyd Drilling Constructions (the respondent), pursuant to section 4 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) or a deemed worker of the respondent, pursuant to Schedule 1, Clause 2 of the 1998 Act.

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION (COMMISSION)

The matter was listed for conciliation/arbitration hearing on 27 January 2022.
The Application to Resolve a Dispute (the Application) was amended to claim weekly benefits compensation from 12 March 2019 to 30 April 2021.
The respondent sought to raise previously unnotified matters, being the applicant’s capacity for work and his pre-injury average weekly earnings (PIAWE) pursuant to section 289A(4) of the 1998 Act; and to rely on documents attached to Applications to Admit Late Documents dated 19 January 2022 and undated. The undated Application to Admit Late Documents was served on 27 January 2022, and I adopted that as its date.
The applicant objected to the respondent being granted leave to raise matters that had not previously been notified as being in dispute. He also objected to some of the attachments to the Applications to Admit Late Documents dated 19 January 2022 and 27 January 2022.
I advised that I would determine the applicant’s objections and set a timetable for the parties to provide written submissions on the remaining issue/s, after which the matter would be determined “on the papers”.
I determined the preliminary matters on 3 February 2020.
The parties have provided submissions on the remaining matter/s in dispute in accordance with the timetable.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)     the Application and attached documents;
(b)     Reply and attached documents;
(c)     Application to Admit Late Documents dated 19 January 2022, filed by the respondent, and attached documents, with the exception of the report of Dr Paul Miniter, dated 23 December 2021;
(c)     Application to Admit Late Documents, dated 20 January 2022, filed by the applicant, and attached documents, and
(d)     Application to Admit Late Documents dated 27 January 2022, filed by the respondent, with the exception of the documents headed “Shane King Initial Question List” and “Payments to Shane King”.

Oral evidence

There was no application to call oral evidence or cross-examine any witness.

FINDINGS AND REASONS

Evidence of the applicant, Shane King

Mr King’s statement is dated 30 April 2020.
Mr King has qualifications in mechanics, bricklaying and building. Commencing in about 2016, he worked with various employers, companies and clients until about 2018, when he began working exclusively for the respondent, for a continual period of six months before the incident.
The applicant commenced work with the respondent on 8 August 2018. He was employed as a builder, working 38 hours per week. His gross average weekly earnings were approximately $2,500.
Mr King re-registered his ABN in early August, so he could work exclusively for the respondent. He operated as a sole trader under an ABN intermittently for 15 years. The ABN expired in 2013, as he commenced full-time work for Western Star Construction.

In respect of his verbal agreement with Mr Llolyd Anglicas, the applicant took out a sickness and injury policy with AHI (Accident & Health International), as well as reinstating his ABN. It is nonetheless incorrect to characterise the nature of his work as that of a contractor.
The applicant’s reasons in support of being classified as a worker are that before the accident, he was exclusively employed by the respondent for six months. He was hired on the basis that he work the same full-time hours of other employees, so he worked from 7.00am to 3.00pm, five days a week. He had no control over his day-to-day hours. Although he took out insurance with AHI, he was always under the impression that he would be covered by the respondent’s insurance if he hurt himself at work. “Lloyd” instructed him to work at his other sites on about five occasions. The applicant followed his instructions and carried out the work. He essentially had a reporting relationship with Mr Anglicas, much like his other workers. Mr Anglicas had the discretion to utilise his skills as he saw fit and dictated his tasks on any given day.
The applicant was not hired to complete a specific part of the job. He followed the instructions given by Mr Anglicas each day and undertook any duties he requested. He assisted with all stages of construction of his three-storey house. He did not have the freedom to choose the tasks or the manner in which he would perform them. Mr Anglicas was always onsite, providing supervision, and they regularly discussed the next steps.
At the end of the week, the applicant submitted his hours of work to Mr Anglicas, who then paid him weekly. He was paid for the hours he had worked. It was agreed he could leave half an hour early on Wednesdays, to pick up his daughter from school. He deducted the half hour from his timesheet and his invoice reflected the deduction. The system was not unlike that of a casual employee who submits a timesheet at the conclusion of each week.
In accordance with their verbal agreement, the applicant brought his own tools and circular saw to work. He also used Mr Anglicas’s tools on a daily basis. He regularly used his drills, jackhammers and other specialist tools. Mr King packed them away with the help of the other employees in the afternoon.
When the accident occurred, the residential construction was nearing completion. The applicant expected he would continue working for Mr Anglicas exclusively. He had built a strong rapport with Mr Anglicas and the other employees, and Mr Anglicas was pleased with the quality of his work.
The applicant did not advertise his services elsewhere. Given the full-time nature of his work, he did not search for other employment. He did not consider searching for future employment, as he expected to continue working for Mr Anglicas.
The applicant has given evidence of the circumstances of the injury. Mr Anglicas was present, and the applicant had been working with him. Mr Anglicas was using the applicant’s saw and Mr King asked him whether he needed help. The saw jammed and kicked back, severing his left thumb. He was taken by ambulance to Royal North Shore Hospital (RNS), where he underwent surgery at the hands of Dr Anthony Beard. Dr Beard re-attached his amputated thumb and tendons to his left hand, using a metal plate and screws.
The applicant underwent a further procedure on or about 20 March 2019 and was discharged on or about 22 March 2019. He returned to the hospital on a weekly basis, for X-rays and to consult Dr Beard. The plaster cast was removed in or about May 2019 and his left thumb was secured by a splint. He was unable to move it for about a month after.
For the next few months, the applicant continued to have X-rays of his left thumb. Dr Beard explained it was progressing well, but it felt very sore. The pain was particularly noticeable when he attempted to move it. He was taught exercises, which he did at home, but felt an uncomfortable tingling sensation at the tip of his thumb. He was unable to feel anything he touched with it. Different environments caused altered sensations.
From that point, the applicant struggled in day-to-day activities and avoided using his left thumb at all costs. It felt useless and remained stiff, despite the exercises. He attempted to pick things up with his other four fingers. The inability to use his thumb made tasks such as tying his shoelaces, doing up buttons and opening jars hugely difficult. His other fingers often became sore and fatigued.
In or about July 2019, the applicant began consulting a psychologist at Penrith Mall Medical Centre. He had become increasingly “despaired” and worried about his future; and struggled to manage lingering feelings of sadness and hopelessness. He underwent therapy about every six weeks for about six months.
The applicant had tried to remain hopeful but had suffered a significant reduction in strength in his left hand and had been warned to avoid heavy lifting. If he attempted to return to heavy work, he would be unable to undertake tasks in the expected time or complete many of his pre-injury tasks. He takes medication to manage pain and to help him sleep and manage his low mood.
The applicant listed disabilities including intermittent pain; restricted movement in his thumb and hand; aggravation of pain with pressure, touch or movement of his thumb, flexion of his hand, and in cold weather; loss of sensation in his thumb; loss of strength in his hand; pins and needles and numbness in his thumb; weakness in his hand; fatigue and occasional pain in four fingers; inability to hold certain objects and lift heavy objects; headaches; loss of libido; stress; frustration; depression; mood swings; loss of concentration; poor appetite; broken sleep; lethargy; reclusive habits; loss of self-esteem and confidence; stress on relationship; inability to return to pre-injury employment; loss of income, career opportunities, and independence; and reliance on family for home support.

Evidence of Mr Lloyd Anglicas

On 20 June 2019, Mr John Pantaleo of EML sent an email with “a couple of questions” about Mr King’s employment to Mr Anglicas.
Mr Anglicas responded on 20 June 2019 that Mr King was “a contractor, verbal contract”. Each week the applicant gave Mr Anglicas an invoice with ABN 67 350 342 546 (Mr King’s ABN). Mr Anglicas paid him by direct debit into his account, of which details had been provided. There were “no payroll details”. As part of the verbal contract, Mr King provided all his own tools and his own vehicle.
On 10 April 2021, the respondent issued Mr King with a reference, signed by Mr Anglicas. It stated that Mr King was employed by “our company” on the construction of Mr Anglicas’s residence in Palm Beach.
Mr King had commenced at the start of construction and carried out formwork, scaffolding, reinforcement and concreting of three floors on an extremely steel [sic; assumed to mean steep] site. He then carried out all finishing of timber feature walls, floors and roofing, until the extremely difficult project was complete. He commenced as a carpenter but quickly rose to control the men as a foreman.
Mr Anglicas highly recommended the applicant for any position, describing him as hard working, punctual, reliable, motivated, highly skilled and adaptable.

Financial evidence

On 19 March 2019, the applicant completed an AHI Claim Form. He ticked the box that indicated he was self-employed and indicated he had not made and would not make a claim for workers compensation.
The applicant was paid the sum of $7,500 in respect of permanent total loss of use of one thumb – one joint on 12 March 2019.
On 24 July 2019, Mr Ken Lai of Ross Fowler & Co, chartered accountants and business advisers, wrote to National Corporate Broking Pty Ltd.
Mr Lai advised that Mr King was a sole trader, trading as Shane King, and was a builder operating five days a week. He charged an hourly rate of $75, working an average of 32 hours per week, earning approximately $2,400 per week from November 2019 [sic: 2018] to March 2019.
The applicant’s business expenses primarily involved motor vehicle costs such as tolls and fuel, as well as mobile phone charges and minor purchases for safety equipment, averaging $250 per week.
Mr Lai advised that, based on information such as sales invoices, receipts and bank statements supplied by the applicant, his net earnings from November 2018 to March 2019 were approximately $2,150 per week.
The only tax returns in evidence are for the financial years from 2014 to 2018. The applicant was variously described as a construction worker/bricklayer; concrete worker; construction worker; and building construction supervisor.
Several Payment Summaries have been provided. They show that the applicant was employed by Bonnici Family Trust from 1 July 2013 to 30 June 2014; Western Star Constructions (Aust) Pty Ltd (Western Star) from 1 July 2013 to 30 June 2017; Premier Plant Hire (Aust) Pty Ltd from 15 August 2016 to 30 June 2017; and Rise Projects Pty Ltd from 22 January 2017 to 17 August 2017.
The respondent has placed in evidence several tax invoices issued by the applicant to the respondent. They include the period from 8 August 2018 to 22 February 2019, although one is undated, and there are some weeks for which no invoice is in evidence, and some in which more than one was issued.
Some invoices show the number of hours worked each day, the days each week, and the total amount owing to Mr King. Some refer only to “construction work”. None includes any charge for materials or GST. One is noted “Formwork carpenter, Ute and tools to fix formwork”.

Medical evidence

Penrith Mall Medical Centre

The applicant consulted Dr Zaglul Habib on 14 June 2019, as a new patient. Dr Habib recorded that his left thumb was amputated by a circular saw on 12 March 2019, and he had had surgery. He noted “Still swelling. No sensation.” The applicant was seeing a specialist. Dr Habib issued him with a Certificate of Capacity (COC) that certified him with no work capacity to 14 July 2019.
Dr Habib continued to issue COCs that certified Mr King with no work capacity to 8 September 2019.
From 31 May 2020 to 10 April 2021, Dr Habib or Dr Remon Farid (in the same practice) issued the applicant with AHI Medical Certificates. A complicating factor affecting or extending his condition was depression, for which he was seeing a psychologist.

Associate Professor Michael Ryan – orthopaedic and spinal surgeon

A/Prof Ryan was qualified by the applicant and reported on 25 September 2019.
A/Prof Ryan recorded a consistent history of the injury and the applicant’s immediate treatment. X-rays of his left hand at RNS on the day of the injury were recorded as showing left thumb complete amputation at the level of the proximal phalanx.
The applicant’s thumb was reimplanted on the same day. A/Prof Ryan noted that on 20 March 2019, he underwent a further procedure, when it was concluded that the reimplantation was 100% viable. Mr King was discharged on 22 March 2019.
Mr King trained as a mechanic, then as a brick layer, and finally completed a Certificate IV in building. A/Prof Ryan recorded that he had not been able to work since his injury.
At home, the applicant functioned as a household adult. His left hand was virtually useless for most domestic activities. If he tried to work, he could only work at half pace. Most of his activities as a builder or bricklayer required both hands to be fit and strong, and to work in unison.
A/Prof Ryan reported that from a functional point of view, Mr King’s left hand was a claw hand, with little functioning of the index, middle, ring and little fingers. The applicant felt useless. He had difficulty sleeping and ruminated about the future and his inability to work. His previous medical history included testicular cancer, which was treated by excision and radiotherapy. He chiefly used Tramadol and may have had Lyrica in the past.
On examination, A/Prof Ryan recorded that the applicant had between 10 degrees and 15 degrees of metacarpophalangeal motion. On passive testing, there was minimal motion at the interphalangeal joint. Mr King had virtually no sensation from the level of amputation to the tip of the finger. He was no longer able to use his left hand to text and could not type. It would be inappropriate to assess his lifting ability or grip until sound union of the reimplanted finger was established.
A/Prof Ryan opined that the applicant could not work. Based on his progress and the findings on examination, the chances of him returning to work as a builder, which requires two strong hands for the vast majority of activities, were remote. His future work prospects were reduced by 95%. As he did not yet have useful return of sensation, he could not work in areas where there was a risk of burn or scalding.
If the applicant developed non-union of the bone, he may require bone grafting. If he did not achieve restoration of protective sensation, he might require revision of the repair of the digital nerves. His condition was not well stabilised, as it was only 6.5 months since he had undergone digital implantation. “Hopefully”, his condition would improve over the next six months.

SUBMISSIONS

The parties have provided written submissions, so I will refer to them only briefly.

Applicant

The applicant submitted that there is no dispute about incapacity or PIAWE. The sole matter at issue is whether he was a worker in the course of his employment at the time of the injury on 12 March 2019.
The applicant submitted that his evidence about re-registering his ABN so he could work for the respondent is consistent with the ABN Lookup, which says it has been active from 30 July 2018. He referred to his evidence about the work he was required to do.
The applicant says he was exclusively employed by the respondent for six months. He worked from 7.00am to 3.00pm, five days per week, and had no control over his day-to-day hours. From time to time, he was instructed to work at other job sites. While on site, he followed the respondent’s instructions. The respondent had discretion to utilise his skills as it saw fit and dictated his tasks on any given day.

The applicant submitted his exact hours of work to the respondent and was paid on a weekly basis. This is supported by the invoices. They do not include GST and there are no amounts included for materials and the like.
The applicant’s evidence is that while he brought his own tools to work, he regularly used the respondent’s tools. The accident occurred while he was using the respondent’s saw (I note that is not the applicant’s evidence). The applicant says he did not advertise his services elsewhere. Given the full-time nature of his work, he did not search for other employment. The applicant referred to the reference provided by Mr Anglicas, in which he said Mr King was employed by the respondent.
The applicant submitted that the modern test for determining whether a person is a worker was set out in Stevens v Brodribb Sawmilling Company Pty Limited [1986] HCA 1; (1986) 160 CLR 16 (Stevens). The current test is to balance the indicia in favour of an employment relationship with those not in favour. The list is not closed, but includes the mode of remuneration, provision and maintenance of equipment, delegation of work, deduction of income tax, payment of GST, and various aspects of control. Whilst control is not the sole test, it is one of the most significant indicia (Articulate Restorations and Developments Pty Limited v Crawford (1994) 10 NSWCCR 751).
The applicant submitted that the respondent clearly had control, as it directed the hours of work, the location of the work, and the tasks to be carried out. The applicant did not employ others. He was paid an hourly rate and no GST was payable. Whilst he provided his own hand tools, the respondent provided other tools that he used daily. The respondent provided all the materials. In any event, the respondent has stated in a letter that the applicant was an employee.
The applicant submitted that the only indicia in favour of him being a contractor is the failure to deduct income tax. The evidence is silent on the provision of holiday pay. There is a clear preponderance of indicia in favour of the conclusion that he was a worker.
In the alternative, the applicant submitted that the evidence discloses that when he commenced working for the respondent, he was not carrying out a trade or business. His ABN had been de-activated, and he had been working with various employers, companies and clients. The invoices show that the contract was for more than $10. He had not sub-let the contract and there is no evidence he employed other people. The evidence is that the other workers on site were employed by the respondent. In the circumstances, the applicant was a deemed worker, pursuant to Clause 2 of Schedule 1 of the 1998 Act.
The applicant submitted there should be an award in his favour in the amounts claimed.

Respondent

The respondent submitted that the remaining issues to be determined are whether the applicant was a “worker” within the meaning of section 4 of the 1998 Act, or a “deemed worker” within the meaning of Clause 2 of Schedule 1 of the 1998 Act.
The respondent referred to the statement of Dixon J in Colonial Mutual Life Assurance Society Limited v Producers and Citizens Co-operative Insurance Co of Australia Limited [1931] HCA 53; (1931) 46 CLR 41 (Colonial Mutual). This statement has been followed – see Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; (1997) 188 CLR 313 at [329]-[330].
The respondent also referred to Humberstone v Northern Timber Mills [1949] HCA 49; (1949) 79 CLR 389 (Humberstone); and Stevens, in which Mason J (Brennan and Deane JJ agreeing) stated that the existence of control, whilst significant, “is not the sole criterion by which to gauge whether the relationship is one of employment.” It is only one indicium that must be considered. The right to exercise control, as opposed to its actual exercise, is particularly significant: per Mason J at [24].
The majority of the High Court in Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 (Hollis), after quoting Dixon J in Colonial Mutual, stated “This statement merits close attention”.
The respondent submitted that there has, however, been recent judicial intervention in the Hight Court on the appropriateness of the indicia approach. The application of the multifactorial test and the use of indicia has been modified somewhat, considering the decisions of Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 (Personnel) and ZG Operations Australia v Jamsek [2022] HCA 2 (Jamsek).
In Personnel, Kiefel CJ, Keane and Edelman JJ observed that the application of the multifactorial test is problematic (at [32]). Their criticisms were echoed by Gordon J
(at [185]-[190]). The respondent submitted that the effect is that where there is evidence of a contract that established the rights and obligations of a party, the High Court has rejected the appropriateness of the multifactorial test.
The respondent submitted that the Court reinforced in Jamsek that the application of a multifactorial test was incorrect and the expansive approach of previous Courts in searching for the substance and reality of the relationship, including by attaching significance to disparity of bargaining power, was an error of principle (at [51]).
The respondent submitted that the reasoning of the Court directs itself to the primacy of the contract and an agreement between the parties as to the arrangement between them. Personnel and Jamsek effectively draw criticism of looking at a relationship retrospectively to determine its nature.
The respondent submitted that there can be no doubt that Mr Anglicas had engaged the applicant as a contractor, referring to his email to EML on 20 June 2019. The applicant’s statement is silent concerning the terms of the contract. However, he affirms there was a verbal agreement whereby he was required to take out a sickness and injury policy with AHI and reinstate his ABN before commencing work. The only evidence concerning the terms of the contract is provided in the email.
Considering Personnel and Jamsek, the respondent submitted that the task is to construe and characterise the contract between the parties at the time it was entered into. The inquiry remains an objective one. It is clear from Mr Anglicas’s evidence that the relationship was one of contract. It was a verbal contract. The respondent referred to this evidence and the applicant’s 2018 tax return, which indicated he was a “building construction supervisor”. It submitted this was confirmed by the correspondence from the applicant’s accountant.
The respondent submitted that the applicant’s contention that he worked full time is at odds with his bank records, which indicate payments of different amounts, supportive of the conclusion that the work was not on a regular basis.
The respondent submitted that the objective evidence, in particular the correspondence from the accountant, supports the conclusion that the applicant came to the formation of the contract operating his own business. His attempts to rely on post-contract conduct to suggest a relationship of employment (relying on the multifactorial test) are misplaced. The only evidence concerning the bargain struck between the applicant and the respondent clearly provides the relationship was one of contractor. The respondent submitted that the applicant was not a worker when he suffered injury.
In the alternative, considering the multifactorial test or indicia, the respondent submitted that the following are pertinent:
(a)     the applicant operated under an ABN;
(b)     the applicant obtained insurance through AHI;
(c)     the applicant used his own hand tools and circular saw;
(d)     the applicant issued invoices on a weekly basis for hours undertaken, that were paid by the respondent as received;
(e)     the applicant maintained his own vehicle and safety equipment and put fuel in the vehicle;
(f)      the bank records do not support the contention of consistent work undertaken;
(g)     the applicant’s statement is silent on issues of taxation, superannuation, holiday leave and sick leave. It might be assumed that his failure to adduce evidence of how this was determined lean towards the contention that it would not support his case (Jones v Dunkel [1959] HCA 8);
(h)     the applicant gives no evidence concerning the clothing and livery worn, and the same position can be stated, and
(i)      the applicant has not produced any invoices upon which he charged the respondent for work undertaken, and presumably these would also not assist his case.
The respondent submitted that the applicant alleged he worked full hours and had no control over the hours, but he would at least leave early on Wednesdays to attend to his personal affairs. It submitted that his contention that in balancing the indicia, he was a worker, is largely not borne out on the available evidence.
As regards “deemed worker”, the respondent submitted that there is no issue that the applicant was party to a contact with the respondent to perform work, and that it exceeds $10 in value. There is no evidence that he sublet the contract or employed workers in its performance.
The single issue in dispute is whether the contract to perform work was incidental to a trade or business regularly carried out by the applicant in his own name, or under a business or firm name. If that be the case, he will not satisfy the definition of “deemed worker” (Djukic v Tactical Cargo Solutions Pty Ltd [2010] NSWWCCPD 123 (at [51]-[57])).
The respondent submitted that the words within the brackets in Clause 2 of Schedule 1, being an exception to the subclause, form a single concept, rather than the sum of several components. This appears most clearly in the long passage in Turner v Stewardson [1961] WCR (NSW) 169; [1962] NSWR 136 (Turner). The court regarded the interpretation of the excluding words as well settled. The explanation given by Dixon J in Humberstone had been applied in Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561; [1956] ALR 123. It has been applied or approved in later decisions without any reservation.
The respondent submitted that, however, the explanation by Dixon J is not to be used in substitution for the words of the statute: “whether what is done by a contractor is a business and whether it is regularly carried on by him are, of course questions of fact”: per Reynolds JA in Higgins v North Coast Theatres & Drive-ins Pty Ltd [1974] 1 NSWLR 9 (CA) at [13], and on appeal sub nom Higgins v Jackson (1976) 135 CLR 174 (Higgins).
The respondent submitted that the question whether a business is being carried on “regularly” is one of fact and depends on the circumstances of the case.
The respondent submitted that the applicant fails with respect to this element. He commenced his contract with the respondent on 8 August 2018 and suffered injury on 12 March 2019. He stated he was “exclusively employed” but is silent on whether he would have undertaken work for anyone else should it have been offered. He places weight on his assertion that he did not advertise his services, that the work was full time, and he did not search for other work.
The respondent submitted that the conclusion must be that should the applicant have had available work at a higher rate or more suitable to him, he would have undertaken it. He does not give evidence that he had given up operating as a contractor, and the assumption is that he would have continued in this type of role at some point in the future. This is supported by the fact that he maintained his ABN and the correspondence from the accountant. In the period preceding his work with the respondent, he worked as a sole trader. His contention that he re-registered his ABN solely so he could work for the respondent is “simply farcical”.
The respondent finally submitted that this is a circumstance in which the applicant had given up his permanent employment with the previous company and commenced operation as a sole trader, using an ABN. This would certainly support a finding that he carried on a business in his own name. The respondent submitted that the Commission would find that the applicant was not a “deemed worker”; and there should be an award in its favour.

Applicant in Reply

The applicant submitted that a proper reading of Personnel and Jamsek reveals that they do not represent a shift in the law with respect to determining whether a contract is a contract of service or a contract for service. In both cases, there was a written contract that set out its terms. This distinguishes it from cases like Stevens and Hollis, where there was no such contract.
The applicant submitted that the important point made in Personnel and Jamsek is that, where there is a written contract, the inquiry as to the nature of the relationship is to be limited to the terms of that contract, unless it can be shown that it was a sham, or its terms had been varied. In a case such as this, the Court was clear that the decisions in Stevens and Hollis continue to apply. It is still a case of in determining the true nature of the contract, one looks at the nature of the relationship. As there are no written terms, one still looks at the reality of what transpired between the parties.
The respondent submitted that an inference should be drawn against the applicant because there is no evidence with respect to taxation, superannuation, sick leave, holiday leave and uniforms. The applicant submitted that the same inference could be drawn against the respondent, which was in a position to adduce evidence about those matters and would be expected to do so if they would assist its case.
The applicant submitted that it is immaterial whether he in fact worked 38 hours per week for the respondent. The issue is the terms under which the work is performed. A casual or part time employee works less than 38 hours per week and is still an employee. The applicant submitted that what the evidence does show is that he was performing consistent work for the respondent and did not during the period of engagement seek or perform work for anyone else. Once the terms of the contract are examined by consideration of the various matters, the conclusion should be that he was a worker.
As regards the question of deemed worker, the applicant referred to the “bold assertion” by the respondent, without supporting evidence, that he re-activated his ABN solely so he could work for the respondent as being farcical. This is in circumstances where there is no dispute about when it was re-activated, and that it was a condition of employment that he have one. The respondent’s assertion should be dismissed as without basis.
The applicant submitted that the respondent speculates without supporting evidence about what would have happened if he got a better offer. The facts are that there was no better offer and no occasion for him to work for anybody other than the respondent. There is no evidence that he was carrying on a business, and the evidence is to the contrary. The question is whether he was carrying on a business at the time of the injury. At the time, he was not carrying on a business or trade – Pasqua v Morelli Constructions Pty Ltd [2009] NSWWCCPD 153.
The applicant submitted that, even if, contrary to the evidence, it is concluded that he was carrying on a trade or business while working for the respondent, the facts are the same as in Turner. A similar conclusion was reached, on facts similar to this case, in Davis v Pioneer Concrete [1976] 1 NSWLR 562. In Davis, also, Mahoney JA held that the deeming provision required the work to be “incidental” to the business and not the trade or business itself.

SUMMARY

Worker and deemed worker

Section 4 of the 1998 Act provides:
“‘worker’ means a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing). However, it does not include--
(a) a member of the NSW Police Force who is a contributor to the Police Superannuation Fund under the Police Regulation (Superannuation) Act 1906, or
(b) a person whose employment is casual (that is for 1 period only of not more than 5 working days) and who is employed otherwise than for the purposes of the employer's trade or business, or
(c) an officer of a religious or other voluntary association who is employed upon duties for the association outside the officer's ordinary working hours, so far as the employment on those duties is concerned, if the officer's remuneration from the association does not exceed $700 per year, or
(d) except as provided by Schedule 1, a registered participant of a sporting organisation (within the meaning of the Sporting Injuries Insurance Act 1978 ) while--
(i) participating in an authorised activity (within the meaning of that Act) of that organisation, or
(ii) engaged in training or preparing himself or herself with a view to so participating, or
(iii) engaged on any daily or periodic journey or other journey in connection with the registered participant so participating or the registered participant being so engaged,
if, under the contract pursuant to which the registered participant does any of the things referred to above in this paragraph, the registered participant is not entitled to remuneration other than for the doing of those things.”
Schedule 1, Clause 2 of the 1998 Act provides:
“(1)    Where a contract--
(a)     to perform any work exceeding $10 in value (not being work incidental to a trade or business regularly carried on by the contractor in the contractor's own name, or under a business or firm name), or
is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, taken to be a worker employed by the person who made the contract with the contractor.
(3)     A person excluded from the definition of
‘worker’ in section 4 (1) because of paragraph (d) of that definition is not to be regarded as a worker under this clause.”
The applicant relies in the alternative on the “worker” and “deemed worker” provisions of the 1998 Act.
The applicant has given evidence about the circumstances in which he came to be performing work for the respondent. The only evidence from the respondent is the email from Mr Anglicas to EML in which he referred to Mr King as a contractor, and to a verbal contract; and the reference letter issued to Mr King. The letter referred to Mr King having been employed by the respondent. It also stated that the applicant “quickly rose” to become foreman. The suggestion here is that he had been promoted by the respondent. The evidence of Mr Anglicas is therefore inconsistent.
As the respondent submitted, there is recent High Court authority that addresses the issue of “worker”. However, as the applicant submitted, those were cases in which there was a written contract of employment between the parties. In Personnel, the entirety of the contract between Mr McCourt, the worker involved, and the respondent, was reproduced in the judgment of the High Court.
Kiefel CJ, Keane and Edelman JJ said at [43]-[44]:
“While there may be cases where the rights and duties of the parties are not found exclusively within a written contract, this was not such a case. In cases such as the present, where the terms of the parties' relationship are comprehensively committed to a written contract, the validity of which is not challenged as a sham nor the terms of which otherwise varied, waived or the subject of an estoppel, there is no reason why the legal rights and obligations so established should not be decisive of the character of the relationship^.
Not only is there no reason why, subject to statutory provisions or awards, established legal rights and obligations in a contract that is entirely in writing should not exclusively determine the relationship between the parties but there is every reason why they should. The ‘only kinds of rights with which courts of justice are concerned are legal rights’. The employment relationship with which the common law is concerned must be a legal relationship. It is not a social or psychological concept like friendship. There is nothing artificial about limiting the consideration of legal relationships to legal concepts such as rights and duties. By contrast, there is nothing of concern to the law that would require treating the relationship between the parties as affected by circumstances, facts, or occurrences that otherwise have no bearing upon legal rights.” (Emphasis in original).

At [55] they said:
“…In neither Stevens nor Hollis did this Court suggest that, where one person has done work for another person pursuant to a comprehensive written contract, the court must perform a multifactorial balancing exercise whereby the history of all the dealings between the parties is to be exhaustively reviewed even though no party disputes the validity of the contract.” (Emphasis added); and
at [56]-[57]: “…Importantly, Stevens was not a case where the parties had committed the terms of their relationship to a written contract. In this respect, Stevens stands in obvious contrast to cases like Chaplin and Narich – and the present case. [Citations omitted].
In Hollis, the ‘contractual relationship’ pursuant to which Vabu ‘imposed’ its work practices upon couriers was partly oral and partly in writing. The terms of the relationship between the parties had not been committed comprehensively to a written agreement. Moreover, there was no suggestion in any of the judgments in Stevens or Hollis that their Honours entertained any misgivings as to the statements of principle in Chaplin and Narich. Indeed, in Stevens, Mason J (with whom Brennan J agreed) and Wilson and Dawson JJ referred to Chaplin with evident approval…As has been correctly observed, Hollis ‘does not alter or even challenge the orthodox principle that courts are not concerned with what has ‘actually occurred’ in a relationship, but rather with ‘the obligations by which the parties [are] bound’.”
The appeal in Jamsek was heard with the appeal in Personnel. Kiefel CJ, Keane and Edelman said [at 8]:
“…In the present case, as in [Personnel], there was no suggestion that the contract between the parties was a sham or had been varied or otherwise displaced by conduct of the parties. There was no claim by the respondents to set aside the contract either under statute or pursuant to equitable doctrines…In these circumstances, and for the reasons given in [Personnel], the character of the relationship between the parties in this case was to be determined by reference to the rights and duties created by the written agreement which comprehensively regulated that relationship…” (Emphasis added).
Where, as in this case, there is no “comprehensive written contract”, and in fact no written contract at all, the principles of Stevens and Hollis still apply. As I have noted, Mr Anglicas’s evidence about the circumstances of Mr King’s engagement is inconsistent.
The applicant’s evidence is that he worked exclusively for the respondent for six months before the injury, and he worked for 38 hours per week, like the other employees. He re-registered his ABN in accordance with his verbal agreement with Mr Anglicas, as well as taking out insurance with AHI. The existence of the ABN and his own insurance are indicia that he was a contractor, rather than a worker, but there is no evidence from Mr Anglicas as to why they were required.
The applicant’s evidence is that the respondent, through Mr Anglicas, controlled the work he did. Mr Anglicas was on site when the injury occurred. He sometimes directed the applicant to work on other sites. The reference provided by Mr Anglicas sets out the work the applicant did on the construction, from start to finish. It does not suggest he was able to work anywhere else during that period. It seems unlikely that he would have “risen” to control the others as foreman, if he was not usually on site.
The respondent submitted that the applicant did not work full hours and had control over his hours to the extent that he would leave early on Wednesdays. It is not incompatible with an employment relationship for a worker who is paid an hourly rate to come to an arrangement with his or her employer to leave or start work early to attend to personal obligations.
The applicant submitted invoices for the hours he worked for the respondent. They do not include any charge for materials, or GST. His accountant stated that his business expenses primarily related to his vehicle, phone and minor safety equipment. There is no mention of materials. Those are indicia that he was a worker, rather than a contractor.
The applicant’s accountant made no mention of Mr King buying tools, but his evidence is that he used some of his tools, and some provided by the respondent. It is not incompatible with an employer/employee relationship for a skilled tradesman to provide and use his own tools.
The applicant stated that he did not advertise his services or look for other employment. There is no evidence of him advertising his services. That is indicia that he was a worker.
As the respondent submitted, the applicant has given no evidence about taxation, superannuation, holiday leave or sick leave, all of which would be relevant to the issue of whether he was a worker. However, I draw no Jones v Dunkel inference from the absence of this evidence. It should be remembered that the only evidence relied on by the respondent in this matter, before the date of the hearing, was Mr Anglicas’s email. In the circumstances, the applicant may not have believed it incumbent on him to provide additional evidence.
On balance, I am satisfied that the applicant was a worker in the employ of the respondent when he sustained injury on 12 March 2019.
If I am wrong in my determination that the applicant was a worker, within the meaning of section 4 of the 1998 Act, I would nonetheless accept that he was a deemed worker.
The Court of Appeal considered this provision in Scerri v Cahill & another (1995) 14 NSWCCR 389 where Bainton AJA (with Kirby ACJ and Rolfe AJA agreeing) held that an applicant who relies on Schedule 1 must prove:
(a)     that he was a party to a contract with the respondent to perform work; and
(b)     that work exceeds $10.00 in value; and
(c)     that the work is not incidental to a trade or business regularly carried on by the applicant in his own name or under a business or firm name; and
(d)     that the applicant has neither sublet the contract nor employed workers in the performance of it.
The applicant was a party to a contract to perform work for the respondent, the value of which exceeded $10 in value. The respondent has conceded as much, and that there is no evidence that he sublet the contract or employed workers.
As the applicant submitted, the evidence discloses that when he commenced work for the respondent, he was not carrying on a trade or business. His evidence is that he operated as a sole trader, under an ABN, intermittently for 15 years. His ABN expired in 2013, as he commenced full time employment with Western Star. His employment by that company is confirmed by the Payment Summaries.
The applicant stated that he re-registered his ABN to allow him to work for the respondent, as well as taking out insurance with AHI. I do not accept that it is farcical to suggest he reactivated his ABN to allow him to work for the respondent. The timing suggests that was the reason, and Mr Anglicas has given no evidence about this.
Dixon J in Humberstone said:
“…I think that the purpose of the exception or exclusion expressed by the words in question was to confine the benefit of the conclusive presumption which it establishes to persons who do not conduct an independent trade or business, who are not holding themselves out to the public under their own or a firm or business name as carrying on such a trade or business and who do not in the course of that trade or business, as an incident of its exercise, undertake the work by entering into the contract…The suggestion which this language conveys of the existence of a business or the practice of a trade is much strengthened in sub-s. (6) by the words ‘carried on,’ ‘regularly’ and ‘in his own name or under a firm or business name.’ These all indicate a business or trade conceived as independently existing or exercised by a person holding himself out to the public under a name or style. No doubt the policy is a matter of inference but it seems reasonable to suppose that it was considered proper that a person conducting a business in the course of which he contracted to perform work should himself carry the risk of personal injury as one of the hazards of his business, while the man who worked under contract but only for the employer or without any general trade or business or outside his trade or business should, like an ordinary employee, be insured by the Act against the risk of injury in his work.”
While Dixon J’s comments have been applied or approved in later decisions, the respondent submitted that Reynolds JA pointed out in Higgins that “whether what is done by a contractor is a business and whether it is regularly carried on by him are, of course questions of fact”.
The respondent submitted that the conclusion must be drawn that, had the applicant been offered more suitable or better paid work, he would have taken it. There is no evidence that would allow me to draw that conclusion. The applicant’s evidence is that he expected to continue to work for Mr Anglicas. That Mr Anglicas thought highly of his work is borne out by the reference he provided. As the applicant submitted, there was no better offer, and no occasion for him to work for anyone other than the respondent.
As the applicant submitted, the question is whether he was carrying on a business at the time of the injury. He may have carried on a business in the past, but there is no evidence that he was doing so when he was injured. There was no evidence that he advertised his services, that he was working for anyone else during the period he worked for the respondent, or that he employed anyone else.
Deputy President Roche held in Pasqua [at 53]:
“…the appropriate question in cases of this kind is whether or not the contractor was, at the relevant time, regularly carrying on a trade or business in his own name or under a business or firm name.”
Roche DP regarded the relevant time as being when the injury occurred. He continued [at 56]:
“It is submitted that it is not significant that Mr Pasqua had no marketing, signage or advertising because word of mouth recommendations carry as much or more weight with head contractors in the building industry as signage and advertisements. Whilst it is true that personal recommendations are important in all industries, the lack of marketing, signage and advertising is a further indicator, though not decisive, that Mr Pasqua was not regularly carrying on a trade or business during the relevant period.”
The indicators are that Mr King, like Mr Pasqua, was not regularly carrying on a trade or business during the relevant period.

Incapacity for work and PIAWE

Due to my determination as to the issues in dispute in this matter, it is not necessary that I determine incapacity. However, Drs Habib and Farid issued the applicant with medical certificates (for AHI) that certified him as continuously totally disabled to 10 April 2021. The claim for weekly benefits has been closed at 30 April 2021. I would therefore accept that the applicant had no capacity for work for the period of the claim, from 12 March 2019 to 30 April 2021.
The PIAWE is also not in dispute, and it is claimed as $2,224 per week.
There will accordingly be an award in favour of the applicant as follows:
(a) from 12 March 2019 to 11 June 2019 at the rate of $2,112.80 per week, pursuant to section 36 of the Workers Compensation Act 1987 (1987 Act), and
(b) from 12 June 2019 to 30 April 2021 at the rate of $1,779.20 per week, pursuant to section 37 of the 1987 Act.
There will be an award in favour of the applicant for medical, hospital and related expenses, pursuant to section 60 of the 1987 Act.
The orders are set out in the Certificate of Determination.

[2022] NSWPIC 177

26 April 2022