Laghaifar v Sealasash Window Renewal System Pty Ltd
[2019] TASSC 9
•7 March 2019
[2019] TASSC 9
COURT: SUPREME COURT OF TASMANIA
CITATION: Laghaifar v Sealasash Window Renewal System Pty Ltd [2019] TASSC 9
PARTIES: LAGHAIFAR, Pejman
v
SEALASASH WINDOW RENEWAL SYSTEM PTY LTD
FILE NO: 538/2018
JUDGMENT
APPEALED FROM: L v Sealasash Window Renewal System Pty Ltd
(Ref No 793/2015) [2018] TASWRCT 2
DELIVERED ON: 7 March 2019
DELIVERED AT: Hobart
HEARING DATE: 28 June 2018
JUDGMENT OF: Pearce J
CATCHWORDS:
Workers' Compensation – Entitlement to compensation – Persons entitled to compensation – Who is a worker or employee – Contract of service or independent contractor – General principles.
Workers Rehabilitation and Compensation Act1988 (Tas), s 3.
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; Protective Security Pty Ltd v Bedelph [2004] TASSC 128, 13 Tas R 354, applied.
Aust Digest Workers' Compensation [15]
Workers' Compensation – Proceedings to obtain compensation – Determination of claims – Appeals, judicial review and stated cases – Nature and scope of appeal and review – Appeal in point of law.
Workers Rehabilitation and Compensation Act1988 (Tas), s 63.
Aust Digest Workers' Compensation [338]
REPRESENTATION:
Counsel:
Appellant: D Marcenko and M Flanagan
Respondent: A Mills
Solicitors:
Appellant: Ogilvie Jennings
Respondent: Dobson Mitchell & Allport
Judgment Number: [2019] TASSC 9
Number of paragraphs: 38
Serial No 9/2019
File No 538/2018
PEJMAN LAGHAIFAR
v SEALASASH WINDOW RENEWAL SYSTEM PTY LTD
REASONS FOR JUDGMENT PEARCE J
7 March 2019
On 28 April 2014 the appellant, Pejman Laghaifar, made a claim for compensation under the Workers Rehabilitation and Compensation Act 1988 (the Act) from the respondent, Sealasash Window Renewal System Pty Ltd. The appellant claimed to have suffered an injury to his cervical and thoracic spine on 18 February 2014. I infer that the respondent disputed liability to pay compensation because, on 10 August 2015, the appellant referred his claim for compensation to the Workers Compensation and Rehabilitation Tribunal under s 42 of the Act. It was agreed between the parties that the Tribunal would determine, as a preliminary question, whether the appellant was a worker within the meaning of that term in the Act, s 3. As it is relevant to this appeal, the term "worker" means "any person who has entered into, or works under, a contract of service". The issue was whether the appellant was working for the respondent under a contract of service, or whether he was an independent contractor and working pursuant to a contract with the respondent in the nature of a contract for services.
The referral was heard over two days on 21 and 27 February 2017. On 5 February 2018, the Tribunal, constituted by Commissioner Wilkins, determined that the appellant had "not discharged the onus to show that he was engaged under a contract of service" and was not a worker. This is an appeal against that determination: L v Sealasash Window Renewal System Pty Ltd (Ref No 793/2015) [2018] TASWRCT 2.
Contract of service
A determination of whether a person was working under a contract of service requires the consideration of the totality of the relationship between the parties: Tasmanian Contracting Services Pty Ltd v Young [2011] TASSC 49 per Evans J at [5] applying Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395 at 401 and Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 29. An appeal against the decision of Evans J was dismissed: Young v Tasmanian Contracting Services Pty Ltd [2012] TASFC 1. Evans J also applied, as did the Tribunal in the appellant's referral, the commonly cited passage from the decision of Crawford J (as he then was) in Protective Security Pty Ltd v Bedelph [2004] TASSC 128, 13 Tas R 354 at [31]:
"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 is entitled to exercise over the latter, not merely in regard to what the latter will do, but also in regard to how it is to be done. But the existence of control, whilst significant, is not the sole criterion by which to gauge the matter. It is merely one of a number of indicia. '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 provision of holidays, the deduction of income tax and the delegation of work by the putative employee'. Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24. It is the totality of the relationship between the parties which must be considered. Op cit at 29. Criteria '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 of him by his own place of work or of his own equipment, the creation by him of goodwill 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 to him of the remuneration without deduction for income tax. None of these leads to any necessary inference, however, and the actual terms and terminology of the contract will always be of considerable importance.' Op cit at 36 – 37. However, having regard to a variety of criteria '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.' Op cit at 35. 'Any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the 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.' Op cit at 37."
The test for establishing whether a contract of service exists involves many factors, none of which is determinative. In Tasmanian Contracting Services Pty Ltd v Young, Evans J at first instance, cited with approval a passage from the judgment of Mummery J in the case of Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 at 944 which has been applied in many subsequent cases. His Lordship said of a determination whether a person was a servant or independent contractor:
"This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another."
Protective Security Pty Ltd v Bedelph is a case in which the parties had entered into a written agreement. Crawford J, at [33]-[34], referred to the authorities which made clear that the nature of the relationship is determined by the law and not by the label which parties choose to put on it. Although the expression of the parties' intention is a relevant factor, it is not conclusive in deciding the true nature of the contract: Johns Perry Hayward Pty Ltd v Greaves A72/1990, ([1990] TASSC 73) at 17–18; Thompson v Cooee Point Abattoirs Pty Ltd [2002] TASSC 41, 10 Tas R 412 at 419. As was stated by Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ in Hollis v Vabu Pty Ltd [2001] HCA 44, 207 CLR 21 at 33: "It should be added that the relationship between the parties, for the purposes of this litigation, is to be found not merely from these contractual terms. The system which was operated thereunder and the work practices imposed by Vabu go to establishing 'the totality of the relationship' between the parties; it is this which is to be considered: Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 29."
Grounds of appeal
There are five grounds of appeal. By the first ground the appellant complains that the Tribunal erred in law in finding that he was not a worker when "no [Commissioner] properly instructed in the law would have made such a finding". As that ground correctly recognises, the right of appeal from a determination of the Tribunal provided for by the Act, s 63, is confined to appeals "in point of law". Thus, the appellant must establish that the facts established by the evidence necessarily led to the conclusion that the appellant was a worker within the meaning of that word in the Act, or, differently stated, that no Tribunal acting judicially and properly instructed as to the law could have reached a different conclusion: Protective Security Pty Ltd v Bedelph per Crawford J at [23]. In that case, Crawford J applied the following passage from The Australian Gas Light Co v The Valuer-General (1940) 40 SR (NSW) 126 at 138:
"[I]f the facts inferred ... from the evidence ... are necessarily within the description of a word or phrase in a statute or necessarily outside that description, a contrary decision is wrong in law."
If, on the facts found, only one conclusion is open concerning whether the case does or does not come within a statutory expression, then a question of law arises: Hope v Bathurst City Council (1980) 144 CLR 1 at 9. Conversely, if on the material before the Tribunal, reasonable minds could differ on the question of whether the appellant was a worker, a conclusion one way or the other could not, of itself, be regarded as indicating any error of law. If the conclusion reached by the Commissioner was reasonably open, then an error in point of law has not been established: Burrage v Rural Press Limited [2013] TASSC 43.
Grounds 3 and 4 complain that the Tribunal failed to attribute sufficient weight, or placed too much weight on aspects of the evidence. Those grounds can only be taken to assert errors of fact which are subsumed in ground 1.
Ground 2 asserts that the Tribunal erred by approaching the relevant question "on the basis of a dichotomy between employer and employee". That ground derives from the comment of Evans J in Tasmanian Contracting Services Pty Ltd v Young at [6]. His Honour stated:
"The question for determination has commonly been expressed to be whether the person was working as an employee under a contract of service or as an independent contractor under a contract for services. However, as explained by McDougall J in Forstaff Pty Ltd v Chief Commissioner of State Revenue [2004] NSWSC 573 at [70] – [80] the real question is not whether the person was an employee or an independent contractor, but whether the person was an employee. To approach the question on the basis of a dichotomy between the relationship of an employer and an employee, and that of a principal and an independent contractor distracts from the core question."
In this case, the Tribunal, in the course of its reasons, posed for itself the question of whether the evidence pointed to the appellant being an employee or an independent contractor. No error of law is demonstrated by doing so. The reasons of courts and tribunals are commonly expressed in such terms. The reasons of Crawford J in Bedelph at [3] are an example. There is nothing in the Tribunal's reasons to suggest that it was distracted from the "core question", that is, whether the appellant was working under a contract of service, and the Tribunal's conclusion was expressed in those terms. This ground is not made out.
The final ground, ground 5, asserts that the Tribunal erred by determining the question by reference to the commencement of the relationship between the appellant and the respondent rather than at the time of the claimed injury. It should be accepted that whether the appellant was subject to a contract of service with the respondent is to be assessed at the time of the claimed "injury". It will sometimes be open to conclude, for example, that an engagement which begins as between a principal and contractor, may evolve such that it becomes, at the relevant time, a contract of service. As will be explained, the appellant claimed to have suffered an injury in February 2014, almost two years after he was first engaged by the respondent. However there is nothing in the Tribunal's reasons which demonstrates, either expressly or by necessary implication, that it incorrectly determined the nature of the relationship between the appellant and the respondent at some earlier time. In order to determine the essential question, the Tribunal was required to consider the establishment of the relationship between the appellant and the respondent and its development from commencement until the time of the injury. No error is demonstrated and this ground should not succeed.
Thus, the result of this appeal depends on assessment of ground 1. As to that ground an additional matter arises. The appellant asserts that the Tribunal should have determined, if not satisfied that the appellant was working under a contract of service, that he should nevertheless have been "taken to be a worker employed by [the appellant]", by operation of s 4B of the Act. That is not a contention which was made to the Tribunal. The appellant argues that the issue arises within ground 1 of the appeal, and no new ground is necessary. If the principal question raised by ground 1 is not determined in the appellant's favour, it will be necessary to determine whether the appellant should now be permitted to raise the issue of the application of s 4B for the first time on appeal.
The hearing
Before the Tribunal the appellant was represented. He gave evidence through an interpreter. His evidence in chief was, for the most part, adduced in the form of his written statement. His wife gave evidence and documents were produced.
Two directors of the respondent, John Brennan and Colm O'Shiel, gave evidence by witness statement and orally, and produced documents.
Evidence of the relationship
At the time of the hearing, the appellant was aged 36. He was born in Iran. He completed high school, but obtained no further education or qualification, and worked as a handyman before leaving that country when he was 23, in about 2003. He spent time in Turkey before moving to Australia. At first he lived in Queensland, on the Gold Coast, at Redcliffe and Mt Isa. He studied English and worked for a period in a sign design business. After a year he moved to Hobart. He worked as a taxi driver. A few years before he started working with the respondent he completed a Certificate 111 through TAFE in painting, design and decoration. On 31 March 2012 he married Yasmin Laghaifar, who was then a post graduate PhD student in business management at the University of Tasmania. The evidence suggested that the appellant's English language skills were limited, although he agreed that he had a reasonable understanding of basic English. He and his wife both suggested that his ability to understand spoken English was better than his ability to speak it himself.
Following the appellant's marriage, his wife helped him look for work which suited his handyman skills. By email he approached businesses they found on the internet. One such business was the one which had been recently established by Mr Brennan and Mr O'Shiel by medium of the respondent, which carried out the repair, renovation and resealing of sash windows. The appellant sent an email attaching his resume, indicating that he had visited their website and "would really like to join their team". Mr Brennan and Mr O'Shiel responded to the appellant's approach. They met at Mr O'Shiel's home in May 2012. The appellant was contacted a few days later and asked to attend a particular job, following which more work was proposed. Mr Brennan sent an email to the appellant on 16 May 2012, which stated:
"It was good to see you the other day and have you work with us. As a contractor worker we need you to please issue an invoice for your work each time. I have found a template for you and filled it in as much as I can. You please need to fill in the yellow areas with your details. Send this back to us on email and we will pay you. Next time you do some work with us issue us with another invoice for the hours you work please. Next job is for Tuesday (next week) and we will send you the time and address details".
The Commissioner's reasons noted when considering the commencement of the relationship, "[as] the business was in its relative infancy, the worker was told that it was not possible to predict what work, if any, was going to become available. He was told that when work became available, he would be contacted". He was told to not give up driving taxis. When the appellant started, he and Mr Brennan and Mr O'Shiel were the only persons working in the business, and he was directed to jobs by text or email.
Some aspects of the relationship between the appellant and the respondent were established in its early stages and remained constant throughout. There was no written contract. The agreement was established by email exchange, by conversations between the appellant and the directors of the respondent, and by their conduct. The appellant was paid a fixed hourly rate, initially $20 per hour, regardless of the hours worked or the type of work he was doing. He was not paid in accordance with any award or industrial agreement. He was asked to, and did, prepare and submit invoices for the hours he worked. He was asked to obtain an Australian Business Number (ABN). He had no entitlement to sick leave or annual leave and the Tribunal found that the appellant understood that to be so. No tax was deducted from the moneys paid to him by the respondent.
The evidence before the Tribunal established that the relationship between the appellant and the respondent developed. As the respondent's business grew the amount of work offered to the appellant increased. The appellant was taught on the job by Mr Brennan and Mr O'Shiel. He was subject to their direction but quickly demonstrated the capacity to do the work required of him. The Tribunal found that "the worker enjoyed his work with the employer, and Mr Brennan and Mr O'Shiel were pleased with the work that the worker undertook. Mr O'Shiel described the worker as 'handy and skilful' and became known as a person who could solve problems which arose from time to time". The Tribunal found that by early 2013 the appellant was "effectively engaged on a full time basis" by the respondent.
Over time, other men were engaged by the respondent, including a supervisor named Phil. The appellant was subject to Phil's direction. The tools and equipment used by the appellant were supplied by the respondent, and although the appellant supplied most of his own clothing, he wore shirts supplied by the respondent bearing the business logo. In its reasons the Tribunal described the position in these terms:
"The service provided by the employer in its business necessitated to use of some specialist equipment, and a degree of expertise in some of the aspects of the work. The nature of the worker's tasks included more rudimentary jobs to assist in the process as a whole. He brought to his work not only a competent set of basic skills but a degree of willingness and innovation. His nickname with the employer was 'I Fix'. In addition to the worker, the employer also engaged other people, including 'Phil' who was a qualified carpenter. Phil managed the on site work activities
The equipment used on site was sourced from the employer's van. I am satisfied that the employer would have had no difficulty if the worker had provided his own equipment to use, but in the circumstances I accept that the worker used the tools and equipment that were made available to him by the employer. He provided his own work clothing (work trousers and footwear) with the exception of work shirts that were later provided by the employer that incorporated the employer's logo. There is no evidence that the worker was directed to wear the employer's branded shirt, although he elected to do so. It is clear that the tops were provided by the employer in an effort to promote its business, but Mr O'Shiel gave evidence that they also wanted the 'team' to feel that they were part of the employer's brand."
The increase in the appellant's work with the respondent is reflected in the appellant's tax returns. The form of the tax returns prepared and filed by the appellant is also relevant to the nature of his relationship with the respondent. The appellant's tax return for the year ended 30 June 2011 showed Centrelink income of $9,220 and "business income" of $9,250, with "expenses" of $815. Because of his low income, no tax was payable. For the year ended 30 June 2012, the appellant's tax return showed "business income" of $23,862, with motor vehicle and other expenses totalling $5,120. Of the income for that year, $18,086 was from driving taxis. Again, no tax was payable. For the year ended 30 June 2013, the tax return disclosed "business income" of $28,687, all of which came from the respondent, but with expenses of $10,357, comprising mobile phone, vehicle fuel and registration, tools and protective clothing and depreciation, resulting in a taxable income of $18,330 for which no tax was payable. The tax return for the year ended 30 June 2014 disclosed "business income" of $31,016, with expenses of $1,370 and a deduction for "income protection" of $913.
The Tribunal recited the evidence about how the tax returns came to be prepared:
"Under cross examination about his tax returns, the worker essentially denied any knowledge about his tax returns, indicating that his wife knew about such things. He said income tax returns were prepared when he was working for the employer because Mr Brennan had told him he needed to do a tax return. When asked about the items claimed in tax returns for things such as tools and protective clothing, the worker indicated that those items were included on the tax returns only because that is what his tax adviser had told him to do. The worker again indicated that his wife knew more about the preparation of the tax returns, and that he knew very little. The worker indicated that his tax returns were prepared and filed on the basis that he was operating his own business, because that is what he had been told to do by his tax adviser.
In relation to the tax returns, the worker's wife gave evidence that she attended the appointment with their accountant to assist her husband with answering questions. She indicated the accountant asked her husband questions about what he was doing, and asked about expenses and his tools, and the tax returns were prepared as a result of those discussions."
Over time, the appellant's hourly rate increased to $25 per hour and then $30 per hour. The Tribunal made these findings:
"Although there was some difference between the parties as to what extent there was negotiation about a starting rate, I am satisfied that the initial rate was essentially agreed because the employer advised the worker that that was what they were prepared to pay. Two increases in the hourly rate occurred during the time that the worker was working with the employer. Again there was a difference between the parties about whether the worker had requested increases in his hourly rate, but I am also satisfied that the increases came about essentially as a result of a decision by the employer, rather than by any real negotiation between the parties at the worker's instigation. On 27 February 2013, the employer forwarded an email to the worker as follows: 'This is to confirm that as of this Monday 25th February your casual rate of pay to invoice [the employer] is now $30.00 per hour. As discussed today your efforts have been recognised. As part of the pay increase we will expect the following tasks to be undertaken ...'. Particular additional tasks were identified."
In February 2013, the appellant was given use of the respondent's marked van. He used it for both work and private purposes. The Tribunal made findings about the appellant's use of the van:
"In about February 2013, the worker started to use the van owned by the employer to travel to and from jobs. Prior to that he had been using his own vehicle. There was some dispute between the parties about how this arrangement eventuated, that is, whether the worker asked to use the van because his wife wanted the car to get to university, or whether the offer was made by the employer for the worker to use the van during the week. The worker's wife gave evidence that they lived near a bus stop at the time, she could catch the bus to get to university if she wanted to, and that having a car at the university was not helpful because of parking cost and limitations. Mr Brennan gave evidence that there has been occasions where the worker had been late for work, and that his understanding was that the worker had been delayed because of difficulties with dropping his wife off at university on the way to work. Mr Brennan specifically recalled an occasion where the worker was 20 minutes late which impacted on the whole group. I am satisfied that the worker was offered the use of the van, and that the employer was partly motivated in doing so because it would assist the worker, but that there were benefits for the employer as well. When he was driving the van, the worker was required to keep it stocked with materials, and he invoiced the employer for petrol and materials. I accept the evidence of Mr O'Shiel that use by the worker of the employer's van was an 'arrangement of convenience' for both parties."
In accordance with its intention that the appellant was not a worker, the respondent did not arrange for workers compensation insurance cover for the appellant. As the relationship between the appellant and the respondent developed, the appellant was asked to obtain his own "insurance". The request was noted in an email sent by Mr Brennan to the appellant on 21 May 2013, asking that the respondent "obtain public liability insurance for your carpentry work with us as a contractor", and "your own personal injury insurance/income protection insurance in case you are injured while working". The appellant, with the assistance of his wife, and following further requests from the respondent, placed both business insurance from 5 June 2013 and income protection insurance from 19 June 2013. Copies of the policy documents were given to the respondent. After he stopped working the appellant made a claim on the income protection policy and was paid somewhere between $7,000 and $9,000.
By the email sent by Mr Brennan on 21 May 2013, he also requested details of the appellant's superannuation fund, into which payments were thereafter made.
A factor to be taken into account in assessment of the relationship is the right to dictate the place of work and hours of work. The Tribunal made findings as follows:
"The worker was able to advise the employer that he would not be available for work. Although it appears from the evidence that this seldom occurred, on occasions the worker emailed the employer to say he would not be able to work on a particular day. The worker gave evidence that he was advised by the employer beforehand that there would be periods of no work and he attempted to fit his holidays around those periods, but I am satisfied that although the worker was clearly keen to obtain as much work as he could, he was ultimately able decide about his availability, and this was the employer's view also.
There is little doubt, and the Tribunal so found, that the respondent had the right to insist that the appellant, and not some other person, do the work. The appellant had no capacity to delegate. As to whether the respondent had the right to the exclusive service of the appellant, the Tribunal's finding was expressed in these terms:
"Both the principals of the employer gave evidence that it was their understanding that the worker had undertaken work elsewhere than with the employer, including work assisting a friend renovate a restaurant in Melbourne in Victoria, and also assembling pre-made furniture and kitchens in Tasmania. Their understanding had come from the worker. The worker's evidence was that his involvement in the restaurant in Melbourne was simply providing design ideas and that he had not done any work assembling furniture or kitchens as suggested, although he had attempted to look for work of that nature before starting with the employer. I accept that the worker did not perform any work other than his work with the employer (except for the taxi driving work that continued for some time after he had commenced with the employer), but I also accept that his employers believed that he had actually done some, albeit limited, additional work."
The Tribunal determination
The learned Commissioner stated that evidence before her identified "a number of matters that tend to point to the worker being engaged under a contract of service, whilst other evidence suggests that the worker was working as an independent contractor". In favour of the proposition that he was an independent contractor, the Commissioner listed:
· the respondent's intention;
· that the appellant's paid his own tax;
· that the appellant obtained income protection insurance and public liability insurance on which he successfully claimed;
· that the appellant had his own ABN and was paid on invoices;
· that he was "able to tell his employer that he was unavailable for work at times" and that "the employer considered" that the appellant could work for others.
In favour of the contrary proposition, the Commissioner listed that:
· the level of remuneration was determined by the respondent;
· tools and equipment were supplied by the respondent;
· the appellant did not give the appearance of promoting his own business or build goodwill, and appeared to be part of the respondent's business by his vehicle and clothing;
· the appellant had no capacity to delegate, worked only for the respondent which was his only source of income, had little autonomy in hours of work and was subject to the direction of others.
As to matters of delegation, autonomy and direction, the Commissioner said that she regarded them as factors of little weight because the appellant was required to work in concert with others, enjoyed the work with the respondent and therefore did not seek out other work, and that although subject to direction, little supervision was required because of his skill and initiative.
Was the Tribunal's determination an error of law?
I have little doubt that the intention of the directors of the respondent was to do what they could to not create a relationship of employment with the appellant, in order to avoid the potentially onerous requirements on employers established by the common law and by legislation. Some of those obligations are identified by Evans J in Tasmanian Contracting Services Pty Ltd v Young (above) at [9] as "vicarious liability in respect of an employee, obligations with regard to workers compensation, payroll tax, PAYE income tax deductions, Superannuation Guarantee contributions, award rates of pay, holidays, annual leave, sick leave, long service leave, and obligations in relation to and arising from the termination of the engagement of an employee". The evidence before the Tribunal established that it was at the initiative of the respondent that the appellant obtained an ABN for inclusion on his invoices and, similarly, it was at the initiative and insistence of the respondent, that the appellant obtained insurance which was not placed until June 2013. The taxation arrangement, the provision of an ABN, the obtaining of liability and personal accident insurance, and the absence of any entitlement to annual leave or sick leave, are all factors consistent with the existence of a contract for services, rather than a contract of service. The Tribunal expressed its final conclusion in these terms:
"Having considered all of the factors relevant to the question at issue, I am not satisfied that the worker has discharged the onus to show that he was engaged under a contract of service as required by the Act. Although there were several indicia that I have referred to above that pointed to the existence of a contract of service, I have concluded that the totality of the relationship between the parties pointed more to both parties conducting themselves as if the worker was an independent contractor. In particular, I have regard to the fact that the worker in many ways did not conduct his affairs in such a way as to indicate that he was engaged under a contract of service – he was aware that he had no entitlement to any personal or sick leave, he advised the employer on occasions when he would not be available to work, and he filed several tax returns indicating that he was maintaining his own business, and claimed against his separately maintained personal injury insurance after he was injured."
The respondent submits that the Tribunal's decision was reasonably open to it, after having observed all of the witnesses (including the appellant) and therefore no appeal in point of law can succeed. The appellant contends that none of the factors as found which led to the Tribunal's conclusion should have been given the weight which the Tribunal seems to have attributed to them, and that the evidence of the totality of the relationship necessarily led to the conclusion that the appellant was a worker, and not a contractor. The appellant contends that the payment of remuneration without deduction of income tax, and the absence of entitlement to annual leave, sick pay and long service leave are all common features of casual contracts of service: Sgobino v State of South Australia (1987) 46 SASR 292 at 308. The appellant contends that the taxation arrangements were instigated for the convenience of the respondent, and "with the appellant's accord". The deductions he claimed were deductions properly claimable regardless of whether the appellant was an employee or contractor.
The appellant's contentions should be accepted. I do not regard this as a case on which reasonable minds may differ about whether the appellant was a worker. The finding that he was not was not reasonably open to the Tribunal on the facts it found. The evidence demonstrated that the appellant was a servant of the respondent and, necessarily, that was the only conclusion open.
To my mind, resolution of the disputed issue begins with examination of the appellant's personal circumstances prior to his engagement by the respondent. He was a person with limited language skills and little or no business experience. He had some self-taught skill as a "handy man", having completed a technical course in "painting, design and decorating" but with no profession, trade or distinct calling. He had no business, business systems or place of work. He had no ABN and no business or personal insurance. He had not commenced any work or undertaking which resulted in the creation of goodwill or saleable assets. When contacting other businesses looking for work he was offering only his capacity to perform manual work and, presumably, his diligence, his ability to perform tasks suited to his abilities, to learn and exercise initiative. He had no particular skill or training in the work undertaken by the business which the respondent was commencing. Although he was asked by the respondent to submit invoices for payment, he had no forms of invoice and was given a template invoice to use by the respondent.
The only reason the appellant submitted invoices, obtained an ABN and insurance, was because he was directed by the respondent to do so. Such directions, or the way the appellant prepared his tax returns, or the respondent's intention to do what it could to make appellant subject to a contract for services, could not change the fundamental character of the relationship. I regard the totality of the relationship between the appellant and the respondent as inconsistent with a relationship based on a contract for services. Unlike the learned Commissioner, I find the evidence about delegation, autonomy and direction to be of considerable weight, and necessarily determinative of the referral. The appellant was subject to the direction and control of the respondent or its employees, he had no ability to delegate, he was paid for the time he worked rather than for a result to be achieved, he did not supply his own equipment, he took no commercial or business risk, had no independent business of his own and generated no goodwill. As a matter of evidence he worked only for the respondent, drove the respondent's marked vehicle and wore work clothing bearing the respondent's logo.
In light of my conclusion it is not necessary to reach any conclusion about the proper application of the Act, s 4B.
Conclusion and order
The first ground of appeal is made out. The appeal is allowed. I order that the appellant's referral be remitted to the Tribunal to be determined in accordance with the law.
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