Luke Bell v Scaffoldinghire.com Pty Ltd t/a Mornington Peninsula Scaffold Hire

[2018] FWC 7559

[2018] FWC 7559

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Luke Bell

v

Scaffoldinghire.com Pty Ltd t/a Mornington Peninsula Scaffold Hire

(U2018/8727)

Deputy President Colman MELBOURNE, 17 DECEMBER 2018

Minimum employment period – whether employee or contractor – alleged sham contracting – whether casual or permanent – jurisdictional objection dismissed

1. This decision concerns an application by Mr Luke Bell for an unfair dismissal remedy under s 394 of the Fair Work Act 2009 (Act). Mr Bell contends that he was employed by the respondent, Scaffoldinghire.com Pty Ltd (Scaffold Hire), from 30 April 2016 until his dismissal on 2 August 2018. He claims that his dismissal was unfair and seeks reinstatement or compensation.

1. Scaffold Hire objects to the application on the jurisdictional ground that Mr Bell has not met the minimum employment period. The company claims to be a small business employer, and that the minimum employment period is therefore one year. It contends that Mr Bell commenced working with the company only on 1 July 2018, and that at the time of his dismissal he had only one month’s service. Mr Bell says that he worked for the company continuously from April 2016, and that he did so as an employee, not an independent contractor, as represented by the company.

1. The jurisdictional objection in respect of the minimum employment period was listed before me on 7 December 2018. Mr Bell filed materials in accordance with directions issued by the Commission, but the company failed to do so. On the day of the hearing, there was no appearance from the company. My associate called the telephone number of the employer representative that had been provided in the F3 response form, but there was no answer. I proceeded to hear Mr Bell’s response to the jurisdictional objection in the absence of the company. At the conclusion of the hearing, my associate wrote to the company, directing it to provide any explanation for its failure to attend the jurisdictional hearing, and advising that in the absence of a response I would determine the jurisdictional objection based on the materials filed and the submissions and evidence given during the hearing. No response was received from the company.

1. The Commission can only order an unfair dismissal remedy if a person was ‘protected from unfair dismissal’ at the relevant time.[1] This in turn requires that the person have completed a ‘period of employment’ that is at least the ‘minimum employment period’.[2] If the relevant employer is a small business employer as defined in s 23 of the Act, the minimum employment period is one year and otherwise it is six months.[3] In its F3 response to the unfair dismissal application, the company stated that it had 13 employees at the time of Mr Bell’s dismissal and that it is therefore a small business employer. Mr Bell did not contest this.

1. Scaffold Hire submitted that Mr Bell was employed only from 1 July 2018 to 3 August 2018. However, it appears from Mr Bell’s submissions and evidence that prior to 1 July 2018 he was engaged under an arrangement that purported to be a contract for services, and that the company’s position is that, prior to 1 July 2018, Mr Bell was a contractor and not an employee.

1. Mr Bell gave evidence that he started working for the company on 30 April 2016 on a full-time basis as a scaffolder. He said that he was not given any documentation about the basis of his engagement. There was no contract, letter, or email confirming the arrangements. Mr Bell was required to submit an invoice to the company each week showing the hours he worked and the total amount he was to be paid. The invoices were made out in his own name. No PAYG tax was deducted from the payments made to him. Mr Bell said that he does not have a private company through which he provides his labour, although he does have an Australian Business Number. Sometimes he would include the ABN on his weekly invoice, but not always. From April 2016 until the date of his dismissal on 2 August 2018, Mr Bell worked five days a week averaging 38 hours. Mr Bell said that he was expected and required to attend for work. He did not work for any other business or person during this period. He was provided with a uniform to wear. Mr Bell said that he brought his own tools to work and used these to assemble scaffolding, however it was his preference to do this, and the company made tools available for him to undertake his duties. Mr Bell said that there are other persons whose circumstances are similar to his.

1. Mr Bell’s evidence was that on 1 July 2018, Mr Woods, company director, spoke to him and said words to the effect that the Australian Taxation Office did not consider the company’s workers to be contractors and that henceforth they would be employees. Mr Bell said that on or about 2 August 2018, he sought to clarify the basis of his employment. He said that a company representative later told him that he had become too much trouble for the company, and that his employment would be terminated. I note that in its F3 document, the company said that the reason for Mr Bell’s dismissal was that there was no work available for him; but elsewhere in the document the company says that Mr Bell ‘did not show good character’.

1. I accept Mr Bell’s evidence. It was given candidly and openly, predominantly in response to questions I asked him during the proceedings. His evidence has not been contradicted. The company did not file materials other than the F3, did not attend the hearing and did not otherwise seek to be heard.

1. Mr Bell submitted that at all relevant times he was at law an employee of the company, not a contractor, and that the company had engaged in sham contracting. Further, if to any extent he was a casual employee, Mr Bell says that throughout the period of his engagement with the company he completed on average 38 hours of work per week, that his employment was regular and systematic, and that during this time he had a reasonable expectation of continuing employment with the company.

1. In my view, the evidence establishes that Mr Bell was an employee of Scaffold Hire from 30 April 2016 until 2 August 2018.

1. There are well-established principles that affect the analysis of whether a person is an employee or a contractor. The courts have developed a multi-factorial approach to determining whether a particular relationship is one of employment or one subject to a contract for services.[4] The various indicia were comprehensively listed in Jiang Shen Cai trading as French Accent v Do Rozario.[5] It is not necessary to reproduce them here, but I will mention several of them briefly, as they apply to the circumstances of the present case.

1. First, Mr Bell did not undertake work for any other persons. He worked exclusively for the company from April 2016 until his dismissal. Secondly, Mr Bell said that the company required him to attend for work, and that if he had not done so, he would not have received any further work. He was not free to undertake as much or as little work as he chose, subject to his availability, as one would expect in a relationship of principal and contractor. He was evidently not able to delegate or subcontract his duties. Thirdly, although Mr Bell provided the company with invoices, this occurred at the end of each week, and because the company asked him to do this. The invoicing was not referable to the completion of particular tasks, as would be typical of a contractor relationship. Fourthly, although Mr Bell preferred to use his own tools, the company made available all the necessary equipment for him to undertake his work. Fifthly, although there was relatively little evidence of his day to day duties, it appears that Mr Bell worked under the control of the company. Exclusivity, non-delegable duties, control over the performance of work and the provision of equipment to a worker all point to the existence of an employment relationship.

1. A consideration of the various indicia of the employment relationship is not a mechanical exercise. It is important to establish a picture of the relationship from the accumulation of detail.[6] I recognise that there is not an abundance of detail in the present matter, due partly to the company’s failure to file materials or participate in the proceeding. However, I am satisfied that there is sufficient evidence of the details of the relationship between Mr Bell and the company for me to comfortably conclude that it was a relationship of employment, not one of principal and independent contractor. In particular, a contract of employment is in essence a work-wages bargain, so that the ‘irreducible minimum of mutual obligation’ necessary to create such a contract is an obligation on a person to perform work reasonably demanded by the other, and for the other to pay for such work.[7] The ‘work-wages’ bargain was clearly present in the relationship between Mr Bell and the company.

1. I note Mr Bell’s submissions that the company has engaged in sham contracting in contravention of s 357(1) of the Act. However, such claims are not ones that can be determined by the Fair Work Commission. They require the exercise of judicial power, and must be brought in a court. Many cases come before the Commission that involve elements that must be judicially determined. A different dispute resolution framework might see members of the Commission proceed to sit on a separate, judicial body, and as members of that body deal discretely with aspects of claims requiring judicial determination.[8] As it is, however, if Mr Bell wishes to pursue his sham contracting claims, he will need to commence proceedings in a court in the usual way.

1. What was the status of Mr Bell’s employment prior to 1 July 2018? He worked full-time for the company, Monday to Friday, every week for over two years. In my view, based on the evidence before me, Mr Bell was a permanent full-time employee, and remained so until his dismissal. Even if the basis of employment over this time were properly to be described as casual, it was casual employment on a regular and systematic basis. Clearly Mr Bell had a reasonable expectation of continuing employment, an expectation that was in fact realised, up until the day in August 2018 when his employment was terminated. Therefore, even if Mr Bell had been employed on a casual basis for the entirety of the relevant period, his service as a casual would count towards his period of employment for the purposes of s 384.

1. I find that Mr Bell’s period of employment exceeded one year. Therefore, I am satisfied that Mr Bell has served the minimum employment period as required by the Act and that he is protected from unfair dismissal.

1. Accordingly, the company’s jurisdictional objection concerning the minimum employment period is dismissed. The parties will be advised of the further programming of Mr Bell’s unfair dismissal application in due course.

DEPUTY PRESIDENT

Appearances:

Mr T. Rizzuto and Mr L. Bell for the applicant

No appearance for the respondent

Hearing details:

2018

Melbourne

7 December

<PR703104>

[1] Section 390

[2] Section 382(a)

[3] Section 383

[4] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24 per Mason J

[5] [2011] FWAFB 8307

[6] Do Rozario, at [30]

[7] See for example Forstaff Pty Ltd v Chief Commissioner of State Revenue [2004] NSWSC 573; (2004) 144 IR 1 at [90]-[91]; Building Workers' Industrial Union of Australia v Odco Pty Ltd [1991] FCA 87; (1991) 29 FCR 104 at 114; Automatic Fire Sprinklers Pty Ltd and Another v Watson [1946] HCA 25; (1946) 72 CLR 435 at 465 per Dixon J

[8] Contrast such a structure with the facts in Brandy v Human Rights & Equal Opportunity Commission (1995) 183 CLR 245

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