Marinic v RPC Interiors Management Pty Ltd
[2019] NSWWCCPD 11
•26 March 2019
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||
| CITATION: | Marinic v RPC Interiors Management Pty Ltd [2019] NSWWCCPD 11 | |
| APPELLANT: | Anne Marinic | |
| RESPONDENT: | RPC Interiors Management Pty Ltd | |
| INSURER: | GIO NSW Workers Compensation | |
| FILE NUMBER: | A1-3544/18 | |
| ARBITRATOR: | Mr C Burge | |
| DATE OF ARBITRATOR’S DECISION: | 18 October 2018 | |
| DATE OF APPEAL DECISION: | 26 March 2019 | |
| SUBJECT MATTER OF DECISION: | ‘Worker’ – application of Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1; 160 CLR 16, Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21; 75 ALJR 1356; 106 IR 80; 181 ALR 263 and associated authorities | |
| PRESIDENTIAL MEMBER: | Deputy President Michael Snell | |
| HEARING: | On the papers | |
| REPRESENTATION: | Appellant: | Nikola Velcic & Associates |
| Respondent: | Hall & Wilcox | |
| ORDERS MADE ON APPEAL: | 1. The Arbitrator’s Certificate of Determination dated 18 October 2018 is revoked. 2. The matter is remitted for re-determination by another arbitrator. | |
INTRODUCTION AND BACKGROUND
Anne Marinic (the appellant) is the widow and only dependant of the late Ivan Marinic (the deceased), who died from a heart attack at work on 2 December 2016. The appellant brings these proceedings pursuant to ss 25(1) and 26 of the Workers Compensation Act 1987 (the 1987 Act), for the lump sum death benefit together with funeral expenses. The appellant alleges that the deceased was a worker in the employ of RPC Interiors Pty Ltd (the respondent), or alternatively a deemed worker pursuant to Sch 1, cl 2 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act), at the time of his death. This was disputed by the respondent in a s 74 notice dated 6 November 2017; these were the only issues between the parties.
These proceedings were commenced by way of an Application to Resolve a Dispute registered on 11 July 2018 (the ARD). The matter was listed for arbitration hearing on 20 September 2018. Both parties were represented by counsel. There were no applications to adduce oral evidence or to cross-examine. The matter proceeded on the written material, counsel addressed, and the Arbitrator reserved his decision. A Certificate of Determination, accompanied by 19 pages of reasons, was issued on 18 October 2018.[1] There was an award in favour of the respondent. The Arbitrator concluded that the deceased was not a ‘worker’ or a deemed worker. This appeal is brought against that decision.
[1] Marinic v RPC Interiors Management Pty Ltd [2018] NSWWCC 281 (the Reasons).
It is not in issue that, at the time of the deceased’s death, he was contracted (however it may be characterised) to the respondent, and was being paid by the respondent. The site at which he was performing duties, Portman Street, Zetland (the Portman Street site) was a development site controlled by Ballast Point Pty Ltd (Ballast Point). The deceased was “provided” by the respondent to another company, Ultra Building Works Pty Ltd (Ultra), which was carrying out works at the site. Ultra paid $60 per hour to the respondent, for the deceased’s time, and the respondent paid the deceased $57.50 per hour for his time.[2]
[2] Reasons, [6]–[8].
ON THE PAPERS
Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
The appellant submits its preference is for “a formal hearing”, whilst noting this is a matter for the Commission. The respondent submits the matter can be dealt with on the papers. Having regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the parties, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.
THE ARBITRATOR’S REASONS
The Arbitrator set out the factual background,[3] and quoted from a number of authorities dealing with issues of ‘worker’.[4] He summarised the submissions of the appellant’s counsel[5] and of the respondent’s counsel.[6] He said that, “examining the relevant indicia … [the parties] were engaged in a contract for services, rather than a contract of service”.[7] The Arbitrator then discussed the indicia in more detail, referring to the following:
(a) The deceased was paid on an hourly basis at a set rate plus GST, described as “an arrangement [which] is indicative of that between principal and contractor”. This applied also to the payment by the deceased of his own income tax, and him claiming business related deductions and depreciation in his taxation returns.[8] There is no suggestion the respondent “provided for the deceased’s holidays”.[9]
(b) The deceased brought his own tools to the site. The Arbitrator said this “at best … is a neutral indicator as to whether an employment relationship existed”.[10]
(c) The appellant submitted the deceased attended at the site at the same times each day, consistent with the respondent exercising ‘control’. The Arbitrator rejected this. The site was controlled by Ballast Point, Ultra was a contractor. An equally available inference was that working hours were set because that was when the “site was open at the behest of Ballast Point”.[11]
(d) When on the site, the deceased “operated under the direction of Mr Miletic” (employed by Ultra, the “leading hand on the site”),[12] who allocated tasks to him.[13]
(e) The deceased did not advertise. The Arbitrator said this was not “of great significance”, the deceased “had substantial contacts within the building industry”.[14]
(f) It was not suggested the deceased had a right to delegate his work for the respondent. This was “suggestive of an employment relationship”, however the deceased did not, in any event, “employ any other people”.[15]
(g) The Arbitrator said that “the deceased did not have an obligation to work for the respondent”. Rather he, through his own business, contracted to work for the respondent, as he had done with multiple other businesses. This was consistent with Mr Clark’s statement that the deceased “would ring him when he was quiet”. The deceased’s own business records disclosed work for “multiple other entities in the years leading up to his death”. This was consistent with an absence of evidence “which suggests the respondent had exclusive use of the deceased’s labour, or that it had the right to dismiss or terminate him”.[16]
(h) The Arbitrator referred to the “respondent’s site foreman” exercising “a substantial degree of control over the deceased at Portman Street” (see the reasons at [99]). This was in fact a reference to Mr Miletic, who was an employee of Ultra (see the reasons at [100]). Other passages suggested he rejected the proposition that the respondent exercised control over the deceased (see the reasons at [91] and [94]). Overall, the Arbitrator expressed doubt regarding whether the respondent exercised control. He appeared to accept a submission attributed to the respondent’s counsel that “a site foreman will nearly always be present on a building site and their mere presence does not mean that independent contractors are not present on the same work site”.[17]
[3] Reasons, [1]–[10].
[4] Reasons, [15]–[34].
[5] Reasons, [35]–[55], [81]–[86].
[6] Reasons, [56]–[80].
[7] Reasons, [88].
[8] Reasons, [89].
[9] Reasons, [92].
[10] Reasons, [90].
[11] Reasons, [91].
[12] Statement of Zac Miletic dated 27 March 2017, ARD p 29, [19].
[13] Reasons, [100].
[14] Reasons, [101].
[15] Reasons, [96].
[16] Reasons, [93], [94], [98].
[17] Reasons, [99].
The Arbitrator rejected a submission that a statement by Mr Clark (manager of the respondent), that the deceased was “a worker in NSW”, was “an admission of an employment relationship”, in the absence of evidence of Mr Clark’s “intentions in making that comment”.[18] The Arbitrator said the deceased did not “constantly work for either of Mr Clark’s companies, and … would ring him when he was quiet”.
[18] Reasons, [95].
The Arbitrator referred to a submission by the appellant’s counsel that the Commission should look to the terms of any agreement between the deceased and the respondent, and the immediate past contract between the deceased and Mr Clark’s other company, “rather than overly emphasise agreements between the deceased and other parties.” The Arbitrator described this submission as “well made”.[19] He continued:
“Nevertheless, the existence of agreements between the deceased and other businesses is still a factor which can be considered by the Commission as evidence of the deceased operating his own business, particularly though not exclusively as it relates to whether or not the respondent had a right to the exclusive services of the deceased. The fact that the deceased provided his services to several different businesses in the two years leading up to his death, rendered all of them tax invoices on a “plus GST” basis and did so at different rates is, in my view suggestive that the deceased was operating as an independent contractor and not as an employee at the time of his death.”[20]
[19] Reasons, [97].
[20] Reasons, [98].
The Arbitrator found that “the relationship between the deceased and the respondent was one of principal and contractor”.[21]
[21] Reasons, [102].
The Arbitrator then turned to consider deemed employment. He concluded that Sch 1, cl 1 of the 1998 Act had no application, given his conclusion that the deceased had not entered into a contract of service with the respondent.[22]
[22] Reasons, [104]–[106].
The Arbitrator considered the application of Sch 1, cll 2 and 2A of the 1998 Act. He referred to Humberstone v Northern Timber Mills.[23] He accepted the appellant had been “carrying on a business in his own name for many years”, and rejected the reliance on Sch 1, cll 2 and 2A for that reason. He accordingly found the deceased was “neither a worker nor a deemed worker”.[24]
[23] [1949] HCA 49; 79 CLR 389 (Humberstone).
[24] Reasons, [112]–[114].
GROUNDS OF APPEAL
The appellant’s Application to Appeal Against Decision of Arbitrator (the appeal) does not clearly distinguish between grounds and submissions. It does not specify numbered grounds. The substance of the document is headed “Grounds of Appeal/Written Submissions”. The respondent submits the document does not adequately identify the respects in which error is alleged to have occurred.[25] In dealing with the appeal, I am required to “act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms”: s 354(3) of the 1998 Act.
[25] Respondent’s submissions, [13].
The appellant specifies that she appeals the two ultimate findings of fact against her, stating the Arbitrator erred in finding that the deceased was not a ‘worker’ or a ‘deemed worker’.[26] For convenience I will describe these as Grounds Nos 1 and 2. The appellant then sets out subclauses describing specific aspects of the decision making said to comprise such error.[27] She sets out headings, under which she deals more fully with the specifics of the alleged error. The challenge is primarily one that goes to the fact-finding process. Its basis is adequately illuminated by the submissions. The respondent has had an adequate opportunity to respond to the matters raised, and itself relies on 17 pages of written submissions in opposition. Notwithstanding the respondent’s submissions about the way in which the appeal is argued, the preferable course is to deal with the matters raised, on their merits. The respondent has addressed the appeal, grouping its submissions under the various sub-headings referred to below. I will adopt the same approach.
APPELLANT’S SUBMISSIONS ON ‘WORKER’
[26] Appellant’s submissions, [2].
[27] Appellant’s submissions, [3].
The contract between the deceased and the respondent
The appellant, under this heading, deals with the following alleged errors by the Arbitrator, described in subpars (a), (b), (c) and (d) of par 3 of her grounds/submissions:
(a) failed to make specific findings about the formation of the contract pursuant to which the deceased was working at the time of his death;
(b) in finding the contract was one for services, placing too much reliance on the deceased’s past contracts, and not having proper regard to the relevant contract between the deceased and the respondent;
(c) failed to refer to and consider that the deceased’s labour was in an unfamiliar field for Ultra, rather than in his specialised field of office fit-outs and partitioning, and
(d) failed to properly consider the matters at (a), (b) and (c) above, and also the fact that the deceased worked under the control and direction of the leading hand.
Dealing with this cluster of alleged errors, the appellant submits the relevant contract was formed on or shortly before 23 November 2016; it was one pursuant to which the respondent swapped the deceased’s labour with Ultra, for the deceased to work on the site. The Arbitrator found the deceased worked under the control of Mr Miletic, the leading hand. It is likely that the deceased was simply contracting his own labour, he did not contract to provide a specific result, such as making a door. The labour provided was not in the deceased’s specialised field of office fit outs. It was rare for the deceased to work outside this field, and it was the first time he had worked for Ultra. This is submitted to be consistent with the statements of Mr Clark and the appellant. On the day of his death, the deceased’s work included putting door frames together, and labouring to carry door frames from a truck to the work site, under the direction of Mr Miletic. The appellant submits the Arbitrator erred in failing to properly consider the conditions of the contract in issue, as opposed to past contracts.[28]
[28] Appellant’s submissions, [8]–[14].
Method of remuneration
The appellant, under this heading, groups the following alleged errors described in subpars (e) and (f) of par 3 of her grounds/submissions:
(e) and (f) Failed to properly consider the deceased was paid at an hourly rate for his labour, rather than being paid for a given result or a specific outcome, suggesting he was selling his labour as an employee.
The Arbitrator in his reasons at [89] said that payment “on an hourly basis at a set rate plus GST” was an arrangement “indicative of that between principal and contractor”. The appellant submits the Arbitrator failed to consider the relevance of being paid on an hourly basis. Payment on an hourly basis, as opposed to payment for a specific outcome, was held in Malivanek v Ring Group Pty Ltd[29] to be suggestive of selling one’s labour as an employee.[30]
[29] [2014] NSWWCCPD 4; 15 DDCR 146 (Malivanek).
[30] Appellant’s submissions, [15]–[19].
Set hours of work
The appellant, under this heading, deals with the alleged error described in subpar (g) of par [3] of her grounds/submissions, that the Arbitrator erred in failing to find the regularity of work hours pointed to the deceased being a ‘worker’.
The Arbitrator, in the reasons at [91], accepted the deceased attended work at the same times each day. This was held, in Malivanek, to suggest “an employer/employee relationship”.[31] The Arbitrator, to the contrary, said it did not support an inference of control in the nature of an employer/employee relationship. This was wrong, this indicium supported a finding of ‘worker’.
[31] Malivanek, [170].
The finding that the deceased did not have an obligation to work for the respondent
The appellant, under this heading, groups the following alleged errors by the Arbitrator, raised in subpars (h) and (i) of par 3 of her grounds/submissions:
(h) the finding at [93] of the reasons was erroneous, and indicated the Arbitrator did not take account of the relevant contract between the deceased and the respondent, and
(i) the fact that the deceased, in the past, had conducted his own business, invoiced other businesses charging GST, and paid his own income tax, were part of the indicia, but were not determinative.
The appellant submits the Arbitrator failed to take account of the relevant contract, formed on or shortly before 23 November 2016, in which the deceased’s labour was “swapped” to Ultra, in an unfamiliar environment, outside his usual field of work. It was a condition of the contract that the deceased work, as directed by Mr Clark, “for Ultra for a set hourly rate of pay”. It was not consistent with the deceased’s past work, for the respondent or others. It was at an unfamiliar site, working under Ultra’s leading hand, outside his usual field of office fit outs. Contrary to the Arbitrator’s finding, the work was not “perfectly consistent” with the deceased’s past work, for the respondent or others.
The Arbitrator, in his reasons at [93], referred to records of the deceased’s previous work, issuing invoices, charging GST and paying his own income tax. He found the deceased carried on a business. The appellant submits this was not determinative of whether the contractual relationship between the deceased and the respondent was one in which the deceased was a worker.[32]
[32] Appellant’s submissions, [25]–[32].
Respondent’s right to exclusive services of the deceased
The appellant, under this heading, deals with the alleged error described in subpar (j) of par 3 of her grounds/submissions, that the Arbitrator conflated the issue of past agreements to work with the respondent and other businesses, with the question of whether the respondent had a right to the exclusive services of the deceased. The appellant submits this issue does not depend on whether the deceased worked with various businesses at different times in the past. The question is whether there was an exclusive right to the deceased’s services, pursuant to the contract formed around 23 November 2016. There was.[33]
[33] Appellant’s submissions, [33].
Lack of right to delegate
The appellant, under this heading, deals with the alleged error described in subpar (k) of par 3 of her grounds/submissions. The appellant submits the deceased had no right to delegate, as the Arbitrator found at [96]. The Arbitrator described this as “suggestive of an employment relationship”, at the same time noting the “deceased’s business did not employ any other people”. The appellant refers to Malivanek at [174], where Roche DP described the lack of a right to delegate as something that “strongly points to an employer/employee relationship”. The appellant submits the Arbitrator failed to give appropriate weight to this indicium, which strongly points to the deceased being a ‘worker’.
The finding of right of direction and control over the deceased
The appellant, under this heading, deals with the alleged error described in subpar (l) of par 3 of her grounds/submissions. It is alleged the Arbitrator, in balancing the indicia, failed to give “full and proper weight” to that of control and direction. The Arbitrator accepted the evidence of Mr Miletic, that he decided what tasks the deceased would carry out, and what parts of those tasks would be done by him and the deceased respectively. The Arbitrator found that the deceased “operated under the direction of Mr Miletic”.[34] Having previously described ‘control’ as the “principal criterion”, the Arbitrator failed to give appropriate weight to this indicium.[35]
[34] Reasons, [100], discussed in appellant’s submissions, [37]–[39].
[35] Appellant’s submissions, [40].
The ultimate question/entrepreneur test
The appellant quotes from a passage in On Call Interpreters & Translators Agency Pty Ltd v Commissioner of Taxation (No 3),[36] which includes the following:
“The majority in Hollis [v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21] (citing Windeyer J) said, the distinction between an employee and an independent contractor is ‘rooted fundamentally’ in the fact that when personal services are provided to another business, an independent contractor provides those services whilst working in and for his or her own business, whereas an employee provides personal services whilst working in the employer’s business: at [40]. Unless the work is being provided by an independent contractor as a representative of that entrepreneur’s own business and not as a manifestation of the business receiving the work, the person providing the work is an employee: Hollis [39], [40], [47], and [57] and see Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161 at [30]–[32]. The English courts have taken a similar approach.”
[36] [2011] FCA 366; 214 FCR 82; 279 ALR 341; 83 ATR 137; 206 IR 252 (On Call Interpreters).
The appellant submits that the Arbitrator set out this passage, but failed to apply it. The appellant submits the deceased, provided personal labour in the employer’s business, rather than as a representative of his own business. The appellant submits this is consistent with the evidence of Mr Miletic, Mr Kyra and the appellant and also with the level of control exercised over the deceased by Mr Miletic at the site.[37]
[37] Appellant’s submissions, [41]–[49].
The appellant submits the indicia strongly favour the conclusion that the deceased was a ‘worker’, as does the ‘entrepreneur’ test.[38]
[38] Appellant’s submissions, [58]–[59].
APPELLANT’S SUBMISSIONS ON DEEMED WORKER
The appellant refers to a passage from Humberstone, where Dixon J (as his Honour then was) 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 provision will thus cover men who work for the principal but have no independent business or trade and men who though carrying on an independent trade or business undertake a contract outside the scope or course of that trade or business.”[39]
[39] Humberstone, [8].
The appellant submits the Arbitrator failed to address whether the deceased was holding himself out to the public as conducting an independent business, and failed to consider whether the relevant contract was “outside the scope or course” of the deceased’s business.
The appellant submits the deceased did not hold himself out to the public as conducting an independent trade or business, and work pursuant to the relevant contract was “outside the scope or course” of the deceased’s business. He was a deemed worker.[40]
[40] Appellant’s submissions, [53]–[55], [60].
RESPONDENT’S SUBMISSIONS ON ‘WORKER’
The respondent makes some general submissions, going to the nature of appealable error. It refers to Jaffarie v Quality Castings Pty Ltd[41] and Inghams Enterprises Pty Ltd v Sok.[42] It submits the appellant has failed to demonstrate an error of fact, law or discretion.[43]
[41] [2018] NSWCA 88, [53].
[42] [2014] NSWCA 217; 13 DDCR 139, [23]–[28].
[43] Respondent’s submissions, [13]–[18].
The contract between the deceased and the respondent
The respondent submits the appellant has not claimed the Arbitrator was under a duty to make findings about the formation of the contract between the deceased and the respondent, and there is no basis for finding that such a duty exists. The Arbitrator was required to find whether there was a contract of service, by reference to the indicia. The appellant does not explain how this alleged error could have affected the result.[44]
[44] Respondent’s submissions, [21]–[23].
The respondent accepts that, if there was error in finding a contract for services, rather than a contract of service, this could constitute an error of law. It submits the submissions do not identify what having a “proper regard to the contract” means. It submits no error is identified.[45]
[45] Respondent’s submissions, [24]–[25].
The respondent refers to the appellant’s submission that the Arbitrator failed to consider the fact that the work for the respondent was in an unfamiliar work environment, rather than the deceased’s “specialised field”. The respondent submits it has not been explained how there was any such duty, nor how the matter is relevant to whether there was a contract of service.[46]
[46] Respondent’s submissions, [26].
The respondent submits that the Arbitrator accepted the appellant’s submission that the Commission should look at the agreement between the deceased and the respondent, rather than overly emphasising past agreements between the deceased and other parties. The Arbitrator accepted that the site foreman exercised “a substantial degree of control over the deceased”, however when taken with “other factors”, this was not determinative of an employment relationship. There was no error in the approach.[47]
[47] Respondent’s submissions, [27]–[31].
Method of remuneration
The respondent submits the Arbitrator did consider the appellant’s submissions that remuneration at an hourly rate was indicative of an employment relationship. The Arbitrator referred to the parties “conflicting positions”, and accepted the respondent’s submission that “payment of the deceased on an hourly basis at a set rate plus GST was indicative of an arrangement between principal and contractor”. The respondent seeks to distinguish Malivanek, on the basis that in that case “there was no indication that the hourly rate included GST”; this difference is submitted to be “critical”. [48]
[48] Respondent’s submissions, [33]–[39].
Set hours of work
The respondent submits that the appellant did not expressly advance the regularity of work hours as an indicium of employment. She did submit an inference should be drawn that the deceased had little control over his start and finish times. It could equally be inferred the hours worked were the hours the site was open. The work hours were not determined by the respondent. The Arbitrator concluded the evidence of working hours did not justify an inference this was indicative of control resting with the respondent.[49]
[49] Respondent’s submissions, [41]–[45].
The finding that the deceased did not have an obligation to work for the respondent
The respondent says “it seems that the alleged error is a failure to ‘properly consider’ the contract between the parties in making the finding that the deceased was carrying on his own business and did not have an obligation to work for the respondent”. It submits that the Arbitrator considered the contract in some detail. An allegation that it was not “properly” considered goes to the merits of the decision making, without clearly identifying the nature of the error. It submits the agreement that the deceased would work for a fixed hourly rate was consistent with a principal/contractor arrangement. The Arbitrator’s reasons at [94] suggest the Arbitrator did not consider Mr Clark to exercise the requisite degree of control. This was open on the evidence.[50]
[50] Respondent’s submissions, [47]–[52].
The respondent submits that ground (i) appears to allege that the Arbitrator treated the circumstance that the deceased invoiced other businesses over the years and charged GST, and paid his own income tax, as “determinative” of the nature of the relationship. It submits this is not an error of fact, law or discretion. If it is, it has no substance, the Arbitrator did not treat these factors as determinative. He described them as “suggestive” that the deceased was an independent contractor.[51]
[51] Respondent’s submissions, [53]–[56].
Respondent’s right to exclusive services of the deceased
The respondent argues that the Arbitrator did not conflate “the issue of the existence of past agreements to work for the respondent and other businesses” with the “question of whether the respondent had a right to the exclusive services of the deceased. The respondent submits the Arbitrator considered “the former was relevant to determination of the latter”. The respondent accepts the “focus had to be on the contract between the parties”, but the deceased’s “pattern of work and billing in the past shed light on the nature of that contract”. This pattern suggested the deceased was an independent contractor.[52]
[52] Respondent’s submissions, [57]–[61].
Lack of right to delegate
The Arbitrator described this indicium as an important factor strongly pointing to ‘worker’. The appellant submits it was not given sufficient weight, referring to Malivanek at [174]. The respondent submits the weight to be attached to this indicium “will depend upon the circumstances of the case”. It submits the correct approach is multifactorial, referring to Stevens v Brodribb Sawmilling Company Pty Ltd.[53] The “substance or reality of the relationship” must be identified.[54] The significance of an indicium may vary from one case to another.[55]
[53] [1986] HCA 1; 160 CLR 16 (Stevens), [20].
[54] On Call Interpreters, [190].
[55] Respondent’s submissions, [62]–[70].
The right of direction and control over the deceased
The respondent submits that consideration of the weight to give to a particular indicium involves the exercise of discretion, and submits that error of the kind in House v The King[56] is not identified. The respondent submits that the Arbitrator, in any event, did not find that the respondent controlled the deceased. He rejected the proposition that the regular work hours were indicative of control. He found that the deceased did not have an obligation to work for the respondent.[57]
[56] [1936] HCA 40; 55 CLR 499 (House v The King).
[57] Reasons, [91] and [93].
The Arbitrator found that the deceased worked under the control of Mr Miletic, but he “was not an employee of the respondent”. The Arbitrator at one point referred to Mr Miletic as “the respondent’s site foreman”,[58] but this was “clearly a loose use of language”. Elsewhere the Arbitrator referred to Mr Miletic as “Ultra’s leading hand”.[59] The respondent submitted that Mr Miletic’s direction of the deceased was “not relevant, in the absence of evidence that the respondent controlled him”.[60] The Arbitrator “did not find in the appellant’s favour on the issue of control”.[61]
[58] Reasons, [99].
[59] Reasons, [49].
[60] Reasons, [73].
[61] Respondent’s submissions, [74]–[76].
The respondent went on to reiterate its submission that it was, in any event, necessary to consider “the totality of the relationship”. Even if the Arbitrator did find that the respondent exercised some degree of control over the deceased, this is “by no means conclusive”.[62] The respondent’s submissions refer to a “decreasing emphasis upon the degree of control”, quoting from On Call Interpreters.[63] The respondent submits that the appellant’s submission, although she does “not expressly say this … is that the Arbitrator should have treated control as being determinative of the relationship”, outweighing “all other factors”. The respondent submits such an approach “is not supported by the authorities”.[64]
[62] Boylan Nominees Pty Ltd t/as Quirks Refrigeration v Sweeney [2005] NSWCA 8 (Boylan Nominees), [54].
[63] On Call Interpreters, [204].
[64] Respondent’s submissions, [81]–[82].
The ultimate question/entrepreneur test
The respondent says it appears the test referred to is the following, from On Call Interpreters:
“Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work, may be posed and answered as follows:
Viewed as a ‘practical matter’:
(i) is the person performing the work an entrepreneur who owns and operates a business; and,
(ii) in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?
If the answer to that question is yes, in the performance of that particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee.”[65]
[65] On Call Interpreters, [208].
The respondent submits that whilst the above is “a useful guide to the question of whether a person is an independent contractor, it is not an error of law to determine this question in another way”. The respondent refers to other indicia which are submitted to be supportive of the Arbitrator’s conclusion that the deceased was not a ‘worker’.
The respondent refers to the statement of Mr Kyra, a director of Ultra, which the appellant referred to in relation to the entrepreneur test. Mr Kyra said the deceased was not supervised by his staff. The respondent submits this is consistent with the deceased being an independent contractor. The respondent refers to the appellant’s reliance on the evidence of Mr Miletic, who said the deceased “worked for another company”. The respondent describes this as “accurate in a loose sense”. The respondent submits that the appellant’s evidence that the deceased “did not run a business” is inconsistent with his taxation returns, and the deceased charging GST in his invoices.
RESPONDENT’S SUBMISSIONS ON DEEMED WORKER
The respondent submits the Arbitrator’s finding that the deceased had carried out a business in his own name for many years was “inescapable”. The respondent submits that the question of whether the deceased held himself out to the public as conducting an “independent” business, raised by the appellant, is “not part of the statutory test”. The Arbitrator, if he was under a duty to consider this issue, quoted from Humberstone and concluded that “the deceased carried on a business in his own name”. He concluded the fact that the deceased did not advertise to the general public was not of great significance, the deceased had “substantial contacts within the building industry” he would arrange to work for. The respondent refers to Humberstone as dealing with the equivalent Victorian provision. The respondent submits “the key issue is what the 1998 Act means, and this is to be determined primarily by a consideration of its text”, referring to Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue.[66]
[66] [2009] HCA 41; 239 CLR 27, [47].
The appellant submits “the Arbitrator failed to consider whether the relevant contract between the deceased and the respondent was ‘outside the scope or course’ of the deceased’s business”. The respondent submits this was not the statutory question, which was whether the work the deceased carried out was “incidental to a trade or business regularly carried on by [him] in [his] own name” (Sch 2 cl 1 of the 1998 Act). The respondent says the Arbitrator did not expressly deal with these words, but it may be inferred he found the relevant work was incidental to the deceased’s trade or business. He cited the relevant passage from Humberstone, and then said he accepted the respondent’s submission, “[t]he evidence in this matter discloses the deceased carrying on a business in his own name for many years”. The respondent had submitted to the Arbitrator, in writing, that the deceased carried out the business of a carpenter in his own name, and the work was incidental to that trade or business.
The respondent submits that the appellant did not actually make a submission, before the Arbitrator, that the work was not incidental to the deceased’s trade or business. Even if the submission was made, the Arbitrator’s finding on this issue was “clearly open”.
Overall, the respondent submits the appellant has not identified error. Even if some error is identified, the Arbitrator’s conclusions were open on the evidence, and consistent with the weight of the evidence. The appeal should fail.
THE NATURE OF THIS APPEAL
Section 352(5) of the 1998 Act provides:
“An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.”
In Raulston v Toll Pty Ltd,[67] Roche DP applied Whiteley Muir & Zwanenberg Ltd v Kerr[68] (cited with approval by Brennan CJ, Toohey, McHugh, Gummow and Kirby JJ in Zuvela v Cosmarnan Concrete Pty Ltd[69]) to the nature of the appeal process involving factual error, pursuant to s 352 of the 1998 Act:
“(a) An Arbitrator, though not basing his or her findings on credit, may have preferred one view of the primary facts to another as being more probable. Such a finding may only be disturbed by a Presidential member if ‘other probabilities so outweigh that chosen by the [Arbitrator] that it can be said that his [or her] conclusion was wrong’.
(b) Having found the primary facts, the Arbitrator may draw a particular inference from them. Even here the ‘fact of the [Arbitrator’s] decision must be displaced’. It is not enough that the Presidential member would have drawn a different inference. It must be shown that the Arbitrator was wrong.
(c) It may be shown that an Arbitrator was wrong ‘by showing that material facts have been overlooked, or given undue or too little weight in deciding the inference to be drawn: or the available inference in the opposite sense to that chosen by the [Arbitrator] is so preponderant in the opinion of the appellate court that the [Arbitrator’s] decision is wrong’.”[70]
[67] [2011] NSWWCCPD 25; 10 DDCR 156 (Raulston).
[68] (1966) 39 ALJR 505, 506.
[69] [1996] HCA 140; 140 ALR 227.
[70] Raulston, [19].
In Davis v Ryco Hydraulics Pty Ltd Keating P observed that these principles “have been consistently applied in the Commission”.[71] The Deputy President in Raulston also cited the following passage from Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd:[72]
“… in that process of considering the facts for itself and giving weight to the views of, and advantages held by, the trial judge, if a choice arises between conclusions equally open and finely balanced and where there is, or can be, no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge.”[73]
[71] [2017] NSWWCCPD 5, [67].
[72] [2001] FCA 1833, [28].
[73] Raulston, [20].
In Northern NSW Local Health Network v Heggie[74] Sackville JA said:
“A fortiori, if a statutory right of appeal requires a demonstration that the decision appealed against was affected by error, the appellate tribunal is not entitled to interfere with the decision on the ground that it thinks that a different outcome is preferable: see Norbis v Norbis [1986] HCA 17; 161 CLR 513, at 518-519, per Mason and Deane JJ.”[75]
[74] [2013] NSWCA 255; 12 DDCR 95 (Heggie).
[75] Heggie, [72].
LEGISLATION
The definition of ‘worker’ in s 4 of the 1998 Act relevantly 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).”
Schedule 1, clause 2 of the 1998 Act relevantly 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
(b) (Repealed)
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.”
CONSIDERATION OF THE ‘WORKER’ ISSUE
The majority of the headings set out above, under which the appellant groups her submissions, describe indicia, accompanied by submissions going to whether the Arbitrator considered them, whether the Arbitrator gave them sufficient weight, and the like. The appellant argues that the Arbitrator erred in how he dealt with the relevant indicia of employment. This is similar to one of the amended grounds argued in Malivanek.[76]
[76] Malivanek, [99].
There is an initial issue which requires resolution, before it is possible to deal with whether there was error in how the Arbitrator dealt with and weighed the indicia. The appellant’s submissions, under the heading ‘The contract between the deceased and the respondent’, deal with the contract pursuant to which the deceased was engaged at the time of his death, and whether the Arbitrator correctly identified that contract. The discussions of the indicia are, in some instances, dependent on whether the Arbitrator erred in how he approached the contract pursuant to which the deceased worked. That argument needs to be addressed at the outset.
Identifying the contract
The reasons dealing with whether the deceased operated a business in the past
In his reasons at [85], the Arbitrator noted a submission by the appellant’s counsel, that:
“… the Commission should examine the terms of this particular contract between the deceased and the respondent, together with the immediate past contract between the deceased and Mr Clark’s maintenance company, rather than overly emphasise the terms of other agreements between the deceased and businesses unrelated to Mr Clark.”
The Arbitrator’s reasoning on the ‘worker’ issue commenced from [87] of his reasons. He correctly identified that the appellant carried the onus of proving that the deceased was a ‘worker’ (or a deemed worker).[77] At the outset, he set out his conclusion, that the contract pursuant to which the deceased was engaged was one for services, rather than a contract of service. In the reasons at [93] to [94], the Arbitrator made a finding regarding the nature of the contract pursuant to which the deceased was engaged by the respondent:
“93. In weighing up the evidence and submissions in this matter, I find that the deceased did not have an obligation to work for the respondent. Rather, the deceased through his own business contracted to carry out work on a site for the respondent. In doing so, the deceased was carrying on his business in a manner perfectly consistent with that which he had over many years. The bundle of documents contained within Exhibit A demonstrates that the deceased invoiced multiple other businesses at varying rates. In doing so, the deceased also charged GST and paid his own income tax from the amounts invoiced. I find that in doing so, the deceased was carrying on his own business rather than operating as an employee of the respondent.
94. Support for this finding is found in the statement of Mr Clark, who noted that the deceased did not constantly work for either of Mr Clark’s companies, and that the deceased would ring him when he was quiet. Mr Clark’s evidence was that prior to the work the deceased carried out in late 2016, he had not seen the deceased for over a year. Likewise, the deceased’s own business records disclose that he had carried out work for multiple other entities in the years leading up to his death at varying rates. Consistent with that evidence is the absence of any material which suggests the respondent had exclusive use of the deceased’s labour, or that it had the right to dismiss or terminate him.
[77] Reasons, [87].
In the reasons at [97], the Arbitrator again referred to the substance of the submission by the appellant’s counsel, set out at [61] above, and continued:
“Nevertheless, the existence of agreements between the deceased and other businesses is still a factor which can be considered by the Commission as evidence of the deceased operating his own business, particularly though not exclusively as it relates to whether or not the respondent had a right to the exclusive services of the deceased. The fact that the deceased provided his services to several different businesses in the two years leading up to his death, rendered all of them tax invoices on a ‘plus GST’ basis and did so at different rates is, in my view suggestive that the deceased was operating as an independent contractor and not as an employee at the time of his death.”
Whether the deceased had an obligation to work for the respondent, whether the respondent had a right to the exclusive services of the deceased, and whether the respondent had a right of termination, were among the indicia (if relevant on the facts) that required consideration, in deciding whether the deceased was employed pursuant to a contract of service. The reasoning above started from the premise that the deceased had been operating a business in the past. The Arbitrator referred to the deceased’s financial records, and moved from that to an acceptance that when the deceased contracted with the respondent, through Mr Clark, this contract was with the deceased’s business, and accordingly it was not a contract of service.
The evidence on this topic
The financial material was under cover of the respondent’s Application to Admit Late Documents dated 13 September 2018 (AALD), which was tendered before the Arbitrator.[78] It included copies of invoices issued by the deceased for days worked from 2 December 2013 to 2 December 2016 (the date of the deceased’s death). The invoices identified the dates when the deceased carried out work, the location, and the hours worked (typically eight hours per day, although sometimes with variations), followed by the labour cost charged for the relevant day. These were issued in the deceased’s individual name. All of the charges were consistent with the basis of payment being on an hourly rate for the deceased’s labour. The invoices had GST added to the totals.
[78] Transcript of Proceedings (T), Marinic v RPC Interiors Management Pty Ltd [2018] NSWWCC 281, Arbitrator Burge, 20 September 2018, T 2.10–3.1.
The respondent (RPC) and Forest Building and Maintenance Pty Ltd (Forest) were both companies associated with Mr Clark, who was the manager of RPC,[79] and who described Forest as his “maintenance company”.[80] Mr Clark’s statement described the deceased as having contracted with RPC.[81] The deceased’s invoices for the period from 12 October 2016 to 2 December 2016 were directed to Forest.[82] The appellant stated that the final invoice dated 4 December 2016 (the only one that related to the Portman Street site) was “incorrectly addressed” (to Forest), but was “actually sent to RPC Interiors Management Pty Ltd and was paid by them”.[83] The invoices to Ultra for the deceased’s labour, during the period when he was “swapped”, were issued by, and Ultra made payments to, RPC.[84] The parties have accepted that RPC is the appropriate respondent in these proceedings. The Arbitrator, setting out the ‘Background’ to the decision, made an apparent finding, not challenged in this appeal, that there was a contract between the deceased and Forest for five weeks up to 17 November 2016, and a further contract between the deceased and RPC from “around 23 November 2016” until the date of death. For the final week of his life, the deceased worked on the Portman Street site for Ultra.[85]
[79] Statement of Robert Clark dated 9 March 2017 (Clark statement), Reply, p 12.
[80] Reply, p 18.
[81] Clark statement, [5]–[6], Reply p 13.
[82] ARD, pp 6–11.
[83] Appellant’s statement, ARD p 2.
[84] Reply, pp 23–25.
[85] Reasons, [7]–[8].
Based on the invoices attached to the AALD, the entities invoiced by the deceased, and over what periods, are set out below in chronological order:
RPC 2.12.13 – 24.1.14
16.6.14 – 23.7.14
Pantheon 20.8.14 – 23.1.15
Chalex 2.2.15 – 26.2.15
Nu Line 10.3.15 – 2.4.15
Pantheon 10.4 15 – 7.5.15
RPC 11.5.15 – 26.8.15
SGB 2.9.15 – 8.8.16
Forest 12.10.16 – 2.12.16
It will be observed that, if Forest and RPC are treated as (for practical purposes from the deceased’s point of view) a single entity under the control of Mr Clark, the invoices are consistent with the deceased contracting with five entities over three years. They are consistent with the deceased contracting with two entities, RPC/Forest and SGB, over the last eighteen months of his working life. It will also be observed that there is no overlap between these engagements. In any given period, the deceased submitted invoices to a single entity.
Some of the invoices have petty cash claims attached to them. By way of example, the invoice dated 3 July 2016 has appended a claim for $31.30 petty cash in the previous week, for liquid cut and polish, vaseline and a velcro strip. That dated 17 July 2016 has a petty cash claim for $55.85 for holesaw, disk cutting and multi-function tool. That dated 31 July 2016 has a claim for paint, scraper and can opener, spray paint primer and spray paint, totalling $112.55, with receipts from Bunnings attached. The invoices to RPC (the respondent) dated 5 and 12 July 2015, when the deceased was engaged by it to perform duties in the Sydney city, included petty cash claims for $30.00 per day for parking. The invoices to Forest dated 13 November 2016 and 20 November 2016 (this is the period of engagement in the last weeks before the deceased’s death) each make a petty cash claim for $9.00 for parking.
The income taxation returns, for the years ending 30 June 2014, 2015 and 2016, are consistent with the deceased conducting a business. They refer to business income, there are deductions for motor vehicle and other expenses, together with depreciation. Preparation of the return for 2015/16 would, of course, have post-dated the deceased’s death.
The appellant’s statement dated 30 April 2018 dealt briefly with the deceased’s work over the years. It stated that, since the deceased was trained to do office fit out work about 30 years ago, he worked in the office fit out and office partitioning field. He did not complete a trade. “He relied on his years of experience to get regular labour work”. He knew a number of businesses and contacts. The appellant said that the deceased did not run a business. “He did no advertising. He did not in any way make himself available to members of the public. He had no firm or business name. He did have an ABN number. He had no employees. He had a work van and lots of tools which he regularly used at work.”[86]
[86] Appellant’s statement, ARD, p 1.
Mr Clark stated that his company was involved in office fit outs. He said he had known the deceased for 15 years, “he comes and goes and rings me when he is quiet as he works for other companies as a carpenter”, although Mr Clarke was “unaware who else he worked for”. Mr Clarke stated that when working for RPC the deceased provided his own tools, was paid at an hourly rate, and paid his own tax. The deceased had an ABN, but not a business or company name. In respect of RPC, the deceased had a verbal contract, there was “no formal written contract or arrangements”.[87]
[87] Reply, p 13.
Other than what is set out above, the evidence is silent regarding what the indicia may have been, when the deceased was engaged in work with other entities over the years. There is, of course, somewhat more evidence dealing with the most recent relationship, between the deceased and the respondent.
Characterisation of the contracts with other entities
In the reasons at [93], the Arbitrator referred to the material attached to the AALD, which demonstrated the deceased invoiced different companies for his labour from time to time, charged GST and paid his own income tax. This is the apparent basis on which the Arbitrator concluded that the deceased was carrying on a business over many years. These matters are potentially consistent with the deceased having carried on a business when working with these other entities. However, such factors are not necessarily determinative. In [88]
“It is also difficult, in my view, to give much independent weight to arrangements about taxation, or even matters such as insurance cover or superannuation. These are reflections of a view by one party (or both) that the relationship is, or is not, one of employment. For that reason, in my view, those matters are in the same category as declarations by the parties in their contract (from which they often proceed). They may be taken into account but are not conclusive. These matters are less important than the adoption by the parties (where this occurs) of rights and obligations which are fundamentally inconsistent with basic requirements of a contract of employment, such as the ability to delegate the discharge of obligations under a contract to another person, or where there is a lack of control over how work is done.”[89]
[88] [2013] FCAFC 3; 209 FCR 146; 295 ALR 407; 235 IR 115 (Trifunovski).
[89] Trifunovski, [37].
In On Call Interpreters Bromberg J, to similar effect, observed:
“Each of these interpreters perceived themselves to be self-employed and had an ABN. Their evidence also indicated that they interacted with the ATO on the basis that they conducted a business. I attach little weight to those indicators. Obtaining an ABN is a simple process in which the existence of a business is not required to be demonstrated. Further, it is not surprising that in circumstances where these individuals perceived themselves to be self-employed that some of the regulatory requirements of a business were in evidence ... In the absence of other indicators of the existence of a business, the fact that some of the regulatory requirements of a business were in place, is likely to have had more to do with an incorrect self-assessed conclusion of the existence of a business than the fact of such a business existing.”[90]
[90] On Call Interpreters, [244].
In considering whether the deceased was conducting a business from 2013 to 2016, when dealing with other entities, there was little evidence before the Arbitrator apart from compliance with some of the regulatory requirements for conducting a business. It is necessary, in seeking to distinguish between a contract for services and a contract of service, to have regard to those indicia which are present and relevant. This involves reference to the contractual terms and relevant work practices. It is necessary to look to the totality of the relationship between the parties.[91] The passage at [93] of the reasons does not draw a clear distinction between the contract involving the deceased and the respondent, applicable at the time of death, and the arrangements in force with other entities previously. This is apparent from the last three sentences of that paragraph, where consideration of the deceased’s previous arrangements, with other entities, moves seamlessly to a finding that “the deceased was carrying on his own business rather than operating as an employee of the respondent”. In the passage of the reasons at [97] there is a similar blurring of the discussion and findings, regarding the previous relationships with other entities, and the relationship between the deceased and the respondent which was in issue.
[91] Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21; 75 ALJR 1356; 106 IR 80; 181 ALR 263 (Hollis), [24].
The issue before the Arbitrator was whether the relationship between the respondent and the deceased, operative at the time of his death, was one of master and servant. This did not require that the appellant establish that the deceased had such a relationship with the other entities he contracted with previously. The Arbitrator dealt with a different question, being whether the deceased was conducting a business over a number of years, and whether the way the deceased contracted with the respondent was consistent with how he had done business over previous years. The Arbitrator asked himself the wrong question. I accept the appellant’s submission that the Arbitrator erred, in failing to properly consider the conditions of the relevant contract in issue, rather than past contracts. The enquiry extends also to the work practices in the employment with the respondent. The approach the Arbitrator took had the clear capacity to affect the result. There was little evidence dealing with the contracts and indicia, relevant to the contracts that predated the dealings with Mr Clark in 2016. There was significantly more evidence dealing with the relationship with the entities controlled by Mr Clark (including the respondent) in 2016, in the weeks before the deceased’s death. If the conclusion about the deceased’s conduct of a business in earlier times was simply carried forward, to characterise the relationship with the respondent in the last weeks of the deceased’s life, this did not have proper regard to the relevant indicia in the later relationship between the deceased and the respondent.
The respondent submits the Arbitrator was not under a duty to make a finding regarding formation of the relevant contract. The Arbitrator was obliged to consider the totality of the relationship between the deceased and the respondent, under the terms of the contract that governed the relationship between the deceased and the respondent at the time of the injury and death, and the work practices imposed.[92] This could not be done without identifying and considering the relevant contract and work practices.
[92] Hollis, [24].
The respondent submits it is not established how the error could have affected the result. This is apparent from the discussion above, dealing with the reasoning at [93]–[94] and [98]. Additionally, the Arbitrator’s consideration of the indicia was affected by the approach which he took. In the reasons at [93] the Arbitrator, on the basis that the deceased was “carrying on his business in a manner perfectly consistent with that which he had over many years”, concluded that the deceased did not have an obligation to work for the respondent. In the reasons at [98], the Arbitrator dealt with whether the respondent had a right to the exclusive services of the deceased. He relied on the deceased having provided his services to several different businesses in the two years leading up to his death, and the associated invoicing arrangements, in concluding the deceased was an independent contractor and not an employee of the respondent. The Arbitrator’s consideration of these indicia, which were decided adversely to the appellant, reflected the conclusion he had reached, that the deceased was previously an independent contractor conducting a business. The consequence was that proper consideration was not given to the indicia applicable to the deceased’s relationship with the respondent. The error affected the result. There is appealable error.
Consideration of the indicia
The remainder of the issues raised by the appellant on this appeal, relevant to Ground No 1 (the ‘worker’ ground), relate to whether there was error in how the Arbitrator dealt with the indicia. The nominated indicia are dealt with below, in the context of whether the alleged errors are made out.
In Stevens Wilson and Dawson JJ said:
“The classic test for determining whether the relationship of master and servant exists has been one of control, the answer depending upon whether the engagement subjects the person engaged to the command of the person engaging him, not only as to what he shall do in the course of his employment but as to how he shall do it: Performing Right Society, Ld. v. Mitchell and Booker (Palais de Danse), Ld. (1924) 1 KB 762. The modern approach is, however, to have regard to a variety of criteria. This approach is not without its difficulties because not all of the accepted criteria provide a relevant test in all circumstances and none is conclusive.”[93]
[93] Stevens, [9].
Their Honours at [11]–[12] said:
“11. The other indicia of the nature of the relationship have been variously stated and have been added to from time to time. Those suggesting a contract of service rather than a contract for services include the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like. Those which indicate a contract for services include work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of 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 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.
12. Having said that, we should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of 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.”[94]
[94] Stevens, [11]–[12].
Method of remuneration
The Arbitrator at [89] of the reasons said:
“The deceased was paid on an hourly basis at a set rate plus GST. Such an arrangement is indicative of that between principal and contractor, as is the fact that the deceased deducted his own income tax and claimed business-related deductions and depreciation on capital equipment in his tax returns.”
The deceased for some years had an ABN, submitted invoices that had a component for GST, and paid his own income tax on the basis that he had a business. The income taxation return for 2015/16 must have been completed and authorised by someone else, as it post-dated the deceased’s death. It is not suggested anything turns on that, it is generally consistent with the pattern of the returns over the previous years. I accept that these factors, in a general sense, are consistent with the proposition that the deceased traded as an independent contractor, rather than entering into a contract of service with the respondent. They are relevant indicia. They are not determinative, and it is necessary that they be considered in context.
The reasons at [89] refer also to the fact that the deceased was paid on an hourly basis. The passage fails to differentiate between the significance of payment on an hourly basis at a set rate, and the significance of GST being added. The fact that pay was made based on a set hourly rate, rather than on “remuneration for a specific outcome”, was regarded by Roche DP, in Malivanek, as tending to suggest that labour was being sold as an employee, rather than as an independent contractor.[95] In On Call Interpreters Bromberg J said of this indicium:
“Its basic premise is that employees are remunerated on a time-basis for the labour provided whereas independent contractors are not and are paid for a result.”
[95] Malivanek, [168].
His Honour went on to consider examples where the premise did not hold good (for example, the bicycle couriers in Hollis were paid per delivery) and said:
“A further caution arises from the fact that whilst a theoretical distinction between a contract for labour and a contract for the product of that labour has its attractions, in practice the distinction is usually illusory. Those observations suggest to me that whilst this indicator will be of some use in an obvious case, its utility in other cases will be much diminished.”[96]
[96] On Call Interpreters, [277].
The way in which the Arbitrator expressed himself, at [89] of the reasons, involved treating the method of remuneration (pay on an hourly basis at a set rate) as a factor consistent with the deceased being an independent contractor. This was erroneous, payment at a set rate on an hourly basis could not represent a factor in any way inconsistent with a contract of employment. The finding to the contrary constituted error. In the circumstances of the case, it is appropriate to regard that aspect of the mode of remuneration as a factor more consistent than not with a contract of employment, but a relatively minor indicator. This is generally consistent with the approach taken in Malivanek.
Set hours of work
The appellant’s counsel made the following submission to the Arbitrator on this point:
“I said already in my preliminary submissions about the hours of work and the fulltime nature of that work, 6.30 to 2.30, seemingly no discretion as to starting and finishing times, they were the work hours on the site and Mr Marinic had to stick to those. He didn’t have any discretion about that. In my submission, that indicates worker.”[97]
[97] T 19.10–16.
The respondent’s counsel responded:
“Again, my friend said that [the deceased] had little discretion about when he started and finished. Again, there’s not very much evidence about that other than he finished at 2.30 at the same time as everyone else. Now, it may be that the building site was only open at that time to be worked at and it may be that he could choose his hours within that time, we just don’t know, there’s no information. Again, I would submit the Commission should be cautious before drawing any inferences.”[98]
[98] T 45.27–46.1.
This indicium was dealt with in the reasons at [91], where the Arbitrator said:
“The evidence discloses that the deceased attended and departed the Portman Street site at the same times each day he worked there in the lead up to his death. Mr Horan submitted this was indicative of control resting in the respondent in the nature of employer over employee. With respect, I do not accept that the evidence is so strong as to allow that inference to be made. Rather, it is apparent that the work site was controlled by Ballast Point Pty Ltd, which retained Ultra as a contractor. The evidence no more suggests the respondent was responsible for and had control of the hours the [deceased] worked than it suggests the working hours were merely set because those were the times the building site was open at the behest of Ballast Point Pty Limited.”
The respondent, on appeal, submits “[t]he appellant did not expressly advance the regularity of the deceased’s work hours as one of the indicia of an employment relationship” (referring to the reasons at [54]). It submits the appellant did submit an inference could be drawn from a comment in Mr Miletic’s statement (“We normally finish up at about 2.30 pm as we started at 6.30 am.”[99]). The respondent submits the Arbitrator’s finding was correct.[100]
[99] Reasons, [47].
[100] Respondent’s submissions, [43]–[45].
The submission noted at [88] above adequately raised the deceased’s set hours at the site as one of the indicia of employment. The Arbitrator was required to deal with the submission, and he did so. The appellant refers to Malivanek at [170], where Roche DP described “regularity of hours” as an issue that “points to an employer/employee relationship”. In Stevens the right to dictate the hours of work was described as an indicium that suggests a contract of service (see [82] above).
The evidence on this topic was that of Mr Miletic. His statement indicates that he had worked for Ultra for about five years, and with the deceased for about five days, having met him on the Portman Street site. Mr Miletic said that he was “the leading hand on the site and would tell [the deceased] what jobs we were to do”.[101] On the topic of hours, he said:
“[The deceased] was packing up tools when the incident happened. This all happened about 2.20 pm. We normally finish up at about 2.30 pm as we started at 6.30 am.”[102]
[101] Statement of Mr Miletic dated 27 March 2017, Reply pp 39–41, [5]–[7], [19].
[102] Miletic statement, Reply p 4, [12].
In Hollis the fact that couriers were required to be at work by a certain time was treated as indicating that they were employees.[103] In On Call Interpreters Bromberg J described a “requirement that a person commence work at a particular time” as “a manifestation of the existence of control by the putative employer”.[104]
[103] Hollis, [49].
[104] On Call Interpreters, [268].
In Re Minister of Immigration, Local Government and Ethnic Affairs v Hamsher[105] the Full Bench of the Federal Court discussed a failure by a judge at first instance to draw an appropriate inference. Beaumont and Lee JJ said:
“The Court must be satisfied that the judgment of the trial judge is erroneous and it may be so satisfied if it reaches the conclusion that the trial judge failed to draw inferences that should have been drawn from the facts established by the evidence. The Court is unlikely to be so satisfied if all that is shown is that the trial judge made a choice between competing inferences, being a choice the Court may not have been inclined to make but not a choice the trial judge should not have made. Where the majority judgment in Warren v. Coombes at pp 552-553 states that an appellate court must not shrink from giving effect to its own conclusion, it is speaking of a conclusion that the decision of the trial judge is wrong and that it should be corrected.”[106]
[105] [1992] FCA 184; 35 FCR 359 (Hamsher).
[106] Hamsher, [24].
The evidence did not touch on why the hours worked by the deceased and Mr Miletic were from 6.30 am to 2.30 pm. The evidence of the hours was found in a statement given to the respondent’s investigator, not further expanded on, and relied on by the respondent. The uncontradicted evidence from Mr Miletic was that the deceased (and others including Mr Miletic) when engaged at the site worked for those regular hours. The invoices show that the deceased worked for eight hours each day that he was on the site, which is consistent with this. There is no indication the hours varied from day to day. If the deceased’s hours were set in a certain way, to reflect the operation of Ultra on the site (for example, when Ultra could access the site), this does not change the fact that the hours were fixed, and the deceased worked them. It can be appropriately inferred the deceased worked those hours because he was required to, having been placed on the site as part of his engagement with the respondent. It was reasonable to draw this conclusion, on the probabilities. It was not “mere conjecture or surmise”. The inference that the deceased did so was compelling, and should have been made.[107] The failure to do so constitutes error of the type identified in Raulston at [19].
[107] Bradshaw v McEwans Pty Ltd [1951] HCA 480; 217 ALR 1, 5, Luxton v Vines [1952] HCA 19; 85 CLR 352, [8].
The finding that the deceased did not have an obligation to work for the respondent
The finding on this issue is at [93] of the reasons, quoted at [62] above. The Arbitrator found the deceased had contracted with other entities in the past, charging GST, paying his own income tax and carrying on his own business. In contracting with the respondent, the deceased was contracting in a way “perfectly consistent” with that adopted in the past, through his own business. The Arbitrator concluded the deceased did not have an obligation to work for the respondent. The appellant submits the finding failed to take account of the contract formed on or shortly before 23 November 2016, when the deceased’s labour was “swapped” to have him work for Ultra. The work was different to what he usually did.[108]
[108] Appellant’s submissions, [26]–[29].
The respondent submits the appellant did not, before the Arbitrator, submit that a direction to work for Ultra, or work as directed by Mr Miletic, was said to be a condition of the contract. It submits that “emphasis” was not placed on the nature of the work or the proposition that it was inconsistent with the deceased’s past work. It submits the Arbitrator did not consider Mr Clark exercised the “requisite degree of control”. [109]
[109] Respondent’s submissions, [46]–[52].
Mr Clark stated:
“7. When [the deceased] was available and I had no work I directed him to Ultra Building Works Pty Ltd this last time, a company I would swap labour with as needed but I would pay [the deceased’s] invoices for time he spent on their work. I am unaware who else he worked for. He conducted work for Ultra for about 2 weeks prior to his death.”
“10. At the time of his death he was working on a job for Ultra Building Works Pty Ltd I believe on a site at Alexandria but I am unaware of details.”
“15. I paid (after his death which was a Friday) the amount that would have been for 5 days work for the week he worked.”[110]
[110] Clark statement, Reply pp 12–14, [7], [10], [15].
Mr Kyra (a director of Ultra) stated:
“6. [The deceased] was provided to us by RPC Interiors Management Pty Ltd as carpenter …
8. Ivan worked on site with one of one [sic, our] employees Zac Miletic …
10. I have attached a copy of [the deceased’s] induction sheet provided by Ballast.
11. [The deceased] was paid by RPC and we had an arrangement with RPC who would invoice my company.
12. On 2/12/2016 I was not on site when [the deceased] passed away. He was not supervised by any of my staff as such but worked with Zac who also was Croatian and would mentor [the deceased].
13. However, as a Director I would visit the site every second day.”[111]
[111] Kyra statement, Reply p 31, [6], [8], [10]–[13].
The appellant stated that the deceased “worked regularly and full time hours”.
The appellant’s counsel, outlining the appellant’s case to the Arbitrator, said:
“… we say that at all material times [the deceased] was effectively contracting to provide labour and carpentry trades work which he was performing himself at all material times and so each contract of service he entered into prior to his passing we say was one that involved his labour.”[112]
[112] T 4.16–20.
The allegation was one that the contract governing the work at Ultra, after Mr Clark “swapped” the deceased’s labour, was for the personal supply of the deceased’s labour. It is consistent with an allegation that the deceased was obliged to work for the respondent, albeit supplying his services to Ultra, which paid RPC for the deceased’s labour. The issue was sufficiently raised at first instance.
The Arbitrator’s reasoning was to an extent circular. Because the deceased previously conducted a business, on this occasion he contracted (consistent with his previous practice) on behalf of his business, as an independent contractor. Because he contracted on that basis, an obligation to work for the respondent was not present, as that is an incident of a contract of service. The way in which this indicium was dealt with constituted error. Rather, it was necessary to consider whether the particular indicium was relevant, and if so, whether it (together with other indicia) supported the proposition that, looking at the totality of the relationship, there was a contract of service.
On the evidence the deceased contracted, on his own account, though Mr Clark. On the Arbitrator’s findings, there was an initial contract by the deceased with Forest, up to about 23 November 2016, followed by a contract with the respondent. The second of these contracts was operative as at the date of the deceased’s death. Mr Clark said the contract was verbal. Mr Clark said that he “directed” the deceased to Ultra, a company he “would swap labour with as needed”. Mr Kyra said the deceased “was provided to us by RPC as carpenter”. Mr Kyra visited the site every second day “as a Director”. Mr Miletic said he was “the leading hand on the site and would tell [the deceased] what jobs we were to do”.[113]
[113] Miletic statement, Reply p 41, [19].
The respondent paid the deceased’s invoices, the respondent invoiced Ultra, which paid the respondent for the cost of the deceased’s labour, plus RPC made a small profit of $2.50 per hour on the deceased’s time. The tax invoice from RPC to Ultra, dated 6 December 2016, covered the period 23 November 2016 to 2 December 2016,[114] which is the full period the deceased worked (on whatever basis) with Ultra. The tax invoice was marked “Re: Labour Hire – Ivan Marinic”. It simply charged for his time, eight hours per day. This was the case both for the five days when he worked at the Portman Street site (28 November 2016 to 2 December 2016), and for the previous three days (23 November 2016 to 25 November 2016).
[114] Reply, p 80.
The invoices covering the period of engagement with Mr Clark’s companies, Forest and RPC, from 12 October 2016 to 2 December 2016, demonstrated that the deceased worked every week, five days per week, for eight (or sometimes nine) hours per day. The exception to this was from 18 November 2016 to 22 November 2016 (when the arrangement moved from Forest to RPC).[115] This would be consistent with the period when Mr Clark had no work for the deceased, before he was directed to Ultra.[116]
[115] Reply, pp 110–117.
[116] Clark statement, Reply p 13, [7].
The regularity of the deceased’s hours of work was consistent with him being under an obligation to work for the respondent (and Forest before it). The description in the RPC tax invoice dated 6 December 2016, of the arrangement as one of “Labour Hire”, was consistent with the deceased being under an obligation to work for the respondent. A labour hire arrangement between RPC and Ultra, if the person the subject of the arrangement was not under an obligation to work for RPC, would be nonsensical. While the deceased was engaged by Forest, and then by RPC, he worked only for these entities (see the discussion at [65] to [68] above). This is all consistent with the deceased being under an obligation to work for Forest, followed by RPC. None of the evidence, dealing with the basis on which the deceased carried out his work activities with Forest and the respondent, suggested otherwise. The evidence strongly supported the proposition that the deceased was under an obligation to work for the respondent. There is error of the type identified in Raulston at [19].
Respondent’s right to exclusive services of the deceased
The Arbitrator’s finding on this indicium is at [94] of the reasons, quoted at [62] above. He relied on Mr Clark’s evidence that the deceased did not “constantly work” for either of his companies. Mr Clark had not seen the deceased for over a year when the deceased came to him in 2016, the deceased would “ring him when he was quiet”. The Arbitrator said the deceased’s records disclosed that he worked for “multiple other entities in the years leading up to his death”. The Arbitrator concluded there was an “absence of any material which suggests the respondent had exclusive use of the deceased’s labour, or that it had the right to dismiss or terminate him.” The appellant submits the issue was not whether the deceased worked for various entities in the past, but whether there was an exclusive right to the deceased’s services pursuant to the contract formed around 23 November 2016. The respondent accepts the focus was on the contract between the parties, but submits the past patterns of work and billing shed light on the most recent contracts.
The pattern in the past was that, when the deceased contracted with a company of Mr Clark’s, he worked only for that company. This applied also when he contracted with other entities (see the discussion at [65] to [68] above). Perusal of the deceased’s invoices attached to the AALD, with odd exceptions, is consistent with the deceased, when working for an entity, working full days of eight hours, sometimes more. It is consistent with the deceased generally working four to five days per week. The invoices are consistent with the deceased only working for one entity at any given time, there is not overlap between the entities the deceased invoiced. This is consistent with the entities the deceased contracted with in the past, during the currency of a contract, having exclusive rights to the deceased’s services.
On the Arbitrator’s findings, the final contract the deceased entered into was with the respondent, from about 23 November 2016. The invoices demonstrate that he worked eight hours per day from Wednesday 23 November 2016 to Friday 25 November 2016, and eight hours per day from Monday 28 November 2016 to Friday 2 December 2016, when he died at work.[117] There is nothing to suggest that he worked elsewhere over that time. This is consistent with the respondent having an exclusive right to the deceased’s services. Mr Clark, the respondent’s director, swapped the deceased’s services to place him at Ultra, when the respondent did not have work for him. The respondent described this as a “Labour Hire” arrangement to Ultra, which it billed for the deceased’s labour. Such an arrangement, by its very nature, required that the respondent have a right to the exclusive services of the deceased, for it to be able to place him with Ultra for a given period.
[117] Reply, pp 110–111.
The evidence strongly supported the proposition that the respondent had a right to the exclusive services of the deceased. The finding to the contrary involved error of the type identified in Raulston at [19].
Lack of right to delegate
The Arbitrator dealt with this at [96] of the reasons:
“There is no suggestion the deceased had the right to delegate his work for the respondent to another person. That indicium is suggestive of an employment relationship between the deceased and the respondent, though it should be noted that the deceased’s business did not employ any other people.”
The appellant submits the Arbitrator failed to give sufficient weight to this indicium,[118] quoting the following passage from Malivanek:
“The power to delegate is an important factor in deciding whether a worker is a servant or independent contractor (Stevens v Brodribb at 26, citing Australian Mutual Provident Society v Chaplin [1978] UKPC 7; (1978) 52 ALJR 407). Regrettably, the evidence does not directly deal with whether Mr Malivanek could have delegated the work on 22 March 2007. Given Mr Tully’s request for assistance, because of his lack of experience in installing skylights, and given Mr Malivanek’s experience, it seems logical that Mr Ring contacted Mr Malivanek with the intention of engaging him to do the work. It is therefore a reasonable inference to conclude that, had someone else turned up in Mr Malivanek’s place, say, for example, his brother Tom, then that would not have been acceptable to Mr Ring. This strongly points to an employer/employee relationship.”[119] (emphasis in original)
[118] Appellant’s submissions, [36].
[119] Malivanek, [174].
The respondent submits it is unclear how much weight this factor was given, but the Arbitrator has found it was outweighed by other factors. The respondent submits the weight to be given to any particular factor will “depend upon the circumstances of the case”, the correct approach is multifactorial, it is necessary to consider the totality of the relationship, it is the substance or reality of the relationship which must be identified. The respondent refers to Stevens and On Call Interpreters. The respondent submits it cannot be said that “the right to delegate (or lack of it) should always be regarded as an important factor”.[120]
[120] Respondent’s submissions, [66]–[69].
Having found that there was not a right to delegate, the Arbitrator referred to the fact that the “deceased’s business” did not employ any other people. The significance of this observation was not expanded on. If delegation were possible, it would not necessarily have been restricted to servants of the deceased (had there been any). The Arbitrator’s reasons did not identify whether the lack of a right to delegate was treated as an important indicium in the overall circumstances of the matter or not. He described it as “suggestive” of an employment relationship. The reference to the absence of employees of the deceased was perhaps meant to limit the significance of this factor, on the basis it would have been less likely the deceased would seek to delegate in the absence of employees he could delegate to. This was unclear.
In Stevens Mason J described the right to delegate as “an important factor in deciding whether a worker is a servant or an independent contractor”,[121] referring to Australian Mutual Provident Society v Chaplin.[122]
[121] Stevens, per Mason J, [13]. See also Trifunovski, [102], On Call Interpreters, [284].
[122] [1978] UKPC 7; 18 ALR 385, 391.
It is not suggested by either party that the Arbitrator erred, in finding that there was no right to delegate. Beyond the discussion at [96] of the reasons, the reasons are silent regarding the significance of this indicium to the reasoning. The Arbitrator concluded that there was not a right to delegate, and that this was suggestive of the existence of a contract of employment. The reasoning did not go beyond this. It was then necessary that this factor be considered, in balancing the indicia and considering whether, on the totality of the relationship, a contract of service existed. The failure to do so involved error, in that there was a failure to take account of a material consideration.[123] It is error of the kind identified by Hayne J in Waterways Authority v Fitzgibbon:
“… because the primary judge was bound to state the reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Understanding the reasons given at first instance in that way, the error identified in this case is revealed as an error in the process of fact finding. In particular, it is revealed as a failure to examine all of the material relevant to the particular issue.[124]
[123] House v The King, 505.
[124] [2005] HCA 57; 221 ALR 402; 79 ALJR 1816 (Waterways Authority), [130].
The right of direction and control over the deceased
The Arbitrator made findings relevant to ‘control’ at [99] to [100] of the reasons:
“99. I have little difficulty in finding that the respondent’s site foreman exercised a substantial degree of control over the deceased at Portman Street. Nevertheless, as Dr Lucy pointed out, a site foreman will nearly always be present on a building site, and their mere presence does not mean that independent contractors are not present on the same work site.
100. In relation to the aspect of control, I accept the evidence of Mr Miletic, whose evidence clearly demonstrated that he decided not only which tasks were to be carried out, but what part of those tasks would be undertaken by him and the deceased respectively. That is to say, once the deceased presented himself for work each day at Portman Street, he operated under the direction of Mr Miletic.”
The appellant submits that the Arbitrator stated, in his reasons at [21], that control was the “principal criterion” of whether an employment relationship exists. Having made the above findings relevant to control, it is submitted the Arbitrator then failed to give the indicium of control full and proper weight.[125]
[125] Appellant’s submissions, [37]–[40].
The respondent submits that ascribing weight to a factor involves an exercise of discretion, such that a challenge on appeal on the basis of the ‘weight’ of evidence raises the principles in House v The King. The respondent submits it is not proper or lawful for the Commission to intervene on such a basis, referring to Heggie at [72] (quoted at [56] above). The respondent submits the Arbitrator did not find the respondent exercised control over the deceased. The Arbitrator rejected the argument that the deceased’s regular hours of work were indicative of control consistent with a contract of service. The Arbitrator found that the deceased did not have an obligation to work for the respondent. The Arbitrator found that the deceased was under the direction of Mr Miletic, but Mr Miletic was not an employee of the respondent. The respondent submits that direction by Mr Miletic was “not relevant, in the absence of evidence that the respondent controlled him”.[126]
[126] Respondent’s submissions, [73]–[75].
The respondent submits that, even if a degree of control were to be found, this is not determinative, it depends on the totality of the relationship. Reference is made to Boylan Nominees[127] and Hollis. The submission refers to the Arbitrator’s recognition that the bicycle couriers in Hollis were found by the High Court to be independent contractors, notwithstanding evidence of a significant degree of control. The finding in the High Court was to the contrary,[128] as the Arbitrator recognised in the reasons at [23] to [25]. The respondent submits the appellant is effectively submitting that control should be treated as determinative, whereas there is “an increasing emphasis upon the totality of the relationship”.[129]
[127] Boylan Nominees, [54], referred to in the reasons, [21].
[128] Hollis, [61].
[129] Respondent’s submissions, [77]–[81].
Denham v Midland Employers Mutual Assurance Ltd[130] involved an issue regarding whether there was a contract of service between a workman, provided by his original employer to help another company (the host employer) with work, and the host employer. The original employer continued to pay the workman’s wages, and it alone had the power to dismiss him. The workman worked alongside workers employed by the host employer, and was subject to the specific direction of the host employer’s foreman. Romer LJ said:
“There is a clearly marked distinction between the transfer of a servant on the one hand and the transfer only of his services on the other.”[131]
[130] [1955] 2 QB 437 (Denham).
[131] Denham, 447.
Referring to the direction of the workman by the host employer’s foreman, his Lordship said:
“Further, the inference I draw from the arbitrator’s findings is that the reason why he subjected himself to the control of [the host employer] as to what he did and how he did it is that [the original employer] told him to do so.”[132]
[132] Denham, 446.
Denham was discussed in a review of the authorities by Buchanan J in Trifunovski.[133]
[133] Trifunovski, [50]–[51].
It is inherent in the appellant’s submission, about the degree of control exercised by Mr Miletic, that control exercised by Ultra should be treated as if it were control exercised by the respondent.[134] The respondent’s submissions are to the contrary; it argues that Mr Miletic was not an employee of the respondent. The respondent submits that direction of the deceased by Mr Miletic was not relevant, in the absence of evidence that the respondent controlled him.
[134] Appellant’s submissions, [37]–[40].
It is common ground that the deceased’s contract remained with one of Mr Clark’s companies (RPC on the Arbitrator’s finding) from 23 November 2016 to 2 December 2016, while the deceased was placed with Ultra. The deceased’s invoices over that period were submitted to Forest or RPC (there was an error, according to the appellant’s statement, about who the final invoice was addressed to) and were paid by RPC. Ultra paid RPC’s invoices directed to it, for the deceased’s labour cost.
There is limited direct evidence regarding the basis on which control over the deceased was exercised by either RPC or Ultra. The evidence of Mr Miletic is summarised at [93] above. Relevant passages from the statements of Mr Clark and Mr Kyra are set out at [99] to [100] above. The invoices to Ultra, generated by RPC, for payment of the labour cost of the deceased, described the arrangement as “Labour Hire”. RPC made a small profit on the labour rates for the deceased. Hiring out the deceased to Ultra was part of the business operations of RPC.
Mr Clark said he “directed” the deceased to Ultra, “a company I would swap labour with as needed”. This evidence was clearly reflective of control. The control extended to directing the deceased, from 23 November 2016, to work in the operations of another company, Ultra, which Mr Clark was in the practice of swapping labour with. Mr Kyra said that the deceased worked with Mr Miletic, who would “mentor” him. Mr Miletic said he had worked with Ultra for “about 5 years”, and “was the leading hand on the site and would tell [the deceased] what jobs we were to do”. When the deceased was placed in that work by RPC, it was inherent that the day to day control of the deceased passed to Ultra, which was paying on an hourly basis for the deceased’s labour cost. There was no contract between the deceased and Ultra. The deceased’s submission to direction by Ultra can only be viewed as a manifestation of the control exercised by the respondent over the deceased, it having placed him in that work situation.
The Arbitrator’s findings at [99] to [100] of the reasons involve acceptance that, whilst working at the Portman Street site, under contract with the respondent, the deceased worked under the day to day control of Mr Miletic. The Arbitrator did not say whether he accepted that such control was consistent with control by the respondent or not. He did not engage in an analysis of the extent to which his finding of control at the site was probative of the appellant’s case on ‘worker’. He referred briefly to the fact that the deceased did not advertise, which he described as not of great significance. The Arbitrator then made an ultimate finding of fact on the ‘worker’ issue:
“For these reasons, and taking into account both the evidence before the Commission and the very helpful submission of counsel for the parties, I find that the relationship between the deceased and the respondent was one of principal and contractor.”[135]
[135] Reasons, [102].
The Arbitrator, earlier in the reasons, described the right of control as the “principal criterion” in determining ‘worker’, and quoted from the judgment of Wilson and Dawson JJ in Stevens, where it is said that the control test “remains the surest guide to whether a person is contracting independently or serving as an employee”.[136] The appellant submits the Arbitrator failed to give this indicium “full and proper weight in balancing the relevant indicia to determine whether the deceased was a worker or an independent contractor”. There is no indication of what weight was given to the indicium of control, or how it was balanced with the other indicia. There is error in the failure to consider and balance the indicia, including that of control, in considering the totality of the relationship, to determine whether the deceased was employed pursuant to a contract of service. Again, it may be understood as error of the kind referred to by Hayne J in Waterways Authority at [130].
[136] Reasons, [21].
The ultimate question/entrepreneur test
The Arbitrator, in the reasons at [33], set out a passage from the decision of Roche DP in Malivanek, in which the Deputy President quoted from On Call Interpreters:
“207. In the pursuit of greater simplicity and clarity it is of assistance that the majority in Hollis, whilst applying a multi-factorial approach, provided a focal point around which relevant indicia can be examined. That focal point has been elsewhere expressed as the ‘ultimate question’ posed by the totality approach: Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215 at [34] (referred to with approval by Crispin P and Gray J in Yaraka Holdings Pty Ltd v Gilgevic (2006) 149 IR 339 at [303]); and see Sappideen C, O’Grady P and Warburton G, Macken’s Law of Employment, (6th ed, Lawbook Co, 2009), at [2.80]. As Wilson and Dawson J in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 observed at 35 ‘the ultimate question’ was posed by Windeyer J in Marshall v Whittaker’s Building Supply Co Ltd (1963) 109 CLR 210 at 217, in a passage which the majority in Hollis strongly endorsed at [40]. The majority in Hollis (citing Windeyer J) said, the distinction between an employee and an independent contractor is ‘rooted fundamentally’ in the fact that when personal services are provided to another business, an independent contractor provides those services whilst working in and for his or her own business, whereas an employee provides personal services whilst working in the employer’s business: at [40]. Unless the work is being provided by an independent contractor as a representative of that entrepreneur’s own business and not as a manifestation of the business receiving the work, the person providing the work is an employee: Hollis [39], [40], [47], and [57] and see Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161 at [30]–[32]. The English courts have taken a similar approach. There the ‘entrepreneur test’ seems to be the dominating feature: Selwyn NM, Laws of Employment (2006) Oxford University Press at [2.34].
208. Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work, may be posed and answered as follows:
Viewed as a ‘practical matter’:
(i) is the person performing the work an entrepreneur who owns and operates a business; and,
(ii) in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?
If the answer to that question is yes, in the performance of that particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee.”
The appellant submits that the Arbitrator, after setting out the passage, failed to apply it. She submits the deceased supplied personal labour services to the respondent and Ultra, working in the respondent’s business rather than as a representative of his own business. She submits this is supported by the statements of Mr Kyra and Mr Miletic. It is supported by the appellant’s statement. The appellant submits the degree of control and direction exercised by Mr Miletic also supports this submission.
The respondent submits that, although the above is a “useful guide”, it is not an error to determine the question in another way. The respondent refers to other indicia which are submitted to support the contrary position. The deceased’s taxation arrangements, that he brought his own tools, that he was not paid holidays, that he did not constantly work for either of Mr Clark’s companies, the lack of an exclusive right to the deceased’s labour or a right to dismiss, are referred to. The respondent submits the appellant’s evidence that the deceased did not run a business is inconsistent with his tax returns and charging of GST.
The appellant did not, in his submissions before the Arbitrator, refer to On Call Interpreters, or submit on the basis of the ‘ultimate question’ or ‘entrepreneur test’. The respondent, in its submissions before the Arbitrator, did refer to On Call Interpreters, and specifically to the passage at [207] which was quoted by the Arbitrator. The respondent submitted to the Arbitrator that the appellant should fail, on the basis of the passage, saying:
“Applying the test as stated by Bromberg J, the work was being provided by the deceased as an independent contractor as a representative of his own business as an entrepreneur, and not as a manifestation of the respondent’s business.”[137]
[137] Respondent’s outline of submissions before the Arbitrator, [10]–[13], [16].
Failure by an arbitrator to address a matter not raised does not constitute legal error.[138] The argument articulated at [133] above is made by the appellant for the first time on this appeal. It follows that the Arbitrator did not err in failing to deal with this argument by the appellant. The Arbitrator did err in failing to deal with the respondent’s argument based on the same authority.[139] That is not an error that is raised or relied on by the respondent in this appeal. It follows that the appellant cannot establish appealable error on this basis.
[138] Watson v Qantas Airways Ltd (2009) 75 NSWLR 539; 7 DDCR 113, [13], Brambles Industries Limited v Bell [2010] NSWCA 162; 8 DDCR 111, [30].
[139] Waterways Authority, [130].
CONCLUSION
It follows from the above that the what I have described as Ground No 1 is made out. This is sufficient that the appeal succeeds. It is unnecessary in the circumstances to deal with Ground No 2. Various errors have been identified in this appeal, going to how the Arbitrator identified and considered the contract and associated work practices, in the relationship between the deceased and the respondent. Errors have been identified in how various of the indicia of employment were dealt with. It is appropriate that the matter be remitted to another arbitrator for re-determination.
DECISION
The Arbitrator’s Certificate of Determination dated 18 October 2018 is revoked.
The matter is remitted for re-determination by another arbitrator.
Michael Snell
DEPUTY PRESIDENT
26 March 2019
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