Mark Scott v Aqua Environmental Pty Ltd T/A Aqua Environmental

[2010] FWA 8676

Note: An appeal pursuant to s.604 (C2010/5762) was lodged against this decision - refer to Full Bench decision dated 15 February 2011 [[2011] FWAFB 989] for result of appeal.

[2010] FWA 8676

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mark Scott
v
Aqua Environmental Pty Ltd T/A Aqua Environmental
(U2010/11813)

COMMISSIONER BISSETT MELBOURNE, 12 NOVEMBER 2010

Application for unfair dismissal remedy - whether an employee or contractor- minimum employment period.

[1] On 24 August 2010 Mr Mark Scott (the Applicant) lodged an application for an unfair dismissal remedy in accordance with s.394 of the Fair Work Act 2009 (the Act) against Aqua Environmental Pty Ltd t/as Aqua Environmental (the Respondent) (Aqua Environmental).

[2] Mr Scott’s employment was terminated on 16 August 2010.

[3] On 27 August 2010 the Respondent submitted material in which it raised a jurisdictional objection to the application on the basis that the Applicant was a contractor for part of the period in question and hence did not have 12 months’ employment with the Respondent. As the Respondent has less than 15 employees the Applicant therefore could not make a claim for unfair dismissal.

[4] This decision deals with the jurisdictional objection relating to the Applicant’s status with the Respondent. If he was a contractor for the period in question he will not be protected from unfair dismissal as he will not have completed the minimum employment period. 1

[5] This matter was listed for hearing on 15 October 2010. Attempts to contact Aqua Environmental prior to the hearing to confirm its attendance (particularly as it was now Sydney-based) were unsuccessful. At the hearing it became apparent that the submissions of Aqua Environmental dated 8 October 2010 in relation to the jurisdictional objection had not been forwarded to Mr Scott. I therefore determined on transcript that this material should be sent to Mr Scott and that he be given some time to respond in writing to that material.

[6] During the hearing an email was received from the Director of Aqua Environmental apologising that he was overseas and unable to attend the hearing.

[7] I therefore issued directions for the lodgement of written material by both parties.

Background

[8] Aqua Environmental undertakes work with respect to water main leak detection, water loss management and pipeline condition assessment.

[9] The Applicant signed a contract with the Respondent on 1 July 2009 (the first contract).

[10] The Applicant signed a further contract with the Respondent on 15 September 2009 (the second contract). This contract is not disputed to be an employment contract.

[11] At issue is the status of the contract signed on 1 July 2009 by the Applicant. The Applicant says that this contract was an employment contract. The Respondent says that the contract signed on 1 July was a contract for services and therefore the Applicant was a contractor up until 17 September 2009, when the contract of employment signed on 15 September became effective. As such the Respondent says the Applicant did not have 12 months’ service at the time of the termination of his employment. The application for remedy from unfair dismissal is therefore not within the jurisdiction of Fair Work Australia.

[12] The matter in dispute goes to the status of the Applicant for the period 1 July 2009 - 17 September 2009.

Contractor or employee?

[13] In Abdullah v Viewdaze Pty Ltd 2the Full Bench of the Australian Industrial Relations Commission set out in some detail the relevant jurisprudence with respect to the question of determination of whether a person is a contractor or employee. I do not intend to repeat that here. I adopt the approach of the Full Bench.

1. Was the Applicant conducting a business of his own?

[14] There is no evidence or submission that the Applicant was conducting a business of his own. Mr Scott admits that he applied for an ABN but says that this was at the direction of Aqua Environmental. 3

[15] The Respondent claims that, on commencement of employment, Mr Scott sought to be engaged as a contractor ‘as he wanted the greater flexibility (and higher weekly pay) of an independent contractor.’ Further, the Respondent submits that Mr Scott subsequently became an employee at his own choosing. 4

[16] The Respondent says that Mr Scott obtained an ABN and that the completion of an Australian Taxation Office (ATO) website ‘contractor/employee decision making tool’ showed Mr Scott to be a contractor.

2. The nature of the work performed and the manner in which it is performed.

[17] Once engaged by Aqua Environmental, Mr Scott performed work as allocated to him by Aqua Environmental. Aqua Environmental held contracts with water companies such as Yarra Valley Water. Each morning he (and others) would arrive at the office of the company and be allocated a map relevant to underground water mains that he was required to work on. The work involved testing pipes for leakages, cracks, pipe condition etc. Once allocated for the day Mr Scott would proceed to the required location. If he finished the work allocated, his submission is that he was then required to connect with the ‘other guys’ to get more maps 5 (and, it appears, more work).

[18] Mr Scott submits that, prior to commencing work for Aqua Environmental, he had no knowledge or experience as a leak detection technician. 6

3. The terms of the contract

[19] Unfortunately the contract allegedly signed on 1 July 2009 is not available to me. The Respondent has not provided a copy of that contract. The Respondent submits however that Mr Scott ‘was made clearly aware that he was engaged as an independent contractor on July 1 2009’ and that he ‘applied for, and received his ABN...’ 7

[20] The Applicant says the 1 July 2009 contract was a contract of employment and has produced such a contract. 8 This contract is dated 1 July 2009 and is an employment contract between Mr Scott and Aqua Environmental. Unfortunately it is not signed. It is the only document produced that bears any relationship to the engagement on 1 July 2009.

[21] Mr Scott says the second contract, signed on 15 September 2009, was done in response to an approach from Mr Chapman of the Respondent who advised that he (and others) ‘would all be switched to a PAYE payment method...At this point it was [Mr Scott’s] understanding that [he] was acknowledging a change in payment method and nothing further as it was always [his] belief that [he] was a full time employee of the company.’ 9

4. The indicia of an employment relationship

(i) Whether (the employer) exercises, or has the right to exercise control over the manner in which the Applicant’s work is performed, place of work, hours of work and the like.

[22] Mr Scott submits that he worked at the direction of Aqua Environmental at all times. He was allocated work each morning upon attendance at the office. This included advice as to who he would be working with. He worked from 6.00am to 2.30pm each day with any changes in hours at the direction of the Respondent. 10

[23] The Respondent alternatively submits that Mr Scott ‘had control of when he worked and when he didn’t’. 11 Mr Scott says he could not pick and choose his hours and says that if he wanted time off this could be requested.12

(ii) Whether the Applicant works for others (or has a genuine and practical entitlement to do so).

[24] The Respondent maintains that Mr Scott could ‘seek and complete work for other companies; the fact that he didn’t take this opportunity should have no bearing on this case.’ 13

(iii) Does the Applicant have a separate place of work and/or advertise his or her services to the world at large?

[25] There is nothing to indicate that Mr Scott had a separate place of business or advertised his services in any way.

(iv) Whether the Applicant provides or maintains significant tools or equipment.

[26] Mr Scott submits that all of his tools, equipment and clothing were supplied to him by the Respondent. In addition, a vehicle for transport to and from work sites and the petrol for this vehicle were also supplied by the Respondent. 14 This is not disputed by the Respondent.

(v) Whether the work can be delegated or subcontracted.

[27] Again, the Respondent says that Mr Scott could have delegated or subcontracted the work out and ‘the fact he didn’t take this opportunity should have no bearing on this case.’ 15

(vi) Did Aqua Environmental have the right to suspend or dismiss the Applicant engaged?

[28] There is no evidence or material that would assist in drawing a conclusion on this matter.

(vii) Was the Applicant presented to the world at large as an emanation of the business?

[29] Mr Scott wore the uniform provided by Aqua Environmental and drove a vehicle provided by Aqua Environmental. To all intents and purposes of the world at large he worked for Aqua Environmental.

(viii) Was income tax deducted from remuneration paid to the Applicant?

[30] It does not appear that this is the case.

(ix) Was the Applicant paid a periodic wage or salary or by reference to completion of tasks?

[31] Mr Scott was paid each week on the submission of an invoice that showed no more than the hours he worked. These invoices tend to support the regularity of the hours Mr Scott worked and his payment was based on hours worked with no reference to the actual work he undertook. He received a fixed hourly rate for the work done.

(x) Was the Applicant provided with paid holidays or sick leave?

[32] Mr Scott does not appear to have been provided with paid sick leave or annual leave.

(xi) Did the work performed by the Applicant involve a profession, trade or distinct calling on the part of the person engaged?

[33] This is not the case. The Applicant was a leak detection technician. His training was provided by the Respondent. Such a job does not appear to be a distinct trade or calling in Victoria (such that it requires the completion of an apprenticeship or traineeship), nor is it a profession such that university qualifications are required.

(xii) Whether the Applicant created goodwill or saleable assets in the course of his or her work.

[34] It is apparent that, in working in the livery of Aqua Environmental, any goodwill created by Mr Scott would be to the benefit of the Respondent in this matter.

(xiii) Whether the Applicant spends a significant proportion of his remuneration on business expenses.

[35] There is no evidence or submission to suggest that Mr Scott spent any of his remuneration on business expenses. He submitted invoices to the Respondent on a lap top provided by the Respondent, his uniform and car were provided by the Respondent and his training was provided by the Respondent (seemingly at no cost to the Applicant). There is no suggestion he ran his own business premises or had any other expenses.

Findings

[36] That Mr Scott has an ABN does not make him a contractor. The nature of the relationship between the Applicant and Respondent as determined on the basis of the information set out above is the critical consideration. That the completion of the ATO on-line tool showed Mr Scott to be a contractor does not make him so. The answer from the on-line tool is dependent on the information provided. I do not consider the existence of an ABN nor the on-line tool result as critical in determining if Mr Scott was an employee or contractor.

[37] There is nothing before me that would enable me to conclude that Mr Scott was carrying out work to his own benefit.

[38] The work performed by Mr Scott and the manner in which it was performed for the period 1 July 2009 to 17 September 2009 does not suggest it was being carried out in nay different manner to the work he carried out as an employee from 17 September 2009.

[39] The absence of the actual contract purported to have been signed by the Applicant and Respondent on 1 July 2009 means that my decision can only be made on the basis of statements and submissions made by the parties. I have nothing to suggest that Mr Scott was engaged as a contractor, and signed a contract as such, from 1 July 2009.

[40] On the basis of the material submitted to me, and in considering each of the indicia above, I find that Mr Scott was an employee of the Aqua Environmental for the period 1 July 2009 until 17 September 2009. Mr Scott was an employee of the company from 17 September 2009 until his employment was terminated. There is not enough evidence that would enable me to conclude that Mr Scott was a contractor.

[41] Mr Scott was therefore employed by Aqua Environmental for a period of greater than 12 months at the time of the termination of his employment.

[42] Fair Work Australia has jurisdiction to deal with the application.

[43] The jurisdictional objection is dismissed and the matter will be listed to deal with the substantive application.

COMMISSIONER

Appearances:

M. Scott, on his own behalf.

Hearing details:

2010.

Melbourne:

15 September.

Final written submissions:

Applicant, 4 November 2010.

Respondent, 28 October 2010.

 1   s.382(a).

 2   PR927971, AIRC (14 May 2003).

 3   Applicant’s submission, 7 October 2010, paragraph 16.

 4   Respondent’s submission, 8 October 2010.

 5   Transcript, PN64.

 6   Applicant’s submission, 4 November 2010, paragraph 8.

 7   Respondent’s submission, 28 October 2010, paragraphs 1 and 4.

 8   Applicant’s submission, 7 October 2010.

 9   Applicant’s submission, 4 November 2010, paragraph 3.

 10   Applicant’s submission, 4 November 2010, paragraph 7.

 11   Respondent’s submission, 28 October 2010, paragraph 8.

 12   Applicant’s submission, 4 November 2010, paragraph 7.

 13   Respondent’s submission, 28 October 2010, paragraph 11.

 14   Applicant’s submission, 7 October 2010, paragraph 9.

 15   Respondent’s submission, 28 October 2010, paragraph 10.

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