Matthews v Mainstream Marketing Pty Ltd

[1997] IRCA 62

DECISION NO:62/97

CATCHWORDS

INDUSTRIAL LAW - UNLAWFUL TERMINATION - JURISDICTION - EMPLOYMENT RELATIONSHIP - EMPLOYMENT CONTRACT - SERVICES CONTRACT - whether employee or contractor.

Workplace Relations Act 1996 (Cth)





 

MATTHEWS v MAINSTREAM MARKETING PTY LTD
VI96/2151


Before:  MURPHY JR
Place:  MELBOURNE
Dates of Hearing:     28 FEBRUARY 1997
Date of Judgment:    28 FEBRUARY 1997

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI96/2151

BETWEEN:

DANIEL SCOTT MATTHEWS
Applicant

AND

MAINSTREAM MARKETING PTY LTD
Respondent

BEFORE:     MURPHY JR
PLACE:       MELBOURNE
DATE:          28 FEBRUARY 1997

MINUTES OF ORDERS

THE COURT ORDERS THAT:

1. The application is dismissed.

Note: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI96/2151

BETWEEN:

DANIEL SCOTT MATTHEWS
Applicant

AND

MAINSTREAM MARKETING PTY LTD
Respondent

BEFORE:     MURPHY JR
PLACE:       MELBOURNE
DATE:          28 FEBRUARY 1997

REASONS FOR DECISION
Delivered ex tempore - revised from the transcript

The Court is required to determine a preliminary issue whether the applicant is covered by the provisions of the Workplace Relations Act 1996 (Cth) (“the Act”) on the basis that he was an employee.  The respondent took the preliminary point that the applicant's retainer with it was not as an employee but was as a consultant or contractor.  Evidence was led from the applicant, Mr Laurie Arthur, the Managing Director of the respondent, from two consultants to the respondent, and a personnel agent on the point.  I will not rehearse the evidence.

It was the applicant's case that he was employed by the respondent on a wage of $500 a week from early April 1996 until early July 1996.  He said that he was required to work fixed hours of work, and was acting under the direction of Mr Arthur and also Mr Arthur's son.  The respondent's case was that the applicant was a contractor and not its employee.  There was a stark difference in the evidence.  In particular, the applicant's evidence was that he was told by Mr Arthur that he would have to fix up his own taxation.  Mr Arthur, on the other hand, denied that.

The applicant is a graphic artist.  In evidence Mr Fargher, a personnel agent, detailed the arrangement that he had with the applicant.  Before April the applicant was on the books of the personnel agency, Desktop People, and Mr Arthur contacted Desktop People indicating that he had a need for a graphic artist. Mr Arthur gave evidence of the financial difficulties or stringency that the respondent was in at the time.  He conveyed that to Mr Fargher, and also said he conveyed it to the applicant in the initial meeting.

Mr Arthur's evidence was that he made it clear to Mr Fargher, and also to the applicant, that the work that he had available was only of a temporary nature and that he was at that stage endeavouring to find additional financial resources for his company.  At the same time he was working on a major project that was to generate the additional funding on which the applicant was to do graphic artwork.  The respondent called two witnesses to say that the applicant had told them that he was his own boss and paid his own tax.  The applicant admitted that none of the usual indicia of employment like a tax file number were discussed between himself and Mr Arthur.

Mr Arthur's evidence was that he told the applicant in their initial meeting that his company did not employ anybody, and that he was not employing the applicant.  This evidence was not the subject of any cross-examination.  The applicant, when he was cross-examined in relation to his evidence, was evasive and non-responsive.  Mr Arthur tendered a letter (Exhibit A1) that was written on 19 July 1996, prior to these proceedings being issued, to the Department of Social Security.  The letter reads:

“As he [the applicant] has constantly maintained and to quote him directly, “I do not work for you and you are not my employer, I work for myself.””

Mr Arthur's evidence that the applicant had maintained, while engaged by the respondent, that he was his own boss is to the extent that it is contained in the letter of 19 July 1996, protected from an allegation that it is recent invention.  This leads me to the conclusion that where there is conflict in the evidence between the applicant and Mr Arthur, I prefer the evidence of Mr Arthur.  His evidence was in general terms put to the applicant in his cross-examination, and it was consistent with the evidence from the three witnesses that he called to corroborate his case.  Further, Mr Arthur was not cross-examined by the applicant.  To that extent his evidence stands unchallenged except where contradicted by the applicant.  Having regard to these matters, and to a comparison of the demeanour of the two principal witnesses, I prefer, where there is a conflict in the evidence, to accept the evidence of Mr Arthur.

The parties here assert conflicting legal consequences to be drawn from the evidence.  Each of the principal witnesses asserted that they believed that the proper legal characterisation of the relationship was either an employee, on the part of the applicant, or a contractor on the part of the respondent.  It is for the Court to determine the legal characterisation of the arrangement.  I was referred to one authority by the applicant, and there are numerous authorities to be considered. 

The first principle to be extracted from the authorities is that no single test is to be applied, rather a variety of indicia are to be weighed to determine whether or not a relationship between two parties is to be characterised as one of employment or some other relationship.  The question of whether there is a capacity to control is an important but not necessarily decisive indicia.  Other matters include the mode of remuneration, whether taxation is deducted, whether the individual is carrying on their own business, and the label that the parties applied to the relationship.  It has also been said that the matter may be one of impression.  The label that the parties attach to a particular relationship has been said to be relevant where the other indicia do not give a direct or decisive answer to the question of the proper characterisation of the relationship.

Here I accept the evidence of Mr Arthur that he made it clear to the applicant at the commencement of the engagement that his company was not in a position to employ the applicant as its employee.  At that stage the respondent had no employees.  Mr Arthur's evidence was that he wanted to retain the applicant's services for a short time to perform graphic design work.  The evidence was that it was discussed that this may develop into further work if the project got off the ground.  I am satisfied that in the conversations between the applicant and Mr Arthur there was always a temporary aspect to the engagement of the applicant.  This was both because of the financial stringency that applied to the respondent at the time, and also because the work was to be done to get the project up to obtain further funding.

Next, the curriculum vitae that was tendered by Mr Fargher to Mr Arthur indicates that the applicant had previously worked as a contractor.  Next, there was the evidence of the applicant's own assertion as to his status.  Under cross-examination from Mr Arthur the applicant conceded that he may have said at one stage that he would pay his own taxation.  This is a damaging concession from the point of view of his case.  Mr Arthur's evidence was that he made it clear that that was to be the position at the commencement of the engagement.  Further, Mr Arthur maintained that the applicant had consistently said that he was not employed by the respondent and that he worked for himself.  Further, Mr Arthur gave unchallenged evidence that the applicant said that he would pay his own tax and superannuation.  It is clear that there was some discussion about the applicant being retained as an employee in the future when the project got off the ground. 

Here, although there are some indicia that support the proposition that the applicant is an employee and, in particular, the indicia of the retention of control over the applicant's activities by Mr Arthur, the expected short-term nature of the work that the applicant was engaged in, and the evidence of what Mr Arthur told the applicant at the time he engaged him lead me to the conclusion that the proper legal characterisation of the relationship between them is not one of employer and employee, and that the applicant was retained as a contractor by the respondent. It follows that the applicant is not entitled to proceed in this Court under the Act and that I must dismiss the application.

I certify that this and the preceding four (4) pages
are a true copy of the reasons for decision of
Judicial Registrar Murphy as recorded in the transcript
and revised by the Judicial Registrar.


Associate:      KAREN HALSE
Dated:           28 February 1997

APPEARANCES

Applicant in person
Respondent’s representative	Mr Lawrie Arthur
Date of Hearing:	28 FEBRUARY 1997
Date of Judgment:	28 FEBRUARY 1997