Mindgrove Pty Limited v Hentunen
[2005] NSWWCCPD 118
•17 October 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Mindgrove Pty Limited v Hentunen [2005] NSWWCCPD 118
APPELLANT: Mindgrove Pty Limited
RESPONDENT: Pertti Anterio Hentunen
INSURER:QBE Workers Compensation (NSW) Ltd
FILE NUMBER: WCC1758-04
DATE OF ARBITRATOR’S DECISION: 10 August 2004
DATE OF APPEAL DECISION: 17 October 2005
SUBJECT MATTER OF DECISION: Adequacy of evidence to support a finding of “worker” under section 4 of the Workplace Injury Management and Workers Compensation Act 1998.
PRESIDENTIAL MEMBER: Acting Deputy President Deborah Moore
HEARING:On the papers
REPRESENTATION: Appellant: QBE In-House Legal Department
Respondent: P K Simpson
ORDERS MADE ON APPEAL: 1. The appeal is upheld.
2. The decision of the Arbitrator is
revoked.
3.The matter is referred to the Registrar for referral to another Arbitrator to determine the outstanding issues between the parties.
4.No order as to costs of the appeal.
BACKGROUND TO THE APPEAL
Pertti Antero Hentunen (“the Respondent Worker”) alleged that he was employed by Mindgrove Pty Limited (“the Appellant Employer”) at the time he suffered an injury to his right shoulder on 12 December 1997.
On 28 January 2004, the Respondent Worker lodged an Application to Resolve a Dispute in the Commission seeking weekly benefits compensation, medical expenses, and permanent impairment/pain and suffering.
The matter was listed for arbitration hearing on 19 July 2004 to determine the issue as to whether the Respondent Worker was a “worker” pursuant to section 4 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) or a “deemed worker” pursuant to Schedule 1, Clause 2 of the same Act. The issue was to be determined as a threshold issue prior to referring the Respondent Worker to an Approved Medical Specialist in the event that he was found to be a worker.
On 10 August 2004 a Certificate of Determination issued. The decision of the Arbitrator was as follows:
“(a) The Applicant is a worker within the meaning of section 4 of the Workplace Injury Management and Workers Compensation Act, 1998.
(b) If it were necessary to do so, I would also find that the Applicant is a deemed worker, pursuant to clause 2 of schedule 1 of the same Act.”
On 25 August 2004 the Appellant Employer filed an Application to Appeal against Decision of an Arbitrator. The Appellant Employer cited six grounds of appeal, but in essence claimed that the Arbitrator’s finding of ‘worker’ was against the weight of the evidence and not supported by adequate reasons.
On 17 September 2004 the Respondent Worker filed submissions in reply dated 7 September 2004. Those documents form the basis of a Notice of Opposition to Appeal apparently filed on 2 June 2005. In summary, the Respondent Worker submits that the totality of the evidence before the Arbitrator was sufficient to support his ultimate finding, and that his reasons were adequate.
LEAVE TO APPEAL
The appeal was filed in time, and the amount at issue on appeal satisfies the criteria set out in section 352(2) of the 1998 Act. Leave to appeal is granted.
ON THE PAPERS REVIEW
The Respondent Worker submits that “the parties have provided sufficient information in these proceedings to enable the Commission to make its determination without holding any conference or formal hearing”.
The Appellant Employer submits that “there should be an oral hearing”. The Appellant Employer said this:
“In Mayne Health Group v Sandford [2002] NSWWCC PD6 (“Sandford”) it was held that an appeal from a decision by an Arbitrator is a ‘review’ where error of law, fact or discretion must be demonstrated. The Applicant [sic]/Employer submits that such a process will more readily be achieved to the mutual satisfaction of the parties and in the interests of fulfilling the objectives of the Commission if there is an oral hearing.”
The Appellant Employer goes on to cite the principles of natural justice and the requirement of the Commission to “… afford procedural fairness to any party to an appeal.” The Appellant Employer then submits that “… where there is contested litigation concerning a matter of substance any party to the proceedings is entitled to an oral hearing so that the real issues can be properly and fully debated.”
Whilst I am mindful of the Commission objectives, my task on appeal is not to further debate issues raised before the Arbitrator, but is concerned with claimed error, of law, fact and/or discretion, and not with the hearing of evidence and determination of the matter at first instance.
Having carefully read the Arbitrator’s reasons, the transcript, all the evidence before him, and the submissions both before the Arbitrator and on appeal, I am satisfied that I have sufficient information within the meaning of section 354 of the 1998 Act and in accordance with Practice Direction 1 to proceed ‘on the papers’, and that this is the appropriate course in the circumstances.
THE EVIDENCE BEFORE THE ARBITRATOR
The appeal focuses on the inadequacy of the evidence to support the Arbitrator’s findings, so it is crucial to examine precisely what evidence was before the Arbitrator. This he sets out in paragraph 9 of the Statement of Reasons as follows:
“For the Applicant:
(a) Application, including undated statement of the Applicant, attached to the Application to Resolve a Dispute;
(b)Income taxation returns for the Applicant for the years ending 30 June 1997 to 30 June 2003 inclusive;
(c) Income taxation returns for Pelli Pty Limited (“Pelli”) for the years ending 30 June 1997 to June 2003 inclusive;
(d) Supplementary Statement of the Applicant dated 1 July 2004;
(e) Applicant’s wages schedule dated 19 January 2004;
For the Respondent:
(a) Reply including notice of request for reference to an Approved Medical Specialist dated 14 April 2004;
(b) Affidavit of the Respondent’s solicitor … dated 16 July 2004.”
The taxation returns for the company Pelli Pty Limited disclose the business address of that company as identical to that of the Respondent Worker. Whilst there is no direct evidence of the relationship between Pelli Pty Limited and the Respondent Worker, the Respondent Worker’s statement being silent on this issue, the Respondent Worker’s counsel submitted to the Arbitrator that Pelli was a company set up by the Respondent Worker “… for the basis of taxation avoidance …” and that the Respondent Worker “… was providing the service, and the money … was paid into his company …” (see page 4 of the transcript).
The personal taxation returns of the Respondent Worker only disclose income from Pelli. There is no mention in those returns of the Appellant Employer.
It is clear from the documents described by the Arbitrator that the evidence before him on the issue of “worker” was scant indeed. As the Arbitrator pointed out (paragraph 11 of the Statement of Reasons), the Respondent Worker’s “… initial statement would not have been sufficient to discharge the onus… of proving he was a worker …”
The supplementary statement dated 1 July 2004, with numerous handwritten additions and alterations, sought to set out what the Respondent Worker described as “the conditions of my employment”. Because of the issues raised, I think it important to set out that paragraph 3.5 in full, adding, where possible the handwritten notes.
“3.5 The conditions of my employment were –
· My hours of work were set by the respondent. (handwritten – “the respondent provided all our equipment for work).
· My wages were paid by the respondent. (handwritten “time sheets were filled in weekly. I am not employed elsewhere”).
· The wages were paid by cheque or into my account. (handwritten “company”).
· My place of work was specified by the respondent.
· The respondent appointed me to my position and had the right to dismiss me from such position.
· I was required to pay my own income tax.
· The respondent paid for Workers Compensation cover.
· I had no right to delegate my duties to other persons in the absence of authority from the respondent.
· I was under the complete control of the respondent. The respondent controlled and supervised my work duties.
· I say that I was an employee or deemed employee of the respondents at the time of my injury”.
As to that document, the Arbitrator said this (paragraph 11):
“His second statement was admitted into evidence pursuant to an Application for Late Lodgement and portions assumed or suggested the outcome of ‘Worker’ which the Applicant sought to establish. Those portions were not allowed into evidence”.
On page 1 of the transcript, those “portions” are noted as “clause 3.2 in its entirety, the word ‘wages’ in clause 3.5, and the phrase ‘I stopped working for the respondent’ in 7.1”. This ‘selective’ approach adopted by the Arbitrator is not explained. For example, in paragraph 3.2 of the statement, disallowed by the Arbitrator, the Respondent Worker said this, “After the takeover, my employment continued with the respondent and I held the same position for some time until I became a supervisor.” In paragraph 3.3, he said, “My employment was on a full-time basis for 38 hours per week, plus overtime spread over 5 to 6 days per week”. The word “employment” was used in both paragraphs, and it is difficult to see how one paragraph “assumed” or “suggested” the outcome of “worker” but the other did not. My reading of the whole statement suggests that most of the points made by the Respondent Worker “assumed” or “suggested” that he was a “worker” within the meaning of section 4 or Schedule 1, Clause 2 of the 1998 Act.
This must also be read in the context of the Arbitrator’s statement at the hearing (page 1 of the transcript) that:
“There has been discussion during the conciliation period as to whether oral examination would be permitted. It has been pointed out to the parties that that would only be permitted if I was of the view that I could not make a decision in the absence of oral evidence. I have come to the conclusion … that that is not the case, and oral examination will not be permitted, nor will cross examination”.
No reasons were given as to the basis upon which the Arbitrator came to that conclusion.
This conclusion is important in light of the requirements of section 354 of the 1998 Act. Section 354(3) states that, “The Commission is to act according to equity, good conscience and the substantial merits of the case…” and section 354(6) “If the Commission is satisfied that sufficient (my emphasis) 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”.
Factors to be considered, as set out in Practice Direction 1, include relevantly, “whether there is significant conflict as to the facts…”
Essentially then, the Arbitrator had before him, from the Respondent Worker, what I infer from his comments as inadequate statements from the Respondent Worker and a series of taxation returns for the Respondent Worker and Pelli, none of which made any reference to the Appellant Employer. Some documents, described as “deposits slips” (page 7 transcript) and “payments made over to him [Respondent Worker]… paid to a company …” (page 2 transcript) which apparently brought the Appellant Employer into the picture, were forwarded by the Respondent Worker to the Arbitrator on 2 July 2004 on Commission letterhead authorised by the Dispute Management Officer. As to these documents, the Arbitrator said this (paragraph 34 of the Statement of Reasons):
“The Respondent’s supplementary submissions refer to payments made by the Respondent to Pelli … whilst however there was some discussion as to cheques during the course of the arbitration, they were not, in the end result, in evidence. I cannot therefore pay any regard to this portion of the submissions from the Respondent’s counsel”.
The Arbitrator failed to give any reasons as to why this evidence was not admitted, and when he made such a determination.
The affidavit of the Appellant Employer’s solicitor dated 16 July 2004 together with other correspondence from the Appellant Employer was forwarded to the Arbitrator on similar letterhead apparently on 21 July 2004, two days after the Arbitration hearing. It is not therefore clear how or when this ‘evidence’ was admitted in the proceedings before the Arbitrator, and again, no reasons have been provided for this decision.
The Appellant Employer’s Reply under the heading “DISPUTE DETAILS” read as follows:
“Attempts to resolve dispute:
Nil – please see the primary documentation.
List issues in dispute and reasons supporting dispute:
·Employment
·Injury
·Section 102
·Section 101 breach
·Section 9A
·Section 68A”.
No reasons supporting the issues in dispute were included. The only documents included in the Reply were some medical reports obtained from the Respondent Worker and notices to both parties from the Commission for referral to an Approved Medical Specialist.
The transcript essentially records submissions made by counsel for both parties at the arbitration hearing on the evidence referred to above. Supplementary written submissions were provided by the Respondent Worker on 28 July 2004, and by the Appellant Employer on 21 July and 28 July 2004. These referred to a number of cases, some of which were considered by the Arbitrator in his Statement of Reasons.
THE ARBITRATOR’S FINDINGS AND REASONS
The contractual relationship between the parties
Having dealt with the apparent deficiencies of the Respondent Worker’s statements in paragraph 11 of his Statement of Reasons referred to in paragraphs 17 and 18 of this decision, the Arbitrator concluded in paragraph 12 of his Statement of Reasons as follows:
“I was satisfied on the evidence that:-
·The Applicant rose to the position of supervisor;
·On occasions, he supervised 350 people who worked for the Respondent;
·He was employed fulltime in the one position (regardless of whom the employer was) for 13 years, and it was a fulltime position;
·His employment involved working 38 hours per week, plus ‘overtime’;
·He worked five or six days per week, the days and hours being determined by the Respondent;
·His place of work was specified by the Respondent;
·He had no right to delegate his duties;
·He was under the control of the Respondent.
Notwithstanding the above, the Respondent relied on the fact that prima facie, the relevant contract was between the Respondent and Pelli and made no effort to refute this evidence. The Applicant says that the rule in Jones v Dunkel applies”.
Contrary to the Arbitrator’s statement that the Appellant Employer made no effort to refute this evidence, it is clear from the transcript and the Appellant Employer’s submissions that the Appellant Employer had submitted to the Arbitrator that there was no evidence of any relationship between the Appellant Employer and the Respondent Worker and that many of the assertions made by the Respondent Worker in his second statement were refuted by the contents of his own and Pelli’s taxation returns.
The only relevant part of the initial statement of the Respondent Worker, annexed to his application, were paragraphs 3 and 4, wherein he said “I commenced working for Mindgrove Pty Limited as a Supervisor/Formwork Foreman” and “Whilst I was working for the Respondent my earnings as a Supervisor/Formwork Foreman were $1000.00 gross per week”. This, the Arbitrator correctly determined was insufficient to discharge the Respondent Worker’s onus.
The Respondent Worker’s supplementary statement sought to make a number of assertions about the relationship between the Respondent Worker and the Appellant Employer, but it is clear that many of these were contradicted by the Respondent Worker’s other evidence, i.e, the taxation returns. In the Respondent Worker’s 1998 personal taxation return (covering the alleged date of injury), the only employer nominated was Pelli. The Respondent Worker’s occupation was described as “scaffolder”. That return also disclosed dividends the Respondent Worker received from Pelli. The description of main business activity in the return for Pelli in the 1998 year was “Concrete Formwork and Consulting”.
It is clear then that there was significant ‘conflict’ in the evidence before the Arbitrator.
I now turn to the definition of “worker” . “Worker” is defined in section 4 of the 1998 Act as follows:
“worker means a person who has entered into or works under a contract of service or a training contract with an employer (…whether the contract is expressed or implied, and whether the contract is oral or in writing)”.
Contrary to the Respondent Worker’s submission, the Arbitrator found that (paragraph 23 of the Statement of Reasons):
“I do not accept that ‘it is obvious that there was an oral contract between the parties’. On the contrary, this is a case in which it is necessary to ‘lift the corporate veil’ if such there be, in order to determine whether is a contract between the Applicant and the Respondent”.
There was clearly no evidence of any written contract between the Respondent Worker and the Appellant Employer. Indeed, there was simply no evidence, other than the Worker’s statement, of the involvement of the Appellant Employer in the proceedings at all. It was not clear whether the Arbitrator was referring to the “corporate veil” of Pelli or the Appellant Employer. In the absence of any express or written contract between the parties, and the rejection by the Arbitrator of any claimed oral contract, it must be inferred that the Arbitrator concluded that there was some form of implied contract.
However, the Arbitrator’s findings and reasons are completely silent on this point. In the following paragraph (24), he then says:
“… the cases referred to … all deal with the necessity to balance the indicia, which assist in determining whether a person such as the Applicant has either entered into a ‘Contract of Service’ or a service contract”
The establishment of a “contract” is a condition precedent to the determination of the nature of the contract. The Arbitrator has failed to make a determination as to the existence of any contractual relationship between the parties and has thereby erred in law.
The ‘indicia’ relevant to “worker” or “deemed worker”
The Arbitrator appears to have embarked on a discussion of various ‘indicia’, which might define the nature of a particular contract without having made any determination as to the existence of a contract.
At paragraph 25 of his Statement of Reasons the Arbitrator said, “Traditionally, ‘control’ has been the ‘principal criterion’ as was stated in Steven’s case” (see Stevens v Brodribb Saw Milling Co Pty Limited [1986] 160CLR 16).
He then said (paragraph 30) “In this instance, all the issues as to control, as listed in paragraph 12, suggest that the Applicant was a worker and were not, see above, contested”. Then in paragraph 31 he states:
“The taxation returns, by way of contrast, suggest that Pelli was an independent contractor to Mindgrove and that the Applicant was an employee of Pelli. The amount of Pelli’s income and the manner in which it dealt with it, both unexplained, tend to further weaken the impression that the Applicant was a Worker, but it is clear from the cases that there is no definite rule”.
As I said earlier, the only ‘indicia’ as to ‘control’ were set out in the Respondent Worker’s supplementary statement. I cannot determine from the Arbitrator’s reasons upon what basis the Arbitrator suggested that the issues as to ‘control’ were not contested, when the Appellant Employer had repeatedly submitted that the primary evidence of the taxation returns contradicted the Respondent Worker’s assertions.
It is true, as the Arbitrator pointed out at paragraph 32 of his Statement of Reasons, that “each case depends on its own facts”. But he then went on to say, in the same paragraph:
“It is also fair to say that it is not the relationship between Pelli and others, including its directors, shareholders and any other employees about whom there was no evidence, which are the most important factors. The focus is on the relationship between the Applicant and the Respondent”.
But what evidence was there of the relationship between those parties? Only the unsubstantiated statement of the Respondent Worker, contradicted by his tax returns and those of Pelli.
The Arbitrator went on to conclude that (para 36 of the Statement of Reasons):
“The most telling factor to me is in the area where the Respondent has failed to adduce any evidence. It relates not only to the alleged control of the Applicant but its duration.
The uncontradicted evidence that the Applicant worked in virtually the same job for 17 years, for 38 hours per week plus overtime, spread over five or six days per week creates a very strong assumption in favour of ‘Worker’. The ordinary person would simply not have time to pursue any other employment.
The income tax arrangements are persuasive but not sufficiently compelling to rebut the clear evidence as set out in paragraph 12 hereof in favour of the Applicant.
In this matter, that evidence is decisive”.
Implicit in the Appellant Employer’s submissions before the Arbitrator that there was no arrangement between the parties within the meaning of section 4 of the 1998 Act, was that questions of indicia such as “control” or indeed “duration” of control were irrelevant in the absence of any form of contract.
I cannot see any evidence the Appellant Employer could have adduced as to the purported “duration of control” in circumstances where the Appellant Employer maintained that there was no evidence of any relationship between the named parties.
The Appellant Employer essentially relied upon the Respondent Worker’s own evidence by way of taxation returns, contradicted by his statement. There was no attempt to explain the relationship between Pelli and the Appellant Employer by the Respondent Worker which may have assisted the Arbitrator in determining the nature of any relationship between the Appellant Employer and the Respondent Worker. The Arbitrator’s ultimate finding that “if it were necessary to do so, I would also find that the Applicant is a deemed worker, pursuant to Clause 2 of Schedule 1 of the same Act” may well have been a conclusion open on inference from some of the evidence, but there is no discussion nor reasons for this possible conclusion in the Arbitrator’s determination.
The Respondent Worker cannot be both a “worker” within the meaning of section 4 and a “deemed worker” pursuant to Clause 2 of Schedule 1 of the 1998 Act. The latter clause provides as follows:
“(1)Where a contract:
(a) To perform any work exceeding $10.00 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) To perform any work as an outworker, 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”.
In the absence of any evidence from the Respondent Worker as to the relationship between the Appellant Employer and Pelli, or indeed any other evidence as to “deemed
worker”, it is difficult to see how the Arbitrator could have concluded that “if it were necessary to do so, I would also find that the Applicant was a deemed worker …”.
SUBMISSIONS AND FINDINGS
The Appellant Employer’s Submissions
The Appellant Employer submits that the determinations of the Arbitrator in paragraphs 37(a) and (b) were against the evidence and the weight of evidence. The Appellant Employer submits that:
“…had those portions of the Respondent Worker’s second statement been properly excluded from the evidence, there was no evidentiary basis for finding that the Respondent Worker was either an employee of the Respondent or a Worker within the meaning of Clause 2 of Schedule 1 of the 1998 Act.”
Further, the Appellant Employer submits that “… the Arbitrator erred in law by not specifying which parts of the Respondent Worker’s second statement had not been allowed into evidence. This omission constitutes a failure to disclose the Arbitrator’s reasoning process”.
The Appellant Employer further submits that the Arbitrator’s findings and reasons on the ‘balancing the indicia’ issue demonstrate that:
“… the Arbitrator has fallen into error because he has failed to appreciate that before the indicia are balanced it is an essential pre-requisite that the Respondent Worker establish that there was a contract between him and the Appellant Employer. The exercise known as balancing the indicia is an exercise which takes place in order to determine the nature of the contract between the parties, not its existence.”
This statement formed the basis of the Appellant Employer’s primary submissions to the Arbitrator.
As I said in paragraph 37 above, the issue as to any alleged contract between the parties was simply left in abeyance. The Arbitrator then embarked on an exercise of balancing the ‘indicia’, which he appears to have regarded as necessary to the determination as to whether or not a contract existed, rather than as to the nature of any contract.
As to the issue of “deemed worker”, the Appellant Employer submits that the Arbitrator has failed to provide any reasons for his apparent finding that the Respondent Worker was also a “deemed worker”. He has not dealt with the submissions made by the Appellant Employer on this alternate allegation. The Appellant Employer submits there was no evidence before the Arbitrator upon which to make a finding that the necessary elements of Clause 2 of Schedule 1 of the 1998 Act were in existence. The Appellant Employer further submits that “… the Arbitrator has failed to provide any reasons or findings sufficient to support this aspect of his decision and that the use of the words ‘if it were necessary to do so’ indicate that the Arbitrator was unsure about the first finding and believed that this finding would cure any defect in the first finding”.
As to the Appellant Employer’s submission that the Arbitrator failed to provide adequate reasons for the finding of ‘worker’, it is clear law that a failure to provide adequate reasons for a decision constitutes an error of law (see Soulemezis v Dudley (Holdings) Pty Limited [1987] 10NSWLR 247).
Commission Arbitrators have a statutory obligation to provide adequate reasons for a decision. The Commission is not a court and its objectives are to provide a fair and cost effective process for resolution of disputes between parties. Proceedings are conducted with as little formality and technicality as the proper consideration of the matter permits. As Deputy President Fleming said in Sandford’s case, “the content of statements of reasons for decision reflect this process and should not on review be ‘construed minutely and finely with an eye keenly attuned to the perception of error’ (Collector of Customs v Pozzolanic [1993] 43FCR 287). Further, “to succeed on the ground of ‘inadequate reasons’ it will be necessary for the Appellant Employer to demonstrate not only that the reasons are inadequate but that the inadequacy sufficiently demonstrates that the Arbitrator has failed to exercise his or her statutory duty to fairly and lawfully determine the application” (see Y G & G G v Minister for Community Services [2002] NSWCA247.
Nevertheless, reasons must be capable of unveiling clearly to the parties the grounds upon which a determination was made. Whilst on one view of the matter the Arbitrator appears to have given reasons for his determination, as Deane J as he then was said in Australian Broadcasting Tribunal v Bond [1990] 170CLR 321:
“If a statutory tribunal is required to act judicially, it must act rationally and reasonably. Of its nature, a duty to act judicially (or in accordance with the requirements of procedural fairness or natural justice) excludes the right to decide arbitrarily, irrationally or unreasonably… When the process of decision making is disclosed, there will be a discernable breach of the duty if findings of fact upon which a decision is based are unsupported by probative material and if inferences of fact upon which such a decision is based cannot reasonably be drawn from such findings of fact. Breach of a duty to act judicially constitutes an error of law which will vitiate the decision”.
Similarly, to identify a wrong issue is an established error of law. As the High Court said in the joint judgment of McHugh, Gummow and Hayne, JJ in Minister for Immigration and Multicultural Affairs v Yusef [2001] 180 ALR 1;
“… ‘jurisdictional error’ can thus be seen to embrace a number of different kinds of error... Those different kinds of error may well overlap. The circumstances of a particular case may permit more than one characterisation of the error identified, for example, as the decision-maker both asking the wrong question and ignoring relevant material. What is important, however, is that identifying a wrong issue, asking a wrong question, ignoring relevant material or relying on irrelevant material in a way that affects the exercise of power is to make an error of law”.
In my opinion, the Arbitrator’s determination disclosed findings of fact unsupported by probative material.
The Arbitrator’s reliance upon the Respondent Worker’s statement, portions of which he appears to have arbitrarily rejected and effectively made inadmissible, amounted to reliance upon irrelevant and indeed wrong material, particularly since the determination appears to effectively ignore relevant material such as the taxation returns. Similarly, the Arbitrator’s focus on an analysis of relevant ‘indicia’ to determine the issue of “worker”, without establishing any contractual basis for proceeding on that analysis, amounts to identifying a wrong issue, and in turn constitutes an error of law.
The Respondent Worker’s Submissions
The Respondent Worker’s submissions before the Arbitrator were to the effect that the Respondent Worker’s “uncontested” evidence as set out in paragraph 3.5 of his statement was that he was a “worker” within the meaning of section 4, and that “… it is obvious that there was an oral contract between the parties.” That later submission was specifically rejected by the Arbitrator. The rest of the Respondent Worker’s submissions referred to various authorities on the ‘indicia’ issue.
The Respondent Worker concluded that:
“Should it be determined that Mr Hentunen was a contractor then it is submitted that he was not carrying on a business in his own name or under a business name, nor did he sublet the contract nor employ other workers and would therefore be a deemed worker”.
These submissions are no more than comment on the law and various authorities. The final submission by the Respondent Worker referred to above is made without reference to any evidence that was before the Arbitrator whatsoever.
Similarly, at page 6 of the transcript, the Respondent Worker’s counsel makes submissions on the meaning of Clause 2 of Schedule 1 of the 1998 Act. He submitted that:
“… there was some mention of deposit slips with cheques being deposited. Well, that’s not denied. I mean, the cheques were coming from the Respondent going to the company and he was being paid, and that’s a matter of his remuneration. The important thing is that he was remunerated for his services… But anyway, I think on the balance of probabilities, he satisfies, first of all, the indicia of worker and also the deeming provisions”.
The ‘evidence’ of cheques and deposit slips had been disallowed by the Arbitrator, despite the Respondent Worker purportedly agreeing that the Appellant Employer had made payments to Pelli. Again, the submissions do not address the actual evidence before the Arbitrator.
In its Notice of Opposition to the appeal, the Respondent Worker provided further submissions dated 7 September 2004. He repeated his submission that the Appellant Employer “called no evidence” on the issue of “worker”, and that accordingly the Respondent Worker’s statement should be accepted. However, as I have said previously, the Appellant Employer had relied on the Respondent Worker’s taxation records to refute the allegation of “worker”. The Respondent Worker then submitted that the Appellant Employer called no evidence on “… the relationship between the worker and Pelli Pty Limited and on the relationship between Pelli Pty Limited and Mindgrove Pty Limited”. The onus of course is on the Respondent Worker to establish that he is either a “worker” or a “deemed worker”. It is hard to see what evidence the Appellant Employer could have adduced as to the relationship between the Respondent Worker and his own company, Pelli, other than the taxation records.
The bulk of the Respondent Worker’s submissions in this document again refer to authorities previously discussed, and to the Arbitrator’s findings and reasons on the ‘indicia’ issue. The submissions are contradictory. On the one hand, the Respondent Worker says that the Arbitrator used the various ‘indicia’ and “correctly concluded that it was a contract of service…” (paragraph 3.2). In paragraph 3.4, the Respondent Worker submits that “… the totality of the evidence … was sufficient … for the conclusion if necessary that the worker was in fact a deemed worker … the worker did not carry on business in his own name nor did he sublet the contract or employ other workers and would therefore be a deemed worker.”
As I said previously, the Respondent Worker cannot be both a “worker” and a “deemed worker”. There was simply no evidence to support the Respondent Worker’s submissions on “deemed worker”.
CONCLUSION
I accept the essential thrust of the Appellant Employer’s submissions that the determination was against the weight of the evidence and unsupported by adequate reasons and accordingly, the Arbitrator has erred in law.
The totality of the evidence was by no means clear or unequivocal on the relevant question of fact to be determined by the Arbitrator. In my opinion, there was by no means “sufficient” evidence within the meaning of section 354(6) of the 1998 Act to support the Arbitrator’s finding that the Respondent Worker was a “worker” within the meaning of section 4 of the 1998 Act.
The Arbitrator failed to determine the issue as to whether or not there was any form of contract between the named parties.
There was simply no evidence before the Arbitrator upon which to make a finding that the necessary elements of Clause 2 of Schedule 1 of the 1998 Act had been satisfied.
His ‘alternate’ finding was unsatisfactory and against the weight of evidence. He erred in law in finding that the Respondent Worker was both a “worker” within the meaning of section 4 of the 1998 and a “deemed worker” pursuant to Clause 2 of Schedule 1 of the same Act.
The Arbitrator’s apparent acceptance of the compelling nature of the “duration of control” was a material finding of fact upon which the ultimate decision of the Arbitrator was based. That finding, relevant to the ‘indicia’ issue, was an irrelevant consideration, and constitutes an error of law.
The Arbitrator gave no reasons why, at the outset, he was satisfied that he had sufficient evidence to determine the matter when that evidence was scant and patently contradictory, and in my opinion, the Arbitrator has erred in law and failed to properly determine the matter in accordance with the provisions of section 354 of the 1998 Act.
DECISION
(i) The appeal is upheld.
(ii)The decision of the Arbitrator is revoked.
(iii)The matter is referred to the Registrar for referral to another Arbitrator to determine the outstanding issues between the parties.
COSTS
I make no order as to costs of the appeal.
Deborah Moore
Acting Deputy President
17 October 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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