Morrow v Tattsbet Limited

[2014] FCCA 1327

FEDERAL CIRCUIT COURT OF AUSTRALIA

MORROW v TATTSBET LIMITED [2014] FCCA 1327

Catchwords:
INDUSTRIAL LAW – General protections court application – whether adverse action was taken for a proscribed reason – whether applicant was an employee or an independent contractor – whether applicant made an inquiry in relation to a workplace law.

Legislation:
Fair Work Act 2009, ss.117, 338(1), 341, 342, 345, 355, 357, 361(1), 362, 539
Federal Circuit Court Rules, r.13.10(a)
Independent Contractors Act 2006
Superannuation Guarantee (Administration) Act1992

Cases cited:
Stevens v Brodribb Sawmilling Co Pty Ltd (1985) 160 CLR 16
Hollis v Vabu Pty Ltd (2001) 50 AILR
ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146
ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532
On Call Interpreters & Translators Agency Pty Ltd v Commissioner of Taxation (No.3) (2011) 214 FCR 82

Applicant: SHARYN MORROW

Respondent: TATTSBET LIMITED

File Number: BRG 271 of 2012

Judgment of: Judge Jarrett

Hearing date: 10 October 2012

Date of Last Submission: 29 October 2012

Delivered at: Brisbane

Delivered on: 4 July 2014

REPRESENTATION

Counsel for the Applicant: Mr Millar

Solicitors for the Applicant: Partners Legal Pty Ltd

Counsel for the Respondent: Mr Pratt

Solicitors for the Respondent: directly instructed

ORDERS

1. The respondent pay to the applicant the sum of $7,400;

2. Within the next 21 days each party file and serve any further written submissions that party might wish to make in relation to:

   (a)the interest rate to be applied to the judgment sum;

   (b)the level of penalty, if any, to be imposed for the breach of s.117(1) of the Fair Work Act;

   (c)to whom any such penalty should be paid;

   (d)any costs applications; and

   (e)any other orders sought herein.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 271 of 2012

SHARYN MORROW

Applicant

And

TATTSBET LIMITED

Respondent

REASONS FOR JUDGMENT

1. The applicant, Sharyn Morrow, was engaged by the respondent Tattsbet Limited, a TAB agency in Queensland.  There is no dispute about the terms of the engagement or the responsibilities and obligations that those terms cast upon each party.  However, the legal categorisation of the relationship between Ms Morrow and the respondent is in dispute.  Ms Morrow contends that the relationship is that of employee and employer.  Tattsbet contends that the relationship is one of principal and independent contractor.

2. Tattsbet terminated Ms Morrow’s engagement abruptly in November, 2011.  Temporally, it followed upon Ms Morrow taking steps to investigate whether Tattsbet was liable to make superannuation contributions to Ms Morrow and others engaged in a similar way, pursuant to the Superannuation Guarantee (Administration) Act1992 (Cth). When Ms Morrow’s actions were bought to the attention of the relevant people within the respondent’s office, swift steps were taken to terminate her engagement. She was seen by some within the respondent’s organisation as a pest.

3. Arising from those brief facts, Ms Morrow pursues four claims, namely:

   a)relief for adverse action in breach of s.342 of the Fair Work Act2009 (Cth) arising from the termination of her engagement by the Respondent on 10 November, 2011;

   b)if the Applicant was an employee of the respondent, relief arising from a failure to provide notice of termination under s.117 of the Fair Work Act;

   c)if the Applicant was an employee of the respondent, relief arising from “sham contracting” in breach of s.357 of the Fair Work Act; and

   d)if the Applicant was not an employee of the respondent, relief under s.12 of the Independent Contractors Act2006 (Cth) on the grounds that the contract was harsh or unfair.

4. In summary the gravamen of Ms Morrow argument is that:

   a)if she is found to have been an employee of the respondent, then:

   i)the adverse action taken against her was taken because she either took, or she proposed to take, action which for the purposes of the Fair Work Act, was the exercise of a workplace right. The relevant workplace right that she identifies was an alleged right to make an inquiry to the Australian Tax Office about the liability of the respondent to make superannuation payments to her and other Tattsbet agents;

   ii)She was not given the requisite period of notice of termination of her employment and the respondent thereby contravened s.117 of the Fair Work Act; and

   iii)the respondent represented to her that she was an independent contractor and thereby contravened s.357 of the Fair Work Act;

   b)if she is found not to have been an employee of the respondent, then:

   i)the adverse action taken against her was taken because she either took, or she proposed to take, action which for the purposes of the Fair Work Act, was the exercise of the workplace right identified above; and

   ii)because her contract contained no provision for termination upon notice, she is entitled to relief under s.12 of the Independent Contractors Act on the grounds that the contract was harsh or unfair.

5. Tattsbet opposes each of the claims made by Ms Morrow and argues that:

   a)at all times Ms Morrow was properly considered an independent contractor, not an employee; and

   b)the real reason that it terminated Ms Morrow’s engagement had nothing to do with the fact that she sought to take up the issue of the respondent’s liability for superannuation with the ATO, but rather, it was the way that she went about that inquiry, together with some other reasons.

6. The essential issues for determination are:

   a)Was Ms Morrow an employee of Tattsbet over the relevant period for the purposes of the Fair Work Act?

   b)If so, what was the real reason for the termination of her employment by Tattsbet?

   c)If that reason was one proscribed by the Fair Work Act, to what relief is Ms Morrow entitled?

   d)If Ms Morrow was not an employee of Tattsbet over the relevant period, to what relief, if any, under the Fair Work Act or the Independent Contractors Act is she entitled?

Employee or Independent Contractor?

1. The most recent authorities, Stevens v Brodribb Sawmilling Co Pty Ltd (1985) 160 CLR 16, Hollis v Vabu Pty Ltd (2001) 50 AILR and ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146, make the following propositions clear:

   a)the characterisation of the relationship by the parties, whilst of some weight, is not determinative of the proper characterisation of that relationship;

   b)no one matter is likely to be determinative of whether a particular relationship between two people is that of employer and employee.  Some matters will attract more weight in a particular case than those same factors will attract in another case; and

   c)the “test”, if there is one, is said to be multi-factorial.  All of the relevant circumstances need to be weighed and the totality of the relationship identified. 

2. Ms Morrow has a long history of working in the betting and wagering industry.  From 2001 to 2003 she worked as a manager of a hotel in Melbourne which had TAB facilities.  From 1993 to 2002, Ms Morrow worked for Tabcorp in Victoria carrying out cash control duties.  A requirement of these positions was that she held formal Tabcorp wagering accreditation as a cash controller.

3. In 2004 Ms Morrow sought work as a TAB agent in Queensland.  She was offered a position in Brisbane by the respondent.  She came to Brisbane to inspect the relevant office at Moorooka, but undertook no other investigations.  She signed an agency agreement with the respondent for that agency. 

4. According to the evidence of Mr Barrie Fletton, the Chief Executive officer of the respondent who gave evidence for the respondent in these proceedings, the terms of the agency agreement utilised by the respondent are not negotiable and all agents have the same terms and conditions.

5. Upon taking up the agency, Ms Morrow relocated her home from Melbourne to Brisbane.  She trained with the respondent for three weeks at another agency before taking up her position at the Moorooka agency.  

6. Sometime after commencing work in Moorooka, Ms Morrow chose to apply for an agency in Elizabeth Street, Brisbane.  Her application was unsuccessful.  However, from that application she was offered a position at the Logan Central agency which she accepted.  Upon taking the Logan Central agency, she surrendered her Moorooka agency. 

7. Ms Morrow worked at Logan Central from December, 2005 to the date of her termination on 10 November, 2011.  From time to time she was offered other agencies to operate.  She took up those opportunities and so, for some time, she operated two agencies at the same time.

8. The agency agreements between the applicant and the respondent were generally for a term of years.  As an agreement expired by the effluxion of time, another was executed.  There were four consecutive agreements between Ms Morrow and the respondent in respect of the Logan Central Agency.  The evidence does not permit a finding about whether the terms remained constant over the years.  However, the parties conducted the case on the basis that the historical dealings between the parties were relevant to the proper characterisation of their relationship pursuant to the agreement now under consideration. 

9. Relevantly for the purposes of this application, the parties entered into a written agreement on or about 9 March, 2010 for Ms Morrow to operate the Logan Central TAB agency for the respondent.  It was the latest in the line of agreements the parties had entered into for the Logan Central agency.

10. The work to be performed by Ms Morrow pursuant to the agency agreement is not particularly well specified in the agreement itself.  Clause 10(a) of the agreement touches upon it in this way:

    10.(a)     The Agent acknowledges that the Agent will process transactions relating to the business of UNiTAB;

11. Beyond that, there is no specificity in the agreement as to what was to be performed by Ms Morrow for the respondent.  It is not controversial, however, that Ms Morrow was to conduct a shopfront for the respondent selling the respondent’s betting and wagering products to the public.  But, she was not merely performing a clerical role selling bets and wagering contracts for the respondent as the applicant submits.  Her role extended to ensuring the smooth operation of the agency and making sure that it was open at relevant times and was adequately staffed. 

12. I do not accept the respondent’s argument that the running of the agency required “business acumen” on the applicant’s part.  A certain level of managerial expertise was required but there is no suggestion in the evidence that the work was particularly complex or there was an extensive number of persons to be managed by the applicant.    I do accept the respondent’s contention that the truth is that the applicant was engaged to manage and operate a business.  The real question is “whose business was she operating?”

13. Ms Morrow’s unchallenged evidence was that the operation of the Logan Central agency was determined and directed by the respondent.  She says, and I accept, that the respondent:

    a)determined the minimum hours the agency operated;

    b)chose the business premises of the agency and conducted the dealings with the landlord.  The respondent also paid the rent for the premises;

    c)supplied the computer equipment;

    d)supplied and paid for data connections;

    e)supplied the telephones (but passed on the charges to the agency operator);

    f)provided all television screens, race broadcasting equipment, furniture and fittings for the agency; and

    g)either supplied or approved the signage for the agency.

14. Ms Morrow gave evidence that her daily work required her to “arrive at work, unlock the premises and turn the systems on.”  She swears that her “actual work” was “simply selling the bet types on the IT system of the respondent”.  Ms Morrow states the “respondent supplies all the facilities required to do the job” and that “the respondent would closely monitor the betting.” 

15. Ms Morrow’s duties also required her to bank the “takings” which usually occurred on Tuesdays and Thursdays.  She would bank the takings on additional days as well if required.  These takings were banked into the respondent’s account.

16. Mr Fletton disagreed with the proposition that Ms Morrow only need to arrive at work, unlock the agency, turn on the systems and sell bets.  He said she was also responsible “for creating a marketing plan … running local promotions, engaging with customers, handling customer complaints, monitoring customer behaviour, ensuring responsible service of gaming/wagering and complying with the Anti-Money Laundering and Counter Terrorism Act.”  I accept that she was responsible for these matters.

17. For most of the week, Ms Morrow would operate the Logan Central agency by herself.  However, she outlined the following arrangements for additional staff:

    a)as Saturday was the busiest day, she would usually roster two additional staff to work;

    b)she would also often roster an additional staff member on “Thursdays, Sundays and some Friday nights.”; 

    c)she used to take “Mondays and Tuesdays off as a delayed weekend” and would roster on a staff member to replace her on those days;

    d)she usually kept four casual staff members available for use in the agency. 

18. Mr Fletton argues that Ms Morrow could decide the best way to operate her agency to “maximise financial return” provided it was in accordance with the agency agreement.  This was said to be an indicator that Ms Morrow was operating her own business.  Mr Fletton pointed out that Ms Morrow could:

    a)set her own hours of work and her employee’s hours of work;

    b)set the rates of pay for her employees,

    c)determining her employees’ employment status (i.e. casual, part time or full time); and

    d)determining her employees’ terms and conditions of employment.

    However, it is significant, I think, that all of the above examples given by Mr Fletton relate to the management of Ms Morrow’s employees in one form or another.  There is little else, apart from managing the costs of her own staff, that she could have undertaken to maximise the profit of the undertaking.

19. Mr Fletton was cross-examined about his suggestion that agents had flexibility when it came to how they ran their agencies.  The cross-examination revealed that there were limits to the flexibility and that, in fact, Ms Morrow had been the subject of adverse attention from the respondent when she attempted some flexibility in the way in which she operated her agency.  She had expanded her agency to include the sale of food.  That was unacceptable to the respondent and Ms Morrow had to desist from that practice.  According to Mr Fletton, it did not fit with the image the respondent wished to cultivate and project to the public.

20. Although Mr Fletton argued to the contrary, his evidence made it clear that there was indeed little flexibility about how an agent might go about conducting their agency.  Regional managers were employed by the respondent to “assist” and “advise” those like Ms Morrow with the running of their agencies.  In truth, the regional manager’s role was to ensure that the agencies were conducted in a way that was acceptable to the respondent. 

21. The location of the agency, or in other words the place of work of Ms Morrow, was determined by the respondent.  The work of the agency (perhaps leaving aside some administrative tasks in the nature of accounting) could only be performed at the agency’s shop front that had already been selected by the respondent.  Ms Morrow was not free to operate from whatever premises she chose.  She had no separate place of work apart from the premises supplied by the respondent.

22. Whilst Ms Morrow argued that the single location of her work pointed towards a conclusion that she was operating the respondent’s business, the respondent argued that the applicant’s submissions on this point were a “gross oversimplification”.  By way of example the respondent suggested that a tradesman who is contracted to do work at a particular site is not ordinarily seen as an employee.  However, Ms Morrow was not in the position of a tradesman.  Although she gave evidence that she operated more than one agency at times in the past, it was not suggested that she could simply make her services available to other betting shops as part of her business.  Indeed, as I have set out below, there was a clause in the agreement intended, on my view, to prevent her from competing with the respondent’s business.

23. Ms Morrow was appointed initially on a six-month probationary period.  There is no explanation in the agreement as to what that meant, and having regard to clause 28 of the agreement (which provided that the respondent could terminate the agreement at any time without notice), the clause seems to be of little consequence save that it represents an indication that the respondent desired the opportunity to assess Ms Morrow’s performance in conducting the agency.  Probationary periods are not uncommon in employment situations.

24. Ms Morrow was required to use the plant and equipment provided by the respondent.  Clause 5 of the agreement provided:

    5.UNiTAB will provide the following as part of this Agreement:

    (a)The data line from the Agency to UNiTAB's central computer;

    (b)Terminals, and all office furnishings required by UNiTAB;

    (c)A Cash Office Information System and Odds Display Monitors at a rental fee determined by UNiTAB and payable by the Agent (Appendix 1);

    (d)A telephone service, rental and call charges to be repaid by the agent to UNiTAB on demand;

    (e)A race broadcasting service;

    (f)A satellite receiving system and the TV monitor for race telecasts at a rental fee determined by UNiTAB (Appendix 1);

    (g)Stationery as approved by UNiTAB;

    (h)All tickets stocks with the cost of betting tickets stocks repaid by the Agent to UNiTAB on demand (Appendix 1);

    (i)Monies as UNiTAB shall think fit by way of working capital for the proper operation of the Agency. The Agent acknowledges that these monies shall at all times be and remain the property of UNiTAB and shall be repaid to UNiTAB on demand. No such monies shall be removed from the said premises except for immediate deposit into the Bank Account referred to in Clause 10 of this Agreement or as otherwise directed in writing by UNiTAB;

    (j)Rent free premises;

    (k)Payment of rates, outgoings and garbage collection;

    (l)Payment of electricity charges;

    (m)Repairs to office and office equipment;

    (n)Promotional material for promotions organised by UNiTAB;

    (o) An Electronic Results System and Results Display Monitors at a rental fee determined by UNiTAB and payable by the Agent (Appendix 1);

    (p) A Sportsbet Interactive Unit at a rental fee determined by UNiTAB and payable by the Agent (Appendix 1);

    (q) A Keno Information Display System ("KIDS") at a rental fee determined by UNiTAB and payable by the Agent (Appendix 1);

25. Although the agreement suggests that the respondent would “provide” those items of plant and equipment and consumables to Ms Morrow, it appeared to be common ground that the respondent made a rental charge, based on turnover of the agency, in respect of the equipment that was provided.  Mr Fletton confirmed that the respondent provided the equipment for the agency but also gave evidence that the respondent charged Ms Morrow for “many of these services.”  He provided the example of the financial year ending 30 June, 2011 whereby Ms Morrow paid to the respondent:

    a)$6,590 (plus GST) for the use of the equipment;

    b)$4,510 (plus GST) for Sky Channel; and

    c)$177 (plus GST) for Foxtel.

1. Those rental charges were claimed by Ms Morrow as deductions against her income taxation purposes.

2. Although the respondent provided all of the plant and equipment set out above, Ms Morrow supplied additional equipment for the conduct of the agency.  Cross-examination revealed that she supplied facilities for the comfort of those working on the premises such as a refrigerator and tea and coffee facilities.  However, on the evidence she provided little else.

3. By clause 13 of the agreement, Ms Morrow was required to use only the tickets, betting slips, forms, other stationery, display material, furniture and fittings as were provided or authorised by the respondent.

4. The agency agreement between the applicant and the respondent regulated Ms Morrow’s hours of work.  In fact, the agency agreement reposed in the respondent the ability to determine the number of hours per week that Ms Morrow had to attend the agency.  Clauses 7 and 8 and Appendix 4 to the agreement are relevant:

   Agency Hours:

   7.(a)    UNiTAB shall from time to time, determine the categories of the Agency;

   (b) The Agent shall keep the said premises open for the business of the Agency on such days and during such hours as are, from time to time, required by UNiTAB. The current minimum hours arrangements are attached as Appendix 4.

   8. Agents shall personally be in attendance at their office for the minimum weekly hours listed hereunder:

   Category ‘A’

   Weekly Opening Hours ·· 55 hours (Excluding Sunday)

   Agents required attendance -- 33 hours

   Category 'B'

   Weekly Opening Hours -- 43 hours (Excluding Sunday)

   Agents required attendance -- 32 hours

In case of Joint Agents, the personal attendance of one agent only for the designated hours is required.  In the case of Corporate Agents, the personal attendance of one director only for the designated hours is required.

…

Appendix 4

Minimum Opening Hours

The minimum opening hours per week which shall be worked between Thursday and Wednesday of each week, at the discretion of the UNiTAB, are as follows:

Category “A” Offices:

The minimum weekly hours will be 55 hours (Excluding Sunday).

(1)With the exception of Sunday & Public Holiday meetings, a flat rate of $ 20 per hour will apply on occasions when opening hours are extended at the discretion of UNiTAB.

(2)A flat rate of $ 26.00 per hour will apply on Sunday meetings.

(3)Extended hours on Public Holiday meetings will be paid at the rate of $ 26.00 per hour.

Category “B” Offices:

The minimum weekly hours will be 43 hours (Excluding Sunday).

(1)With the exception of Sunday meetings, a flat rate of $ 20 per hour will apply on occasions when opening hours are extended at the discretion of UNiTAB.

(2) A flat rate of rate of $ 26.00 per hour will apply on Sunday meetings.

(3) Extended hours on Public holiday meetings will be paid at the rate of $ 26.00 per hour.

1. Those clauses make it clear that the respondent retained the ability to determine how many hours per week Ms Morrow’s agency had to remain open, and how many hours per week she needed to personally attend at the agency.  The respondent also retained the ability to determine how the minimum opening hours per week could be organised and worked by Ms Morrow.  The agreement left little scope for Ms Morrow to determine her own hours of work, except to say that she was free to work more than the prescribed minimum if she wished to do so.

2. The respondent determined that Ms Morrow’s agency was a “Category B” office.  It was required to be opened 43 hours per week and according to her evidence, the agency opened from 11.00am until 6.00pm every day.  There was a requirement for her to be in attendance for at least thirty-two hours per week.  She also worked on Sundays.  According to Ms Morrow’s evidence she employed somebody to attend the business on a Saturday and one day during the week.

3. I accept that Ms Morrow was free to perform work for others at times when she was not working within her agency.  Indeed, Ms Morrow gave evidence that between 2004 and 2009 (thus before the present agreement was executed) she worked part-time in a bank two days of the week and five days of the week for the respondent.  For that period she described in her tax returns that she received her primary income as a “bank employee”.  I accept Ms Morrow’s submission, however, that her doing so is not inconsistent with her being an employee of the respondent, but rather reflected industry on her part and an ability to hold down a second job.

4. Ms Morrow could not engage in any business or occupation in the agency premises other than the business of the respondent, except such business or businesses as might be approved in writing by the respondent: clause 23 the agreement.  Neither party suggested that Ms Morrow had been given such approval.  In fact, the evidence showed that when Ms Morrow tried to expand the business and provide a service to the patrons of the agency, the respondent insisted that she stop.

5. Clause 9 of the agency agreement is also significant.  It provides:

   9.Agents who wish to be absent from their office for a period in excess of one (1) week must submit, in advance, the following details in writing to UNiTAB's  Regional Manager:

   (a)Period of proposed leave;

   (b)Name of Relief Agent;

   (c)Names of persons acting as bank signatories;

   (d)Casual staff arrangements;

6. Although it is not clear from that clause, the implication is that Ms Morrow required the respondent’s approval to take leave.  That is especially so having regard to clauses 7 and 8 and appendix 4 of the agreement and the obligations cast upon her to be personally present at the agency.

7. I accept that all Ms Morrow needed to provide was labour.  But it was more than her labour that she had to provide.  By clause 18 of the agreement, Ms Morrow was required to engage, train and maintain a level of staff to ensure that her office had sufficient staff available at all times.  According to clause 18:

   …Minimum staffing levels are to be consistent with UNiTAB requirements to service customers, and are to generally meet the labour required to service specified ticket sales volumes.

8. Ms Morrow gave evidence that she performed the key hours of work in the Agency, but was required to employ staff, in particular to cover busy periods and days off.  Ms Morrow’s ability to engage staff was tightly controlled by the respondent by reason of the terms of the agreement.  The relevant clauses are as follows:

   Staff Responsibilities:

   17.The Agent shall assume responsibility for the engagement, training, payment, Workers' Compensation, and conduct of any person employed by them for the business of the Agency. Such employees shall be the servant of the Agent and not of UNiTAB.

   18.The Agent is required to engage, train and maintain a level of staff to ensure the office has sufficient staff available at all times. Minimum staffing levels are to be consistent with UNiTAB requirements to service customers, and are to generally meet the labour required to service specified ticket sales volumes.

   19.The Agent and its employees are required to observe a minimum business-like standard of dress at all times as follows:

   Female Staff:

   Smart street attire or tailored slacks (eg. no T-shirts or shorts except as forming part of the corporate wardrobe, no jeans, thongs or joggers).

   Male Staff:

   Open neck shirts, slacks, shorts and long socks (sock to be fully extended), (eg. no T-shirts except as forming part of the corporate wardrobe, no jeans, thongs or joggers).

   20.The Agent will dismiss forthwith, or if not permitted under any industrial relation legislation and/or award, upon giving such notice as is required by such legislation or award, dismiss any employee who fails to meet the standards for business conduct and dress required by UNiTAB.

   The Agent will not engage in the Agency any employee who, in the opinion of UNiTAB, fails to respond to counselling from UNiTAB's Regional Manager.

   21.(a)     The Agent will not permit any person other than itself or its employees to use or operate the machines, plant and equipment of UNiTAB situated in the Agency;

   (b)The Agent shall keep, and at the termination of this Agreement deliver up to UNiTAB in good order and condition subject to normal wear and tear all property of UNiTAB which may be entrusted to it or which may be in its possession.

   22.The Agent shall be liable to UNiTAB for all losses sustained by UNiTAB resulting from the acts, errors or omissions by the Agent, or its employee during the operation of the Agency.

9. The respondent argues that the fact that Ms Morrow was an employer of others within the agency is a compelling matter pointing towards her being an independent contractor.

10. In that respect, both parties referred me to ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532 where Perram J considered that the engagement of staff by the workers concerned in that case was not, when taken with all else in that case, sufficient to change the nature of the engagement to being other than employment.

11. Here, the employees engaged by Ms Morrow were subject to an obligation cast upon her by the agreement to dismiss them from her employment if they failed “to meet the standards for business conduct and dress required by” the respondent.  She was not to engage any employee who “in the opinion of UNiTAB, fails to respond to counselling from UNiTAB’s Regional Manager”.  The evidence demonstrated that the respondent did, on at least one occasion, exercise the right to direct the applicant not to employ a particular person. 

12. Ms Morrow says, without challenge, that for the majority of the time she operated the agency she was required to “pay payroll tax as a contribution to the operating expenses of the respondent.”  Ms Morrow would pay the payroll tax and the respondent would reimburse her once she claimed the payments as an operating expense.  While essentially agreeing with this proposition, Mr Fletton explained how that circumstance had come about.  He did not take issue with the proposition that once paid by Ms Morrow it was reimbursed by the respondent.

13. Ms Morrow retained the ability to set the terms and conditions for her employees, including their wages.  In that respect, Ms Morrow was an “active” member of the Queensland UNiTAB Agents Association from November, 2008 and became the Vice President of the Association from November, 2010. The Association caused an enterprise agreement to be reached with the relevant employees’ association and registered in the Queensland Industrial Relations Commission: UniTAB Agents Association (Sharon Morrow) Enterprise Bargaining – Certified Agreement 2008.

14. The respondent submits that it is very significant that the applicant was able to effectively subcontract out the work she was required to perform pursuant to the agency agreement.  Her evidence in cross-examination on this point was that when she was absent from the agency, the workers that she engaged performed the bulk of the work that she would otherwise have performed, but not all of it. 

15. The respondent points to the applicant’s income tax returns and submits that those in evidence (Exhibit 1) reveal significant expenses by way of staff costs.  One example (the 2007 tax return) claims about $57,000 in paying staff to do work provided for in the Agency Agreement.  A further $63,291 in wages expenses was claimed by the applicant in her 2008 tax return.  She also claimed superannuation expenses for her employees as deductions in the relevant taxation.

16. Ms Morrow and staff engaged by her, were prohibited from competing with the respondent in the betting and wagering business conducted by the respondent.  Clause 26 of the agreement required that both Ms Morrow and any employee or other person engaged in or about the business of the agency not hold a Bookmaker’s Licence or a Bookmaker’s Clerk’s Licence nor act as a Bookmaker, a Bookmaker’s Clerk, a Bookmaker’s Agent nor a Bookmaker’s Remote Clerk.  Ms Morrow was required to produce to the respondent, on demand, evidence satisfactory to the respondent that any such licence held by her or any employee or other person engaged in or about the business of the agency had been cancelled or otherwise determined. 

17. There were other ways in which the respondent controlled the work undertaken by Ms Morrow pursuant to the agreement.  For example, she was unable to advertise and promote the business of the agency without the respondent’s approval.  Clause 6 of the agreement provided:

    Promotional Plan:

    6.The Agent will complete and submit annually by 1 August a written promotional plan to UNiTAB's Regional Manager. This plan will detail the promotional activities and other business initiatives which will be undertaken by the Agent over the ensuing twelve months.

18. Mr Fletton suggested that some agents engaged by the respondent may promote the business of their agency by advertising.  Indeed, the applicant claimed marketing and promotion expenses across all the relevant years’ tax returns. That indicates that the applicant was spending money (which she claimed as a deduction) on marketing the business.  But, the advertising and marketing was as a TAB agent, effectively promoting the business and reputation of the respondent, not exclusively that of her agency.

19. There is no doubt that in the performance of her work, Ms Morrow would appear to any outside individual as part of the respondent.  She operated in premises quite clearly recognisable as a retail outlet of the respondent.  The appearance and livery of the business were all strictly as determined by the respondent. 

20. Ms Morrow says she was paid an agreed rate of commission and fees on wagering sales with “an agreed minimum payment.”  She states the respondent created a weekly “Recipient Created Tax Invoice” which outlined the amounts payable to her and upon which her commissions were paid to her.

21. Whilst the respondent did not pay any tax due on the payments to Ms Morrow, it did pay GST on the commissions and deducted the GST on the outgoings charged to Ms Morrow.  Other than that Ms Morrow was responsible for the taxation arrangements of her agency.

22. Mr Fletton gave evidence that the commission paid to Ms Morrow as an agent “was significantly higher” than the wages that she would have been paid as an employee managing one of the respondent’s branches.  He says that employees employed by the respondent to manage branches received about $900 per week.  He compared this to Ms Morrow’s average net commission (before GST) for the financial year to 30 June, 2011 of $3,345 per week.  He acknowledged that from her commission, Ms Morrow also needed to pay expenses like wages, superannuation and taxes.  He did not perform the necessary calculations so as to demonstrate that the payment of commission left Ms Morrow with a greater income than a wage-earning employee.

23. The respondent did not deduct taxation from any payments made by it to Ms Morrow.  Nor did it pay to her holiday pay or annual leave loading.  She was not provided with sick leave.  The respondent argues that this is an indicator that Ms Morrow was in fact an independent contractor.  Indeed, as Bromberg J summarises in On Call Interpreters & Translators Agency Pty Ltd v Commissioner of Taxation (No.3) (2011) 214 FCR 82 the authorities reveal that whether or not income tax has been withheld and whether annual, long service or sick leave is afforded are often used as relevant matters to assist in determining the nature of the relationship between a putative employer and employee. However the ultimate utility of those indicators is questionable for the reasons explained by Bromberg J in On Call (above) at [219]:

    Reliance on these factors may involve circularity of reasoning particularly where these factors are based upon the self-assessed and objectively incorrect label that the parties have attached to their relations: see Hollis at [37] and Owens and Riley at 140. Further, it is necessary to appreciate that casual employees are not ordinarily entitled to leave or sick pay: Sgobino at 293 and 308; Yaraka Holdings at [50];

24. The agreement did provide for Ms Morrow to receive certain minimum payments in the event that her agency location was closed.  On those occasions, according to her evidence, she was granted leave of absence and she received the minimum payments provided for in the agreement.  It was not the case that her income ceased altogether.

25. Ms Morrow was paid on the basis of a commission structure common to all agents. She was guaranteed a minimum commission payment on particular days. That is, there was an arrangement to ensure that she was paid at least a minimum rate of commission for the work performed by her.

26. There was no goodwill attached to the agency conducted by Ms Morrow.  The appointment by the respondent of Ms Morrow as its agent was for a determinable period of three years.  Ms Morrow had no asset that she might sell if she chose to leave the agency.  If the respondent chose to end the arrangement, as it was entitled to do pursuant to clause 28 without notice and without reason, there was nothing to sell to a prospective purchaser and according to the terms of the agreement, the respondent was obliged to give her nothing.  I accept the applicant’s argument that her position is entirely akin to that of an employee who has no right to sell the job to the next incumbent.

Conclusion

1. Taking up the tests espoused by Bromberg J in On Call (above) viewed as a  “practical matter” the questions are:

   a)was Ms Morrow performing the work as an entrepreneur who owned and operated the relevant business; and

   b)when performing the work, was Ms Morrow working in and for her business as a representative of that business and not of the Tattsbet’s business?

2. Further, as Bromberg J pointed out in On Call (above), a genuine independent contractor providing personal services will typically be autonomous rather than subservient in its decision-making.  It will be financially self-reliant rather than economically dependent upon the business of another and, chasing profit (that is a return on risk) rather than simply a payment for the time, skill and effort provided.

3. This is a finely balanced case in my view.  There are a number of indicators which point in the direction of Ms Morrow being an independent contractor.  The agreement by its terms provides for that characterisation.  It is clear from Ms Morrow’s cross-examination that she understood what the agreement provided and always envisaged that she was conducting her own business.  That is the way she accounted to the taxation authorities.  She employed others to assist her with her obligations to the respondent.  She was responsible for their wages and other entitlements.  She was a member of an employer association and took an active part in that association.

4. Her commission was paid by the device of recipient created invoices using an ABN held by her for the purpose of running the agency, remitting taxation to the Australian Taxation Office and creating quarterly Business Activity Statements.  She paid the respondent for GST on supplies made by the respondent to her pursuant to the agreement.

5. There are also strong indicators pointing towards an employee - employer relationship.  Ms Morrow’s conduct of the agency was tightly controlled by the respondent.  It provided the premises from which the agency operated.  It provided and approved the plant and equipment and other consumables (except for staff amenities) used in the agency.  Ms Morrow was not able to engage in providing services for like businesses such as bookmakers.  The respondent controlled the identity of the persons that she could employ as staff.  The respondent reserved to itself the right to approve any proposed leave of absence. 

6. Ms Morrow was required to purchase the relevant supplies from the respondent.  The respondent reimbursed Ms Morrow for payroll tax respect of her own employees at least for some period.  Ms Morrow was unable to make autonomous decisions about the conduct of the betting services that were provided through the agency.  Indeed, as the respondent’s reaction to her decision to sell food demonstrates, she was unable to make autonomous decisions about the conduct of the agency business generally.  Any promotional activities undertaken by her were required to be approved by the respondent.

1. No single factor is decisive.  But overall, I am left with the impression that Ms Morrow was clearly working in the respondent’s business rather than in a business of her own.  Whilst success in her agency meant an increase in her net income, that was only ever a sharing of the profits of the agency.  The income of the agency belonged to the respondent, subject to its obligation to pay commission to Ms Morrow according to the scales set out in the agency agreement.  Remunerating employees by way of commission is not uncommon.

2. I appreciate the respondent’s argument that Ms Morrow was operating a business in her own right as a TAB Agent, and that business of providing skill and labour in operating the agency was fundamentally different to the business of the respondent, a business of betting and wagering.  Nonetheless, the measure of control provided for in the contract between the parties, together with the evidence of the way in which that control was exercised, as I have set out above, leads me to conclude that Ms Morrow was in fact an employee of the respondent.  That is so even though Ms Morrow was herself an employer of others in the agency.

Adverse Action

1. The parties agree that Ms Morrow’s engagement as a TAB agent was terminated by the respondent on 10 November, 2011.  It is also not in dispute that the termination of the agreement was adverse action for the purposes of the Fair Work Act. Terminating the employment of an employee is clearly adverse action: s.342, item 1 of the Fair Work Act.

2. The respondent concedes that the Superannuation Guarantee (Administration) Act1992 is a workplace law for the purposes of the Fair Work Act, at least insofar as employees under the Fair Work Act are concerned. The respondent also concedes that the ATO is a person or body that has capacity under the Superannuation Guarantee (Administration) Act to seek compliance with that Act.

3. Ms Morrow was entitled to make an inquiry of both her employer and of the ATO about the respondent’s liability to make superannuation contributions for her.  To the extent that she may have done that, she exercised her workplace right.  To the extent that she may have made preparations to make that inquiry of the ATO, she was clearly proposing to exercise her workplace right.

4. However, the respondent argues that Ms Morrow did not, in fact, exercise the relevant workplace right or propose to exercise it, so that those matters could not have formed the reason or part of the reason for the adverse action that was taken against her.  To determine that issue requires the examination of some more facts.

5. As I set out above, Ms Morrow was a member of the executive committee of Queensland UNiTAB Agents Association.  She attended a national conference of the Association in May, 2011 as a Queensland delegate.  At the conference, members from different States were apparently discussing different options for improving membership in the Association.  One option offered by a Victorian member was the idea of a discount card.  Ms Morrow says she was tasked with finding out if the Association could source insurance or superannuation discounts for its members. 

6. Ms Morrow used “contacts” she had made when working at a bank in Queensland.  Using those contacts, she arranged a meeting with BT Financial Group.  The discussions with BT Financial Group led Ms Morrow to believe that she should be receiving superannuation contributions from the respondent. 

7. Ms Morrow reported this back to her Association.  She says that at the same time she reported this to the council of the Association, some other agents also reported that their accountants had advised them that they too should be receiving superannuation contributions from the respondent.  Ms Morrow says the Council wanted to “pursue the matter” and she “understood that the equivalent association in Victoria was also considering the issue.” 

8. At this point Ms Morrow considered whether she should, as an individual, find out if there was a right to superannuation entitlements, “including whether a ruling should be sought from the ATO, or whether an approach should be made to the respondent to complain about the failure to pay superannuation.”  Ms Morrow says she was “reluctant” to pursue the claim personally as she “didn’t want to get into trouble with the respondent.”  She said she was concerned the respondent would become aware of the discussions regarding superannuation and this would be detrimental for her.  For that reason, she says she was unsure how to “progress the issue.”

9. Ms Morrow says that an agent within her region of the Association had a “contact who was a tax expert.”  She spoke to this tax expert in approximately October, 2011 and obtained some advice about the contract she had with the respondent.  The tax expert advised Ms Morrow about how to make an application to the Australian Taxation Office for an appropriate ruling on the superannuation contribution issue.

10. At about the same time, Ms Morrow says that she also met with a former TAB agent who was prepared to take the superannuation contribution issue up with the Australia Taxation Office.  Ms Morrow considered that the former TAB agent had “a lot less to lose” than she did because that person was no longer in a contract with the respondent.  Ms Morrow introduced the former TAB agent to the tax expert with whom she had consulted in mid-October, 2011.  Ms Morrow says that she took no further part in any application to the Australian Taxation Office or any other steps in relation to possible superannuation entitlements.  She took time to consider her position.

11. In November, 2011 Ms Morrow was a convenor for a conference to be held by the UNiTAB Agents Association.  She was “responsible for the planning, development and management of” the “Unitab Agents Association Conference in Cairns on 28th and 29^th November”, 2011. 

12. On 9 November, 2011 Mr Fletton telephoned Ms Morrow to arrange a meeting with her and the President of the Association, a Mr Gray, for the following day.  Ms Morrow assumed the meeting related to arrangements concerning the Cairns conference.

13. Mr Fletton was the person who made the decision to terminate Ms Morrow’s agency agreement.  He swears that in late October, 2011 he was contacted by a regional manager of the respondent who advised him that she had been contacted by a former TAB agent named Clayton “regarding an approach that had been made indirectly to Ms Clayton by Ms Morrow.”  Mr Fletton decided to speak directly to Ms Clayton about the approach from Ms Morrow.  Ms Clayton confirmed for Mr Fletton what the regional manager had reported to him.  Mr fletton was informed that Ms Morrow was attempting to encourage the former agent to sue the respondent for superannuation.  Mr Fletton swore that he understood that Ms Morrow wanted to “have agents running their own businesses deemed to be entitled to benefit from superannuation contributions.  … I considered the conduct of Ms Morrow to be unprofessional and dishonourable and not what I thought to be appropriate for a TattsBet Agent.”

14. Mr Fletton said Ms Clayton “was a highly respected TattsBet Agent for many years and I was not happy that she had been approached and placed in a potentially awkward position by Ms Morrow in this way.” 

15. Mr Fletton swore that there were other previous occasions where Ms Morrow’s conduct “had been brought to my attention and caused me concern”.  He swore that it was not the first time he had discussed Ms Morrow’s behaviour (as an agent) with her.  Mr Fletton said that Ms Morrow’s prior history of “unacceptable behaviour as an Agent” made him decide that he needed to speak with Ms Morrow because he “could no longer trust her as a TattsBet Agent.” 

16. According to Mr Fletton’s evidence, the issues that had previously been raised with Ms Morrow related to:

    a)her conduct as an agent;

    b)“her failure to follow reasonable directions and her failure to comply with the Agency Agreement.”  In that respect, Mr Fletton swore that Ms Morrow had on occasions been spoken to about:

    i)Ms Morrow selling food at her agency which Mr Fletton thought “detracted from the retail image that TattsBet was promoting through its electronic office format;”

    ii)complaints regarding Ms Morrow’s customer service standards; and

    iii)Ms Morrow not complying “with directions with respect to operating procedures for having separate cash floats for each wagering terminal.”

    c)her failure to keep the agency in a “respectable and acceptable state of cleanliness” which he considered to be a breach of the agreement.

17. Mr Fletton swore that when these issues were raised with Ms Morrow by her regional manager, she was “generally dismissive and unco-operative”.

18. In his trial affidavit Mr Fletton swore:

    I objected to the underhand manner in which Ms Morrow had gone about trying to involve others in in [sic] her plans to take action against TattsBet and the impact this conduct had on others such as Ms McQueen and Ms Clayton.  The issue of superannuation for Agents had never been raised with me by Ms Morrow or any other Agent.  In fact, at a meeting on the 10th of November 2011, Mr Ron Gray, President of the Agents Association advised me that the Association was thinking about coming to speak to me about this issue.  At that time I told him that I thought this would be an appropriate way to address such an issue and that I would make a time available to speak with him about it.

19. After confirming what he had been told about Ms Morrow’s approach to Ms Clayton, Mr Fletton contacted the President of the Agent’s Association and advised him that he wished to meet with Ms Morrow.  He did not tell Mr Gray the reason for the meeting.  Mr Fletton involved Mr Gray as he knew that Ms Morrow was “actively involved in the Association” and considered Mr Gray “would be an appropriate person to be present.”  Mr Fletton set the meeting for 10 November, 2011.  He also invited Ms Julie Capstaff an employee of the respondent, to the meeting as his witness.

20. Ms Morrow and Mr Gray attended the meeting with Mr Fletton at the head office of Tattsbett Limited in Brisbane.  Ms Morrow swears that “at the beginning of the meeting I found that the discussion had nothing to do with the Unitab Agents Association Conference.”  She was told that her “agency agreement was being terminated.”  Ms Morrow said “It was clear from what was said that the respondent had taken this action based on my involvement in the agitation over the issue of whether superannuation was payable.”  Ms Morrow made a file note of the discussions that occurred at the meeting the following day.

21. According to Mr Fletton’s evidence he asked Ms Morrow if she had approached Ms McQueen.  He says that she “initially” denied his suggestion but then confirmed that she had spoken with her.  She denied “attempting to get Ms Clayton to take legal action against TattsBet.”  However, based upon the information that Mr Fletton had received, he did not believe Ms Morrow and thought that “she was being untruthful with me.”  Upon conveying this to Ms Morrow and explaining to her that he thought her conduct was unprofessional and that he could no longer trust her or have confidence that she should be an agent, he advised her that he was “therefore terminating her Agency Agreement.”

22. While Mr Fletton cannot recall the actual words used, he offered Ms Morrow the opportunity to end the contract.   According to Ms Morrow, during the meeting “it was suggested to me that it would be better if I resigned.”  Whatever is the case, Mr Fletton and Ms Capstaff left the room so Ms Morrow and Mr Gray could have discussions and Ms Morrow could seek legal advice.  Having done so, she ultimately decided not to resign.  Ms Morrow refused to resign and her “engagement was terminated by the respondent.”  She was not provided with a termination notice, however the termination took effect immediately.  On the morning of the meeting, the locks were changed at the Logan Central agency and the respondent appointed another person to operate the agency.

23. Ms Morrow says that she later received a letter in the post, dated 10 November, 2010 which formally advised her that her contract was terminated.

24. Mr Fletton swears in his trial affidavit that “to that point in time”, which presumably is a reference to the date of the meeting with Ms Morrow, the payment of superannuation to agents had never been raised with him in his position as chief executive officer.  He said he was not aware that it had been raised with anyone else at TattsBet. 

25. Ms Julie Capstaff gave evidence in the proceedings.  She swore that she attended the meeting between Ms Morrow and Mr Fletton on 10 November, 2011.  She recalled Mr Fletton said the superannuation issue did not concern him but rather it was “the way Ms Morrow had conducted herself.”  She swears Mr Fletton said at the meeting with Ms Morrow that “he could no longer tolerate Ms Morrow’s conduct and behaviour and he no longer had trusted her in the role of TattsBet Agent.”

Conclusions – Adverse Action

1. In my view, Ms Morrow clearly had a workplace right because she was entitled to the benefit of a workplace law, namely the Superannuation Guarantee Act, was able to initiate, or participate in, a process or proceedings under that workplace law and was able to make a complaint or inquiry to both her employer and the ATO to seek compliance with that law. In my view she is able to demonstrate that she satisfies each of ss.341(1)(a), 341(1)(b) and 341(1)(c).

2. However, according to Ms Morrow’s own evidence, she never made a complaint or an inquiry to the respondent about her entitlement to superannuation under the Superannuation Guarantee Act.  Nor did she make a complaint or an inquiry about her entitlement to superannuation under the Superannuation Guarantee Act with the ATO, or any other body charged with ensuring compliance with that Act.  Although Ms Morrow had taken some advice about those matters before her termination, she had not at that point acted upon that advice.  Indeed, her clear evidence is that she deliberately chose not to make the respondent aware of her inquiries for fear of reprisals from the respondent.  She confirmed those matters in her cross-examination. 

3. Accordingly, Ms Morrow does not establish that she exercised her workplace right.  To the extent that she proposed to exercise her workplace right to pursue a complaint or inquiry about her superannuation (and thereby engaged s.341(1)(a)(iii) of the Fair Work Act), there is no evidence that Ms Morrow informed the respondent or anyone on its behalf about that. Indeed, it was her evidence that she deliberately kept her intention to pursue the issue of superannuation for her from the respondent.  In those circumstances, Ms Morrow cannot make out her case inasmuch as it relies upon her entitlement to pursue those matters on her own behalf.

4. However, Ms Morrow puts her case on the basis that she exercised a workplace right in that her inquiries and actions undertaken as part of the executive of the Agents Association, and specifically her inquiries of the former agent Ms Clayton, should be construed such that I should be satisfied that Ms Morrow was participating in a process or proceeding under a workplace law for the purposes of s.341(1)(b) of the Fair Work Act. I reject her submissions about that because there is no evidence that Ms Clayton, the former agent approached by Ms Morrow, ever undertook any process or proceedings concerning superannuation contributions from the respondent. At best the evidence reveals that Ms Morrow spoke to her about that and that Ms Clayton made contact with the “tax expert” identified by Ms Morrow to her. There is no evidence that there was any process or proceedings embarked upon by Ms Clayton, or anyone else, in which Ms Morrow participated. Moreover, apart from the meeting with the “tax expert” there is no evidence that Ms Clayton proposed exercising her workplace right to make a complaint or inquiry about superannuation contributions from the respondent (which I shall assume for the purposes of these reasons she had).

5. Given those findings, I am not persuaded that s.361(1) of the Fair Work Act is engaged in this case. Ms Morrow does not establish the necessary facts upon which one might conclude that the adverse action taken against her was potentially for a reason proscribed by the Fair Work Act.

6. Even if I am wrong about that and s.361(1) of the Fair Work Act is engaged, I am satisfied that the real reason for the termination of Ms Morrow’s agreement was the reason ascribed by Mr Fletton in his evidence, namely that he had lost trust and confidence in Ms Morrow because of what he saw as the surreptitious way she went about the investigating the superannuation issue. Mr Fletton’s state of mind was informed by the information he had been given about Ms Morrow’s contact with Ms Clayton. Whether that was true or not is not to the point. I am satisfied that the information, coupled with the other matters referred to by Mr Fletton in his evidence led him to conclude that the agency agreement should be terminated. He saw Ms morrow and her conduct as underhanded and divisive. He described her as a pest. I accept his evidence that the information that he received about Ms Morrow’s approaches to Ms Clayton was the last straw.

Overall Conclusions

1. Having regard to the issues that I identified at the commencement of these reasons, I conclude that:

   a)Ms Morrow was an employee of Tattsbet over the relevant period for the purposes of the Fair Work Act;

   b)the real reason for the termination of her employment by Tattsbet was the reason I have identified above.  It was not because she exercised or proposed to exercise a workplace right on her own behalf arising out of the Superannuation Guarantee (Administration) Act 1990 (Cth).  It was not because she participated in, or proposed to participate in the exercise or a similar workplace right by another person;

   c)the reason for which she was terminated was not proscribed by the Fair Work Act, and so, she is not entitled to any relief under that Act in respect of her termination as she claims in these proceedings;

   d)given my finding that Ms Morrow was an employee, no issue arises under the Independent Contractors Act 2006 (Cth).

2. Ms Morrow’s employment was terminated without notice. She was entitled to a period of five weeks’ notice: ss.117(3)(a) and 117(3)(b) of the Fair Work Act. I accept Ms Morrow’s submissions that the amount due in respect of the period of notice is $7,400.00. There will be judgment for that sum in her favour, together with interest from the date of her termination, namely 10 November, 2011. Neither party made submission on the appropriate interest rate to be applied.

3. Further, Ms Morrow is entitled to seek the imposition of a pecuniary penalty for the breach of the Fair Work that I have found proved.  Despite seeking submissions on all issues at the close of the trial, the respondent chose not to make submissions on penalty should the alleged breaches of the Act be found to be proved.  In the circumstances, I shall permit the parties to make further written submissions within the next 21 days in relation to:

   a)the interest rate to be applied to the judgment sum;

   b)the level of penalty, if any, to be imposed for the breach of s.117(1) of the Fair Work Act;

   c)to whom any such penalty should be paid;

   d)any costs applications; and

   e)any other orders necessary arising from these reasons.

I certify that the preceding one hundred and three (103) paragraphs are a true copy of the reasons for judgment of Judge Jarrett

Associate: 

Date:  7 July 2014