Mr John Hanson v Hazeldine Pty Limited

[2011] FWA 5368

[2011] FWA 5368

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr John Hanson
v
Hazeldine Pty Limited
(U2011/334)

DEPUTY PRESIDENT MCCARTHY PERTH, 17 AUGUST 2011

Background

[1] Mr John Hanson (the Applicant) lodged an Application for Unfair Dismissal Remedy (the Application) pursuant to s.394 of the Fair Work Act 2009 (the FW Act) on 21 February 2011. The Applicant asserted that he was employed by Hazeldine Pty Ltd (the Respondent) and that his employment was unfairly terminated on 11 February 2011. The Respondent lodged a response on 22 March 2011 objecting to the application by asserting that the Applicant had not been an employee, but rather had been an independent contractor. It was clear therefore that an initial matter needed to be determined, namely whether the Applicant was protected from unfair dismissal. 1

[2] I listed the matter for a conference on 20 April 2011. This listing was cancelled following a request from the Respondent. A conference was held on 27 May 2011. On 14 June 2011, I issued Directions and listed the matter for conference/hearing on 12 July 2011 to consider the initial matter. The Directions I issued required submissions, witness statements and other documentary material to be lodged by specific dates. The Respondent was required to lodge their material by 24 June 2011. On 1 July 2011, the representative for the Respondent made a request for an extension until 15 July 2011 to lodge their material. I allowed the request, cancelled the listing for 12 July 2011 and re-issued Directions with altered dates. The matter was relisted for 11 August 2011.

[3] The Respondent’s submissions were due to be lodged on 15 July 2011. They were lodged on 22 July 2011. The documents lodged included an outline of submission to which were attached two documents headed “Tax Invoice - Statement”, one dated 5 December 2010 and one dated 9 January 2011. No witness statements were received.

[4] I allowed the Applicant until 5 August 2011 to file their material. The Applicant lodged an outline of submissions, a reply to the Applicant’s submissions and a statement by the Applicant. A series of annexures that were attached to the Applicant’s statement were also lodged. Those annexures included time sheets which were filled out by the Applicant for each day, all hours worked and sample invoices provided to the Respondent.

[5] The listing notice for 11 August 2011 stated the place, date and time for the proceedings. It also stated that should the parties wish to appear by Video-link or telephone, that it could be arranged on request. There does not appear to have been any request made.

[6] Neither the Applicant nor the Respondent or their representatives attended on 11 August 2011. My Associate made enquiries of the representatives. I am advised that the Applicant’s representative thought the initial matter would be determined on the papers. I was also advised that the Respondent’s representative was involved in a trial in Kalgoorlie and not available.

[7] In the circumstances, I have decided to determine the initial matter on the papers that were lodged.

Submissions

The Respondent

[8] The Respondent submitted that the Applicant entered into an oral services agreement with the Respondent. The agreed terms were that the Applicant would:

i. Be paid $55/hour, exclusive of GST.

ii. Pay his own insurance.

iii. Pay his own tax.

iv. Pay his own superannuation.

v. Provide his services at times that were mutually convenient to both parties.

vi. Work variable hours for the Respondent (including times worked and break times).

vii. Use his skills as an excavator and back-hoe operator to determine how to complete the various tasks required by the Respondent.

viii. Provide the Respondent with invoices displaying the Applicant’s ABN, the hours worked and the sundries charged.

ix. The Applicant relied on his own skills to determine the method of completing tasks for the Respondent. For example, the Respondent would request that the Applicant undertake to demolish a structure, and the Applicant would decide how to go about demolishing the structure.

x. The Applicant assumed financial risk in operation of tasks for the Respondent. For example, on 29 January 2011, the Applicant caused substantial damage to the Respondent’s excavator. The Applicant informed the Respondent that he would not charge the Respondent for his labour that day to compensate the Respondent for the damage caused.

xi. The contract was mining industry infrastructure and construction, which demands a high degree of specialist heavy machinery and operator skill. It would be uncommon for any sole operator contracting within the industry to supply machinery, the capital cost of which usually exceeds $500,000.

xii. Industry custom and economic necessity requires a contractor working with heavy machinery to charge for their services on an hourly basis, rather than for the product received. This is because, as typical in the industry, the Respondent was a subcontractor to a third party, and labour and machinery hire is accounted for on an hourly basis.

xiii. The amounts of the Applicant’s invoices were variable, depending on the hours the Applicant decided to work and the nature of the task involved. Unlike a full time employee who works consistent hours for a set amount, the Applicant’s contractual charges were set by him. Two invoices were provided in support of this contention.

xiv. The Applicant was free to delegate and subcontract his services, and the Respondent is unaware of whether the Applicant did so.

The Applicant

[9] The Applicant submitted that:

i. In the pre-employment discussions the Respondent made no mention of arrangements in relation to taxation, superannuation or ABN invoices.

ii. The Applicant was employed pursuant to the General Construction Industry Award and his duties as an excavator / back-hoe / driver / operator included Operating an excavator / back-hoe / at designated sites and General Labouring work.

iii. The Applicant worked a 13 day roster and thereafter had a one-day break.

iv. Furthermore, the Applicant, every 25 days, had a 10 day break.

v. The Applicant worked a 13 day roster, working Monday to Sunday 6am - 6 pm (12 hour shifts) and was paid $55 per hour. His roster shows that he worked regular and systematic hours.

vi. The Applicant also lived on mining campsites where all the accommodation and food were provided by the Respondent and or the principal contractor.

vii. The Applicant always reported directly to the Respondent’s Owner, Mr Brendan Hazeldine or the site Supervisor. The Applicant also worked in a team of 2-5 other Hazeldine and 3rd party contractor employees.

viii. On March 2010, the Applicant approached the Respondent regarding his payment of superannuation. Mr Hazeldine explained that superannuation was a “grey area” and failed to provide any further information about the Applicant’s superannuation.

ix. Whilst employed with the Respondent, the Applicant filled out time sheets for each day and all hours worked.

x. A short period after the Applicant commenced employment, the Respondent required him to provide a GST invoice with an ABN and the Applicant was unsure why he had to do so.

xi. The Applicant, whilst employed by the Respondent as a back-hoe driver and excavator operator, provided no equipment and or tools to undertake his duties. The Respondent provided all the machinery not limited to back-hoe(s), excavators and motor vehicles to enable the Applicant to undertake his duties.

xii. The Applicant was employed to work 12 hours per day and was always directed by the Respondent’s supervisors on what machinery to utilise and what specific area to operate in.

xiii. Whilst employed by the Respondent, the Applicant was an integral part of their operational team. Various third party contractors and other customers knew he was an employee as he was working with Respondent’s equipment and under the Respondent’s control. The Applicant, whilst living on the mining sites, was deemed an employee of Hazeldine Pty Ltd and boarded with some of their employees.

xiv. Whilst employed by the Respondent, the Applicant was paid an hourly rate of $55 for every hour worked and his income was dependent on his hourly workload. The Applicant worked a minimum of 72 hours per week and accordingly, he did not work for any other employers.

xv. The Applicant maintains he had no authority to delegate his work duties (driving back-hoe and operating excavator) on other contractors and he was always under the strict control of the Respondent’s Managers and Supervisors.

[10] In response to the Respondent's submission, the Applicant submitted that:

i. The Respondent did not lead any evidence on any other issue except the hourly rate. In effect, the hourly rate actually supports the Applicant’s intention that he was paid not on task completion but on hours worked. In relation to GST, this is not an indicative factor but one of many when Fair Work Australia will make a decision on this issue.

ii. The Applicant also worked regular and systematic hours for the Respondent as evidenced in the time sheets and invoices. Indeed the Applicant used his skills to operate the machinery and this was what was expected of him.

iii. Indeed the Applicant did provide ABN invoices but this was never discussed prior to commencing the employment relationship. The provision of ABN was an issue post employment commencing and the Applicant only followed the direction by providing one.

iv. Intention is a relevant factor. However, in this case there are no documents to demonstrate a sub contractor relationship. Furthermore, all the pre employment discussions were about the Applicant coming on board as a back-hoe operator and working on a $55 per hour rate.

v. The Applicant received employee entitlements in relation to the provision of onsite complimentary accommodation and food.

vi. The Applicant did rely on his own skills to complete the work. However, the Applicant was under the strict supervision of Hazeldine managers and 3rd party contractors when undertaking work.

vii. The Applicant provided a signed statement which supported the above contentions.

viii. The Respondent has provided no further documentation since the Applicant’s documents were lodged.

Consideration and Conclusion

[11] I have applied what are regarded to be the principles relevant to determining whether an employment relationship existed 2 to the evidence and submissions presented.

[12] It appears to me that whilst the Respondent did not oversee directly what work was to be performed or how that work was to be performed, that was more as a consequence of the nature of the work than it was of the nature of the relationship. Indeed, it would seem the Respondent either delegated direction and control of the Applicant’s work to the clients that the Respondent had a contractual relationship, or that relationship required the client to have that authority. The Applicant clearly had no power of delegation to others. Thus, I do not consider that the Applicant had ultimate authority of the performance of work, rather it resided with the Respondent or through the Respondent with the Respondent’s clients.

[13] The hours of work the Applicant worked, the systematic nature of those hours, the number of hours worked and the rostering arrangements for those hours are also typical for an employment relationship, although I accept not exclusively so. However, here it seems the Applicant’s hours were more akin to those of an employee rather than a contractor.

[14] The Applicant worked exclusively for the Respondent, indeed as the Applicant points out the number of hours worked and the arrangement to those hours made it impossible to perform work for anyone else.

[15] It is not disputed that the Applicant provided no capital or equipment. For the type of work performed here, that may be unsurprising but it is also more indicative of an employment relationship than not.

[16] I have no evidence of a written contract of any sort. The Applicant’s evidence is that he was engaged on an hourly rate of pay and he states there was no discussion of the types of matters that one would usually be considered in a contract for service. I accept the Applicant’s evidence in that regard.

[17] The requirement that the Applicant fill out time sheets to me indicates nothing more than the times that the Applicant performed work. It appears to me to be more of a check-in and check-out system common with time clocks and the like that employees often are required to comply with.

[18] I accept the evidence of the Applicant that he provided invoices because they were requested but I do not consider the provision of those invoices indicate of much other compliance with the request. Nor is the holding by the Applicant of an ABN number indicative to me of the nature of the relationship or the terms of any contract.

[19] The Applicant was paid regularly and systematically similarly to the way an employee would be paid.

[20] Taking the above matters into account, it seems to me that the relationship between the Applicant and the Respondent was an employment relationship.

[21] The application for dismissal on the grounds that the Applicant is not an employee is refused. The matter will now be listed to further deal with the application.

DEPUTY PRESIDENT

Final written submissions:

5 August 2011.

 1   s.396(b)

 2   see Abdalla v Viewdaze (2003) 122 IR 215

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