Mr Michael Muir v Higgins Manufacturing Australia T/A Higgins Manufacturing Pty Ltd

[2010] FWA 7398

[2010] FWA 7398

FAIR WORK AUSTRALIA

DECISION

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

Mr Michael Muir
v
Higgins Manufacturing Australia T/A Higgins Manufacturing Pty Ltd
(U2010/9438)

DEPUTY PRESIDENT MCCARTHY PERTH, 21 SEPTEMBER 2010

Termination of employment - jurisdiction - whether applicant was an employee or contractor.

Background

[1] On 4 June 2010 Mr Michael Muir (the Applicant) lodged an application for unfair dismissal remedy (the Application) regarding an asserted termination of employment by Higgins Manufacturing Australia Pty Ltd (the Respondent).

[2] The Respondent lodged an objection to the application on 22 June 2010 asserting that the Applicant was not an employee but rather, a contractor performing work under a contract for service. On 17 June 2010 the Respondent also lodged an Employer’s Response to Application for Unfair Dismissal Remedy making the same objection.

[3] I listed the matter for conference/hearing to consider an initial matter, namely whether the Applicant was an employee.

[4] The Respondent is a manufacturer of coffins. The work that the Applicant performed was to deliver coffins to customers of the Respondent.

[5] The Applicant contends that he was an employee. He asserts that, on a range of criteria, the nature of relationship was such that in reality it was an employer/employee relationship.

[6] The Respondent disputes that contention and submitted that the Applicant was a sub-contractor whose specific task was to ensure that the Respondent's product was delivered on time, in good working order at the client's request and that was the Respondent’s expectation. He was paid on a per coffin basis.

The Submissions and Evidence

[7] The Applicant gave evidence as did the owner and Managing Director of the Respondent, Mr Higgins.

[8] The Applicant acknowledged that when he had finished deliveries he could take off and do his own thing or he could stay there and help out and get the next day’s deliveries ready to ensure the customers got their product on time. 1 He also acknowledged that he was never told requested to stay and help out.2

[9] He also stated that the hours he worked were dictated by the tasks to be performed, which in turn, was directed by the requests for coffins by the Respondent’s customers. 3

[10] The Applicant was the only person that performed the deliveries other than when he was on leave 4 or, on occasions, when an emergency arose after he had left work.5 The Applicant asserted that if he “finished somewhere near my gym, that is when I would go to the gym and that was when my working hours were finished."6

[11] Mr Higgins gave evidence that the applicant came into work in the morning. He indicated that they wouldn’t receive all of the orders in the morning and that they would get some orders in the afternoon. Picking slips would be completed which converted into delivery dockets. Those delivery dockets were in waiting for the Applicant in the morning to do his deliveries. The Applicant left the premises at varied times in the afternoon from 1.00pm until sometimes 4.00pm but most of the time in the early afternoon. Deliveries would come in the early afternoon which would be processed and would be ready in the morning for the Applicant to deliver. 7 He claims that they did not need to direct the Applicant as he knew exactly what he had to do to deliver the coffins according to the orders. Mr Higgins asserted that they had no control over what the Applicant did and that the Applicant came in and did his own thing. He knew where the coffins had to go, he knew the customers they had to be delivered to and he did that.8

[12] He also stated that if the Applicant had left work and an urgent order was received requiring delivery "We didn’t demand that Michael come back to do work for us after he’d finished his major set runs for the day. Once he’d finished his running sheet - you know, sometimes if we had a vehicle out we would call him and ask him, for sure, but the majority of time he wouldn’t come back.” 9

[13] The events that led up to the termination of the Applicant’s relationship with the Respondent related mainly to the Applicant being on leave and an employee of the Respondent having an accident whilst using the Applicant’s vehicle. The Respondent found out that the Applicant’s vehicle was not insured. Mr Higgins explained that because of that incident he discussed the arrangements with the Applicant with the aim of making the Applicant an employee. 10 The Applicant rejected the request. Mr Higgins stated the Applicant’s response in the following terms:

“You couldn’t pay me enough money,” and went out of the office." 11

[14] He added that:

"So we haven’t actually said to Michael, “You can’t work for us. You can’t drive for us.” We tried to negotiate with him to work as an employee. There was no remuneration mentioned, not any mention at all.” 12

[15] Mr Higgins explained why they were now looking for a new employee:

“Because we had no control of our previous contractor and so we wanted a person that we would have more control over that could work until 4 o’clock and not disappear at 1 o’clock when the job was done because we required somebody to help out in the stores and do these sort of things. So, I mean, I can go back to the insurance thing; we weren’t going to have a subcontractor working for us again that let insurances lapse and put the company in great jeopardy and my staff by allowing other people to drive his truck, which he was in full knowledge that they drove his truck with his permission. So we thought we’re not going down this track again. So we went back to an employee, as we did previously 10 or 12 years ago.” 13

Findings and Conclusions

[16] I am satisfied from the evidence that the Applicant was not an employee of the Respondent. The Applicant in my view had an arrangement with the Respondent to provide a service of delivering the Respondent’s product. The nature of that arrangement was a price paid per product delivered. The Applicant produced regular invoices for his payment, organised his own tax, owned his own vehicle and had control of his own finish times (except to the extent that the nature of the service dictated the delivery time).

[17] Importantly, the Applicant seemed to also have the view that he was not an employee, evidenced by his refusal, and the nature of that refusal, to change his remuneration from a per item basis to a wage.

[18] Here the relationship went beyond one of an employer and employee with remuneration on a piecework basis. The control over the Applicant was minimal and dictated solely by the demands of the Respondent’s customers. The Applicant appears to have made his arrangements to be able to meet those demands but in a manner that best and most efficiently suited him. I therefore do not consider that the relationship was one of employee and employer with payment being a piecework rate.

[19] I consider that the true nature of the relationship was not one of employer and employee. As such, the Applicant was not an employee of the Respondent and able to make an application under s.394 of the Fair Work Act 2009.

[20] The Application is dismissed.

DEPUTY PRESIDENT

Hearing details:

Perth.

2010:

2 September.

 1   pn 184

 2   pn 182

 3   pn 185

 4   pn 202

 5   pn 290

 6   pn 208

 7   pn 277

 8   pn 287

 9   pn 284

 10   pn 386

 11   pn 356

 12   pn 356

 13   pn 306, pn 359

Printed by authority of the Commonwealth Government Printer

<Price code A, PR501972>