Mr Shannon Mander v Sunrise Solar Installers Pty Ltd T/A Sunrise Solar Installers

[2013] FWC 953

[2013] FWC 953

FAIR WORK COMMISSION

DECISION

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

Mr Shannon Mander
v
Sunrise Solar Installers Pty Ltd T/A Sunrise Solar Installers
(U2012/13854)

DEPUTY PRESIDENT BARTEL ADELAIDE, 11 FEBRUARY 2013

Termination of employment - Jurisdictional Objection

[1] Shannon Mander (the applicant) was dismissed from his employment with Sunrise Solar Installers Pty Ltd (the respondent or Sunrise) on 20 September 2012. At the time the applicant held the position of Scope Technician/Panel Installer. He has made application pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking an unfair dismissal remedy.

[2] It is agreed between the parties that:

● The applicant was engaged as an employee between April 2012 and 20 September 2012;

● The respondent is not a small business as defined in s.23 of the Act;

● The minimum employment period required to be completed by the applicant in order to bring his application within the jurisdiction of the Fair Work Commission (the Commission) is 6 months;

● Between February 2011 and April 2012 the applicant installed solar panels for the respondent. From August 2011 the applicant undertook this work pursuant to an agreement he signed entitled “Installer Agreement for Photovoltaic Grid Connect Solar Systems” (the Agreement). 1 It appears that the applicant worked in accordance with the terms of the Agreement in the period before it was formally executed by him; and

● If the applicant was an independent contractor in this period, this service does not count toward the minimum employment period.

[3] The relevant provisions of the Act concerning the minimum employment period are as follows:

“Section 382 When a person is protected from unfair dismissal

382 A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:

(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

Section 383 Meaning of minimum employment period
383 The minimum employment period is:

(a) if the employer is not a small business employer — 6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;
(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.”

[4] Robert Pedecini, the respondent’s Managing Director, appeared for the respondent. He contends that for the period that the applicant performed installation work under the Agreement he was an independent contractor. David Putland, of the Master Builders Association of South Australia Incorporated (the MBA) appeared for the applicant and argues that the Installer Agreement was a sham arrangement and that the applicant was an employee at all material times.

[5] This decision deals with the respondent’s jurisdictional objection.

[6] The business of the respondent is the installation and connection of photovoltaic solar panels pursuant to a commercial arrangement it has with a solar energy systems retailer (the retailer). 2 The respondent holds a restricted builders license in order to undertake this work for the customers of the retailer. The panels are provided by, and remain the property of the retailer.

[7] The Agreement is a 12 page document including a 3 page Confidentiality Agreement, which has been separately signed by the parties, being “the Company” and “the Installer”. In accordance with its terms the Agreement is a standard document 3 and is not subject to change by negotiation. As Mr Pedicini stated “… I didn’t want to sit there and start writing a contract for every contractor who had his own view on something.”4 From the terms of the Agreement it is apparent that it was also utilized for electricians.

[8] The Agreement makes no provision for, or reference to payment for the work undertaken. It does not identify the nature of the arrangement between the parties, although it is implied that it reflects a contract for service or independent contractor arrangement by the reference to labour supplied by the Installer and to “related bodies” and “agents” of the Installer. The Agreement is discussed later in the decision.

The work arrangements

[9] The respondent has a schedule of installations to be undertaken each day for customers of the retailer. The applicant, together with other Installers, would attend at the respondent’s warehouse and pick up one or more jobs to be done. According to Mr Pedicini it was a “first in, best dressed scenario” 5, whereby the Installers who attended when the warehouse opened at 7.00am could have the pick of the jobs and those attending later would get the remaining, more difficult installations. Heidi Condon, the respondent’s Operations Manager, coordinated the allocation of jobs.

[10] The applicant was not obliged to attend the warehouse on any given day or at a particular time. Mr Pedicini provided the Tribunal with a list of jobs undertaken by the applicant between February 2011 and April 2012 6 which indicates that the days worked and the number of jobs undertaken was variable from month to month. For example, in June 2011 he attended the warehouse on 19 days and undertook 35 installations, but in March 2012 attended on 7 days and undertook 8 installations.

[11] The applicant disputes that this is a complete record of the jobs he undertook and gave evidence that, according to his invoice book, 72 jobs were missing from the respondent’s document. The invoice book was not produced and I have therefore taken the respondent’s document to be a reliable indicator of the frequency of jobs undertaken and the days on which work was performed by the applicant.

[12] When the applicant collected jobs from the respondent he was given a kit containing the solar panels to be installed and all materials for fixing the panels to the customer’s roof. He provided his own tools and equipment, but occasionally borrowed a ladder from the respondent if his ladder wasn’t long enough for the job or he didn’t have it with him. He used his own vehicle.

[13] The applicant was required to wear a uniform, branded with the Sunrise logo, which was supplied and paid for by the respondent.

[14] He generally performed the installation of the panels alone, but from time to time the respondent would provide labour to assist him. He was not supervised on the job but had telephone access to one of the supervisors employed by the respondent if he needed advice in relation to the completion of a job.

[15] Once on site the applicant would engage with the customer and explain the work he was to undertake. He would then install the fixings on the roof that support the solar panels, and affix the panels, ensuring that they were located and fixed in accordance with Australian Standards. At the conclusion of all jobs the applicant was required to take photographs of the installation in accordance with the relevant Australian standards, and these remained the property of the respondent.

[16] On occasions the location of the solar panels as advised to the customer by sales representatives was not a practical or viable design given the dimensions and/or structure of the roof. In these circumstances the applicant would identify a suitable alternative placement for the panels and advise the client. This process was known as a “redesign”. If the client was content to proceed with the installation the applicant would complete the job accordingly. At the conclusion of the job the applicant would obtain the customers signature on a sketch of the relocated panels, which was on the respondent’s letterhead. The drawing would be submitted to Ms Condon. Apart from this circumstance, the documentation required to be signed by the customer, including rebate forms, was generally handled by the electrician on site.

[17] The applicant occasionally attended tool box meetings at the respondent’s premises. Other Installers working on the same arrangement as the applicant would attend, as would the respondent’s employees and management. Matters discussed included operational issues and payments for work.

[18] The applicant was required to have undertaken particular training in structural standards in order to perform the installation work. According to Mr Pedicini the cost of this training was met by the applicant. No other training was undertaken by the applicant however, Mr Pedicini acknowledged that the cost of any training on the Australian Standards for solar panel installation was to be met by Sunrise.

Payment for work performed

[19] Payments were made in accordance with a schedule of payments which was provided to the applicant at the commencement of the working relationship. If the rates were varied a new schedule would be provided, and this occurred on at least one occasion during this period. The rates and any variation thereto were determined by the respondent and were not subject to negotiation. The same schedule of payments applied to all Installers.

[20] The schedule provided for a base rate of $200 for the installation of a 1.5kw (8 panel) system and $25 for each additional panel. There was an extra amount if the installation was on a two story dwelling. The schedule also included a cancellation fee and a redesign fee.

[21] There was limited opportunity for the negotiation of additional rates. One such occasion arose when the applicant agreed to perform a significant number of installations over a short period in a regional location. An additional $50 per job was negotiated.

[22] The applicant submitted invoices for the work performed at the mid-month date and at the end of the month. The respondent would check the invoice amount against the details of the job and make payment via EFT to the applicant’s bank account. No written record of payment was provided, however if the respondent did not pay the full amount of the invoice a note was left in the applicant’s pigeon hole at the Sunrise warehouse, advising the reasons for, and the amount of the deduction.

[23] It is agreed that deduction was made from the invoices submitted by the applicant in respect to some damage to panels that the respondent attributed to the applicant. It is unclear whether the applicant accepts that he was responsible for the damage but he did not dispute that he was liable for any damage caused by his actions.

Other work

[24] For two periods of approximately a week each, the applicant performed work installing solar panels for Omar Rasheed, whom he met when Mr Rasheed was a contract electrician with Sunrise. He also performed work for a previous employer for approximately one week in late 2011. Apart from these periods and a period of absence due to a shoulder injury, the applicant performed work for Sunrise. Performance of ‘outside’ work was not prohibited under the arrangement with the respondent, however, the applicant was not allowed to advertise his services as an installer to the customer. Mr Pedicini stated:

“…so if the customer had a relative who also wanted one [installation of panels], definitely not allowed to poach. As a contractor, as a company, definitely not allowed to poach. It had to be referred back to the retailer that the person bought the system from. In regards to work outside of solar, that was never even really touched upon. Like I said, if the customer wanted a deck built and Shannon was able to do it and wanted to quote it, it wouldn't matter to us.” 7

Delegation of work

[25] The applicant was able to employ labourers to assist him to complete the work he was allocated by the respondent, although he never did so. He was not able to transfer or assign the work to another person or company.

The Agreement

[26] The terms of the Agreement entered into by the applicant in August 2011 are consistent with the arrangement that applied in practice, and its terms include the requirement that the applicant:

● Undertakes work on behalf of the respondent and that whilst on the worksite he represents the respondent;

● Assumes liability for any damage to the panels and fixings as supplied by the respondent whilst in his possession;

● Comply with all regulatory requirements and the Sunrise installation guidelines;

● Not make any representations or give warranties, other than those authorized by Sunrise or the Manufacturer or implied by law;

● Will adequately equip himself and his labourers with the correct safety equipment, including clothing, harnesses and gutter guards;

● Is responsible for the quality of the installation;

● Indemnifies Sunrise against claims arising for the work of the installers agents in the event that the agents are not properly trained and informed on the installation of the product

● Will not seek to poach customers and in the event this occurs it “may incur in instant dismissal…” 8;

[27] The respondent’s obligations under the Agreement include:

● To keep the installer fully informed of product developments and application;

● To provide sufficient technical information to support the product installation;

● To provide technical support to the extent of telephone and written queries and initial technical training; and

● To ensure all products are in a fit and proper condition for installation.

[28] The Confidentiality Agreement contains standard provisions restraining the parties from disclosure of certain information. Its contents are not dissimilar to the arrangements that sometimes apply to employment relationships and are of no assistance in determining the nature of the contractual relationship between the parties.

The submissions

[29] Mr Pedicini submitted that the relevant characteristics of the working arrangement between the parties that support a finding that the applicant was a contractor are:

● The applicant was not supervised in his work;

● Subject to compliance with regulatory requirements and standards, he had discretion as to how the job was undertaken;

● The applicant could employ labour to assist with the installation work;

● He provided his own tools, equipment and transport;

● He submitted invoices for payment;

● The applicant decided when and if he would work;

● The applicant assumed responsibility for the quality of his workmanship and bore financial responsibility for the panels and fixings in his possession; and

● The applicant was required to have completed certain training in structural integrity and he paid for his own training.

[30] Mr Putland referred the Tribunal to various cases concerning the distinction between an independent contractor and employee. He submitted that the respondent exercised control over the applicant in the allocation of work and the place of work, and in the ability to dismiss the applicant.

[31] The applicant worked on an ongoing and systematic basis and he had an expectation that the work would continue. He had no separate business premises, no other source of work and he did not advertise his services. He was paid in accordance with a schedule determined by the respondent.

[32] The applicant’s work was integrated into the business of the respondent in terms of training, assistance on the job and access to advice. The applicant was presented to customers as an emanation of Sunrise, especially by the requirement that he wear a Sunrise uniform. The work undertaken by the applicant generated goodwill for the respondent.

Consideration

[33] There are a number of principles that guide the approach to determining whether a relationship is that of employee and employer or independent contractor and principal. The label attached to the relationship by the parties is not of itself determinative, because the parties cannot deem their relationship to be something which it is not. The nature of the relationship is to be found in the system that operated under the written terms and the actual work practices adopted by the parties. 9

[34] In On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No. 3) 10, there is a comprehensive discussion on the distinction between an employee and independent contractor, including the matters to be considered and the general approach to be adopted. His Honour Justice Bromberg refers to various research including Owens R and Riley L, The Law of Work11 and notes:

“Owens and Riley point out that most contracts for the performance of work are ‘contracts of adhesion’. That is, contracts the terms of which are set by the dominant party on a take-it-or-leave-it basis. In that context contractual arrangements may often be imposed by the dominant party for its own purposes”    12

[35] His Honour then notes that the employment relationship classically contains two parties - the worker who provides labour and an entity that receives the benefit of that labour. Labour, being a combination of time skill and effort, is traded for remuneration. There is a provider, a purchaser, an exchange and a contract containing terms and conditions that regulate the exchange. The question posed by His Honour is how is an employee, who provides personal services for hire, to be distinguished from an independent contractor, especially one providing personal services for hire?

[36] There are a range of factors or indicia to be assessed. However, the distinction between an employee and an independent contractor has been expressed to be: that when personal services are provided to another business, an independent contractor provides those services whilst working in and for his or her own business, whereas an employee provides personal services whilst working in the employer’s business. Unless the work is being provided by an independent contractor as a representative of that person’s own business and not as a manifestation of the business receiving the work, the person providing the work is an employee. 13

[37] In applying this approach to the circumstances of the present matter, I am satisfied that the applicant was not operating a business that benefitted from the work he performed. There is no evidence that the applicant operated a business that involved an investment of time, money, or effort with the attendant risk that is generally associated with a business. 14 The evidence indicates that the applicant undertook work for the benefit of Sunrise - he presented as an emanation of Sunrise, could only undertake installation work utilizing the products supplied by the respondent and undertook work as scheduled by the respondent. Labour, technical and training support provided by the respondent integrated the work of the applicant into the respondent’s business.

[38] Mr Pedicini saw this as a means of ensuring the integrity of the respondent’s commercial responsibilities to the retailer and it’s compliance with the regulatory requirements on its business. In other words, the respondent assumed responsibility for the applicant meeting these requirements.

[39] The contractual terms and conditions agreed by the applicant bear the hallmarks of a “contract of adhesion” as described by Owens and Riley, above. The terms were standard terms applying to all Installers and there was no scope for negotiation by the applicant. This was the case with the schedule of payments, which were determined and varied unilaterally by the respondent. Apart from one the exception involving regional work where a higher rate was negotiated, the applicant had no scope to control the extent of the profit he received from any of the work he undertook, by, for example, reducing his costs, increasing the customers’ costs or adopting different techniques. 15

Conclusion

[40] In relation to the matters relied upon by the employer, it is correct that many of these factors would tend to point toward independent contractor status and in the circumstances of a particular set of arrangements, may even be persuasive. 16 However in all the circumstances of this case, these discrete features of the arrangement do not detract from the overall and overriding characteristics of the relationship. The applicant was providing his services in furtherance of the respondent’s business rather than his own.

[41] I therefore determine that in the period between February 2011 and April 2012 the applicant was an employee of the respondent. As such, his employment period with the respondent was 21 months and he has completed the minimum employment period as prescribed in the Act.

[42] The parties will be shortly advised of a directions conference to consider directions associated with the hearing of the substantive application.

DEPUTY PRESIDENT

Appearances:

Mr D Putland representative for Mr Mander

Mr R Pedicini, Managing Director in person for Sunrise Solar Installers

Hearing details:

2013

Adelaide

9 January

 1   Attachment to Ex R1

 2   The installation of the inverters and connection of the solar energy to the electricity grid was undertaken by electricians employed, or otherwise engaged by the respondent.

 3   Clause 22 of the Agreement.

 4   A tr pn 247

 5   At tr pn 29

 6   Attachment to Ex R1 entitled Jobs List

 7   At tr pn 221. The applicant is a qualified carpenter.

 8   Clause 7(c) of the Agreement

 9   Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at [58] and [24]

 10 [2011] FCA 366

 11   Oxford University Press, 2007 at 144

 12 [2011] FCA 366 at para 199

 13   Hollis, supra, at [39], [40], [47] and [57]

 14   On Call Interpreters, supra, at para 213

 15   Hollis, supra, at [54] and [58]

 16   However, the discretion exercised by the applicant as to the days and hours when work was performed and the occasions when he undertook work outside the respondent’s business, can also be features of a casual employment arrangement.

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