Mr Solomon Gela v Townsville Aboriginal and Torres Strait Islander Corporation for Media

[2017] FWC 5614

[2017] FWC 5614

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mr Solomon Gela
v
Townsville Aboriginal And Torres Strait Islander Corporation For Media
(U2017/6244)

COMMISSIONER SIMPSON BRISBANE, 27 OCTOBER 2017

Application for an unfair dismissal remedy – whether contractor or employee – overall relationship assessed having regard to various competing indicia – on balance found to be contractor

[1] This decision relates to an application pursuant to s.394 of the Fair Work Act 2009 (the Act) made by Mr Solomon Gela (‘the Applicant’) on the basis of his belief that his dismissal by Townsville Aboriginal And Torres Strait Islander Corporation For Media (TATSICFM) (‘the Respondent’) was unfair.

[2] On 23 May 2017, Mr Gela was terminated from his employment with the Respondent, and on 13 June 2017, the application for an unfair dismissal remedy was filed in the Fair Work Commission. The Applicant listed the remedies he sought as including recognition of his status as an employee rather than an independent contractor, remuneration of four weeks’ pay in lieu of notice, remuneration of his entitlements during the period of engagement including leave, loading, superannuation and tax.

[3] On 30 June 2017, an Employer’s Response was filed, noting jurisdictional objections by the Respondent on the basis that the Applicant was not an employee, and that the Respondent is a small business which complied with its obligations under the Small Business Fair Dismissal Code.

[4] The matter was listed for conciliation on 28 June 2017, and subsequently adjourned to 5 July 2017, but was not settled. The matter was then allocated to the Commission as presently constituted on 28 July 2017. Thereafter the matter was listed for directions on 9 August 2017, which were subsequently issued on 14 August 2017 along with a listing for arbitration on 9 and 10 October 2017. A further directions and mention was listed for 5 October 2017.

[5] On 13 September 2017 both parties filed submissions; the Respondent set out in their submissions the jurisdictional objections, and provided statements of Mr Randall Cornelious Ross, Ms Margaret Helena Gray, Mr Bradley Henaway, Mr Salvatore Russo and Ms Lorraine Lynn Ross.

[6] The Applicant filed further submissions in reply to the jurisdictional objections on 27 September 2017, and at that time also requested an extension of time to file further material, which was unopposed by the Respondent and was granted to 2 October 2017. On 4 October 2017 Mr Gela provided a response to the substantive matter in reply by the Respondent as well as a statement of Ms Velma Gara.

[7] The Respondent, on 29 September 2017, provided submissions in reply to Mr Gela’s submissions and on 4 October filed its response to his material on jurisdiction.

Background

[8] The Respondent is managed by a Board of Directors and is a community based Aboriginal and Torres Strait Islander organisation based in Townsville and operating 4K1G Radio Station. The organisation had over time employed a Station Manager, Broadcasters and Administrative support. At the time of the termination of Mr Gela’s engagement the Respondent said it had 2 employees. 1

[9] It was put that as a community based organisation 4K1G relies on community volunteers to support the station operations and broadcast services. 4K1G has serviced the Townsville and surrounding regions for over 30 years.

[10] According to the Respondent, Mr Gela was engaged as a “Consulting Acting Station Manager” are the departure of the previous employed Station Manager and this was handled by the then Chairperson of the Board, Mr Jeffrey Henaway, who did not give evidence at the hearing. There is no written contract between the parties.

[11] On 24 February 2017 TATSIMAC AND TSRG4K1G amalgamated to form TATSICFM. It is not contested that during the period of the Applicant’s engagement he issued invoices which included GST on behalf of a business called TDG Consultancy.

[12] A letter to Mr Gela dated 23 May 2017 terminating his engagement read as follows:

“Dear Mr Gela,

The Townsville Aboriginal and Torres Strait Islander Corporation for Media would like to inform you that we will no longer require your contracted services as of Tuesday 23 May 2017.

With this notification, we comply with the minimum notice period required by our agreement.

We thank you for the services you have have (sic) provided us with in the past, however the Board of Directors have determined that these services will be advertised, and filled in accordance with our Organisation’s policy and procedures and funding provider obligations.

TATSICFM request you provide your invoice for Monday 22 May 2017 of 8 hrs to us by Friday 26^th May 2017 for normal processing and return any and all TATSICFM property and keys to Brad Henaway on the morning of Tuesday 23 May 2017.

Please confirm the receipt of this letter is notification of termination of your contract.

If you have any questions please feel free to contact me on (phone number withheld) or email at (email address withheld).

We would like to thank you for our collaboration and wish you all the best in your future endeavours.

Your sincerely

TATSICFM Board of Directors”

Jurisdictional Issue – Not an employee

[13] The Respondent objects on the jurisdictional ground that the Applicant was not an employee, and had always been engaged as an independent contractor.

[14] The Full Bench decision in Kimber v Western Auger Drilling Pty Ltd 2 addresses the factors this Commission needs to consider in assessing whether an Applicant was an employee or an independent contractor during the relevant period. The Full Bench endorsed the general approach to distinguishing employees and independent contractors provided in Jiang Shen Cai T/A French Accent v Michael Anthony Do Rozario3which follows:

“(1) In determining whether a worker is an employee or an independent contractor the ultimate question is whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part? This question is concerned with the objective character of the relationship. It is answered by considering the terms of the contract and the totality of the relationship.

(2) The nature of the work performed and the manner in which it is performed must always be considered. This will always be relevant to the identification of relevant indicia and the relative weight to be assigned to various indicia and may often be relevant to the construction of ambiguous terms in the contract.

(3) The terms and terminology of the contract are always important. However, the parties cannot alter the true nature of their relationship by putting a different label on it. In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole: the parties cannot deem the relationship between themselves to be something it is not. Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.

(4) Consideration should then be given to the various indicia identified in Stevens v Brodribb Sawmilling Co Pty Ltd and the other authorities as are relevant in the particular context. For ease of reference the following is a list of indicia identified in the authorities:

• Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like.

Control of this sort is indicative of a relationship of employment. The absence of such control or the right to exercise control is indicative of an independent contract. While control of this sort is a significant factor it is not by itself determinative. In particular, the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where the work involves a high degree of skill and expertise. On the other hand, where there is a high level of control over the way in which work is performed and the worker is presented to the world at large as a representative of the business then this weighs significantly in favour of the worker being an employee.

“The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.”“[B]ut in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. That was made clear in Queensland Stations Pty. Ltd v Federal Commissioner of Taxation, a case involving a droving contract in which Dixon J observed that the reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.”

• Whether the worker performs work for others (or has a genuine and practical entitlement to do so.

The right to the exclusive services of the person engaged is characteristic of the employment relationship. On the other hand, working for others (or the genuine and practical entitlement to do so) suggests an independent contract.

• Whether the worker has a separate place of work and or advertises his or her services to the world at large.



• Whether the worker provides and maintains significant tools or equipment.

Where the worker’s investment in capital equipment is substantial and a substantial degree of skill or training is required to use or operate that equipment the worker will be an independent contractor in the absence of overwhelming indications to the contrary.

• Whether the work can be delegated or subcontracted.

If the worker is contractually entitled to delegate the work to others (without reference to the putative employer) then this is a strong indicator that the worker is an independent contractor. This is because a contract of service (as distinct from a contract for services) is personal in nature: it is a contract for the supply of the services of the worker personally.

• Whether the putative employer has the right to suspend or dismiss the person engaged.



• Whether the putative employer presents the worker to the world at large as an emanation of the business.

Typically, this will arise because the worker is required to wear the livery of the putative employer.

• Whether income tax is deducted from remuneration paid to the worker.



• Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks.

Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks. Obviously, in the modern economy this distinction has reduced relevance.

• Whether the worker is provided with paid holidays or sick leave.



• Whether the work involves a profession, trade or distinct calling on the part of the person engaged.

Such persons tend to be engaged as independent contractors rather than as employees.

• Whether the worker creates goodwill or saleable assets in the course of his or her work.



• Whether the worker spends a significant portion of his remuneration on business expenses.

It should be borne in mind that no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.

(5) Where a consideration of the indicia (in the context of the nature of the work performed and the terms of the contract) points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. However, a consideration of the indicia is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The ultimate question remains as stated in (1) above. If, having approached the matter in that way, the relationship remains ambiguous, such that the ultimate question cannot be answered with satisfaction one way or the other, then the parties can remove that ambiguity a term that declares the relationship to have one character or the other.

(6) If the result is still uncertain then the determination should be guided by “matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability” including the “notions” referred to in paragraphs [41] and [42] of Hollis v Vabu.” 4

[15] The Full Bench in Kimber further provided:

“The courts have developed a multi-factorial approach, in which there is no single decisive criterion to determine whether a contractual relationship is one of employment or one subject to a contract for services. This approach requires the consideration of the various indicia as summarised in French Accent set out above. It is also clear from the decision of the Full Bench of the Federal Court in ACE Insurance Limited v Trifunovski 5and others, that no one single criterion will necessarily be determinative and that each matter will turn upon the particular circumstances of the case, with the decision maker weighing all the relevant factors.”6

[16] The ultimate question for the Commission as stated in Abdalla v Viewdaze Pty Ltd t/a Malta Travel 7and endorsed in French Accent:

“… will always be whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is whether, viewed as a practical matter, the punitive worker could be said to be conducting a business of his or her own. This question is answered by considering the terms of the contract and the totality of the relationship.”

Whether the Respondent exercises, or has the right to exercise control over the manner in which Mr Gela’s work is performed, place of work, hours of work and the like

[17] It was common ground that prior to the engagement of Mr Gela, the Respondent employed a full time Station Manager. After the previous Station Manager resigned as an employee, according to Mr Gela, the previous Chair of the Respondent Mr Jeffrey Henaway approached Mr Gela and asked him to come and help the Respondent. Mr Gela understood the request was for him to be the Acting Manager. There was no written contract made and the arrangement was verbal. Mr Gela said that Mr Henaway as Chair just said “can you come and do it” and no other board members were involved.

[18] Mr Gela agreed with the proposition when put to him that he was confident he could perform the scope of the work and that the Respondent was looking for someone to assist it with compliance. Mr Gela said that he had worked for 12 years in the public service and had been the Chief Executive Officer of the Aboriginal and Torres Strait Islander Cultural Centre where he had managed staff. Mr Gela said he held an accounting degree and this allowed him to operate in finances.

[19] When Mr Gela was asked if on commencement he was given an employee tax declaration form, he said no, and that it was an “adult arrangement”. He said he thought he would be in and out, which he understood to mean that he believed at the time he would not be working in the role for very long. His evidence appeared to be that issues in connection with his tax and superannuation were not addressed in the early stages as the arrangement was on an “adult basis” of providing support. His explanation for providing invoices to the Respondent appeared to be that he understood it was a temporary arrangement, and the Respondent intended to advertise for a full time Station Manager.

[20] It was put to Mr Gela that as a business person, a manager and former CEO he would have provided information concerning his status an employee if he genuinely believed he was an employee. Mr Gela responded that this was the responsibility of the Board, and at the time the organisation was dysfunctional. Mr Gela said that he had been a volunteer broadcaster for 10 years and said he thought it was okay to help.

[21] Mr Gela accepted that he issued invoices to the Respondent in the name of TDG Consulting. The evidence disclosed in the form of historical details of TDG Consulting obtained from the Australian Business Register indicated that the registration TDG Consulting was cancelled on 4 July 2013. Mr Gela said he was having discussions with the tax office about whether TDG Consulting was registered or not. Mr Gela accepted that he had another registered business called David Gela Ministries Inc. but it was associated with his church and he earned little income from this business.

[22] When it was put to Mr Gela that he was entitled to work his own hours he said that he alerted the Board about this (the hours he worked) in reports to the Board. On examining the invoices issued to the Respondent it can be noted there is some fluctuation over the life of the engagement in the amounts charged and hours worked. Mr Gela was asked if he ever raised his concern (about the nature of his engagement) with the Board and he said he could not remember.

[23] Mr Gela was taken to a document attached to the statement of Ms Gray that he accepted was taken from MYOB, and which recorded him as a management consultant paid from an expense account with an ABN number and a GST tax code. He accepted that one of the functions he performed for the Respondent was to process payments and invoice accounts as part of his role, including payment of his own invoices.

[24] Mr Gela accepted that he determined what duties he would perform on a given day, although made the point that it had on occasion gone so far as to include emptying bins. His role included the role of processing wages and other entitlements with the assistance of an external accountant. It appeared from the evidence his role also included assisting the Respondent to meet its compliance obligations concerning its funding arrangements.

[25] When asked if the Board ever told him what to do he answered no, because he was not sure that the Board knew what he had to do. Ms Ross, a current director of the Respondent, said Mr Gela seldom reported to the Board in person, however provided a report to the Board on a monthly basis. Ms Ross said Mr Gela performed his tasks without input or direction from members of the Board  8 and could accept or decline work at any time during his consultancy.

[26] Mr Salvatore Russo, a director of the Respondent, said that he was notified by Mr Jeffrey Henaway the previous chair that Mr Gela had been engaged as a consultant, and this appointment would continue until the position of Station Manager was called. Mr Russo said at no time did Mr Gela raise concerns regarding his contracting agreement. 9 Mr Russo said Mr Gela maintained remote access to the 4K1G station and had access to all administrative and radio programming systems, as they were loaded onto Mr Gela’s personal laptop. Mr Russo said Mr Gela frequently worked at other locations including his home office.10

[27] Mr Russo said that the Board met with Mr Gela on approximately four occasions during his contracting engagement and Mr Gela would be available by phone if the Board had a question. Mr Russo said Mr Gela had full autonomy and completed his tasks without input from the Board.

[28] Mr Bradley Henaway a director of the Respondent, also said he was notified by Mr Jeffrey Henaway that Mr Gela had been engaged as a consultant and at no time did Mr Gela raise concerns with him about his contracting arrangement. Mr Henaway said Mr Gela had remote access on his personal computer to the radio stations systems and worked at other locations on a frequent basis. 11 Mr Henaway also gave evidence that the Board only met with Mr Gela four times from 15 January 2014 to 23 May 2017 and that Mr Gela had full autonomy of work without input from the Board.12

[29] Mr Gela agreed that a decision was taken to advertise and fill the role of Station Manager on a permanent basis and subsequent to this his engagement was terminated. Ms Velma Gara provided a witness statement 13 in support of the Applicant. Ms Gara was a volunteer broadcaster/producer at 4K1G since 2013 hosting a sports program. She had previously been employed as a Station Manager in 2009 but resigned to work in media in the Torres Strait. Ms Gara’s evidence was that when the Applicant took over the role it was known he was in an acting position until the Board had a strategy in place to deal with its business structure and financial future.

[30] Ms Gara said as a volunteer her only contact with Mr Gela was in relation to programming, access to codes for the main gate and back door, and any issues with on air announcing. Ms Gara’s evidence was to the effect that the Applicant was managing the operations of the Respondent.

[31] Ms Lorraine Ross, a current director of the Respondent, 14 gave evidence that she understood Mr Gela was appointed as the Acting Station Manager as an external consultant negotiated with Mr Jeffrey Henaway the previous chair.

[32] Having considered the above evidence it appears Mr Gela had a significant degree of autonomy and was only required to report to the Board from time to time. It appears the arrangement made, on the particular facts of this case, was that Mr Gela was to a large extent given autonomy and control of his own working arrangements to help run the Respondent’s radio station while it made arrangements to advertise and fill the position of Station Manager with a full time permanent employee. The evidence overall is suggestive that the arrangement was intended to be a temporary consulting arrangement and is indicative of a contracting arrangement.

Whether Mr Gela performs work for others (or has a genuine and practical entitlement to do so)

[33] There was no evidence that Mr Gela performed work of the same nature as he was performing for the Respondent for anyone else. There was also no suggestion in the evidence that the Respondent sought to impose any restriction on Mr Gela performing work for others. There was some limited evidence that he conducted a separate business in connection with his Church. The evidence on this point tends to suggest Mr Gela was free to perform other work and tends to be suggestive of independent contracting.

Whether Mr Gela has a separate place of work and or advertises his or her services to the world at large

[34] There was a dispute in the evidence as to the extent to which Mr Gela performed work away from the office. Mr Gela accepted this occurred to limited extent. There was no evidence that Mr Gela advertised the services he was providing to the Respondent, to others. The evidence on this point is not particularly persuasive either way.

Whether the Applicant provides and maintains significant tools or equipment

[35] The evidence was Mr Gela used his his own vehicle, phone and laptop computer. Mr Gela said that previous corporate vehicles were sold. Mr Gela also used the Respondent’s computers. This tends to indicate a contracting arrangement.

Whether the work can be delegated or subcontracted

[36] Witnesses for the Respondent indicated Mr Gela could delegate work to others engaged by the Respondent, however that could be interpreted as a manager delegating work to persons supervised by that manager. There was no evidence that Mr Gela delegated his work to others. This is indicative of employment.

Whether the Respondent has the right to suspend or dismiss the person engaged

[37] There was no written contract entered into. There was no evidence on this point, other than the fact that the Board maintained it had the right to bring the relationship to an end as it did because it did not regard the engagement as an employment relationship. This tends to indicate a contracting arrangement.

Whether the Respondent presents the Applicant to the world at large as an emanation of the business

[38] Mr Gela was not required to wear a uniform by the Respondent. There was no evidence that the Respondent sought to present Mr Gela as an emanation of the Respondent. This is indicative of contracting.

Whether income tax is deducted from remuneration paid to the Applicant

[39] It was accepted by Mr Gela that income tax was not deducted from payments made to him, and his invoices issued to the Respondent included a charge for GST, and identified that he was trading as TDG Consultancy ABN 79 833 851 186.

[40] It was put to Mr Gela that the Respondent did not have his approval to deduct tax or superannuation from the amounts paid to him. Mr Gela responded that was the thinking, and they were still engaging on an adult basis of providing support.

[41] When Mr Gela was asked why he presented invoices for a business that was not registered at the time, and he responded that he said he was talking to the tax office and he had to organise a way of payment. Ms Ross said that Mr Gela provided the Respondent with invoices each week for his services including GST. Ms Ross said at no time did Mr Gela raise a concern about his contracting arrangement with herself, or any members of the Board.  15

[42] Ms Gray, the external accountant for the Respondent said upon her commencement she was advised that Mr Gela was identified as the Acting Station Manager, and upon review of payroll files she confirmed his file card was set up as a contractor providing management consultancy services in the MYOB program. Ms Gray confirmed Mr Gela did not pay PAYG tax and was not paid superannuation but was paid from an account related to expenses separate to employment payments in the corporation’s chart of accounts. 16

[43] The evidence on this point is indicative of independent contracting.

Whether Mr Gela is remunerated by periodic wage or salary or by reference to completion of tasks

[44] Mr Gela was paid following the issue of an invoice in the name of TDG Consultancy. The invoices included a date, a description of the particulars being for “management services” and included the dates and total hours worked. The invoice described the unit cost as an hourly rate of $29.51 per hour, and a 10% GST charge. Ms Gray confirmed Mr Gela issued the Respondent with invoices on a weekly basis and was paid in conjunction with the weekly payroll and invoice processing.

[45] Ms Gray said she was aware Mr Gela did perform data entry in the corporations MYOB and she would assist Mr Gela via telephone with the accounting system.

[46] Whilst the invoices were calculated by reference to the number of hours worked not by reference to specific tasks other than the generic “management services”, given Mr Gela was a qualified accountant, and the evidence is he was himself using the MYOB system it is difficult to conceive that he was not aware that the Respondent was proceeding on the basis that both it and Mr Gela understood and accepted that the was a contractor not an employee. This is indicative of independent contracting.

Whether Mr Gela is provided with paid holidays or sick leave

[47] Mr Gela was not paid for holidays or leave. This is indicative of independent contracting.

Whether Mr Gela’s work involves a profession, trade or distinct calling on the part of the person engaged

[48] Mr Gela’s work was described as “management services”. Such work carries a high level of responsibility and it is not unusual for work at this level to be performed by a contracted consultant. This tends to be indicative of independent contracting.

Whether the Applicant creates goodwill or saleable assets in the course of his or her work

[49] The was no specific evidence to support a conclusion that Mr Gela was creating goodwill or a saleable asset in the course of his work. This tends to indicate employment.

Whether the worker spends a significant portion of his remuneration on business expenses

[50] Whilst the evidence was limited on this point it was to the effect that Mr Gela provided his own car, phone and sometimes used his own computer, while at other times used the Respondent’s computer.

Conclusion

[51] Mr Gela’s case to a large extent rested on his view that he was an employee because the arrangement was initially intended to be brief, but extended for a period of 3 years until the Board finally decided to advertise for a full time station manager. He said he initially was engaged performing 22 hours per week and this increased over time. In his closing submissions Mr Gela said his engagement may have started as contracting but changed to that of an employee because of the work he was doing.

[52] I am satisfied the evidence overall supports a conclusion that the arrangement entered into at the commencement was that of contracting. When considering the totality of the evidence concerning the various indicia considered above and the extent of Mr Gela’s autonomy it points to Mr Gela conducting a business of his own, and not being a servant of the Respondent. Despite additional hours being performed over time, and some expansion in duties, the evidence does not support a conclusion that the relationship changed from contracting to employment. On that basis the application must be dismissed.

COMMISSIONER

Appearances:

Mr S Gela appearing on his own behalf

Ms L Mariner appearing for the Respondent

Hearing details:

2017,

Brisbane:

October 9

 1   Exhibit 6 para 3

 2   Kimber v Western Auger Drilling Pty Ltd[2015] FWCFB 3704.

 3   Jiang Shen Cai T/A French Accent v Michael Anthony Do Rozario [2011] FWAFB 8307.

 4 Ibid at [30].

 5   ACE Insurance Limited v Trifunovski [2013] FCAFC 3.

 6 Ibid at [41].

 7   Abdalla v Viewdaze Pty Ltd t/a Malta Travel (2003) 122 IR 215.

 8   Exhibit 8 para 11

 9   Exhibit 6 para 6

 10   Exhibit 9 para 7

 11   Exhibit 10 para 5

 12   Exhibit 10 para 10

 13   Exhibit 5

 14   Exhibit 8 para 1

 15   Exhibit 8 para 5

 16   Exhibit 7 para 4

Printed by authority of the Commonwealth Government Printer

<Price code C, PR597204 >