On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3)

[2011] FCA 366

FEDERAL COURT OF AUSTRALIA

On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366

Citation:

On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366

Parties:

ON CALL INTERPRETERS & TRANSLATORS AGENCY PTY LTD  (ACN 006 272 760) v  COMMISSIONER OF TAXATION

File number:

VID 409 of 2009

Judge:

BROMBERG J

Date of judgment:

13 April 2011

Catchwords:

INDUSTRIAL LAW – employer and employee – whether interpreters and translators, casual employees or independent contractors – multi-factorial totality test – indicia for distinguishing between an employee and an independent contractor – indicia of a business – indicia as to whose business the activity is performed in and for.

SUPERANNUATION – liability for superannuation guarantee charge – whether employees or independent contractors at common law – whether interpreters and translators were employees within the extended definition of employee in s 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth).

Legislation:

Evidence Act 1995 (Cth) ss 63(2), 67, 68
Fair Work Act 2009 (Cth) s 357

Income Tax Assessment Act 1936 (Cth) s 221A(1)

Superannuation Guarantee (Administration Act) 1992 (Cth) ss 11, 12, 12(3), 16, 17 and 19
Superannuation Guarantee Charge Act 1992 (Cth) Taxation Administration Act 1953 (Cth), Part IVC
Taxation Laws Amendment Act (No 4) 1993 (Cth) s 81

Cases cited:

Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215
Associated Translators & Linguists Pty Ltd v Commissioner of Taxation [2010] AATA 260
Commissioner of State Taxation v Roy Morgan Research Centre Pty Ltd (2004) 90 SASR 12
Commissioner of Taxation v Barrett (1973) 129 CLR 395
Commissioner of Taxation v Sleight (2004) 136 FCR 211
Curtis v Perth and Fremantle  Bottle Exchange Co Limited (1914) 18 CLR 17
Damevski v Giudice (2003) 133 FCR 438
Deputy Commissioner of Taxation v Bolwell (1967) 1 ATR 862
Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614
Ferguson v Federal Commissioner of Taxation (1979) 37 FLR 310
George v Federal Commissioner of Taxation (1952) 86 CLR 183
Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939
Hollis v Vabu Pty Ltd (2001) 207 CLR 21
Hope v Bathurst City Council (1980) 144 CLR 1
Hungier v Grace (1972) 127 CLR 210
JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue (2001) 105 IR 66
Lee Ting Sang v Chung Chi-Keung (1990) 2 AC 374
London Australia Investment Company Ltd v Federal Commissioner of Taxation (1976-1977) 138 CLR 106
Lopez v Deputy Commissioner of Taxation [2005] FCAFC 157
Market Investigations v Minister of Social security [1968] 2 QB 173
Marshall v Whittaker’s Building Supply Co Ltd (1963) 109 CLR 210
McCormack v Federal Commissioner of Taxation (1979) 143 CLR 284
Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194
Montreal v Montreal Locomotive Works Ltd [1947] 1 DLR 161
National Labour Relations Board v Hearst Publications Inc. 322 US 111 (1943)
Neale v Atlas Products (Vic) Pty Ltd (1955) 94 CLR 419
Puzey v Commissioner of Taxation [2003] FCAFC 197
Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 539
Re Porter; re Transport Workers Union of Australia (1989) 34 IR 179
Ready Mix Concrete (South East) Ltd v Minister for Pensions and National Insurance [1967] 2 QB 497
Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (1997) 37 ATR 528
Roy Morgan Research Pty Ltd v Commissioner of Taxation (2010) 184 FCR 448

Sgobino v State of South Australia (1987) 46 SASR 292

Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161
United States of America v Silk 67 S.Ct.1463 (1947)
Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 33 ATR 537
Wesfarmers Federation Insurance Ltd v Stephen Wells trading as Wells plumbing [2008] NSWCA 186
World Book Australia Pty Ltd v Federal Commissioner of Taxation (1992) 108 ALR 510
Yaraka Holdings Pty Ltd v Giljevic (2006) 149 IR 339

Creighton B and Stewart A, Labour Law, (5^th ed, The Federation Press, 2010)
International Labour Office (Geneva), “The Employment Relationship” Report (V)(1) to the International Labour Conference 95^th Session 2006
Lord Wedderburn, The Worker and the Law, (3^rd ed, Penguin Books Ltd, 1986)
Owens R and Riley J, The Law of Work, (Oxford University Press, 2007)
Razzolini O “The Need to Go Beyond the Contract: “Economic and Bureaucratic” Dependence in Personal Work Relations”, (2010) 31 Comparative Labor Law and Policy Journal 267
Sappideen C, O’Grady P and Warburton G, Macken’s Law of Employment, (6^th ed, Lawbook Co., 2009)
Selwyn NM, Laws of Employment (Oxford University Press, 2006)
Stewart A, “Redefining Employment?  Meeting the Challenge of Contract and Agency Labour” (2002) 15 AJLL

Date of hearing:

7-10 June 2010, 18 June 2010 and 8 July 2010

Place:

Melbourne

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

316

Counsel for the Applicant:

Ms F O'Brien SC with Mr D McInerney

Solicitor for the Applicant:

McNab Lawyers

Counsel for the Respondent:

Mr P Sest

Solicitor for the Respondent:

Maddocks Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 409 of 2009

BETWEEN:	ON CALL INTERPRETERS & TRANSLATORS AGENCY PTY LTD  (ACN 006 272 760) Applicant
AND:	COMMISSIONER OF TAXATION Respondent

JUDGE:	BROMBERG J
DATE OF ORDER:	13 APRIL 2011
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The applicant’s application be dismissed.

2.The applicant file and serve any submission regarding costs on or before 20 April 2011.

3.The respondent file and serve any submission regarding costs on or before 27 April 2011.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 409 of 2009

BETWEEN:	ON CALL INTERPRETERS & TRANSLATORS AGENCY PTY LTD  (ACN 006 272 760) Applicant
AND:	COMMISSIONER OF TAXATION Respondent

JUDGE:	BROMBERG J
DATE:	13 APRIL 2011
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

INTRODUCTION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[1]
THE RELEVANT STATUTORY PROVISIONS........ ........ ........ ........ ........ ........ ......	[8]
THE CONSTITUTIONAL CHALLENGE........ ........ ........ ........ ........ ........ ........ ........ .	[9]
EVIDENTIARY DISPUTES........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[10]
The Affidavit of Josie Cassar........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[14]
Should Witnesses Called Be Regarded as a Representative Sample of the Interpreters?........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[16]
THE EVIDENCE........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[28]
On Call’s Business........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[28]
Initial Treatment of Panel Interpreters........ ........ ........ ........ ........ ........ ........ ........ ...	[34]
On Call’s Recognised Employee Interpreters........ ........ ........ ........ ........ ........ ........ .	[37]
Characterisation of the Status of Panel Interpreters........ ........ ........ ........ ........ .....	[41]
Allocation of Assignments........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[53]
No Obligation to Accept Assignments........ ........ ........ ........ ........ ........ ........ ........ ......	[55]
Requests for Particular Interpreters........ ........ ........ ........ ........ ........ ........ ........ .......	[56]
Duration of Assignments........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[57]
Double Appointments and Multiple Assignments........ ........ ........ ........ ........ ........ ..	[60]
Extensions of Assignments........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[67]
Sessional Assignments........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[70]
Cancellations........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[71]
Pricing, Invoicing and Payments to Panel Interpreters........ ........ ........ ........ ........ .	[73]
Extent of Integration of Panel Interpreters with On Call’s Business........ ........ ...	[80]
Lack of Exclusivity........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[86]
Representation of On Call by Panel Interpreters........ ........ ........ ........ ........ ........ ...	[89]
Control of Panel Interpreters - Instructions........ ........ ........ ........ ........ ........ ........ ...	[93]
Control of Panel Members – Performance, Compliance and Discipline........ ......	[98]
Control – No Obligation to Work........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[102]
Extent of Use of Other Persons to Carry Out Assignments........ ........ ........ ........ ...	[103]
Supply of Equipment........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[110]
Risk and Professional Indemnity Insurance........ ........ ........ ........ ........ ........ ........ ...	[112]
Expenses and Allowances........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[116]
Advertising by Panel Interpreters........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[117]
Use of Business Names and Incorporation........ ........ ........ ........ ........ ........ ........ ......	[120]
Taxation and Business Registration Arrangements........ ........ ........ ........ ........ .......	[121]
Josie Cassar........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[124]
Ngoc-Anh Tran........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[128]
Susana Shuk Man Loy Lui........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[133]
Patricia Avila........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[145]
Susan Halliday........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[155]
Moreno Giovannoni........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[165]
Mikhail Gutkin........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[181]
LEGAL PRINCIPLES – COMMON LAW EMPLOYEE OR INDEPENDENT CONTRACTOR?........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[188]
The Need to Identify the True Nature of the Relationship........ ........ ........ ........ ....	[188]
Distinguishing Between an Employee and an Independent Contractor........ .......	[201]
DID PANEL INTERPRETERS OWN AND OPERATE A BUSINESS?........ ........	[221]
WHOSE BUSINESS WAS THE ECONOMIC ACTIVITY BEING PERFORMED IN AND FOR?........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[259]
Control........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[261]
Representation of the User’s Business........ ........ ........ ........ ........ ........ ........ ........ .....	[270]
Goodwill........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[274]
An Outcome or Result........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[276]
Delegation........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[283]
Economic Dependency, Extent of Integration and Exclusivity........ ........ ........ .....	[285]
Opportunity for Profit and the Risk of Loss........ ........ ........ ........ ........ ........ ........ ...	[290]
Characterisation of the Economic Activity........ ........ ........ ........ ........ ........ ........ .....	[293]
Withholding of Tax and Leave & Supply of Equipment........ ........ ........ ........ .......	[295]
DO THE INTERPRETERS FALL WITHIN THE EXTENDED DEFINITION OF EMPLOYEE IN SECTION 12(3)?........ ........ ........ ........ ........ ........ ........ ........ ........	[298]
CONCLUSION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[315]

INTRODUCTION

1. This proceeding is an appeal against an objection decision made by the respondent (“the Commissioner”).  The appeal arises from assessments made by the Commissioner that the applicant (“On Call”) is liable to pay a tax known as the ‘superannuation guarantee charge’ in relation to a number of persons that the Commissioner considered were employees of On Call.  On Call’s objections to the assessments made were disallowed by the Commissioner and, as a result, On Call has instituted this appeal pursuant to Part IVC of the Taxation Administration Act 1953 (Cth) (“the Taxation Administration Act”).

2. The superannuation guarantee charges, the subject of the Commissioner’s assessments, were imposed pursuant to the Superannuation Guarantee (Administration Act) 1992 (Cth) (“the Superannuation Guarantee Act”) which is to be read together with the Superannuation Guarantee Charge Act 1992 (Cth) (“the Superannuation Guarantee Charge Act”). Those Acts have the effect of imposing a superannuation guarantee charge upon those employers (as defined) who fail to pay prescribed superannuation contributions for the benefit of their employees. The Commissioner collects the superannuation guarantee charge from defaulting employers and pays the prescribed superannuation contributions to the benefit of the employees for whom superannuation was not provided.

3. On Call owns and operates a business which provides interpreting and translating services to its clients.  To conduct that business, On Call engages individuals skilled in interpreting and translating.  I will refer to interpreters and translators jointly as “interpreters” unless a distinction needs to be drawn between them. 

4. In the period 1 July 2002 to 30 June 2007 (“the relevant period”) On Call did not provide superannuation benefits to the vast majority of interpreters that it utilised in that period.  A very small number of interpreters were recognised by On Call as its employees. The vast majority of interpreters utilised were not recognised by On Call as such and were treated by On Call as independent contractors.  Contrary to the view taken by On Call, the Commissioner considered that those employees treated as independent contractors during the relevant period were employees of On Call within the meaning of the Superannuation Guarantee Act.  Accordingly, the Commissioner assessed On Call to be liable for the superannuation guarantee charge in relation to those persons and in respect of the remuneration paid to them over the relevant period.

5. The principal question raised by this litigation is whether the interpreters utilised by On Call over the relevant period (but not recognised by On Call as its employees), were in fact employees within the meaning of the Superannuation Guarantee Act or whether instead they were self-employed independent contractors.

6. By reference to the provisions of s 12 of the Superannuation Guarantee Act, the principal question raises two specific and important issues. The first is whether the relevant interpreters were employees within the meaning of s 12(1) of the Act. That issue requires consideration of whether On Call is an employer and the relevant interpreters were employees within the ordinary meaning of those terms at common law. The second issue is whether On Call was an employer (and the relevant interpreters its employees) within the extended definition of those terms as provided by s 12(3) of the Superannuation Guarantee Act. Interesting issues are raised in an area of jurisprudence in which the law has found it difficult to draw a clear dividing line separating an employee from an independent contractor.  This case requires these issues to be examined in the particular context of persons who are engaged for short periods and by multiple end users of their labour.  On Call contends they are independent contractors, whilst the Commissioner says they are casual employees.

7. For the reasons which follow, I have determined that On Call was the employer of the relevant interpreters within the common law meaning of that term and also within its extended meaning.

   THE RELEVANT STATUTORY PROVISIONS

8. It is necessary to set out s 12 of the Superannuation Guarantee Act in full.  It is in the following terms:

   Interpretation: employee, employer

   (1)Subject to this section, in this Act, employee and employer have their ordinary meaning. However, for the purposes of this Act, subsections (2) to (11):

   (a)       expand the meaning of those terms; and

   (b)       make particular provision to avoid doubt as to the status of certain                   persons.

   (2)      A person who is entitled to payment for the performance of duties as a    member of the executive body (whether described as the board of directors or    otherwise) of a body corporate is, in relation to those duties, an employee of the body corporate.

   (3)      If a person works under a contract that is wholly or principally for the labour      of the person, the person is an employee of the other party to the contract.

   (4)      A member of the Parliament of the Commonwealth is an employee of the           Commonwealth.

   (5)      A member of the Parliament of a State is an employee of the State.

   (6)      A member of the Legislative Assembly for the Australian Capital Territory is      an employee of the Australian Capital Territory.

   (7)      A member of the Legislative Assembly of the Northern Territory is an    employee of the Northern Territory.

   (8)      The following are employees for the purposes of this Act:
             (a)       a person who is paid to perform or present, or to participate in the                   performance or presentation of, any music, play, dance,   entertainment, sport, display or promotional activity or any similar                    activity           involving the exercise of intellectual, artistic, musical,   physical or other personal skills is an employee of the person liable                    to make the payment;

   (b)       a person who is paid to provide services in connection with an   activity referred to in paragraph (a) is an employee of the person   liable to make the payment;

   (c)       a person who is paid to perform services in, or in connection with,   the making of any film, tape or disc or of any television or radio   broadcast is an employee of the person liable to make the payment.

   (9)      A person who:

   (a)holds, or performs the duties of, an appointment, office or position under the Constitution or under a law of the Commonwealth, of a State or of a Territory; or

   (b)is otherwise in the service of the Commonwealth, of a State or of a Territory (including service as a member of the Defence Force or as a member of a police force);

   is an employee of the Commonwealth, the State or the Territory, as the case requires. However, this rule does not apply to a person in the capacity of the holder of an office as a member of a local government council.

   (9A)Subject to subsection (10), a person who holds office as a member of a local government council is not an employee of the council.

   (10)A person covered by paragraph 12‑45(1)(e) in Schedule 1 to the Taxation Administration Act 1953 (about members of local governing bodies subject to PAYG withholding) is an employee of the body mentioned in that paragraph.

   (11)A person who is paid to do work wholly or principally of a domestic or private nature for not more than 30 hours per week is not regarded as an employee in relation to that work.

   THE CONSTITUTIONAL CHALLENGE

1. By its Amended Application, On Call raised a constitutional challenge to the Superannuation Guarantee Act as well as the Superannuation Guarantee Charge Act. At the time On Call raised its constitutional challenge the same challenge was the subject of an appeal between different parties due to be heard by a Full Court of this Court. By the time that this proceeding was heard, that appeal had been determined and the constitutional challenge rejected: Roy Morgan Research Pty Ltd v Commissioner of Taxation (2010) 184 FCR 448 (“Roy Morgan (2010)”).  On Call accepts that I am bound to follow the decision of the Full Court and made no submissions in support of its challenge other than a formal submission designed to reserve its rights on any appeal.  In the circumstances, I reject the challenge on the same basis as did the Full Court in Roy Morgan (2010).

   EVIDENTIARY DISPUTES

2. On Call called eight witnesses in support of its application.  Ms Deniz Hulusi gave evidence in her capacity as the National Operations Manager of On Call.  Her husband Mr Hulus Hulusi, the Managing Director of On Call, also gave evidence.  Additionally, On Call called six interpreter witnesses and sought to rely on the affidavit of a seventh.  Each of the witnesses called by On Call made one or more affidavits in the proceeding.  Most of the witnesses called by On Call made affidavits in proceedings in the Administrative Appeals Tribunal (“the AAT proceedings”), which related to earlier assessments made by the Commissioner for the period 1 July 2000 to 30 June 2005.  The AAT proceeding was suspended pending the finalisation of this proceeding.  Affidavits filed in the AAT proceeding made by witnesses called by On Call in this proceeding were tendered by the Commissioner and relied upon (“the AAT affidavits”).

3. The Commissioner did not call any witnesses.  An agreed set of documents produced by On Call were tendered as a Court Book.

4. There are a number of inconsistencies in the evidence given by some of the witnesses in this proceeding as compared to the evidence given by those witnesses in their AAT affidavits. Some of those inconsistencies were left unresolved but are not particularly significant.  There are also inconsistencies in the evidence given about the operations of On Call as between Mr and Ms Hulusi.  Generally, I have preferred the evidence of Mr Hulusi.  To some extent I have discounted the evidence given by Ms Hulusi on the basis that on my view, Ms Hulusi was prone to advocate On Call’s case and in so doing exaggerate those facts that she regarded as supporting On Call’s position.

5. There were two disputes between the parties as to evidentiary matters.  Neither dispute is of any particular relevance to the more interesting legal issues raised by the proceeding, but nevertheless those issues need to be resolved.

   The Affidavit of Josie Cassar

6. On Call sought to rely on the affidavit of Josie Cassar affirmed on 19 September 2009. Ms Cassar was overseas and was not available to give evidence at the hearing. Shortly before the hearing, On Call gave notice pursuant to s 67 of the Evidence Act 1995 (Cth) (“the Evidence Act”) that it proposed to rely on s 63(2) of that Act to contend that the hearsay rule did not apply to the affidavit of Ms Cassar.

7. By notice given pursuant to s 68 of the Evidence Act, the Commissioner objected to the tender of the affidavit of Ms Cassar. At the hearing, the Commissioner took what it described as a pragmatic position in relation to the reception of Ms Cassar’s affidavit. Whilst the Commissioner formally maintained its objection, it conceded that on the basis of the decided cases the Court should admit the affidavit but accord little or no weight to the evidence. That was said in particular as to that of the evidence of Ms Cassar which concerned the contentious question of the alleged “sub-contracting” of work provided by On Call. I have determined to admit the affidavit of Ms Cassar. In doing so I recognise that the Commissioner has been prejudiced by its inability to cross-examine Ms Cassar. Accordingly no weight should be given to that evidence in so far as it addresses controversial matters which would likely have been challenged in cross-examination. The evidence given on the issue of “sub-contracting” falls into that category and accordingly paragraphs 9-12, 18 (last line) and 50 (last seven words) of Ms Cassar’s affidavit have not been taken into account. If, however, I had taken that evidence into account, I would have reached the same conclusions as those later detailed, both in relation to Ms Cassar and also in relation to the issue of sub-contracting generally.

   Should Witnesses Called Be Regarded as a Representative Sample of the Interpreters?

8. The Commissioner acknowledged that it would have been impractical for On Call to call as witnesses each of the interpreters that the assessments made by the Commissioner have characterised as employees of On Call (“the relevant interpreters”).  There are in excess of 2,500 interpreters involved.  The Commissioner does not complain that On Call called a sample of the interpreters in question, but has raised an issue as to the representative nature of the sample of witnesses called.

9. The Commissioner submitted that each of the witnesses called was a very experienced interpreter.  All hold Level 3 NAATI (National Accreditation Authority for Translators and Interpreters) accreditation.  Each has extensive and impressive experience, and several have held teaching positions or high level offices in the professional body AUSIT (Australian Institute of Interpreters and Translators Inc).  The Commissioner submitted that by virtue of that extensive experience and in contrast to the majority of interpreters on On Call’s panel, those persons may:

   ·Be able to negotiate rates of pay;

   ·Be less likely to attract any form of disciplinary action;

   ·Be more likely to be in high demand, and therefore offered work by more than one ‘agency’ or offered work directly by clients of those ‘agencies’;

   ·Be less likely to require guidance on proper conduct in their work; and

   ·Be more likely to operate a business providing interpretation/translation services than less experienced interpreters/translators.

10. In these respects, the Commissioner argued that the witnesses called were not reflective of the wider workforce.  The Commissioner relies on that submission in order to urge the Court to guard against drawing inferences as to the characteristics of the wider workforce in relation to the features identified. 

11. In speaking to On Call’s final written submissions, senior counsel for On Call raised, for the first time, On Call’s objection to the approach being urged upon the Court by the Commissioner.  Reference was made to orders made following a scheduling conference conducted by Gordon J on 6 August 2009 and to the transcript of that conference.  It was suggested by On Call that by a combination of what was said at the scheduling conference and the orders there made, an arrangement had been put in place whereby in the absence of an objection from the Commissioner, the trial was to be conducted on the basis that the sample of witnesses put forward by On Call was to be accepted as a representative sample of the wider workforce. I have examined the orders made and the transcript to which I was referred.  It is apparent from that transcript that some discussions were held between counsel prior to the scheduling conference about the calling of a representative sample of interpreters.  No evidence of those discussions is before me.  Counsel for the Commissioner denies any agreement that the witnesses called are to be regarded as representative of the totality of On Call’s interpreters.

12. The Commissioner concedes that an arrangement was made but says that the arrangement was that, insofar as On Call did call a representative sample, the agreed position between the parties was that the Court could infer from the representative sample the nature of the relationship between On Call and those interpreters who were not called to give evidence.  However, insofar as On Call failed to call a representative sample across some issues or across all issues, no such inferences should be drawn.  The Commissioner’s position was that the sample of interpreters actually called is in fact representative of the wider workforce for most of the issues that the Court may need to deal with but not for some including, for example, the question of whether interpreters in the wider workforce of relevant interpreters carried on their own businesses during the relevant period.

13. Beyond the concessions made by the Commissioner, there is no evidence before me from which I could be satisfied of an agreement or arrangement of the kind for which On Call contends.  It appears on the material before me that if any agreement or arrangement on this issue was made (and the Commissioner concedes it was) that arrangement occurred outside of the proceedings before Gordon J.  However, in the scheduling conference before her Honour discussions occurred and orders were made designed to limit the number of witnesses that might need to be called in order for the Court to determine issues common to the position of many interpreters.  For that purpose, Gordon J made orders designed to allow the parties to understand the nature of the evidence intended to be called by On Call by reference to common issues that particular witnesses may address.  Accordingly, On Call was ordered to file and serve a witness list that identified “the period and factors to which evidence of that witness will relate”.  An opportunity was also given to the Commissioner to notify On Call of any “objections or omissions” in relation to the witness list to be provided by On Call.

14. On 28 August 2009, On Call provided its witness list.  That list identified proposed witnesses by name, it specified the period of the witnesses’ employment and which of either the 2005 or 2007 ‘standard form contracts’ the witness had made.  This was what the order made by Gordon J had in mind in relation to identifying “the period”.  The witness list also identified the “factors” required by that order.  Those factors dealt with the usual location of the work assigned to the interpreter (for instance whether Melbourne metropolitan or regional); whether the person was an interpreter, a translator or both; the industry (hospital, education, medical, community, legal) in relation to which the witnesses’ assignments were commonly based; and, the availability (day, evening, weekend) of the witness.

15. The experience or inexperience of witnesses was not adverted to as a “factor”.  When, by letter of 4 September 2009, the Commissioner made its “objections or omissions” in response to the witness list, experience was not raised as a factor.  Other factors were raised but no response to that notice was provided by On Call until 3 June 2010 when, by an email of that date, On Call told the Commissioner that the factors adverted to were addressed by the witnesses to be called. 

16. In a letter dated 4 June 2010, three days prior to the first day of the trial, the Commissioner wrote to the solicitors for On Call complaining that the Commissioner did not consider that the witnesses for which affidavits had been filed and served by On Call were sufficiently representative of all On Call interpreters.  The letter specified by way of example that the witnesses chosen by On Call all had a high or reasonably high level of experience.

17. Counsel for On Call submitted that by virtue of the orders made by Gordon J, the Commissioner was bound to give notice to On Call if the Commissioner believed that the witnesses to be called by On Call were not representative.  Counsel contended that the Commissioner had made no mention of the matter until three days prior to trial and therefore could not now raise the submissions sought to be raised.

18. I disagree that the orders made by Gordon J imposed the obligation on the Commissioner for which On Call contends.  The orders were designed to facilitate input from the Commissioner as to the identification of common “factors” which might be dealt with by samples of witnesses.  The orders were not designed to, nor did they in terms, disentitle the Commissioner from raising a point such as that now sought to be raised.  The orders made did not discharge the onus upon On Call to provide representative evidence in relation to each of the factors that may be relevant to the Court’s determination of the issues in the case.  Further, as the Commissioner had, prior to the commencement of the trial, raised its concerns about the lack of a representative sample, On Call should have taken the matter up with the Court at the commencement of the trial in order to address any claim of prejudice.  That could have been done but was not done.  If it had been done either the prejudice which On Call complains about could have been addressed (for instance, an opportunity may have been provided to call inexperienced interpreters) or at the very least, the issues agitated in final submissions could have properly been agitated during the trial, including by the calling of any necessary further evidence. 

19. For those reasons, I reject the contention of On Call and its objection to the submission made by the Commissioner.  I will, however, take into account the agreement conceded by the Commissioner to have been made between the parties.  Thus, insofar as I am satisfied that On Call has called a representative sample of interpreters on an issue or across all issues, and if it is otherwise appropriate to do so, I will infer from the representative evidence that the same circumstances attend the wider workforce of relevant interpreters.

    THE EVIDENCE

    On Call’s Business

20. On Call was established in 1984.  Initially, On Call operated in Victoria only.  Its operations were extended to New South Wales when its Sydney office opened in 1996.  Offices in Perth and Adelaide were opened in 2002 and an office in Brisbane opened in 2003. The Adelaide office closed in 2003 but reopened in 2005.  On Call offers the services of interpreters and translators in 120 different languages.  Its operations are substantial.  On Call’s Melbourne office deals with 400-600 interpreting assignments per day.  Outside of Victoria, On Call’s operations are smaller.  Queensland generates 120-170 assignments per day; New South Wales 110-150; Western Australia 70-100; and South Australia an average of 5-30 assignments per day.  On Call’s Melbourne office operates 7 days a week 24 hours per day.  Other offices are physically attended during business hours only. Calls outside of business hours are transferred through to the Melbourne office.

21. The number of interpreters and translators on On Call’s panel has grown steadily since On Call was established.  By mid-2000 there were approximately 1,000 in Victoria and the number grew to 1,500 by the middle of 2007.  During the relevant period there were about 2500 interpreters on what On Call calls its ‘panel’.  These were interpreters that, in that period, On Call did not recognise as its employees and who were regarded as independent contractors.  The number of interpreters of On Call recognised as employees was 10 in September 2006.  By September 2009 there were four such employees and more recently five.

22. On Call employed other persons that it recognised as employees.  In the main these consisted of booking officers and administrative staff.  When a client contacted On Call seeking an interpreter, the call was taken by a booking officer and processed in the manner I will shortly describe. 

23. Assignments were generated from On Call’s client base.  On Call’s clients fell into the following five major categories – hospitals; educational services providers; ancillary health services providers; public and private welfare services providers; and legal services providers.  A review of On Call’s client list demonstrates that in the hospitals category, there were a large number of public and private hospitals.  In the education category the clients were universities or other institutions of tertiary education as well as government departments dealing with education and training.  The typical client in the ancillary health category was a community health provider such as an area health service or a provider of counselling or rehabilitation services.  These clients included many governmental providers.  In the community welfare category, On Call’s clients included governmental departments, employment agencies and other providers of community welfare services.  In the legal category, the client base included courts and tribunals, legal aid and advice centres, police forces and a small number of legal firms, amongst others.  There was also a miscellaneous client category where the client base consisted mainly of private corporations including large insurance companies.

24. It is apparent from On Call’s client list and other evidence before me that the majority of the services provided by On Call were provided to large institutional clients.  Most often these institutional users of On Call’s services had a governmental or semi-governmental character.  Some 50% of the services provided by On Call were provided under contract with an institutional client.  Contract work was obtained by On Call through tendering processes which provided either for On Call to be the preferential provider of the interpreting services required by the client or, in some cases, for On Call to be the exclusive provider of those services.  Other engagements of On Call’s services occurred on an ad hoc basis where, in the absence of an overarching contractual arrangement, clients engaged On Call for particular assignments.  Ad hoc work of this kind included services provided to regular clients, usually large institutional clients.  On Call also provided conference interpreting but this was an insignificant part of its business.  The vast majority of the services that On Call provided were interpreting services.  Less than 10% of On Call’s assignment work involved translating.  Translating services accounted for approximately 5% of On Call’s turnover. 

25. On Call is one of many private providers of interpreter and translation services but is one of Australia’s largest providers.  Other private providers include private corporations similar to On Call.  On Call competes with these other businesses.  There are four or five such businesses operating in each State.  There are and have in the past been a number of government-owned and operated interpreting services.  Examples of these include the Victorian Interpreting and Translation Service (“VITS”) and the Commonwealth Translating and Interpreting Service (“TIS”), amongst others.  Both the private and public providers of such services utilise panels of interpreters. Most of the interpreter witnesses called gave evidence that they were listed on these panels and regularly performed work for a number of these private or public providers.  Those witnesses and others, referred to these providers (including On Call) as the “agencies”.  As that seems to be the accepted description in the industry, I will adopt it.  I do so without wishing in any way to suggest that On Call (or the other providers) are ‘agencies’, in the sense that they are businesses which act as agents of an interpreter facilitating the provision of work to that person for the payment of a fee.  That was never the nature of On Call’s business.  On Call contracted with the recipients of its services as a principal and was remunerated for providing the interpreting or translating service which it was contracted by its client to provide.

    Initial Treatment of Panel Interpreters

26. In the early years of On Call’s operations, On Call treated the interpreters on its panel as employees including by withholding taxation from their remuneration.  Mr Hulusi gave evidence that this placed On Call at a disadvantage relevant to its competitors and accordingly, in August 1989, he conferred with and later wrote to the Australian Taxation Office (“ATO”) seeking a ruling that the panel interpreters were not employees but independent contractors.  The ATO was advised that the relationship between On Call and the panel interpreters was not an ongoing relationship; that On Call was not entitled to direct and control the work of the interpreter; and that On Call had no authority to order the interpreter to attend an assignment or to direct the manner of performance of work.  On Call also advised that the interpreters were not entitled to sick leave or annual leave.  Mr Hulusi suggested to the ATO that the terms of engagement of the panel interpreters were similar to those of a surgeon, barrister or public accountant. 

1. On 8 January 1990, and on the basis of the information provided, the ATO advised that an employer/employee relationship did not appear to exist between On Call and its panel interpreters.  On Call was advised that it was therefore not required to deduct tax instalments from payments made to these interpreters.  It was partly on the basis of this advice from the ATO that from about January 1990, On Call began treating the panel interpreters as independent contractors.

2. Whilst the advice given by the ATO is relevant background to the issues before me, On Call has not sought to rely upon it as a means of diminishing or defeating the Commissioner’s position in this proceeding.

   On Call’s Recognised Employee Interpreters

3. In about September 2006, On Call supplemented its panel interpreters with ten interpreters who were regarded as its employees.  These interpreters were employed full-time on a 38 hour week.  They were initially employed with the intention of servicing a particular client of On Call.  However, to keep them busy they were allocated a wide range of available assignments.  They performed about 8% of the interpreting assignments generated in the Melbourne office.  That involved about three to five assignments each per day.  As some of these interpreters left employment with On Call they were not replaced and their work was carried out by members of On Call’s panel.  As at September 2009, only four of these interpreters remained.

4. For reasons I will shortly deal with, the manner of the performance of work by panel interpreters was largely dealt with by the AUSIT Code of Ethics (“the Code of Ethics”).  Each of those interpreters regarded by On Call as its employees made Australian Workplace Agreements (“AWAs”) with On Call.  Insofar as those agreements relevantly dealt with the manner and performance of work, it was a requirement that the Code of Ethics be observed.

5. The interpreters regarded by On Call as its employees were paid a salary based on an annual rate of pay together with a travel allowance.  On Call was required by the AWAs it made to make superannuation payments.  Annual and personal leave was provided and the AWAs contained counselling and disciplinary procedures.

6. There is no evidence of any relevant distinction between the manner in which those interpreters regarded by On Call as employees carried out the interpreting assignments required of them, and the manner in which those assignments were carried out by interpreters who were part of On Call’s panel but regarded as independent contractors.  Beyond the terms and conditions of engagement, the only distinction which On Call sought to emphasise was that the interpreters recognised as employees were obliged to undertake the work involved in any interpreting assignment assigned to them during their working hours.  In other words, unlike the panel interpreters that On Call regarded as “freelancers”, these interpreters did not have the right to choose whether or not to accept an assignment. 

   Characterisation of the Status of Panel Interpreters

7. The relationship between On Call and the interpreters on its panel was initiated either by the interpreter or by On Call.  When initiated by an interpreter, typically the interpreter would write to On Call and advise that he or she is an accredited interpreter and would like to be registered on On Call’s panel.  Applications of this kind were regularly received by On Call.  Alternatively, On Call was involved in recruiting interpreters.  That was done by regularly checking the NAATI and AUSIT websites.  On the AUSIT website there is a directory which includes a profile of interpreters who are members of AUSIT.  That profile provides the language skills and accreditation of the interpreter together with their contact details.  On Call regularly checked to see whether it could identify interpreters with language skills that were in demand and if so would invite interpreters to register with On Call as part of On Call’s panel. 

8. Ms Hulusi has been responsible for interviewing prospective interpreters since about 1987.  It is not clear whether all prospective interpreters were interviewed.  Interpreters interviewed by Ms Hulusi were told that they would be working as “an independent contractor”. Usually the expression used was that the person would continue to be

   
   

   self- employed or working “freelance”. 

9. It was the practice of On Call to provide a registration pack to the prospective interpreter.  The contents of the registration pack changed over time.  A registration pack in use in or after 2003 was in evidence.  I will refer to that as “the registration pack”.  That material contained no direct assertion that the interpreter would be engaged as an independent contractor.

10. In about July 2005, the registration pack was reproduced as the “registration Kit” (“the Kit”).  The Kit was headed “Independent Contractor Information Kit and Contract”.  After setting out some introductory material about On Call, the Kit included a paragraph headed “Contract Details”.  In that paragraph the Kit referred to interpreters as working as independent contractors and as “a supplier of Interpreting and Translation Services”.

11. The records of On Call in relation to written contracts made between On Call and panel members are shambolic.  Three different versions of standard form contracts were utilised by On Call during the relevant period.  On Call was unable to establish the periods in which, and the extent to which, each of these versions were utilised.  Nevertheless, I would infer that a July 2005 version of the standard contract (“the July 2005 Contract”) was made available to prospective interpreters as part of the Kit.  The July 2005 Contract (under a heading “Services”) stated that On Call engages independent contractors with appropriate qualifications to service its clients.  It referred to the interpreter as an independent contractor and sought the interpreter’s acknowledgement that the interpreter understood that he or she would be supplying services “as a business entity/agency or otherwise with an ABN number and that your engagement with On-Call does not give rise to any employment or any other joint venture relationship or partnership”.  The contract provided that each assignment accepted by the interpreter would constitute a separate contract with On Call.

12. A second version of a standard form contract was produced sometime in September 2005 (“the September 2005 Contract”).  Ms Hulusi was unable to say why that version came into existence.  The difference between the July and September 2005 contracts is not significant.  The September 2005 standard form of contract characterised the nature of the relationship between On Call and the interpreter in the same way as had the July 2005 Contract.

13. A third version of a standard form of contract with interpreters was produced in about October 2006 (“the October 2006 Contract”).  Ms Hulusi’s evidence suggests that this version was produced in response to notification that there was an issue with the ATO.  The October 2006 Contract specified that it replaced all prior agreements between On Call and the interpreter.  Under a heading “Relationship of Parties”, the October 2006 Contract specified that the relationship between the interpreter and the company “will be that of an independent contractor and this Agreement does not create a partnership, employment or any other legal relationship except of a contractual one on the terms of this Agreement”.

14. Under that same heading, the October 2006 Contract specified that for the avoidance of doubt, the interpreter acknowledged that as an independent contractor the interpreter had no entitlement to annual leave, sick leave, long service leave or any other leave.  Additionally the following clause appeared:

    6.5 To the extent that an employment relationship between the Company and you may be deemed to exist or implied by law you fully indemnify the Company against any liability or claim which may thereby arise.

15. There are two further matters of some interest. The first is that the contract sought the interpreter’s acknowledgment that all intellectual property created during the course of the agreement was the property of On Call and/or On Call’s clients.  Secondly, clause 3.1 of the contract required the interpreter to “follow all reasonable and lawful orders and instructions” of On Call.

16. This version of the standard form of contract came into use from on or about October 2006.  Not only were new registrants asked to sign the October 2006 contract but in April 2007 On Call also conducted a mass mailing to all members of its panel.

17. There was a further version of a standard form contract produced in about November 2007.  As that version was first utilised outside of the relevant period, I do not need to deal with it further.

18. As I have said, On Call was unable to establish through its records, the number or even the proportion of interpreters on its panel who executed each of the three relevant versions of the standard form contract.  What is apparent from the evidence, is that the majority of interpreters on the panel were not subject to any form of written contract during the relevant period.  As to those that were, other than in relation to some of those interpreters who gave evidence in the proceedings, the evidence did not establish which of the three relevant versions were executed.  It may have been the case, but the evidence did not establish, that some interpreters made more than one contract with On Call in circumstances where different versions of the standard form of contract applied at different times over the relevant period.       

    Allocation of Assignments

19. On Call maintained a database which was utilised by booking officers employed by On Call to identify an appropriate interpreter for a requested service.  The database included a page of information in relation to each interpreter on On Call’s panel.  The page was broken up into a range of categories and, beyond name and contact details, included information as to the language skills and the accreditation and qualifications of the interpreter.  There was also a section on the page in which comments could be included.  On Call’s practice was to include comments on a wide range of subject matter, including the areas of language specialisation, the geographical work preferences of the interpreter and indications as to the past performance of the interpreter and the extent to which the interpreter should or should not be utilised in the future.

20. By reference to the client’s requirements, On Call’s booking officers would typically search the database for an appropriate and available interpreter.  Whilst some attempt was made to distribute assignments evenly over a number of panel interpreters with suitable skills, in practical terms the first interpreter called by a booking officer who indicated availability for the particular assignment would usually be allocated the assignment.  

    No Obligation to Accept Assignments

21. There was no obligation on a panel interpreter to accept an assignment offered.  Each version of the standard form contract to which I have referred makes that point.  As a matter of practice, interpreters would pick and choose and, on occasion, decline assignments.  Some would decline on the basis that they did not want to work in the aged care area or do court work.  Alternatively, interpreters declined because they had other commitments.  Some interpreters declined assignments because of the travel that was required to undertake the assignment.

    Requests for Particular Interpreters

22. On some occasions, On Call’s clients would request a particular interpreter.  That occurred because a client may have developed a relationship with a particular interpreter in which continuity of service was an advantage.  Where such requests were made, On Call would seek to obtain the particular interpreter for the assignment but if the interpreter was not available then offers would be made to other, similarly accredited interpreters, in accordance with On Call’s usual process.

    Duration of Assignments

23. The duration times for assignments varied depending upon a range of factors.  In relation to court interpreting, assignments were requested and allocated on the basis of a half day block or alternatively on the basis of a daily block.  That was the standard which the evidence suggests was applied in the industry. 

24. For non-court assignments, the industry standard varied from State to State.  In Victoria, an interpreting assignment at a hospital or a community welfare centre or any other non-court setting was based on a maximum period of one and a half hours.  In New South Wales, Western Australia and Queensland the period was one hour.  Assignments for the Refugee Review Tribunal were based on a two hour block.  The practice was for the client to be charged and for the interpreter to be paid on the basis of the block of time for which the assignment was booked. 

25. The different blocks of time for which assignments were booked were (in each case) the maximum hire time applicable to what was, in effect, the minimum charge for a particular kind of booking.  To some extent the maximum hire time was nominal.  The court session in which the interpreter was required may have been over in an hour but the client was charged the minimum half day rate and the interpreter paid on the half day rate.  Similarly, if a hospital appointment was concluded in half an hour, the hospital would nevertheless be charged the minimum charge referable to the one and a half hour booking and the interpreter would likewise be paid on that basis.  It was commonly the case that interpreters would leave when the interpretation service required of them was completed, rather than stand and wait the entirety of the maximum hire time.  That practice was well known to On Call and was consistent with the industry norm.

    Double Appointments and Multiple Assignments

26. The identification of a maximum hire time in relation to the minimum charge resulted in some tension between On Call and some of its clients and between On Call and some panel interpreters assigned to interpret for those clients. Ordinarily, interpreting assignments were based on the interpreter interpreting the language of a single person (known as the ‘CALD’ or ‘UR’).  In the ordinary case, there will only be one person whose language requires interpretation.  However, some of On Call’s larger clients have multiple needs for an interpreter which are proximate in both time and location.  Thus, for instance, a hospital may require an Arab speaking interpreter for an Arab speaking patient for an appointment at 10am followed by a further appointment for a different Arab speaking patient with the same doctor at 10.30 am.  Ordinarily, each of those requirements for an interpreter were met by two separate assignments and thus two minimum charges.  That charging practice from time to time raised tensions and led to the advent of what were called “double appointments”.  Because of the way in which the minimum charge is made referable to a maximum hire period, some regular clients of On Call (and other agencies) insisted that only one charge be applied where multiple interpreting assignments occurred within the maximum hire time.

27. As Ms Hulusi acknowledged, double appointments don’t suit the interests of On Call.  Obviously On Call preferred to be paid for two assignments than to be paid for one.  For the same reason, double appointments were disadvantageous from the interpreter’s perspective.  On Call had an ongoing relationship with many of its major clients and did, to some extent, cooperate with those of its clients who sought to allocate more than one CALD or UR to a particular assignment.  Double appointments were controversial with panel interpreters.  Some would accept them, others would not.  On Call always asked the interpreter if he or she was prepared to accept such an arrangement.  The fact that some interpreters refused to stay and perform a second assignment is a factor relied upon by On Call as demonstrating On Call’s lack of control over the interpreters.

28. From time to time, On Call tried to persuade interpreters that they should stay for the full maximum hire period in order to accommodate demands by some clients that double appointments be performed within that period.  In that context, comments were included in a regular newsletter prepared by On Call and distributed to panel interpreters called the “Bugle”.  Such comments have included: - “our clients purchase language services on a time basis”; or, “our clients pay for the time they have booked”.  Those comments are relied upon by the Commissioner to demonstrate that the completion of an interpreting assignment is a time based task rather than the provision of an outcome or result.

29. The fact that more than one interpreter of a particular language may be required at a proximate time and location led to other practices which On Call relies upon as supporting its contention that interpreters have a capacity to manage their affairs so as to maximise their profits.  From time to time, On Call had a number of assignments which required a number of interpreters to attend at the same or proximate locations and at the same or similar time.  For example, two Italian language interpreters may have been booked to attend at a magistrates court to interpret in relation to two different proceedings to be dealt with at that court on a particular morning.  On occasion, a booking officer will have been persuaded by an interpreter to allow the same interpreter to take both assignments on the basis that the interpreter will coordinate with the court, so as to avoid a conflict between the performance of the two assignments.  Whilst that conduct involved some risk of conflict and thus may have led to complaints, On Call may have facilitated the practice rather than booking a second interpreter because a second interpreter was, from time to time, hard to find.  There was a shortage of interpreters across a range of languages.  Allocating multiple assignments to the same interpreter within a maximum hire period often facilitated On Call’s need to supply an interpreter but always provided extra remuneration to the interpreter. 

30. The evidence also shows that there were instances of multiple assignments within the same maximum hire period being offered to interpreters as inducement to take an engagement.  Thus, for example, an interpreter who was reluctant to do a particular assignment at a far off location may have been induced by the offer of multiple assignments at or near that location. 

31. Additionally, the practice encouraged by On Call (and no doubt other agencies) of providing multiple assignments within the same maximum hire period also resulted in some interpreters taking multiple assignments from a combination of agencies.  For instance, an experienced interpreter allocated an assignment at a hospital by On Call (and knowing that hospital appointments generally take 30 minutes) would take another assignment from another agency due to commence in the last half hour of the 90 minute maximum hire period of the On Call assignment. 

32. The extent to which the practice of multiple assignments occurred is not clear.  I am unable to say on the evidence how significant the practice was, although I would infer that it was not insignificant.

    Extensions of Assignments

33. From time to time, the interpretation service required exceeded the maximum hire time and an extension of time was required.  In that situation, the practice within On Call was that if the interpreter conducting the assignment was available, that interpreter would stay on for the extended period.  If the interpreter was not available, On Call would attempt to find another interpreter.  On Call did not insist on the interpreter staying.

34. The extension of an assignment did not require the interpreter to obtain On Call’s approval.  Usually, all that the interpreter was required to do was to inform On Call of the extension so that On Call could charge the client and organise for the interpreter to be paid an additional fee.  In the case of Victorian hospitals, an extension of time could not be approved by the medical professional involved but needed to be approved by the hospitals ‘interpreting office’.  In that situation, On Call required the panel interpreter to obtain approval for an extension from the interpreting office.

1. In relation to hourly or 90 minute block assignments, if the service was required to be extended it would be extended in 30 minute blocks.  The practice was that if an assignment went 10 minutes over the time allocated then an additional 30 minute charge would be paid by the client to On Call and an additional payment would be paid to the interpreter.  Any further extensions would be charged and paid on the same basis.  In relation to court work, a half day block could be extended by a further half day block.  Telephone interpreting was charged and paid for in 15 minute blocks with 5 minute extensions.

   Sessional Assignments

2. Beyond those arrangements which I have already described and which operated according to what was regarded as the industry standard, On Call entered into contracts with specific major clients in which interpreters were given assignments which required the interpreter to commence and remain throughout a designated session.  These were called “sessional assignments” in which an interpreter would be given a set starting and finishing time and perform whatever interpreting was required by the client during the allocated session.

   Cancellations

3. Where a client cancelled an assignment with more than 24 hours notice to On Call, On Call would not charge the client and would cancel the interpreter booked for the assignment without paying a fee.  If a client cancelled within 24 hours of the booked time, On Call charged a cancellation fee and would pay a fee to the interpreter who had been booked.  A full fee would be incurred by the client and paid to the interpreter where the assignment was cancelled on the same day of the booking. 

4. From time to time panel interpreters would cancel booked assignments.  Ms Hulusi described it as a constant problem that On Call was faced with every day.  On Call did not impose any financial penalty on an interpreter who had cancelled an assignment but unwarranted cancellations may have resulted in the interpreter not been used again.

   Pricing, Invoicing and Payments to Panel Interpreters

5. Ordinarily, the rates paid by On Call to interpreters were paid in accordance with schedules of rates set and applied by On Call.  On Call had a rates schedule which identified rates paid: for onsite interpreting; for court interpreting; for telephone interpreting; and, for translating.  On Call’s schedule was attached to the registration pack and to each version of On Call’s standard forms of contract.  Each of those contracts provided for the interpreter to be paid in accordance with On Call’s schedule of rates.  The standard payments varied as between different States. 

6. Sometimes On Call negotiated a rate above its standard rate.  That happened on an

   
   

   ad hoc basis, for instance an extra inducement may have been provided to get an interpreter to fill an assignment with little or no notice.  There are a number of rare languages where interpreters were particularly scarce and negotiations occurred in relation to assignments for those languages.  There was evidence from Ms Hulusi of two translators (Mr Giovannoni and another unnamed person) who generally set their own rates for translation work.  Mr Giovannoni’s evidence, which I refer and later set out in more detail, is that generally there is no negotiation with On Call.

7. On Call provided to members of its panel a book of forms.  Interpreters were required to fill in a form in relation to each assignment.  The purpose of that exercise was to confirm that the assignment had been completed.  The form was provided in triplicate.  One copy was provided to On Call’s client. On the completion of the assignment, a second copy was forwarded by the interpreter to On Call and the third copy was for the interpreter to retain. 

8. Whilst the interpreter was asked to submit a copy of the form to On Call, that was not for payment purposes but simply for verification should there be a dispute with On Call’s client as to whether or not the assignment had been completed.  An interpreter was paid on the basis of the booking request recorded on On Call’s database. 

9. Putting to one side the position of the 10% to 15% of panel interpreters who were registered for Goods and Services Tax (“GST”), panel interpreters did not invoice On Call for the services provided.  On a monthly basis On Call produced and forwarded a remittance advice to an interpreter who had provided services in the previous month.  The remittance advice would detail the assignments completed by that interpreter in the previous month.  The remittance advice would be accompanied by a payment.  Interpreters were paid on a monthly basis and not as and when an assignment was completed.

10. In relation to interpreters who were registered for GST, On Call provided a ‘recipient created tax invoice’.  On Call’s recipient created tax invoices were in the same form as On Call’s remittance advice but had an additional heading “Recipient Created Tax Invoice” under a first heading “Remittance Advice”. The Australian Business Number (“ABN”) of the interpreter appeared and a GST component was added to the total remittance paid.  That arrangement was facilitated by a form provided by On Call to new interpreters which asked if they were registered for GST purposes and which allowed interpreters to tick a box acknowledging their request for On Call to issue recipient created tax invoices.  The form advised that a failure to tick the relevant box would require the interpreter to provide a tax invoice.  Ms Hulusi’s evidence was that only a very limited number of interpreters provided their own tax invoice.

11. Overwhelmingly panel interpreters did not invoice On Call.  The transactional records flowing between On Call and the panel interpreters were produced and superintended by On Call.

    Extent of Integration of Panel Interpreters with On Call’s Business

12. The vast majority of the services that On Call provided to its clients were provided by the interpreters on On Call’s panel.  Panel interpreters were engaged in an integral part of On Call’s business and were essential to the operation of that business.  This was acknowledged by Mr and Ms Hulusi who also acknowledged that the success of On Call’s business depended upon the professionalism and performance of its interpreters. 

13. A number of comments were made by On Call to its panel interpreters through the Bugle referring to panel members as part of On Call’s team.  Interpreters were urged to continue to work as a team in order to grow On Call’s business.

14. Ordinarily, panel interpreters did not attend at On Call’s offices, although invitations for interpreters to drop in were made from time to time including to some social functions such as the anniversary of the opening of an office.  Communications between On Call and panel members occurred by telephone, email or other electronic means.  The extent of that contact depended upon the extent to which the particular interpreter was utilised by On Call.  Many interpreters were utilised regularly and routinely whilst others were only rarely offered an engagement.  From time to time, On Call removed from its database panel members who were no longer in use. 

15. There were interactions between On Call and its panel members beyond the assignment and performance of work.  From time to time On Call offered to panel members training and other professional development opportunities.  The Kit provided to panel interpreters stated that On Call would provide professional development opportunities for independent contractors, as part of On Call’s commitment to quality.  The registration pack stated that On Call strongly supported and encouraged interpreters to undertake courses or workshops relating to interpreting and that, from time to time, On Call conducted courses.  Interpreters were encouraged to read the Bugle for information on upcoming training courses and seminars.  There were comments published in the Bugle to the effect that On Call was committed to the personal development of its interpreters.

16. The actual provision of training was not substantial but it occurred from time to time.  It was not uniformly made available to all panel members.  Occasionally, familiarisation sessions were organised by On Call in order to train interpreters in relation to the particular needs or setting of a major client.  For instance, in relation to interpreting work for a particular tribunal, familiarisation sessions were conducted with the assistance of members of the tribunal. The purpose of workshops of that kind was to familiarise interpreters with the role and function of the tribunal, the specific terminology and the procedures and principles that interpreters required by that tribunal were to adhere to.  Similarly, familiarisation sessions were conducted by On Call for other major clients.  Interpreters were not required to attend but were invited to do so.

17. On Call also provided training to interpreters or would be interpreters in order to fill shortages of required interpreters.  Courses of that kind were provided in Perth and also when On Call opened its office in Brisbane.  For example, On Call provided a 10 hour introduction to interpreting course for rare languages in these locations.  There is also evidence of On Call financially assisting interpreters to complete a Health Interpreting Certificate course provided by TAFEs in Western Australia. 

    Lack of Exclusivity

18. In the ordinary case, the connection that a panel interpreter had with On Call was not exclusive.  Most interpreters worked for more than one agency.  Mr Hulusi explained that this occurred because interpreters wanted to maximise their opportunity to work.  The extent of work performed for other agencies by members of On Call’s panel varied, including by reference to the extent of work provided by On Call to the particular interpreter.  On Call did not discourage interpreters on its panel from working for other agencies, in fact Ms Hulusi’s evidence was that On Call encouraged interpreters to do so in order to get experience. 

19. From time to time other agencies approached On Call and On Call approached other agencies in order to locate interpreters for available assignments.  That practice, no doubt, also encouraged the significant cross fertilisation of interpreters between agencies. 

20. On occasion, interpreters on On Call’s panel took work from a former client of On Call.  There were two occasions in evidence of where a regular user of On Call’s services decided to organise for itself its interpreting needs and approached interpreters directly and not through an agency.  In those situations, some interpreters on On Call’s panel who had carried out On Call’s work for that particular client were, at a later time, approached directly by the client to provide interpreting directly to that client.  In relation to an existing client, the Code of Ethics prohibits an interpreter from conduct of that kind without the approval of the agency.  On Call did, on occasion, remind interpreters of that requirement and instructed interpreters not to provide their contact details to On Call’s clients.

    Representation of On Call by Panel Interpreters

21. On Call required interpreters to wear an identification badge (“ID badge”) provided by On Call when on an assignment for On Call.  Interpreters were told by On Call, including through the Bugle, that On Call’s identification badges “must be worn at all times whilst representing On Call”.  The ID badges provided by On Call were headed “On Call Interpreters and Translators Agency Pty Ltd”.  On Call’s logo appeared on the badge as well as On Call’s slogan “Solving your language needs”.  The badge also listed the address, telephone, fax and email details for On Call.  The name of the interpreter together with a photograph and the language the person interpreted appeared on the badge with the description “On Call Interpreter”.

22. Interpreters who worked for other agencies had an ID badge from that agency.  Some interpreters also had their own identification badge.  The Code of Ethics allows that interpreters may present business cards representing the agency for whom they are engaged and that no use is to be made of personal cards of the interpreter or cards which imply employment by any other organisation. 

23. Ms Hulusi suggested that the requirement that interpreters wear the ID badges arose for security reasons in circumstances where some clients required the identification of an interpreter entering their premises.  Whilst security may have formed part of the motivation at some earlier time, the content of On Call’s ID badge makes it plain that its purpose was promotional as well as functional.  Whatever its purpose, I would infer that the effect of the wearing of the On Call ID badge by an interpreter was to represent to people dealing with the interpreter that the interpreter was an On Call interpreter representing On Call and providing the service that On Call was engaged to provide.  Ms Hulusi did not seek to deny that panel members represented On Call.  On Call’s professional indemnity insurance (to which I will refer) only covered panel interpreters who were “employed by or acting solely for or on behalf of” On Call.

24. Further, a number of On Call publications acknowledged that in the performance of their work, panel interpreters were an emanation of On Call.  The Kit stated “Our interpreters are the public face of our business, and therefore your conduct and behaviour when on an interpreting assignment is of importance to us”.  Ms Hulusi acknowledged the correctness of that statement.  A large number of statements in various editions of the Bugle reminded panel interpreters that they were representing On Call. For instance: – “You represent our agency and if you continue to run late we lose faith with our clients”.

    Control of Panel Interpreters - Instructions

25. Interpreting assignments were ordinarily conducted by interpreters at the location of On Call’s client.  Typically, translations were conducted at the office of the translator.  As the work is conducted offsite, it was not directly overseen by a manager or supervisor from On Call.  In any event, given the instantaneous nature of the work involved in interpreting, there is also little scope for the giving of instructions to the interpreter whilst the work is being performed. 

26. Nevertheless, the manner in which interpreting and translating is performed is the subject of standards set by AUSIT in consultation with NAATI.  Those standards are set out in the Code of Ethics published by AUSIT.  The Code of Ethics consists of three sections: - general principles; a code of practice (annotated for specific practical applications); and, supplementary notes.  Ethical requirements such as impartiality, honesty, integrity and dignity are dealt with, but the Code also deals with many practical or practice requirements.  These include politeness, reliability, accuracy, clarity of speech and the rectification of mistakes.  The Code is reasonably comprehensive in dealing with the attributes and performance requirements of interpreters and translators.

27. Through a range of statements and other measures, On Call made it plain that it expected panel members to observe and abide by the Code of Ethics.  Statements of that kind are to be found in the registration pack and the Kit.  The Code of Ethics forms part of the Kit and was thus provided to interpreters when first engaged by On Call.  Ms Hulusi’s evidence was that interpreters were also told about the Code at their first interview and if the prospective interpreter was not NAATI qualified, a copy of the Code was provided.  Ms Hulusi accepted that On Call could direct interpreters to follow all the professional requirements of the Code.  Each of the July 2005 and September 2005 contracts gave On Call the right to terminate the contract if the interpreter acted in breach of the Code of Ethics.  The terms of the Code make it clear that the Code is applicable to interpreters working as independent contractors or to interpreters employed as such.

28. There are numerous examples in the Bugle publications published by On Call of On Call notifying panel interpreters of its expectations in relation to their conduct and performance.  There were constant reminders that interpreters must be punctual.  Interpreters were told to communicate with On Call’s office over various matters.  Interpreters were encouraged to complete the transactional record keeping requirements of On Call associated with each assignment.  Interpreters were reminded about their obligations of confidentiality.  Interpreters were constantly told to turn off their mobiles whilst on an assignment.  They were told that such conduct was “not acceptable”.  Interpreters were reminded about being appropriately attired, including because inappropriate dress reflects badly on On Call.  Interpreters were instructed to get authority for extensions of time from the client where that was required.  The Bugle publications contain instructions to interpreters to be assertive with clients when they were made to wait unnecessarily.  Various instructions were provided in relation to direct contact with On Call’s clients including to inform the client when the interpreter was running late. 

29. The October 2006 Contract required interpreters who were subject to it to “follow all reasonable and lawful orders and instructions”.  However, for reasons I will explain, the terms of the standard form contracts played little or no part in the practical application of On Call’s procedures and processes.

    Control of Panel Members – Performance, Compliance and Discipline

30. There were statements made in the Kit which, whilst recognising that interpreting is an “autonomous” activity, acknowledged that interpreters may face many challenges during an assignment and encouraged interpreters to contact the appropriate manager at On Call to discuss issues relating to their performance or to client behaviour.  On occasion, Ms Hulusi provided support and advice, listening to the concerns of interpreters and, if necessary, raising those concerns with On Call’s clients.

31. Through the Kit, On Call informed panel interpreters that it had a complaints procedure and that the complaints procedure would be followed by the responsible manager of On Call where a complaint was received about the interpreter’s performance.  The Kit stated that On Call would counsel interpreters who demonstrate poor performance and would offer necessary advice and assistance for improvement.  If, however, consistently poor performance was experienced, On Call would remove the interpreter from the panel.  Some examples of performance that On Call said it would monitor and appraise as part of its quality assurance systems were set out.  Those included: failure to attend assignments; repeat poor performance; a lack of punctuality; failure to adhere to the conditions of the contract; wilful and professional misconduct; good performance; good client feedback; and, the ability to adhere to On Call’s “Operational Guidelines”.

32. There were a range of items published in the Bugle which warned that inappropriate conduct would not be tolerated including unfavourable feedback from clients about lateness.  From time to time On Call got complaints about the performance of some of the panel interpreters.  When that occurred, the nature of the complaint would be identified and feedback sought from the interpreter and provided to the client.  The interpreter may have been reminded of their professional responsibilities.  On Call had the practice of recording complaints and instances of non-performance.  Typically, that was done by notations made in the comments section on the database page dealing with the particular interpreter.  If there was a repeat complaint about a particular interpreter, the interpreter’s page would be marked with a “Do not use” or “Only if desperate” or “Caution”.  Ms Hulusi’s evidence was that in those circumstances On Call would not make any further offers to the interpreter if On Call could possibly avoid doing so.  Sometimes, despite the database indicating that no further assignments should be provided to an interpreter, On Call did so if no other interpreter was available.

1. I would infer from the evidence that the origins of the charging arrangements for interpreting have been formulated by reference to considerations of the kind that I have just identified.  Interpreting assignments are of a relatively short duration.  Minimum charges are in place and minimum payments are paid to interpreters.  I have no doubt that those payments are founded in part on the time anticipated to be worked and in part on the dislocation involved.

2. An industry standard or rule of thumb applies to the charging of translating.  Charges are based on a word count with each unit of 100 words constituting a unit of charge.  A premium rate will be applied for non-standard complex documents and an additional premium for translating which is required urgently.  Mr Giovannoni’s evidence was that the 100 word unit charge was, roughly speaking, based on the time, effort and expertise required to translate a block of 100 words. He agreed that the more complex the document, the more time that is likely to be involved in translating it.  Other elements of the fees charged by him, for instance attending at a solicitor’s office, would be calculated on the basis of a time-based fee.  I accept that there is a connection between the time taken or anticipated to translate a document and the payment received.  The dislocation involved in translating very short documents is reflected in the 100 word unit of charge and also in the premium charged for urgent work.

3. This is not a case where the fixing of the reward bears little or no connection to the time actually spent or anticipated.  In my view the payments made to the interpreters have a connection with time, that is, a combination of time worked and the time involved in the dislocation to which I have referred.   Additionally, this is not a case where there is a discernable product created which is distinct from the labour that created it.  In short, this is not the kind of obvious case where the indicator here under consideration has significant utility.  I am not satisfied that interpreting or translating was remunerated for an agreed result.  The fact, however, that I have come to the view that the work has a connection to time and dislocation does not lead me towards the conclusion that interpreters are employees. As I have already identified, the remuneration of work by reference to time and dislocation, whilst a common feature of an employment relationship, is also a common feature of the charging practices of independent contractors.  In the end, I regard this indicator as of neutral value.

   Delegation

4. A key element in an employment relationship is the personal performance of work.  A capacity to delegate work tends to strongly suggest against the existence of an employment relationship (Stevens v Brodribb at 24-26) although limited or occasional delegation may not (Ready Mix Concrete (South East) Ltd v Minister for Pensions and National Insurance [1967] 2 QB 497 at 515). The mere right to delegate in the absence of the likelihood or actuality of delegation occurring may be of little consequence: Neale v Atlas Products at 428.

5. As I have already found, the evidence in this case does not support the existence of delegation.  The absence of delegation tends significantly against the conclusion that the work provided by panel interpreters was performed in and for their own businesses.

   Economic Dependency, Extent of Integration and Exclusivity

6. This is not a case in which economic dependency is an indicator of any utility.  The evidence does not suggest that panel interpreters were economically dependent or reliant on On Call to the extent that the level of dependency pointed towards an employment relationship.  However, the lack of dependency does not point in the other direction because it is explained by the part-time nature of the link between On Call and the panel interpreters.

7. That part-time link needs also to be appreciated on the question of the extent of integration of interpreters with the business of On Call.  The evidence of a lack of exclusivity, including the fact that panel interpreters work for On Call’s competitors, is demonstrative of a lack of integration.  However, the part-time rather than full-time nature of the work requires that the analysis not be overly distracted by what the interpreters did when not performing work for On Call: Roy Morgan (2010) at [50]-[51].  The absence of a provision requiring exclusive service is a feature of casual and other employments and not necessarily indicative of an independent contractor: Sgobino at 308; Wesfarmers Federation Insurance at [74].

8. The evidence suggests that in the performance of work for On Call, the panel interpreters are integrated with the business of On Call to an extent which would not ordinarily attend the relations of an independent contractor and a recipient of that contractor’s services.  Regular contact and communication between On Call and its regular panel interpreters occurred through the distribution of the Bugle. The Bugle is a newsletter. Its purpose was to inform panel interpreters about On Call’s operations including relevant changes or developments.  It was also the means by which On Call invited its panel interpreters to attend both social functions (for example On Call’s first birthday party for its Brisbane office) and also training courses.  The contents of the Bugle publications demonstrated its informational and functional purposes but also demonstrated On Call’s desire to build a corporate ethos extending to its panel interpreters.  There were frequent references in those publications to the interpreters in possessory terms suggestive of interpreters being part of On Call’s business as well as motivational statements which emphasised that On Call and the interpreters are a team working for mutually beneficial outcomes.

9. Additionally, on the issue of integration, training courses and seminars were provided from time to time. Although not compulsory, interpreters were invited to attend.  On Call displayed interest in the professional development of the panel interpreters and communicated that interest through the Bugle publications.  Typically, employers will have a concern and interest in the professional development and skill enhancement of their employees.  That concern and interest is demonstrative of the extent of integration, attachment and commitment as between the business of an employer and the employees that work within it.  That kind of integration would not readily be expected in the relations between two independent businesses.

10. For those reasons I would conclude that there was a level of integration between On Call and its interpreters of sufficient significance to tend towards supporting the existence of an employment relationship. 

    Opportunity for Profit and the Risk of Loss

11. A consideration of the evidence, by reference to the sub-indicators that I have earlier identified on the question of the opportunity for profit and the risk of loss, has led me to the conclusion that, in providing their work, the panel interpreters took little or no risk but had some capacity to manage their affairs so as to maximise their remuneration. In terms of risk, it was On Call that bore the responsibility for the work of interpreters failing to meet expected or agreed performance standards or causing others harm or injury.  There was nothing in the evidence to suggest a connection between performance and payment.  Lack of performance may have led to no future engagements but there was no evidence of it leading to financial penalty or a denial of the remuneration contracted for.  Whilst the standard form contracts required that the interpreters indemnify On Call, as a matter of reality, it was On Call that bore the risk of exposure for a failure by an interpreter to perform the work contracted for by On Call’s clients.  Despite any indemnity, On Call also took out its own policy of insurance protecting it against claims made by its clients including in relation to the work of the panel interpreters.  On Call made its interpreters aware of the existence of that cover and its policy was to apply the cover to protect all panel interpreters irrespective of whether or not the interpreter contributed to the cost of that insurance.  That demonstrates that On Call did not perceive its panel interpreters as bearing the responsibility for causing harm to others.

12. Whilst I have accepted the existence of some capacity to maximise reward, it is important to distinguish between the maximisation of remuneration and the maximisation of profit. As I have earlier indicated, a genuine self-employed entrepreneur will seek to be remunerated not simply for the provision of that person’s personal services, but also for the risks involved in being an entrepreneur.  It is in that sense that a distinction between remuneration and profit arises. There was little or no evidence which would support an inference that the interpreters were generating profits in exchange for the taking of risk. Nor was the extent to which remuneration could be maximised of much significance. For all of those reasons, I do not regard the provision of interpreting services by the panel interpreters as demonstrating the risk of loss and an opportunity for profit to an extent that would tend towards a conclusion that those services were provided by independent contractors.

13. Overwhelmingly, the remuneration to be provided to interpreters was not negotiable and not negotiated by reference to the interpreters’ standard fees or standard terms of trade.  That consideration points towards the existence of employment relationships and against the conclusion that the interpreters were providing their services as independent contractors.

    Characterisation of the Economic Activity

14. As to the manner in which the provision of interpreting services was characterised, it is clear on the evidence that On Call, the interpreter witnesses called and, I would infer, most of the relevant panel interpreters, characterised the work provided by the interpreters as work being performed in and for the business of the interpreter.  That conclusion necessarily flows from the fact that On Call characterised the interpreters as self-employed and that the interpreters accepted or acknowledged that characterisation.  The legitimacy of that characterisation calls into question the weight that ought to be attached to it.  At an earlier time and, prior to the relevant period, On Call characterised its panel interpreters as employees and not independent contractors.  As the evidence revealed, the change in On Call’s characterisation of its panel interpreters was not based on any re-evaluation of the nature of the relationship but simply the disadvantage On Call regarded itself to be in, relative to its competitors who had characterised panel interpreters as independent contractors.  That fluidity in characterisation suggests that On Call’s characterisation, including through the various standard forms of contract that On Call had prepared, was based upon On Call’s commercial needs rather than upon the reality of the relationship between On Call and the panel interpreters.  It is unsurprising that most interpreters would have adopted the characterisation of their relationship that On Call (and other agencies) were asserting.  That conclusion seems particularly apt in a context where any insistence by an interpreter upon the characterisation of the relationship as that of employer and employee would probably have led to little or no work from On Call and at the very least would have led to On Call withholding 48.5% of the remuneration earned where an ABN registration number was not provided.

15. Additionally, as the evidence of Ms Hulusi and some of the interpreters called demonstrated, their characterisation of panel interpreters as independent contractors was primarily arrived at by reference to a perceived absence of control of the interpreter by On Call, because there was no obligation on the interpreter to work.  Other potent factors demonstrative of control (including those that I have earlier identified) were not appreciated. For all of those reasons it cannot be said that the characterisation or label of independent contractor utilised by On Call and interpreters had a level of validity that justifies significant weight being attached to it as an indicator.

    Withholding of Tax and Leave & Supply of Equipment

16. I have already stated my reluctance to utilise the absence of deductions of income tax and the failure to provide leave as indicators of any utility because of the circularity of reasoning involved.  Even if these indicators were to be put in the mix, the absence of these factors is a common feature of most casual contracts of service and thus no assistance in this case: Sgobino at 308. Finally, the supply of equipment by interpreters was not a matter of any significance for most panel interpreters, although it was more significant in the case of translators working at home.

17. Taking account each of the indicators to which I have referred, including the weight or strength of indication which I regard ought to be attached to each, I have come to the clear conclusion that the activities of the relevant interpreters were performed in and for the business of On Call.  I should say expressly that my conclusion extends to those activities provided to On Call’s clients by Mr Giovannoni and Ms Avila.  By reference to both the general evidence and the specific evidence given by those witnesses, I am clearly of the view that in performing interpreting work required by On Call, Mr Giovannoni and Ms Avila did so as emanations of On Call and that, in the application of all of the relevant indicators, their work was performed in and for the business of On Call.  I may well have been persuaded to treat the translating work performed by Mr Giovannoni, and perhaps Ms Avila, differently if the evidence called had been sufficient to discharge On Call’s onus on that issue.  It was not.  Neither the evidence of Mr Giovannoni or Ms Avila relating to any translating work that might have been performed for On Call during the relevant period was sufficiently detailed or specific to allow me to draw a distinction of the kind that might have assisted On Call.

18. For those reasons I have come to the ultimate conclusion that On Call has failed to satisfy me that the relevant interpreters were not its common law employees over the relevant period.

    DO THE INTERPRETERS FALL WITHIN THE EXTENDED DEFINITION OF EMPLOYEE IN SECTION 12(3)?

19. The Commissioner defended the assessments on a second basis and in that respect relied on s 12(3) of the Superannuation Guarantee Act. The Commissioner contended that even if I was satisfied that the relevant interpreters were not employees of On Call at common law, I could not be satisfied that they were not employees of On Call within the expanded meaning of “employee” provided by s 12(3) of the Superannuation Guarantee Act.

20. Section 12(1) of that Act operates to expand and clarify the ordinary meaning of employee and employer.  It does so by specifying that particular categories of persons (identified in sub-sections (2) to (11)) are, for the purposes of the Act, to be regarded as employees. 

21. That the Superannuation Guarantee Act intends to expand the ordinary meaning of employee is also apparent from the terms of s 11 which defines “salary or wages”.  The expression “salary or wages” is important to the scheme of the Act because the total salary or wages paid by an employer to a particular employee is included in the formula set out in s 19 by which an employer’s “individual superannuation guarantee shortfall” for an employee is to be calculated.  The amount of any superannuation guarantee charge to be imposed on an employer will in turn be referable to the superannuation guarantee shortfall: see ss 16 and 17.  As the expression “salary or wages” normally denotes payments by a common law employer to a common law employee (see: Neale v Atlas Products at 424-425; World Book Australia Pty Ltd v Federal Commissioner of Taxation (1992) 108 ALR 510 at 513), it was necessary for the Act to provide an expanded definition of “salary or wages” in line with the expanded definition of “employer” and “employee” found in s 12. That, seems to me, the purpose of

    
    

    s 11 which takes the following form:

    (1)  In this Act, salary or wages includes:

    (a)  commission; and

    (b)payment for the performance of duties as a member of the executive body (whether described as the board of directors or otherwise) of a body corporate; and

    (ba)payments under a contract referred to in subsection 12(3) that are made in respect of the labour of the person working under the contract; and

    (c)remuneration of a member of the Parliament of the Commonwealth or a State or the Legislative Assembly of a Territory; and

    (d)  payments to a person for work referred to in subsection 12(8); and

    (e)  remuneration of a person referred to in subsection 12(9) or (10).

    (2)Remuneration under a contract for the employment of a person, for not more than 30 hours per week, in work that is wholly or principally of a domestic or private nature is not to be taken into account as salary or wages for the purposes of this Act.

    (3)Fringe benefits within the meaning of the Fringe Benefits Tax Assessment Act 1986 are not salary or wages for the purposes of this Act.

22. On Call and the Commissioner disagreed as to the proper construction of

    
    

    s 12(3). That provision should be construed by reference to the plain meaning of the language utilised in the context of s 12 as a whole and the evident purpose of that section conveyed by the Superannuation Guarantee Act. Section 12(3) identifies an employee as a person that works under a contract that is wholly or principally for the labour of a person. The provision identifies that person as a person who “works” and also as a party to the contract that is “wholly or principally for the labour of that person”. It is clear then that the person referred to must be both a party to the contract and the person contracted to perform the work required by that contract. In other words, there must be a contract for the personal services of the contracting party who will perform those services.

23. The conclusion that s 12(3) is confined to contracts requiring the personal performance of labour by the contracted worker is also supported by the language of

    
    

    s 11(1)(ba).  That provision speaks of “the labour of the person working under the contract” and supports the conclusion that the contract must relate to the personal labour of that person.

24. The contract in question must be “wholly or principally for the labour of that person”. Thus, if the remuneration to be paid to the person is partly for that person’s labour and partly for other benefits provided, so long as the principal benefit provided is referrable to the provision of labour, the contract in question would fall within s 12(3). In that respect, I see no reason why the word “principally” ought not be given its ordinary meaning, that is, “chiefly” or “mainly”: Macquarie Dictionary (5^th ed, 2009).  It is of some assistance to observe that the Explanatory Memorandum to the Bill that became the Taxation Laws Amendment Act (No 4) 1993 (Cth) shed some light on what Parliament had in mind in relation to a contract “wholly or principally for labour”.  Section 81 of the amending Act amended the Superannuation Guarantee Act by inserting s 11(1)(ba).  The Explanatory Memorandum explained that by that amendment the Superannuation Guarantee Act will specifically include salary or wages payments made to contractors for their labour under a contract that is wholly or principally for the person’s labour.  In that context, the Explanatory Memorandum stated (at 13.21):

    A contract is considered to be wholly or principally for labour if more than half of the value of the contract is for labour.

1. The plain words of s 12(3) are potentially very wide in their operation. They clearly extend to persons who provide personal services who are not employees at common law. In that respect, s 12(3) extends to independent contractors who provide personal services under a contract which is wholly or principally for their labour. On a wide construction of the

   
   

   sub-section a contract between a solicitor and a client which is wholly or principally for the provision of the labour of the solicitor would fall within the scope of s 12(3). It seems unlikely that Parliament intended to include within the scope of s 12(3) contracts of that kind. Once it is recognised that some contracts with independent contractors are included within the scope of s 12(3), it becomes difficult to know by reference to the words of s 12(3) alone, where the line is to be drawn. However, the words utilised in the sub-section must be construed in the context of the section as a whole and by reference to the evident purpose of the Act in which the section is found. It seems to me that the dividing line becomes more apparent when attention is given to those matters.

2. The Explanatory Memorandum to the Bills which were later enacted as the Superannuation Guarantee Act and the Superannuation Guarantee Charge Act described the purpose of the Bills as “to encourage employers to provide a minimum level of superannuation support for employees”. An analysis of the second reading speech for the Superannuation Guarantee (Administration) Bill 1992 (Cth) together with the Second Report of the Senate Select Committee on Superannuation (a Committee of the Senate charged with reporting on that Bill and other related Bills) demonstrates that Parliament was concerned with promoting and enhancing the provision of occupational superannuation by employers to their employees.  Occupational superannuation was seen as a key element in encouraging retirement provision by employees during their working lives in order to achieve adequate living standards in retirement.  At the time the Bills were introduced, occupational superannuation was available to many employees through industrial awards but was not universally provided for and the proposed legislation aimed to substantially extend the coverage of occupational superannuation.  It is evident from a proper understanding of the history of occupational superannuation, and the circumstances in which compulsory superannuation was introduced, that the source of funding for occupational superannuation was not intended to be governmental but was instead to be sourced from the remuneration paid by employers to their employees.  In that respect, occupational superannuation is a compulsory form of retirement saving for employees and is achieved by the imposition of an obligation on the employer of those employees to remit part of the remuneration which would otherwise have been earned, into a superannuation fund which cannot be accessed prior to the employee’s retirement.

3. Whilst s 12 of the Superannuation Guarantee Act makes it clear that the scheme for enhancing occupational superannuation was not intended to be restricted to common law employees, it is also clear that the extent of that expansion is to be limited by the evident purpose of the legislation. Parliament did not intend that a client of a sole practitioner solicitor provide for the retirement savings of the solicitor out of the exchange of labour for remuneration that arises out of the relationship of solicitor and client. However, Parliament did intend to cover employment-like relationships in which work is performed for remuneration or payment despite the fact that the relationship in question may not be recognised by the common law as a relationship between an employer and employee. Each of the categories of persons dealt with in sub-paragraphs (2) and (4)-(10) of s 12 are persons who may not be common law employees but who earn remuneration in exchange for the provision of personal services in the context of an employment-like setting. Those categories include: parliamentarians; directors of corporations; statutory office holders; and, public servants (including police officers and Defence Force personnel). In my view, Parliament’s intent in relation to s 12(3) is similar. The sub-section seeks to facilitate occupational superannuation being paid out of the exchange of work for remuneration when an independent contractor provides personal services in an employment-like setting which is not of a domestic or private nature (see s 12(11)). Whether an employment-like setting exists may be best answered by asking: Whether, in all the circumstances, the labour component of the contract in question could have been provided by the recipient of the labour employing an employee?

4. The search for the correct result, will be guided by bearing in mind the underlying purpose of the Superannuation Guarantee Act of facilitating occupational superannuation for workers who sell their labour in employment and employment-like settings.

5. The expression “under a contract that is wholly or principally for the labour of the person” utilised in s 12(3), has been the subject of earlier judicial consideration. That consideration occurred in the context of a judicial examination of the meaning of the phrase “salary or wages” as utilised in the Income Tax Assessment Act 1936 (Cth) (“Income Tax Assessment Act”). In that context, the High Court in Neale v Atlas Products was called upon to determine whether tilers who were considered not to be common law employees received payments which were within the definition of “salary and wages”.  The Court determined at 425 that the payments were not salary or wages because the tilers had contracts which left them free to do the contracted work themselves or delegate that work for the performance of others. 

6. Although the context is quite different, the decision in Neale v Atlas Products supports the construction of s 12(3) which I have arrived at, insofar as I have concluded that

   
   

   s 12(3) only applies in relation to contracts for the personal performance of work by the worker who is a party to the contract.

7. Some thirty years after Neale v Atlas Products was decided, an amendment was made to the definition of “salary and wages” as then found in s 221A(1) of the Income Tax Assessment Act. That provision was considered by the New South Wales Court of Appeal in World Book. As Meagher JA stated at 514 the amendment was designed to reverse the effect of Neale v Atlas Products so that the existence of the right to delegate no longer prevented a contract from coming within the statutory definition.  His Honour held that the language utilised by the amendment failed to effectuate Parliament’s intention.  Furthermore, each member of the Court was of the view that a contract for a result was outside the scope of the description “a contract that is wholly or principally for the labour of the person”.  The Court seems to have been driven to that view in that case by the potential consequences of a wide view of the definition.  The Court was obviously concerned that without a limitation of the kind it identified, the definition would extend to cover payments made by a client to his solicitor, an owner to his estate agent and a patient to his doctor (at 515) or payments made to a distinguished portrait painter, a champion jockey or a skilled barrister (at 518).  It was that potential for an extreme operation that led to the qualification or limitation arrived at, that the contract in question needed to be a contract for work and not for a result. 

8. For reasons that I have described, the potential for s 12(3) to have an extreme operation is negated when reference is given to the context in which the sub-section is found together with the underlying purpose of the Superannuation Guarantee Act. That context and underlying purpose is very different to the legislation which was considered in World Book.  Additionally, the focus upon the single criterion of whether the contract is a contract for an outcome or result is somewhat out of step with the modern day acceptance of the

   
   

   multi-factorial totality test.  Furthermore, for the reasons I have dealt with at [277]-[278] the distinction between a contract for labour and a contract for the product of that labour is illusory in all but the most obvious cases.  For those reasons, the approach taken in World Book is to be distinguished.  I have come to that view despite the fact that in Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 33 ATR 537 the New South Wales Court of Appeal applied World Book in construing s 12(3) of the Superannuation Guarantee Act. In that case both Meagher and Sheller JA applied their reasoning in World Book without any apparent consideration of sub-paragraphs (2) and (4)-(10) of s 12, or of the purpose of the Act to which I have previously referred. With great respect to that Court, I have been driven to the conclusion that it is not appropriate to construe s 12(3) on the basis that a contract for a given result or outcome is outside its scope.

9. In coming to the view that I have arrived at, I necessarily reject On Call’s contention that the expansionary or clarifying effect of s 12(3) is related only to contracts involving the provision of tools and equipment. That contention has no textual support nor can I discern any underlying policy reason why the intended extension should be limited to that reason alone. Whilst the authorities relied upon by On Call refer to the provision of tools and equipment by the person providing the labour as the kind of contract upon which s 12(3) may operate, they do so by way of example and not in an attempt to suggest that the expansionary operation or clarification by the sub-section is limited to those contracts alone: see Roy Morgan (2010) at [68] and [69].  On Call also contended that a contract which required the exercise by a person of their professional skills was not a contract wholly or principally for the labour of that person.  That contention denies the fact that the provision of labour involves the combination of time, skill and physical or mental effort. The provision of labour is not confined to physical toil: Deputy Commissioner of Taxation v Bolwell (1967) 1 ATR 862 at 873.

10. Turning then to the facts of this case, I agree with the Commissioner’s contention that I could not be satisfied that the panel interpreters were not employees of On Call within the expanded meaning provided by s 12(3). For the reasons already addressed, I have not been satisfied that the panel interpreters worked under contracts which, either expressly or as a matter of reality, provided a right to delegate. I am not satisfied that the contracts concerned were not contracts for the interpreters to perform work personally. Given that On Call has failed to satisfy me that the relationship between it and the panel interpreters is not an employment relationship, it logically follows that On Call has failed to satisfy me that the relationship is not employment-like. I have come to that view including by reference to a consideration of the underlying purpose of the Superannuation Guarantee Act of facilitating occupational superannuation for workers who sell their labour in employment and employment-like settings. Even if I had been satisfied that panel interpreters were not common law employees, on the findings I have made, I would nevertheless have been satisfied that they are workers personally performing work in an employment-like setting.

11. If I am wrong in my construction of s 12(3) and a contract for a given result falls outside of the scope of the subsection, for the reasons I have already given, I am not satisfied that the contracts of the relevant interpreters were not for their labour but were instead contracts for an agreed result.

    CONCLUSION

12. It follows that On Call has failed to establish that the relevant interpreters were not its common law employees and were not its employees within the extended meaning given in

    
    

    s 12(3) of the Superannuation Guarantee Act. On Call’s application to set aside and or vary the Commissioner’s decision of 6 April 2009 to disallow On Call’s objections to the Commissioner’s assessments, should be dismissed.

13. As I have not received submissions on the question of costs, I will make orders for the exchange of written submissions on that issue.  If the parties are agreed as to that issue, proposed consent orders should be promptly filed.

I certify that the preceding three hundred and sixteen (316) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.

Associate:

Dated:       13 April 2011