Personnel Contracting v Construction, Forestry, Mining and Energy Union
[2004] WASCA 312
•22 DECEMBER 2004
PERSONNEL CONTRACTING PTY LTD T/AS TRICORD PERSONNEL -v- THE CONSTRUCTION FORESTRY MINING AND ENERGY UNION OF WORKERS [2004] WASCA 312
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASCA 312 | |
| WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT | |||
| Case No: | IAC:7/2004 | 1 NOVEMBER 2004 | |
| Coram: | STEYTLER J (PRESIDING JUDGE) EM HEENAN J SIMMONDS J | 22/12/04 | |
| 49 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed | ||
| B | |||
| PDF Version |
| Parties: | PERSONNEL CONTRACTING PTY LTD T/AS TRICORD PERSONNEL THE CONSTRUCTION FORESTRY MINING AND ENERGY UNION OF WORKERS |
Catchwords: | Industrial law Labour hire agency Whether in relation to agency two workers were employees or independent contractors Application of common law test for finding employment relationship Whether document headed "Agreement to Contract" created employment relationship Whether document headed "Independent Contractors Agreement" created employment relationship Courts and Judges Appeals jurisdiction Industrial Appeals Court Jurisdiction to hear appeal from Full Bench Decision of Full Bench that worker was an "employee" for the purposes of the Industrial Relations Act 1979 (WA) Decision of Full Bench that the matter before it was an "industrial matter" for the purposes of the Industrial Relations Act 1979 (WA) |
Legislation: | Industrial Relations Act 1979 (WA), s 7(1), s 24, s 90, s 91(1) Interpretation Act 1984 (WA), s 18, s 19(1)(a), s 19(2)(f) Occupational Health and Safety Act 1984 (WA), s 19(4) |
Case References: | Accident Compensation Commission v Odco Pty Ltd [1990] 64 ALJR 606 Adam v Newbigging (1888) 13 App Cas 308 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Australian Mutual Provident Society v Allan (1978) 52 ALJR 407 Buck v Bavone (1976) 135 CLR 110 Building Workers' Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104 Building Workers Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 Cam & Sons Pty Ltd v Sargent (1940) 14 ALJ 162 Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Cooperative Assurance Co of Australia (1931) 46 CLR 41 Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135 Drake Personnel Ltd v Commissioner of State Revenue (2000) 2 VR 635 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 Ex parte Delhasse; In re Megevand (1878) 7 Ch D 511 Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 Hollis v Vabu Pty Ltd (2001) 207 CLR 21 Humberstone v Northern Timber Mills (1949) 79 CLR 389 Lister v Romford Ice & Cold Storage Co Ltd [1957] AC 555 Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210 Massey v Crown Life Insurance Co [1978] 2 All ER 576 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 Narich Pty Ltd v Commissioners of Pay-roll Tax (NSW) [1983] 2 NSWLR 597 Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138 R v Foster; ex parte Commonwealth Life (Amalgamated) Insurances Ltd (1952) 85 CLR 138 Re Polites; Ex parte Construction, Forestry, Mining and Energy Union (2002) 117 FCR 212 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 Stevens v Brodripp Sawmilling Co Pty Ltd (1986) 160 CLR 16 TNT Worldwide Express (NZ) Ltd v Cunningham [1993] 3 NZLR 681 United Construction Co Pty Ltd v Birighitti [2003] WASCA 24 United Construction Pty Ltd v Birighitti [2003] WASCA 24 Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561 Abdalls v Viewdaze Pty Ltd (2003) 122 IR 215 Attorney-General (NSW) v Perpetual Trustee Co Ltd (1952) 85 CLR 237 Borg v Troubleshooters Available Pty Ltd (1995) 75 WAIG 2852 Climaze Holdings Pty Ltd v Dyson (1995) 13 WAR 487 Country Metropolitan Agency Contracting Services Pty Ltd v Slater (2003) 124 IR 293 Damevski v Guidice [2003] FCAFC 252 Housing Industry Association Ltd v Murten [2004] WASCA 139 Leighton Contractors Pty Ltd v Panizza, unreported; FCt SCt of WA; Library No 950562; 19 October 1995 Mason & Cox Pty Ltd v McCann (1999) 74 SASR 438 Matthews v Cool or Cosy Pty Ltd [2003] WASCA 136 Re Porter (1989) 34 IR 179 Stephen G May T/A Little Muppets Child Care Centre [2004] WASCA 133 Thompson v Brunel Energy Pty Ltd (2001) 81 WAIG 3155 Vetter v Lake Macquarie City Council (2001) 202 CLR 439 Waters v Public Transport Corporation (1991) 173 CLR 349 Western Australian Builders Labourers, Painters & Plasterers Union v Florida Exclusive Pools (1996) 77 WAIG 4 Williams v Bill Williams Pty Ltd [1971] 1 NSWLR 547 Zurich Australian Insurance Ltd v Amec Services Pty Ltd, unreported; FCt SCt of WA; Library No 980139; 31 March 1998 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT CITATION : PERSONNEL CONTRACTING PTY LTD T/AS TRICORD PERSONNEL -v- THE CONSTRUCTION FORESTRY MINING AND ENERGY UNION OF WORKERS [2004] WASCA 312 CORAM : STEYTLER J (PRESIDING JUDGE)
- EM HEENAN J
SIMMONDS J
- Appellant
AND
THE CONSTRUCTION FORESTRY MINING AND ENERGY UNION OF WORKERS
Respondent
ON APPEAL FROM:
Jurisdiction : WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Coram : SHARKEY P, BEECH SC, SMITH C
Citation : THE CONSTRUCTION FORESTRY MINING AND ENERGY UNION OF WORKERS -v- PERSONNEL
(Page 2)
- CONTRACTING PTY LTD T/AS TRICORD PERSONNEL
File No : FBA 40 of 2003
Catchwords:
Industrial law - Labour hire agency - Whether in relation to agency two workers were employees or independent contractors - Application of common law test for finding employment relationship - Whether document headed "Agreement to Contract" created employment relationship - Whether document headed "Independent Contractors Agreement" created employment relationship
Courts and Judges - Appeals jurisdiction - Industrial Appeals Court - Jurisdiction to hear appeal from Full Bench - Decision of Full Bench that worker was an "employee" for the purposes of the Industrial Relations Act 1979 (WA) - Decision of Full Bench that the matter before it was an "industrial matter" for the purposes of the Industrial Relations Act 1979 (WA)
Legislation:
Industrial Relations Act 1979 (WA), s 7(1), s 24, s 90, s 91(1)
Interpretation Act 1984 (WA), s 18, s 19(1)(a), s 19(2)(f)
Occupational Health and Safety Act 1984 (WA), s 19(4)
Result:
Appeal allowed
Category: B
(Page 3)
Representation:
Counsel:
Appellant : Mr P P McCann
Respondent : Mr H Borenstein SC & Mr T J Dixon
Solicitors:
Appellant : Hotchkin Hanly
Respondent : Construction Forestry Mining & Energy Union of Workers
Case(s) referred to in judgment(s):
Accident Compensation Commission v Odco Pty Ltd [1990] 64 ALJR 606
Adam v Newbigging (1888) 13 App Cas 308
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Australian Mutual Provident Society v Allan (1978) 52 ALJR 407
Buck v Bavone (1976) 135 CLR 110
Building Workers' Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104
Cam & Sons Pty Ltd v Sargent (1940) 14 ALJ 162
Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41
Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135
Drake Personnel Ltd v Commissioner of State Revenue (2000) 2 VR 635
Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95
Ex parte Delhasse; In re Megevand (1878) 7 Ch D 511
Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540
Hollis v Vabu Pty Ltd (2001) 207 CLR 21
Humberstone v Northern Timber Mills (1949) 79 CLR 389
Lister v Romford Ice & Cold Storage Co Ltd [1957] AC 555
Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210
Massey v Crown Life Insurance Co [1978] 2 All ER 576
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611
Narich Pty Ltd v Commissioners of Pay-roll Tax (NSW) [1983] 2 NSWLR 597
Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313
(Page 4)
R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138
Re Polites; Ex parte Construction, Forestry, Mining and Energy Union (2002) 117 FCR 212
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
TNT Worldwide Express (NZ) Ltd v Cunningham [1993] 3 NZLR 681
United Construction Pty Ltd v Birighitti [2003] WASCA 24
Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561
Case(s) also cited:
Abdalls v Viewdaze Pty Ltd (2003) 122 IR 215
Attorney-General (NSW) v Perpetual Trustee Co Ltd (1952) 85 CLR 237
Borg v Troubleshooters Available Pty Ltd (1995) 75 WAIG 2852
Climaze Holdings Pty Ltd v Dyson (1995) 13 WAR 487
Country Metropolitan Agency Contracting Services Pty Ltd v Slater (2003) 124 IR 293
Damevski v Guidice [2003] FCAFC 252
Housing Industry Association Ltd v Murten [2004] WASCA 139
Leighton Contractors Pty Ltd v Panizza, unreported; FCt SCt of WA; Library No 950562; 19 October 1995
Mason & Cox Pty Ltd v McCann (1999) 74 SASR 438
Matthews v Cool or Cosy Pty Ltd [2003] WASCA 136
Re Porter (1989) 34 IR 179
Stephen G May T/A Little Muppets Child Care Centre [2004] WASCA 133
Thompson v Brunel Energy Pty Ltd (2001) 81 WAIG 3155
Vetter v Lake Macquarie City Council (2001) 202 CLR 439
Waters v Public Transport Corporation (1991) 173 CLR 349
Western Australian Builders Labourers, Painters & Plasterers Union v Florida Exclusive Pools (1996) 77 WAIG 4
Williams v Bill Williams Pty Ltd [1971] 1 NSWLR 547
Zurich Australian Insurance Ltd v Amec Services Pty Ltd, unreported; FCt SCt of WA; Library No 980139; 31 March 1998
(Page 5)
1 STEYTLER J (PRESIDING JUDGE): I have had the advantage of reading the judgments of EM Heenan J and Simmonds J. I will not repeat what each has said about the circumstances giving rise to this appeal.
2 As appears from the other judgments, the appeal raises two principal questions. The first is whether this Court has jurisdiction to hear it. The second, which assumes a favourable answer to the first, is whether the Full Bench of the Industrial Relations Commission ("the Full Bench") erred in finding that two workers, Kevin Bartley and Craig Fowler, were employees of the appellant and not independent contractors.
3 As to the first question, s 24 of the Industrial Relations Act1979 provides that:
"(1) The Commission has jurisdiction to determine in any proceedings before it whether any matter to which those proceedings relate is an industrial matter and a finding by the Commission on that question is, subject to sections 49 and 90, final and conclusive with respect to those proceedings.
(2) A determination under subsection (1) is not a decision for the purposes of section 49 or 90 unless and until -
(a) those proceedings have been concluded; or
(b) leave to appeal is granted by the Commission making that determination."
"(1) Subject to this section, an appeal lies to the Court in the manner prescribed from any decision of the President, the Full Bench, or the Commission in Court Session -
(a) on the ground that the decision is in excess of jurisdiction in that the matter the subject of the decision is not on an industrial matter;
(b) erroneous in law in that there has been an error in the construction or interpretation of any Act, regulation,
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- award, industrial agreement or order in the course of making the decision appealed against; or
- (c) on the ground that the appellant has been denied the right to be heard,
- but upon no other ground."
5 The respondent, as I understood its argument, makes the following contentions:
(a) So long as the matter before the Commission is an industrial matter then, on the proper construction of s 90(1), findings made in respect of that matter are immune from challenge in this Court unless they fall within s 90(1)(b).
(b) In this case there were two industrial matters before the Commission, one being an application under s 29 concerning an alleged unfair dismissal and the other arising out of the service on the appellant by the respondent of a notice of intention to initiate bargaining for an industrial agreement under s 42 of the Act.
(c) Consequently, even though, in the course of dealing with those matters, the Full Bench found that Messrs Bartley and Fowler were employees of the appellant and although such a finding was necessary, in each of the cases before the Commission, for the matter to be an "industrial matter" as defined in s 7 of the Act (the relevant terms of which have been set out in the judgment of Simmonds J), those findings are immune from challenge under s 90(1)(a).
(d) It is not contended on behalf of the appellant that the Full Bench misconstrued any provision of the Act. The appellant contends only that the Full Bench made factual errors or misapplied accepted common law tests imported by the Act for the purpose of determining whether or not an employment relationship existed. Accordingly, s 90(1)(b) has no application.
(e) There is no suggestion that s 90(1)(c) has any application.
(Page 7)
- (f) The appeal is consequently incompetent.
6 As to propositions (a), (b) and (c), it was common cause that the relevant provisions of the definition of "industrial matter" in s 7 are such that neither of the matters before the Full Bench could be characterised as an industrial matter unless it involved the relation of employer and employee. Consequently, on the respondent's argument, the Commission could give itself jurisdiction by an erroneous finding of fact as regards the existence of that relationship and there could be no appeal to this Court in respect of that error unless it involved "an error in the construction or interpretation of any Act, regulation, award, industrial agreement or order" for the purposes of s 90(1)(b).
7 Senior Counsel for the respondent sought to bolster this submission by reference to the legislative intention which, he said, might be derived from a comparison between the form which s 90(1)(a) and (b) now take and that which those provisions took prior to the amendment effected by the Labour Relations Reform Act 2002 and also from the second reading speech made by the responsible Minister at the time of that amendment.
8 Prior to the amendment, s 90(1) of the Act read as follows:
"(1) Subject to this section, an appeal lies to the Court in the manner prescribed from any decision of the President, the Full Bench, or the Commission in Court Session on the ground that the decision is erroneous in law or is in excess of jurisdiction but upon no other ground."
9 I can find no support for the respondent's contention in the contrast between the provisions of that section and those of the section as it now exists. It seems to me that the only legislative intention which might be divined from the change is that, by the amendment, the legislature sought to limit appeals on jurisdictional issues to those in which the decision was not on an industrial matter (like Simmonds J, I read the word "on" as meaning "with respect to"), to limit appeals on errors of law to those concerning errors of the kind now identified and to preserve a right of appeal on the ground of a denial of the right to be heard.
10 Similarly, the Minister's second reading speech (the relevant portion of which is extracted in the judgment of Simmonds J) lends no support to the respondent's contentions. Like Simmonds J, it seems to me that it does no more than indicate an intention that a jurisdictional error arising from the fact that "the matter the subject of the decision is not on an
(Page 8)
- industrial matter" has been singled out as an "important … jurisdictional matter".
11 That the legislature has seen fit generally to confine the jurisdiction of the Commission to "industrial matters" (see s 23(1) of the Act) has, as I have said, the consequence that in each of the cases concerned in this appeal there must have been the relationship of employer and employee. If, in either case, the relationship did not exist, the Commission had no jurisdiction in respect of it. Consequently, the existence of the employer/employee relationship was a "jurisdictional fact" in the commonly accepted terminology of the case law in this area: see, for example, Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135; Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 651; Re Polites; Ex parte Construction, Forestry, Mining and Energy Union (2002) 117 FCR 212 at 231 and 236; and Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 at [183]. Moreover, given the language of the relevant provisions (s 23(1) and the definition of "industrial matter" in s 7), the jurisdictional fact is one which is required "objectively" (as to which see Aronson, Dyer and Groves: Judicial Review of Administrative Action, 3rd ed (2004) at 228 - 229) to exist and not one of which the decision-maker need merely be subjectively satisfied (cf, for example, Eshetu, above; Buck v Bavone (1976) 135 CLR 110 at 118 - 119; and Corporation of the City of Enfield, above, at 149 - 150).
12 In such cases, on judicial review (or on an appeal such as this) the reviewing Court, when considering the issue of jurisdiction, decides for itself the question whether the fact "in truth" exists (see Corporation of the City of Enfield at 155, per Gleeson CJ, Gummow, Kirby and Hayne JJ, and see, generally, Aronson, Dyer and Groves, above, at 228 - 288) and its decision in that respect necessarily prevails over that of the impugned decision-maker.
13 There being nothing in s 90 of the Act (or any other of the provisions of the Act to which reference has been made) which should be taken to displace these principles, I am satisfied that this Court has jurisdiction and that the appeal is competent.
14 That brings me to the second question, whether the workers Kevin Bartley and Craig Fowler were employees of the appellant or independent contractors.
(Page 9)
15 The principles to be applied in answering a question of this kind are not in doubt.
16 Traditionally, the so-called "control test", measuring the degree of control which the person engaging the worker is able to exercise over the worker, has been regarded as important: see, for example, Humberstone v Northern Timber Mills (1949) 79 CLR 389 and Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561.
17 In Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24, Mason J said that:
"A prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter. It has been held, however, that the importance of control lies not so much in its actual exercise, although clearly that is relevant, as in the right of the employer to exercise it: Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561 at p 571; Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395 at p 402; Humberstone v Northern Timber Mills (1949) 79 CLR 389 at p 404. In the last-mentioned case Dixon J said:
'The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter's orders and directions.'"
"[T]he existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment. The approach of this Court has been to regard it merely as one of a number of indicia which must be considered in the determination of that question: Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 539 at p 552; Zuijs'Case; Federal Commissioner of Taxation v Barrett (1973) 129 CLR at p 401; Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210 at p 218. Other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the
(Page 10)
- obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee."
19 Similarly, in that case, Wilson and Dawson JJ said (at 35):
"The classic test for determining whether the relationship of master and servant exists has been one of control, the answer depending upon whether the engagement subjects the person engaged to the command of the person engaging him, not only as to what he shall do in the course of his employment but as to how he shall do it: Performing Right Society Ltd v Mitchell and Booker (Palais de Danse) Ltd [1924] 1 KB 762. The modern approach is, however, to have regard to a variety of criteria. This approach is not without its difficulties because not all of the accepted criteria provide a relevant test in all circumstances and none is conclusive. Moreover, the relationship itself remains largely undefined as a legal concept except in terms of the various criteria, the relevance of which may vary according to the circumstances."
20 In Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 40 - 41 Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ pointed to the increasing difficulty in applying the control test in more modern times. In the course of referring to the history of that test, they quoted (at [43]) the following passage from Glass, McHugh and Douglas, The Liability of Employers in Damages for Personal Injury, 2nd ed (1979), pp 72 - 73:
"The control test was the product of a predominantly agricultural society. It was first devised in an age untroubled by the complexities of a modern industrial society placing its accent on the division of functions and extreme specialisation. At the time when the courts first formulated the distinction between employees and independent contractors by reference to the test of control, an employer could be expected to know as much about the job as his employee. Moreover, the employer would usually work with the employee and the test of control and supervision was then a real one to distinguish between the employee and the independent contractor. With the invention and growth of the limited liability company and the great advances of science and technology, the conditions which gave rise to the control test largely disappeared. Moreover, with the advent into industry of professional men and other occupations
(Page 11)
- performing services which by their nature could not be subject to supervision, the distinction between employees and independent contractors often seemed a vague one."
21 McHugh J pointed out, in that case at 50 [71], that "The right to supervise or direct the performance of a task cannot transform into a contract of service what is in substance an independent contract …".
22 Hollis was a case which involved an issue of vicarious liability. There, the Court placed some emphasis on the question whether the workers in that case (they were couriers) were carrying on a trade or business of their own or were serving the employer in its business. Distinctions of this kind go back some time in this context. In Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48 (in a passage since quoted in Hollis at 39) Dixon J said, of an independent contractor, that:
"[t]he work, although done at [the principal's] request and for his benefit, is considered as the independent function of the person who undertakes it, and not as something which the person obtaining the benefit does by his representative standing in his place and, therefore, identified with him for the purpose of liability arising in the course of its performance. The independent contractor carries out his work, not as a representative but as a principal."
23 Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ, in Hollis, after considering what had been said by Dixon J, went on to say (at 39):
"This statement merits close attention. It indicates that employees and independent contractors perform work for the benefit of their employers and principals respectively. Thus, by itself, the circumstance that the business enterprise of a party said to be an employer is benefited by the activities of the person in question cannot be a sufficient indication that this person is an employee. However, Dixon J fixed upon the absence of representation and of identification with the alleged employer as indicative of a relationship of principal and independent contractor. These notions later were expressed positively by Windeyer J in Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210 at 217. His Honour said that the distinction between an employee and an independent
(Page 12)
- contractor is 'rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carries on a trade or business of his own'. In Northern Sandblasting (1997) 188 CLR 313 at 366, McHugh J said:
'The rationale for excluding liability for independent contractors is that the work which the contractor has agreed to do is not done as the representative of the employer.'"
"The law, as I see it, is this: if the true relationship of the parties is that of master and servant under a contract of service, the parties cannot alter the truth of that relationship by putting a different label upon it … On the other hand, if their relationship is ambiguous and is capable of being one or the other [that is, either service or agency], then the parties can remove that ambiguity, by the very agreement itself which they make with one another. The agreement itself then becomes the best material from which to gather the true legal relationship between them."
25 This passage was cited with approval by the Privy Council in Narich Pty Ltd v Commissioners of Pay-roll Tax (NSW) [1983] 2 NSWLR 597 at 607 (see also Building Workers' Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104 at 126).
26 In Stevens, at 37, Wilson and Dawson JJ said that "the actual terms and terminology of the contract will always be of considerable importance". More recently, in Hollis, at 45, Gleeson CJ and Gaudron, Gummow, Kirby and Hayne JJ reiterated (citing R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138 at 150 - 151; Adam v Newbigging (1888) 13 App Cas 308 at 315; Ex parte Delhasse; In re Megevand (1878) 7 Ch D 511 at 526, 528, 532 and TNT Worldwide Express (NZ) Ltd v Cunningham [1993] 3 NZLR
(Page 13)
- 681 at 699) that such terms are not of themselves determinative as parties cannot deem the relationship between themselves to be something it is not.
27 That brings me to the application of these principles to the circumstances of this case, set out in some detail in the judgment of Simmonds J.
28 As has been explained by Simmonds J, with whom I am, in this respect, in general agreement, the characterisation of the relationship between each of the workers and the appellant must proceed by reference to the totality of that relationship, including the system operated and work practices imposed by the appellant and, of course, an analysis of the terms of the contract entered into by each of the two workers with the appellant. All of these matters have been set out in some detail in the judgments of EM Heenan J and Simmonds J.
29 In his judgment, EM Heenan J has mentioned that each contract obliged the worker, once an offer of work was accepted during the period of engagement, to undertake it in a timely, professional manner, using such professional skills as are necessary to complete the work appropriately with a high standard of workmanship. Because the appellant conducts a business providing labour for hire to third parties in circumstances in which the task to be performed and its performance is determined by the third party (in this case, Hanssen Project Management Pty Ltd which, under its contract with the appellant was able to "direct" the workers supplied by the appellant), there was no great scope for day-to-day supervision of that work by the appellant. However, as EM Heenan J points out, each worker was obliged by his contract with the appellant to comply with work safety laws and regulations, to follow safe working practices, to avoid harassment and to report difficulties encountered in the performance of the work to the appellant. Either party to the contract had the right to terminate the work, or the engagement, by giving not less than one hour's notice to the other (the appellant's right to terminate the work in that way being, in EM Heenan J's opinion, as effective a measure of its control as can be imagined). Also, Pt 7 of each contract provides that:
"The Contractor will not during any Work either directly or indirectly provide services to or be engaged with, any business or activity involving Clients which is competitive with any business carried on by the Company with its Clients."
(Page 14)
30 "Client" is defined in Pt 1 to mean a client of the appellant and "Work" is defined in that Part as meaning "work which the Company refers, or makes available, to the Contractor on a day to day basis … as part of the Engagement".
31 EM Heenan J has also mentioned that the work carried out by the two workers is performed for the business of the appellant under an organised and repetitive system, this being a factor which, in his Honour's opinion, is more consistent with the workers so supplied working in the business of the appellant than with each of them conducting businesses of their own, notwithstanding the absence of several of the conventional indicia of the employer/employee relationship.
32 Other matters which might be taken to support the existence of an employer/employee relationship include the fact that one of the two workers concerned was supplied with a safety vest on which the appellant's name appeared (although, as Simmonds J has said, there was no evidence that this vest was required), both workers were required to present themselves for work in a "neat, clean and tidy" way, there were detailed safety prescriptions of the kind described by Simmonds J and there were prohibitions in respect of alcohol and drugs and even "practical jokes and horseplay". Also, the two men were paid an hourly rate calculated by reference to a rate provided by the appellant to its client and the resulting amount, calculated from a record of hours worked, was paid into their accounts. Neither had invested capital in assets used for their work (other than in respect of the few items supplied by them) or in any separate business. Neither of them was in partnership with anyone else.
33 On the other hand, there are indicia which point away from the existence of an employment relationship. Many of these have been mentioned by Simmonds J. They include the provision by the two men of some materials needed for their work (the limited nature of what was provided makes this a matter of no great significance), the absence of any provision for such items as annual leave and sick leave, the fact that the workers were responsible for their own public liability insurance (although the appellant was willing to arrange this on their behalf under its existing insurance policy) and the fact that the appellant deducted income tax on what was paid to the workers on a PAYG basis (applicable to independent contractors) and not on a PAYE basis (applicable to employees), although the appellant had made an arrangement accordingly with the Australian Taxation Office.
(Page 15)
34 Next, cl 7(b) of the appellant's "Personnel Contracting Guide", incorporated into each contract of employment, appears to contemplate that a contractor might "… [choose] to leave the site early", in which event the guaranteed minimum short-term hire payment, equal to that for four hours' work, is not applicable.
35 Also, each of the contracts entered into by the workers provides that, during the engagement, the worker "must … consider and may, at its discretion, accept and agree to undertake such Work as is referred by the Company from time to time". There is consequently no obligation to agree to undertake any work which is offered. Indeed, the Guide expressly provides that the worker has the right "to accept or decline any work offered" to him or her. Part 5 of each contract records that the appellant does not guarantee that it will be able to provide work to the worker.
36 While there is the prohibition to which I have earlier referred in Pt 7 of the contract, that prohibition operates only "during any Work" (I have said how that term is defined) and, as will be apparent, is limited in its ambit to businesses or activities which are competitive with the appellant's clients. Consequently, when not involved in any "Work" for the appellant, as defined, each worker is able to work for any other person or entity and, during any period of "Work", is able to work, also, for others who are not clients of the appellant or competitive with the appellant in respect of those clients, so long, of course, as this does not result in the worker breaching one or more of the other provisions of the contract (as, for example, that requiring him to complete work in a timely, professional manner). So much is expressly recorded by Pt 2 of the agreement which provides that, subject to the provisions of the agreement, the worker "may provide services to any other person or entity during the Engagement".
37 Finally, in this respect, I have mentioned that each worker, like the appellant, is able to terminate any "Work", or the engagement, at his own discretion and at any time, by giving not less than one hour's notice of termination.
38 That brings me, next, to the manner in which the parties have themselves characterised their relationship.
39 Recital B of each contract provides that "the Contractor is a self-employed individual, carries on an independent business and provides labour services". The parties are, throughout, referred to as "the Company" and "the Contractor" respectively. The contractor's
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- remuneration is described as "fees", rather than wages or salary. Part 9 of each contract reads as follows:
"The relationship between the Company and the Contractor is that of principal and contractor. The Company may assign the benefit of this Agreement to any subsidiary of the Company.
Nothing in this Agreement will be taken as constituting the Contractor an employee or servant of the Client or the Company or any of its subsidiaries. The Contractor will not represent himself as being an employee of the Company at any time, or as being in any way connected with the business of the Company unless he is doing Work for the Company."
41 In such a case, and in circumstances in which (contrary to what was said by the Full Bench) there is, in my respectful opinion, little to suggest that the label applied by the parties is a sham (and a good deal to suggest that it is not), it seems to me that the evident intention of the parties should be given effect and that the relationship between them should, in each case, be found to be that which they have been at some pains to describe, namely, that of independent contractor and principal and not that of employer and employee.
42 I would consequently allow the appeal on the grounds identified by Simmonds J (with whom I am, as I have said, in general agreement), set
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- aside the judgment of the Full Bench and restore the judgment of the Commission at first instance to the effect that both applications be dismissed for want of jurisdiction.
43 EM HEENAN J: This is an appeal pursuant to s 90 of the Industrial Relations Act from a decision of the Full Bench of the Industrial Commission dealing with two applications for relief under the Act brought respectively by Mr Kevin Bartley seeking relief for alleged unfair dismissal and by the Union on behalf of Mr Craig Fowler seeking to institute a claim for higher wages and improved conditions. Both men had been engaged by Personnel Contracting Pty Ltd t/as Tricord Personnel under arrangements which the appellant had as a labour hire agency for the provision of labour to various building sites.
44 Before Gregor C the claims were dismissed on the grounds that neither was an "industrial matter" and hence the Commission did not have jurisdiction. This conclusion followed from the learned Commissioner's conclusion that the relationship between the appellant and each of the two "contractors", was not that of employer/employee but, rather, that of principal and independent contractor. The Full Bench of the Commission unanimously upheld the appeal from that decision concluding that the relationship between the appellant and the two contractors was that of employer and employee and thereupon remitted the applications for hearing before a single Commissioner.
45 In this Court the respondent submitted that the appeal was not competent because, according to the submission, under s 90(1) an error alleging excess of jurisdiction must relate to the subject matter of the application to the Commission. On this argument the subject matters of the original applications were, respectively, a claim for unfair dismissal and a claim for higher wages or other improved working conditions, both of which were recognised industrial matters. In the respondent's submission a determination of whether or not the particular relationship between an applicant and respondent was that of employer and employee was a matter of fact or, alternatively, not an issue of law which went to jurisdiction and, hence, no appeal lay under s 90(1)(a) of the Act. Similarly, it was submitted that no appeal lay under s 90(1)(b) of the Act because any alleged error of law relating to whether or not the disputants were employee/employer did not involve a matter of construction of any Act or order but, rather, was restricted to the application of common law principles to the particular facts established by the evidence. In this regard the respondent relied upon the dissenting judgment of Anderson J in United Construction Pty Ltd v Birighitti [2003] WASCA 24 accepting
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- that the decision of the majority in that case, Scott and Hasluck JJ was to the contrary.
46 In my opinion this Court does have jurisdiction to entertain and determine this appeal. There are some complexities in determining the ambit of the scope of appeal under s 90(1) since the amendments effected by s 126 of the Labour Relations Reform Act (No 20 of 2002) which recognised that an appeal will not lie in every case of excess of jurisdiction but only in relation to errors or excesses of jurisdiction relating to a determination of whether or not the case involves an "industrial matter".
47 The determination by the Full Bench that there was an "industrial matter" in this case turns on the issue of whether or not the relationship between the parties was that of employer/employee and I do not consider how that finding can be categorised as other than one going to jurisdiction on a question of whether or not the case involved an "industrial matter". Consequently, I consider that the appeal is competent within s 90(1)(a) of the Act. I also consider that it is competent under s 90(1)(b) of the Act on the basis that the determination of whether or not the applicants before Gregor C were employees and the appellant was an employer involves the determination and application of the meaning of those terms as they are employed in the Industrial Relations Act especially in relation to the conduct of a labour hire agency. There is no doubt that common law concepts of employer and employee are adopted and applied by the language of the Act but that does not mean that a determination of whether or not an individual is an employee or an individual or a corporation is an employer does not involve the proper interpretation of the statute. In this respect I gratefully adopt and apply the approach taken by Hasluck J in United Construction Co Pty Ltd v Birighitti (supra) when his Honour said:
"[102] As to the first ground of appeal, I recognise that much of the reasoning of the Full Bench is devoted to a review of common law principles bearing upon the contentious issue. Nonetheless, it is quite clear that both the Industrial Magistrate and the Full Bench were conscious that at the end of the day the operative point of reference was the definition of 'employee' in the Long Service Leave Act. The issue presented to the Industrial Magistrate by the respondent's particulars of claim at the outset was whether he could be characterised as an employee within the meaning of the Long Service Leave
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- Act during the relevant four year period. It is well known that in the field of industrial legislation including statutes concerning workers compensation that special and extended meanings are given to terms bearing upon master and servant relationships. Accordingly, a term such as 'employee' cannot be regarded simply as a term with an ordinary meaning so that, in accordance with proposition two of the Collector of Customs' case [Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280] mentioned earlier, the ordinary meaning of the word can be regarded as a question of fact."
- and
"[103] In the circumstances of the present case, I consider, having regard to the propositions set out in the Collector of Customs' case, that the meaning of the term 'employee' as it is used in the Long Service Leave Act is a technical legal term which should be characterised as a question of law. It was not possible ultimately to resolve that question of law without being conscious of and giving proper weight to the way in which the term 'employee' was defined and used in the Long Service Leave Act. Likewise, it was not possible to determine whether there had been sufficient continuity of employment without taking account of and construing the provisions concerning that concept set out in s 6 of the Long Service Leave Act."
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49 By Pt 7:
"The contractor will not during any work either directly or indirectly provide services to or be engaged with, any business or activity involving clients, which is competitive with any business carried on by the company with its clients."
- It follows from this that, during the engagement, if an offer of work is accepted the contractor is required to work for the business of the appellant. I do not consider that there is any doubt but that the appellant conducts the business of providing labour for hire to third parties under circumstances where the nature of the task to be performed and its performance is determined by the third party notwithstanding that the appellant, at all times, retains a right of termination on one hour's notice. The guidelines contain detailed provisions about the obligation to comply with work safety laws and regulations, to follow safe working practices, to avoid harassment and to report difficulties encountered in the performance of the work to the appellant. These are directions which the contractor is obliged to observe (contract Pt 4(b)) and the appellant at all times can effect a termination or suspension of the work or engagement by the provisions of Pt 7 of the contract.
50 To my mind this confers upon the appellant rights of control which, upon the classical tests referred to by McHugh J in Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 40 and at 48 per McHugh J characterise the appellant as an employer. See also Drake Personnel Ltd v Commissioner of State Revenue (2000) 2 VR 635.
51 In Accident Compensation Commission v Odco Pty Ltd [1990] 64 ALJR 606 and in Drake Personnel Ltd v Commissioner for State Revenue (supra) at 653 emphasis was placed on the fact that the employment agency firms which supplied alleged contractors to carry out various tasks for the customers of the employment agencies were in reality carrying on a business which involved the provision of services to their customers. In Odco Pty Ltd (supra) at 612, Mason CJ, Brennan, Dawson, Toohey and McHugh JJ said:
"And a notion that the supply of services and the performance of work referred to in s 9 are necessarily distinct and separate concepts is not borne out by examination of the provisions. Likewise, the notion that the person supplying the services or the person supplying the services of persons is necessarily different from the person performing the work cannot be made out. It is a mistake to read the expression 'for or in relation to
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- the performance of work', where it appears in s 9(1) and elsewhere, as doing anything more than qualifying the content or scope of the word 'services'. All that the expression is saying is that 'services' must be work-related; it is not stipulating that the services are wholly distinct from the work or that the supplier of the services is a person other than the performer of the work."
- Obviously, those observations were directed to the terms of s 9 of the Accident and Compensation Act (1985) (Vic) but they are capable of wider application. In the present case I do not consider that it can be doubted that Tricord Personnel was in the business of supplying men to undertake construction work, in this case building formwork, for builders and construction companies in need of such labour services. The business of the appellant, therefore, involved the supply of men who would contract with it on the terms exemplified by the agreement between the appellant and Mr Bartley in the incorporated guidelines. Supply of Mr Bartley to the builder in these circumstances was the provision of services which it was the business of the appellant to provide and the performance of those services by Mr Bartley and others like him involved the performance of the services which the appellant had contracted to provide to its customer. In these circumstances the work conducted by Mr Bartley and others like him should, in my view, be regarded as work performed for the business of the appellant, particularly because of the organised and repetitive system under which it was supplied and conducted. To my mind this is more consistent with Mr Bartley, and others like him, working in the business of the appellant than each of those individual men conducting independent businesses of their own, no matter that several of the conventional indicia of employer/employee are missing from their relationship. In a commercial, as well as a legal sense, the source of engagement of the men is arranged through the relationship between the appellant and its customers and, once the men accept an individual engagement and become subject to the guidelines, the right of termination of the relationship at an hour's notice by the appellant is as effective a measure of their control by the appellant as can be imagined.
52 It is true that the contract between the appellant and each contractor goes to considerable lengths to set out, in express terms, that many of the indicia of the employer/employee relationship are excluded and that the relationship between the parties is expressly stated to be that of principal and independent contractor and not employer/employee. However, it is the substance of the relationship and not its form, still less declarations or labels which the parties themselves may attempt to place on their
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- relationship, which is determinative - R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138 at 150 - 151; Cam & Sons Pty Ltd v Sargent (1940) 14 ALJ 162 and Hollis v Vabu Pty Ltd (supra) at 45.
53 For these reasons I consider that the Full Bench of the Commission was correct in determining that the relationship between the appellant and the two contractors was that of employer and employee and that the Commission had jurisdiction to hear and determine the applications for relief made under the Act.
54 For these reasons I would dismiss this appeal.
55 SIMMONDS J: Personnel Contracting Pty Ltd is a labour hiring business trading as Tricord Personnel (Tricord). It registers individuals whom from time to time it may approach, or who approach it, to do work, under contract with Tricord, for clients of Tricord. The work includes work in construction. Two particular individuals performed construction work under these arrangements. Their circumstances gave rise to the question whether the arrangements under which they worked could result in disputes with Tricord on "industrial matters" for the purposes of the Industrial Relations Act 1979 (WA) (the Act). This appeal was from a determination of the Full Bench of the Industrial Relations Commission that those arrangements could do so, on the basis they gave rise to a relationship of employer and employee under a contract of service for the purposes of the Act. This determination reversed the decision to the contrary of Commissioner Gregor.
56 This appeal raises two issues, both of importance to the application to arrangements of the kind I have described of the system of regulation of industrial matters under the Act. One is whether the Act reserves the determination that it does apply to such arrangements exclusively to the Commission, so this Court cannot review it, at least in the case of a determination as a preliminary matter of the question of such application, being one made before the relevant industrial matter is dealt with by the Commission. If the Court can indeed review a determination of such a preliminary matter, then the other issue is whether the Full Bench's determination was in error. Both are issues of some difficulty.
Does this Court have jurisdiction? Appeal Ground 1
57 An understanding of this issue requires an appreciation of how this matter came to this Court.
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58 Mr Kevin Bartley did work on building projects for a client of Tricord, Hanssen Project Management Pty Ltd, initially as a steel fixer then as a form worker, under the arrangements I have described. He was a member of the Construction Forestry Mining and Energy Union (the CFMEU). The CFMEU on his behalf made a claim before the Industrial Relations Commission that alleged he had been wrongfully dismissed from that work for Hanssen, either by Tricord or by Hanssen. This claim was in application No CR 168 of 2003. In that application the CFMEU sought a declaration that Mr Bartley was an employee of Tricord or alternatively of Hanssen.
59 Mr Craig Fowler also did work on building projects for Hanssen under the arrangements with Tricord. He too was a member of the CFMEU, which informed Tricord that the union intended to negotiate for an industrial agreement under the provisions of the Act. This became the application to the Commission that is No 1036 of 2003.
60 In both No CR 168 of 2003 and No 1036 of 2003 the question arose of whether they raised an "industrial matter" for the purposes of the Act. The parties to them agreed that the question be determined as a preliminary question going to the jurisdiction of the Commission to entertain the applications. The question was answered at first instance by Commissioner Gregor that it did not, on the basis that there was no "employee" and therefore no "employer" involved, which is an element of "industrial matter" for the purposes of the Act. The CFMEU appealed to the Full Bench of the Commission. The Full Bench upheld the appeal, and remitted the matter to the Commissioner to determine the applications according to law in accordance with the reasons for the decision on the appeal. The principal judgment was by Sharkey P, with whom Smith C agreed. Beech SC also agreed, but he delivered additional reasons. The Full Bench's decision only related to Tricord, not to Hanssen.
61 Tricord appealed the Full Bench's decision to this Court. Only Tricord was a respondent to the appeal. The appeal was argued on the basis that the Court's only source of jurisdiction under the Act to hear this appeal was s 90, which in material part is as follows:
"90. Appeal to Court from Commission
(1) Subject to this section, an appeal lies to the Court in the manner prescribed from any decision of the President, the Full Bench, or the Commission in Court Session -
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- (a) on the ground that the decision is in excess of jurisdiction in that the matter the subject of the decision is not on an industrial matter;
(b) erroneous in law in that there has been an error in the construction or interpretation of any Act, regulation, award, industrial agreement or order in the course of making the decision appealed against; or
…
but upon no other ground."
62 Tricord's original grounds of appeal set out a list of respects in which the Full Bench was said to have erred in determining that the matter the subject of its decision was an "industrial matter", for which the question is whether Tricord was an "employer" for the purposes of the phrase. Those respects were in the original ground 1 related only to "excess of jurisdiction" in s 91(1)(a). The written submissions for the CFMEU included that here the Full Bench's decision went to a matter, the application to the facts of "employer" under the Act, which did not represent an "excess of jurisdiction" of the particular sort referred to under that paragraph.
63 However, at the hearing, leave was granted to Tricord to amend ground 1 to add that, further or in the alternative, the listed respects showed the decision was "erroneous in law" insofar as the Full Bench erred in finding the appellant was an "employer" for the purposes of the Act. Counsel for Tricord explained to us that the amendment was not to permit it to contend the Full Bench had put forward an erroneous construction of relevant provisions of the Act. Rather he said he was contending that the Full Bench's application of those provisions showed a misunderstanding of what they meant. We granted the leave on the basis that counsel for the CFMEU did not oppose the amendment, and on the basis that the respects in which the Full Bench was said to have erred in law were the same as those in respect of which it was said to have made a decision in excess of jurisdiction. Counsel for the CFMEU took the position before us that the amendment did not avoid the necessity for Tricord if it were relying on the Act s 90(1)(b) to show (on the facts of this case) an error in the construction or interpretation of the Act, here the terms "employer" and "employee". Unlike in United Construction Pty Ltd v Birighitti [2003] WASCA 24, where the application of the term
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- "employer" for the purposes of the Long Service Leave Act 1958 (WA) was in issue, here there was no suggestion from Tricord that the Full Bench had erred in its interpretation of the corresponding term in the industrial relations legislation.
64 In the event I have determined that the Court has jurisdiction under s 91(1)(a), which makes it unnecessary for me to determine whether the case under s 91(1)(b) had been made good. I begin by setting out the material parts of the other relevant provisions of the Act, and then considering the arguments for the CFMEU that this appeal cannot be dealt with under s 91(1)(a).
65 Those provisions of the Act are s 24(1), on the jurisdiction of the Commission, and s 7(1) "industrial matter", "employee" and "employer".
66 The Act s 24(1) deals with the jurisdiction of the Commission in matters like this one as follows:
"24. Jurisdiction to decide whether matter is industrial
(1) The Commission has jurisdiction to determine in any proceedings before it whether any matter to which those proceedings relate is an industrial matter and a finding by the Commission on that question is, subject to sections 49 and 90, final and conclusive with respect to those proceedings.
68 The definitions of "industrial matter", "employer" and "employee" in the Act s 7(1) are in material part as follows:
"7. Interpretation
(1) In this Act, unless the contrary intention appears -
….
'industrial matter' means any matter affecting or relating or pertaining to the work, privileges, rights, or duties of employers or employees in any industry or of any employer or employee therein and, without limiting the generality of that meaning, includes any matter
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- affecting or relating or pertaining to - [a list of items appears as (a) to (m)]
- 'employee' means -
(a) any person employed by an employer to do work for hire or reward including an apprentice or trainee; …
'employer' includes -
(a) persons, firms, companies and corporations;
…
employing one or more employees and also includes a labour hire agency or group training organisation that arranges for an employee (being a person who is a party to a contract of service with the agency or organisation) to do work for another person, even though the employee is working for the other person under an arrangement between the agency or organisation and the other person;"
69 I have set out the provisions as they were in force from 8 September 2002. However, I note that, in the version of the Act apparently the one the Full Bench used, the s 7(1) definitions I have set out were all made subject to specified provisions in Pt 1A of the Act. However, that part was repealed by Labour Relations Reform Act 2002 (WA) (No 20 of 2002) together with the referring language in the definitions. Act No 20 of 2002 came into force in this respect on 8 September 2002. The specified provisions related to an "employer" and an "employee" who were parties to a "workplace agreement". However, the Full Bench makes no reference to what are now the repealed provisions and no other reason to think they figured in its reasons is apparent to me.
70 I also note that s 7(1) says "labour hire agency" means "a person or entity that conducts a business of the kind commonly known as a labour hire agency". It was accepted before us that Tricord was a "labour hire agency" within that definition.
71 For the CFMEU it was contended that the joint effect of s 24 and s 90 was to eliminate the possibility of review by this Court of Commission decisions for jurisdictional error, except where the error was one where "the matter the subject of the decision is not on an industrial
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- matter", in the language of current s 90(1)(a). This sort of excess it seemed to be suggested could only be encountered at least where the Commission had actually made the decision dealing with the industrial matter, as opposed to making a preliminary determination as to its jurisdiction to make such a decision, as in this case. This would seem to mean that at best the current proceedings were premature: they could only be brought after the Commissioner had dealt with the alleged industrial matters before it (those of the unfair dismissal, and the negotiations for an industrial agreement), as called for by the Full Bench's decision.
72 This seems to me to be a somewhat strained reading of the paragraph, and unlikely to have been intended by the legislature. Counsel for the CFMEU laid considerable emphasis on the word "on" in the phrase "on an industrial matter" in s 91(1)(a). That word does not seem to me to be decisive. As a matter of ordinary language, it seems to me that the word in this context could readily be understood as "with respect to": see Macquarie Dictionary (2000) "on", 17 ("subject, reference, or respect: [as in] views on public matters"). So understood, it avoids what seems otherwise to be the rather odd result that the parties would have to await the outcome of the Commission's deliberations resting on a possibly erroneous view of the scope of "industrial matter" before any error could be addressed by way of an appeal to this Court.
73 Counsel for the CMEU went further, however. The submission appears to have been that an error where the "matter the subject of the decision is not on an industrial matter" went to whether as a matter of application of the Act to the facts before the Commission the dispute was one of those listed in the Act s 7(1), "industrial matter" (a) to (m). These include the following:
"(a) the wages, salaries, allowances, or other remuneration of employees or the prices to be paid in respect of their employment;
(b) the hours of employment, leave of absence, sex, age, qualification, or status of employees and the mode, terms, and conditions of employment including conditions which are to take effect after the termination of employment; …
(ca) the relationship between employers and employees; …"
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74 This, it seems to have been suggested, means that "employer" and "employee" would only arise to the extent the terms were employed in one of the specifics, as they did in the ones I have set out.
75 Counsel for the CFMEU directed us to the change that had been made to the Act s 90(1)(a) by Act No 20 of 2002, which is responsible for the current form of the provision. The previous form was as follows:
"(1) Subject to this section, an appeal lies to the Court in the manner prescribed from any decision of the President, the Full Bench, or the Commission in Court Session on the ground that the decision is erroneous in law or is in excess of jurisdiction but upon no other ground."
76 It will be seen that that this provision combined what is now s 90(1)(a) (on excess of jurisdiction) and s 90(1)(b) (on errors of law). But more importantly for present purposes, the previous form did not qualify the reference to "excess of jurisdiction" in any way.
77 The argument for the CFMEU rests, of course, on Interpretation Act 1984 (WA) s 18, which says that "a construction that would promote the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to a construction that would not promote that purpose or object". We were directed, for the purpose or object of the law making the change, Act No 20 of 2002, to the second reading speech of the Minister, which is admissible for this purpose under Interpretation Act s 19(1)(a) read with s 19(2)(f). In that speech, the Minister said, materially for our purposes it was submitted:
"This Bill includes amendments designed to strengthen the power and effectiveness of the Commission. The legislation affirms that proceedings before the Commission cannot be removed from the Commission or challenged in any other Court.
…
Under the new legislation the Industrial Appeal Court's role will be limited to important legal and jurisdictional matters. … These reforms are intended to ensure that the discretionary exercise of power by the Commission is not overturned by the Court unless there is some significant specified error. This will reduce the increasing tendency to legal technicality that detracts
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- from the proper role of the Commission in conciliating and arbitrating industrial matters in a practical everyday manner that is intelligible to ordinary people."
78 It does not seem to me that these passages advance the CFMEU argument. They seem rather to indicate a determination by the legislature that "a the matter the subject of the decision is not on an industrial matter" has been singled out as an "important jurisdictional matter", distinct from other possible jurisdictional issues in the Act.
79 However, the position for the CFMEU also appeared to be that in any event the provision had the effect, provided the conclusion that there was an "industrial matter" was reasonably open on the facts before the Full Bench, that its determination the Commission had jurisdiction would not be reviewable. We were referred to a number of authorities on judicial review, particularly Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, per Mason CJ at 355 - 356. Here, as will appear below, it appears to be agreed there is evidence in support of the Full Bench's decision, although it is contended for Tricord that the evidence taken as a whole is insufficient to reach it, and so the opposite conclusion was not in fact reasonably open to the Full Bench.
80 However, the argument I have just described seems to me to be a strain on the language of the relevant provisions, and a qualification of the ordinary law on review for jurisdictional fact which I would expect to find rather more clearly addressed in the statutory language if the legislature intended such qualification. Under that law, it is not sufficient there is some evidence in support of a determination that the facts essential for jurisdiction existed. The facts must be established on the evidence before the Court: see Aronson M et al, Judicial Review of Administrative Action, 3rd ed, Law Book Company, Pyrmont NSW, 2004, at 228.
81 I note, of course, that this is an appeal under the Act, not a proceeding by way of judicial review under the prerogative writs. I further note that it is a matter of some difficulty to determine what is a jurisdictional fact for the purposes of the law of judicial review (Aronson et al, 231). However, I also note the structure both of the old s 91(1) and the new s 91(1)(a) and (b), distinguishing between errors as to jurisdiction and errors of law, it seems to me. This structure indicates that Parliament intended the decision of the Full Bench that the matter the subject of the decision is on an industrial matter be treated as reviewable on an appeal in the same way as if it were a jurisdictional fact.
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82 I conclude then that this Court has jurisdiction to hear this appeal, and to consider whether the Full Bench was in error in determining that the matter the subject of its decision is an "industrial matter" within Act s 7(1).
The Commission's jurisdiction: was Tricord an "employer"?
83 The appeal was argued before us on the basis that the issue as to the jurisdiction of the Commission reduced to whether Tricord was not an "employer" with the Act s 7(1). That definition in its turn required us to determine whether the two individuals, Mr Bartley and Mr Fowler, were "employees" under a "contract of service" with Tricord. This the parties conceded took us to the common law on the distinction between a contract of service, involving employers and employees, and a contract for services, involving principals and independent contractors.
84 For the purpose of that determination, it was accepted on the appeal that Tricord had contracts with Mr Barley and Mr Fowler, and with Hanssen, Tricord's client on the jobs on which those two individuals worked. It appears to have been accepted before us that the two did not have contracts with Hanssen. Such a view in any event derives considerable support from the analysis by the Full Court of the Federal Court of the same question in respect of a labour hire agency firm in Victoria in Building Workers' Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104, at 113 - 123, where the contractual arrangements were similar but not by any means identical to the ones before us.
85 The question then becomes one of the identification and characterisation of the contract or contracts between Tricord and the two individuals, in the light of certain further matters arising out of the relations between the parties. I turn first to the issue of the identification of the contracts.
Identification of the contracts with the two individuals
86 In Mr Bartley's case he signed a very simple agreement with Tricord in 2001, one which appears to have been superseded by a rather lengthier document he signed in 2003. He signed the former but it does not appear that he undertook any work under it, at least until 2003, when he responded to an advertisement for work on a building site, and began work there, without realising that Tricord had a contract for the site. About a week into working there, he met with a representative of Tricord and signed the lengthier document. It would appear that the 2001 agreement at least was accompanied by a "Personnel Contracting Guide".
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- In Mr Fowler's case he was invited to work at a site after leaving his name there, and was told at the time of the invitation that he would need to discuss this with a representative of Tricord. At the meeting with that representative he signed the lengthier document. Mr Fowler's document was accompanied by the Guide.
87 Mr Bartley's 2001 document was a single page, headed "Agreement to Contract", which a representative of Tricord also signed. This document contained an acknowledgement and agreement that Mr Bartley had "no relationship of Employer-Employee with Tricord Personnel", he was "self-employed", and "as such" he was "not bound to accept any work through" Tricord. The document further provided for Mr Bartley to work at an agreed price per hour for "actual on-site hours" or the "job price to be agreed", which was the extent of Tricord's "responsibility or liability" to him. All work he agreed to do "through" Tricord he agreed would be done "in a 'workmanlike' manner" and Tricord would be indemnified against "faulty workmanship". He agreed that he had no claims on Tricord for holiday pay, sick pay or similar. And he agreed to supply his own "personal tool kit, safety gear or any necessary ancillary equipment required", with no claim on Tricord for any of this.
88 The 2001 document appears to represent the terms for a contract to be concluded for the work to be done for a client of Tricord. It is not clear under it whether in fact those terms included that Tricord's client was meant to be bound by and able to take advantage of the terms. This is because Tricord was defined in the document as "Tricord Personnel and/or Associated Clients".
89 The 2003 document that both men signed is three pages long, and differs from the 2001 one in both of the respects just described, as well as in providing very much more detailed terms and other provisions, for the most part. The 2003 document is headed "Independent Contractor Agreement" and is between Tricord and each man identified as a "Contractor". There is an express disclaimer of any intention to create the relationship of employer and employee, and a statement of an intention to create one of principal and independent contractor (Pt 9). The Full Bench noted that Mr Fowler had in his evidence before the Commissioner acknowledged he had been told that the Agreement was to make him an independent contractor (per Sharkey P, par 18), while Mr Bartley conceded he may have been told this (per Sharkey P, par 29). There is no definition of Tricord as including anyone else. There are some indications of an intention there be contractual obligations on both sides apart from any arising out of the work to be done for a particular client of Tricord.
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90 Thus, the Agreement also refers to an "Engagement" which the Contractor "accepts" (Pt 2) for a term commencing on its date and ending with the termination by either Tricord or the Contractor. This is by either "in their sole discretion … at any time … giving the other party not less than one hour's notice of termination" (Pt 3). The Contractor during the Engagement has certain "Duties" (Pt 4), which are to "consider … such Work as is referred by [Tricord] from time to time", to "comply and act in accordance with the provisions of the Guide" and to "comply with the laws of Western Australia and where relevant of each of the other States and Territories of Australia". For its part, Tricord has during the Engagement "Obligations" (Pt 5) to "use its reasonable endeavours to refer appropriate Work" to the Contractor "as and when [Tricord] sees fit". However, Tricord "does not guarantee" it will be able to "provide Work" to the Contractor. And the Contractor agrees (Pt 9.2) to indemnify Tricord in three situations. Two of these concern actions or similar, costs, expenses or fees for harm, either "caused by or resulting from any wilful or negligent act or omission or misfeasance of the Contractor", or "sustained by the Contractor incurred while attending to performance of the Contractor's duties under, or incidental or preparatory to this Agreement" (with a saving for wilful or negligent acts or omissions of Tricord or its officers, servants or agents). The third is rather less clear, concerning actions or similar, costs, expenses or fees for "challenges brought by the Contractor or by any person, organisation or government authority concerning the efficacy, legitimacy or effect and meaning of the terms and conditions of this Agreement".
91 As I have indicated, it also appears to be contemplated that there will be agreements, on terms including those in the Agreement, for each case of Work referred to and accepted by the Contractor. Thus, where Work is referred the Contractor "may, at its discretion, accept and agree to undertake such Work" (Pt 4(a)). If the Work is accepted, the Contractor must carry it out "in a timely and professional manner using such professional skills as are necessary to complete the work appropriately with a high standard of workmanship" (Pt 4(b)). The fees for the Work will be (Pt 6 (a) and (b)) "based on a flat hourly rate as agreed by the Company and the Contractor on a case by case basis", based on "actual on-site hours". Either the Contractor or Tricord may terminate any Work (Pt 8) "without necessarily terminating the Engagement" in the same way as the Engagement may be terminated (at any time, by giving not less than one hour's notice of termination).
92 It was not put to us, however, that the Agreement gave rise to an enforceable contract apart from the incorporation of the relevant terms
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- into the contract for any Work accepted by the "Contractor". The view that they do not derives support from Drake Personnel Ltd v Commissioner of State Revenue (2000) 2 VR 635, on arrangements similar in this respect, at [34]. Argument before us was rather directed to the characterisation of the contracts for the Work accepted. The Full Bench appears to have proceeded in a similar way. This exercise of characterisation should recognise, however, that the contract is one that is only partly written, in view of the provision for the flat hourly rate to be agreed, and should also recognise that the characterisation exercise is to proceed by reference to the "totality of the relationship" between the parties, including the "system operated" and the "work practices imposed" by Tricord: see Hollis v Vabu Pty Ltd (2001) 207 CLR 21, at 33. This in my view would at least involve taking account of the terms of the Engagement, whether or not it is a contract, as I will indicate. Whether or not those terms tip the balance in favour of or against the conclusion the Full Bench reached is a different matter.
93 Ground 2 for the appeal was to the effect that the Full Bench failed to have any or proper regard to Mr Bartley's 2001 agreement, the Guide, the 2003 independent contractor's agreement and the reference in discussions with them at the time to the individuals becoming independent contractors. In fact the Full Bench appears to have taken account of all of these. Rather, the matter resolves to one of whether or not they were properly borne in mind in making the Bench's final determination. This overlaps with the other grounds of appeal below, and in my view does not add usefully to them.
94 It is now convenient to turn to the question of the appropriate test for a contract of service at common law.
The test for a contract of service
95 The common law test for distinguishing a relationship of employer/employee, on the one hand, and principal/independent contract or, on the other, has recently been reviewed in some detail in the judgment of Hasluck J of this Court in Birighitti (supra), at [57] to [67]. The other members of the Court (Anderson J, who dissented on the jurisdictional issue in the case, and Scott J) did not find it necessary to enter into the question in as much detail because of the case's particular facts.
96 In this case, where it seems to me the matter is rather more evenly balanced than in Birighitti, I consider it is necessary to review the matter again, particularly as it was contended in this case that there had been a shift in the law not entered into in Birighitti.I review the matter again
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- without meaning to depart from the view of Hasluck J there in any way, but to emphasise matters of first principle particularly relevant to this case.
97 The most recent High Court authority in point, for the purposes of vicarious liability for the negligence of a bicycle courier, is Hollis v Vabu Pty Ltd (supra). There was a clear majority on the issue of the application of the test, that of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ, with McHugh J dissenting, and Callinan J not expressing a concluded view on the matter. As to the test itself, however, I see no clear difference between all of the members of the Court who expressed a concluded view.
98 The test set out in Vabu by the majority is expressed in terms of the difference between a person (an employee) whose work serves another, and is done in that other's business, on the one hand, and a person whose work is likewise for the benefit of another's business, but is done in the course of the carrying on of a trade or business of the person doing the work, on the other. The majority referred (Vabu,at 39) for this purpose to Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41, at 48, per Dixon J, and to Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210, at 217 per Windeyer J, where language of this sort is used. The Vabu majority also referred to Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313, at 366 per McHugh J, where the distinction is expressed in terms of the independent contractor as a person who does the work not as "the representative of the employer".
99 For the application of the test, and particularly for the relevance of the matter of "control" of the work done, the Vabu majority refer to the dicta in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, at 29 per Mason J. There, his Honour acknowledges the historical significance of the "control test" and the difficulties in using it in the historical ways in modern working conditions, where he says
"The common law has been sufficiently flexible to adapt to changing social conditions by shifting the emphasis in the control test from the actual exercise of control to the right to exercise it, 'so far as there is scope for it', even if it be 'only in incidental or collateral matters': Zuijs v Wirth Brothers [(1955) 93 CLR 461, at 571]. Furthermore, control is not now regarded as the only relevant factor. Rather it is the totality of the relationship between the parties which must be considered."
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100 What his Honour meant by the reference to the factors, including but not limited to control, subsumed by the "totality of the relationship" is indicated by an earlier passage in his judgment in Stevens (supra), which is not referred to in Vabu, but which is a passage quoted in Odco as setting out the law on this point ((supra) at 754):
"The approach of this court has been to regard it [control] merely as one of a number of indicia which must be considered in the determination of the question: Queensland Stations Pty Ltd v FCT (1945) 70 CLR 539 at 552; Zuijs' case [supra]; FCT v Barrett (1973) 129 CLR at 401; 2 ALR 65; Marshall [supra] at 218. Other relevant factors include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee."
101 As these dicta tend to indicate, the application of the test is a matter of some difficulty, as this case illustrates. I need to consider that question separately.
The application of the test
102 The difficulty in applying the test for finding an employment relationship is acknowledged in Stevens (supra), in the judgment of Wilson and Dawson JJ, a passage also quoted as setting out in the law on this point in Odco ((supra) at 754):
"The modern approach is … to have regard to a variety of criteria. This approach is not without its difficulties because not all of the accepted criteria provide a relevant test in all circumstances and none is conclusive. Moreover, the relationship itself remains largely undefined as a legal concept except in terms of the various criteria, the relevance of which may vary according to the circumstances."
103 It was put to us for the CFMEU that Vabu (supra) should be seen as indicating the law has moved on since Odco in respect of the significance of the "control test", and we were also referred to the judgment of Kirby J in Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, at [81], where his Honour affirmed by reference to Vabu "that 'control', the traditional indicium of the employment relationship, is only one relevant factor". In light of the dicta I have referred to as having been quoted in Vabu I cannot agree that the law has changed as
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- submitted. I also note that so far as I can determine this appears to have been the view of Hasluck J in Birighitti ((supra) at [74] and [75]).
104 There is, however, a further matter in respect of the application of the common law test, and in particular the relevance of the "control test", that was not before the Court in Birighitti, which was not dealing with a labour hire agency. It is whether the common law approach is modified by the specific inclusion of the possibility of such an agency as an "employer" in s 7(1). I return to that below, after I have considered the application of the "control test" and the other factors in this case.
105 In any event, it may be that the application of the common law test for an employee, framed in the way of the one I have described and to be applied as I have indicated, may allow for differences in result influenced by the reason for which the test is relevant (such as vicarious liability), a point which appears to have been of some concern to McHugh J in Vabu ((supra) at 50). However that may be, I do not see any such differences as likely to affect the outcome in this case, as I will explain. In particular, the characterisation of the contract in this case would seem to me to be likely to be the same on the view of the Vabu majority, or that of the Full Court of the Federal Court in Odco.
106 It follows from the way the test and its application must be approached that I now need to consider the various factors in this case that might be seen to be relevant to the characterisation issue, as the judgments in Vabu and Odco did. The grounds of appeal were concerned with how the Full Bench did, and did not, proceed in relation to the relevant factors.
107 For this purpose, I begin with the factors made relevant by the "control test".
The control test
108 Of the 12 grounds of appeal, grounds 4, 5, 6 and 7, as well as 9(ii), related to different aspects of the application of this test and the conclusions to be drawn from such application. That focus was understandable, as the Full Bench appears to have placed heavy reliance on the factors made relevant by the test. In particular, it referred to the control elements it saw emerging from the Personnel Contracting Guide with which it was a term of the Engagement, and therefore of the Work accepted, that the Contractor comply (Agreement, Pt 4). The Full Bench appears to have seen the Guide as of considerable importance to distinguishing the position of the labour hire agency before it, Tricord, from that of the agency before the Court in Odco (supra), where the Court
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- concluded that the agency was not in an employment relationship with those it engaged, and where there was nothing corresponding to the Guide (see Sharkey P, at par 243; and Beech SC, par 269).
109 Particular emphasis was laid by the Full Bench on the way the Guide indicated that there was a right of ultimate control in Tricord, which on ground 4 was an error. The Full Bench appears to have drawn this conclusion in part from the "restricted" delegation of (non-exclusive) day-to-day control to the clients with which Tricord contracted (Sharkey P, par 195). Thus, the Guide contained an express provision obliging the Contractor to comply with the "requirements" of the "position" represented by the Work accepted (Guide, 2, referred to by Sharkey P at par 204(a)). The form of contract, or "Personnel Contracting Agreement", between Tricord and its client Hanssen which regulated the Work done by the two Contractors here provided that "Tricord Personnel contractors are at the client's direction" (Personnel Contracting Agreement, cl 4). Grounds 6(i) and 7 were that the use of these provisions by the Full Bench in this way was an error.
110 For Tricord, it appears to have been submitted that these provisions did not go to any more than was entailed in the obligation of the Contractor to Tricord in their Agreement to carry out the work to the standard the Agreement specifies (Pt 4(b), above). This view appears to me to overstate the matter. The provisions in the Guide read with the Personnel Contracting Agreement appear to me to point towards a contract of service, but in light of the provisions referred to by counsel for Tricord not by any means to determine the matter. This appears to me to be the view of these provision which is required by the law on the application of the test of a contract of service that I have referred to. I do not read the judgments of the Full Bench to have proceeded in any other way.
111 There were also a number of elements in the Guide read with the Contractor's Agreement that were referred to by Sharkey P of the Full Bench as going to actualcontrol by Tricord of its Contractors. One of these, however, the subject of ground 9(ii), does not seem to me to be control of the sort that points towards a contract of service, but rather on the authorities to point away from it. It is the requirement for the Contractor to supply their own equipment including work wear (Sharkey P, par 204(c) and (d)), and the lack of provision for any equipment to be supplied by Tricord: Guide 4, which echoes the Contractor's Agreement, Pt 4, concluding words. Such supply, while not being inconsistent with a contract of service, appears to me to have been
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- referred to as tending away from such contracts in Vabu ((supra) at 44). There, however, the firm that engaged the bicycle couriers provided radios and uniforms, for which the couriers were responsible. There was also in the case of one of the Contractors evidence that he had been supplied with safety wear on which Tricord's name appeared. However, there was no evidence that this clothing was required, and Sharkey P appears to have placed no weight in his determination on this evidence (par 209).
112 Two of the other requirements Sharkey P points to do not seem to me to point one way or the other. One, the subject of part of ground 6(ii), is for the Contractor to keep and pass on to Tricord records of hours worked for weekly payment by Tricord: Guide 5 read with Contractor's Agreement, Pt 6 (referred to by Sharkey P, par 206), which is consistent with a casual employment relationship, or an independent contractor's arrangement for time billing. The other is for Tricord to withhold income tax at source, which, however, is acknowledged by Sharkey P, at par 204(f), to be "neutral", correctly in my view.
113 There was one matter pointed to by Sharkey P (at par 204(b)) which does not appear to me to be clearly a matter of obligation. This is the provision (Guide 3) for the Contractor to inform Tricord if the Contractor is unable to present for Work accepted. This is described as "essential" as a matter of "courtesy", in the interests both of the Contractor (because Tricord would be able to consider covering them) and of Tricord.
114 This leaves a number of matters, referred to in the Full Bench's decision (per Sharkey P, par 204(c), (g) and (h)) that do seem to me to point to actual control. They were the obligation of Contractors to present themselves for work in a "neat, clean and tidy" way (Guide 4), to take certain actions or refrain from others in the interests of occupational health and safety for the Contractor (Guide "Occupational Health and Safety"), and to report certain other matters to Tricord, being workplace "difficulties or problems experienced on site" (Guide 9), concern that their union representatives are not "acting in their best interests" (Guide 10), and concern that they have been discriminated against or harassed (Guide 13). These matters include, under the "Occupational Health & Safety" head, many prescriptions at levels of considerable detail (such as applying "15+ sun screen cream" on exposed portions of the body while "working outside"), and strict "prohibitions of consuming or being under the influence of alcohol or drugs", and of "practical jokes and horseplay" on the job, as well as compliance with any smoking prohibitions for the workplace, prohibitions which Contractors were told they should
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- "normally expect". These matters were separately emphasised in the judgment (Sharkey P, par 205), and form the subject of ground 5. I return to them again below.
115 For Tricord it was put to us that the provisions here, as to occupational health and safety at least, were in fact neutral, because of the common law and statutory duties that employers owed to employees, and principals to their independent contractors, in respect of their safety. Reference was made to Occupational Health and Safety Act 1984 (WA), s 19(4), in respect of principals and their independent contractors. This consideration does not in my view detract, however, from the way the detailed prescriptions in the Guide point towards actual control.
116 My conclusion on the factors made relevant by the common law control test is that, while some do indeed point towards an employment relationship, in sum they do not point as strongly in that direction as the Full Bench concluded, and to that extent I would uphold the relevant grounds of appeal 4, 6(ii) and 9(ii).
117 I turn now to the matters on which the Full Bench separately relied in support of its conclusion and which are addressed in the Grounds of appeal. I note that most of these matters appear to form part of the inclusionary list provided by Mason J in the passage (at 24) quoted from Stevens (supra), and I use the headings from that list.
Mode of remuneration
118 This is addressed as part of ground 6(ii), another part of which I have already addressed, and elaborated upon in ground 9(v). The Full Bench referred to the facts that its quantum was calculated by reference to the rate provided to Tricord by its client (Hanssen), and paid weekly into their accounts on the basis of records of hours worked provided by the Contractors and by the client. These were said to be "significant evidence of a modus operandi compatible with and consistent with the existence of a contract of service and not a contract of services" (per Sharkey P, par 190). There seems to be an implicit contrast here with payment by result or otherwise on the completion of the work contracted for.
119 While the contrast may be a reasonable one, it does not seem to me that in a world of time-based billing and piecework too much should be made of that contrast. While I am not convinced that the facts so referred to here are, as was contended for Tricord, "neutral" (appellant's submissions par 7), I am also of the view that more was made of the
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- contrast here than was appropriate, and to that extent I would uphold grounds 6(ii) and 9(v).
Provision and maintenance of equipment
120 I have already referred to this matter in another context in which the Full Bench refers it, that of control, and is the subject of ground 9(ii). The matter is also separately referred to (per Sharkey P, par 180), in terms of the evidence before the Commissioner of provision by the two individuals of some materials needed for their work, but with the balance made available by the client, so far as is apparent from the judgments (per Sharkey P, par 19, for Bartley, and par 23, for Fowler). The provision by the individuals is referred to as "not meaning they were not employees" (Sharkey P, par 180), which is consistent with Vabu (supra) as I explained; however, the effect of this view is in my view detracted from by his later reference to it being evidence of control, a matter I discussed above.
The obligation to work
121 Here the Contractor's Agreement makes it plain, as I have explained, that any such obligation arises only when the Contractor accepts an offer of Work (Pt 4), and is an obligation that is terminable on either side by one hour's notice (Pt 8). While ground 9(vi) puts it to be an error not to weigh this as tending against a finding of an employment relationship, with the Full Bench (Sharkey P, par 191), I do not consider much can be made of it, as it is also consistent with casual employment.
The hours of work and provision for holidays
122 What this factor appears to refer to is (putting aside the hours of work, with which I have already dealt) what the Full Bench called the "usual benefits of an employee", which would include also sick leave and the like (Sharkey P, par 188). Matters such as workers compensation and superannuation, it was conceded before us and by the Full Bench (Sharkey P, par 192), must now, because of the terms of the relevant legislation, be set aside, because that legislation now extends beyond employees. There was no provision in the Contractor's Agreement for the other "usual benefits", while the earlier agreement signed by Mr Bartley, to the extent it is relevant, expressly negatived them. Ground 9(iv) was that the Full Bench had failed to give this matter its proper effect, but I do not agree. As the Full Bench indicated, it is a factor "of some significance" as pointing away from an employment relationship, although it can be overborne by other factors (par 188). The Full Bench
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- found that it was overborne, however, which is a different matter, to which I return.
The deduction of income tax
123 By the Guide, Tricord deducted income tax on a PAYG basis, not a PAYE one. The latter would be usual in the case of employees, the former in the case of independent contractors. However, as the Full Bench pointed out (Sharkey P, par 186), this was a matter specially arranged by Tricord with the Australian Taxation Office, and in those circumstances could not be seen as other than "neutral". It was not addressed by the grounds of appeal.
The delegation of work
124 The ability of the person engaged to delegate their work would on the face of it tend away from the status of an employee. There was no provision for this in the Contractor's Agreement or otherwise emerging from the evidence, the Full Bench noted (Sharkey P, par 185), and the grounds of appeal did not address this point.
Other factors: indicia of a separate business
125 The relevance of the matter of whether there were indications that persons like the Contractors here were engaged in a separate business in whose course the relationship with Tricord was entered into emerges clearly from Vabu (supra). Such indications would of course point away from the status of an employee. Grounds 9(i), (iii) and (vii), and ground 8, went to these factors.
126 In Vabu reference was made to the bicycle couriers not supplying "skilled labour or labour which required special qualifications", and having no ability to pursue an "independent career" or generate "goodwill" as a bicycle courier (at 42). There were indications that the "engagement by Vabu left the couriers with limited scope for the pursuit of any real business enterprise on their own account" (at 44). These indications were not overborne by the couriers' provision of their own bicycles, although it was indicated that the case "might" be different if "investment in capital equipment were more significant or greater skill and training were required to operate it" (at 41 - 42).
127 Here there was on the face of it more room left under the Contractor's Agreement for the pursuit of separate activities than was the case under Vabu, given the Agreement's provisions for deciding whether to accept the offer of Work, and termination on one hour's notice. There
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- was also the provision in the Guide (11) stating that the Contractor is responsible for their own public liability insurance, a matter referred to by the Full Bench as "probably a neutral factor" (Sharkey P, par 185). Ground 9(iii) addressed this factor, and, standing alone, I would have seen it differently from the Full Bench. However, the same provision in the Guide also indicates that Tricord can carry the Contractor under their "blanket" policy, and by "default" would charge to the Contractor the relevant "minimal" fee by way of deduction from their weekly payments (Pt 11). This provision for joining Tricord's "scheme" is referred to an "indicative of integration in Tricord's organisation" in the judgment of the Full Bench (Sharkey P, par 185), as I think it does. The matter of integration in Tricord's organisation is a matter I return to below.
128 A related point emerges from ground 9(vii), which drew our attention to the provisions in the Contractor's Agreement that required the work to be of a suitable standard (Pt 4, above), and the Contractor to indemnify Tricord against any action or similar arising out of or referable to damage or similar caused by or resulting from any wilful or negligent act or omission or misfeasance of the Contractor (Pt 9.2(a)). The former matter is not discussed in the Full Bench's decision, except as in passing apparently as something tending towards an employment relationship (Sharkey P, par 243), while the latter matter is said to be "neutral" in the same way as that of responsibility for public liability insurance (Sharkey P, par 185). It seems to me, in light of the authority on the liability of an employee to their employer for negligence (Lister v Romford Ice & Cold Storage Co Ltd [1957] AC 555), that the two matters are indeed "neutral", notwithstanding what might be a somewhat higher standard of responsibility under the express provision than that under the liability in tort. However, it was put to us that the inclusion of the contractual provision was of a piece with the other provisions in the Agreement to do with the parties' relationship, in that they all stipulated the consequences of the principal and independent contractor relationship. However, I do not see the provision adding anything of significance to those provisions, which I reach below.
129 There was a non-competition clause in the Contractor's Agreement which "during any Work" prohibited the Contractor "directly or indirectly" providing any "services" to, or being "engaged with, any business or activity involving, 'Clients", where that prohibited conduct was "competitive with any business carried on by [Tricord] with its Clients" (Pt 7). Ground 8 was that the Full Bench was in error in construing the nature of this provision by reference to the client, rather
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- than competitors of Tricord, and in not noting that the clause was consistent with the relationship of principal and independent contractor.
130 In fact, the Full Bench read the clause as prohibiting the Contractor working for a "competitor with the client" while they were working for that client, and so read as "consistent" with an employment relationship (Sharkey P, par 211). However, I do not read the clause as broadly. In view of the definitions of "Work" and "Client" in the Agreement (Pt 1), the clause would appear to cover conduct during Work even when the Contractor had not accepted the Work, but not to prevent the Contractor seeking out work where there was no involvement with Clients, as well as where the Contractor had not been offered Work with one. So read, it is indeed consistent with the relationship of principal and independent contractor as ground 8 puts to us.
131 Beyond these matters, there was no suggestion, either in submissions to us or before the Full Bench (Sharkey P, par 178), that the two individuals were carrying on separate businesses, with an exception I shortly reach. In particular, neither individual had formal trade qualifications, although they did have construction skills at least in formwork (Sharkey P, par 174), a matter which ground 9(i)(a) draws to our attention. Nor was there a suggestion of any capital investment by either beyond the equipment they provided (see Sharkey P, par 177). Neither individual was suggested to be in partnership with any one else, or a principal of any corporate enterprise in the sphere of their work for Tricord (Sharkey P, par 184).
132 However, as ground 9(i)(b) reminded us, Mr Bartley had signed the 2001 agreement which contained an acknowledgement that he was "self-employed". I return below to the provisions of the agreements the two men had signed to a similar effect.
Other factors: integration in the organisation
133 This is a matter pointing away from the possibility of a separate business, of course. Its relevance seems to emerge from the test for employment I have referred to. To repeat that test as I formulated it, it is of the difference between a person (an employee) whose work serves another, and is done in that other's business, on the one hand, and a person whose work is likewise for the benefit of another's business, but is done in the course of the carrying on of a trade or business of the person doing the work, on the other (Vabu,at 39). Ground 10 addressed these matters.
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134 The integration test directs attention to the question in whose business the work was being done, although it is open to question whether it simply restates the question, rather than directing attention to factors relevant to answering it. I note in particular the dicta of Mason J in Stevens (supra) on the test doubting its value as other than a way of collecting factors which could just as easily be viewed as relevant to the right to control: at 27 - 28.
135 The Full Bench in this case referred to a "mosaic of integration underpinned by specific and detailed obligations and practices", which was "entirely significant" (Sharkey P, par 218). What constituted the underpinning appear to be factors already mentioned (by Sharkey P, and by me), of no evidence of a separate business, of the non-competition clause, of the obligation to maintain a neat and clean appearance, to perform the Work accepted to the relevant standard at the agreed "remuneration" and with withholding of taxation on a PAYG basis, to document hours worked, and to comply with the occupational health and safety and other reporting obligations to which I earlier referred (Sharkey P, par 214 and par 217). At the same time reference was made in this connection to Tricord's ability to terminate the Work or the Engagement on one hour's notice, as I have indicated. I do not see this way of collecting these factors as adding weight to them in the resolution of the employment question.
136 However, there was also what appears to be a reference in this connection to the power in Tricord's Personnel Contracting Agreement with its client Hanssen to withdraw a Contractor from a client's "unsafe workplace" until Tricord is "satisfied that any risk is removed" (cl 1: see Sharkey P, par 217). This was also a matter specifically mentioned as one that in the case of labour hire agencies was possibly of greater significance to the employment issue than that of day to day control (Beech SC, at par 269). This may go to show a form of identification of the Contractors and Tricord with one another of the sort the test I have referred to contemplates.
137 It is not, however, as strong an identification, it seems to me, as the sort of factor represented by the provision of a uniform identifying those doing work for another with that other. The provision of a uniform has historically been acknowledged as a relevant factor, as is indicated in Vabu (supra), where the Court found that the requirement to wear the uniform provided was to advertise the Vabu business (at 42 - 43). There was no such provision here (putting aside the safety vest to which I have previously referred). Nor were there other factors like those referred to in
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- Drake (supra), where Drake provided awards for performance, organised happy hours and film nights and sent out newsletters and birthday cards, and also emphasised that "in the client's workplace [those doing work under the arrangements with Drake] will be perceived as coming from Drake, and that Drake will be judged by their behaviour and performance" (at 638 per Phillips JA, quoting from the first instance judgment).
138 In summary then, to the extent this factor adds anything to the others, I do not see it adding as much as the Full Bench appears to have concluded it did, and to that extent I would uphold ground 10.
Other factors: the language of the parties' written contract
139 I have treated this as a separate factor because the authorities indicate that, while clauses stating that the relationship of the parties is that of principal and independent contractor, or to a similar effect, are "not determinative", the language of the contract is relevant to determining what rights and obligation the parties created for themselves: Vabu (supra), at 45. Ground 3, and 9(viii) which appears to me largely to restate ground 3, was that the Full Bench failed to give proper effect to the language of this sort in the parties' relationship, while ground 12 took issue with the conclusion that the Full Bench drew in the face of that language that the parties were in a casual employment relationship in respect of accepted Work. Ground 12 was addressed to the Full Bench's conclusion that it could put the language to one side as a "sham". Ground 5, which I have previously referred to in connection with the control test, also addressed certain portions of this language.
140 I begin by noting the repeated indications in the Agreement between the Contractors here and Tricord, beginning with its title ("Independent Contractor's Agreement"), that their relationship was being labelled principal and independent contractor, not employer and employee. There was an express provision to that effect (Agreement, Pt 9.1) which goes further, to indicate at least some of the implications intended to flow from that, as follows:
"Nothing in this Agreement will be taken as constituting the Contractor an employee or servant of the Client or the Company or any of its subsidiaries. The Contractor will not represent himself as being an employee of the Company at any time, or as being in any way connected with the business of the Company unless he is doing Work for the Company."
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141 There were also repeated references in the Guide to the status of the Contractor as an "independent contractor" or similar. These preface statements concerning the Contractor's need for public liability insurance (cl 11), the indicated differences for a "contractor" compared with an "employee" for issues of discrimination and equal opportunity, and the section on "Occupational Health & Safety" with its reference to the Contractor's "responsibilities" for their own safety and health, followed by lengthy and detailed descriptions of conduct in which the Contractor "must" or must not engage in the interests of occupational health and safety. I have previously referred to these requirements and prohibitions; here I emphasise the aspects of the contexts in which they appear which appear to me to be calculated to emphasise the contractor's responsibility for their own position, and to which no reference is made by the Full Bench. Ground 5 emphasised just these aspects of the provisions.
142 In the judgment of the Full Bench the conclusion is expressed that the provision in the contract (Pt 9.1) expressly characterising the individuals signing them as "independent contractors" was a "sham" (per Sharkey P, pars 84 and 233). Ground 12 took issue with this characterisation, which appears to have been important to the Full Bench's conclusion on the parties' relationship.
143 Such a characterisation is certainly one basis for a determination that the provision is not entitled to any weight. It expresses the conclusion that the other terms of the parties' relationship indicate it should not be seen as "a genuine statement of the parties' intentions": Australian Mutual Provident Society v Allan (1978) 52 ALJR 407, at 409 (PC SA) (source of quotation). However, such a clause may still be regarded as a statement of the parties' genuine intentions, and yet be overborne by those other terms: Birighitti (supra), at par 13 per Anderson J.
144 However, in this case, in my view it is difficult to extract from the materials before the Full Bench, analysed as I have indicated above, that the clause was a "sham". I have indicated in my rather lengthy review of the factors bearing on the nature of the parties' relationship that the matter is not as strongly in favour of an employment relationship as the Full Bench appears to have concluded. As to the matters which appear to me to have been of predominant significance to the Full Bench, the control factors do not point as strongly in that direction as they concluded, while in my view this is also the case for the factors pointing away from a separate business and towards integration of the Contractors in Tricord's business. Of the remaining factors, none points strongly towards the conclusion the Full Bench reached, as the Full Bench itself seemed to
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- recognise, with the exception of the mode of remuneration, where I have indicated my disagreement with the view the Full Bench took. And one factor - the lack of provision for the usual benefits of employment - points away from employment, as the Full Bench indicated.
145 In these circumstances, as ground 12 put to us, I do not believe it is possible to put the clause aside on the basis it is a "sham". Rather, this is, as was put for Tricord, a case where there are indications pointing in both directions, none of which is determinative. In this situation, the correct approach appears to be as the Privy Council put it in AMP ((supra) at 389), quoting with approval from the judgment of Lord Denning MR in Massey v Crown Life Insurance Co [1978] 2 All ER 576:
"If their relationship is ambiguous and is capable of being one way or the other [ie, either service or agency], then the parties can remove that ambiguity, by the very agreement itself which they make with one another. The agreement itself then becomes the best material from which to gather the true legal relationship between them".
146 To a similar effect, as is noted in Odco ((supra) at 756), are Wilson and Dawson JJ in Stevens ((supra) at 37):
"None of this leads to any necessary inference however, and the actual terms and terminology of the contract will always be of considerable importance."
147 This does not mean that the clause in the Contractor's Agreement which labelled the parties' relationship is then simply given effect to, without further analysis. The possibility must also be considered (as I have indicated) that that language is overborne by other language (including most importantly the rights and duties that language gives rise to) in the Agreement. Here, however, there is no such overbearing, on the analysis I have already set out. Rather, there is, to set alongside the features of the parties' relationship that (as I have indicated) might be seen to point the other way, the other features that, throughout the Agreement, and its Guide, might be seen to point towards independent contractor status.
148 I note the emphasis on the presence of language like that in the Agreement labelling the relationship (in Pt 9.1) as a significant factor to be weighed, in Odco where such a clause was present (at 755), and as a point upon which to distinguish that case in Drake, ((supra) at 655), per Phillips JA, where there was no such clause. Counsel for the CFMEU laid
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- considerable emphasis on Drake in support of his arguments, but I do not consider that case to be, in the light of this aspect of the matter, as helpful to his case as he submitted. I note finally that a clause like that in the Agreement here, Pt 9.1, in the contract with couriers in TNT Worldwide Express (NZ) Ltd v Cunningham [1993] 3 NZLR 681, was referred to in Vabu (at 45) as having been held to summarise the relationship between the parties "accurately", by reference to other factors. In Vabu there does not appear to have been a clause like Pt 9.1.
149 It follows that I consider it was an error of the Full Bench to put aside, or not to have weighed, the language in the Agreement that labelled the relationship that of principal and independent contractor, and that sought to pursue the logic of that label as I have indicated.
150 Further, on the balance of indications to be drawn from the language of the parties' relationship and the rights and obligations to which it gave rise I am of the view that the relationship here is one of principal and independent contractor in each case. I would thus uphold ground 3 and its restatement in ground 9(viii).
The relevance of the status of a "labour hire agency"
151 A further issue arises in respect of the application of the common law test, however, and it went to the specific inclusion of "labour hire agency" in the definition in s 7(1) of "employer" I set out above. This matter was considered by the Full Bench in its decision (Sharkey P at par 46 to par 74, and Beech SC, at par 262 to par 270), where it was concluded the inclusion did not change the necessity to determine that a "contract of service" was involved according to "ordinary common law precepts and concepts" (Sharkey P, par 73; and see Beech SC, par 262 and par 269). Rather, Sharkey P concluded (par 73) that the new language made it "irrelevant" whether or not the "employee" was under the "day to day control" of the client of Tricord for whom the employee performed their work, while Beech SC concluded (par 269) that the new language meant such control might not be "as significant" as the evidence of a "right of ultimate control" in Tricord of the sort that might be argued to emerge from the Guide here.
152 On the appeal to us there was no argument addressed to this point, and in the final analysis nothing in my view turns on it.
153 In my view, the construction advanced appears to be correct, as a matter of the ordinary meaning of the relevant phrase in s 7(1) "employer". It also gives effect to the apparent intention underlying the
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- phrase, which was introduced into the definition by Act No 20 of 2002. This intention was indicated in the Minister's second reading speech to be "to ensure that the Commission has the power it properly requires" by making it "explicit that an employer also includes labour hire and group training organisations" (quoted in the Full Bench's decision, at par 52).
154 However, such an approach appears to me to be within the modern approach to the common law test, as this is referred to by Mason J in Stevens ((supra) at 29). It is the approach I have endeavoured to follow here. It follows that the suggested implication of the form of reference to "labour hire agency" in Act s 7(1) "employer" does not in my view change the common law, or my conclusion.
Conclusion
155 I have concluded then that the Full Bench erred in concluding that Tricord was an "employer" of each of the two individuals in this case for the purposes of Act s 7(1) and therefore for the purposes of the jurisdiction of the Commission in respect of an "industrial matter" within s 7(1) that might otherwise arise between them, and that this Court has jurisdiction to review and set aside that decision.
156 Accordingly, this appeal in my view should be allowed.
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