Probin and Commissioner of Taxation (Taxation)

Probin and Commissioner of Taxation (Taxation) [2019] AATA 4597 (8 November 2019)
Division:TAXATION AND COMMERCIAL DIVISION
File Number: 2018/2471
Re:Charles Probin
APPLICANT

AndCommissioner of Taxation
RESPONDENT

DECISION
Tribunal:Member D K Grigg
Date:8 November 2019
Place:Brisbane

The Tribunal affirms the decision under review.
.................................[SGD]......................................
Member D K Grigg
CATCHWORDS
TAX – assessment of superannuation guarantee charge - whether correctly imposed – whether worker an employee or independent contractor pursuant to section 12 of the Superannuation Guarantee (Administration) Act 1992 – decision under review affirmed.
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
Superannuation Guarantee (Administration) Act 1992 (Cth)
Taxation Administration Act 1953 (Cth)
CASES
ACE Insurance Limited v Trifunovski [2013] FCAFC 3
Federal Commissioner of Taxation v Dalco [1990] HCA 3; (1990) 168 CLR 614
Gauci v Federal Commissioner of Taxation [1975] HCA 54; (1975) 135 CLR 81
On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3)[2011] FCA 366
Re Porter: Transport Workers Union of Australia (1989) 34 IR 179
Stevens v Brodribb Sawmilling Co Pty Ltd[1986] HCA 1; (1986) 160 CLR 16
Trautwein v Federal Commissioner of Taxation [1936] HCA 77; (1936) 56 CLR 63
REASONS FOR DECISION
Member D K Grigg
8 November 2019
BACKGROUND

This matter concerns notices of assessment of Superannuation Guarantee Charge (SGC) issued to Mr Charles Probin by the Australian Tax Office (“ATO”) in relation to a former worker of Mr Probin’s, Mr Paul Miastkowski. During the relevant period Mr Probin operated a general property maintenance business, TLC Property Maintenance.[1] It is not in dispute that in the period 1 April 2011 to 28 January 2016 Mr Miastkowski worked with Mr Probin in the business, performing all types of general property maintenance work.[2]
[1] Exhibit 3, Statement of Mr Probin dated 15 June 2019.
[2] Exhibit 5, Witness Statement of Mr Paul Miastkowski dated 5 October 2018.
Mr Probin considered that Mr Miastkowski was a self-employed contractor, and not an “employee” and as a result Mr Probin paid no superannuation guarantee payments in relation to Mr Miastkowski.[3]
[3]Exhibit 1, Applicant’s Statement of Issues, Facts and Contentions dated 20 October 2018; Exhibit 2, Further Witness Statement of Mr Probin dated 29 October 2019, page 2; Exhibit 3, Statement of Mr Probin dated 15 June 2019, page 4.
On 27 May 2016 Mr Miastkowski contacted the ATO to say that he had not been paid superannuation guarantee contributions. As a result of this contact the ATO commenced an audit of Mr Probin’s tax affairs. The ATO investigated the nature of the working relationship between Mr Probin and his ex-worker Mr Miastkowski in order to determine whether Mr Miastkowski was an “employee” as defined in sections 12(1) and 12(3) of the Superannuation Guarantee (Administration) Act 1992 (“SGAA”).
The purpose of the SGAA is to establish and administer the Superannuation Guarantee Scheme, and related purposes. It is an employer’s responsibility to pay a minimum prescribed level of superannuation payments for their employees. If the employer fails to do so, a SGC for the shortfall will be imposed on the employer.
As part of the audit, the ATO sent Mr Probin and Mr Miastkowski superannuation guarantee questionnaires to complete.[4]
[4]Exhibit 4, T documents, T3 – T4, pages 13 – 16, worker questionnaire and principal questionnaire cover letters dated 14 July 2016.
According to Mr Miastkowski’s completed worker questionnaire:[5]
[5]Exhibit 4, T documents, T5, pages 22 – 37, worker questionnaire completed by Mr Miastkowski dated 20 July 2016.
·each morning Mr Probin would provide him with instructions on the different tasks and jobs assigned to him that day;
·there was no written agreement with Mr Probin;
·he was simply given oral instructions at the beginning of each day of what jobs Mr Probin wanted him to complete on which property;
·he was paid at a fixed rate per hour of $35 which was not able to be changed;
·Mr Probin had the right to dismiss or terminate his services and he was entirely reliant on Mr Probin assigning work to him;
·he would work the required hours to complete the jobs assigned to him by
Mr Probin;
·Mr Probin assigned the tasks to him in the morning by telephone, although, sometimes these would be reassigned during the day if more urgent work was required to be completed;
·Mr Probin directed him to where the jobs were to be performed and all work was performed at the clients’ premises;
·on many occasions he worked under Mr Probin’s supervision;
·on a few occasions he was asked to do plumbing and tiling jobs that he felt he was not qualified to do and as a result Mr Probin undertook that work himself and he was reassigned to another task;
·he would give Mr Probin adequate notice if he wished to take leave;
·he did not advertise his services during the period he worked with Mr Probin;
·there were two occasions when he performed services independently of
Mr Probin. On one occasion he was paid $140 to do work for a family friend and the other was for a family member;
·he was approached on several occasions to do jobs for other people but because of his commitment to Mr Probin, he referred the jobs to him;
·Mr Probin provided him with a hat, but he was not required to wear it and he provided his own shorts and T-shirt;
·he did not have any badge, clothing or business cards or other items promoting his personal business;
·he did not advertise his personal business on any of the tools provided by him;
·he would provide weekly invoices of the hours worked to Mr Probin;
·Mr Probin would set the fees for the work tasks done for the clients;
·his rate of pay from commencement to 13 May 2010 was $32.50 per hour and from 1 April 2011 to 31 March 2016 he was paid at the rate of $35 per hour;
·his payment was not dependent upon the completion of a task or job;
·he was paid by cheque;
·other than the work completed he received no payments or reimbursements for anything such as superannuation, car allowance, holiday pay and sick pay;
·if he was away Mr Probin would arrange for the work to be done by others;
·he was unable to organise work or tasks to be performed by others;
·in relation to the work he performed, Mr Probin was responsible for paying for workers compensation insurance and public liability insurance;
·at no time was he required to guarantee any of the work that he performed;
·if he made a mistake or broke something he was not responsible for paying for the breakage;
·he provided his own van and tools at an approximate value of $5,000, and a mobile phone;
·Mr Probin reimbursed him for a grinder and heat dryer;
·Mr Probin provided all materials for a job and arranged delivery of those materials to the job site;
·he was required to wear protective work gear;
·he provided his own safety boots and Mr Probin provided facemasks and earmuffs;
·he provided Mr Probin with invoices at the end of each week. He was not required to specify the details of the work in the invoice and simply gave the details of the hours he spent on each job; and
·during the time he worked for Mr Probin he had never been employed by another contractor.
According to Mr Probin’s completed principle questionnaire:[6]
[6] Exhibit 4, T documents, T6, pages 54 – 87, principal questionnaire completed by Mr Probin dated 4 August 2016.
·Mr Miastkowski performed property maintenance tasks such as painting, plastering and general carpentry;
·there is no specific daily work routine scheduling as the routine varied depending on the jobs at hand;
·Mr Miastkowski arranged the start and finish times by himself;
·there was no written agreement with Mr Miastkowski but the terms and conditions of the engagement were that:
oMr Miastkowski was required to, and supplied, an ABN number and was a self-employed contractor;
oan agreed hourly rate of pay was established and accepted and was intended to include all extras such as holiday, long service, superannuation et cetera;
oMr Miastkowski was to provide his own tools and Mr Probin would replace any tools that broke or wore out;
othe engagement was essentially part-time as Mr Miastkowski was still servicing customers at his chiropractic clinic;
othere was no specific probationary period;
othe hourly rate was negotiable and was increased from time to time by mutual arrangement;
ohours were flexible and by arrangement;
ohe could terminate Mr Miastkowski’s service in the event of, for example, non-punctual attendance or failure to attend or refusing to undertake work requested;
ono advance notice of termination was required;
oMr Miastkowski could also self-terminate;
ohe had other workers engaged on a similar basis to Mr Miastkowski;
ono training was provided to Mr Miastkowski;
oMr Miastkowski worked largely unsupervised;
owhile he allocated the work, Mr Miastkowski chose his own working hours;
oany plan for a job was generally prearranged;
ohe directed Mr Miastkowski to where the job was to be performed;
oit was Mr Miastkowski’s choice as to whether he would undertake the requested work;
oMr Miastkowski was not really supervised, although Mr Probin would inspect the work to ensure appropriate standards and details were achieved;
oif Mr Miastkowski wanted to take time off it was usually by mutual arrangement and that because of the ongoing working relationship and long-term friendship, any time off request was always happily given;
oMr Miastkowski was never beholden or contracted specifically to Mr Probin and he was able to choose whether to do a task or to accept work for another person or company;
oto his knowledge Mr Miastkowski carried out paid work for several other parties, including repairing works for a customer of his own at a rental property owned by that person and transporting services for a linen wholesale company;
oMr Miastkowski worked independently and was self-supervised and self-managed;
oin the rare event that there were other workers at a job it was undertaken with collaboration and cooperation;
oit was not a requirement that Mr Miastkowski wear any particular clothing, although, he did provide him with a baseball type cap;
oMr Miastkowski was paid in full for the hours that he worked and claimed regardless of the state of completion of any jobs or tasks;
ono amounts were deducted for tax or superannuation as it was agreed that it was Mr Miastkowski’s responsibility as a contractor to do that for himself;
oin terms of requisite insurance it was Mr Miastkowski’s responsibility as a contractor to have arranged his own workers compensation and private accident insurance, although, Mr Probin arranged for public liability insurance;
oMr Miastkowski was never required to guarantee his work. It was simply never an issue;
ohe did not supply Mr Miastkowski with any equipment or tools to complete his work, although, there was the odd occasion where he provided his own hand tools and ladders on a short-term needs basis;
ohe supplied all materials for the job and arranged for those materials to be delivered to the job site; and
o
he supplied safety glasses and vests, earmuffs and a hardhat and

Mr Miastkowski supplied his own safety boots.
Following the audit, the ATO concluded that the relationship between Mr Probin and
[7]Exhibit 4, T documents, T7, pages 106 – 116, letter from ATO to Mr Probin dated 10 October 2016; T12, pages 383-391, Letter from ATO to Mr Probin dated 1 December 2016.
Mr Miastkowski was that of employer and employee and that therefore Mr Probin should have been paying superannuation guarantees in relation to that worker.[7]
As a result of its findings the ATO issued notices of SGC assessment for the period 1 April 2011 to 31 March 2016.[8] The total amount of superannuation guarantee charge owing by Mr Probin (including interest thereon) is $27,272.24.[9]
[8]Exhibit 4, T documents, T11, pages 301-382, Notices of superannuation assessment of guarantee charge dated 24 November 2016; Section 40, SGAA.
[9]Exhibit 4, T documents, T14, page 394, superannuation guarantee employer statement of account issued on 6 April 2017.
On 22 December 2016 Mr Probin lodged an objection to the SGC assessments.[10]
[10]Exhibit 4, T documents, T2, pages 6 – 7, reasons for decision dated 8 May 2017; T13 – T14, pages392 – 395 , objection and supplementary objection letter lodged by Mr Probinon 19 December 2016 and 24 April 2017; section 42, SGAA, Part IVC, Taxation Administration Act 1953
On 8 May 2017 the ATO advised Mr Probin that they had considered his objection and determined that Mr Miastkowski was an employee of Mr Probin for the purposes of the SGAA and that therefore Mr Probin had an obligation to pay superannuation contributions on Mr Miastkowski’s behalf.[11]
[11]Exhibit 4, T documents, T2, pages 6 – 12, reasons for decision dated 8 May 2017; T15, page 396, Letter from ATO to Mr Probin dated 8 May 2017.
On 7 May 2018, Mr Probin applied to this Tribunal for review of the ATO’s decision.[12] The Tribunal has jurisdiction to review decisions under the Act pursuant to section 25 of the Administrative Appeals Tribunal Act 1975 (Cth), section 42 of the SGAA and Part IVC of the Taxation Administration Act 1953 (Cth) (“TAA”).
[12]Exhibit 4, T Documents, T1, pages 1- 5, Application for review dated 7 May 2018.
ISSUES FOR THE TRIBUNAL
The issue for determination by the Tribunal is whether Mr Miastkowski was an “employee” within the meaning provided in section 12 of the SGAA.
LEGISLATIVE BACKGROUND
Superannuation Guarantee Charge
A "superannuation guarantee charge" is a “charge imposed by the Superannuation Guarantee Charge Act 1992.[13]
[13]section 6, SGAA.
A SGC is payable if the minimum amount of the superannuation guarantee for an employee has not been paid into the appropriate superannuation fund by the due date.
Pursuant to section 16 of the SGAA, the “Superannuation guarantee charge imposed on an employer's superannuation guarantee shortfall for a quarter is payable by the employer”.
Superannuation guarantee is not payable other than for employees.
Pursuant to section 36 of the SGAA, where an employer has not lodged a superannuation guarantee statement for a quarter and the Commissioner is of the opinion that the employer is liable to pay SGC for the quarter, the Commissioner may make a default assessment of the amount that should have been paid (“the superannuation guarantee shortfall”).
Definition of “Employee”
Section 12 of the SGAA defines an employee relevantly as follows:
Interpretation: employee, employer
(1) Subject to this section, in this Act, employee and employer have their ordinary meaning. However, for the purposes of this Act, subsections (2) to (11):
(a)expand the meaning of those terms; and
(b)make particular provision to avoid doubt as to the status of certain persons.
…
(3) If a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract.
[Emphasis added]
The most recent decision on what is meant by the ordinary meaning of “employee” for the purposes of the SGAA, is that of Bromberg J in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3)[2011] FCA 366 (“On Call”). In that case the Court had to determine whether interpreters were employees or independent contractors pursuant to section 12 of the SGAA.
Bromberg J explained that the assessment of whether someone is an employee is an objective one and requires a consideration of the substance and nature of the relationship between the relevant parties.[14] Bromberg J posed the following practical test:
[14]         [2011] FCA 366, at [188]-[189].
[208] Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work, may be posed and answered as follows:
Viewed as a “practical matter”:
(i)     is the person performing the work an entrepreneur who owns and operates a business; and,
(ii)    in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?
If the answer to that question is yes, in the performance of that particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee.
[209]…The central question has two elements. The first is whether the person has a business. The second is whether the work or the economic activity being performed is being performed in and for the business of that person.
[210] As to the first element, to carry on a business is to conduct a commercial enterprise as a going concern: Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 at [83]. It will usually involve the acquisition and use of both tangible and intangible assets in the pursuit of profit: Gribbles Radiology at [39]… A business typically has (or at least aspires to have) value (goodwill or saleable assets) beyond its physical assets: Steven v Brodribb at 37. A common intangible asset of a business is its name, brand, reputation or goodwill. Typically, the activities of a business will be organised in a business-like manner, including by the use of systems: Ferguson v Federal Commissioner of Taxation (1979) 37 FLR 310 at 314 – 315. The word “business” imports the notion of system, repetition and continuity: Hungier v Grace (1972) 127 CLR 210 at 216-217. A business will normally operate in a business-like way; Puzey v Commissioner of Taxation [2003] FCAFC 197 at [48].
…
[212] A personal services business is a business which is likely to involve system, repetition and continuity in the pursuit of profit. A genuine personal services business will aspire to make profits and not simply be paid remuneration, as is an employee. Such a business will seek to be remunerated not simply for the provision of the labour of the self-employed entrepreneur that provides the personal services, but also for the risks involved in that person being an entrepreneur.
…
[214] A genuine independent contractor providing personal services will typically be: autonomous rather than subservient in its decision-making; financially self-reliant rather than economically dependent upon the business of another; and, (as I have said), chasing profit (that is a return on risk) rather than simply a payment for the time, skill and effort provided.
[Emphasis added]
The current approach to determining the status of a worker, involves consideration of a range of indicia and involves an examination of “the totality of the relationship between the parties”: Stevens v Brodribb Sawmilling Co Pty Ltd[1986] HCA 1; (1986) 160 CLR 16 at 29 (Mason J).
Bromberg J set out the indicia of a business (case references excluded):[15]
[15] [2011] FCA 366, at [217].
·Do the economic activities of the putative business involve the taking of risk in the pursuit of profits?
·Does the putative business engage in a repetitive and continuous manner with purchasers of its services?
·Does the putative business employ or engage persons other than the owner/operator to carry out its economic activities?
·Is goodwill (name, brand and reputation) being created by the economic activities of the putative business?
·Is the putative business promoted as a business to the public through advertising or other promotional means?
·Does the putative business have tangible assets such as buildings and equipment which are utilised to support its economic activities?
·Does the putative business have the basic transactional systems that are common of a business of that kind? For instance: invoicing systems; standard rates and terms and conditions of trade; insurance coverage; payment and debt collection systems; appropriate financial records; budgeting or forecasting systems; business based arrangements with a bank or other financial institution
·Do the services provided by the putative business involve the provision of labour of sufficient skill to be suggestive of the pursuance of a profession or trade through a business[?]
·Are the regulatory requirements of a business (including business name registration, taxation, GST and ABN registration and compliance) being met by the putative business?

Bromberg J then set out the indicia as to whose business the economic activity is being performed in (case references excluded):[16]
[16] [2011] FCA 366, at [218].
·Does the provision of the economic activity provide an opportunity for profit and involve the risk of loss…?
·In that respect and in relation to profit:
- to what extent is the reward for the provision of the activity negotiable and negotiated commercially?
- to what extent does the putative owner/entrepreneur have the capacity to manage the activity so as to maximise the potential for profit?
· In that respect and in relation to risk:
- to what extent is the agreed payment contingent upon the person providing a satisfactory result (i.e. are there financial consequences for poor performance)?
- who bears the risks associated with providing any equipment or assets required for the performance of the economic activity?
·Does the putative business or the putative employer’s business control and direct or have the capacity to control and direct the manner in which the economic activity is carried out?
·Is the economic activity represented or portrayed as the activity of the putative business or that of the putative employer’s business?
·To what extent is the person providing the economic activity integrated with the business receiving the activity?
·To what extent is the person providing the economic activity financially self-reliant from, as opposed to, economically dependent upon or organisationally tied to, the business receiving the activity? Exclusivity is suggestive of an employment relationship However, it does not follow that a person who provides casual or part-time work to multiple purchasers is not an employee
·Is the person providing the economic activity free to employ his or her own means (employees or contracted agents) to produce the activity or must that person personally perform the work?
·To whose business does any goodwill created by the economic activity enure?
·In contracting to provide the economic activity has the person agreed to provide an outcome or result?
·To what extent is the person providing the economic activity doing so with his or her own tools and equipment?
·If the person is providing their own equipment, to what extent can the person be directed in the management and control of that equipment?
·Have the parties involved characterised the economic activity as that of the owner/entrepreneur being performed in and for that person’s business, or alternatively as part of the receiving business, and to what extent does that characterisation reflect the reality?
Bromberg J also identified that whether income tax has been withheld and whether annual, long service or sick leave is afforded are often also used as relevant indicators. However his Honour noted that there are differently held views regarding what inference should be drawn in relation to these factors.[17] That is understandable given that the arrangements made are often based on the subjective opinions or preferences of the parties involved.
[17] [2011] FCA 366, at [219].
Bromberg J considered the following indicia as relevant in On Call:
·Characterisation of the Status of Panel Interpreters;
·Allocation of Assignments;
·Obligation to Accept Assignments;
·Initial Treatment of Panel Interpreters;
·On Call’s Recognised Employee Interpreters;
·Requests for Particular Interpreters;
·Duration of Assignments;
·Double Appointments and Multiple Assignments;
·Extensions of Assignments;
·Sessional Assignments;
·Cancellations;
·Pricing, Invoicing and Payments to Panel Interpreters;
·Extent of Integration of Panel Interpreters with On Call’s Business;
·Lack of Exclusivity;
·Representation of On Call by Panel Interpreters;
·Control of Panel Interpreters - Instructions;
·Control of Panel Members – Performance, Compliance and Discipline;
·Control – No Obligation to Work;
·Extent of Use of Other Persons to Carry Out Assignments;
·Supply of Equipment;
·Risk and Professional Indemnity Insurance;
·Expenses and Allowances;
·Advertising by Panel Interpreters;
·Use of Business Names and Incorporation; and
·Taxation and Business Registration Arrangements.
Burden of Proof
Section 14ZZK(b)(i) of the TAA provides that the Applicant has the burden of proving that the assessment is excessive or otherwise incorrect and what the assessment should have been.
The High Court decision in Federal Commissioner of Taxation v Dalco [1990] HCA 3; (1990) 168 CLR 614 confirms that the onus is on the taxpayer to establish that default assessments issued by the Commissioner are excessive. The High Court explained that where the Commissioner and taxpayer have not agreed on the assessment:[18]
“… the Commissioner is entitled to rely upon any deficiency in proof of the excessiveness of the amount assessed to uphold the assessment … unless the [taxpayer] shows by evidence that the assessment is incorrect, [the default assessment] will prevail.” (Brennan J)
[18](1990) 168 CLR 614, at 624, citing Gauci v Federal Commissioner of Taxation [1975] HCA 54, [6]; (1975) 135 CLR 81, 89..
In Trautwein v Federal Commissioner of Taxation [1936] HCA 77; (1936) 56 CLR 63 Latham CJ found as a general rule:
[2]. “…the taxpayer must…go further and show, not only negatively that the assessment is wrong, but also positively what correction should be made in order to make it right or more nearly right.”
In Gauci v Federal Commissioner of Taxation [1975] HCA 54; (1975) 135 CLR 81 Mason J explained:
[6]. “The Act does not place any onus on the Commissioner to show that the assessments were correctly made. Nor is there any statutory requirement that the assessments should be sustained or supported by evidence.”
EVIDENCE
The facts are largely agreed. The issue is whether those facts give rise to a finding that
Mr Miastkowski was an “employee”.
Mr Probin’s Evidence
In addition to the information provided in the principal questionnaire (see paragraph
[19]Exhibit 1, Applicant’s Statement of Issues, Facts and Contentions dated 20 October 2018; Exhibit 2, Further Witness Statement of Mr Probin dated 29 October 2019; Exhibit 3, Statement of Mr Probin dated 15 June 2019.
7 above), Mr Probin provided several written statements[19] and gave evidence before the Tribunal.
Mr Probin has always been of the view that the working arrangement between him and
Mr Miastkowski was one of independent contractor and not that of employer/employee.
Mr Probin says:[20]
(a)Mr Miastkowski represented himself as a self-employed contractor;
(b)it was pre-agreed with Mr Miastkowski that Mr Miastkowski would:
(i)be responsible for all tax, holiday pay, sick leave, workers compensation and private accident insurance and superannuation; and
(ii)provide invoices, his own tools and use his own vehicle.
[20]Exhibit 2 Further Witness Statement of Mr Probin dated 29 October 2019; Exhibit 3 Statement of Mr Probin dated 15 June 2019.
Mr Probin gave the following evidence during the hearing:
·MR PROBIN: When we discussed the arrangements, I was very specific in terms of what he had to provide; that he had to provide his own vehicle, his own tools, which I would replace if they were broken or whatever, I would supply all the materials. He also had to supply his own ABN and he had to provide me an invoice and then I would pay him from my business cheque account…
·I also said to him that he would be regarded as self-employed and that the hourly rate which we agreed upon was to cover everything possible. So it was sick leave, holiday pay, long service, superannuation, whatever else might be included with the exception, as I’ve already said - I offered to provide a uniform which he declined; I offered to provide boots which he declined; and I did on several occasions replace tools which either broke or ran out during the course of his engagement;[21]
[21]Transcript, 17 June 2019, pages 8 – 9.
·Mr Miastkowski was paid the same hourly rate for every task;[22]
[22]Transcript, 17 June 2019, page 11.
·he met Mr Miastkowski through a family member;[23]
[23]Transcript, 17 June 2019, page 12.
·Mr Miastkowski undertook manual work as directed by him for an hourly rate;[24]
[24]Transcript, 17 June 2019, page 13.
·he would discuss with Mr Miastkowski how long he thought a job would take but did not receive any quotes from Mr Miastkowski to perform the work.
Mr Probin would provide quotes to his clients;[25]
[25]Transcript, 17 June 2019, page 13.
·he would organize all the materials required to perform whatever job
Mr Miastkowski was to undertake;[26]
[26]Transcript, 17 June 2019, page 13.
·“…hours were always flexible and by arrangement”;[27]
[27]Transcript, 17 June 2019, page 14.
·he would discuss with Mr Miastkowski when he was to start each day:
MR PROBIN: It was a very - the whole thing in terms of our arrangement for work was very negotiable except that when we were working we worked and when we stopped we stopped.
MS CHEN: But you always discussed the start times with Paul in advance so you knew where ‑ ‑ ‑
MR PROBIN: Usually that was arranged, yes.
MS CHEN: That was arranged. So you would agree on what time he’d start, where he’d be, what work he was doing?
MR PROBIN: Yes.
…
MR PROBIN: …essentially, as exactly as I’ve said there, he chose his own working hours. It depended on his availability and his choices whether or not to do the work, access to the job and the weather. We might discuss a job and he would say “Oh no, that’s going to be too difficult or too hard or it’s too far away” or “No, I’m not available that particular day” so he chose his own working hours.
MS CHEN: Well, just talking about that: if an urgent matter occurred, an urgent job needed to be done, you would call Paul, wouldn’t you, or you’d talk to him and direct him to immediately attend to them?
MR PROBIN: No, I would call him and ascertain his availability and if he wasn’t available I would go and do it myself or organise somebody else to come with me if I needed two people or three people.
MS CHEN: But if he was doing another job for you that day, so he was at work on another job and an urgent job came up; you would tell him to quickly go do that urgent job; isn’t that correct?
MR PROBIN: I ring him and/or contact him if I wasn’t there and ask him, I wouldn’t tell him. It was always, “Could you please?” or “So and so has rung…” - for example, if I may, we did a lot of work at a high rise building and he might be working, I don’t know, fixing somebody’s couch that a leg had broken and I would ring him and say, “Could you please ring - give a unit number because the manager has just rung me to say that so and so has got a bottle top jammed in the InSinkErator”.
MS CHEN: Well, in those instances isn’t it correct that the worker would undertake the urgent task?
MR PROBIN: Most of the time, yes;[28]
[28] Transcript, 17 June 2019, pages 15, 18.
·he mostly checked Mr Miastkowski’s work when completed to ensure it met his clients’ expectations;[29]
[29] Transcript, 17 June 2019, pages 15 – 16.
·he always paid for the materials;[30]
[30]Transcript, 17 June 2019, page 16.
·he could not recall if there were any instances where work had to be rectified;[31]
[31]Transcript, 17 June 2019, page 16.
·despite listing the bases on which he could terminate Mr Miastkowski in the questionnaire, the issue never arose;[32]
[32]Transcript, 17 June 2019, pages 16 – 18.
·time off was always discussed and agreed;[33]
[33]Transcript, 17 June 2019, page 19.
·Mr Miastkowski worked approximately 25-30 hours per week for him for
12 years;[34]
[34]Transcript, 17 June 2019, page 20.
·he did not recall Mr Miastkowski ever saying that he could not undertake work because he was undertaking other work;[35]
[35]Transcript, 17 June 2019, page 20.
·he introduced Mr Miastkowski to the owner of a linen company who then arranged for Mr Miastkowski to do a delivery job on one occasion;[36]
[36]Transcript, 17 June 2019, page 20.
·he believes Mr Miastkowski did property maintenance work for a family member and filled in as a maintenance gardener for the managers of a
high-rise building;[37]
[37]Transcript, 17 June 2019, page 20.
·he believes Mr Miastkowski may have worked for others but does not know for certain;[38]
[38]Transcript, 17 June 2019, pages 20 – 21.
·MR PROBIN: Mr [Miastkowski] was not happy to undertake certain work because he felt that he wasn’t competent or qualified, and I completely accept that, because with regard to plumbing and electrical work, I think legislation came in at the time that, particularly in regard to plumbing, certain items, even changing a tap washer, could only be undertaken by a plumber;[39]
[39]Transcript, 17 June 2019, page 50.
·Mr Miastkowski would be paid weekly based on the hours worked, not on whether a task had been completed;[40]
·he paid for the public liability insurance which covered Mr Miastkowski;[41]
·to his recollection Mr Miastkowski was not responsible for any rectification works required. If Mr Miastkowski made mistakes Mr Probin would pay for the materials and pay Mr Miastkowski his hourly rate to fix it;[42]
·he provided the bulk of the safety personal protection equipment such as glasses, safety vests, earmuffs and hard hats;[43]
·he has no recollection of Mr Miastkowski charging him for work and then using others to perform the work;[44] and
·
on those occasions when he was not available, or away, Mr Miastkowski was happy to be the representative for the business and liaise with

Mr Probin’s clients and other workers as necessary.[45]
[40]Transcript, 17 June 2019, page 21.
[41]Transcript, 17 June 2019, page 23.
[42]Transcript, 17 June 2019, page 23.
[43]Transcript, 17 June 2019, page 23.
[44]Transcript, 17 June 2019, page 24.
[45]Transcript, 17 June 2019, page 24.
Mr Miastkowski’s Evidence
In addition to the information provided in the worker questionnaire (see paragraph
[46]Exhibit 5, Witness Statement of Mr Miastkowski dated 5 October 2018.
6 above), Mr Miastkowski provided a written statement[46] and gave evidence before the Tribunal.
Mr Miastkowski’s evidence was that:[47]
[47]Exhibit 5, Witness Statement of Mr Miastkowski dated 5 October 2018; Transcript, 17 June 2019, page 27.
·he knew Mr Probin prior to working with him;
·Mr Probin told him he did not want to pay sick or holiday pay and asked if he had an ABN;
·he was paid based on an hourly rate initially set by Mr Probin, which he accepted;
·Mr Probin paid for the work materials;
·in the twelve years he worked with Mr Probin, there were only two occasions, that he performed work for others – once he did a day’s work for his daughter and friend, and the other he helped a linen company unload some pallets for a few hours at Mr Probin’s request. He never performed any work for anyone else;
·I was always asked to do jobs by friends and everything and I said no I could not do this or fit it in with my commitment with Charles because ongoing day after day or what it is, like, and that I wouldn’t be able to do it. And I mentioned to them would they be happy if I referred Charles to make contact and everything and work it out;
·100 per cent of his work each year was for Mr Probin;
·he used his own tools; and
·he managed Mr Probin’s business when Mr Probin was on leave.
CONSIDERATION
As identified earlier, while some weight is given to the intention of the parties, how the parties decide to deal with one another is not decisive.[48] One cannot contract out of statutory obligations.[49] Objectively, the Tribunal finds that the substance of the relationship overall is one of employer and employee.
[48]ACE Insurance Limited v Trifunovski[2013] FCAFC 3, at [32]
[49]Re Porter: Transport Workers Union of Australia (1989) 34 IR 179, at 184.
What work was to be performed, and the time and location of the work to be performed, was determined by Mr Probin. Although Mr Probin discussed the days schedule with
Mr Miastkowski, Mr Probin practically exercised full control of Mr Miastkowski’s daily activities. The degree of control that may be exercised over a worker is a
“prominent factor” in determining the nature of the relationship.[50] Although
[50]Stevens v Brodribb Sawmilling Co Pty Ltd[1986] HCA 1; (1986) 160 CLR 16, at [24]
Mr Miastkowski was not often supervised in his work, what he had to do and how it was to be done was discussed by the parties in advance of each task. By contrast an independent contractor would be expected to perform the task how and when they desired.
Mr Miastkowski did not advertise his services outside of the relationship with Mr Probin, and the evidence does not weight in favour of the Mr Probin’s contention that
[51]See indicia of a business outlined by Bromberg J in On Call at paragraph 23 above.
Mr Miastkowski was operating a business.[51]
Mr Miastkowski was paid a flat hourly rate based on the number of hours he worked. The rate of pay did not vary depending upon the nature of the task involved, which one would expect if Mr Miastkowski was operating his own business. Mr Miastkowski did not provide quotations for the work to be performed. There was no evidence of Mr Miastkowski attempting to source any independent work.
The evidence around whether Mr Miastkowski was entitled to refuse to do certain tasks is limited. This is because the situation never arose. Mr Miastkowski would not perform work he was unqualified to do, but this is substantially different to refusing to do the work or being selective about which tasks he would perform.
There is no evidence of Mr Miastkowski negotiating his rate of pay or setting his fees for individual tasks.
Mr Probin would decide which tasks were to be done and when. Mr Miastkowski appears to have simply followed Mr Probin’s directions. There is no evidence that Mr Miastkowski had any ability to decide for himself when he could schedule a task.
As in On Call, the clients for whom the work was conducted, other than on one or two limited occasions, were exclusively Mr Probin’s clients. Any goodwill generated from the work would belong to Mr Probin’s business.
There is no evidence of any capacity of Mr Miastkowski to delegate work, an element Bromberg J identified as strongly suggesting in favour of the existence of an employment relationship.[52]
[52][2011] FCA 366, at [283].
Mr Miastkowski seems to have taken little or no risk in relation to the work performed. Any risk was borne by Mr Probin.
If Mr Miastkowski was asked to perform work by third parties, he said he would tell them that he could not do the job because of his commitment to Mr Probin and would then refer them to him. This is not typical of the conduct that would be expected if
Mr Miastkowski was operating his own business. Mr Probin says he was not privy to what other work Mr Miastkowski may have engaged in while also working for him. There is no evidence before the Tribunal that Mr Miastkowski regularly engaged in work for third parties.

Bromberg J pointed out in On Call that the fact that an individual was responsible for his own sick leave and holiday pay and tax obligations is of little utility in determining the nature of the relationship, and further is common in casual contracts of service.[53] Such was the case with Mr Miastkowski.
[53][2011] FCA 366, at [295].
CONCLUSION
On balance, given the evidence and the legally held meaning of “employee”, the Tribunal is not satisfied that Mr Miastkowski was an independent contractor, therefore superannuation guarantee payments were payable by Mr Probin on Mr Miastkowski’s behalf.
The Tribunal finds that Mr Miastkowski was an “employee” in accordance with the ordinary meaning of the word pursuant to section 12(1) of the SGAA. It is unnecessary to consider whether the relationship between Mr Probin and Mr Miastkowski would also fall within section 12(3) of the SGAA.
DECISION
The decision under review is affirmed.

I certify that the preceding 51 (fifty -one) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg

............................[SGD]............................................
Associate
Dated: 8 November 2019

Date of hearing: 17 June 2019

Date final submissions received: 15 July 2019

Applicant: In person

Counsel for the Respondent: Ms Florence Chen

[2019] AATA 4597

8 November 2019

Key Legal Topics

Areas of Law

Tax Law

Statutory Interpretation

Legal Concepts

Statutory Construction

Date of hearing:	17 June 2019
Date final submissions received:	15 July 2019
Applicant:	In person
Counsel for the Respondent:	Ms Florence Chen