Putland v Royans Wagga Pty Ltd
[2017] FCA 910
•9 August 2017
FEDERAL COURT OF AUSTRALIA
Putland v Royans Wagga Pty Limited [2017] FCA 910
File number: NSD 1006 of 2015 Judge: BROMWICH J Date of judgment: 9 August 2017 Catchwords: INDUSTRIAL LAW – whether radio base (call centre) work performed by the applicants for respondent truck repair company was pursuant to a contract of employment or contract for services – principles on determination of employment vs independent contractor status – held: applicants were employees of the respondent for the relevant period
INDUSTRIAL LAW – determination of appropriate award, job classification and nature of employment – claimed breaches of the Fair Work Act 2009 (Cth) flowing from finding an employment relationship – breach of a modern award under s 45 – misrepresentation of employment being pursuant to a contract for services under s 357 – failure to provide pay slips under s 536 – separate claim for breach of implied term of employment contract for failure to provide notice of termination – held: breaches of ss 45, 357 and 536 made out – separate hearing to determine relief
Legislation: Evidence Act 1995 (Cth), s 59
Fair Work Act 2009 (Cth), ss 13, 45, 46, 117, 357, 536, 545, 546
Independent Contractors Act 2006 (Cth), ss 12, 16
Cases cited: ACE Insurance Ltd v Trifunovski [2013] FCAFC 3; 209 FCR 146
Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365
Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395
Hamzy v Tricon International Restaurants [2001] FCA 1589; 115 FCR 78
Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21
Humberstone v Northern Timber Mills (1949) 79 CLR 389
Kucks v CSR Limited (1996) 66 IR 182
Marshall v Whittaker’s Building Supply Company (1963) 109 CLR 210
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
Tattsbet Ltd v Morrow [2015] FCAFC 62; 233 FCR 46
Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561
4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541
Telum Civil (Qld) Pty Limited v Construction, Forestry, Mining and Energy Union [2013] FWCFB 2434; 230 IR 30
Dates of hearing: 30, 31 March 2016, 29, 30, 31 August 2016, 2, 7 September 2016 Registry: New South Wales Division: General Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 343 Counsel for the Applicants: Mr N Furlan Solicitor for the Applicants: Connect Legal Counsel for the Respondent: Mr B Rauf Solicitor for the Respondent: Commins Hendriks Pty Ltd Table of Corrections 22 August 2017 The original paragraph [336]:
“Having found that the Putlands were employed by Royans Wagga within the job classification “level three call centre principal customer contact specialist” under the Clerks Award on a full-time basis, and having found that the National Employment Standards (NES) termination provisions applied by reason of that award, there does not appear to be any point in attempting to ascertain what notice period might have been required by terms to be implied under a contract of employment. As no notice was in fact given, the entitlement is that provided by the NES, as is the compensation. That becomes the entitlement under the contract of employment, subject to calculations being provided to quantify that entitlement.”
Has been replaced with the following:
“I have concluded that no notice of termination was in fact given to the Putlands. In those circumstances, it falls for consideration what obligation to give notice was required by s 117 of the FW Act, and whether any different period should be implied in the Putlands’ contracts of employment. This is a further question to be resolved at the separate hearing to determine relief.”
22 August 2017 The original paragraph [340]:
“The Putlands are also entitled to an order for payment of damages for breach of their employment contracts on the basis of Royans Wagga’s failure to provide notice of termination. I am presently of the view that the award of damages should be for the relevant period from start date determined in September 2012 until 2 May 2015 and therefore in the sum dictated by the notice of termination entitlement in the National Employment Standards, as applied by clause 13.1 of the Clerks Award. I will hear the parties as to any reason why that is not the proper approach.”
Has been replaced with the following:
“The Putlands are also entitled to an order for payment in lieu of notice of termination of their contracts of employment. The period of notice that was required to be given, and the rate at which compensation should be ordered to be paid for that period, are further questions to be resolved at the separate hearing.”
ORDERS
NSD 1006 of 2015 BETWEEN: LINDA PUTLAND
First Applicant
SHANE PUTLAND
Second Applicant
AND: ROYANS WAGGA PTY LIMITED
Respondent
JUDGE:
BROMWICH J
DATE OF ORDER:
9 AUGUST 2017
THE COURT ORDERS THAT:
1.The matter be listed for a case management hearing at a time convenient to the parties for the purposes of making procedural orders for the hearing to determine the outstanding issues as to final relief.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BROMWICH J:
INTRODUCTION AND OVERVIEW
[1]
LEGAL PRINCIPLES AND STATUTORY PROVISIONS
[17]
Case law on the characterisation of employment contracts and independent contractors
[17]
Statutory provisions
[32]
FW Act
[32]
Independent Contractors Act
[33]
PLEADINGS, CHRONOLOGY OF KEY EVENTS AND EVIDENCE
[34]
Summary of the Putlands’ case
[34]
Summary of Royans Wagga’s case
[38]
Pleadings
[39]
Chronology of primary evidence – documentary and from the key witnesses
[45]
Before the relevant period: 1944 – June 2012
[46]
Leading into the relevant period: June 2012 to September 2012
[63]
The relevant period: September 2012 – May 2015
[71]
Additional evidence for the Putlands
[92]
Linda Putland
[92]
Shane Putland
[149]
Additional evidence for Royans Wagga
[178]
Margaret Scott (also known as Margaret Hinchcliffe)
[178]
Brett Haberecht
[187]
Bill Andrews
[194]
CONSIDERATION
[258]
Employee vs independent contractor
[258]
Alleged breaches of the FW Act contingent on finding an employment relationship
[282]
Breach of s 45 of the FW Act: contravening a term of a modern award
[283]
The applicable award and classification
[286]
Nature of the role: casual, part-time and full-time employment
[305]
Breach of s 357 of the FW Act: misrepresenting employment as independent contracting
[320]
Breach of s 536 of the FW Act: failure to provide pay slips
[328]
Failure to give reasonable notice of termination
[332]
RELIEF
[337]
INTRODUCTION AND OVERVIEW
This is a multifaceted employment law dispute arising out of a particular kind of call centre and related work performed from September 2012 to early May 2015. The work was performed for the respondent, Royans Wagga Pty Limited, by the first applicant, Ms Linda Putland, and by her husband, Mr Shane Putland, the second respondent (together, the Putlands).
Royans Wagga’s principal business is that of repairing trucks. The work performed by the Putlands involved obtaining or otherwise receiving and passing on information about vehicle accidents or other incidents resulting in damage to trucks. It is convenient to describe the overall work product as providing an accident reporting service for Royans Wagga. The benefit of that service also extended to other companies associated with Royans Wagga.
The business conducted by Royans Wagga has been operating for many decades under various legal owners and structures, the details of which are not material. It was not in dispute that in the period leading up to 2005, prior to any involvement by the Putlands, Royans Wagga had an in-house, employee-based accident reporting service which referred potential leads for work to its core truck repair business.
The central issues in this case concern and flow from the capacity in which the accident reporting service work was performed by the Putlands for Royans Wagga. This entails consideration and application of long-standing authority dealing with the distinction between contracts of service between an employer and employee (employment contracts), contracts for services between a principal and independent contractor and related issues. Terms such as “worked for” or “work performed for” are used neutrally in these reasons to mean work done by the Putlands for Royans Wagga, whichever kind of contract was involved. Litigation in this area often involves situations that involve features of both kinds of contract. This was such a case.
The accident reporting service work was performed for Royans Wagga by Ms Putland from about May 2005, and also by Mr Putland from about 2008. The Putlands ceased performing the accident reporting service work in early May 2015. While the period in contention was from September 2012 until early May 2015, the prior arrangements by which Ms Putland in particular worked for Royans Wagga are relevant and important in ascertaining the nature of the legal relations that existed in the contested period.
At all times, the accident reporting service work included answering telephone calls from a range of sources (including members of the public), monitoring radios and scanners to detect reports or communications about accidents, and dealing with Royans Wagga sales representatives, who would use the information provided to attempt to secure the repair work arising out of the accident or incident.
In early 2005, Royans Wagga had difficulty in retaining staff to perform the accident reporting service work after various employees left Royans Wagga to move interstate. In 2005, Royans Wagga recruited Ms Putland (then Ms Pullen) to perform the accident reporting service work, including working from her home. In 2007, Ms Putland became responsible for performing the accident reporting service work 24 hours a day, seven days a week, solely from her home. At some point in time in 2008, Mr Putland commenced assisting Ms Putland with the work at their home. Those arrangements were background to the contractual arrangements that were the subject of the present dispute.
In early 2012, while the Putlands were still responsible for performing the work 24 hours a day, seven days a week, Royans Wagga had a growing dissatisfaction with the accident reporting service for a variety of reasons. In June 2012, Mr William (Bill) Andrews, the managing director of Royans Wagga, went to the Putlands’ home and had a conversation about proposed changes to the way the accident reporting service would operate. Thereafter, from about the end of July 2012 until approximately October 2014, the weekday accident reporting service work was performed from a new demountable shed at the Royans Wagga premises known as “the Hut”. From sometime in October 2014 until early May 2015, the accident reporting service work was conducted from the Putlands’ home. The term “radio base” was used to refer interchangeably both to the accident reporting service and to the various locations from which it was provided, these being the Hut, the Putlands’ home and another home from which the work was sometimes performed.
Mr Putland worked from the Hut from mid-2012 until approximately October 2014, during what might be termed business hours, although not confined to 9.00 am to 5.00 pm. Ms Putland worked from home on weekends from mid-2012 until approximately October 2014. Following the resignation of a radio base employee, Ms Kylie Yerbury, in approximately October 2014, the Putlands again worked solely from home with responsibility to perform the accident reporting service work 24 hours a day, seven days a week. The Putlands did not perform this work for anybody else at any time, including during the relevant period.
In early May 2015, Royans Wagga outsourced its accident reporting service to an independent call centre, Fonebox. Consequently, the Putlands ceased performing any work for Royans Wagga. This dispute arises partially from the alleged conduct of Royans Wagga in terminating the arrangement (however ultimately characterised) with the Putlands, and partially from the conduct of Royans Wagga throughout the relevant period in relation to wages and other benefits and conditions.
As noted above, the central issue is whether the contracts by which the Putlands performed the accident reporting service work were employment contracts, as was their primary position, or whether that work was performed as independent contractors, as was the Putlands’ alternative position and Royans Wagga’s contention.
If either of the Putlands were found to be an employee of Royans Wagga, back pay was sought according to the Clerks—Private Sector Award 2010 (Clerks Award). Civil penalties under the Fair Work Act 2009 (Cth) (FW Act) were also sought for the following alleged contraventions:
(1)failure to pay wages and other benefits in accordance with an award in breach of s 45;
(2)failure to provide pay slips in breach of s 536; and
(3)falsely representing that the Putlands were employed as independent contractors in breach of s 357(1).
Payment in lieu of reasonable notice of termination was also sought.
Alternatively, even if the Putlands were independent contractors, they sought relief in that capacity by way of contract variations for harsh or unfair terms under s 16(1)(b) of the Independent Contractors Act 2006 (Cth) in order to secure payment in lieu of reasonable notice and payment of the difference between what they were paid and payments that would have been made if they were employed and paid in accordance with the Clerks Award.
Royans Wagga denies that there was ever any employment relationship or contract with either of the Putlands, asserts that there was an independent contractor arrangement with both, and asserts that proper notice of termination was given orally in December 2014. In the alternative, Royans Wagga asserts that even if there was any contract of employment, then such a conclusion was contrary to Royans Wagga’s knowledge (via Mr Andrews) and not reckless such that the defence in s 357(2) of the FW Act was made out. Aside from a concession that pay slips were not provided, Royans Wagga otherwise denied any entitlement to relief arising from any employment relationship found by the Court. Royans Wagga also denied any entitlement to alternative relief under the Independent Contractors Act.
The evidence, both oral and documentary, was wide-ranging and detailed. The main difference between the parties was the conclusions, both factual and legal, that they contended should be reached. There were also sharp differences in the evidence in a relatively small number of key areas. The resolution of both the legal and factual disputes has been difficult, requiring a detailed consideration of the oral evidence in particular.
Ultimately, I have found that the Putlands were employees of Royans Wagga. As a consequence of that finding, I have also considered the breaches of the FW Act and the breach of contract claimed by the Putlands. In respect of those breaches, I have found that the Putlands were employed pursuant to the Clerks Award as “call centre principal customer contact specialists” on a permanent, full-time basis, and that Royans Wagga breached ss 45, 357 and 536 of the FW Act. I will hear the parties in respect of final relief in the context of the findings made and conclusions reached in these reasons.
LEGAL PRINCIPLES AND STATUTORY PROVISIONS
Case law on the characterisation of employment contracts and independent contractors
The legal principles applicable to establishing whether work is performed pursuant to an employment contract or pursuant to a contract for services (i.e. as an independent contractor) were not in dispute. The difficulty arises in their application, especially in circumstances such as these in which certain features of the working arrangements indicated an independent contractor relationship, whereas other features indicated an employment relationship. The oral evidence, in particular of the Putlands, and of Mr Andrews on behalf of Royans Wagga, including its testing in cross-examination, ended up being of considerable importance.
Although modified by modern circumstances and technology, a prominent factor in determining whether a relationship is one of employer and employee or one of principal and independent contractor remains the degree of control which the person who engages another to perform work can exercise over the person so engaged: Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24.2 per Mason J (as the former Chief Justice then was), citing Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561 at 571; Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 404 and Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395 at 402.
The reference in Stevens to the control that “can” be exercised reflects the focus on the existence of authority to control, rather than its exercise. The exercise of control is virtually conclusive evidence of its existence, but the absence of the exercise of control does not deny its existence. The existence of authority to control remains a critical consideration in many cases, because that underlying reality of the power dynamic can still go to the heart of the difference between the two types of contract. However, control, like other indicia, is an analytical tool by which to measure and assess the relationship. Assessment of the existence and extent of any right of control assists in guiding and advancing the inquiry, rather than necessarily providing a conclusive answer on its own as to the nature of the legal relationship. The nature of the relationship is the ultimate issue.
The importance of considering authority to control was also canvassed by Wilson and Dawson JJ in Stevens. Their Honours opined at 36.3 that in many, if not most, cases, it is appropriate to apply the control test in the first instance because it remains the surest guide as to whether a person is contracting independently or serving as an employee. Their Honours noted that modern work conditions and norms of behaviour enable personal skills to be exercised so as to prevent control over the manner of doing work, such that the control test in the original master and servant sense is no longer a sufficient or necessarily appropriate test. Their Honours noted that this led to the observation in other authorities that the right to control rather than its actual exercise is the important component. However, their Honours also cited authority for the proposition that, in some circumstances, it may also be a mistake to treat a reservation of control as decisive: Stevens at 36.4.
Authority to control is a test of substance and not form, calling for distracting appearances to be brushed away when not reflective of reality. Properly and rigorously applied with appropriate caution and adjustment, the authority to control test is still capable of translating well to modern circumstances. As Dixon J noted in Humberstone at 404 (also partially extracted in Stevens at 24), albeit in the now-redundant language of “master and servant” and confined in expression to post-war period male workers:
… the test of the existence of the relation of master and servant is still whether the contract placed the supposed servant subject to the command of the employer in the course of executing the work not only as to what he shall do but to how he shall do it. …
The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.
That passage has particular resonance in this case in considering the competing evidence and arguments, having regard to the importance of the concept of ultimate authority, as opposed to its exercise in the particular circumstances.
Mason J in Stevens also held that while the existence of control is significant, and in many cases even dominant, it is but one of a number of indicia which must be considered. Other factors may include 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: Stevens at 24.5. That list is not exhaustive.
Wilson and Dawson JJ in Stevens noted that various other indicia have been added over time which may point towards employment rather than independent contractor status, including such things as the right to have a particular person do the work, the right to suspend or dismiss a person so engaged, the right to the exclusive services of that person and the right to dictate the place of work, the hours of work and so on: Stevens at 36.9. By contrast, indicators in favour of independent contractor status include such things as “a profession, trade or distinct calling”, the provision of the person’s own place of work (perhaps less significant in more recent times with relatively cheap and portable technology facilitating employees working from home with relative ease), the provision by the worker of his or her own equipment, the creation of goodwill or saleable assets, the payment of business expenses as a significant proportion of remuneration and payment of remuneration without the deduction of income tax: Stevens at 37.1. However, it must be kept steadily in mind that all of these indicia, and any others that might be thought of and sought to be applied as workplaces continue to evolve, can be no more than a guide leading to the answer to the ultimate question of whether a person is working for another in what is in truth an employment relationship or on his or her own behalf as an independent contractor, with the indications varying from case to case: Stevens at 37.3.
The importance of control must be considered keeping its historical context steadily in mind. Its source as a conceptual marker of an employment relationship was a predominantly agricultural society that has largely disappeared for most people. Many of the conditions that gave rise to that test have since disappeared, and occupations have emerged which do not so readily lend themselves to control as a dominant consideration. As was pointed out in Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21 at 40-1 [43]-[45], Stevens entailed an adjustment of the concept of control to more modern life, and to that end, Stevens continued the developments over many years in this area reflected in cases such as Humberstone in 1949 and Zuijs in 1955.
It was this modernisation that produced the shift from actual control to the right to exercise it: Stevens at 29.1, as quoted in Hollis at 41 [44]. The distinction reflected in the control test remains fundamentally between serving an employer in the employer’s business and carrying on a trade or business of his or her own: Hollis at 39 [40], citing Windeyer J in Marshall v Whittaker’s Building Supply Company (1963) 109 CLR 210 at 217.
It may be difficult to give much independent weight to such things as taxation arrangements because they reflect a subjective view of the nature of the relationship and may therefore be considered in the same category as declarations of intent, which, while not necessarily wholly irrelevant, must be approached with caution and may not assist at all. In that event, such features may be taken into account, but will not be conclusive and should be subordinate to conduct which constitutes a stronger and more objective indication of rights and obligations fundamentally inconsistent with the basic requirements of a contract of employment, such as the ability to delegate or a lack of ultimate control over how work is done, and who may perform that work. See ACE Insurance Ltd v Trifunovski [2013] FCAFC 3; 209 FCR 146 at 153 [37].
Even in cases in which the form of the arrangement is that of an independent contractor, a lack of real independence of action or true independence of organisation may lead to the conclusion that, in truth, there was no adequate foundation for finding the relationship to be anything other than one of employment: ACE Insurance at 186 [148]. Ultimately, whether a person is an employee or an independent contractor requires an objective assessment of the relationship. Which side the person falls on may not be easy to answer.
The outcomes of prior cases cannot simply be applied to reach the necessary conclusion in a given case. What really matters is principled analysis of the facts and circumstances of the case at hand. In ACE Insurance, ostensible independent contractor insurance agents were found to be employees, while in Tattsbet Ltd v Morrow [2015] FCAFC 62; 233 FCR 46, a person who worked entirely within the putative employer’s premises was nonetheless ultimately found to be an independent contractor due to a range of factors which, on appeal, were found to deny the existence of an employment relationship. In each case, careful attention to the detail of the totality of the arrangements and circumstances informed the ultimate conclusion reached. In ACE Insurance, Buchanan J, with whom Lander and Robertson JJ agreed, surveyed a wide range of appellate authority across a variety of circumstances in which the issue fell to be determined, and made the following pertinent observations at 173:
102It is trite to say that the foregoing survey yields no single or unifying test to determine whether an employment relationship exists. Some features of a particular relationship may tend strongly against such a conclusion. Principal amongst such features, in my view, are contractual terms which deny any requirement for personal service or represent clear indications of the pursuit of an independent business. Even where such features are absent the proper conclusion may be that a particular relationship is not one of employment, but the analysis is less straightforward.
103Of the indicia of employment it is clear that a right of control remains an important consideration in many cases. It may be found in a right of organisation and allocation of work, as much as in some theoretical right to say how actual work should be done.
ACE Insurance was followed in Tattsbet and may be regarded as one of the leading cases in this area. The analysis by Buchanan J in ACE Insurance has been of great assistance in deciding this case.
While the degree of control remains important, the modern approach is multifactorial and the totality of the relationship must therefore be considered. A range of indicia may, and usually will, need to be examined and those more useful favoured over those that are less useful as an indicator of the true relationship.
On any view, the central issue in this case was the characterisation of the nature of the relationship between the Putlands and Royans Wagga, applying the legal principles outlined above. As may be seen, the balance of the case largely fell to be considered in the context of the determination of that question. There is no single test, and indeed any attempt to find one may divert attention from the ultimate question of whether or not the Putlands were, in all the circumstances and at each relevant point in time, employees or independent contractors.
Statutory provisions
FW Act
The following provisions of the FW Act are relevant to the primary case advanced by the Putlands that their relationship with Royans Wagga was that of employer and employee:
13 Meaning of national system employee
A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.
Note:Sections 30C and 30M extend the meaning of national system employee in relation to a referring State.
45 Contravening a modern award
A person must not contravene a term of a modern award.
Note 1:This section is a civil remedy provision (see Part 4-1).
Note 2:A person does not contravene a term of a modern award unless the award applies to the person: see subsection 46(1).
46 The significance of a modern award applying to a person
(1) A modern award does not impose obligations on a person, and a person does not contravene a term of a modern award, unless the award applies to the person.
(2) A modern award does not give a person an entitlement unless the award applies to the person.
Note:Subsection (2) does not affect the ability of outworker terms in a modern award to be enforced under Part 4-1 in relation to outworkers who are not employees.
357 Misrepresenting employment as independent contracting arrangement
(1) A person (the employer) that employs, or proposes to employ, an individual must not represent to the individual that the contract of employment under which the individual is, or would be, employed by the employer is a contract for services under which the individual performs, or would perform, work as an independent contractor.
Note: This subsection is a civil remedy provision (see Part 4-1).
(2) Subsection (1) does not apply if the employer proves that, when the representation was made, the employer:
(a) did not know; and
(b) was not reckless as to whether;
the contract was a contract of employment rather than a contract for services.
536 Employer obligations in relation to pay slips
(1) An employer must give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.
Note 1: This subsection is a civil remedy provision (see Part 4-1).
Note 2:Section 80 of the Paid Parental Leave Act 2010 requires an employer to give information to an employee to whom the employer pays an instalment under that Act.
Independent Contractors Act
The following provisions of the Independent Contractors Act are relevant to the alternative case advanced by the Putlands that their relationship with Royans Wagga was that of principal and independent contractor (emphasis per original):
12 Court may review services contract
(1) An application may be made to the Court to review a services contract on either or both of the following grounds:
(a) the contract is unfair;
(b) the contract is harsh.
Note:A proceeding pending in the Federal Circuit Court of Australia may be transferred to the Federal Court of Australia: see Part 5 of the Federal Circuit Court of Australia Act 1999.
(2) An application under subsection (1) may be made only by a party to the services contract.
(3) In reviewing a services contract, the Court must only have regard to:
(a) the terms of the contract when it was made; and
(b)to the extent that this Part allows the Court to consider other matters—other matters as existing at the time when the contract was made.
(4) For the purposes of this Part, services contract includes a contract to vary a services contract.
Note:The effect of subsection (4) is that a contract to vary a services contract can be reviewed under this Part, as the contract to vary will itself be a services contract.
16 Orders that Court may make
(1) If the Court records an opinion under section 15 in relation to a services contract, the Court may make one or more of the following orders in relation to the opinion:
(a) an order setting aside the whole or a part of the contract;
(b) an order varying the contract.
(2) An order may only be made for the purpose of placing the parties to the services contract as nearly as practicable on such a footing that the ground on which the opinion is based no longer applies.
(3) If an application under this Part is pending, the Court may make an interim order if it considers it is desirable to do so to preserve the position of a party to the services contract.
(4) An order takes effect on the date of the order or a later date specified in the order.
(5) A party to the services contract may apply to the Court to enforce an order by injunction or otherwise as the Court considers appropriate.
(6) Subject to section 14, this section does not limit any other rights of a party to the services contract.
Note 1:The rights of a party to a services contract may be affected by the exclusion provisions.
Note 2:An appeal may be brought to the Federal Court of Australia from a judgment of the Federal Circuit Court of Australia: see section 24 of the Federal Court of Australia Act 1976.
PLEADINGS, CHRONOLOGY OF KEY EVENTS AND EVIDENCE
Summary of the Putlands’ case
On the first day of the hearing, counsel for the Putlands, Mr Nicholas Furlan, advised that the Putlands were not pressing their adverse action claim and, accordingly, were not pressing particular paragraphs of the statement of claim (as subsequently reflected in a second amended statement of claim filed on 8 July 2016).
The key aspect of the Putlands’ claim of a contract of employment was an asserted breach of s 45 of the FW Act, for underpayment (including overtime, penalties and superannuation contributions) pursuant to an asserted award. The balance of the Putlands’ case arising from the primary employment contract claim was articulated as having three dimensions (putting to one side the alternative claim under the Independent Contractors Act, the subject of disputed pleadings discussed further below), namely:
(1)a sham contracting claim under s 357(1) of the FW Act;
(2)a breach of an obligation to provide pay slips under s 536 of the FW Act; and
(3)a claim for breach of contract for failure to provide reasonable notice of the termination of a contract.
The alternative case under the Independent Contractors Act advanced by the Putlands was that the contracts for services by which they were engaged were unfair or harsh at the time they were made. The contracts were pleaded to provide total remuneration that was, or was likely to be, less than that of an employee performing similar work, and pleaded not to include a term requiring Royans Wagga to give reasonable notice of termination. The Putlands sought relief by way of contract variations under s 16(1)(b) of the Independent Contractors Act in order to secure payment in lieu of reasonable notice and back payment.
The gravamen of the Putlands’ case was conveniently summarised by their counsel on the first day of the hearing as follows:
… these proceedings are, in essence, a claim for relief in connection with work arrangements between each of the applicants and the respondent in respect of the period September 2012 to 5 May 2015. Now, in order to properly understand the significance of what happened during that period, it will be necessary to lead evidence of things that happened a good deal earlier in time, especially in relation to Ms Putland, the first applicant.
… principally, these proceedings are a claim that each applicant was an employee and not an independent contractor of the respondent during that period, September 2012 to 5 May 2015, and that they were entitled to pay and other benefits prescribed by the Clerks—Private Sector Award 2010, and that they did not receive those benefits, which was a breach of both the award and section 45 of the Fair Work Act.
… they’re essentially award underpayment claims, these proceedings. The Clerks—Private Sector Award 2010 is an award made pursuant to Part 2-3 of the Fair Work Act, and it is therefore a modern award, and the significance of that … is a failure to comply with a provision for the modern award, such as the Clerks Award, is a breach of section 45 of the Fair Work Act.
Section 45 … is what is described as a civil remedy provision, and that is the effect of section 539(2) of the Act, and as a result of that, the applicants are entitled to apply to [the Court] for orders under Chapter 4, Division 2 of the Fair Work Act in respect of contraventions of section 45, and [the Court] will see that from section 540(1)(a).
[The Court] has [the] power to make orders … if satisfied there has been a breach of section 45. [The Court] has that power under section 545(2)(b), and that is a power to award compensation which the applicants seek to remedy the loss that they have suffered as a result of the underpayments they say have occurred. … the applicants claim pecuniary penalties under section 546(1) of the Fair Work Act.
…
If [the Court] is not satisfied that each of the applicants are employees, then that claim fails in its entirety, and [the Court] doesn’t need to go on to consider compensation or penalties for breach of section 45. Of course, [the Court] could take one view of Ms Putland’s situation and a different view of Mr Putland’s situation. The circumstances … are not entirely the same throughout that period.
Summary of Royans Wagga’s case
Counsel for Royans Wagga, Mr Bilal Rauf, indicated that the Royans Wagga’s case was that:
(1)There was a contract for services (i.e. an independent contractor arrangement) with Ms Putland which came into existence in 2005.
(2)There were variations to that contract, especially in 2007.
(3)There was no variation of that contract in 2012 in relation to the legal arrangements between the parties; rather, there was only a change in the manner in which the contract was to be performed. Accordingly, it was not a contract to vary a services contract such as to engage s 12(4) of the Independent Contractors Act.
Pleadings
The pleadings in this case provide a starting point for defining some of the areas of agreement and dispute, before turning to the evidence and submissions to determine the facts upon which reliance should be based, both agreed and requiring resolution, and the application of the above legal principles to those facts.
The parties join issue by way of a second amended statement of claim and an amended defence. An issue arose on the first day of the hearing in relation to the scope of the defence filed by Royans Wagga in reply to the Putlands’ alternative claim for relief under the Independent Contractors Act. That issue was clarified in the amended defence filed on 25 August 2016, and the parties were sufficiently able to address the issue in closing written and oral submissions on the final hearing day, 7 September 2016.
In some areas, the defence pleading provides a sufficient account for the purposes of the Putlands’ claim, with there being no need to resolve differences in expression. For example, the second amended statement of claim pleads that Royans Wagga operated a business that “includes truck accident and repair centres and a truck incident and emergency telephone reporting and response service”. In reply, the defence states that, at all material times, Royans Wagga operated a “heavy vehicle accident repair specialist business”, and an aspect of that business was an “accident management service”. The difference in expression does not appear to be material and in any event is not treated that way. These reasons will continue to refer to that part of Royans Wagga’s activities as the accident reporting service.
The second amended statement of claim pleads that Ms Putland entered into a contract for the performance of work by her in relation to the accident reporting service in or about May 2005. Royans Wagga’s defence describes that contract as being for the provision of services by Ms Putland (contract for services). While Royans Wagga did not take issue with the original commencement of the arrangement with Ms Putland being in 2005, it pleads in its defence that from about November 2007, the contract with Ms Putland was partly oral and partly in writing. Royans Wagga particularised a written proposal provided to Royans Wagga by Ms Putland and her father, Ronald (Ron) Pullen, dated 16 September 2007, and relied upon the written terms of the proposal. The relevant text of that document is of some importance and is reproduced in the course of the analysis of the evidence.
In relation to the relevant period from September 2012 to May 2015, it is pleaded on behalf of the Putlands that their relationship with Royans Wagga was, in substance and reality, an employment relationship governed by an unwritten contract of employment, the existence of which is to be inferred from conduct. Certain aspects of the pleaded conduct included stipulated hours of work, stipulated rates of pay, Royans Wagga supplying and installing equipment in the Putlands’ home and the duties and responsibilities of the Putlands in terms of what work was to be done and how work was to be carried out in general terms. Certain terms of the inferred employment contract were pleaded, including a term allowing either party to terminate the contract on reasonable notice. These allegations were all denied by Royans Wagga, on the basis that there was no employment relationship or contract of employment.
The parties had a starkly different stance in relation to who was responsible for how the work would be carried out, itself an important feature of the legal distinction between employment contracts and independent contractor arrangements as outlined above. Much of the pleading response by Royans Wagga to the details relied upon by the Putlands, apart from rates of pay, was either denied or pleaded by way of not knowing and therefore not being able to admit the allegations.
Chronology of primary evidence – documentary and from the key witnesses
Much of the following chronology of key objective events was either not in dispute, or was established by evidence that was not contradicted. Considerable assistance was gained from chronologies helpfully furnished by both parties, supplemented as needed by reference to the evidence.
Before the relevant period: 1944 – June 2012
The Royans business was started by Bill Andrews’ grandfather in 1944. Royans Wagga commenced operating from Copland Street, Wagga Wagga in 1980. In the period between the late 1990s and early to mid-2000s, an in-house call centre known as the radio base was in operation at the Copland Street premises.
In the period between 1999 and 2001, Ms Margaret Scott (also known as Margaret Hinchcliffe) was employed by Royans Wagga as an operator of the radio base. At various times, the radio base serviced not only Royans Wagga but also other Royans businesses in Dubbo, Brisbane, Sydney and Newcastle (known as O’Reilly’s Newcastle). Nothing apparently turns on which other Royans branches received the benefit of radio base work performed by the Putlands, nor when. The work included answering telephones, monitoring police radios/scanners and dealing with sales representatives in order to provide the accident reporting service. A written record of the information received about each accident or incident was made. Margaret Scott created a “log report” template for that purpose. Ms Scott carried out some of this work from her home, particularly on weekends.
In 2002, the Royans group of companies was split into separate entities with separate management structures. Mr Andrews was appointed as managing director of Royans Wagga and director of the holding company of Royans Wagga, Royans Dubbo Pty Limited.
In the period from March 2001 to 10 September 2016, Brett Haberecht was employed by Royans Wagga as a sales representative, and had dealings with the Putlands. His evidence is considered below.
On 4 April 2003, Ms Putland obtained an Australian Business Number (ABN) as an individual/sole trader. The ABN extract in evidence, obtained on 19 November 2015, recorded:
(1)two trading names – “Linda-Lewis” from 4 April 2003 and “MPOWER PT” from 13 May 2010;
(2)one business name – “TRILOGY FITNESS” from 2 March 2011;
(3)a last updated date of 27 October 2013; and
(4)a GST status of “Not currently registered for GST”.
No business names are recorded for Mr Putland. There was no evidence of any business name being registered which was associated with the accident reporting service.
In about May 2005, one of the then operators of the radio base, Kelly Flint, ceased working for Royans Wagga. Mr Andrews met with Ms Putland (at that time, Ms Pullen) and she commenced working for the Royans Wagga radio base from her home. Ms Putland’s evidence was that when she first started, only weekday hours were available but there might be an opportunity to cover some weekends for others. She later did weekend work and other hours.
In or about 2007, Ms Putland was asked to train a Royans Wagga employee, Nicole Debritt. Ms Putland attended the radio base at Royans Wagga to provide this training to Ms Debritt.
On 1 May 2007, Mr Putland obtained an ABN as an individual/sole trader. The ABN extract in evidence, obtained on 2 December 2015, recorded one trading name (“Shane Putland”), a last updated date of 13 June 2013 and a GST status of “Not currently registered for GST”. No business names are recorded for Mr Putland.
In September 2007, discussions took place between Mr Andrews, Ms Putland and Ron Pullen (Ms Putland’s father) concerning a proposal for the provision of radio base services. On 18 September 2007, Mr Andrews received an email from Mr Pullen enclosing a written proposal to Royans Wagga. On about 19 or 20 September 2007, further discussions took place between Mr Andrews and Mr Pullen concerning details of the proposal. The relevant portions of the proposal were as follows (as per original):
Please Note: The Following Proposal is Private and Confidential.
Attention: Bill Andrews
PROPOSAL to ROYANS WAGGA 16th-Sep-2007.
REFERENCE: Consideration of 24/7 Customer Service & Base Operation.
BASE LOCATION: [Putlands’ home address in North Wagga Wagga]
OVERVIEW:
We believe the Base Operation as it stands lacks the polish it needs to be complete and professional in its outlook for representing the very best interest of the Royan Group. We also believe the objectives to fix this problem can be achieved by way of the obligations outlined in the detailed proposal as listed.
An agreement subject to the conditions listed can be achieved by a contractual arrangement between the two parties from here on in called.
1.The Company: ROYAN GROUP.
2.The Prime Contractor: “NWB” NORTH WAGGA BASE.
An agreement would allow the NWB to focus on streamlining the entire operation to gel with newly implemented programs which includes training of staff to a standard that’s required i.e. emphasising the importance of the monitor situation and the proper liaising with open clients and Royan staff.
[In] accordance with our proposal the NWB intends to explore any available new technology … methods of scanning for possible accidents in areas we currently do not target. In addition the NWB have a plan to set up a complete new network of possible call out “part timers” and “spotters” also in areas we currently do not target.
…
Please see PROPOSAL attached and Note: {Any or part of this proposal is subject to either approval or negotiation.}
OBLIGATIONS OF THE NWB
(a) To ensure the smooth running of a customer service base operation which includes professional handling of the phone system, intense monitoring of scanner reports.
(b) To move forward with commitments pertaining to new programs as stated.
(c) Train staff …
(d)To invoice the company “Royan” once every week for wage commitments etc.
(e)To invoice the company “Royan” with phone A/c etc along with the attached phone A/c readouts as they become available.
(f)Appointee of the NWB “Linda Pullen” to inform the Appointee of the company of any major changes to the current situation of the NWB that may effect the company.
The Employee
# The NWB will be responsible for all staff employed by NWB i.e.
…
(b) Allocation of hours to the employee will be at the discretion of the NWB.
…
(d)Any complaint to the company “Royan” about an employee of the NWB will be liaised between an appointee of the company “Royan” and the management of the NWB.
(e)The NWB will not hesitate to remove any staff member found to be disloyal or not performing in the best interest of the company “Royan” or the NWB.
(f)Wages are the total responsibility of the NWB and employees will be required to hold an ABN No.
OBLIGATIONS OF THE COMPANY “ROYANS”
· The Royan management or their staff are not to interfere with the general running and management of the NWB unless of course deemed justified through discussion by NWB and the company “Royan”.
· The payment of wages etc will be paid by bank transfer on a given day on a weekly basis upon receipt of an invoice. The amount is yet to be determined by both parties.
…
· After the initial amount is determined, it is requested by NWB that this amount be negotiated every 2 two years from the given start date.
…
THE BENEFITS TO THE COMPANY “ROYANS”
…
· Lifting the burden of the radio base operation from its current Royan company manager would automatically open a door of valuable time he could use somewhere else and the company can then get on with what it does best.( Repairing Trucks)
…
· Contracting the base operation to an independent automatically creates incentives for the prime operator to succeed. This success would have to benefit the company.
· Linda Pullen and Ronny will lead the team and Ronny would begin to use his initiative to canvass work for the company …
· Instead of just sitting and waiting for phones to ring the NWB will exploit ways to filtrate the scan system enabling a better scan ear throughout a wider country area “I will explain details of this when we meet” in addition to engaging a truckie forum setup. We at NWB “and our staff” will make use of some down time to benefit the company.
· The NWB already has the infrastructure and the know how to run a commitment as proposed …
Please note:This proposal is draft form only and further discussion needs to take place between the stakeholders to achieve agreement status compatible to both parties.
PS. Bill I will call you soon so that we may discuss some of the finer items.
Thank you Ronny
On 10 October 2007, Ms Putland emailed a document to Bill Andrews. The covering email had the subject line “For the representatives” and was as follows:
Hi Bill,
Go over it and see what you think should/could be added, or changed.
Kind Regards, Linda
The document relevantly provided as follows (as per original):
Attention: Branch Managers/Representatives of the Royan Group.
You may be already aware, as of the 1st week in November 2007, the Royan base operation will undergo a major change in terms of the present, and the future interest of the Company. There has already been a considerable amount of time and effort injected into criteria that will be set in the new plan.
The base will appreciate your involvement in these changes and we welcome and encourage you to forward any ideas that you feel are relevant in the success of the new operation.
We have set a formula criteria in writing that all new and existing operators will stringently have to follow. { A copy of this action can be emailed at request }
All staff will undergo an intensive training period to ensure a professional customer service centre is in operation 24/7.
With the support of the Group, you can be sure that the base will continue in its efforts, striving for a professional outlook at all times, and implementing the new ideas.
Some Recommendations to Consider:
·To guarantee a more fair spotter payment policy.
·First Call to the base ideally should be from the spotter direct, not from a branch representative as this has proven to cause some friction in the past. However this would still have to be at the Reps discretion as we understand they too have their followers and in the short term this may be difficult to change but in the long term spotters should be encouraged to ring the base.
Please note: The integrity and honesty of the new base is to ensure the 1st Call is the 1st Call, without further ado.
·Branch representatives are asked to contact the base after they attend an accident scene, and inform the base of updates and outcome. This ensures a better and more complete log system without the need for callbacks, and memory jogs.
·Branch Representatives/ Royans Staff should be discouraged from discussing personal issues with base staff, unless it is directly involved with a current job. It is not acceptable to include base staff in personal disagreements/issues between branches/staff of the Royans Group.
·If an issue should arise with a base operator, you should contact Linda Putland as soon as possible with the problem so a suitable plan of action to rectify it can take place.
The base welcomes your suggestions/comments on how the base can further help you, and the Royans Group as a whole.
I wish to thank you for your support and of your consideration on the points above.
Kind regards,
Linda Putland …
…
In November 2007, Ms Putland commenced providing radio base services 24 hours a day, seven days a week from her home and the radio base situated at Royans Wagga closed. Royans Wagga describes this as being the point at which the written proposal furnished by Mr Pullen took effect.
On 23 November 2007, Mr Andrews sent an email to three Royans group managers, the relevant details of which are as follows (per original):
can we please keep in mind the radio base redistribution of charges as proposed. [Barry Blomeley, branch manager of Royans Brisbane] had to follow up with [Craig Martin, former head sales representative at Royans Brisbane] regarding former nemisis [sic] Ronny Pullen and any known acts of scullduggery [sic]. Please advise asap as this situation was first proposed a few months ago. In the meantime other branches are paying the bulk, but not getting the bulk of the calls. Perhaps their [sic] maybe other better suggestions.
Hope to hear from you soon.
In the middle of 2008, Mr Putland began assisting Ms Putland with the radio base work from home. In the period between August or September 2009 until February 2010, Ms Margaret Scott was paid (mostly via Ms Putland’s bank account, albeit Ms Scott gave evidence of some initial cash payments) to do some of the radio base work, mainly on weekends. Ms Scott received payments from Ms Putland into her bank account for that work, as reflected in Ms Scott’s bank statements. Ms Putland was taken to those bank statements in cross-examination, and specifically to 11 payments made to Ms Scott from Ms Putland’s bank account in the period from September to December 2009. It was put to Ms Putland more globally that the statements for the period from September 2009 to February 2010 included 18 payments to Ms Scott totalling $5,866.90. Ms Putland neither adopted nor dissented from that figure, but denied that payments took place outside that five‑month period.
As outlined at [50] above, on 13 May 2010, Ms Putland registered a trading name “MPOWER PT”. On 2 March 2011, Ms Putland registered a business name “TRILOGY FITNESS”. As at 3 April 2011, the website for Trilogy Fitness had a class schedule. In the period from 2011 to 2012, Ms Putland leased premises for the purpose of conducting a fitness business venture. These events are recorded for completeness, but they are incapable of making any difference to the conclusions required to be reached because they are not in any way connected to the nature of the relationship Ms Putland had with Royans Wagga. It would not make any difference, either way, if MPOWER PT or Trilogy Fitness amounted to a business conducted by Ms Putland, noting that the evidence did not go that far in any event. Although perhaps of marginal significance, Ms Putland knew about business names but apparently did not register the name “North Wagga Base” nor any variation of it in either of the Putlands’ names. However, she registered another business name after the 2007 proposal i.e. MPOWER PT. If anything, this tends to suggest that the Putlands did not subjectively regard themselves as running their own business and, objectively, did not in this respect behave as though that was what was taking place.
On the evidence of Mr Putland, in the period from about 2010 to about 2011, David Sloan was paid by the Putlands to listen to scanners.
In late 2011 or early 2012, Mr Andrews had discussions with Ms Putland regarding radio base reports being late. This was evidently part of the reason for the discussions that led to the radio base work during the week returning to the Hut on the Royans Wagga premises after July 2012.
Leading into the relevant period: June 2012 to September 2012
In June 2012, Mr Andrews came to see the Putlands at their home. They had a conversation in the backyard. The Putlands were told, amongst other things, that Royans Wagga management wanted to see the radio base returned to the premises of Royans Wagga. This was so that management could be sure that calls were being answered and the log reports were being completed.
On 29 June 2012, Mr Andrews emailed Ms Putland his “initial thoughts” on radio base shifts and pay rates as follows:
Hi Linda,
Initial thoughts are;
Radio base at Rep Hut during the week.
Monday 5am – 1pm, 1pm – 9pm, 9pm – 5am
Tuesday 5am – 1pm, 1pm – 9pm, 9pm – 5am
Wednesday 5am – 1pm, 1pm – 9pm, 9pm – 5am
Thursday 5am – 1pm, 1pm – 9pm, 9pm – 5am
Friday 5am – 1pm, 1pm – 6pm
Weekend Fri 6.30pm – Mon 5am
Weekend is valued at $800 and could be done at home.
Shifts from 5am -9pm are at $20 p/hr
Shift from 9pm – 5am is at $25 p/hr
Have a think about what shifts you would want to nominate for.
You could still submit your company invoice and add GST to the total.
Let me know what you think.
The Reps hut does have a reverse cycle air cond. & I would put a television in there.
Regards
Bill
Mr Putland ultimately agreed to do weekday shifts at a demountable building known as “the Hut” located at Royans Wagga’s premises in Wagga Wagga. Ms Putland ultimately agreed to work the weekend shift (Friday evening until Monday morning) from home.
From the end of July 2012, radio base work was performed during the week from the Hut.
In about July or August 2012, Mr Putland started working from 11.00 am to 5.00 pm in the Hut, Monday to Friday of each week. He filled in timesheets, submitted weekly invoices in his name and was paid by the hour for his work except on public holidays when he was paid a flat rate of $500 and later $400. Two other individuals, Mr Rodney Roy and Ms Kylie Yerbury, who were employees of Royans Wagga, were also doing radio base work in the Hut. Their agreed salaries were $20 per hour for day shifts and $25 per hour for night shifts. Mr Joel Roy, another employee of Royans Wagga, also briefly did some radio base work in the Hut before he was dismissed. Ms Yerbury’s work as an employee of Royans Wagga, in a role described in her contract of employment as “call centre receptionist”, was paid pursuant to the Vehicle Manufacturing, Repair, Services and Retail Award 2010 (Vehicle Award).
Also in July or August 2012, Ms Putland started working weekend shifts which commenced at 6.00 pm on Friday and ended at 5.00 am the following Monday. She submitted weekly invoices in her name only and was paid a total of $800 per weekend-long shift.
In the period from the middle to the end of 2012, Vicki McCully did radio base work in the Hut. She was paid by the hour, had an ABN and submitted a weekly invoice. Ms McCully was trained by Mr Putland. There was no evidence to suggest that the work she did differed in any way at all from the work that Ms Yerbury did as a designated employee.
On 13 August 2012, Mr Putland made a formal complaint in writing to Royans Wagga about “intimidation and bullying” in “the workplace”.
The relevant period: September 2012 – May 2015
On 25 September 2012, Mr Putland issued an invoice numbered “001” in his own name and for work completed by him only.
In the period from October 2012 to December 2012, Mr Putland’s shift patterns were irregular.
In the period from the end of December 2012 to March 2013, Mr Putland generally worked 5.00 am to 9.00 pm, Monday to Thursday and 5.00 am to 6.00 pm on Friday of each week.
On 9 January 2013, Mr Andrews wrote a letter to assist Mr Putland to obtain finance to buy a motor vehicle. The letter represented that Mr Putland “works for Royans Wagga on a subcontractor basis and earns $1520.00 per week”. In cross-examination, Mr Andrews could not recall whether he turned his mind to the question of whether Mr Putland was an employee or a contractor, although this evidence was not specifically tied to the time of the letter and referred instead to the period around August 2012 when discussions were happening about Mr Putland moving into the Hut.
From about March 2013, Mr Putland generally worked 5.00 am to 9.00 pm on Monday, 6.00 am to 9.00 pm on Tuesday to Thursday, and 6.00 am to 6.00 pm on Friday of each week.
On 19 December 2013, the Putlands were informed by an email from Mr Andrews that Mr John Cusack, a sales representative of Royans Sydney, would be doing the radio base work for the Sydney branch of Royans from his home from 3 February 2014.
On 3 February 2014, Mr Cusack started to do the Sydney radio base work from his home, referred to as “The Rock”, confined to weekdays during business hours. This appeared to be a nickname or convenient label, rather than any formal designation. The reference to the service provided from the Putlands’ home as “North Wagga Base” did not appear to have any substantially greater degree of formality.
On 5 August 2014, Steve O’Reilly (the Royans Group administration manager) sent an email to Mr Andrews, David Church (director of Royans Melbourne) and Peter Royan (director of Royans Brisbane) attaching a presentation from a Royans meeting in Port Douglas. The text of the email was as follows:
Hi All
Attached is the Presentation displayed during the Port Douglas meeting (I have also copied it in email form below)
I hope you have success in your directors discussion on the matter and hope you can form a unanimous position.
I think the opportunity exists to create a turning point on the way we do business, and another step up in professionalising the Group.
Let me know what I can do to help.
…
The text in the body of that email, which was copied from the presentation slides, included the following:
Why change anything ?
Our current system has been running for decades without any real change.
Regular complaints include – calls not being answered / incorrect information / operators half asleep / working out of a house / no updates
We currently have 3 bases – which increases costs and reduces efficiency
We cannot professionally promote the current set up to Insurers / Brokers / Fleet customers
NTI has had a professional assist line for over a decade
ISS have been going for 9 years & have many fleet customers on board.
…
If they [ISS] remain the only option for insurers, they will take over the market ( they are already well on their way )
We could benefit from a united approach that focuses our resources.
We can create an alternative to ISS – an option for insurers …
We can create an alternative to ISS, for Fleets …
We can create a new market – an Accident Assist service for Brokers …
Proposal to consider
ŸOutsource our bases (or at least the first point of contact)
ŸEngage professional call centre to handle inbound 1800 calls
Ÿ…
Ÿhtttp:// established, professional
Ÿ…
ŸCall based charging (minimal calls = minimal costs)
Basic Process
…
Advantages over our existing set up’s
ŸA service to market to brokers that is capable of removing the advantage ISS has built with insurers
ŸAn alternative to ISS for insurers
ŸOne professional set up with equipment & systems ready to go
ŸLikely savings
Ÿa live base system – where reps log in and update on the go
Ÿa live base system – that we can all log in to at any time
Ÿa live base system that can generate very useful reports (can be exported to XL and sorted -- so, by rep, by branch, by location etc)
Ÿno need for daily emails of 3 base sheets that many do not even read.
ŸWe could have a user pays split up amongst our branches – with costs split by actual usage (not rough estimates that can change year to year)
htttp:// on calls $1.90 per minute (average inbound 2-3 mins, outbound 1-2 mins)
Ÿ…
Summary
Ÿa Group solution that would improve our services and also allow us to compete with the very real threat from ISS.
Ÿan instant alternative to ISS
Ÿsomething that can trump ISS – via Brokers
Ÿreduced costs for all
Ÿ…
ŸIt could actually turn a profit
On 10 September 2014, Mr Andrews attended a meeting at the offices of “Well Done”, a call centre contractor, in Nowra concerning Well Done becoming the service provider for the Royans companies.
In October 2014, Ms Yerbury resigned from her position. She was the last remaining person working in the Hut apart from Mr Putland. The only way in which the Putlands considered they could continue to provide the accident reporting service on their own was to move all of the work to their home. As a result, the radio base work was then performed exclusively from the Putlands’ home. At the time that Ms Yerbury resigned, Mr Andrews was overseas. He did not subsequently demur from the decision taken in his absence.
On 14 November 2014, Mr Andrews attended a Royans managers meeting in the Hunter Valley. The minutes record that “Wagga base operators” are to be given three months’ notice “shortly”.
In early December 2014, Mr Andrews went to the Putlands’ home. On his account, he provided three months’ notice of termination of the contract. The Putlands each say that he told them there would be a trial of a call centre but did not say that their engagement would necessarily end. Mr Andrews claims to have spoken to Ms Putland over the telephone shortly after the face-to-face meeting in December 2014 – on his account, minutes later. He said that Ms Putland was hostile. According to Mr Andrews, during that telephone conversation, Ms Putland asserted that she and her husband were employees of Royans Wagga. In response, Mr Andrews became angry and said:
You can’t be serious. You are contractors. You work from home. You give an ABN invoice. You’re charged GST. I can see right through what you’re trying to do here.
Ms Putland gave evidence of a hostile telephone conversation taking place, but much later in time, in February 2015. The evidence from her on that conversation was not very clear.
In late December 2014, a trial of Well Done commenced in respect of only Royans Brisbane and its affiliate, O’Neills Newcastle.
In about January or February 2015, the Royans Group commenced discussions with an alternative supplier of call centre services, Fonebox.
In April 2015, Mr Andrews provided a reference by telephone for Ms Putland in relation to a position with Wagga Radio Cabs.
On 9 April 2015, Royans Wagga entered into a contract with Fonebox.
On 2 May 2015, Mr Andrews had a discussion with Steve O’Reilly, who confirmed that the phones were diverted from the Putlands to Fonebox on 1 May 2015. The Putlands therefore ceased all radio base work on 1 May 2015. Evidence was given by each of the Putlands and Mr Andrews that the Putlands were notified by John Cusack on 2 May 2015 that all phones had been transferred to Fonebox.
On 4 May 2015, final invoices were issued by each of the Putlands. The final invoices reflected payment for half of the final weekend worked by the Putlands, an amount arrived at following negotiation between Mr Putland and Mr Andrews, in recognition of the fact that the Putlands were not aware that the phones had been transferred to Fonebox.
Mr Andrews wrote letters on behalf of each of the Putlands dated 4 May 2015, apparently in fact written on 5 May 2015, regarding the termination of their contracts. The text of each letter was relevantly as follows:
To whom it may concern,
[Ms Putland or Mr Putland] … has ceased to be used by any of the companies in the Royan Group for Radio Base Operations. [Ms Putland or Mr Putland] was provided a minimum of three months notice as per contract requirements. The final date of operations was May 1, 2015. I believe [she/he] is no longer contracted to any other Companies for [her/his] Radio Base Services.
For completeness, it should be observed that, on 19 May 2015, Well Done were told their services would not be used by Royans Wagga.
Additional evidence for the Putlands
Linda Putland
Ms Putland was the first witness called for the applicants and gave oral evidence in chief, cross-examination and re-examination for most of the first and second hearing days. She came across as being an intelligent woman, who had commenced but not concluded tertiary studies. In the greater part, Ms Putland seemed to be doing her best to give a truthful account of events. Overall, she came across as a frank and forthright witness. There did not appear to be any immediate issue as to her honesty or whether she was doing her best to give a truthful account, even after cross-examination. However, it was put to Ms Putland at various points that certain events deposed to by her did not occur.
It was not squarely put to Ms Putland at any time that she was lying. Any shortcomings in her evidence are therefore best viewed as reflecting on reliability rather than dishonesty or other forms of adverse credit finding. Some issues did emerge about Ms Putland’s memory (which was not surprising given that the earlier events took place in the mid to late 1990s), her reliability, the accuracy of some parts of her evidence and her understanding of anything of a technical nature, including as to financial matters.
Ms Putland repeatedly said that she did not understand maths or numbers. She did not know what “CPI” meant. She credibly said that she provided information to her accountant for the purposes of tax returns, and completely relied on him as to what she could or could not include in her tax return, including, most particularly, allowable deductions.
The key parts of Ms Putland’s evidence warranting particular attention covered the following topics:
(1)Engagement of Ms Putland by Royans Wogga;
(2)Radio base between 2005 to 2007;
(3)Radio base between 2007 and 2008;
(4)Radio base between 2008 and 2012;
(5)Establishing the Hut: June 2012 onwards;
(6)The commercial call centre proposal, the issue of termination, and the Putlands ceasing to work for Royans Wagga; and
(7)Ms Putland’s evidence as to general matters.
Engagement of Ms Putland by Royans Wogga
On the topic of contract formation, in relation to the initial retention of Ms Putland by Royans Wagga, Ms Putland said that in May 2005 she had been looking for paid secretarial, receptionist or clerical work, and that her uncle, Mr Bert Cool, an employee of Royans Wagga, had organised a meeting between her and Mr Andrews. She said that when they met each other, Mr Andrews:
(1)confirmed that Royans Wagga was looking for somebody and that Mr Cool had told him of her prior experience;
(2)asked her if she would like to continue working from home, which she had been doing with a prior employer, Re-Car;
(3)outlined what the job would entail and what her duties would be, including:
(a)answering an 1800 number for the eastern seaboard of Australia;
(b)answering branch diversions whereby each Royans branch would divert their office phones through to the 1800 number at 5.00 pm every afternoon and she would have to pick that up and deal with any calls;
(c)monitoring and listening to police, ambulance, fire and rescue scanners and really concentrating for the words “accident” and “truck accident”;
(d) logging all call details; and
(e)at the end of the shift, emailing the logs through to the branch managers and representatives;
(4)told her that at this time, he could only offer her work on week days, although there might be the opportunity to fill in for the other two base operators, Ms Vicki Hayden and Ms Casey Hilton, for weekend shifts;
(5)took her into the radio base room, which was then located between an office and the staff room, and introduced her to Ms Hayden; and
(6)told her to sit there for a while and watch Ms Hayden take a few calls.
This description of the proposed work is largely consistent with the evidence Ms Putland gave of the work that she ultimately performed and which apparently never really changed.
On the question of remuneration, Ms Putland said that Mr Andrews told her that she would be paid in accordance with the Clerks Award, which he said he thought was $18 per hour. In cross-examination, it was suggested to Ms Putland that, as the Clerks Award had not come into existence until 2010, Mr Andrews had not referred to any award. Ms Putland denied that. I find it unlikely that Ms Putland either lied or made up the reference to an award, although she was clearly mistaken as it was an award that did not, at that time, exist. I find that she was given to believe that she would be paid in accordance with some kind of employment industrial award.
From 2005 onwards, the work or services carried out for Royans Wagga was not provided to anyone else. Ms Putland never offered to do the work for anyone else and never approached anybody or asked them if she could do work for anyone else, an assertion that was not challenged in cross-examination.
Radio base between 2005 to 2007
In 2005, Ms Putland had one telephone, one computer and an airways scanner by which the transmissions of the police, ambulance and fire brigade could be listened to. Royans Wagga supplied her with an extra telephone handset for the extra telephone line that she had installed, two old scanners, a CB radio and perhaps an office chair; they gave her more “stuff” over the years. Ms Putland’s telephone bills (including bills for the installation of the additional phone line) were ultimately paid by Royans Wagga. In May 2013, the ownership and account name for the telephone lines at the Putlands’ home was changed over to Royans Wagga.
In about August or September 2005, Mr Andrews asked Ms Putland if she would take on the weekends, or some weekends, filling in for Vicky or Casey, and at that time said that she was doing a good job. In contrast to the afternoon shifts which were paid at $18 per hour, payment for the weekend work was to be made against an invoice charging $750, being for the period from 5.00 pm on Friday until Monday morning. Ms Putland said that she was not allowed to put an hourly rate on the invoice, but rather just a number, $750.
The following comments can be made about some of the documents that were originally annexures to the affidavit of Ms Putland (which was not read, but instead was oral evidence required to be adduced) to which she was taken in oral evidence in chief:
(1)An ABN registered in the name of Ms Putland was obtained for her by her father (she not having any understanding of what they were at the time it was obtained) and was used on all of her invoices throughout the period that she was retained by Royans Wagga.
(2)A collection of incident reports from 2005 and 2006 which did not of themselves indicate the nature of the relationship between the Putlands and Royans Wagga.
(3)In relation to a sample copy of invoices from 16 November 2005 to 26 October 2007:
(a)For the first period from 16 November 2005 to 5 July 2006, the description on the invoices was “North Wagga Base Operations for” and then either “Weekends of” or “Afternoons of” followed by an identification of the particular days and then a flat rate figure for those days consistent with work being done by Ms Putland (at that time referred to on the invoices by her maiden name of Linda Pullen). As noted above, the flat rate for weekends for that period was $750.
(b)Ms Putland gave evidence about the different email addresses that appeared on the invoices for 2005 to 2007. This did not advance the case one way or the other.
(c)Ms Putland was taken to an invoice from July 2007 which had the words “Additional Hours per Vicki Dayshift”. She said that she believed Vicki (Ms Hayden) was either sick that day or may have been looking for another job at that stage and had to go away for the day, so she did Vicki’s dayshift. This evidence did not advance either case in any readily discernible way.
(d)In the period from 2005 to July 2006, Ms Putland’s invoices stated there was no registration for GST.
(e)An invoice claiming payment of Telstra telephone accounts by Royans Wagga in July 2006. (In about 2009 or 2010 the lessee of the phone lines at the Putlands’ home was changed from the Putlands to Royans Wagga so as to get “corporate benefits”.)
(f)For the later period from 12 July 2006 until later that month on 26 July 2006, GST was charged but soon after that it ceased being charged again.
Very few of these invoices make a reference to the number of hours worked.
Radio base between 2007 and 2008
Starting on or about 1 November 2007, Ms Putland had responsibility for the radio base 24 hours a day, seven days per week. Payment was made against invoices, with those invoices always including an ABN, and at various stages charging GST.
A substantial issue arising from the annexures to Ms Putland’s affidavit concerned a proposal to Royans Wagga that was, on the evidence of Ms Putland, apparently prepared by her father, Ron Pullen, the details of which are extracted at [54] above. The proposal in terms expressly refers to a “contractual arrangement between the parties”, with “North Wagga Base” being referred to as a prime contractor responsible for staff being employed, wages being paid and other independent contractor‑type features. This was not as much in favour of such an arrangement existing as might first appear. There was a live dispute between the parties as to whether this document forms any part of the arrangements that started on 1 November 2007 or whether it was a proposal that went nowhere and gave way in fact to a contract of employment arrangement. Ms Putland said that at some point in the middle or towards the end of 2007:
(1)Mr Andrews approached her and asked her if she would be interested in taking on the base full-time (“like, full on. Like, 24/7”);
(2)this conversation was initiated by Mr Andrews;
(3)Mr Andrews told her that the whole job would be worth $2,800 and that he wrote this down, but also said he couldn’t “just say this is going to be your job from now on, Linda”; he would invite other people to put in an expression of interest as well, being Vicki Hayden and John Cusack, who were respectively the original base operator and a prior base operator and sales representative of Royans Wagga;
(4)Mr Andrews told her that she had to put in an expression of interest and that she had no idea how to do it, but that Mr Andrews had said not to worry and gave her some things to put in the document, telling her that there needed to be such a process, but not to worry because she already had the job;
(5)she told her father about her conversation with Mr Andrews, and that he was a little bit worried at first about the 24/7 operation, but would support her in whatever decision she made;
(6)Mr Andrews invited her and her father out to Royans Wagga and sat down with them and gave them points to include in the expression of interest. Her father and Mr Andrews had a discussion on what she should put in and what might sound good; and
(7)the proposal was prepared by her father following that meeting and she was reasonably sure he had emailed it to Mr Andrews. There was never any further conversation about the document, she never saw it again, she forgot it even existed, and she never received a copy signed by Royans Wagga.
In Telum Civil (Qld) Pty Limited v Construction, Forestry, Mining and Energy Union [2013] FWCFB 2434; 230 IR 30, the Full Bench of the Fair Work Commission considered the meaning of “casual employee” in the FW Act. It was concluded that the term was not referable to the general law meaning of that term. Rather, it was found that specification of casual employment in federal awards has diverged from the ill-defined common law position in favour of the basis of engagement being determinative: see 36 [21]-[25], 38-40 [38]-[43], 40-1 [49]-[51], 42 [58], especially 38-9 [38].
The approach taken in Telum was adopted by White J in Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365, in which his Honour observed:
137The FWO submitted that both Mr James and Mr Kouka should be characterised as casual employees and that they had not been paid the casual loading. The submissions of the FWO proceeded on the basis that the status of the men as casuals or otherwise was to be determined by the general law. In this respect, the FWO referred to Reed v Blue Line Cruises Ltd (1996) 73 IR 420 and to Hamzy v Tricon International Restaurants [2001] FCA 1589; [2001] 115 FCR 78. In Blue Line Cruises, Moore J at 425 described casual employment in the following terms:
A characteristic of engagement on a casual basis is … that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.
To similar effect, the Full Court in Hamzy said at [38]:
… The essence of casualness is the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work. But that is not inconsistent with the possibility of the employee’s work pattern turning out to be regular and systematic.
138However, in my opinion, the approach for which the FWO contended is not the correct approach. Regard must be had instead to the definition of “casual employment” in cl 14.1, namely, that a “casual employee is one engaged and paid as such”. That definition is to be understood in the context of the Award as a whole and, in particular, in the context of its provisions concerning full-time and part-time employment.
…
141The word “engaged” in cl 14.1 of the Award is capable of more than one meaning. On one view, it can refer to the way in which the parties themselves identified their arrangement at its commencement. On another view, it can be a reference to the objective characterisation of the engagement, as a matter of fact and law, having regard to all the circumstances. Support for the former construction is seen in the decision of the Full Bench of the Fair Work Commission in Telum Civil (Qld) Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FWCFB 2434. The Full Bench said at [38]:
[38]All of the modern awards contain a definition of casual employment. Those definitions, notwithstanding some variation in wording, have the same core criteria:
(i)That the employee was “engaged” as a casual - that is, the label of “casual” is applied at the time of time of engagement; and
(ii)That the employee is paid as a casual, and specifically, the employee is paid a casual loading (set at 25% in all of the modern awards, subject to transitional arrangements), which loading is paid as compensation for a range of entitlements that are provided to permanent employees but not to casual employees.
(Emphasis added)
…
144It is sufficient in my opinion to state that, in the present case, the former construction draws support from two considerations and should be adopted. First, the term “specifically engaged” in cl 12 indicates that the focus is on the agreement of the parties at the commencement of the employment as to the character of the employment. Secondly, the requirement in cl 14.3 for the observance of formality at the time of engagement of a casual employee suggests that the word “engaged” is directed to the agreement made between the parties rather than to the manner and circumstances in which the employee does in fact carry out his or her work.
That approach has since been endorsed by Full Bench of the Fair Work Commission in its 4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541 at [72]-[85] (5 July 2017). In that way, Hamzy has been distinguished by confining it to the different legislation under consideration in that case, preceding the FW Act.
The same approach should apply here. In order to be employed as a casual under the Clerks Award, the employee must be “engaged as such”. In the circumstances of this case, that could not, and therefore did not occur for either of the Putlands, because they were never subjectively regarded by Royans Wagga to be employees at all, let alone casual employees. That leaves the choice between full-time and part-time employment.
The definition of full-time employment in cl 10 of the Clerks Award is the number of hours regarded as the full-time hours at the particular workplace, being 38 hours or less per week. While again the term “engaged” is used, the context is different from that pertaining to casual employees. Permanent employment, whether full-time or part-time, is the default in the Clerks Award based on the reasoning above. When a person is found to be an employee, they are engaged as such, and there is no parallel requirement that this be subjectively recorded for the person to be an employee. Were that not the case, the Clerks Award, and any other award expressed in similar terms, would have the effect of dispensing with the concept of employment whenever the subjective form of an independent contractor arrangement is deployed, which is going well beyond the work that any such award is capable of performing.
There was no evidence of what was regarded as full-time hours at Royans Wagga. Accordingly the default of 38 hours or less applies. In the relevant period, Ms Putland worked well in excess of 38 hours per week, and so was full-time. Mr Putland worked 30 hours per week in the period from sometime in July 2012 until the middle of October 2012. Thereafter he worked 38 hours per week or more. Any part-time period in the relevant period was confined to something less than two months from sometime in September to the middle of October. He was therefore overwhelmingly full-time and should be classified as such.
Breach of s 357 of the FW Act: misrepresenting employment as independent contracting
Section 357 of the FW Act, extracted at [32] above, relevantly has three limbs:
(1)The existence of an employment relationship, which has already been resolved in favour of the Putlands.
(2)Whether Royans Wagga, the employer, had represented to each of the Putlands that they were employed as, or performed work as, independent contractors.
(3)If the first two limbs within s 357(1) are made out, whether Royans Wagga had proved the defence in s 357(2) that when each representation was made, it did not know and was not reckless as to whether the contract was one of employment rather for services.
The Putlands submitted that Royans Wagga, via its managing director Mr Andrews, made representations to the Putlands on two occasions that they were engaged as independent contractors in breach of s 357 of the FW Act:
(1)by way of the letter written by Mr Andrews dated 9 January 2013, which stated that Mr Putland worked for Royans Wagga “on a subcontractor basis”; and
(2)in a telephone conversation with Ms Putland, following the conversation at the Putlands’ house in December 2014, upon which Royans Wagga claimed notice of termination was given, extracted above at [83].
As to the first of these asserted breaches, counsel for the Putlands submitted that the representation was clearly made (in the letter). It was further submitted that Mr Andrews during cross-examination:
(1)gave evidence that as far back as August 2012, he was aware of the distinction between an employee and an independent contractor, and that any labels used were not determinative; and
(2)when questioned about his state of mind when he wrote the letter, said he could not recall thinking about whether Mr Putland was an employee or a contractor.
Upon that basis, it was submitted that Royans Wagga cannot make out the defence because it had not shown that it did not know and was not reckless.
As to the second of those asserted breaches, counsel for the Putlands relied upon Mr Andrews’ own evidence in these proceedings that, in December 2014, he said to Ms Putland:
You can’t be serious. You are contractors. You work from home. You give an ABN invoice. You’re [sic] charged GST. I can see right through what you’re trying to do here.
It was submitted that there was no evidence that Mr Andrews (and thus necessarily, no evidence that anyone else at Royans Wagga) took any steps to satisfy himself of the correctness of his asserted belief that the Putlands were independent contractors. The only evidence led as to his state of mind was as to anger. Upon that basis, it was again submitted that Royans Wagga cannot make out the defence because it had not shown that it did not know and was not reckless.
Royans Wagga did not directly engage with this aspect of the case advanced on behalf of the Putlands. Instead it was submitted that their case relied upon it being established that there was a new contract of employment proposed in August or September 2012, because it was said to be not in contest that there was an independent contractor arrangement from 2005 to July 2012. That is not a concession that was either overtly made or available by implication. While the Putlands ran a case based on the more limited period from September 2012, presumably because that was considered their best case, that did not amount to any concession in relation to the earlier period. In closing submissions, counsel for the Putlands referred to any employment relationship existing from September 2012, if it had not existed earlier. However none of this is to the point. The prohibition necessarily fixes on a given point in time, as does the case advanced by the Putlands. At the time of the letter and at the time of the conversation, the Putlands were both employees, but had represented to them that each was an independent contractor. That must be the focus of consideration.
Royans Wagga is caught by the strict liability nature of the civil penalty provision and the limited scope of the statutory defence. For the reasons advanced on behalf of the Putlands, I am satisfied that both s 357 contraventions have been made out and that the defence has not been established for either.
I will hear the parties on penalty. I note, without expressing any concluded view, that relevant considerations may include whether the evidence already available, or perhaps sought to be adduced, establishes that Mr Andrews intended to obtain the benefits of an independent contractor arrangement and subjectively believed that this is what he had achieved on behalf of Royans Wagga, or had a less benign state of mind. The breadth of the contraventions and their duration will also be relevant.
Breach of s 536 of the FW Act: failure to provide pay slips
Section 536 of the FW Act, extracted at [32] above, requires an employer to provide an employee with a pay slip in the proper form within one working day of payment in relation to the performance of work. Section 536 is a civil remedy provision under Part 4-1 of the FW Act. The second amended statement of claim pleads that Royans Wagga was in breach of s 536 for failing to provide the Putlands with pay slips “at any time in respect of their employment”, i.e. during the pleaded employment period between September 2012 and May 2015.
The parties were in agreement that resolution of this issue followed the outcome of the employee/independent contractor issue. The parties also agreed that the Putlands were not provided with pay slips between September 2012 and May 2015 (or, in fact, before September 2012, though nothing turns on this given the scope of the claim brought). Evidence was given by Ms Putland, Mr Putland and Mr Andrews that confirmed that pay slips were not provided to the Putlands. For example, during a line of questioning in cross-examination on the letter written by Mr Andrews which stated that Mr Putland was employed on a “subcontractor basis” for the purpose of assisting Mr Putland to obtain vehicle finance, Mr Andrews said, “[Mr Putland] obviously couldn’t produce wage dockets to the financier…”. Closing written and oral submissions on behalf of Royans Wagga conceded that if an employment relationship was found during the relevant period, then Royans Wagga accepts that it did not issue pay slips in accordance with s 536 of the FW Act.
On the basis of the evidence and the concession made by Royans Wagga, I accept that the Putlands were not provided with pay slips by Royans Wagga between September 2012 and 2 May 2015, in breach of s 536 of the FW Act. The more difficult question is the scope of the breaches of s 536 of the FW Act and the penalty (if any) which is appropriate. The evidence demonstrated that Royans Wagga’s practice was to pay employees on a weekly basis, and the invoices submitted by the Putlands were paid on the same day as employees were paid. The evidence does not establish the number of breaches of s 536 for each of Mr Putland and Ms Putland. During closing oral submissions, counsel for Royans Wagga submitted that the Putlands worked interchangeably when conducting work from their home, and therefore it would be difficult to establish the hours worked by each of Mr Putland and Ms Putland. In my view, while perhaps the division of hours may be difficult to establish, the number of pay slips which should have been issued to each of Mr Putland and Ms Putland should be relatively easy to establish. For example, assuming that each of Mr Putland and Ms Putland worked at least one shift each per week from September 2012 to 2 May 2015, the number of pay slips required to be issued for each of them by Royans Wagga should be equivalent to the number of payment periods between September 2012 and 2 May 2015.
Given the absence of evidence on this point put forward by the parties, I grant the parties the opportunity to put on supplementary written submissions and supporting calculations in relation to the number of breaches of s 536 of the FW Act for each of Mr Putland and Ms Putland, in addition to submissions on the quantum of penalty, if any, which is appropriate for those breaches.
Failure to give reasonable notice of termination
The second amended statement of claim pleads that Royans Wagga breached the employment contracts with Mr Putland and Ms Putland by terminating each contract without notice. Royans Wagga denied any breach and submitted that reasonable notice of termination had been given to each of the Putlands during the conversation between Mr Andrews and the Putlands at the Putlands’ house in December 2014, referred to above at [83].
On the topic of notice being given, none of the Putlands or Mr Andrews struck me as being untruthful. Each of those witnesses was doing his or her best to depose truthfully and accurately to what had taken place. However, the recollections and perceptions of what took place were very different. That highlights the problem in giving oral notice of something as important as the end of either an employment or a contractual relationship. The onus was on Royans Wagga to prove that notice was given, not on the Putlands to prove that it was not. However, even if there was no such onus, the answer is still the same as I am satisfied, on the balance of probabilities, that neither of the Putlands had communicated to them what they understood to be notice of termination.
I am somewhat fortified in that conclusion because the alternative service provider arrangements for the radio base were not finalised at the time of the conversation at the Putlands’ house in December 2014, making the giving of any clear notice at that time difficult, at least as to a date, unless Royans Wagga was going to risk being without a radio base, or be forced to rely upon ad hoc arrangements, such as diverting calls to individual Royans branches. I am further fortified by the evidence given by the Putlands and Mr Andrews that the Putlands only became aware of the phones being finally diverted to Fonebox on the morning of 2 May 2015, suggesting formal notice was not properly given to the Putlands until that date.
Even if Mr Andrews did intend to give notice on behalf of Royans Wagga, and in fact uttered words which to his mind communicated that, it is entirely possible that he simply was not clear enough to communicate that, especially if he was trying to avoid confrontation. I am unable to form a different view because of his account of the telephone conversation that he says later took place with Ms Putland. That conversation does not go to notice, but rather to conflicting views of the nature of legal relations. Further, Mr Andrews’ evidence was that the conversation was with Ms Putland, so that conversation could not provide any support for Royans Wagga’s contention that notice had been given to Mr Putland.
I have concluded that no notice of termination was in fact given to the Putlands. In those circumstances, it falls for consideration what obligation to give notice was required by s 117 of the FW Act, and whether any different period should be implied in the Putlands’ contracts of employment. This is a further question to be resolved at the separate hearing to determine relief.
RELIEF
The relief sought by the Putlands in their amended originating application, omitting the abandoned adverse action claim and alternative independent contractor claim, was as follows:
1.A declaration that the First and Second Applicants were employees of the Respondent from September 2012 to 5 May 2015.
2.A declaration that the employment of the First and Second Applicants by the Respondent was covered by the Clerks Private Sector Award 2010 (Award).
3.A declaration that the Respondent has contravened the Award and s. 45 of the Fair Work Act 2009 (Cth) by:
(a)Failing to pay the First Applicant and Second Applicants at the applicable hourly rate for a Casual Level Three Call Centre Customer Contact Specialist;
(b)Failing to pay the First Applicant at the applicable hourly rate for overtime, penalties, weekends and public holidays;
(c)Failing to pay the Second Applicant at the applicable hourly rate for overtime, penalties and public holidays [noting that relief is not expressly claimed for Mr Putland in respect of weekend work, if any, including from October 2014 to early May 2015];
(d)Failing to make any superannuation contributions on behalf of the First and Second Applicant;
…
5.A declaration that the Respondent has contravened s. 357 of the Fair Work Act 2009 (Cth) by misrepresenting to the First and Second Applicant that the contracts of employment under which they performed work for the Respondent was a contract of services, where the First and Second Applicant performed work as an independent contractor.
6.A declaration that the Respondent has contravened s. 536 of the Fair Work Act 2009 (Cth) by failing to provide pay slips to the First and Second Applicant.
7.An order that the Respondent pay compensation to the First and Second Applicant for breaches of the Fair Work Act and the Award pursuant to s. 545(2)(b) of the Fair Work Act 2009 (Cth).
8.An order that the Respondent pay pecuniary penalties pursuant to s. 546(1) of the Fair Work Act 2009 (Cth), and that those penalties be paid to the First and Second Applicant pursuant to s. 546(3) of the Fair Work Act 2009 (Cth).
9.An order that the Respondent pay to the Applicants damages for breach of contract.
…
11.An order for payment by the Respondent to the Applicants of the amounts in order 9 above.
12.Such further or other order or orders as the Court deems fit, or as the case may require.
13.Interest up to judgment.
The above reasons mean that I have determined that the Putlands are entitled to most of the relief sought in their amended originating application, omitting the abandoned adverse action claim and the alternative relief sought under the Independent Contractors Act (because, at the first threshold, that Act does not apply because of the determination that the Putlands were employees of Royans Wagga). Accordingly, the Putlands are entitled to declarations:
(1)that they were employees of Royans Wagga:
(a)in respect of Ms Putland, from the date or dates in September 2012 to which invoice number 0421 issued by Ms Putland dated 25 September 2012 relates, to 2 May 2015 (being the date upon which the Putlands’ services were terminated by the diversion of the radio base telephones to Fonebox); and
(b)in respect of Mr Putland, from the date or dates in September 2012 to which invoice number 001 issued by Mr Putland dated 25 September 2012 relates, to 2 May 2015;
(2)that their employment in that period was covered by the Clerks Award for the classification “level three call centre principal customer contact specialist” on a full-time, permanent basis;
(3)that Royans Wagga contravened the Clerks Award:
(a)to the extent that they were paid below the applicable hourly rate (including as to any variation in that period) for a permanent, full-time level three call centre principal customer contact specialist;
(b)to the extent that they were not paid overtime, penalties, weekends and public holidays as required during that period;
(c)to the extent that superannuation contributions were not made as required,
the scope and quantum of such contraventions being dependent on further submissions and calculations, whether agreed or competing, noting that the resulting declaration be accompanied by an order that Royans Wagga pay to the Putlands the sums thereby ascertained;
(4)that Royans Wagga has contravened s 357 of the FW Act by misrepresenting to the Putlands that the contracts of employment under which they performed work were contracts of services under which they performed work as independent contractors on the following occasions:
(a)in the conversation Mr Andrews had with Ms Putland after the December 2014 meeting wherein he stated that she was a contractor; and
(b)in the letter dated 9 January 2013 and furnished to Mr Putland referring to him as a “subcontractor”; and
(5)that Royans Wagga has contravened s 536 of the FW Act by failing to provide payslips to them throughout the period of employment found in these reasons.
I have also determined that Royans Wagga is liable to pay pecuniary penalties pursuant to s 546(1) of the FW Act for the contraventions of ss 45, 357 and 536. What remains to be determined, following further submissions and any further evidence, is what the quantum of those penalties should be, and whether those penalties should be paid to the Putlands or to the Commonwealth.
The Putlands are also entitled to an order for payment in lieu of notice of termination of their contracts of employment. The period of notice that was required to be given, and the rate at which compensation should be ordered to be paid for that period, are further questions to be resolved at the separate hearing.
I see no reason why interest should not be ordered to be calculated and paid to the date when the final orders are to be made.
The closing oral submissions for both parties indicated that the appropriate course would be for the Court to hear the parties on costs. Accordingly, at this stage I propose to address the question of costs as part of the determination of outstanding issues and penalties.
The matter will be listed for a case management hearing for the purposes of making procedural orders for the hearing to determine the outstanding issues as to final relief, as outlined above. It may be that the procedural orders can be agreed between the parties and orders made in Chambers for that purpose.
I certify that the preceding three hundred and forty-three (343) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromwich. Associate:
Dated: 9 August 2017
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