Qoreishi v B2C Delivers Pty Ltd
[2024] NSWPIC 699
•13 December 2024
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Qoreishi v B2C Delivers Pty Ltd & Anor [2024] NSWPIC 699 |
| APPLICANT: | Sadi Qoreishi |
| RESPONDENTS: | B2C Delivers Pty Ltd |
| Fleet Flyers Pty Ltd | |
| MEMBER: | Adam Halstead |
| DATE OF DECISION: | 13 December 2024 |
| CATCHWORDS: | WORKERS COMPENSATION - Workers Compensation Act 1987 (1987 Act); Workplace Injury Management and Workers Compensation Act 1998 (1998 Act); claim for weekly compensation payments pursuant to section 37 of the 1987 Act; claim for medical treatment expenses pursuant to section 60 of the 1987 Act; whether the applicant was a worker pursuant to section 4 of the 1998 Act; written contract between parties; nature of contract and required services; whether employment or contractor arrangement; ZG Operations Australia Pty Ltd v Jamsek considered; Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd considered; Held – applicant not a worker; award for the respondent. |
| DETERMINATIONS MADE: | The Commission determines: 1. The applicant was not a worker for the purposes of s 4 of the Workplace Management and Workers Compensation Act 1998. 2. Award for the respondent. |
STATEMENT OF REASONS
BACKGROUND
These proceedings are about the nature of the contractual relationship between the parties. The applicant, Mr Sadi Qoreishi, entered a contract with B2C Delivers Pty Ltd (the first respondent). The core of their agreement was that the applicant would transport and deliver goods on behalf of third parties, a home appliance delivery service for certain well-known retail shops. It was a requirement of the contract the applicant would also cooperate with, and accept direction from, the second respondent, Fleet Flyers Pty Ltd.
The applicant claims he was injured during a delivery around 11 March 2022 and that he was a worker employed by either the first respondent or second respondent at the time. He seeks the payment of weekly compensation and expenses for medical and related treatment. The first respondent and second respondent dispute the claim made by the applicant.
The applicant filed an Application to Resolve a Dispute (ARD) in the Personal Injury Commission (Commission) on 29 August 2024 in relation to the disputed claim.
PROCEDURE BEFORE THE COMMISSION
After progressing through the usual preliminary conference and conciliation stages, the matter was before the Commission for arbitration hearing on 8 November 2024. Mr Trainor of counsel, instructed by Ms Limbaco of Walker Law Group, appeared for the applicant, who was also present. The first respondent and second respondent were represented by Mr Stiles of counsel, instructed by Ms Hudson solicitor of Hicksons Lawyers. An interpreter of the Farsi language was present at the hearing.
I am satisfied the parties to the dispute understood the nature of the application and the legal implications of any assertion made in the information supplied. I endeavoured to bring the parties to the dispute to an agreed outcome and am satisfied that the parties have had sufficient opportunity to explore settlement. They were unable to reach agreement on resolution of the dispute.
ISSUES FOR DETERMINATION
The Commission has been requested to determine the following issues in dispute:
(a) whether the applicant was employed by either respondent as a “worker” and, if so;
(b) whether the applicant sustained injuries to his cervical spine and lumbar spine in the course of employment and, if so;
(c) whether weekly compensation is payable in relation to any such injury, and if it is, the amount with reference to the applicant’s pre-injury average weekly earnings, which must also be determined, and
(d) whether expenses for medical treatment are payable in relation to any such injury.
The threshold issue for determination is whether the applicant was a “worker” at the time he was injured. The other issues in dispute become redundant if he was not.
EVIDENCE
There was no application to call oral evidence or cross-examine any witness at the hearing.
Documentary evidence
The following documents were in evidence before the Commission and considered in making this determination:
(a) ARD and attached documents, and
(b) Reply to the ARD with attachments from the respondents (Reply).
There was no objection by either party to the admission into evidence of any documents contained within the ARD and Reply.
FINDINGS AND REASONS
Was the applicant a worker?
Section 4 of the Workplace Management and Workers Compensation Act 1998 (the Act) defines a “worker” as:
“worker means a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing).”
There has been no claim about the existence of any training contract between the parties and so that aspect of the definition at s 4 is not relevant in these proceedings. I must therefore consider whether the applicant entered into or worked under a contract of service with the respondent. The applicant bears the onus, on the balance of probabilities, to establish that he was a worker according to s 4 of the Act.
Establishing that a contract of service exists involves the application of contract law principles such as offer and acceptance, consideration and mutual obligation. A contract of service requires a mutuality of obligation in the formation of the contract with the intention to create legal relations: Dietrich v Dare.[1] If there is unambiguous evidence a person offered services for reward, and the proposed employer accepted the offer on the basis that payment for those services would be made, there will be an intention to enter into legal relations, and a contract of employment will exist.
[1] (1980) 30 ALR 407.
The “multi-factor test” was developed by the High Court in Stevens v Brodribb Sawmilling Company Pty Limited[2] (Stevens), where consideration of various indicia is applied to determine whether an employment (contract of service) or principal and independent contractor (contract for services) relationship exists. Relevant indicia that indicate employment include the nature and extent of employer control, direction and supervision over a worker, mode of remuneration, provision and maintenance of equipment, obligation to work, hours of work and provision for holidays, deduction of income tax, ability to delegate work, the right of the employer to have a particular person do the work, right to suspend or dismiss the worker, right to the worker’s exclusive services, and the right to stipulate the place of work.
[2] [1986] HCA 1.
In Malivanek v Ring Group Pty Ltd[3] Roche DP referred to the indicia set out in Stevens as well as the observation of McColl JA in Australian Air Express Pty Ltd v Langford:[4]
“The second observation concerns the distinction between an employee and an independent contractor. That distinction has been said to be ‘rooted fundamentally in the difference between a person who serves his employer in his, the employer’s business, and a person who carries on a trade or business of his own’: Marshall v Whittaker’s Building Supply Co [1963] HCA 49; (1963) 109 CLR 210 at 217 per Windeyer J. Although this statement was criticised by Wilson and Dawson JJ in Stevens (at 34) as ‘posing the ultimate question in a different way rather than offering a definition which could be applied for the purpose of providing an answer’, it was referred to with approval by the majority in Hollis (at 38 – 39 [39] – [40] [Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21 (Hollis)]).”
[3] [2014] NSWWCCPD 4.
[4] [2005] NSWCA 96 at [16].
According to the more recent decision of the High Court in ZG Operations Australia Pty Ltd v Jamsek[5] (Jamsek), to establish whether a person is an employee or independent contractor, it is necessary to give primacy to the legal rights and obligations contained in the contract entered between the parties rather than their subsequent conduct.
[5] [2022] HCA 2.
In the related decision[6] of Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd[7] (Personnel Contracting),[8] referring to Stevens, the High Court found the characterisation of a relationship as one of employment or one of principal and independent contractor is to be determined by reference to ‘the totality of the relationship between the parties” at the time the contract was made rather than using a checklist approach and preferring subsequent conduct as being determinative.
[6] As far as similar legal concepts were considered, and the judgments were handed down together.
[7] [2022] HCA 1.
[8] At [34].
Importantly, both Jamsek and Personnel Contracting explain the principal factor to be reckoned with when characterising a workplace relationship is the terms contained in the contract entered by the parties. At the time also recognising that “a “label” which the parties may have chosen to describe their relationship is not determinative of the nature of the relationship”,[9] Wigney J provided a summary and explanation of various other principles arising from Jamsek and Personnel Contracting in the Federal Court decision of MC Pty Limited v Commissioner of Taxation[10] (MC Pty Ltd):
“…where the rights and duties of the parties are comprehensively committed to a written contract, the legal rights and obligations established by the contract are decisive of the character of the relationship provided that the validity of the contract has not been challenged as a sham, or that the terms of the contract have not been varied, waived or are subject to an estoppel… The task is to construe and characterise the contract made between the parties at the time it was entered…[11]
…
It follows that the fact that the parties’ subsequent conduct may not have precisely aligned with their contractual rights and obligations, or the fact that a particular contractual right may have never been exercised or utilised, will generally be irrelevant when it comes to characterising the relationship…[12]
…
… It should also be emphasised that the list of possible indicia must now be approached on the basis that the focus is on the parties’ contractual rights and obligations relevant to those matters, at least where the contract is wholly in writing, not on the way in which the work was actually carried out.”[13]
[9] At [26].
[10] [2022] FCA 750.
[11] At [17].
[12] At [20].
[13] At [22].
The contract
It is undisputed that the applicant entered a contract with the first respondent on 30 September 2020 (the contract). A related “cover letter” provided to the applicant refers to him being an “independent contractor with B2C Delivers Pty Ltd”.[14] The contract provides the cover letter forms part of the contract.[15] The letter states “B2C Delivers Pty Ltd is a transport company proving services to ANC and their clients”.[16] ANC is the trading name used by the second respondent. The contract was not challenged by the applicant to be a sham (ie, something that is not what it purports to be[17]). Nor was it argued to be impaired by some other legal deficiency.
[14] ARD p 111.
[15] ARD p 112 at clause 1.1.
[16] ARD p 111.
[17] Macquarie Dictionary.
The contract identifies and refers to the applicant as “Contractor” throughout. The first respondent is identified and referred to as “The Company”. At the heading “Status of Contractor” the contract states the applicant “is engaged as an Independent Contractor and will not be an employee, partner, or joint venture partner of the Company”.[18]
[18] ARD p 119 at clause 16.1.
As was confirmed by the Federal Court in MC Pty Ltd, the fact the contract may refer to the applicant being “Independent Contractor” as a “label” is not of itself determinative and does not necessarily make it so. The parties merely express an opinion about their relationship. That point of agreement reached between the parties in the contract is however a relevant consideration about how the parties viewed the relationship. In his statement dated 8 July 2022, the applicant considered himself to be a “sub-contractor”[19] who was “performing delivery and installation work” for the first respondent. Accordingly, it seems there was consistency over a period of almost two years[20] about how the applicant perceived the relationship.
[19] The submission that the applicant was not referring to legal status in that statement is noted and accepted.
[20] From the time of the contract to the date that statement was made was 21 months, nine days.
Applicant’s submissions
The applicant contends in this matter that despite being referred to as a contractor or sub-contractor, the nature of the arrangement was nonetheless one of employment. As an employee of the first respondent, he was therefore a “worker” for the purposes of s 4 of the Act since the legal relationship was a contract of service. He argues there are many relevant indicia to support his contention, not least of which is the nature of control exercised by the first respondent, either directly or through the second respondent.
In relation to the issue of control, it was highlighted that the applicant was required to “comply with reasonable directions and requests given or made by [the second respondent] in relation to [Chain of Responsibility] compliance and adherence to (Heavy Vehicle National Law) HVNL”.[21] He was also subject to a “Code of Conduct” established by the second respondent, as were any “Drivers and Offsiders” employed or otherwise retained by the applicant.[22]
[21] Reply p 94 at [1].
[22] Reply p 97 at [3].
Training was provided to the applicant, he was required to work during fixed hours, and he contends there was “exclusivity of service”. Payment for his services was made to the applicant on a “piece work basis” (that is, he was paid on output rather than hours worked). The applicant was required to wear a uniform provided by the second respondent and he presented to customers as their representative. These are all compelling indicia that the applicant was an employee, and the nature of the contract was such as to provide the respondents with the benefits of an employee without associated obligations. He should be found to have been a worker in the circumstances according to the applicant.
Although it is not for the applicant to “untangle the relationship between the respondents”, it is clear from the contractual terms that control of the applicant was with the second respondent in a manner not dissimilar to a labour hire arrangement. The onus upon the applicant is to establish the employment relationship, is not required for him to also identify the correct employer party it was submitted. However, the first respondent would be the appropriate employer according to the applicant because it was the contractual counterparty and paid the applicant per the contracted terms.
Respondents’ submissions
The respondents argue the applicant was at all times an independent contractor, not employed by either of them, and they primarily rely on the terms of the contract. The applicant was required to provide his own equipment, most significantly a motor vehicle to transport and deliver goods in accordance with the fundamental purpose of the contract. That is submission is accepted given the applicant’s evidence confirms he used a 2011 model Mitsubishi Fuso truck that he supplied for making deliveries. Although the truck was apparently legally owned by Mr Mohamed Haftgeli, an associate of the applicant and also his “off-sider” in the delivery work, the applicant nonetheless had some form of interest given they “purchased the vehicle together”.[23]
[23] ARD p 6 at [26].
The applicant had an Australian Business Number (ABN) at all relevant times, including prior to the date of the contract, and was registered for Goods and Services Tax (GST) reporting. As agreed, he supplied and used equipment related to the work[24] and there was no exclusivity of service as the contract allowed the applicant to work elsewhere. A fee was paid for each delivery. Business insurances were to be held by the applicant as a specific requirement of the contract and he was responsible for paying his own taxation and making superannuation contributions. He employed an “off-sider”, Mr Haftgeli. His tax returns leave no doubt the applicant was operating a business because they were submitted on that basis. He had also applied for a government Covid-19 grant as a business for financial support.
[24] Including trolleys according to the applicant’s statement: ARD p 9 at [42].
All these indicia demonstrate the applicant was at all relevant times an independent contractor according to the respondent. The contract contains the totality of the relationship between the parties and makes clear the applicant was a contractor. It is the primary source to be examined in accordance with the principles in Jamsek and Personnel Contracting. The respondent submitted the applicant was not a “worker” based on the evidence.
Consideration
It has not been disputed, and it is accepted, the written contract (including the documents incorporated into it, such as the cover letter and the “Chain of Responsibility” document) contains the terms of the relationship between the parties. The contract is to be given primacy accordingly: Jamsek and Personnel Contracting. It is the interpretation to be given to that agreement which is challenged by the applicant based on the indicia.
The various terms of the contract as identified by the applicant are certainly capable of being indicia of employment according to Stevens. Those terms do appear to establish an employment relationship, they have however been selectively extracted by the applicant and read without full regard to the complete document.
In relation to at least one of the indicia relied upon, I do not accept the applicant’s submission (which was also refuted by the respondents) that there was any exclusivity of service. The contract expressly states the contrary: “When not available for work, the [applicant] can work elsewhere”.[25] On another of the indicia, although the contract provided for set working hours, which is generally an indicator of employment, there was also flexibility in the contract for the applicant to increase income by providing additional work. It could also not be said that either respondent exercised significant control over the actual delivery and installations services provided by the applicant when in transit or on-site. I note these facts resemble some of those considered in Jamsek, where an employment relationship was not found to exist.
[25] Reply p 97 at [4.7].
It is evident that when read in its entirety the contract does not confine itself to the applicant as an individual. It anticipates a situation where he was at liberty to conduct and expand his business to have multiple employees and vehicles operating to make deliveries across a wider area. That is, it was clearly open to the applicant to have employed other persons to do the work for which he was contracted, he was not required to do that work personally. Such an arrangement could not usually, if ever, be accepted as an employment relationship.
The contract also specifically provided for the applicant to structure his business in such a way as to obtain workers compensation insurance coverage for himself, for example he was able to use a corporate entity, had he chosen to do so. The various documents provided to the applicant before entering the contract referred to various insurances, including workers compensation, thereby bringing those to his attention. It was open to him to obtain professional advice about his business structure and insurances. The evidence does not establish one way or the other whether he did so, but it seems not.
I consider clause 15 of the contract to be central to the relationship. It provides for “Employees and Agents” and makes clear the obligations and requirements of the contract are not personal to the applicant, they may be delegated by him to an employee or agent (which presumably refers to something like a sub-contractor for practical purposes). It was open to the applicant to conduct a business with his own employees or sub-contractors making deliveries where his role was to manage and coordinate the operations. He would bear ultimate responsibility to ensure performance on the contractual arrangements but was undoubtedly permitted by the terms of the contract to conduct a business considerably broader than his personal physical capacity would allow as an individual.
The essence of such an arrangement extends far beyond the confines of a contract of service. An employee is not able to employ staff and fully delegate the work that is the key subject of a contract, which is what is permitted in the contract here. It is worth repeating that the contract did not actually require the applicant to do the delivery work central to it.
The measures that have been argued by the applicant as employer control mechanisms in the contract are in effect parameters to ensure compliance with the respondents’ business requirements, including in the context of a contractor who potentially engages employees to perform the delivery work. When the contract is viewed from that perspective, the strictures it apparently contains are not personal to the applicant, but merely applied to him if he chose to perform the delivery work. In circumstances where he employed other persons to do so, the obligation for him under the contract was to ensure compliance by those employees.
Such arrangements are not at all consistent with an employment relationship between the applicant and first respondent or second respondent. Whichever is the appropriate party being an issue that has become unnecessary to determine.
As was underscored in Jamsek and Personnel Consulting, it is the terms of the contract that are the key determinant of the character of the nature of the relationship. I am reasonably satisfied that the contract between the applicant and the first respondent was a contract for services, that is, the applicant was a contractor not an employee. In circumstances where there was no contract of service, the applicant cannot have been a “worker” for the purposes of s 4 of the Act.
As the evidence does not establish a contract of service, further consideration of the role of the second respondent is not required. It is also unnecessary to examine the other issues in dispute between the parties because the threshold issue has not been met and so payment of workers compensation is not available to the applicant.
SUMMARY
The applicant was not a worker according to s 4 of the Act and in the circumstances, there must be an award for the respondent following determination of the application.
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