Rahimi v MDS Tiling Pty Ltd
[2018] ACTIC 1
•26 April 2018
INDUSTRIAL COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Rahimi v MDS Tiling Pty Ltd & Ors |
Citation: | [2018] ACTIC 1 |
Hearing Dates: | 9 and 10 April 2018 |
DecisionDate: | 26 April 2018 |
Before: | Magistrate Theakston |
Decision: | See [41] |
Catchwords: | WORKERS COMPENSATION – choice of employer - Territory or State of connection – liability of principal for uninsured contractor’s injured worker |
Legislation Cited: | Workers Compensation Act 1951 (ACT) ss 8, 11, 12, 13, 36B |
Cases Cited: | Avon Products Pty Ltd v Falls [2009] ACTSC 141 Hanns v Greyhound Pioneer Pty Ltd [2006] ACTSC 5 Tapia v Woolworths Limited [2016] ACTSC 129 Workcover Authority of New South Wales v Billpat Holdings Pty Limited [1995] NSWSC 49 Yaraka Holdings Pty Ltd v Ante Giljevic [2006] ACTCA 6 |
Parties: | Nazir Rahimi (Applicant) MDS Tiling Pty Ltd (First Respondent) Chase Building Group (Canberra) Pty Limited (Second Respondent) Pamir Tiling Services Pty Ltd (Third Respondent) Employers Mutual NSW Limited (First Respondents Insurer) |
Representation: | Counsel Mr A Muller (Applicant) Mr S Onitiri (First Respondent) Mr D Crowe (Second Respondent) Mr Y Qasemi (Director) (Third Respondent) Mr D Shillington (First Respondents Insurer) |
| Solicitors Slater + Gordon Lawyers (Applicant) HWL Ebsworth Lawyers (First Respondent) Bradley Allen Love Lawyers (Second Respondent) Self-Represented/Party in Person (Third Respondent) Hall & Wilcox (First Respondents Insurer) | |
File Number: | WC 318 of 2017 |
MAGISTRATE THEAKSTON:
Background
On 19 April 2016, the applicant was working on a building site at Kingston in the ACT. While mixing tiling adhesive, one of his trouser legs became entangled in the electric mixer. He attempted to remove his trousers from the device, but overbalanced and squeezed the trigger on the mixer. This caused his hand to become caught in the trouser material, which in turn causing a serious injury to his left thumb.
Consequently, the applicant applied for arbitration under the Workers Compensation Act 1951 (ACT) (‘the Act’).
A hearing was conducted to resolve a number of fundamental issues, namely:
(a)Was the applicant a worker for the purposes of the Act, and if so who was the applicant’s employer or contractor?
(b)Which jurisdiction is connected to the employment of the applicant?
(c)Is a principal contractor liable due to the applicant’s employer being uninsured?
Facts not in dispute
The following facts were not in issue and I make findings accordingly:
(a)In 1995, the applicant was born in Afghanistan. In 2013, he arrived in Australia as a recognised refugee without his immediate family.
(b)The applicant did not have any accredited employment skills. He had worked for three years, between the ages of 14 and 17, in Pakistan performing construction work. He had, and continues to have, limited English language skills.
(c)Mr Yazdan Qasemi was and remains the sole Director and Shareholder for Pamir Tiling Services Pty Ltd.
(d)Mr Medhat Eleisawy was and remains the sole Director and Shareholder for MDS Tiling Pty Ltd. MDS provides waterproofing, tiling and stone trade services to builders. Mr Robert Rae is employed by MDS as a project manager. His duties include running a number of projects simultaneous. He finds opportunities, prepares tender documents and engages others to perform the work. Mr Eleisawy performs similar duties.
(e)From early 2014, the applicant performed labouring work at locations and times directed by Mr Qasemi. That work contributed to trade work being performed on behalf of MDS. That work occurred at the following sites:
(i)in Canberra City, near the CIT;
(ii)in Belconnen;
(iii)in Franklin;
(iv)at the Bupa site near Weston Creek;
(v)in Darwin;
(vi)in Sydney; and
(vii)at the Prince Apartment site in Kingston.
(f)The applicant provided time sheets to, and was paid by, Mr Qasemi. Initially that was by cash, then cheque and later by deposit into the applicant’s bank account. Mr Qasemi did not provide the applicant with pay slips or similar documentation.
(g)The applicant liaised directly with Mr Qasemi in relation to what site to attend and when he was not well enough to attend work.
(h)On the work sites, the applicant was directed to perform specific tasks by either Mr Qasemi or fellow Afghani workers Mohammed, Ramazan, Zakir, or Kabir. (There is a dispute about whether Mr Rae on occasions also gave the applicant directions.)
(i)The applicant provided his own clothing and, later on, a spirit level. All other materials and tools were provided by others.
(j)The applicant believed he, Mr Qasemi and other workers were working for MDS.
(k)During the periods when the applicant worked at sites as directed by Mr Qasemi, he did not perform any work for any other person or organisation.
(l)While working on sites as directed by Mr Qasemi, the applicant lived in rented accommodation with other Afghani workers that was paid for by MDS. When the applicant worked in Darwin and Sydney, his accommodation and transport was funded by someone else. In Darwin, that was by RST Tiling Pty Ltd, who had engaged MDS to perform the work, and in Sydney it was by MDS.
(m)The work the applicant undertook at the direction of Mr Qasemi, was the applicant’s first job in Australia. Mr Qasemi was aware that the applicant was not familiar with Australian work practices and taxation requirements.
(n)Between late 2015 and March 2016, the applicant was not provided with work by Mr Qasemi, and obtained alternative employment with Canberra Group Tiling and later Emplace Pty Ltd. During at least part of that period, the applicant was required to contribute to the cost of his accommodation that had earlier been paid for by MDS.
(o)In late 2015 and 2016, Chase Building Group (Canberra) Pty Limited built a multi-unit building at Kingston, known as the Prince Apartments. Chase engaged MDS Tiling Pty Ltd to install the waterproofing and tiling for the building.
(p)In late March 2016, Mr Qasemi contacted the applicant and requested he work at the Prince Apartment site. He indicated that the work would take several months to complete.
(q)On 19 April 2016, the applicant seriously injured his left thumb when mixing adhesive at the Prince Apartment site. He attended hospital and underwent surgery. He was 21 years old at the time.
(r)In April 2016. MDS intended to pay $5,000 to the applicant. It erroneously paid $10,000 into the applicant’s bank account. It subsequently requested, through Mr Qasemi, a $5,000 refund, which the applicant arranged.
(s)Shortly after the injury, Mr Eleisawy made a claim on MDS’ workers compensation insurance policy in relation to the injury, with the applicant being described as an employee of MDS. On 19 May 2016, Employers Mutual NSW Limited provisionally accepted liability and made payments to the applicant and towards his medical expenses for a period of time before ultimately denying the claim.
(t)Pamir was not insured in the ACT for workers compensation.
Was the applicant a worker for the purposes of the Workers Compensation Act, and if so who was the applicant’s employer or principal contractor?
It was common ground that the applicant was a worker within the meaning of that term as defined in s 8 of the Act.
Out of completeness, I note that there was a submission made on behalf of MDS that s 12 of the Act applied. That provision relates to labour hire arrangements and provides an extension to the definition of ‘worker’ beyond the extended definitions contained in ss 8 and 11.
An application of the principles and indicia adopted by Crispin P and Gray J in Yaraka Holdings Pty Ltd v Ante Giljevic [2006] ACTCA 6 at [22] and [30], which distinguish a ‘contract of service’ from a ‘contract for services’, yields an overwhelming conclusion that the applicant was engaged in a contract of service. This is because the applicant was directed where, when and how to work and was patently a servant of another’s business and not carrying on a trade of business on his own behalf. He did not perform work for others at the relevant times; had no separate place of work; did not advertise his services to the world at large; did not bring significant tools or equipment; could not delegate his role to someone else; was paid a daily rate; worked in an unskilled capacity; and did not spend a significant portion of his remuneration on business expenses. In the absence of a ‘contract for services’, s 12 has no application.
There was a dispute about precisely who the applicant worked for.
The evidence
The applicant indicated that he believed he was working for MDS. He appears to have formed that view following conversations with fellow Afghani workers, and because MDS appeared to be the source of the projects in which he performed work. However, the applicant is not a sophisticated person. He is young, with limited education and had only been in Australia for a short period of time before his injury. He was patently unaware of Australian business and employment practices, as evidenced by his unfamiliarity with superannuation, tax, and the use of Tax File and Australian Business numbers.
Mr Qasemi described Pamir as performing waterproofing, tiling and stone work. The business was incorporated in 2010 and had provided services solely to MDS until 2016. All workers were Afghani and Pamir had 15 – 20 workers.
Mr Qasemi described Pamir providing a job to the applicant, without a written contract. Some of Pamir’s workers stayed in a house in Canberra. The rent and utilities for that house were paid by MDS, while the workers were performing work in support of MDS. At one point, MDS withheld part of a payment to Pamir as an offset against the rent MDS had paid for the house when the workers were not working on MDS sites but still residing in the house. Pamir paid the workers without withholding a component for that rent.
Mr Qasemi described paying the applicant at a daily rate, which increased over time. He denied discussing with the applicant any payment amount for the Prince Apartments job before the injury. He had spoken to the leading hand, Kabir, about the square metre rate the tilers would be paid. The applicant also claimed he had been paid a daily rate.
Mr Qasemi indicated that MDS would supply the materials and his workers would supply their own tools. He indicated an exception to this when Pamir provided a drill and drill bit. He also described providing the applicant with a broom and shovel. He indicated that the applicant did not need to provide his own tools, which I understand was because of his role as a labourer in support of the other workers.
Mr Rae indicated that MDS did not directly employ tilers. It only employed office staff and himself. When Pamir was engaged as a subcontractor for the tiling, it would submit invoices, which he drafted on behalf of Mr Qasemi due to Mr Qasemi’s poor handwriting, and the MDS office staff would arrange payment. That payment was based on the area of tiling completed. The arrangement was settled by a discussion and then a shaking of hands, rather than by the preparation of a written agreement. The only tools that MDS supplied were pallet jacks.
Mr Rae indicated he was not involved in the allocation of workers to various jobs, but did discuss the number of workers required for jobs with Mr Qasemi.
He went on to indicate that on the Prince Apartments project, the workers were supervised by the Pamir leading hand Kabir, and like all projects, he did not personally direct the tasks of the workers. He always went through either Mr Qasemi or a leading hand like Kabir. The only exception to that was if he had an issue with quality or safety. He conceded that he had the responsibility for the supervision of MDS projects and said that ultimately the buck stopped with him. I understood that to relate to what was achieved and when, and not necessary who performed the actual work or what precise methods were employed. I found Mr Rae’s evidence to be authentic and compelling. He was in a strong position to know the arrangements at the work sites and was far better placed to understand the subtleties of the subcontractor arrangements than the applicant. I therefore prefer his evidence to that of the applicants, who suggested that at times he was supervised by Mr Rae.
Mr Rae explained that he had described MDS as the employer of the applicant in an incident report, because MDS was responsible for the work site. He did not go on to provide any foundation for a conclusion that the applicant was an employee of MDS. It was not clear if Mr Rae considered the legal meaning of the term ‘employer’ when completing that form or when giving his evidence. In any event, any view Mr Rae may have about the applicant’s relationship with MDS is not determinative of the issue.
Mr Eleisawy described the employees of MDS as being limited to himself, Mr Rae and the two women who worked in the company office at Castle Hill. He described seeking the services of a subcontractor to perform the tiling trade work MDS had secured. He described that process as commonplace within the building industry. He indicated that at any time he had various subcontractors performing work on various projects.
Mr Eleisawy indicated that when choosing a subcontractor, he would negotiate the price per square metre and consider the subcontractor’s capacity to complete the job. That is, the number of tradesman the subcontractor had available for the job. He indicated that MDS would supply the tiles, grout, adhesive and spacers, and the subcontractor would be expected to provide its own tools.
Mr Eleisawy indicated that he was not at liberty to personally direct the tasks of a subcontractor’s staff, and speculated that if he tried to do so, he would be told to ‘go jump’. He conceded that he had made a workers compensation claim for the applicant, notwithstanding the applicant was not an employee of MDS. He said he had done so due to pressure from the builder and union, and a desire not to have the Prince Apartment and subsequent projects disrupted by union action.
The above evidence of Mr Qasemi, Mr Rae and Mr Eleisawy is largely consistent, and very close to the evidence of the applicant. Any difference from the applicant’s evidence can be explained by the applicant’s limited ability to perceive and understand the subtleties of company arrangements and work practices. Additionally, the applicant’s evidence, at [35] and [42] of his affidavit, that Mr Rae ‘supervised us’ is not necessarily inconsistent with MDS managing the quality of the work being performed by Pamir, and the Pamir leading hand supervising the Pamir workers. I accept the above evidence of Mr Qasemi, Mr Eleisawy and Mr Rae and make findings accordingly.
Consideration of the question
The evidence as a whole points to the applicant being engaged directly by Pamir. This is the case notwithstanding the applicant’s expressed belief, Mr Rae’s identification of MDS as the employer on a form, Mr Eleisawy’s completion of a workers compensation claim and MDS making a payment of $5,000 to the applicant.
The applicant was engaged as a result of negotiations between himself and Mr Qasemi. The latter was an officer of Pamir. There is no evidence that Mr Qasemi had actual or implied authority to engage a worker on behalf of MDS. In any event, that decision was made without any consultation with MDS. From the totality of the applicant’s evidence I infer that the applicant understood he was under the control of Mr Qasemi, or his delegate. The applicant’s own understanding of who he answered to is of significance: Workcover Authority of New South Wales v Billpat Holdings Pty Limited [1995] NSWSC 49 at [47]. The applicant was directed to attend particular work sites and to perform particular tasks by an agent of Pamir. He also worked as part of a team of workers engaged by Pamir and was paid by Pamir.
Pamir provided a trade service to MDS. While Mr Rae almost solely used Pamir as the subcontractor for the projects he was responsible for, and up until 2016 Pamir was providing work solely for MDS, MDS through Mr Eleisawy also engaged other subcontractors. There was inadequate evidence before me to support the submission that the arrangements described by Mr Qasemi, Mr Eleisawy and Mr Rae were a sham.
The provision by MDS of accommodation for the Pamir workers when in Canberra and Sydney, while a relevant consideration, does not persuade me that the applicant was not engaged directly by Pamir. I reach the same conclusion in relation to the accommodation and transport provided to the applicant by RTS and MDS in relation to the projects in Sydney and Darwin. The provision of benefits to workers by third parties or principal contractors is not unheard of and cannot, of itself, alter the legal relationship between a worker and the entity that engages that worker.
Accordingly, I find that the applicant was employed as a worker by Pamir.
Which jurisdiction is connected to the employment of the applicant?
The State of Connection or Employment Connection test is provided at s 36B of the Act. The test is a precondition for compensation to be awarded under the Act. It is a cascading test with three steps. The second step need only be considered if the answer is not provided by the first step. Similarly, the third step need only be considered if the second step is considered and does not yield an answer.
In the present case, the break in the applicant’s work with Pamir immediately before the Prince Apartment project may be of relevance. The applicant testified that he was told by Mr Qasemi that the Bupa job had finished and there was no work for him, and that Mr Qasemi would let him know when MDS got another job. During that break the applicant found alternative employment. In light of those comments attributed to Mr Qasemi, which I accept, I am not able to find that the work arrangement between the applicant and Pamir ceased and re-started prior to the Prince Apartment project.
The first step of the test involves a determination about in which Territory or State the applicant “usually works”? Relevant considerations for that test are provided at s 36B(6), which reads:
(6) In deciding whether a worker usually works in a Territory or State—
(a) regard must be had to the following:
(i) the worker’s work history with the employer over the previous 12 months;
(ii) the worker’s proposed future working arrangements;
(iii) the intentions of the worker and employer;
(iv) any period during which the worker worked in a Territory or State (a relevant place) or was in a relevant place for the purposes of employment, whether or not the worker is regarded as working or employed in the relevant place under the workers compensation law of the relevant place; but
(b) regard must not be had to any temporary arrangement under which the worker works in a Territory or State for a period of not longer than 6 months.
Gray J in Hanns v Greyhound Pioneer Pty Ltd [2006] ACTSC 5 at [26] accepted that ‘usual’ meant ‘habitual or customary, or that of “in a regular manner”’, and Higgins CJ in Avon Products Pty Ltd v Falls [2009] ACTSC 141 at [43] observed that the test was ‘not a merely mathematical exercise’.
For the majority of 2014 and 2015, the applicant worked for Pamir at six work sites. Four of those sites were within the ACT. His first and last sites were within the ACT. For four months in the early part of 2015, the applicant worked in Darwin.
Mr Qasemi drew a distinction with the arrangements in Darwin. While he conceded he sent the workers to Darwin and paid them for the work they did in Darwin, he said that work did not relate to him because, as I understand it, he did not make any profit on that job. He also did not personally attend Darwin or monitor the work. He made the workers available for the project in Darwin because that was better than them sitting in Canberra without a job. I accept that evidence.
That arrangement was therefore exceptional in nature and was not how Pamir ordinarily conducted its business. The Darwin project could not be described as just another part of the applicant’s usual job. It also obviously involved the applicant moving out of his usual accommodation and temporarily relocating to the other side of the country. It amounted to a clear departure from the way the applicant habitually or customarily worked and the way Pamir habitually and customarily operated.
Mossop AsJ, as he was then, in Tapia v Woolworths Limited [2016] ACTSC 129 at [35] made the following observations about the temporary arrangement exclusion provided at s 36B(6)(b) of the Act:
It may therefore be applied in circumstances where the place or places where the worker usually works has been distorted by a temporary arrangement of less than six months. The appropriate approach is to work out where the worker usually works having regard to all the facts. Having done that, the temporary arrangement exclusion can be applied if the place or places where the worker usually works has been affected by a temporary arrangement. The arrangement must be a temporary departure from what would otherwise be the usual state of affairs. If there is such a temporary arrangement then the exercise of determining where the worker usually works must be undertaken without regard to such temporary arrangements.
I note that, other than the Darwin and Sydney exceptions, the applicant ordinarily worked on building sites located within the ACT. Due to the exceptional and impermanent nature of the Darwin project, I characterise that Darwin project as a temporary arrangement. Accordingly, I will have no regard to the applicant’s work in Darwin for the purpose of the first step of the Employment Connection test.
That leaves a history where the applicant ordinarily worked on sites in the ACT, with the one exception when he worked for a brief period on a site in Sydney. The proposed future working arrangements were limited to the applicant working on the Prince Apartment site in the ACT for several months. Both the applicant and Pamir intended that to occur, and there was no evidence of any other intentions by either the applicant or Pamir. On the evidence I am not persuaded that the brief single placement within NSW extends the location of where the applicant usually worked to include NSW.
Accordingly, I am satisfied on the balance of probabilities that the applicant usual worked in the ACT, and I make that finding.
Consequently, the ACT is the Territory or State of connection.
Is a principal contractor liable due to the applicant’s employer being uninsured?
I find that MDS was carrying on a business and it entered into a contract with Pamir for the provision of tiling services which was part of MDS’ business. I further find that the applicant was a worker employed by Pamir and he was injured while carrying out the work which was the subject of the above contract. I find that Pamir was uninsured.
Accordingly, MDS is liable to pay to the applicant any compensation that MDS would have been liable to pay if the applicant had been employed by MDS, pursuant to s 13 of the Act.
Orders
I make the following declarations:
1. The applicant was a worker for the purposes of the Workers Compensation Act 1951 (ACT) and employed by Pamir Tiling Services Pty Ltd.
2. The Australian Capital Territory is the Territory or State of connection for the applicant.
3. MDS Tiling Pty Ltd is liable to pay to the applicant any compensation that it would have been liable to pay if the applicant had been employed by it.
| I certify that the preceding forty-one [41] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Magistrate Theakston. Associate: Sam Lynch Date: 26 April 2018 |
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