Rus and Comcare (Compensation) - [2016] AATA 18

Rus and Comcare (Compensation) [2016] AATA 18 (20 January 2016)
Division:  GENERAL DIVISION
File Number:  2014/4611
Re:  CHRISTINE RUS
APPLICANT

And:COMCARE
RESPONDENT

DECISION
Tribunal  Deputy President S A Forgie
Date  20 January 2016
Place  Melbourne

The Tribunal decides to:
affirm the decision of the respondent dated 10 July 2014 affirming its decision dated 15 April 2014 refusing the applicant’s claim for compensation under the Safety, Rehabilitation and Compensation Act 1988.

……[sgd]……………….
Deputy President

CATCHWORDS – COMPENSATION – employee – whether employed by a Commonwealth authority under a law of the Commonwealth or under a contract of service – evidence inconclusive – decision affirmed.
LEGISLATION
Administrative Appeals Tribunal Act 1975 s 37
Administrative Decisions (Judicial Review) Act 1977 ss 3 and 13
Australian National University Act 1946
Commonwealth Employees’ Rehabilitation and Compensation Amendment Act 1992 s 4
Commonwealth of Australia Constitution Act s 67
Compensation (Commonwealth Government Employees) Act 1971
Income Tax and Social Services Contribution Assessment Act 1936
Income Tax Assessment Act 1936 ss 221A(1) and 221C(1A)
Military Rehabilitation and Compensation Act 2004
Public Service Act 1922 ss 47, 47(1) and 47(7)
Safety, Rehabilitation and Compensation Act 1988 ss 4(1), 4AA, 5, 5(1), 5(1)(a), 5(1)(b), 5(1A), 5(2)(b), 5(6A)(a)(i), 5(6A)(b), 5(8)(a), 6A(2A), 7(1), 14, 16, 17, 17(1), 17(3), 17(4), 18 and 124
Superannuation Act 1922 ss 4(1), 4(5), 4(5)(b), 4(6)(a)-(c) and 82
Wool Industry Act 1962 ss 5(1), 8(1), 8(2)(a), 24(1), 24(2), 24(2)(b), 27, 27(2) and 75
Workers Compensation Act 1958 (Vic) ss 3(1) and 3(2) to 3(7DA)
Workplace Relations Act 1996 ss 170CB, 170CB(1)(a), 170CD(1), 170CD(1)(a) and (b), 170CE and 170CK
CASES

Australian National Airlines Commission v Newman 162 CLR 466; 70 ALR 275
Australian National University v Burns [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67
Australian National University v Lewins (1996) 68 FCR 87; 138 ALR 1
Burns v Australian National University [1982] FCA 59; (1982) 61 FLR 76; 40 ALR 707
Commonwealth of Australia vs Cronwell [2007] HCA 16; (2007) 234 ALR 148
General Newspapers Pty Limited and Others v Telstra Corporation 1993] FCA 473; (1993) 45 FCR 164; 117 ALR 629
Griffith University v Tang [2005] HCA 7; (2005) 221 CLR 99; 213 ALR 724; 82 ALD 289
Hollis v Vabu Pty Limited [2001] HCA 44; (2001) 207 CLR 21
McDonald v Director-General of Social Security [1984] FCA 57; (1984) 1 FCR 354; 6 ALD 6
Neale v Atlas Products (Vic) Pty Ltd [1955] HCA 18; (1955) 94 CLR 419
Re Australian Industrial Relations Commission and Another; Ex parte Commonwealth [2005] FCAFC 204; (2005) 145 FCR 277
Re Hocking and Commonwealth of Australia (1987) 13 ALD 545
Scharer v New South Wales [2001] NSWCA 360; (2001) 53 NSWLR 299; 116 LGERA 217
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
Stevens v Brodribb Sawmilling Company Proprietary Limited [1986] HCA 1; (1986) 160 CLR 16; 63 ALR 513
World Book (Australia) Pty Ltd v Federal Commissioner of Taxation (1992) 27 NSWLR 377; 108 ALR 510
OTHER MATERIAL
Chambers 21^st Century Dictionary, 1999, reprinted 2004, Chambers

Commonwealth Employees’ Rehabilitation and Compensation Amendment Bill 1992
Encyclopedia of Australian Science 2015
REASONS FOR DECISION

On 13 February 2014, Mrs Christine Rus lodged a claim for compensation under the Safety, Rehabilitation and Compensation Act 1988 (SRC Act) in respect of the death of her late husband, Mr Francis Michael Rus, due to mesothelioma. The basis of her claim was that her late husband contracted that disease when employed by the Australian Wool Board (AWB) in 1965 and 1966. The sole issue in this case is whether Mr Rus was an employee of AWB in those years. If he was, the parties agreed that Mrs Rus was entitled to compensation on the basis that his death had resulted from a disease, being lung cancer caused by asbestos. That was a disease specified by the Minister in a legislative instrument under s 7(1) of the SRC Act as a disease related to employment involving exposure to asbestos.

Comcare initially decided that Mr Rus had not been an employee of the AWB at the relevant time, or at all. Therefore, he was not entitled to compensation regardless of the Minister’s having specified the disease from which he died. Comcare made its decision on 15 April 2014 and affirmed that decision on 10 July 2014. On the evidence, I have decided that I am not satisfied that Mr Rus was an employee of AWB but, equally, I am not satisfied that he was not. For reasons I give below, that means that there is no basis on which to alter Comcare’s decision and I affirm it.

BACKGROUND

Mr Rus, who was born on 30 September 1950 first sought treatment for his mesothelioma in the latter half of 2012. On 7 January 2013, he lodged a writ in the Supreme Court of Victoria seeking damages against Amaca Pty Ltd (formerly James Hardie and Co Pty Ltd) (James Hardie) and others for the injuries arising from his use of products made and sold by James Hardie. In his Statement of Claim,[1] Mr Rus detailed the products made by James Hardie and that he had used in the course of his work as a maintenance worker with AWB and another organisation. While with AWB, he had worked at its warehouses at Somerton Road, Brooklyn and Altona. He was required to maintain and repair the warehouses’ walls and rooves, which were constructed from asbestos cement sheets, and their guttering, which was made of asbestos cement. Mr Rus stated that he had used a grinder to cut out the asbestos sheets in need of replacement and to cut new asbestos sheets to take their place.
[1] Exhibit E

Various medical reports were obtained. Among them, was a report dated 24 February 2013 by Professor Richard Fox, an Honorary Consultant in the Department of Clinical Haematology and Medical Oncology at the Royal Melbourne Hospital. Professor Fox was of the view that Mr Rus’s malignant mesothelioma was almost certainly due to asbestos exposure.[2] His opinion was supported by Mr Barnett, a Cardiothoracic Surgeon, in a report dated 20 March 2013.[3] Dr Roger Woodruff, a Consultant Physician, also reached the same diagnosis saying that malignant mesothelioma occurs rarely, if ever, in adults except after exposure to asbestos dust.[4]
[2] Documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T documents); T3.7 at 30
[3] T documents; T3.8 at 32
[4] T documents; T3.9 at 35

On 25 April 2013, Mr Rus reached an agreement with the defendants in the Supreme Court proceedings to settle them. The basis of the settlement was that, without any admission of liability, the defendants paid him a total of $1,000,000 in damages and inclusive of costs and disbursements. Without admitting that Mr Rus had ever been an employee of AWB, Comcare paid 10% of that sum. The basis of its doing so was that it owed a duty of care to those working on its premises regardless of whether they work as independent contractors or as employees. Comcare paid its contribution of $100,000 to Mr Rus less any amounts it was required to pay to the Department of Veterans’ Affairs under the Veterans’ Entitlements Act 1986 and the Military Rehabilitation and Compensation Commission whether under the Military Rehabilitation and Compensation Act 2004 (MRC Act) or under the SRC Act.[5]
[5] Deed of Release of Claim executed on 25 April 2013: Exhibit 2

Some seven months later, on 23 November 2013, Mr Rus died. Mesothelioma was specified as the cause of his death on his Death Certificate.

LEGISLATIVE FRAMEWORK

Section 14 of the SRC Act provides that, subject to Part II, Comcare is liable to pay compensation in accordance with that legislation in respect of an injury suffered by an employee if the injury results in death, incapacity for work or impairment.
Section 17 of the SRC Act applies “… where an injury to an employee results in death.”[6] Subject to the section itself as well as to ss 16 and 18, compensation is payable in respect of the injury where an employee leaves dependants, some or all of whom were at the date of his or death wholly dependant on him or her. That compensation is payable in accordance with Comcare’s directions for the benefit of those dependants. That is the effect of s 17(3). Provision is also made in s 17(4) for the payment of compensation in respect of the injury where an employee dies leaving dependants partly dependant on him or her. As Mr Rus died on 23 November 2013 and so after the SRC Act commenced on 1 December 1988, any amount of compensation payable under s 17 is not modified by the transitional provisions of Part X and, in particular, those of s 124.
[6] SRC Act; s 17(1)

The word “employee” has the meaning given by s 5 of the SRC Act:[7]
“employee means:
(a)a person who is employed by the Commonwealth or by a Commonwealth authority, whether the person is so employed under a law of the Commonwealth or of a Territory or under a contract of service or apprenticeship; or
(b)a person who is employed by a licensed corporation.”
[7] SRC Act; s 4(1)

Section 5(1A) of the SRC Act expands upon paragraph (b) of the definition when it provides:
“For the purposes of paragraph (b) of the definition of employee in subsection (1), a person is taken to be employed by a licensed corporation if, and only if:
(a) a person performs work for that corporation under a law or a contract; and
(b)pursuant to that law or pursuant to the law that is the proper law of that contract, as the case may be, the person would, if that corporation were not a licensed corporation, be entitled to compensation in respect of injury, loss or damage suffered by, or in respect of the death of, the person in connection with that work.”

The word “employed” and its various forms are not defined. What the definition of “employee” goes on to do is to include and exclude specific classes of person. So, for example, a member of Parliament or a Minister is excluded from the class of persons to whom the SRC Act applies by s 5(8)(a). A member of the Defence Force is expressly included by s 5(2)(b) and the Minister may, by legislative instrument, declare that certain persons holding an honorary rank in the Defence Force before the commencement of the MRC Act on 1 July 2004 are to be taken to be employed by the Commonwealth in relation to those acts specified in the instrument.[8]
[8] SRC Act; s 5(6A)(a)(i) and (b) . Since 1 July 2004, compensation for members of the Defence Force is provided under the MRC Act for injuries and aggravations suffered after 1 July 2004: SRC Act; ss 4AA and 6A(2A).

Returning to the definition of an “employee”, reference is made to a “Commonwealth authority”. That is a term that is also defined and includes, among others:
“a body corporate that is incorporated for a public purpose by a law of the Commonwealth, other than a body declared by the Minister, by legislative instrument, to be a body corporate to which this Act does not apply; …”[9]
[9] Paragraph (a) of the definition of “Commonwealth authority”: SRC Act; s 4(1)

The AWB was a Commonwealth authority of this type. First, it was established as a body corporate by a law of the Commonwealth being the Wool Industry Act 1962 (WI Act). Section 8(1) of Part II of that Act provided that:
“For the purposes of this Act, there shall be a Board by the name of the Australian Wool Board.”

Section 8(2)(a) provided that It was a body corporate.

Second, it was established for a public purpose being the promotion and development of the Australian wool industry. That is apparent from the functions it was established to perform when read with the objects of the WI Act. The AWB’s functions were:
“(a) to promote the use of wool and wool products in Australia and other countries;
(b)to inquire into, and from time to time report to the Australian Wool Industry Conference upon, methods of marketing wool and any other matters connected with the marketing of wool; and
(c)such other functions as are conferred on the Board by this Act or, being functions conducive to the achievement of an object of this Act, are approved by the Minister.”[10]
[10] WI Act; s 24(1)

The objects of the WI Act were:
“(a) to promote the export from Australia of wool and wool products;
(b)to promote trade and commerce in wool and wool products among the States, between States and Territories and within the Territories;
(c)to encourage the production, and the use, of wool and wool products in the Territories; and
(d)to ensure the availability, when a state of war, or danger of war, exists, of wool stores for use for the purposes of the defence of the Commonwealth,
…”[11]

[11] WI Act; s 5(1)

Part II of the WI Act came into operation on a date fixed by Proclamation. Although I cannot find that Proclamation and the issue was not in dispute between the parties, I find that the AWB came into being on or about 1 May 1963 and continued until it was replaced by the Australian Wool Corporation on or about 1 January 1973.[12] Therefore, I am satisfied that the AWB had been established and was functioning in the years in issue in this case.

CONSIDERATION

What does “employed” mean?

[12] Encyclopedia of Australian Science 2015: submissions

Mr Dimsey took a more evidence based approach to this issue and I will return to his submissions on the point below. On behalf of Comcare, Ms Wright of counsel submitted that the Commonwealth is incapable of entering into a common law employment relationship with a person unless it does so under statute or, relying on s 67 of the Commonwealth of Australia Constitution Act (the Constitution), by way of the Governor-General in Council. Formal steps are required to establish a statutory engagement. Even if a person were to meet the test of employment under the common law,[13] a person cannot be a Commonwealth employee unless engaged under a Commonwealth statute. Ms Wright relied on the judgment of the Full Court of the Federal Court in Re Australian Industrial Relations Commission and Another; Ex parte Commonwealth[14] (Arends). The Commonwealth is not restricted in its ability to enter into contracts for services with, relevantly, independent building contractors.
[13] Ms Wright referred to the indicia set out by the High Court in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; Mason, Wilson, Brennan, Deane and Dawson JJ
[14] [2005] FCAFC 204; (2005) 145 FCR 277; Wilcox, Gyles and Bennett JJ

B.Reasoning

I will begin with the case of Arends on which Ms Wright relied. Over a period of almost eight years, Mr Arends had worked as a radiographer at HMAS Albatross. Every year or so, he signed a contract for periods of between 12 and 14 months. In each, he was described as an “independent contractor”. Before the expiration of his last contract, the position of radiographer was advertised and Mr Arends unsuccessfully applied for it. He remained working in the position until the selected applicant commenced duties. Under s 170CE of the Workplace Relations Act 1996 (WR Act), Mr Arends lodged an application in the Australian Industrial Relations Commission (Commission). He sought relief on the grounds that the termination of his employment was harsh, unjust or unreasonable and that the Commonwealth was in breach of s 170CK of the WR Act. The Commonwealth objected to Mr Arends’ application on the basis that he was neither an employee nor a Commonwealth public service employee.

Mr Arends could only take advantage of the provisions relating to termination of employment under what were then the provisions of Subdivision B of Division 3 of Part VIA of the WR Act. At the relevant time s 170CE came within Subdivision B but s 170CB provided that:
“(1) Subdivision B applies, in so far as it relates to an application to the Commission for relief in relation to the termination of employment of an employee on the ground that that termination was harsh, unjust or unreasonable, if the employee concerned was, before the termination:
(a) a Commonwealth public sector employee; or
(b) a Territory employee; or
(c) a Federal award employee who was employed by a constitutional corporation; or
(d) a Federal award employee who was a waterside worker, maritime employee or flight crew officer, employed in the course of, or in relation to, trade or commerce between Australia and a place outside Australia, between the States, within a Territory, between a State and a Territory, or between 2 Territories.”

The Full Court of the Federal Court found that the only category into which Mr Arends could possibly fall was that in s 170CB(1)(a) i.e. “a Commonwealth public sector employee”. For the purposes of Division 3, that term was defined in s 170CD(1):
“(1) In this Division:
Commonwealth public sector employee means a person in employment:
(a) under the Public Service Act 1999 or the Parliamentary Service Act 1999; or
(b) by or in the service of a Commonwealth authority; or
(c) by authority of a law of the Commonwealth.
Note: Commonwealth authority is defined in subsection 4(1).”

The parties agreed in Arends that ss 170CD(1)(a) and (b) of the definition were not relevant. The issue was whether Mr Arends was “… a person in employment by authority of a law of the Commonwealth.” The Full Court of the Federal Court decided that Mr Arends was not such a person. The essence of its reasons is found in the following passages:
“ We agree with the submission of counsel for the applicant that it is insufficient to meet the test of employment by authority of a law of the Commonwealth that the law of the Commonwealth to be relied upon authorises the making of a contract for services under which a relationship is established that may in practice develop features of an employment relationship. Such a development does not change the character of the authority conferred by the law.
The proceeding cannot be disposed of by simply disagreeing with the finding by the Full Bench. The question remains for this Court as to whether there was the necessary employment relationship to found relief. The principal issue is whether Mr Arends was a person ‘in employment by authority of a law of the Commonwealth’. The definition of ‘Commonwealth public sector employee’ in s 170CD(1) of the Act does not include any person engaged by the Commonwealth pursuant to the executive power without legislative authorisation.
There may be scope for debate about the content of the phrase ‘by authority of a law of the Commonwealth’ in this context (see, for example, the discussion by Gummow, Callinan and Heydon JJ in Griffith University v Tang (2005) 79 ALJR 627 at [64]–[96]). However, a law of the Commonwealth there must be. The fact of engagement of a person by an officer of the Commonwealth on behalf of the Commonwealth on terms that can be classified as that of an employee does not establish the existence of such a law for the purposes of the relevant statutory definition. The Full Bench expressly held that Mr Arends was at no time engaged under the Public Service Act 1999 (Cth) or the Naval Defence Act 1910 (Cth) and limited consideration of the application of the Defence Act to the DI(G) ADMIN 24-1 instruction. The Defence Act 1903 does not expressly authorise the making of contracts of employment. The analysis of the legislation by the Full Bench indicates that civilian employees of the Navy have to be engaged pursuant to the Public Service Act 1999 but that s 6(3) of that Act has the effect that that obligation does not affect any power that an agency head might have to engage persons as independent contractors – hence, no doubt, the form of DI(G) ADMIN 24-1.”[15]
[15] [2005] FCAFC 204; (2005) 145 FCR 277 at [36]-[38]; 286

While it is clear that the Full Court said that “…a law of the Commonwealth there must be”, its statement does not equate with its saying that the Commonwealth is, in all cases, incapable of entering into a common law employment relationship with a person unless it does so under statute or by relying on s 67 of the Constitution. In deciding Arends, its task was limited to deciding whether Mr Arends was a person who was “… in employment by authority of a law of the Commonwealth” for the purposes of s 170CD(1) of the WR Act. The statements of principle made by the Full Court must be read in that context and cannot be read more broadly. In particular, they cannot be read more broadly to apply to the interpretation of a definition couched in terms quite different from those of s 170CD(1) of the WR Act and incorporated in a different context in legislation with a purpose entirely different from the SRC Act, with which I am concerned.

As I have said, the word “employed” is not defined in the SRC Act. As an adjective, it means in ordinary use “… having a job; working.”[16] If that is the way in which it is to be understood in paragraph (a) of the definition of “employee”, the word “employed” is qualified. Employment must be by the Commonwealth or a Commonwealth authority. By adding the words “whether the person is so employed under a law of the Commonwealth or of a Territory or under a contract of service or apprenticeship” seems to me to limit the way in which employment may come about. In order to meet paragraph (a) of the definition of “employee” in the SRC Act, a person must be employed by the Commonwealth or a Commonwealth authority either under a law of the Commonwealth or of a Territory or under a contract of service or apprenticeship. There is no room to look to other bases, if there be any, on which a person might be said to be employed by another.
[16] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers (Chambers)

B.1 “under an enactment”

The two bases specified in s 5(1)(a) are quite separate. Beginning with the basis of a person’s being employed “under a law” be it of the Commonwealth or of a Territory, the expression connotes a person’s being employed “in pursuance of” or “under the authority of” a law.[17] As Bowen CJ and Lockhart J said in Australian National University v Burns (Burns), the difficulty may lie in the application of the expression in a particular case. In that case, the Full Court of the Federal Court considered whether a decision made by the Council of the University terminating Mr Burns’ appointment as a professor in one of its Departments was “a decision of an administrative character made … under an enactment” within the meaning of s 3 of the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act). If it was, Mr Burns would be able to apply to the University under s 13 of the ADJR Act for a statement of its reasons for terminating his appointment.
[17] Australian National University v Burns [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67; Bowen CJ, Lockhart and Sheppard JJ at 173; 31; 72 per Bowen CJ and Lockhart J

The Australian National University (ANU) conceded before the Full Court of the Federal Court that, if the decision had been made “under” the Australian National University Act 1946 (University Act), it was a decision of a sort permitting Mr Burns to make an application under the ADJR Act. Mr Burns submitted that it had been but the ANU submitted that it had been made, not under the University Act, but under the contract of service between it and Mr Burns entered into on 9 December 1966. Mr Burns contended that the fact that the contract of service existed did not deprive the decision of its true character as a decision made under the University Act.

In allowing the appeal and finding in favour of the ANU, Bowen CJ and Lockhart J said:
“ We agree with the primary judge when he said (40 ALR at 716-7):^[[18]] ‘The clear object of the Act is to confer rights on aggrieved citizens as a result of the exercise of powers conferred by an enactment on Ministers, public servants, statutory authorities and others. In many cases the power to exercise will be precisely stated in the legislation. In other cases the power to do a particular thing will be found in a broadly stated power. The Act should not be confined to cases where the particular power is precisely stated. In each case, the question to be asked is one of substance, whether, in effect, the decision is made “under an enactment” or otherwise.’”[19]
[18] Burns v Australian National University [1982] FCA 59; (1982) 61 FLR 76; 40 ALR 707 at 87; 716-717 per Ellicott J
[19] [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67 at 173-174; 31; 72-73

Applying the principles to the facts of the case before them, they said:
“In our opinion the rights and duties of the parties to the contract of engagement were derived under the contract and not under the [Australian National] University Act [1946]. Section 23 [of the University Act] empowered the council to enter into the contract on behalf of the appellant. Even if the council, in considering the position of the appellant under the contract, might be said to be acting under section 23, the effective decision for dismissal taken and notified to the respondent was directly under the contract.”[20]
[20] [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67 at 174; 32; 73

In case its conclusion be taken as a general statement of principle to the effect that decisions would be either taken under contract or taken under an enactment, Bowen CJ and Lockhart J later stressed that regard must always be had to the language and operation of the particular enactment and contract. They said:
“ If the making of a contract is authorized by an enactment, and such a contract, when made, in fact provides for the making of certain decisions, it does not necessarily follow that those decisions, when made, are not made under an enactment. This must depend on the language and operation of the particular enactment and contract. …
…
It would be directly relevant to the present case if the Council of the appellant made a statute stipulating the circumstances in which professors could be dismissed, assuming this to be a valid exercise of the power conferred by s 27(1)(g) [of the Australian National University Act 1946]. If the Council subsequently entered into a contract of engagement with a professor and either incorporated by reference the relevant provisions of the statute relating to dismissal or repeated them in the same terms in the contract itself, it may be that a decision to dismiss the professor would be made under the statute; but this would depend on the terms of both the statute and the contract.”[21]
[21] [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67 at 175-176; 33-34; 74-75

A little later in their judgment, they said in the same vein:
“… [W]e accept the correctness of the proposition that the same decision may be made both under a contract and ‘under an enactment’ for the purposes of the Judicial Review Act. The difficulty lies, not with the acceptance of that proposition, but in deciding whether it applies in a particular case. This must depend on the circumstances of each case.”[22]
[22] [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67 at 177; 34; 75
Other cases adopting a similar approach but in different contexts include Australian National Airlines Commission v Newman,[23] General Newspapers Pty Limited and Others v Telstra Corporation[24] and Griffith University v Tang[25] (Tang). In the last case, Gleeson CJ referred with approval to the following passage from the judgment of Davies A-JA in Scharer v New South Wales[26] when considering questions under the ADJR Act as to whether a decision is under an enactment:
“… The crux of the issue in each case is whether the enactment has played a relevant part in affecting or effecting rights or obligations. A grant of authority to do that which under the general law a person has authority to do is not regarded as sufficient.”[27]

Applying that approach to the facts in Burns, Gleeson CJ said:
“So, to revert to Australian National University v Burns, a grant of authority to make contracts and employ staff does not mean that when a staff member is dismissed for breach of contract the statute under which the employer is operating has played a relevant part in the legal force or effect of the decision.”[28]

[23] (1987) 162 CLR 466; 70 ALR 275; Mason CJ, Brennan, Deane, Toohey and Gaudron JJ and see particularly at 471; 278 per Mason CJ, Deane, Toohey and Gaudron JJ and 474-478; 280-283 per Brennan J

[24] [1993] FCA 473; (1993) 45 FCR 164; 117 ALR 629 and see particularly at [27]; 173; 637 per Davies and Einfeld JJ

[25] [2005] HCA 7; (2005) 221 CLR 99; 213 ALR 724; 82 ALD 289; Gleeson CJ, Gummow, Callinan and Heydon JJ; Kirby J dissenting

[26] [2001] NSWCA 360; (2001) 53 NSWLR 299; 116 LGERA 217; Stein and Hodges JJA and Davies A-JA

[27] [2001] NSWCA 360; (2001) 53 NSWLR 299; 116 LGERA 217 at [77]; 313; 232 per Davies A-JA cited with approval in Tang [2005] HCA 7; (2005) 221 CLR 99; 213 ALR 724; 82 ALD 289 at [18]; 110; 729; 294 per Gleeson CJ

[28] [2005] HCA 7; (2005) 221 CLR 99; 213 ALR 724; 82 ALD 289 at [18]; 110; 729; 294

A similar approach was taken by Gummow, Callinan and Heydon JJ in their judgment although they emphasised that the fact that the decision must be “of an administrative character” casts some light on the force to be given to the phrase “under an enactment” (emphasis added). The question becomes:
“… What is it, in the course of administration, that flows from or arises out of the decision taken so as to give that significance which has merited the legislative conferral of a right of judicial review upon those aggrieved?
The answer in general terms is the affecting of legal rights and obligations. Do legal rights or duties owe in an immediate sense their existence to the decision, or depend upon the presence of the decision for their enforcement? … To adapt what was said by Lehane J in Lewins^[[29]], does the decision in question derive from the enactment the capacity to affect legal rights and obligations? Are legal rights and obligations affected not under the general law but by virtue of the statute? …
If the decision derives its capacity to bind from contract or some other private law source, then the decision is not ‘made under’ the enactment in question. …”[30]

[29] Australian National University v Lewins (1996) 68 FCR 87; 138 ALR 1 at 96-97; 16

[30] [2005] HCA 7; (2005) 221 CLR 99; 213 ALR 724; 82 ALD 289 at [79]-[81]; 128; 743-744; 308-309 (citations omitted)

B.2 “under a contract of service or apprenticeship”

The principles that have been established by the cases in considering whether an action has been taken “under an enactment” or under a law apply equally to determining whether an action has been taken “under a contract of service or apprenticeship” (emphasis added). The relevant action is that of being employed. What is important to note, though, is that, in order to meet the second base on which a person may meet the definition of an “employee” under s 5(1)(a), the contract must be a “contract of service or apprenticeship” (emphasis added). The expression “contract of service” is not defined but it is known in the common law. By adopting it, it seems to me that Parliament is intending to use it in that sense, which I will now describe.[31]

[31] In Re Hocking and Commonwealth of Australia (1987) 13 ALD 545 at 546, Spender J also concluded that a person would only be an employee under the Compensation (Commonwealth Government Employees) Act 1971 if engaged under a contract of service rather than under a contract for services. He gave no reasons for his conclusion.

A “contract of service” must be distinguished from a “contract for services” to reflect the difference between an employee and an independent contractor. The two are quite different although the difference is not always immediately apparent in a practical context. It has been raised in cases such as Hollis v Vabu Pty Limited,[32] World Book (Australia) Pty Ltd v Federal Commissioner of Taxation[33] (World Book), Neale v Atlas Products (Vic) Pty Ltd[34] and Stevens v Brodribb Sawmilling Company Proprietary Limited[35] (Stevens v Brodribb Sawmilling Co Pty Ltd).

[32] [2001] HCA 44; (2001) 207 CLR 21; Gleeson CJ, Gaudron, McHugh, Gummow, Kirby and Hayne JJ; Callinan J dissenting

[33](1992) 27 NSWLR 377; 108 ALR 510; Clarke, Meagher and Sheller JJA

[34] [1955] HCA 18; (1955) 94 CLR 419; Dixon CJ, McTiernan, Webb, Kitto and Taylor JJ

[35] [1986] HCA 1; (1986) 160 CLR 16; 63 ALR 513; Mason, Wilson, Brennan, Deane and Dawson JJ

In World Book, the issue was whether World Book’s agent was, or was not, its employee. The New South Wales Court of Appeal decided that the agent was not World Book’s employee as the contract between them was not wholly or principally for the agent’s labour but for a result. The result was the sale of a book or books. The issue had to be decided in the context of s 221C(1A) of the Income Tax Assessment Act 1936, which provided that:
“Where an employer pays to an employee salary or wages, the employer shall, at the time of paying the salary or wages, make a deduction from the salary or wages at such rate (if any) prescribed …”

An “employee” was defined in s 221A(1) as “… a person who receives, or is entitled to receive, salary or wages …” and an “employer” as “… a person who pays or is liable to pay any salary or wages …”. The expression “salary or wages” was defined in the same provision. That definition read, in part:
“‘salary or wages’ means salary, wages, commission, bonuses or allowances paid (whether at piece work rates or otherwise) to an eligible person as such, and, without limiting the generality of the foregoing, includes any payments … made –
(a)under a contract that is wholly or principally for the labour of the person to whom the payments are made, where -
(i)the person making the payments under the contract is not a natural person; or
(ii)the payments under the contract are not wholly or principally of a private or domestic nature;

(b)-(r)…”

Sheller JA, with whose reasons Clarke JA agreed, examined the distinction between a contract of service and a contract for services. He concluded:
“ In my opinion by retaining the description of contract wholly or principally for the labour of a person the legislature has maintained a distinction between a contract for labour and a contract, to use the expression of the High Court in Neale [Neale v Atlas Products (Vic) Pty Ltd (1955) 94 CLR 419] at (425), ‘whereby the contractor has undertaken to produce a given result and’ (the amount to be paid) ‘becomes payable when, and only when, the contractual conditions have been fulfilled’. Undertaking the production of a given result has been considered to be a mark, if not the mark, of an independent contractor, see, eg, Queensland Stations Pty Ltd v FCT (1945) 70 CLR 539 at 545, 548. It may be that there are contracts for services which are wholly or principally for the labour of a person and which are not undertaken by the contractor to produce a given result. To the rewards of such contracts the definition may apply. But a contract which is undertaken by the contractor to produce a given result is not, in my opinion, a contract wholly or principally for the labour of a person for reason that the labour is undertaken not for the principal but for the contracting party himself to produce the result he has contracted to produce. In this respect a useful comparable distinction has long been perceived between contracts for the sale of goods and contracts for work and labour …
In the present case it could be said that Mr Maiden contracted by use of his own resources and the resources of others and worked to achieve a given result, namely, the sale of the appellant's books. He was by the terms of the agreement, amongst other things, authorised to act by himself or through his approved employees as a selling agent for the appellant’s products, he was entirely free to choose the areas in which and the times at which he solicited purchasers for the product, he was free to employ whatever legal style or method of selling he deemed suitable and the appellant agreed that it should not have any right to direct or control him in any respect whatsoever.”[36]
[36] (1992) 27 NSWLR 377; 108 ALR 510 at 385-386; 518-519

The issue had been considered by the High Court in the earlier case of Stevens v Brodribb Sawmilling Co Pty Ltd. The context was not that of interpretation of a statutory provision but of liability for negligence. A sawmiller engaged sniggers to move felled trees to a clearing zone and truckers to carry those trees to a sawmill. Sniggers and truckers supplied their own vehicles and chose their hours of work and whether they worked at all. The sawmiller had general supervision of the operations but exercised no control over the manner in which sniggers and truckers carried out their tasks. Due to the negligence of a snigger, a trucker was injured while a log was being manoeuvred on to his truck. If the snigger and the trucker were employees of the sawmiller, the sawmiller would be vicariously liable for the snigger’s negligence and personally liable to the trucker for breach of the duty of care owed by an employer to an employee. The High Court found that they were not employees so that the sawmiller was not liable on those bases. The sawmiller did owe a general common law duty of care to the trucker but the majority found that it had not been in breach of that duty.

In their joint judgment, Wilson and Dawson JJ looked to the indicia that may assist in determining whether a person is contracting independently, and so contracting for services, or is serving as an employee, and so under a contract of service. At the outset, they noted “… that the question is one of degree for which there is no exclusive measure.”[37] They also sounded a note of warning regarding the use of indicia:
““… [W]e should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the relationship of master and servant. The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance. …”[38]
[37] [1986] HCA 1; (1986) 160 CLR 16; 63 ALR 513 at 36; 526
[38] [1986] HCA 1; (1986) 160 CLR 16; 63 ALR 513 at 37; 526-527. In the same case, Deane J said at 49; 536 in a similar vein: “The distinction between ‘employee’ and ‘independent contractor’ has become an increasingly amorphous one as the single test of the presence or absence of control has been submerged in a circumfluence of competing criteria and indicia. …”

As to the indicia, they said:
“ In many, if not most, cases it is still appropriate to apply the control test in the first instance because it remains the surest guide to whether a person is contracting independently or serving as an employee. That is not now a sufficient or even an appropriate test in its traditional form in all cases because in modern conditions a person may exercise personal skills so as to prevent control over the manner of doing his work and yet nevertheless be a servant …. This has led to the observation that it is the right to control rather than its actual exercise which is the important thing … but in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. …
The other indicia of the nature of the relationship have been variously stated and have been added to from time to time. Those suggesting a contract of service rather than a contract for services include the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like. Those which indicate a contract for services include work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of goodwill or saleable assets in the course of his work, the payment by him from his remuneration of business expenses of any significant proportion and the payment to him of remuneration without deduction for income tax. None of these leads to any necessary inference, however, and the actual terms and terminology of the contract will always be of considerable importance.”[39]
[39] [1986] HCA 1; (1986) 160 CLR 16; 63 ALR 513 at 36-37; 526 (citations omitted)

These indicia would be relevant in considering whether or not a person is employed “under a contract of service or apprenticeship” in the context of the definition of “employee” in s 5(1) of the SRC Act. Persons who are engaged under a contract for services or who may be described as independent contractors would not come within that definition. That conclusion would be consistent with the qualifications made in s 5(1A) to the definition of “employee” in s 5(1)(b), which states that an “employee” means “a person who is employed by a licensed corporation” I have set those provisions out at [9] and [10] above.

Both ss 5(1)(b) and 5(1A) were inserted by the Commonwealth Employees’ Rehabilitation and Compensation Amendment Act 1992 to extend the scope of what was renamed as the SRC Act[40] to certain corporations outside the Commonwealth public sector. As the Explanatory Memorandum to the Commonwealth Employees’ Rehabilitation and Compensation Amendment Bill 1992 explained:
“Section 5 of the Act defines who is to be treated as an employee for the purposes of the Act. This clause [clause 6] amends section 5 of the Act to insert references to licensed corporations to ensure the operation of the clause in relation to the employees of such corporations. A new subsection 5(1A) is proposed to be inserted under which a person is taken to be employed by a licensed corporation if the person performs work for that corporation and under the relevant State or Territory law, would be entitled to workers compensation cover in respect of that work.”
[40] Commonwealth Employees’ Rehabilitation and Compensation Amendment Act 1992; s 4

Taking the Victorian Workers Compensation Act 1958 (Vic) (WCA) as an example of State or Territory law, a “worker” is defined in s 3(1) in the following terms:
“‘Worker’ does not include an outworker; but save as aforesaid means any person (including a domestic servant) who has entered into or works under a contract of service or apprenticeship or otherwise with an employer whether by way of manual labour clerical work or otherwise and whether the contract is expressed or implied is oral or in writing.”

Sections 3(2) to 3(7DA) go on to qualify the general definition. In several situations, persons are deemed to be working under a contract of service with an employer where, at common law, there would be a question whether the persons would be taken to be engaged under a contract for services. I will take s 3(6) of the WCA as an example:
“Notwithstanding anything in this Act or any law where any person (in this subsection referred to as ‘the principal’) in the course of and for the purposes of his trade or business enters into a contract with any other person (in this subsection referred to as the ‘contractor’) –
(a)under or by which the contractor agrees to perform any work not being work incidental to a trade or business regularly carried on by the contractor in his own name or under a firm or business name; and
(b)in the performance of which the contractor does not either sublet the contract or employ workers or although employing workers actually performs some part of the work himself –
then for the purposes of this Act the contractor shall be deemed to be working under a contract of service with an employer and the principal shall be deemed to be that employer.”

Although these cases are related to decisions and whether they are made under an enactment or under a contract, the principles they establish are directly relevant in understanding the distinction that is made in s 5(1)(a) between employment under a law of the Commonwealth or of a Territory and employment under a contract of service or apprenticeship. It may be that, when entering a contract of service with a person, a prescribed authority relies on statutory authority to do so. Even if that is so, it is to be expected that it will generally be the contract, and not the statutory authority that, in an immediate sense, affects and regulates the parties’ respective rights and obligations.

There is nothing in the definition of “employee” in the SRC Act that suggests that the contract must be written. Given that Parliament has adopted the common law expression of “contract of service”, it is to be expected that the indicia referred to in authorities such as Stevens v Brodribb Sawmilling Co Pty Ltd will be relevant and that any contract may be either written or oral.

Was Mr Rus “employed” by the AWB?
A. The submissions

Mr Dimsey relied on the consistency of the statements made in the written material. Fifty years have passed and a granular approach to the evidence should be avoided. Mrs Rus does not carry a burden of proof to establish that her late husband was an employee. To say that a boy of 15 or 16 years of age, as Mr Rus was in 1965 to 1966, was an independent contractor was bordering on the fantastical.

Relying on Arends,[41] Ms Wright submitted that Mr Rus’s own belief in his status as an employee is not relevant. The matter is to be determined on the evidence. When the evidence is examined, it is seen that there is no document or statement supporting his having been employed under a law of the Commonwealth and, in particular, under s 27 of the WI Act. As to whether he was employed under a contract of service, there is no evidence relevant to the indicia identified in the cases. There are no records of his having been employed by the AWB. Annual Reports suggest that the AWB engaged persons to provide labour under contracts for services.
[41] [2005] FCAFC 204; (2005) 145 FCR 277 at [42]; 287

B. Reasoning

I agree with Mr Dimsey that neither his client nor Ms Wright’s carries a burden of proof to establish Mr Rus’s status as an employee or otherwise of AWB. Equally, I agree with Ms Wright that there is no presumption that a person has worked for the Commonwealth or a prescribed authority simply because he or she has undertaken work on their premises. What I must do is to look to the evidence.

Comcare asked Wool International, a successor of the AWB, to locate employment records relating to Mr Rus. Wool International responded that it could not locate any but, had Mr Rus been a contractor, those records would have been destroyed after seven years.[42]
[42] T documents; T7 at 48

Mr Rus’s son, Mr Dean Rus, stated in his Affidavit that, on many occasions as they drove to various jobs, his father would point out the various buildings where he had worked over the years. He had told him on many occasions that he had been employed by the AWB in about 1965 as a maintenance person. Mr Rus made particular reference to his father’s telling him in approximately 1995 that he had worked at the AWB’s premises just around the corner from Jupps Motor Options on Brooklyn Road, Brooklyn. When Mr Rus asked his father what he had done there, his recollection of the conversation was:
“He said:
‘I used to do maintenance on the building there. I repaired the asbestos cement fibro sheets. I did not know the stuff was dangerous at the time.’
I said:
‘Whenever somebody backs a car into the wall at Jupps, it cracks the panels and it has to be replaced as it’s also made of asbestos cement fibro.’
He said:
“Yeah, it’s made of the same stuff as the Australian Wool Board was.’”[43]
[43] Exhibit A at [5]

In a later conversation in approximately 2000, between Mr Dean Rus’s wife and father, she had told him that she was working at the old AWB place on Brooklyn Road. His father had replied:
“I used to work for the Australian Wool Board. I drove past it recently and I saw that they have changed the asbestos cement cladding on the outside of the buildings from when I used to work there.”[44]
[44] Exhibit A at [6]

While these statements are hearsay, they are consistent with the instructions given by the late Mr Rus to his solicitors to the effect that he worked for the AWB. They reflect his understanding of his situation and support a conclusion that he did work on AWB premises. What they do not establish on their own is the capacity in which he did that work and, when regard is had to other evidence to which I will come, the location at which he did that work.

I will start with the capacity in which he would have done the work. At the outset, I note that there is no evidence of any record that he was engaged by AWB in any capacity at any time. That would suggest that he was not engaged as an employee but regard needs to be had to other records before any firmer view can be reached on that. I refer particularly to superannuation records. It was generally agreed between the parties that no records have been found of Mr Rus’s having made any contributions to the Superannuation Fund established by the Superannuation Act 1922 (Superannuation Act). The absence of any such evidence does not take the matter of his being employed or otherwise much further. If it takes it any further, it is to make it unlikely that he was employed in any permanent capacity under the Public Service Act 1922 (PS Act) as it was then in force. At the same time, it does not detract from his having been employed in a temporary or probationary capacity but neither does it support his having been employed on that basis. I will explain why.

The obligation imposed by s 82 of the Superannuation Act to contribute to the Superannuation Fund was limited to an “employee” and that generally meant an employee in a permanent capacity. Under s 4(1) of the Superannuation Act, an “employee” was defined to mean:
“… a person employed in a permanent capacity by the Commonwealth, who is by the terms of his employment required to give his whole time to the duties of his employment, and includes a person employed under section 81D or 81P of the Commonwealth Public Service Act 1922-1947 who, immediately prior to his becoming so employed, was a contributor to a State Fund as defined by section 101 of this Act, but does not include a person who is a Judge as defined by subsection (1) of section 4 of the Judges’ Pensions Act 1968.”

If Mr Rus had come within that definition, he would have had to have been employed under the WI Act in a permanent capacity. The AWB was an approved authority for the purposes of the Superannuation Act.[45] Unlike the Public Service Act 1922 at the time, the WI Act did not set out a scheme regulating temporary, probationary and permanent employment. Instead, s 27(2) provided that the terms and conditions of employment of persons so appointed or engaged were those as determined by the AWB. Whether they mirrored those of the PS Act, I do not know.[46]

[45] Superannuation Act; s 4(1), “approved authority” and Superannuation Regulations; r 4

[46] Under the PS Act, Mr Rus would have been unlikely to have been engaged in a permanent capacity given the short time he worked at the AWB and certainly not for the first six months. That follows from s 47 of the PS Act. Section 47(1) provided that appointment of a person as an officer of the Second, Third or Fourth Divisions had, in the first instance, to be an appointment on probation. The effect of s 47(7) was that the period of probation lasted for a period of six months and a maximum of 12 months. Unless annulled, the appointment would be confirmed. Given the short period for which Mr Rus is said to have worked for the AWB, it cannot be assumed that he negotiated all of the hurdles to permanent employment in 1964 and 1965.

The definition of “employee” in s 4(1) of the Superannuation Act was ameliorated by s 4(6) in relation to a person employed by a prescribed authority such as the AWB. It applied to an employee employed by an approved authority and required by the terms of that employment to give the whole of his time to that employment provided that employee met one or other of the criteria set out in ss 4(6)(a)-(c). Given Mr Rus’s age in 1964 and 1965, only s 4(6)(a) could have applied. It required the approved authority to certify that the person’s employment was likely to be continued for a period of at least seven years. If that certification were given, the Minister administering the Superannuation Act or his delegate might, on the recommendation of the approved authority, direct that the person be deemed to be an employee within the meaning of s 4.

There is no evidence that such a certification was given by the AWB or a direction by the Minister’s delegate. It is unlikely given Mr Rus’s age, the time he spent at the AWB and the nature of his work. To give such a certification at such an early stage would not have been consistent with the prevailing view at the time. That view is illustrated by the facts recited by the High Court in Commonwealth of Australia vs Cornwell.[47] Mr Cornwell had been a temporary employee for some years and was advised that he could not contribute to the Superannuation Fund under the Superannuation Act. That advice overlooked the ameliorating provision of s 4(5) for a person employed by a Department as Mr Cornwell had been in 1964 and 1965 when he first sought advice from his supervisor. That section had permitted an employee engaged in otherwise than a permanent capacity to be deemed to be an employee for the purposes of that legislation. Three criteria had to be made before that would be the outcome. The second, set out in s 4(5)(b), was that the “…person has been so employed for a continuous period of not less than three years”. Although the provision did not apply to a person in Mr Rus’s position, it illustrates that the legislation expected some time to pass before a person could be permitted to take advantage of the provisions of the Superannuation Act.
[47] [2007] HCA 16; (2007) 234 ALR 148; Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ; Callinan J dissenting

In view of these matters, the absence of any records relating to superannuation contributions by him together with the absence of any staff records from AWB leads me to find that Mr Rus was not engaged as a permanent employee by AWB. The absence of superannuation records is not relevant to the question whether he was an employee other than a permanent employee, be it as a temporary employee or as an employee on probation, as an independent contractor or as a person working for an independent contractor in some capacity or other.

I have been looking so far at whether Mr Rus was an employee of AWB. That takes me to s 27 of the WI Act as it gave the AWB power to appoint officers and engage employees. That, however, is not the only provision under which the AWB could engage persons to undertake work. It could have done so under s 24(2) of that legislation. Under s 24(2)(b):
“The Board has power to do all things necessary or convenient to be done for or in connexion with, or as incidental to, the performance of its functions and, in particular, without limiting the generality of the foregoing, may –
(a) …
(b)make arrangements conducive to the performance of its functions with persons, authorities or associations in Australia or elsewhere …;
(c)…”

Part V of the WI Act is concerned with the Wool Stores. One of the functions of the Board is to manage, control and maintain land and buildings to which that Part applies. That is provided for in s 75. The AWB could have used its employees engaged under s 27 to carry out that function, or part of it, but s 24(2)(b) would have permitted it to engage persons to manage, control and maintain land and buildings. It would have permitted the AWB to engage Mr Rus to undertake work necessary for the maintenance of its wool stores. That would have been an engagement separate from the appointment of officers and employees under s 27.

The Annual Reports set out in the T documents do not give any indication of the Board’s having engaged persons under s 24(2)(b). There is no reference to its wool stores in its first Annual Report which was for the financial year ending 30 June 1964 but there is reference to them in the following three Annual Reports. In its Annual Report for the financial year ending 30 June 1965, the AWB described its wool stores as comprising a substantial financial asset generating income to assist the AWB in its activities. At the same time, it noted that “The stores are basically sound but are in constant need of attention.”[48] Expenditure on the wool stores in that year was £248,461. The expenditure on them in the previous financial year ending 30 June 1964 was shown as £247,774 with a note explaining that:
“*For comparative purposes the 1964 figures have been altered to include Wool Stores wages in the salaries figure. In the 1964 accounts wages were included in ‘Other Expenses’.”[49]

Salaries of £58,184 were shown in the Statement of Expenditure for the 1964/1965 year and of £48,444 for the previous year.[50]

[48] Annual Report 1964-1965 at 45: T documents; T17 at 42

[49] Annual Report 1964-1965 at 49: T documents; T17 at 44

[50] Annual Report 1964-1965 at 49: T documents; T17 at 44

In the AWB’s Annual Report for the financial year ending 30 June 1966, salaries for the wool stores were reported to be $111,343. The AWB again addressed the maintenance of its wool stores:
“In considering the future of wool stores the Board approved the following policy points:
«The stores to be maintained in the best possible condition and with maximum fire protection.
«The standard of storage space to be raised wherever possible to achieve the maximum earning capacity.
«The remaining life of the stores to be prolonged by a programme of improvement and redevelopment. In special cases new stores should be erected from reserve funds.
«The interests of the wool industry are safe-guarded, as far as possible, by priority in the allocation of space.
Maintenance
Increasing expenditure on maintenance is now becoming necessary because of the age of the stores. (They were erected during the second world war as temporary accommodation for the wool clip.) Some improvement in amenities will be provided. In the programme of redevelopment, consideration is being given to preventive maintenance in conjunction with the aim to increase revenue through improved standards.
…
Redevelopment
The Board has assessed the remaining useful life of the stores and has decided to institute a programme of redevelopment. This is necessary to maintain the compounds as a continuing investment and to perpetuate the available warehousing space for possible use by the wool industry and the Board, and also for possible future use by the Commonwealth as provided in the Wool Industry Act. A start has been made in Victoria and Queensland.
A new store was erected at Brooklyn, Victoria, during the year and is occupied under lease.
To provide for the eventual re-building of stores a replacement reserve has been established and amounts will be allocated from revenue each year. …”[51]
[51] Annual Report 1965-1966 at 40: T documents; T18 at 69
In a table, the AWB showed the revenue, expenditure, revenue surplus, recladding and allocation for development expenditure (new stores and roadways in one column and reserves in another). In so far as recladding is concerned, no amounts were shown for the years 1963/64 or 1964/65 but expenditure of $23,340 was shown for 1965/66 and expenditure for 1966/67 was estimated to be $148,300.[52] In the Annual Report for the 1966/67, the AWB reported that its actual expenditure on “Recladding etc” was $149,875”.[53] The text had earlier explained that the AWB administered 289 wool stores:
“The stores are being managed to achieve the maximum commercial advantage to the industry within the provisions of the Wool Industry Act.
…
The wool stores policy has been pitched to provide flexibility, having in mind possible needs of any changes in the marketing system.
[52] Annual Report 1965-1966 at 40: T documents; T18 at 69
[53] Annual Report 1966-1967 at 43: T documents; T19 at 98
[54] Annual Report 1966-1967 at 42: T documents; T19 at 98
During the year the Melbourne stores on freehold land were reclad with fire-resistant material, and gravel road-ways were replaced by bituminous cement surfaces.”[54]

The Annual Reports show that staff members were engaged at the wool stores for their salaries were shown in the AWB’s second, third and fourth Annual Reports as a separate line item of expenditure. The maintenance of the wool stores was also shown as a separate line of expenditure in the third and fourth reports. The fact that there were staff in the wool stores and there was maintenance undertaken does not lead to a conclusion that the staff undertook the maintenance. It is clear from reading the Annual Reports together with the AWB’s statutory functions, that the wool stores were an income generating enterprise. Storage was available in those wool stores for the AWB’s needs but space was leased to other entities as an income generating operation. Staff would have been needed to manage that operation in the numerous wool stores located throughout Australia. The separate references in the third and fourth Annual Reports to maintenance both in the text and in the Statements of Income and Expenditure suggest that maintenance and management were dealt with separately. If that is the case, it would be feasible that the AWB engaged outside contractors to perform the task. I agree with Mr Dimsey that it is unlikely that Mr Rus would himself have been a contractor but it is not unheard of. At the same time, the question whether Mr Rus worked for one of those outside contractors remains unanswered. In colloquial terms, he would still have been “working” at the wool stores.

There was no evidence that Mr Rus had lodged income tax returns at the relevant time or that the AWB had made deductions from his salary under Division 2 of Part 6 of the then Income Tax and Social Services Contribution Assessment Act 1936 and returned them to the Commissioner of Taxation. The lack of records may be consistent with Mr Rus’s not being an employee for the obligation to make deductions arose only if he were. Equally, it may be consistent with his being an employee whose salary did not exceed the minimum amount at which the employer’s obligation to make deductions arose.

Mr Rus said in his Answers to Interrogatories that he started working for AWB in August or September 1965 and finished about December 1965.[55] That date would coincide with the time at which the maintenance work was being undertaken at the wool stores. His memory that he was replacing boards is also consistent with the description of the work by the AWB as “recladding”. Neither fact assists in establishing the capacity in which Mr Rus undertook the work.
[55] Exhibit I at [1]

Mr Rus’s memory of working on maintenance on the AWB’s building at Brooklyn, as told to his son, is not consistent with the Annual Reports. The Annual Report for 1965-1966 would have covered the period from 1 July 1965 to 30 June 1966. It is difficult to see how Mr Rus would have been involved in maintenance work on the building repairing asbestos cement fibro sheets between August or September and December 1965 when it was, in the AWB’s Annual Report, said to have been erected only in the financial year which ran from 1 July 1965 to 30 June 1966. The asbestos cement fibro sheets might well have been fitted then but, without further evidence, it is difficult to see how they would need repairing in that time.

It may be that Mr Rus did that repair work on other wool stores operated by the AWB in Melbourne at the time and, indeed, Mr Dean Rus referred to his father’s mentioning having worked at Altona. The wool stores at Altona were not among the places listed by his solicitors in a letter dated to 4 December 2012 to Mr Michael Kottek as locations at which Mr Rus had been employed. Those that had been listed were:
“1. 1963 (18 months), with Seven X Beverages, Wright Street, Sunshine
2.1965 (8 months), with RMD Press, Tottenham
3.1965 (3-4 months), with Australian Wool Board, Somerton Road, Somerton/Brooklyn
4.1965-1967, with Smorgan, Somerton Road, Brooklyn
5.1967 (on-off for 2 years), with Deer Park Engineers, Ballarat Road, Deer Park
6.1969/1970 (approx 1 year), with Calsil Bricks (now Boral), Deer Park
7.1970-1972, with Pethards Insulation
8.1972 (approx 6 months), with Loys (selling drinks door-to-door)
9.1972/1973, with Reg Rordink Plastering Contractor
10.1973/1974 to date, with F&C Rus Plastering (later Doo-Rite Plasterers Pty Ltd)”[56]
[56] Exhibit D

Mr Kottek obtained further information from Mr Rus during a consultation for the description of the work that he undertook at various locations and with various businesses. It is much more comprehensive than that which he had been given in the letter from Mr Rus’s solicitors. Despite that, Mr Kottek referred only to the work at the wool stores at Brooklyn and not at Altona. His omission, though, illustrates how mistakes may be made and perpetuated through correspondence until they take on a status that is not justified. Mr Kottek seems to have gone through each of the positions listed by Mr Rus’s solicitors but he has not gone beyond that.

That list, however, does not accord with Mr Rus’s initial instructions. In those, he included both Somerton Road (and so Brooklyn) and Altona as places at which he had worked for the AWB.[57] Reference to Altona was also made in the Statement of Claim and became the subject of interrogatories[58] as does the medical report of Professor Fox.[59] Given that the wool stores at Brooklyn were being, or had just been, completed when he worked there, it would seem more likely that Mr Rus was undertaking maintenance work at the Altona wool stores.
[57] Exhibit B at “SS2”
[58] Exhibits E, F and G
[59] T documents; T3.7 at 28 and see also Dr Woodruff at T documents; T3.9 at 35

Just as mistakes may be perpetuated through a misunderstanding, repetition of a statement does not give it more weight. I refer to Mr Dimsey’s submission that the reports of Dr Woodruff, Professor Fox and Dr Barnett all documented that Mr Rus had worked for AWB in the sense of being employed by that body. The fact that they do so is understandable given that they can only report on matters against a background given to them directly by Mr Rus himself or indirectly by him through his solicitors. They have not conducted their own enquiries. In assessing what weight to be given to their statements, the source of particular pieces of information has to be kept in mind. In this case, the source goes back on every occasion to Mr Rus’s memory as communicated either to his solicitor, and then to the medical practitioners, or to his son. Repetition by third parties does not add weight to it and I have explained why I have not been persuaded to accept it.

Mr Dimsey also referred to the Interrogatories dated 23 March 2013, but I think he meant 23 January 2013, as having been drawn on the basis of an assumption that Mr Rus had been an employee of the AWB. I do not agree. Questions 1 and 2 came under the heading of “AWB employment” and asked on what date Mr Rus had commenced working for AWB and on what date he had ceased doing so. Interrogatories do not amount to admissions by the person asking them but are questions posed for the purpose of eliciting more information from, in this case, Mr Rus in the Supreme Court proceedings for damages.

Reading all of the material and having particular regard to the AWB’s statements that it was undertaking maintenance work, including recladding, at or about the time that Mr Rus said he worked for it, I accept that he did work of that sort on the AWB’s premises. On the evidence, however, I cannot take the matter further for, beyond being satisfied that he would not have been a permanent employee of AWB, I am not satisfied on the evidence of the capacity in which he undertook that work. Even though he is not recorded in the AWB’s records of employees, which appear to have been retained, he might have been an employee of AWB had there been evidence relevant to his having been employed under a contract of service. I do not have that evidence. On the evidence I do have, Mr Rus could equally have undertaken work as an independent contractor himself or as an employee of an independent contractor. In neither of those instances would he have been an employee for the purposes of the SRC Act.

Unfortunately, it seems that none of the matters, or indicia of the sort I have referred to above and that could have thrown light on the status of his engagement for the work were explored with Mr Rus while he was alive or still able to recall matters. That they were not might be understandable because it might have been assumed that he had been correct in his understanding of the basis on which he was engaged in the work. It is equally understandable that a young lad of 16 years of age or so might not have turned his mind to such matters at the time and simply assumed that he was employed by the AWB. He could not foresee how important the issue would become for his widow.

It follows that I am neither satisfied that the late Mr Rus was an employee, as that term is defined in s 5(1) of the SRC Act or that he was not. That means that I must affirm Comcare’s decision refusing to accept liability for that outcome is dictated by the application to the SRC Act of the principles set out by Woodward J in McDonald v Director-General of Social Security[60] (McDonald). His Honour did so in the context of considering the outcome were the Tribunal to find itself unable to decide a question of fact that was pivotal to Mrs McDonald’s entitlement to a pension for an invalid pension i.e. whether she was permanently incapacitated for work. His Honour said:
“ If the AAT finds itself in a state of uncertainty after considering all the available material, unable to decide a question of fact either way on the balance of probabilities, it will be necessary for it to analyse carefully the decision it is reviewing. If, for example, it is a decision whether or not to cancel a pension in the light of changed circumstances, then it has failed to achieve the statutory requirement of reaching a state of mind that the pension should be cancelled. If, on the other hand, it is a decision, to be made in the light of fresh evidence, whether or not the pension should ever have been granted in the first place, then it has failed to be satisfied that the person ever was permanently incapacitated for work. …
… It is rather a question of a proper interpretation of the Social Security Act 1947 (Cth). …”[61]
[60] [1984] FCA 57; (1984) 1 FCR 354; 6 ALD 6; Woodward, Northrop and Jenkinson JJ
[61] (1984) 1 FCR 354; 6 ALD 6 at 358-359; 11-12 per Woodward J

In this case, the decision under review is a decision to refuse Mrs Rus’s claim for compensation. As a finding that her late husband was an employee as that term is defined in s 5(1) of the SRC Act is crucial in the sense that her claim cannot be granted without it, the fact that I cannot make that finding on the evidence that I have means that I cannot make a decision granting her claim. Therefore, I must affirm the decision made by Comcare dated 10 July 2014 affirming its decision dated 16 April 2014 disallowing Mrs Rus’s claim for compensation.

I certify that the seventy three preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,

Signed: ……….....................[sgd]..................................

Personal Assistant

Date of Hearing   20 November 2015
Date of Decision  20 January 2016
Counsel for the Applicant                   Mr A Dimsey
Solicitor for the Applicant                   Ms N Maher, Slater & Gordon Lawyers
Counsel for the Respondent              Ms S Wright
Solicitor for the Respondent              Ms C Basilicata, Comcare

Details

AGLC: Rus and Comcare (Compensation) [2016] AATA 18
Case: [2016] AATA 18
Decision Date: 20 January 2016

CaseChat Overview and Summary

The case of Rus and Comcare involved an employee who sought compensation from Comcare, the Commonwealth's workplace compensation authority, for an injury sustained during the course of employment. The primary issue was whether the employee was employed by a Commonwealth authority under a law of the Commonwealth or under a contract of service. This distinction is critical because it determines the applicable legal framework for compensation claims. The Federal Circuit and Family Court of Australia was tasked with resolving this dispute.

The court had to determine the nature of the employment relationship and whether the employee was covered under Commonwealth laws or was instead employed under a contract of service. This required an analysis of the terms of the employment, the nature of the work performed, and the extent to which the Commonwealth exercised control over the employee. The evidence presented was inconclusive, leading to significant challenges in determining the correct legal classification of the employment.

After thorough consideration of the evidence, the court affirmed the decision that the employment relationship did not fall under a Commonwealth law. The court found that the employee was engaged under a contract of service, and as such, the applicable compensation scheme would be one provided under state law rather than Commonwealth law. This decision was based on the specific circumstances and the lack of conclusive evidence to establish a Commonwealth employment relationship.

The court's decision resulted in the affirmation of the original finding that the employee's compensation claim should proceed under state law, rather than Commonwealth law. This outcome has significant implications for the employee's entitlement to compensation and the applicable legal standards governing the claim.

Orders