Sek v Bell River Homes Pty Ltd

CERTIFICATE OF DETERMINATION OF MEMBER
Citation:	Sek v Bell River Homes Pty Ltd [2023] NSWPIC 117
APPLICANT:	Adrian Sek
RESPONDENT:	Bell River Homes Pty Ltd
Member:	Jill Toohey
DATE OF DECISION:	21 March 2023
CATCHWORDS:	WORKERS COMPENSATION - Injury to right shoulder; no dispute as to injury; applicant was sub-contractor; whether applicant was deemed worker at the time of injury; applicant and respondent had written agreement; no dispute that applicant was party to a contract with the respondent to perform work; no dispute that the work exceeded $10 in value; no dispute that the applicant neither sublet the contract nor employed others; issue whether the work the applicant carried on for the respondent was incidental to a trade or business regularly carried on by him under his own name or the name of his business; Held –the work the applicant carried on for the respondent was not incidental to a trade or business regularly carried on by him under his own name or the name of his business; finding that the applicant was a deemed worker; respondent to pay the applicant weekly payments at the agreed rate; applicant entitled to reasonably necessary medical expenses as a result of his injury.
determinations made:	The Commission determines: 1. The applicant sustained injury to his right shoulder on 4 February 2022 while carrying out work for the respondent. 2. The applicant was a deemed worker within the meaning of Schedule 1 to the Workers Compensation and Workplace Injury Management Act 1998 at the time of his injury. 3. The respondent is to pay the applicant weekly payments as follows: (i) $1425.00 per week from 4 February 2022 to 6 May 2022 pursuant to s 36 of the Workers Compensation Act 1987, and (ii) $1200.00 per week from 7 May 2022 to date and continuing pursuant to s 37 of the Workers Compensation Act 1987. 4. The respondent is to pay the applicant’s reasonably necessary medical expenses resulting from the injury in accordance with s 60 of the Workers Compensation Act 1987.

STATEMENT OF REASONS

BACKGROUND

Adrian Sek (the applicant) is a carpenter by trade. He owns and operates a business known as Adrian Sek Building Construction and Maintenance (the business) in which he is a sole trader.
On 4 February 2022, Mr Sek was doing maintenance work on a property for Bell River Homes Pty Ltd (the respondent) when he slipped on a driveway and fell, injuring his right shoulder.
At the time of his injury, Mr Sek was working under a “Sub-contractor Agreement” between his business and the respondent.
There is no dispute that Mr Sek injured his right shoulder on 4 February 2022 or that he was working for the respondent at the time. He does not assert that he was an employee but, rather, that he was a “deemed worker” within the meaning of Schedule 1 of the Workers Compensation and Workplace Injury Management Act 1998 (the 1998 Act).
Clause 2(1) of Schedule 1 relevantly provides:
“(1) Where a contract—
(a) to perform any work exceeding $10 in value (not being work incidental to a trade or business regularly carried on by the contractor in the contractor's own name, or under a business or firm name), or
(b) (Repealed)
is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, taken to be a worker employed by the person who made the contract with the contractor.”
The respondent disputes that Mr Sek was a “deemed worker” at the time of his injury and denies liability to compensate him for his injury.
By an Application to Resolve a Dispute (ARD) lodged with the Personal Injury Commission (Commission) on 24 November 2022, Mr Sek claims weekly payments from 4 February 2022 and continuing, and reasonably necessary medical expenses.
Parties agree that, if Mr Sek is found to be a “deemed worker”, he is entitled to weekly payments from 4 February 2022 to date and continuing, in accordance with ss 36 and 37 of the Workers Compensation Act 1987 (the 1987 Act), based on agreed pre-injury average weekly earnings (PIAWE) of $1500 per week. Parties also agree that he will be entitled to reasonable medical expenses pursuant to s 60 of the 1987 Act.

ISSUES FOR DETERMINATION

The parties agree that the only issue remaining in dispute is whether Mr Sek was a deemed worker within the meaning of Schedule 1 to the 1998 Act at the time of his injury.

PROCEDURE BEFORE THE COMMISSION

The parties attended a conciliation conference on 6 March 2023. Mr Sek was represented by Mr Graham Barter of counsel, instructed by Ms Angy Basal. The respondent was represented by Mr Phillip Perry of counsel, instructed by Ms Jenny Doyle. The parties could not reach agreement and the matter proceeded to an arbitration hearing.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    ARD and attached documents,
(b)    Reply and attached documents, and
(c)    Application to Admit Late Documents (AALD) lodged by the applicant on
27 February 2023 and attached documents.

Oral evidence

There was no application to adduce oral evidence or cross-examine any witness.

Mr Sek’s statements

Mr Sek provided a statement to an investigator on 29 March 2022. Two copies of the statement are in evidence, one apparently in draft,[1] and a final, signed version.[2] He provided two supplementary statements dated 9 November 2022.[3]
[1] Reply page 10.
[2] ARD page 1.
[3] ARD pages 16 and 21.
There is no dispute that Mr Sek slipped and injured his right shoulder on 4 February 2022 and it is not necessary for present purposes to recount his evidence about the circumstances of the injury and its effects.
In his statement to the investigator, Mr Sek states that he has been a sole trader “for a few of years now [sic]”. Prior to working for the respondent, he was doing maintenance work for another housing company, Eden Brae Homes, “for a few years”. He fixed defects while houses were under construction and before they were signed off and handed over to clients. When Jason Busutill, the maintenance manager at Eden Brae Homes, moved to work for the respondent, he asked Mr Sek to come over “and do some work for them”. Mr Busutill is now the construction manager for the respondent. At the time of his statement, Mr Sek states, he had been contracting to the respondent “for a couple of years now”.
Mr Sek states that, when he first started working for the respondent, there was no written agreement. Rather, they had an oral agreement that he would do the jobs and work that he was asked to do. There was an oral agreement that he would be given 90% of the respondent’s maintenance work. He was grateful for this as it meant he was getting enough work from the respondent alone that he did have to go out and advertise his services.
Mr Sek states that, while working for the respondent, he sometimes used his own tools but they were generally the smaller tools that any handyman would have; other bigger tools were supplied directly by the respondent.
Mr Sek states that the hours he worked for the respondent depended on how much work was on at the time and when he was called in. He did not decide his hours. He would receive an email to say there was a job to attend to, with the client’s details. He would contact the client to organise access to the house and arrange for the work to be done. In the last months before his injury, he had returned to work for a few weeks following the Christmas and New Year holidays. Prior to that, and up until the time of his injury, he worked most days. When things were going “full steam” he worked an average of 30 to 40 hours per week. He would invoice the respondent for the work and was paid every Friday on the respondent’s weekly pay cycle.
Mr Sek states that he did not employ anyone to work for him. He did not do full-time work for anyone else. He had a uniform provided by the respondent which included their shirts, jumpers and hats. He had “some sort of sickness and accident policy” which he had to have to work for the respondent before they would pay him. He describes his insurance as “nosebleed insurance” that “essentially” provided little cover and he thought it was for income protection outside of work. It was the cheapest accident insurance that he could obtain and put on the paperwork for the respondent so that he could be paid. He did not have his own workers compensation insurance.

Mr Sek’s supplementary statements

Mr Sek’s first supplementary statement largely concerns the treatment for his injury. Relevant to this matter, he states that he commenced working for the respondent “in or around 2021” and was contracted “on a full-time basis working approximately 30-40 hours per week”.
In his second supplementary statement, Mr Sek refers to wage records from All State Group Pty Ltd (All State) and Eden Brae Homes.
Mr Sek states that, between late September 2021 and 6 December 2021, he did some work for All State, which was owned by his good friend, Phillip Glendenning, who had started his own business and asked Mr Sek to “give him a hand” to build a duplex. Mr Glendenning said he needed help “fitting the frames and roofs” and it would be a four-week job. Mr Sek states that he was “initially apprehensive” because he knew he was responsible for completing 90% of the respondent’s work. Mr Glendenning reassured him and understood that the work would be secondary to his work with the respondent and he could assist whenever he could.
Mr Sek states that he advised Craig Smith, the construction manager for the respondent, and Mr Busutill, that he wanted to help a friend out over October but that he would still complete the respondent’s jobs. They agreed to allow him to help Mr Glendenning but "had an understanding that I was effectively ‘on call’ for them and would prioritise [the respondent’s] jobs”. Mr Sek states he agreed to help Mr Glendenning “as a favour” because he had known him for a long time; he did not need the additional work or income.
Mr Sek states that there was heavy rainfall between 8 October 2021 and 26 October 2021, and the All State project was continually delayed. He refers to a list of “Account transactions” showing that he worked a total of 28 days for All State in the period to 6 December 2021, reflecting the original four-week agreement. During this time, he continued to complete jobs for the respondent and was “in constant communication” with Mr Smith who was “continually approving” his ongoing work for Mr Glendenning.
While working for All State, Mr Sek was paid a daily rate for eight hours. He states that he was able to earn more in this capacity in contrast to the jobs for the respondent which were “only a couple of hours long” and required him to attend different locations for each job. However, while he could only charge for the hours it took him to complete the respondent’s jobs, it gave him the flexibility to “chip away at the All State project”.
Mr Sek states that “prior to commencing employment” with the respondent in February 2021, he worked for Eden Brae Homes for several years. He started his transition to the respondent in February 2021 when Mr Busutill moved there. He was required to collect and return building materials and scaffolding to Eden Brae Homes, and attended several lots to finalise jobs and complete handovers. During his “transition” he worked for four days on
26 March 2021, 21 May 2021, 11 June 2021 and 30 July 2021. He states that he has not completed any work for Eden Brae Homes since 30 July 2021.
With respect to workers compensation insurance, Mr Sek states that he did not have his own policy, as the subcontractor agreement indicates. He was “under the impression” that he was covered by the respondent’s workers compensation insurance and was not required to have his own.

Mr Sek’s handwritten note

The ARD includes a note handwritten by Mr Sek bearing the date 18 March 2022. It is headed “Jordan EML” and appears to be his responses to a number of questions asked of him by the insurer. The questions do not appear on the note but they can be inferred from the responses.
The note records that Mr Sek:
i)     has an ABN which has been operating for approximately five years;
ii)     he does not advertise his services to the public;
iii)    the respondent’s clients control his hours of work;
iv)    he does not wear a uniform;
v)     he sometimes supplies materials to complete jobs and at other times the builder supplies them for him;
vi)    he provides his own tools most of the time;
vii)   he is licensed and pays his licensing fees;
viii)     the respondent directs the jobs and provides the jobs for him;
ix)    he is registered for GST;
x)     he does not have his own workers compensation insurance;
xi)    he does not employ others to do the work, and
xii)   he “very rarely” works for anyone else; late last year he did approximately one month “frame and roof carpentry” for All State.

Mr Smith’s statement

Mr Smith is the Warranty Manager for the respondent. He provided a statement to the investigator on 29 March 2022.[4]
[4] Reply page 18.
Mr Smith states that Mr Sek is a subcontractor doing carpentry work and is engaged to complete warranty works. He states that he understands Mr Sek is required to have his own accident insurance and public liability insurance.
Mr Smith states that Mr Sek has always been able to work for other companies and “at no stage was [he] informed to solely work for the [respondent]”. I understand Mr Smith to mean that Mr Sek was not required to work solely for the respondent.
Mr Smith states that “during conversations with Jason [Busutill] he wasn’t available to do our work for a period of time as he was standing frames for a company in the Penrith area”. It is not entirely clear, but I understand Mr Smith to refer to a conversation with Mr Busutill about
Mr Sek’s work with Mr Glendenning.
Mr Smith states that he understands Mr Sek had done similar work for Eden Brae Homes as he did for the respondent.
Mr Smith refers to Mr Sek’s injury on 4 February 2022. He states that Mr Sek contacted him on that date to update him about the job he was doing and he said he slipped and hurt his shoulder.
Mr Smith states that he was “under the impression” that Mr Sek had his own “insurances”. He states that “during conversations with Jason sometime later Adrian advised” that he had seen a surgeon who said he needed surgery. It is not clear from his statement whether
Mr Smith was part of this conversation himself or whether he is relaying something
Mr Busutill told him. In any event, it seems from his statement that Mr Sek was making inquiries about whether Eden Brae Homes or the respondent would pay for the surgery.
Mr Smith states that Mr Sek “was advised that he had not submitted an incident form/report as per company procedure, if this was reported it would have been passed on to our safety officer”.
Mr Smith states that Mr Sek continued to contract with the respondent after this date “without mention of the injury”. He says Mr Sek continued to do work for the respondent including “work in our head office”.
Mr Smith states that he understands that, as a subcontractor, Mr Sek is required to have his own insurances, pay his own sick leave and annual leave and have his own workers compensation insurance.
Mr Smith states that Mr Sek is allocated work and he then provides an update on the job and an invoice which the respondent pays. He denies that the respondent provided Mr Sek with a uniform. He states that the respondent has given out “promo gear to some trades” but it is not compulsory for Mr Sek to wear them. He states that Mr Sek supplies “his own tools uniforms” by which I understand him to say his own tools and uniform.
According to the investigation report, Mr Busutill declined to provide a statement to the investigator.

The sub-contractor agreement

Mr Sek has provided a copy of Bell River Homes Subcontractor Agreement signed by him on 10 February 2021.[5] It does not appear to be signed on behalf of the respondent but I do not understand there to be any dispute that it is the document that reflected the terms of their agreement.
[5] ARD page 21.
On the first page, under “Insurances” the agreement notes, under workers compensation, “N/A”. Under public liability, it notes a policy with BizCover.
The agreement provides that the sub-contractor will perform services in accordance with the agreement, which is to be subject to an annual review, and will be undertaken “in accordance with the plans, specifications, purchase orders, standard notes and directions” from the respondent’s site supervisor relevant to that trade. The respondent is to make payment upon satisfactory completion of the work. The subcontractor will work “consecutive days where possible, or unless directed otherwise” by a representative of the respondent until the work is completed to the satisfaction of the supervisor. The subcontractor “will follow all reasonable directions” given by the site supervisor or equivalent as to how the work is to be undertaken.
The agreement specifies safety obligations to be met by the subcontractor who “will supply all personnel, tools, materials, plant and equipment” and is required to complete the work safely. The subcontractor will only use tools that are “in good working order, and suitable for purpose, and will immediately notify the respondent of any safety issues on site, any accidents injuries or near misses, or any fines warnings or directions given by WorkCover or the Principal Certifying Authority.”
Under “Insurance and Indemnities”, the agreement provides that the subcontractor will, at their own cost, fully insure the respondent against liability from their employees from workers compensation claims and will “provide and maintain up-to-date certificates of currency for public liability and workers compensation insurance prior to and during work undertaken for the respondent.” It outlines the procedures for the subcontractor to invoice the respondent for work done, and for invoices received by 6.00am on a Monday to be paid on the Friday of the same week.
The agreement also contains provisions concerning “Loyalty and Confidentiality”.

Other documents

Mr Sek has provided a list of account transactions for Adrian Sek Building Construction from 1 February 2021 to 28 February 2022.[6] They show payments to the business in varying amounts from Eden Brae Homes, All State and the respondent.
[6] ARD page 202.
Mr Sek has also provided a copy of his tax return for the financial year ending 30 June 2021. It shows net income from his business of $79,042 with deductions for various business expenses. Neither party made submissions as to the relevance, if any, of the tax return.
The respondent has provided copies of a number of invoices issued by the business around the time of Mr Sek’s injury.[7]

[7] Annexed to the investigation report at Reply page 1.

SUBMISSIONS

Counsel provided written outlines of submissions prior to the conciliation conference and arbitration hearing, and expanded upon them at the hearing.

The applicant’s submissions

Mr Barter refers to the evidence relied on by the respondent in the dispute notices: that
Mr Sek had an ABN; that he was paid in accordance with invoices issued by his business; that he was responsible for paying his own insurance and organising his own sick leave and annual leave; that the work he performed for the respondent was incidental to the usual business of Adrian Sek Building Construction; that he charged GST on tax invoices; that he was free to subcontract for other work at any time; that in late 2021 he performed work for another company for approximately one month; and he supplied his own tools and was not required to wear a uniform.

In response to those matters, Mr Barter refers to Mr Sek’s evidence that he has worked exclusively for the respondent for two years with one exception; he has been provided with a uniform, although he does not wear it; he does not advertise his services to the public; he does not subcontract or employ others; he does not carry workers compensation; and, while he has his own selection of small tools, he relied on the respondent to provide him with larger and heavier tools.
Mr Barter refers to the decision of Deputy President Roche in Malivanek v Ring Group Pty Ltd[8] at paragraphs 235 to 243 and submits that Mr Sek had a special relationship with the respondent which precluded him from establishing his own customer base; his reasons for establishing a business pre-dated his “retainer” by the respondent; and he did not “systematically and regularly accept work to be done under contract” with anyone other than the respondent.
[8] Malivanek v Ring Group Pty Ltd [2014] NSWCCPS 4 (Malivanek).
Mr Barter submits that the two main indicia that Mr Sek was not regularly carrying on business for others at the time of his injury are, firstly that, except for a short period, he worked exclusively for the respondent and clearly had a “special relationship” with the respondent.
Secondly, relying on Turner v Stewardson,[9] Mr Sek was not required to have his own workers compensation insurance: cited in Malivanek at [216]. Mr Barter submits that the contract is clear that it was “N/A”; it is common ground that Mr Sek did not have workers compensation insurance despite Mr Smith’s understanding, and it was clearly not a requirement of the respondent.
[9] Turner v Stewardson [1962] NSWR 137.
Mr Barter submits that the subcontractor agreement has other provisions indicating the relationship was more like an employment relationship. It includes safety provisions more in keeping with an employment relationship, and provisions for termination if work was defective. Mr Barter submits these evidence a degree of control over the work Mr Sek was required to carry out. He was not able to sublet or reassign without the consent of the respondent, also consistent with the degree of control, and the provisions concerning “loyalty and confidentiality” clearly delineated between the customer, the respondent and Mr Sek.
Mr Barter submits that working for someone else on occasions, with the permission of the respondent, is not evidence that the work Mr Sek was doing for the respondent was incidental to his usual business.
Mr Barter submits that the special relationship Mr Sek had with the respondent, to make good work done for third parties with whom he had no direct relationship, is not consistent with the entrepreneurial nature of a business being regularly carried on by Mr Sek in his own name, and he is entitled to be characterised as a “deemed worker”.

The respondent’s submissions

Mr Perry relies on Scerri v Cahill[10] and submits that Mr Sek bears the onus of establishing that the contract between him and the respondent was such that he was a deemed worker.
[10] Scerri v Cahill (1995) 14 NSWCCR3 89.
Mr Perry submits that Mr Sek has failed to establish that the work he was performing for the respondent was anything other than work incidental to the trade or business that he regularly carried on. Mr Perry submits that the handwritten document prepared by Mr Sek on
18 March 2022 is instructive: Mr Sek acknowledges he has had an ABN for approximately five years, that is from around 2017, and his business caused invoices to be directed to the respondent.
Mr Perry refers to the wages schedule (I understand this to be the Account Transactions document[11]) and submits that it establishes beyond question that Mr Sek was injured while carrying out work incidental to the business regularly carried on by his own business. The document shows that the first payment from the respondent was received on
[11] At ARD page 202.
27 February 2021. Prior to that, payments were received from Eden Brae Homes. Mr Perry submits that, contrary to Mr Sek’s evidence that he was “transitioning” while finishing up work for Eden Brae Homes, he received payments from Eden Brae Homes in March, April, May, June and August 2021. Mr Perry acknowledges that it is not clear from the document when the work was actually done.
Mr Perry submits that the schedule of payments indicates that, after starting work for the respondent, Mr Sek continued to work for Eden Brae Homes up until August 2021 and, from 27 September 2021 for All State. Although Mr Sek says the work for All State took longer than expected, he continued to contract in the name of his own business. He was regularly performing contract work for others, inconsistent with the meaning of “deemed worker” as set out in Humberstone v Northern Timber Mills[12] and Higgins v Jackson.[13]
[12] Humberstone v Northern Timber Mills [1949] HCA 49; 79 CLR 389 (Humberstone).
[13] Higgins v Jackson [1976] HCA 37; 135 CLR 174 (Higgins).
Mr Perry submits that nothing in Mr Sek’s agreement with the respondent precluded him from working for others. There was no prohibition on him contracting with anyone else. He was always able to work for others, and he did. The fact that he did not work full time for anyone else does not change things.
Mr Perry refers to Mr Sek’s statement that, when he first started working for the respondent he was told he would be given 90% of their work and so did not advertise his services, and that the respondent “had an understanding” that he was on call while working for All State. In Mr Perry’s submission, it is not clear whose understanding it was. There is no evidence of an agreement to that effect and Mr Sek was able to work for All State between September and December 2021.
Mr Perry refers to Mr Sek’s statement that Mr Glendenning asked him “to help out” with his newly formed company. Mr Perry submits that the “help” was provided by Adrian Sek Building Constructions which charged for the services provided, as evidenced by a record of cash transactions.
Mr Perry submits that the record of cash transactions shows that Adrian Sek Building Construction and Maintenance received payments for multiple invoices from Eden Brae Homes, as well as from All State. The inference is that the business was contracting to parties other than the respondent. Mr Perry submits that the work being performed on 4 February 2022 when Mr Sek was injured was work incidental to a trade or business regularly carried on by Mr Sek under a business name and that he has not discharged the onus of establishing he falls within the meaning of “deemed worker”.
Mr Perry submits that this case can be distinguished from Malivanek in which the applicant did not work for anyone else other than the respondent and which was the basis for the special relationship between the worker and the respondent.
Mr Perry submits that this case can also be distinguished from Wathen v AUT Holdings Pty Ltd[14] in which the applicant had no business prior to working for the respondent. Mr Perry submits that the contrast in this case could not be stronger. Mr Sek had other business in which he was actively engaged up until December 2021 and it cannot be said he had a special relationship with the respondent.
[14] Wathen v AUT Holdings Pty Ltd [1977] 51 WCR 1 (Walthen).

Submissions in reply

In reply, Mr Barter submits that there is no real argument as to the law. As to the relevance of any prohibition against nother employment, Mr Barter submits that is not of itself determinative and, in any event, Mr Sek regarded himself as the respondent’s employee.
Mr Barter submits that Mr Sek’s evidence about his work for All State is not contradicted and should be accepted. He was doing 90% of the respondent’s work and the work for All State was a “one off job”. There is no evidence to contradict this. The evidence of work done for All State is not indicative of business regularly carried on. It was an exception to his work for the respondent. The last date of an invoice for Eden Brae Homes was 30 July 2021 end, except for a one-off job for his friend, Mr Sek worked exclusively for the respondent.

CONSIDERATION

Mr Sek bears the onus of establishing that he was a “deemed worker” at the time of his injury. He must establish that he was a party to a contract with the respondent to perform work, that the work exceeded $10 in value, that it was not work incidental to a trade or business regularly carried on by him in his own name or under a business or firm name, and that he has neither sublet the contract nor employed workers in its the performance: Scerri.
There is no dispute that Mr Sek was party to a contract with the respondent to perform work and that the work exceeded $10 in value. Nor is there any dispute that he neither sublet the contract nor employed others in its performance.
Whether Mr Sek was a “deemed worker” at the date of his injury turns on whether the work he carried on for the respondent was incidental to a trade or business regularly carried on by him under his own name or the name of his business.
I do not understand there to be any dispute that Mr Sek had carried on a business in the name Adrian Sek Building Construction and Maintenance for some years. Although the evidence is not entirely clear, he had held an ABN from around 2017, and said that he had worked for Eden Brae Homes “for some years” before Mr Busutill moved to work for the respondent and asked Mr Sek to “come over” and do some work for them.
In his statement to the investigator in March 2022, Mr Sek states that he had been contracting to the respondent “for a couple of years now”. That statement appears to be an anomaly.
In his first supplementary statement, Mr Sek states that he commenced working for the respondent “in or around 2021”. In his second supplementary statement, he states that, throughout February 2021, he started his “transition” out of Eden Brae Homes to the respondent. He attended several lots in February 2021 to finalise jobs and “complete handovers”. Following his transition, he worked for Eden Brae Homes on four dates completing outstanding jobs and finalising transportation of Eden Brae Homes’ building materials. He states that he has not completed any work for that company since 30 July 2021.
The Account Transactions document shows that the first payment from the respondent was received on 27 February 2021. This is consistent with Mr Sek’s evidence that he made his “transition” to the respondent around February 2021.
Mr Sek told the investigator that, when he first started working for the respondent, there was no written agreement, rather they had an oral agreement that he would complete the work that the respondent asked him to do. Mr Sek signed the subcontractor agreement on
10 February 2021. To the extent that he worked according to an oral agreement for a time, the evidence indicates that the period would have been a matter of weeks at most.
The significance of when Mr Sek started work for the respondent is that, in order to be a “deemed worker” for the respondent, the work for the respondent cannot have been incidental to a trade or business “regularly” carried on by him in his own name or under a business or firm name. For “regularly” to have any meaning requires consideration of a period beyond that immediately on or around the date of injury.
Mr Sek’s evidence is that he had worked for Eden Brae Homes for “some years”. There is no evidence as to any contract he had with that company, how much work he did for them or whether he worked for them exclusively. In any event, things changed around February 2021 when he started doing work for the respondent.
The Account Transactions document shows that Mr Sek was paid by Eden Brae Homes on four dates in February 2021, the last date being 25 February 2021. After receiving the first payment from the respondent on 25 February 2021, he received payments from Eden Brae Homes on 4 March 2021, 1 April 2021, 7 May 2021, 25 May 2021, 26 June 2021 and
5 August 2021. He states that he did not work for Eden Brae Homes after 31 July 2021, and there is no evidence to the contrary. I accept that he worked for Eden Brae Homes on four dates after he started regular work for the respondent.
Except for the dates in the preceding paragraph, the Account Transactions document shows that, from 25 February 2021 to 24 September 2021, all the payments received by Mr Sek were from the respondent.
A difficulty with this document, as Mr Perry acknowledged, is that it does not show the dates on which the work was actually carried out. However, it indicates payments received from the respondent regularly, on several dates each month.
Although Mr Sek states that he worked full time for the respondent, up to 30 to 40 hours a week when things were busy, there is no evidence to show the hours he worked, and
Mr Smith’s evidence does not refer to the hours worked. Nevertheless, according to the Account Transactions document, which is not disputed, all of Mr Sek’s work from
25 February 2021 to 24 September 2021 was performed for the respondent.
Things changed around October 2021 when Mr Sek started performing work for All State. He claims he got “permission” from the respondent to do so. Mr Smith does not specifically dispute this claim but he maintains that Mr Sek was always free to contract with others, and nothing in the written agreement precluded Mr Sek from working for others.
In the end probably little turns on this point. Had the agreement specifically precluded work for others, there might be little argument that Mr Sek was a deemed worker. However, the absence of any prohibition is not, in my view, determinative.
Mr Sek states that he was contracted to the respondent on a full-time basis and there was an oral agreement that he would be given 90% of the respondent’s work. Mr Smith does not specifically dispute this claim, and nothing in the written agreement reflects this. However, even if that was agreed or happened in fact, it says nothing about how much of Mr Sek’s work was work for the respondent, and whether it was incidental to other work that he regularly carried on.
On the other hand, I accept Mr Sek’s evidence that, once he understood the amount of work he would be given by the respondent, he had no need to advertise his services or “hold himself out” for other work.
Although Mr Sek described the work for All State as helping Mr Glendenning, there is no dispute that his business invoiced, and was paid for, work on various dates. He says
Mr Glendenning originally indicated the work would take about four weeks but it was delayed by weather. It is clear that Mr Sek understood this to be effectively four weeks full time because he says he ended up working on 28 days “reflecting their original agreement”.
The Account Transactions document covers the period 1 February 2021 to 18 February 2022. It shows that, from 27 September 2021, 32 payments were received on nine dates from All State and 28 payments on nine dates from the respondent. Again, it is difficult to know what to make of this, but it supports Mr Sek’s evidence that he continued to make himself available, and was available, to the respondent while doing the work for All State.
In Malivanek, Deputy President Roche considered the authorities relevant to the meaning of “deemed worker”. He cited Humberstone, in which Dixon J said of similar provisions at the time, that the purpose of the exception or exclusion was to confine its benefit to persons:
“who do not conduct an independent trade or business, who are not holding themselves out to the public under their own or a firm or business name in carrying on such a trade or business and to do not in the course of that trade or business, as an incident of exercise, undertake the work by entering into the contract.”
Dixon J said the distinction that the policy of the provision to draw was:
“between on the one hand an independent contractor whose relation with the principal is special or particular either because it is outside the course of the general business of the contractor or the general gractice of his trade or because he has no such general business or is not a general practitioner of his trade, and on the other hand an independent contractor who performs work successively or perhaps concurrently for his customers or others in the course of a definite trade or business carried on systematically or who holds himself out as ready to do so.”
His Honour considered that the words “carried on”, “regularly” and “in his own name or under a firm or business name” all indicated “a business or trade conceived as independently existing or exercised by a person holding himself out to the public under a name or style”.
In Higgins, the High Court considered the question of whether there must be a “holding out” before an applicant is prevented from relying on Schedule 1. Barwick CJ (Steven, Mason and Murphy JJ concurring) said:
“The subsection requires the business to be carried on with regularity. A contractor who regularly contracts can scarcely be said not to hold himself out as carrying on the business in the course of which he makes the contract. But in my opinion, there is no separate element required by the sub section of holding out. It is sufficient … That the contractor regularly carries on business in his own or a firm name.”
In Wathen, the applicant had been conducting a general business prior to contracting with the respondent to do work exclusively for that company. The respondent argued that the work performed and the contract was “incidental to” a business regularly carried on by the worker under his own name or under a business or firm name. Mahoney JA concluded that the worker “had no trade or business other than what he was doing for the defendant” and it was not “work incidental”.
Deputy President Roche concluded that the work being performed by Mr Malivanek was not work “incidental to a trade or business regularly carried on by him in his own name or a firm name”. (As the other conditions in the schedule were satisfied, Mr Malivanek was a deemed worker at that time and entitled to compensation.) He stated his reasons as (paraphrased):
·        considering the period April 2005 to March 2007, Malivanek worked as an employee for one company from April 2005 to May 2006, he then helped his daughter until October 2006, he worked for the respondent on two jobs in October and November 2006 and did no work from then until his accident on
22 March 2007;
·        the respondent’s belief that he was subcontracting to other people from
April 2005 to May 2006 was not borne out by the evidence in the invoices;
·        evidence as to work he was said to have done for others was vague and imprecise and of no persuasive value;
·        he was doing some work for two hours helping a friend and other work was on his home; the evidence did not establish that he was conducting a trade or business and did not establish that he had his own clientele, and
·        the only evidence that he was working elsewhere at the time of the accident is that he said he would try to fit work around his other work commitments.
Deputy President Roche was satisfied that there was a “special or particular” relationship between Mr Malivanek and the respondent, and he did not perform work successively or concurrently for his customers in the course of a business or trade. He had no customers and no independent business outside the work he did for the respondent.
Deputy President Roche said those matters would have been sufficient for Mr Malivanek to be a deemed worker but there were additional reasons:
(a)    the applicant did not employ a worker or workers at the date of injury or any other time;
(b)    while he had a business name and an ABN, he had obtained them as a condition of working for the respondent; the evidence did not support the conclusion that he regularly carried on a business or trade prior to working for the respondent;
(c)    there was no evidence that the business had any tangible assets other than hand tools that were used by all in support of the business;
(d)    he did not advertise for work and his vehicle had no name on it and it could be inferred no advertising on it;
(e)    the evidence suggested that the applicant was not free to engage with whomever he wished as a business would normally be;
(f)    the business had no identifiable goodwill; all the income generated came from the applicant’s labour and all of its contracts were with the respondent;
(g)    though the business issued invoices, they were all hand-written, without letterhead business address or phone number and none of the other information one would normally expect of a business, and
(h)    while it is not necessary for there to be a “holding out” before an applicant can be said to be regularly conducting a trade or business, the applicant did not “systematically and regularly accept work to be done under contract”; he had no trade or business other than what he was doing for the respondent.

Malivanek is not on all fours with the present case. For example, Mr Sek had an ABN prior to working for the respondent and regularly carried on a business or trade prior to working for the respondent. The evidence suggested that Mr Malivanek was not free to engage with whomever he wished; there was no evidence that he worked for anyone else; and the hand-written invoices were not what might be expected of a business.
On the other hand, the cases are similar in some important respects. There is no challenge to Mr Sek’s evidence that he was pleased to have work with the respondent because it meant he did not have to advertise to others. There is no evidence that he “held himself out” to others for work. I am not persuaded that his agreement to work for Mr Glendenning, regardless of the fact that he was paid, was the result of him “holding himself out”. I accept his evidence that they were friends and Mr Glendenning asked him to do the work for that reason.
Nor is there evidence that Mr Sek “systematically and regularly” accepted other work. There is no dispute that he continued to do some work for Eden Brae Homes but I accept his evidence that he worked on four dates while finishing jobs and transitioning to the work for the respondent. The evidence supports the conclusion that he worked solely for the respondent until he agreed to do the work for All State. In the period up until his injury, the only other person or business he worked for was All State.
I accept, as Mr Barter submits, that Mr Sek’s agreement with the respondent evidences a degree of control by the respondent. The fact that the respondent told Mr Sek where and when he was required is not, in my view, determinative; he had to be given the work in some way. However, I agree that the clauses relating to consecutive days to be worked where possible unless otherwise directed and to follow all reasonable directions, and provisions concerning supervision, termination, safety and loyalty, tend to suggest an employee-type relationship.
Mr Sek told the investigator that the respondent provided him with a uniform. Mr Smith disputes that. He says that some “promo gear” was provided and there was no obligation on Mr Sek to wear it. I accept Mr Smith’s evidence which is borne out by Mr Sek’s hand-written note in which he states he did not wear a uniform. However, while a requirement to wear a uniform might suggest a special relationship, it is not determinative.
The evidence about the provision of tools is not particularly clear. In his statement to the investigator, Mr Sek says he only had his own small tools and relied on the respondent for larger tools. Mr Smith disputes that claim. It is not clear what larger tools Mr Sek says he relied on the respondent for, what work it was needed for, or how often that work was required. In his handwritten note, he states that he provides his own tools “most of the time”.
While the provision of tools is often an indication that a relationship is not one of employment, it is not necessarily determinative: Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance.[15] Given the evidence, I place no weight on the provision of tools or otherwise.
[15] Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2QB 497.
The evidence is finely balanced but I consider that it supports the conclusion that the work that Mr Sek did for the respondent was not incidental to work that he regularly carried on in his own name or in the name of a business. In coming to this conclusion, I give weight to the fact that, for approximately a year before his injury, Mr Sek worked four days finishing up with Eden Brae Homes, and the only other work that he did in that time was for All State. I accept that his friendship with Mr Glendenning was the reason he did that work. I find it did not alter his relationship with the respondent and the evidence shows that he continued to do work for the respondent throughout that time.
For these reasons, I find that Mr Sek was a deemed worker at the time of his injury and is entitled to weekly payments as agreed, and reasonably necessary medical expenses.

[2023] NSWPIC 117

21 March 2023