Simon Blackwood (Workers' Compensation Regulator) v Blue Wren Holdings Pty Ltd
[2014] ICQ 11
•9 May 2014
INDUSTRIAL COURT OF QUEENSLAND
CITATION: | Simon Blackwood (Workers' Compensation Regulator) v Blue Wren Holdings Pty Ltd [2014] ICQ 011 |
PARTIES: | Simon Blackwood (Workers' Compensation Regulator) v Blue Wren Holdings Pty Ltd |
CASE NO: | C/2013/24 |
PROCEEDING: | Appeal against decision of Industrial Commission |
DELIVERED ON: | 9 May 2014 |
HEARING DATE: | 31 October 2013 |
MEMBER: | Deputy President O'Connor |
ORDERS: | 1. The appeal is dismissed. |
| CATCHWORDS: | WORKERS' COMPENSATION - MEANING OF "WORKER" - CONTRACTORS - Where there was no dispute that the workers' compensation claimant suffered personal injury - Where the claimant performed work for the respondent under a contract - Whether the claimant was a "worker" - Whether the claimant worked "for labour only or substantially for labour only" - Whether the claimant was paid to achieve a specific result or outcome - Whether the claimant had to supply equipment or tools of trade needed to perform the work - Whether the claimant would be liable for the cost of rectifying any defect in the work APPEAL TO INDUSTRIAL COURT - APPEAL AND NEW TRIAL - NATURE OF APPEAL - APPEALS BY WAY OF REHEARING - SCOPE AND EFFECT OF REHEARING - Where the Workers' Compensation and Rehabilitation Act 2003 provides for an appeal to the Court "by way of rehearing" - Whether the hearing should proceed de novo - Recent authority considered |
| CASES: | Industrial Relations (Transparency and Accountability of Industrial Organisations) and Other Acts Amendment Act 2013 (Qld), s 76 Ace Insurance Ltd v Trifunovski (2013) 209 FCR 146 |
| APPEARANCES: | Mr S. P. Gray for the appellant, directly instructed. Dr M. Spry for the respondent, instructed by Cooper Grace Ward. |
Decision
On 11 May 2012 Mr Zbigniew Rusek applied under the Workers' Compensation and Rehabilitation Act 2003 (Qld) ("the Act") to be compensated for an injury sustained on 9 May 2012. WorkCover Queensland accepted that application. On review, the Workers' Compensation Regulator confirmed WorkCover's decision to accept Rusek's application for compensation. On appeal to the Industrial Commission, the Regulator's decision was set aside.[1] The Regulator now appeals to this Court, seeking orders that the Commission's decision of 25 May 2013 be set aside and the Regulator's review decision of 4 October 2013 be confirmed.
[1] Blue Wren Holdings Pty Ltd v Q-COMP (WC/2012/425) - Decision <
It was not in contention between the parties to the appeal before the Commission that Rusek suffered personal injury to his leg and shoulder as a consequence of his leg and shoulder being "crushed by glass". The sole question for determination by the Commission was whether Rusek was a "worker" within the meaning of s 11 of the Act. The very same question now comes before the Court in this appeal.
Nature of appeal
Section 561 of the Act provides:
"(1) A party aggrieved by the industrial magistrate's or the industrial commission's decision may appeal to the industrial court.
(2) The Industrial Relations Act 1999 applies to the appeal.
(3)The appeal is by way of rehearing on the evidence and proceedings before the industrial magistrate or the industrial commission, unless the court orders additional evidence be heard.
(4) The court's decision is final."
The powers of the Court on appeal are found in s 562 of the Act:
"(1) In deciding an appeal, the industrial court may—
(a) confirm the decision; or
(b) vary the decision; or
(c) set aside the decision and substitute another decision."
As to the nature of the appeal to this Court, the Regulator and Blue Wren both relied on the following statement of Hall P in Q-COMP v Ungerer:
"[I]t is not necessary for … the Appellant to identify an error of law. The Appeal at s 561 of the Act is not confined in the same way as an appeal at
s 341(1) of the Industrial Relations Act 1999. The Appeal is by way of rehearing of the evidence of proceedings at first instance, see s 561(3) of the Act. Neither must the Appellant satisfy the criteria of House v The King. The question whether Mr Ungerer suffered an over time injury, may be answered 'yes' or may be answered 'no'. There is no discretion to exercise. However, I do accept appeals are about the correction of error. Where the Commission's reasons are sufficiently comprehensive as to expose the basis of the Commission's decision and the Commission's findings are reasonably open, this Court should not intervene."[2]
[2] Q-COMP v Ungerer (C/2012/13) - Decision < [5] ("Ungerer").
In Davidson v Simon Blackwood (Workers' Compensation Regulator),[3] Martin P did not follow Ungerer but held that the correct statements of principle as to the nature of an appeal to the Industrial Court are those contained in Allesch v Maunz[4] and Fox v Percy.[5] In considering the statutory provisions Martin P wrote:
"These provisions are of similar effect to those considered by the High Court in Allesch v Maunz. In considering the difference between an appeal by way of rehearing and a hearing de novo it was emphasised that, in the former type of appeal:
(a) the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error, and
(b)an appellate court can substitute its own decision based on the facts and the law as they then stand."[6]
[3] [2014] ICQ 008 ("Davidson").
[4] (2000) 203 CLR 172.
[5] (2003) 214 CLR 118.
[6] Davidson [2014] ICQ 008 [10], citing Allesch v Maunz (2000) 203 CLR 172, 180 [23].
In the joint judgment of Gleeson CJ, Gummow and Kirby JJ in Fox v Percy, their Honours held:
"The 'rehearing' does not involve a completely fresh hearing by the appellate court of all the evidence. That court proceeds on the basis of the record and any fresh evidence that, exceptionally, it admits. …
On the one hand, the appellate court is obliged to 'give the judgment which in its opinion ought to have been given in the first instance'. On the other, it must, of necessity, observe the 'natural limitations' that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.
… the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of 'weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect'"[7]
[7] (2003) 214 CLR 118, 125–7 [22]–[23], [25], quoted in Davidson [2014] ICQ 008 [11].
The relevant legislative provisions and authorities
The meaning of "worker" is set out in s 11 of the Act:
"11 Who is a worker
(1) A worker is a person who works under a contract of service.
(2)Also, schedule 2, part 1 sets out who is a worker in particular circumstances.
(3)However, schedule 2, part 2 sets out who is not a worker in particular circumstances.
(4) Only an individual can be a worker for this Act."
At the relevant time, sch 2, pt 1 provided:
"Part 1 Persons who are workers
1 A person who works under a contract, or at piecework rates, for labour only or substantially for labour only is a worker.
2 A person who works for another person under a contract (regardless of whether the contract is a contract of service) is a worker unless–
(a) the person performing the work–
(i) is paid to achieve a specified result or outcome; and
(ii) has to supply the plant and equipment or tools of trade needed to perform the work; and
(iii) is, or would be, liable for the cost of rectifying any defect in the work performed…"[8]
[8] The definition of "worker" was amended by s 76 of the Industrial Relations (Transparency and Accountability of Industrial Organisations) and Other Acts Amendment Act 2013 (Qld), removing items 1 and 2 and renumbering the remaining items.
In Brett Holt Plumbing Pty Ltd v Q-COMP Review Unit, Hall P wrote:
"Further, the explicit purpose of the scheme at s 12 and Schedule 2 is to bring some persons within the definition of 'worker' without regard to whether the characterisation is justified (Part 1), and to exclude other persons from the definition without regard to whether characterisation as a 'worker' is truly justified (Part 2). Additionally, whereas one may readily grasp the notion of 'payment made wholly or principally for the labour of the person to whom the payments are made' with which the fiscal cases were concerned, read literally Schedule 2, Part 1, s. 1 is a nonsense. A person cannot work under a contract 'substantially for labour only'. A person may work under a contract for labour only. A person may work under a contract other than for labour only. A person working under a contract otherwise than for labour only may be paid principally for the labour expended. But a person cannot work under a contract 'substantially for labour only' nor may a person be paid 'substantially for labour only'. The adjectives 'substantially' and 'only' are antipathetic. Schedule 2, Part 1, s 1 is the imperfect expression of an idea. It has to be read robustly lest the imperfections impede achievement of the section's purpose."[9]
[9] (2005) 178 QGIG 255.
Schedule 2 was first inserted to the WorkCover Queensland Act 1996 (Qld) by the Workplace Health and Safety and Other Acts Amendment Act 2003 (Qld). It was carried over with the enactment of the Workers' Compensation and Rehabilitation Act 2003 (Qld), as the Explanatory Note to the Workers' Compensation and Rehabilitation Bill 2003 (Qld) explains:
"The Bill carries over and amends schedule 2, Part 1 of the WorkCover Queensland Act 1996, inserting a new provision specifying that any person who works for another person under a contract (regardless of whether the contract is a contract of service) is a "worker" unless the person can satisfy all three elements of a results test, or it can be shown that a personal services business determination is in effect for the person under the Income Tax Assessment Act 1997 (Cwlth).
The three elements of the results test to be satisfied are that:
• The person performing the work is paid to achieve a specified result or outcome.
• The person performing the work has to supply the plant and equipment or tools of trade needed to perform the work.
• The person is, or would be, liable for the cost of rectifying any defect in the work performed.
A person who works for another person under a contract would ordinarily be a person who works for labour only or substantially for labour only, or a person who seeks to receive a reward mainly for his or her personal efforts or skills. However, for the purposes of the results test, it does not matter whether the contract is a contract of service, a contract for services, or any other type of contract. For example, a contract which is substantially for supplying or selling goods, granting a right to use property, or providing the use of an asset may involve some degree of labour which is incidental or ancillary to the main purpose of the contract. The provision of labour would not be the substantial intent of the contract and section 1A would not apply because the contract does not substantially concern one person working for another person. In determining the main purpose of the contract, it may be necessary to look past the contract to the true nature of the agreement between the two parties.
In order to prove that an individual is not a "worker", all three elements of the results test must be met.
Despite the results test, a person will not be considered to be a worker if they have a personal services business determination under the Income Tax Assessment Act 1997 (Cwlth), section 87-60. This section specifies the matters about which the Commissioner of Taxation must be satisfied in order to make a determination that a person is performing work and receiving income as a personal services business.
In the event of an application for compensation being lodged, all of the information available at the time of the claim may be considered. This is in keeping with the current common law as enunciated by the High Court of Australia in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 and Hollis v Vabu Pty Ltd (2001) HCA 44 that there is no single objective test for deciding who is an "employee" or "worker" and that all of the circumstances of a case must be considered, on an individual case by case basis. Part 1 does not therefore seek to replace or codify the common law meaning of "employee" or "worker".[10]
[10] Explanatory Note, Workers' Compensation and Rehabilitation Bill 2003 (Qld) 181–2.
Grounds of appeal
The grounds of appeal are that the Commission erred in law and fact in its interpretation and application of s 11 of the Act by:
"(a) determining that as Rusek provided a vehicle and was solely responsible for meeting all maintenance and running costs, it was open, based on the issue of the provision of the vehicle by Rusek, to find that, for the purposes of the Act, he was working for substantially labour only; and
(b) failing to determine that Mr Zbigniew Rusek was a worker" on the basis of the "results test".
(a) Whether working "for labour only or substantially for labour only"
The appellant argues that the Commission erred in determining that "the provision of a fully maintained vehicle" was sufficient to conclude that Rusek was not a worker under the Act. Counsel for the appellant referred the Court to Reliable Couriers Pty Ltd v Q-COMP[11] and SPE Pty Ltd v Q-COMP[12] to support the submission that the provision of a motor vehicle did not preclude the categorisation of the contractor as a worker. By adopting an approach focusing solely on the motor vehicle, the appellant argues, the Commission reached a conclusion which was not reasonably open on the evidence before it.
[11] (2005) 180 QGIG 130 ("Reliable Couriers").
[12] SPE Pty Ltd v Q-COMP (C/2010/19) - Decision <>
At paragraph [71] of its reasons for decision, the Commission concluded:
"As was the case with Robinson it is not open, based on the issue of the provision of the vehicle by Rusek, to find that for the purposes of the Act he was working for substantially for labour only."[13]
[13] Blue Wren Holdings Pty Ltd v Q-COMP (WC/2012/425) - Decision < [71], citing Robinson v Q-COMP (C/2009/30 - Decision < type="1">
That conclusion needs to be seen in context. Earlier, the Commission considered the evidence of Blue Wren's only witness, Mr Lance Styles:
"The evidence of Styles was also that Rusek had to, as part of the employment, provide a vehicle, tools, transport materials to site and then perform the installations. There were occasions when Rusek had transported materials to a site but was not required to undertake the installation."[14]
[14] Ibid [66].
The Commission then considered the authorities:
"In Hollis, McHugh J at paragraph 71 in respect of employees who provide their own motor vehicles, stated:
'If the couriers were confined to bicycle riders, there would be much force in the contention that, on the classical tests, they were employees. That is because the couriers were subject to extensive control and direction – always a strong indication that the worker is an employee. But the couriers included those who provided their own motor vehicles. Given the course of authority in this Court concerning workers who provide their own equipment, it seems impossible to say that those couriers who provided their own motor vehicles were employees. The right to supervise or direct the performance of a task cannot transform into a contract of service what is in substance an independent contract and, when a person has to provide equipment such as a motor vehicle, the conventional view is that the person is not an employee. In principle, there can be no distinction between those couriers working for Vabu who provide their own bicycles and those couriers who provide their own motor vehicles.'.
In the Reliable Couriers decision, President Hall stated, in respect of Employees who provide their own motor vehicles for work:
'Notwithstanding the decision in Hollis v Vabu Pty Ltd, op cit, the conventional view continues to be that the person who has to provide expensive items of equipment such as a motor vehicle is not an employee, compare Hollis v Vabu Pty Ltd, op cit at paragraphs 22 and 47 per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ and para 50 per McHugh, Green v Q-Comp (2005) 178 QGIG 75 at 77 and Australian Air Express Pty Ltd v Langford [2005] NSWCA 96 at para 31…'.
In the Robinson matter, President Hall once again dealt with the provision of a vehicle (by Robinson) to be used in the course of performing work stating:
'Quite apart from the circumstance that the Appellant had to pay the rent for the shed from the monies paid to him for his labour, he also paid for the utility which he used to transport the gates to the intended destination. A conclusion that the Appellant was working substantially for labour only, was not open.'.
In the case of Rusek, it is not of question that he provided a vehicle for the purposes of his employment and was solely responsible for meeting all maintenance and running costs.
As was the case with Robinson it is not open, based on the issue of the provision of the vehicle by Rusek, to find that for the purposes of the Act he was working for substantially labour only."[15]
[15] Ibid [67]–[70], quoting Hollis v Vabu Pty Ltd (2001) 207 CLR 21, 49–50; Reliable Couriers (2005) 180 QGIG 130, 131.
The conclusion at para [71] was open on the evidence before the Commission and is consistent with the established authorities. In the circumstances, I do not consider that the Commission has fallen into error.
(b) The "results" test
At the relevant time, s 2(a) of sch 1 pt 1 deemed a person to be a worker unless it can be established that the person performing the works:
"(i) is paid to achieve a specified result or outcome; and
(ii) has to supply the plant or equipment or tools of trade needed to perform the work; and
(iii)is, or would be, liable for the cost of rectifying any defect in the work."[16]
[16] The "results test" has now been removed: see above n 8.
In relation to sch 2 pt 1 s 2(a)(i) the Commission concluded at para [64] of its reasons that "the evidence points to Rusek accepting the jobs, being paid to achieve a specific result or outcome as a result of performing the set installation."
Counsel for the appellant relied on the observations of Hall P in Reliable Couriers to submit that the specific result or outcome was not capable of identification at the commencement of the contract. It was argued that Rusek would not have known the specific result or outcome at the commencement of his contract with Blue Wren and that the results or outcome are only identified as the contract is performed.
Hall P in Reliable Couriers found it difficult to apply the language of s 2(a)(i) to a case in which the "results or outcomes" are not specified at the time of the commencement of the engagement but became identified as the contract is performed.[17] The outcome in Reliable Couriers turned on a different set of factual circumstances. The appellant in that case employed contract couriers to pick up and deliver goods on behalf of the appellant's customers.[18] By means of an advanced communication network, the appellant's radio operator would offer a booking received from a customer to a courier by means of data transfer. Hall P concluded that couriers did not meet the test posited by s 2(a)(i) of the Act.
[17] (2005) 180 QGIG 130, 133.
[18] Ibid, 132.
In considering whether s 2(a)(i) has been satisfied, I accept the submission of the respondent that the job sheet outlined the specific result or outcome that was to be achieved. Rusek knew at the commencement of his engagement the specific result or outcome he was to achieve. By using the job sheet and the rates schedule, Rusek was able to calculate the remuneration that he would receive once he had achieved the specific result or outcome identified in the job sheet.
Turning to s 2(a)(ii), and whether Rusek supplied the plant and equipment or tools of trade needed to perform the work, the appellant submitted that the tools of trade supplied by Rusek was limited and were only required to assemble the components of the shower screen, rather than any significant aspect of construction.
The appellant's submission fails to give adequate consideration to the provision of a motor vehicle which is a significant piece of plant and equipment.
The evidence of Styles was that Rusek was required to have his own motor vehicle and supply his own tools including cordless drills, drill pits and levels. Rusek's evidence was that he supplied the van, was responsible for maintaining it, for registration and insurance.
The evidence supports a conclusion that Rusek supplied the plant and equipment or tools of trade needed to perform the work and, accordingly, s (2)(a)(ii) is satisfied.
The third element of the "results" test, that is, the liability of Rusek to rectify any defect in work performed by him was conceded by the appellant. Such a concession was no doubt influenced by the acceptance of the implied term that an independent contractor (or an employee) is required to exercise reasonable skill and care in the performance of his calling.[19]
[19] See Smith v Bush [1990] 1 AC 831, 843; Kashemije Stud Pty Ltd v Hawkes [1978] 1 NSWLR 143, 146.
In examining the relationship between Blue Wren and Rusek the evidence supports the following conclusions reached by the Commission:
· remuneration was to be paid on receipt of an invoice and remunerated in accordance with the agreed rates schedule;
· Rusek was required to provide his own vehicle to carry out his work and was solely responsible for meeting all maintenance and running costs;
· Rusek was free to accept or not accept and job that was offered;
· There were no restrictions on Rusek performing outside work for other persons;
· Rusek was entitled to engage other people to undertake the work offered by the appellant;
· GST was paid to Rusek and he was responsible for remitting payments to the Australian Tax Office ("ATO") as well as make tax instalments to the ATO for monies received;
· Rusek had his own Australian Business Number;
· Rusek did not have access to entitlements such as holiday pay, sick leave and superannuation;
· Rusek was required to provide work tools including cordless drills, drill pits and levels;
· Rusek was required to undertake rectification work on any defective work; and
· There was limited communication in the course of the work day.
The above features tend against a conclusion that there is an employment relationship between Rusek and Blue Wren. In Ace Insurance Ltd v Trifunovski Buchanan J wrote:
"[I]n cases of the present kind, where it is necessary to examine whether a particular relationship is one of employment, or of a different character, it now seems established in Australian law that all the circumstances should be taken into account. In Hollis the majority noted (at [24]):
'It should be added that the relationship between the parties, for the purposes of this litigation, is to be found not merely from these contractual terms. The system which was operated thereunder and the work practices imposed by Vabu go to establishing "the totality of the relationship" between the parties; it is this which is to be considered.'"[20]
[20] (2013) 209 FCR 146, 174 [107].
In Green v Q-COMP Review Unit, a case which is apposite to the matter presently before the Court, Hall P in considering whether the appellant was a worker or an independent contractor, wrote:
"In this case both the substantive terms of the agreement and its implementation indicated that the Appellant was not an employee. The Appellant was required to and did provide and maintain a motor vehicle, not merely to travel to work sites, but in order to discharge the duties of a courier. She was required to and did keep it insured under a comprehensive policy of insurance. She was required to and did maintain a public liability policy and was encouraged to maintain a personal sickness and accident policy (and for a period did). The Appellant was paid on presentation of an invoice (admittedly by filling in a form prepared by TOLL) recording her services. She had registered for GST and held an Australian Business Number. A GST Component was added to the tax invoices. She completed a business activity statement. She submitted personal tax returns which she claimed the expenses of operating the vehicle as a business expense. The Appellant was entitled to use and had used a replacement driver. In such cases she invoiced the company as if she had performed the services and paid the replacement driver cash in hand. No tax was deducted from the payments made by TOLL to the Appellant under the invoices. No provision was made for paid holidays or rostered days off and the Appellant did not receive same."[21]
[21] (2005) 178 QGIG 75, 76.
Humberstone v Northern Timber Mills[22] involved a claim under Victorian workers' compensation legislation. Humberstone was a carrier, used his own truck (primarily to carry timber), and paid for petrol, insurance and the maintenance of the truck. He was found not to be an employee. Latham CJ said:
"The distinction between a servant and an independent contractor was explained in the case of Performing Right Society Ltd v Mitchell & Booker (Palais de Danse) Ltd. If the work done by one person for another is done subject to the control and direction of the latter person as to the manner in which it is to be done the worker is a servant and not an independent contractor. If, however, the person doing the work agrees only to produce a given result but is not subject to control in the actual execution of the work he is an independent contractor.[23]
[22] (1949) 79 CLR 389.
[23] Ibid, 396, citing Performing Right Society Ltd v Mitchell & Booker (Palais de Danse) Ltd (1924) 1 KB 762.
Dixon J wrote:
"The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter's order and directions."[24]
[24] Ibid, 404.
I am of the view that there was evidence before the Commission to support the conclusions it reached. Whilst the findings of the Commission were not as comprehensive as they could have been, they were not so deficient as to constitute an appealable error. The appellant has not demonstrated that the Commission fell into an error of the sort which calls for correction.
Conclusion and orders
The appellant has not demonstrated any error. The appeal is dismissed.
In considering the appropriateness of making an order pursuant to s 563 of the Act, I have formed the view that the appeal to this Court has not been instituted vexatiously or without reasonable cause and, accordingly, there should be no order as to costs.
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