Susan Bergman v Broken Hill Musicians Club Ltd T/A Broken Hill Musicians Club

[2011] FWA 1143

[2011] FWA 1143

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Susan Bergman
v
Broken Hill Musicians Club Ltd T/A Broken Hill Musicians Club
(U2010/10537)

COMMISSIONER STEEL BROKEN HILL, 21 FEBRUARY 2011

Termination of employment - Jurisdiction - Whether the applicant was an employee.

[1] This matter concerns an application under s 394 of the Fair Work Act 2009 (“the Act”) by Mrs Susan Bergman (“the applicant”) who alleges that the termination of her employment on 30 June 2010 with the Broken Hill Musicians Club Ltd (“the respondent”) was harsh unjust or unfair.

[2] The application was subject to a telephone conciliation conference on 9 August 2010, which did not resolve the matter. The respondent at that time had provided a response in a relevant Form F3 that indicated:

• The applicant was a casual employee working limited hours.



• That she had a unique pay arrangement that was arrived at mutually with the respondent and which was known and agreed to by the employee.



• That the occasion of the applicability of the Modern Award for the industry of the respondent’s activity from 1 January 2010 would consequently result in the applicant being paid more in wages.



• That the applicant stated at the conclusion of discussions with her employer, that she would not continue her employment with the respondent.



• That the respondent was willing to allow the applicant to return to her former role on terms to be identified and to continue her employment.

[3] On 17 August 2010 the respondent notified Fair Work Australia, by lodgement of a Form F4, that they now objected on jurisdictional grounds to the application for unfair dismissal remedy on the following basis:

“That the applicant was engaged by the respondent in a voluntary capacity or in the alternative, under a contract for services and therefore, the employee was not an employee as defined and required by the Act and the common law.” 1

[4] The parties were directed to prepare and provide documents and argument in respect to both the jurisdictional objection and the applicant’s merit case. A hearing was held at Broken Hill on 3 and 4 November 2010 and for the convenience of all parties heard both matters. The parties were granted leave to be represented by counsel.

[5] The tribunal therefore was engaged in determining initially if the applicant was in fact employed by the respondent and not a volunteer or contractor of services to the respondent. If the applicant is other than an employee the tribunal has no jurisdiction to review the separation or alleged termination of employment under s 394 of the Act. The respondent contends further that the termination of employment on 30 June 2010 was not at the initiative of the respondent and hence not within s 386(1)(a) of the Act giving rise to a further jurisdictional issue.

[6] The Tribunal is also advised that the applicant is pursuing a claim with the office of the Fair Work Ombudsman in regard to underpayment of wages as an employee. Such claim obviously, may be affected by the outcome in this matter.

Evidence

[7] The respondent provided witness evidence from Mr Trevor Brown the former General Manager, Mr Charles Sultana, a Board member and Mr Michael Dwyer, a patron of the respondent. The applicant gave evidence on her case. The tribunal found the applicant, Mrs Bergman, and the respondent’s witnesses Mr Brown and Mr Dywer had limitations with recall of events and facts in this matter. Mr Sultana’s evidence was limited but reliable as to his involvement.

Was the applicant an employee or other than an employee?

The respondent’s submissions

[8] The respondent asserts that it is a not for profit organisation that provides entertainment bingo as a service to its members. The applicant was a member of the club and a regular bingo patron who acted in the role or capacity as a bingo caller during the period January 2005 to June 2010. The applicant was paid $50 per week for doing so.

[9] The respondent submits this was an honorarium, a voluntary fee for services rendered and not wages and that there was no contract of service such that the applicant was an employee of the club. They contend that the relationship was not an employment relationship as there is no identified arrangements or factors which indicate an intention to enter into a legal relationship, taking into account the actions and statements of the parties and the circumstances of such factors and relies to this extent on the findings of Lunn J in the matter of Gibbs v Christies Beach Sports & Social Club (No 1) 2

[10] Those relevant factors are identified as:

• The selection of the applicant as a bingo caller was left to the bingo patrons themselves including the former caller and the club was not involved in the process. Bingo patrons being all members of the club.



• The applicant was not constrained from playing gambling machines in her breaks unlike employees of the club.



• There is no evidence of the applicant receiving an offer of the role or employment from the respondent and no evidence of her receiving the customary documentation that other employees received from the club on commencement of employment. There is further, no explanation as to the lack of activity or agitation by the applicant in relation to her asserted “pay” over a significant period.



• The respondent did not monitor the applicant’s times of attendance or the times of the bingo sessions nor intervene in the conduct of such sessions.



• Other persons did the bingo calling at times when the applicant was absent and the applicant did not inform the club that she would be late or absent on such occasions. These people may or may not have been paid by the applicant. The applicant had a power of delegation and organisation, which she used.



• The applicant was advised she was not required to attend staff meetings.

[11] The respondent asserts that the relationship of the applicant to the respondent was akin to that of a volunteer. The payment of the $50 per week was a nominal fee or honorarium and not intended to affect the relationship. They assert the factors such as payroll records, the letters to Centrelink, the references by the respondent to the applicant as a form of employee, do not weigh against there being no contract of employment existing.

The applicant’s submissions

[12] The applicant asserts that the relationship was not that of a volunteer and that the reliance on Gibbs above by the respondent is superficial on the basis that Gibbs can be differentiated significantly from this matter. The applicant contends: that the regularity of the bingo calling was significantly in contrast to Gibbs and that the work was shared in Gibbs, unlike in the applicant’s case generally. In Gibbs the plaintiff plainly volunteered her services to a club unlike in this case. The payment of $50 to the applicant was regular and unrelated to bingo takings and in reference to five sessions of bingo per week. Further, the applicant asserts the work was covered by a state award and this circumstance was not evidenced in Gibbs.

[13] The applicant provided a tax file number to the respondent and did not re-donate the money back to the club as the applicant in Gibbs had volunteered to do. The applicant also submitted that the relationship considered against the principles delivered in the matter Abdalla v Viewdaze Pty Ltd 3 supports a number of indicia of employment and not volunteerism.

[14] The applicant indicates the following should be considered:

• The nature of the work is indicative as it is contemplated by the state award.



• The parties considered the relationship to be that of employment by reference to, the evidenced Centrelink letter describing the applicant as an employee, and reference to the applicant as an “employee” by Mr Brown.



• Similarly the initial filed Form F3 - Employers Response in this matter acknowledged the applicant as an employee.



• The respondent exercised control over the applicant as to the manner of the work performance, the place of work, the hours and timing and required permission for leave.



• The applicant did not perform work for others and was inhibited in doing so because of the attributes of the work involved attributes determined by the respondent.



• The work was capable of delegation when the applicant was on forms of leave but this was of a minor import and does not overcome the former indicia of employment. The issue of taxation by the respondent was controlled by that party.



• The respondent had a right to dismiss indicating an employment relationship.



• The regularity of payment indicates an employment relationship and the absence of payment for holidays is not crucial but neutral in these circumstances.



• The absence of the creation of goodwill by the applicant supports the proposition of employment.



• The respondent provided all the equipment pointing to an employment relationship.

Consideration of the evidence

[15] The tribunal received during the hearing a number of exhibit documents relating to the operating and financial records of the respondent and the personal documentation of the applicant. Due consideration has been given to the nature, accuracy and veracity of all exhibits as to the assertions of the parties.

[16] The tribunal further has exercised a discretion in relation to the witness statements provided as evidence, as the witnesses in this matter have relied significantly on personal recollection of events. The tribunal has therefore been exposed to various information which could be questionable in its veracity. The tribunal has previously referred to the observation that all witnesses, save Mr Sultana, indicated some difficulty with accurate recall of information and the concepts involved in this matter and hence the above discretion has been considered necessary to obtain the best evidence.

[17] The tribunal has taken into account all the information, evidence and submissions provided in considerate of this matter.

[18] The initial focus of consideration by the tribunal in this matter is whether the applicant had a contract of employment with the respondent or was she a volunteer or contractor. The tribunal does not consider on the evidence, material and submissions of the parties provided that the applicant can be considered to be a contractor as she was not carrying out her own business within the respondent’s enterprise and other elements of that form of arrangement are not identified, e.g. branding, taxation, insurance, control, integration.

Is there an identified contract of employment?

[19] If there is no contract of employment identified between the parties, the applicant cannot be an employee. If there is a contract of employment and the person performs work as an employee, the employer must conform with the following:

• Any relevant award or applicable enterprise agreement that covers the work performed.



• Any industrial legislation, such as the Fair Work Act 2009 its predecessors, or New South Wales state industrial legislation including Workers Compensation legislation.



• Federal superannuation legislation.

[20] An employee within various limits may pursue a remedy for unfair dismissal such as this application. Generally a non-employee, a volunteer or contractor cannot pursue such a remedy.

[21] The law requires that there are certain basic essential requirements or elements for an agreement to be legally enforceable as a contract. These are described in Professor Andrew Stewart’s book, Stewart’s Guide to Employment Law 4 and in various other forms in texts such as Macken, McCarry & Sappideen’s The Law of Employment5 as being the following essential elements:

• The parties must have reached agreement as to the terms of the contract.



• The agreement must involve the provision of “consideration” by each party.



• The agreement must be intended by the parties to be legally enforceable.



• The terms of the agreement must be certain and complete and there must be no element of illegality or any other vitiating factor that would deprive the agreement of legal effect.

[22] The tribunal has sought to compare these elements to the facts of this matter and has identified the following:

The parties must have reached agreement as to the terms of the contract

Where this is not evidenced in writing as in this case the tribunal or court must infer from the parties conduct whether they have reached agreement (see Walker v Salomon Smith Barney Securities Pty Ltd & Anor. 6

In evidence

[23] The applicant was a bingo patron and was a bingo caller elsewhere at other facilities prior to, during and after her bingo calling activities with the respondent. 7 The applicant arranged to do the bingo calling with the former bingo caller, a Mrs Murphy. She received payment from Mrs Murphy in respect to the bingo calling that she did by arrangement. This arrangement was not instigated or determined by the respondent and the chronology of the applicant commencing such arrangements is contentious between the parties, but records indicate regularity from January 2005. The permission to partake in the role as bingo caller and the encouragement and or endorsement of the applicant to take over the bingo calling came from apparently Mrs Murphy.

[24] This was acknowledged by Mr Brown of the respondent to Mrs Murphy. 8 Mr Brown’s evidence is that the club did not involve itself generally in the allocation of replacement bingo callers as it allowed the bingo fraternity to manage its own affairs.9 Further, the applicant made her own arrangements for other persons to do the bingo calling when it suited her or when she was ill. She shared with, or paid those persons, part of the money she received from the respondent. The respondent was not involved in these arrangement or delegations by the applicant. The respondent did not control or instigate these arrangements nor were they concerned that they occurred as long as the bingo was available to patrons.

[25] Mr Brown’s evidence is that bingo was to be run by the bingo patron members themselves, (described by the applicant as “a close group” at PN 7 of her statement) and that that group and the applicant did in fact make their own arrangements for the running of the bingo. 10

[26] Mr Dwyer’s evidence was that the bingo calling was done by various people as well as the applicant over the past few years and that other regular players filled in for the applicant on the occasion of her absences. Mr Dwyer states he volunteered his services on occasion in regard to the bingo calling and its arrangements.

[27] The applicant states that she was a regular and systematic employee for a considerable period as a bingo caller. Various indicia of employment have been referenced by the applicant including direction as to hours, the incidence of timesheets and tax file numbers and reference letters to Centrelink.

[28] The respondent though referring to the applicant on occasions as an employee made it clear she was not considered to be an employee in the same way as other full-time, part-time or casual employees, but that of a bingo caller within the arrangements for bingo at the club. The respondent asserts the applicant did not have a contract of employment and submits the above indicia items as administrative, supportive and non-confirmatory in regard to employment, i.e. the applicant accessed breaks in which she was free to partake in the club facilities unlike club employees, the letter to Centrelink was provided by non-managerial staff.

[29] Suffice to say the parties in this matter are at odds in relation to the formation of a contract and it is difficult to isolate a situation or scenario where an offer and acceptance of contractual terms has been affected. What is identified is the emergence of the applicant as the endorsed bingo caller from within the member patrons of that pursuit and her acceptance in that role by the respondent. The tribunal finds that the respondent did not make an overture or offer to her in this scenario but acquiesced to a person purported to be recognised and endorsed by the community of member players.

The agreement must involve the provision of a ‘consideration’ by each party

[30] The applicant asserts that she received an amount of $50 per week as remuneration for her work as a bingo caller. This amount never altered as the respondent never offered any more money. The applicant, during the whole time she was involved as a bingo caller which was for several years, did not approach the respondent to negotiate or seek an increase to this amount. The applicant submits it was payment for hours worked in her work. That is she sold her labour.

[31] The respondent assert it was a fee to bingo callers, an honorarium or “nominal stipend”, to recognise their contribution to the bingo and to supplement their pension as it was assumed they were receiving social service benefits and were doing the bingo calling on a voluntary basis. In the applicant’s case she was on such benefits and from the respondent’s evidence all recent bingo callers for the last decade were similarly disposed. 11

[32] As Professor Stewart says:

“For an agreement to be legally enforceable, there must be some element of bargained exchange. Each party must provide some form of ‘consideration’ that is, they must do or agree to do something of value in return for whatever it is the other party is doing or agreeing to do. 12

[33] A gift received does not satisfy the element of exchange. In a normal employment equation a person hired to work receives wages for such work and a contract is easily discernible.

[34] In some situations a “consideration” has been found by the courts to be present where work has been performed for non monetary benefits (see Cudgegong Soaring Pty Ltd v Harris 13). In that case a live-in caretaker, receiving no wages, was held to be an employee as he was provided with rent free accommodation. Consideration having been identified and satisfied.

[35] In this matter the applicant is claiming she was an employee receiving a small regular remuneration and was dismissed. The respondent claims the applicant was a volunteer receiving an honorarium or a payment not related to her hours of work. The tribunal must in these circumstances, make an objective assessment of the conduct of the parties and determine whether it can reasonably be inferred what the parties intended.

[36] The applicant asserts that she was an employee receiving remuneration; :that remuneration was received for an involvement of five days a week in a community pastime without charge, provided by a registered and licensed social club; she shared her role with others on the occasions she was absent from the bingo sessions and she organised such replacements; she endorsed various forms of time sheets provided to her on a weekly basis; she received various pay slips acknowledging the payment but no detail as to its constituents; she did not complain or agitate for more money; she did not complain or agitate in respect to her volition of sharing the money with others; the bingo took about an hour of time each day plus a break and preparation and cleanup times; patrons of the bingo regularly assisted preparation, bingo calling and cleanup arrangements and that the applicant further always worked for other bingo establishments, some on a voluntary basis, throughout the period in question.

[37] The respondent asserts that they provided bingo for altruistic reasons to benefit and assist the community; that they incurred a financial loss approximating $30000 per annum. in providing such bingo whilst not charging players; that the community was assisted to run the bingo by themselves for the benefit of that community of players who were predominantly pensioners, unemployed and others on social security benefits; part of that assistance arrangement was a regular identified responsible bingo caller from within the community who was paid a $50 per week fee to recognise their efforts and not as wages and that the respondent did not employ the applicant and did not pay wages.

[38] On review of the conduct of the parties in this matter the tribunal has difficulty with the position of the applicant that the fee was a consideration for her work. It was not related to the applicant’s hours, whatever they may have been, or even for her to do the work in question. It was paid to her as the bingo caller with the understanding that the bingo calling had to occur when the bingo was organised by the club to be occurring. It would seem the applicant was in fact free to absent herself if she chose to do so. In these circumstances it would seem that the fee received by her was not the “price” of her work but a fee for activities which could include her physically doing the bingo calling or otherwise. The fee therefore was more a payment to the applicant as a conduit for the activities of the bingo calling which could be delegated or otherwise at her volition. In the tribunal’s view this does not satisfy the definition of a consideration being exchanged between the parties.

[39] The fact that the applicant did not attempt to discuss the above with the respondent throughout the period of her involvement is a further influence against the assertion the applicant had a contract of employment.

The agreement must be intended by the parties to be legally enforceable

[40] An agreement to do something is only regarded as a contract if the parties intended the agreement to be legally binding and carry legal consequences. That is, if something goes wrong, if one party failed to act in accordance with the agreement, the other party would be entitled to take legal action to seek performance. In employment situations where work is intended to be performed for payment, the necessary legal relations are generally present.

[41] There are exceptions such as Teen Ranch Pty Ltd v Brown 14 and Redeemer Baptist School v Glossop & Ors15 and counter-exceptions of Ermogenous v Greek Orthodox Community of SA Inc.16

[42] Volunteer work by its definition does not, in general, involve this element as the usual motivation for the arrangement is altruism rather than private gain or material advantage. That is, the commitments between parties in such arrangements are moral rather than a legal and formal one. In this matter the applicant provided work in a capacity which is argued to be employment and have a contract of employment. The respondent asserts that she was a volunteer or other than an employee. In determining further whether a contract existed the question must be asked, can it reasonably be inferred that the parties intended to create legal relations?

[43] The applicant in this matter was not offered the job by the respondent but evolved into the role via a relationship with the former bingo caller and as a patron of the bingo. She was not formally made an employee or given documentation of employment. The administration of her relationship with the respondent was administratively basic with; accounting references; a tax file number but no deductions; no detailed payslips and unendorsed by the applicant. The payment by the respondent was accounted for within the enterprise in a fashion akin to basic accounting of a payment by a not for profit organisation. The payment was unrelated to the hour’s involved and or actual performance of the work, but was related to the organisation and performance of bingo calling when such occurred. The fee or claimed “wage” of $50 per week is claimed to be an honorarium by the respondent. That description was well chosen as the existence of an honorarium does not in itself imply the existence of a contract of employment.

[44] The applicant’s motivation for involvement in the bingo calling was not solely motivated for gain as she participated continuously in such pursuits as a patron and on a voluntary basis elsewhere. Importantly when this voluntary work occurred, the applicant received, on various regular occasions, payments per game, but still referred to such arrangements as ‘voluntary’. These voluntary arrangements seem to have provided the applicant with similar fees referred to as $10 to $15 per session. 17

[45] It would seem the applicant considers various other arrangements for bingo calling where payment to her involved a fee per game as “voluntary” even where the patrons had to pay for such bingo. .Yet the applicant claims the situation with the respondent was one of employment and a contract of employment.

[46] In this matter there appears to be a complete absence of sanction by either party against the other. Putting aside this present application neither party applied any sanction or applied control or gave effect to grievances or even discussion at anytime as to the operation or non-operation of the arrangement. The inference being that they both clearly understood the dimensions of the arrangement.

[47] The respondent did not consider the applicant as an employee with a contract of employment and their evidence is that they mistakenly thought that their arrangement with the applicant would now require a contract of employment to be entered into with the onset of the Modern Award for the industry.

[48] Taking all the above into consideration the tribunal cannot identify an intention by the parties to enter into a legally enforceable arrangement or contract.

Determination

[49] Given the above findings in identifying the necessary elements in the applicant’s case for the existence of a contract to have been formed and exist, the tribunal does not intend to analyse the remaining listed elements in this matter.

[50] The tribunal considers that the applicant must fail in this application on the grounds that a contract of employment did not exist between the applicant and the respondent as the essential characteristics of an enforceable contract are not evident nor can be inferred from the evidence. The applicant cannot then be considered to have been an employee and hence there is no jurisdiction of this tribunal to review her alleged dismissal.

[51] Given that conclusion the application for review of the applicants dismissal must fail for want of jurisdiction. This application is dismissed.

COMMISSIONER

Appearances:

Mr S Prince with Ms M Curcuruto for the applicant

Mr J Darams with Mr W Boyce for the respondent

Hearing details:

Broken Hill

2010:

3, 4 November

 1   Respondent’s Form F4

 2 (2000) 217 LSJS 409

 3 (2003) 121 IR 215

 4   Stewart, A Stewart’s Guide to Employment Law, The Federation Press, Sydney 2008

 5   Macken, JJ, O’Grady, P, Sappideen, C The Law of Employment, Fourth Edition, LBC Information Services, Sydney 1997

 6 [2003] FCA 1099

 7   PN 1484-1492

 8   Ex A1 at PN 12

 9   Ex R1 at PN 27

 10   PN 267

 11   Ex R1 at PN 22

 12   Stewarts Guide to Employment Law, p 79

 13 (1996) 13 NSWCCR 92

 14 (1995) 87 IR 308

 15   [2006]NSWSC 1201

 16 (2002) 209 CLR 95

 17   PN 1482-1492

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