Toni Andreevski v Western Institute Student Union Inc

[1994] IRCA 96

CATCHWORDS

INDUSTRIAL LAW ‑ Termination of employment ‑ employment ‑ student editor paid honorarium and commission ‑ whether receipt of honorarium constitutes employment relationship ‑ intention to create legal relationship ‑ criteria for employment relationship. 

PRACTICE AND PROCEDURE ‑ Accrued and associated jurisdiction ‑ matter not pleaded or argued ‑ whether jurisdiction should be exercised. 

Industrial Relations Act 1988, ss.170EA, 418, 430.

Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395 at 402.

Peter W Jupp v Computer Power Group Ltd And Anor, (unreported, Industrial Relations Court of Australia, VI No 141 of 1994, Keely J, S October 1994).

Philip Morns Inc. v Adam P. Brown Male Fashions Pty Ltd (1981) 148 CLR 457.

Re Vladicka and Board of School Trustees of Calgary School District No. 19 (1974) 45 DLR (3d) 442.

TONI ANDREEVSKI AND ANOTHER V WESTERN INSTITUTE STUDENT UNION INC.

NO.  VI 1279 of 1994

Before:   MURPHY JR

Place:    MELBOURNE

Date:     28 October 1994

IN THE INDUSTRIAL RELATIONS COURT          )
OF AUSTRALIA   )
  )          No.  VI 1279 of 1994
  )
VICTORIA DISTRICT REGISTRY  )

BETWEEN:     TONI ANDREEVSKI
  and ANOTHER

AND:              WESTERN INSTITUTE
  STUDENT UNION INC. 

Court:    M.  D.  Murphy JR
Place:    Melbourne
Date:     28 October 1994

REASONS FOR JUDGMENT

Introduction

Within tertiary institutions the position of editor of the students' union magazine is a prestigious one and has provided a springboard for the career of many well known members of the fourth estate. 

The first named Applicant ("the Applicant") in these proceedings was for a short period earlier this year the editor of Genesis magazine.  The magazine is published by the Respondent, which is the incorporated student union at the Victoria University of Technology ("VUT"). 

In late July the Applicant was removed from his position as editor by the Executive of the Respondent. Mr Andreevski and the Media Entertainment and Arts Alliance then issued an Application under Part VIA of the Industrial Relations Act 1988 ("the Act") seeking a remedy for the termination of his employment.
Notice of Motion

After the proceedings were issued the Respondent sought by way of Notice of Motion to allege that there was an adequate alternative remedy available, namely the university visitor, and that under s.170EB of the Act, the Court should not exercise its jurisdiction. That motion was dismissed by the Court (Parkinson JR, 26 September 1994) and the matter proceeded to trial. issues. At the outset of the trial Counsel for the Respondent indicated that he wanted the Court to rule on the issue as to whether the Applicant was an employee, prior to the substantive evidence in the case. I ruled against him on the basis that it was likely that the evidence on that issue and on the overall application would substantially overlap. The matter proceeded with the Respondent's position throughout being that there was no employment relationship.

The Applicant's case, as opened by his representative, was that in his position as editor he was an employee of the Respondent in a permanent part‑time position.  He sought reinstatement to his position.  In the alternative he sought $800.00 compensation being the amount that he would have been paid had he not been removed.  He also sought to recover some $55.00 owing as commission on advertising.  He also claimed $600.00 for advertising commission which he would have earned but for the termination.  In addition he claimed $1,000.00 compensation for damage to his career path.  In the course of the hearing the Applicant also made a claim for some $50.00 reimbursement of travel expenses.  

The Court heard evidence from the Applicant and from Mr David Cody, the editor of a student newspaper at Monash University.  The Respondent called Mr Zoltan Kovacs and Mr Richard Imierowicz, respectively the President and Secretary of the Executive of the Respondent.  I have considered all the evidence in coming to my conclusion in this matter. 

Background

The structure of the Respondent is that it has an elected Executive, with a number of office bearers, including a President and a Secretary, who are paid honorariums.  The honorariums are paid by WT on behalf of the Respondent, an arrangement which was established to maintain proper audit controls over payments.  The Respondent also has a number of paid staff who have titles such as Media Officer, Finance Officer and Resource Officer.

The annual budget of the Respondent was tendered.  This shows that salaries for staff were treated separately from honorariums to be paid to Executive members.  The budget of Genesis was dealt with as a discrete item within the budget with provision made for honorariums for the editors and for other expenses including an amount of $250.00 for travel allowance.

There was no reference in the Rules of the Respondent or the staffing structure of the Respondent to the position of editor of the student magazine. 

The Appointment To The Position

The evidence established that the Rules of the Respondent provide that it has power to publish, authorise or delegate the power of publication of any magazine or newspaper.  In each academic year a temporary editor of the magazine was arranged or appointed early in the year to publish an "election edition" of the magazine.  Subsequent to the election of the incoming Executive, arrangements were made to advertise for the position of editor for that year.

The Applicant gave evidence that he was a fourth year Bachelor of Arts Honours student majoring in communications.  He applied for the position as editor of Genesis after seeing it advertised around the campus.  He was interviewed for the position by a Committee of the Executive of the Respondent and was advised in writing on 16 May 1994 that he had been successful.  He was expected to produce six issues between the date of appointment and the end of the semester.   He was to seek approval from the Executive for his proposed publication dates.  He was to be paid an honorarium of $1,000.00 payable in instalments based on the number of issues which he nominated to produce.  The letter required him to complete a Tax Declaration and a Bank Authority for Payment.

The letter of appointment dated 16 May 1994 was tendered, but Mr Flynn objected to its tender on the basis that the author did not have authority to sign the letter.  I provisionally admitted it.  Subsequently Mr Flynn put to the Applicant that he relied on the letter of appointment.

The evidence of both parties was to the effect that they relied on the letter and the Applicant assigned the position as editor in reliance of the letter.   In those circumstances I rule that the letter is absolutely admissible.

The Applicant was assisted in his duties by two sub‑editors one of whom came from another campus of theVUT.

The Applicant tendered a detailed position description which set out the duties of the editor, the fact that he was to report to the student Executive, and that he was to have ultimate editorial control subject only to vetting for defamatory material by the student Executive.

The remuneration for the position was stated to be an "annuity" of $1,200.00.  In fact on another page of the position description it was to be $1,000.00.  The discrepancy was explained on a basis that the payment had been set at $1,200.00 in 1993 but reduced to $1,000.00 in 1994.   After his appointment the Applicant was able to have the fee increased back to $1,200.00.

The Applicant was curiously reticent in his evidence as to his employment status.  At no time did he explicitly say that he regarded himself as an employee of the Respondent.   He stated that the amounts paid to him had been described as "an honorarium, an annuity and as a payment".  He admitted that the payment had never been described as a salary.  He claimed that his mode of payment was different from those members of the Executive who were paid honorariums because for him to be paid each instalment of his honorarium he had to produce an edition of Genesis.  The Executive members would be entitled to their honorariums even if they did no work.  Interestingly the Applicant and Mr Kovacs gave evidence that there had been some discussion between the parties with a view to establishing a contract but no agreement had been reached.

Mr Kovacs' evidence was that all Executive members who are entitled to honorariums were volunteers and that they did not regard themselves as employees.  He said that the Applicant was in the same position.   He also referred to the flexibility with which the Respondent established and abolished particular positions and granted honorariums attached to those positions.

In addition to the honorarium the Applicant gave evidence that as a result of previous resolutions of the Respondent he was entitled to a 35% commission on any advertising revenue which he had been able to attract.   He stated that he was entitled to the sum of $55.00 being 35% of the revenue on a particular advertisement which appeared in the second edition of Genesis which he produced.   He said that students were encouraged to obtain advertising and were entitled to a 10% commission but the editor was on the higher rate.

The Respondent challenged the evidence in that it was put that the Applicant had never actually been paid for advertising at the rate of 35%.  This was conceded by the Applicant.  His evidence however was that the endorsed policy of the Respondent was that the editor was entitled to a commission at that higher rate and this evidence was not challenged and I find that that was the arrangement.

The Applicant also gave evidence that he had made claims on the Respondent for reimbursement of some $50.00 of travelling expenses which had not been paid.  The Respondent denied knowledge of the claims but did not really dispute his entitlement to those monies.

The Applicant gave evidence that following his appointment he was involved in the production of two issues of Genesis, the first appearing in late May and the second appearing on 20 July 1994.  He was also involved in a co‑production of a student newspaper with editors from a number of other universities around Melbourne.  He worked a minimum of twenty hours per week and as each edition was published he began preparations for the next edition.

He indicated that in his position he worked with two sub‑editors as well as liaising with the Executive media officer of the Respondent.  He submitted the two editions that he was involved in to members of the Executive to have them vetted for defamatory material.  In his duties he had complete artistic licence in relation to content and layout.  He had published a photo of the President, Mr Kovacs, which the latter had objected to.

There was much evidence about the control exercised over the Applicant by the Respondent.  The Applicant had complete editorial freedom, subject only to vetting for defamatory material.  At the same time the Applicant emphasised that he was personally appointed to the position while Mr.  Kovacs maintained that the Applicant was free to delegate his tasks as long as the product was up to standard.   Mr.  Kovacs did attempt to exercise some control over how the Applicant performed his duties by reason of his criticism of the first edition.  Mr.  Kovacs position was that ultimately, control over the Applicant was in the hands of the Executive of the Respondent.

The Applicant was paid $200.00 for each of the two editions he edited.   The payment was to his own bank account by the VUT.  There was an arrangement where VUT would make payments on behalf of the Respondent.   He produced a pay slip to show that he had been paid for "two hours" and that an amount of 60 cents had been deducted from the $200.00 for taxation.

The Termination of the Applicant's Editorship

Unfortunately the parties in this matter failed to obey the injunction "(S)ee that ye not fall out by the way" (Book of Genesis.  chap.  45 1.  24).  After the release of the first issue both Mr Kovacs and Mr Imierowicz raised concerns about aspects of the content, style and layout of the magazine.   In particular the issue appeared without any page numbering.  Those discussions, on the evidence, did not reach any form of formal counselling.   In the second edition the Applicant wrote an article about a public figure which Mr Kovacs maintained was defamatory.   There were also other aspects of the content of that second edition to which Mr Kovacs took exception.

As a result of these matters Mr Imierowicz and Mr Kovacs moved a motion at a meeting of the Executive of the Respondent for the removal of the Applicant from his position.   The Applicant was given no notice of this meeting and the resolution appeared to have been carried by a narrow margin.   Both witnesses were evasive as to why the Applicant was not notified.  On any view be was denied procedural fairness in relation to the matter.  It is also my view that the matters raised by the movers of the motion could not have justified such radical action as his removal.

Subsequent to the resolution of the Executive the Applicant became aware of the resolution and sought written reasons for it.   These were provided and gave that the grounds for the removal that the magazine was "not up to expected standards" and that this was due to "the editorial team's lack of direction".   Following this the Applicant took these proceedings.

The Applicant claimed that he be entitled to $1,000.00 compensation for damage to his career prospects as a result of the termination of his editorship.  He also claimed that he had lost the opportunity to earn advertising revenue.  The amount of this loss was somewhat vague but he maintained that he would have earned about $600.00 in advertising commission for the balance of the year had he remained in the position.

Is the Applicant Entitled To A Remedy?

To be entitled to a remedy under section 170EE of the Act the Applicant must have had his "employment" terminated. "Employee" is defined in s.4 of the Act as including "any person whose usual occupation is that of an employee". Having regard to the objects of the Act and the Conventions to which Part VIA seeks to give effect in my view for the Applicant to succeed he must be in a contract of employment with the Respondent. This raises two discrete issues between the parties namely, whether there is a contract, and if so whether it is one of employment.

A central question in determining whether or not there is a contract between the parties is what legal characterisation is given to the $200.00 per issue to which the Applicant was entitled to pursuant to his letter of appointment.   The Macquarie Dictionary defines an "honorarium" as an "honorary reward, as in recognition of professional services on which no price may be set".  The Respondent in this matter referred me to a Canadian case where it was stated:

"A common thread running through (the dictionary) definitions (of honorarium) is the notion that while the money paid as an "honorarium" is a compensation for services rendered, it is nevertheless not a payment for which the recipient, if not paid, could sue in a court of law.  It is thus in the nature of an ex gratia or gratuitous payment, unlike a salary or wage or other contract ‑ remuneration.   Certainly "honoraria" paid to English barristers or to Fellows of the Royal College of Surgeons in England may be very substantial in amount.   There is nothing in the use of the word in relation to those professions in England denoting a mere "token" amount".   Re Vladicka and Board of School Trustees of Calgary School District No.  19 (1974) 45 DLR (3d) 442 at 449, Alta SC, per McDonald J

On the basis of this case Mr Flynn urged that the Court should conclude that there was no intention to create contractual relations here and that the relationship arose at most out of status akin to a minister of religion.

The Applicant did not really confront the difficulties which flow from characterising the payment of an honorarium as non‑contractual.    Rather MsAtkin in an able argument, sought to combine the entitlement to payment of an honorarium with the entitlement to be paid a commission on advertising revenue.  She claimed that the combination of those two features were such as to constitute the Applicant an employee.   She referred to the fact that the honorarium was a substantial amount and claimed that when the benefits to which he was entitled are added up they are quite substantial.   She maintained that his work was integrated with other staff and he was under the control of the Executive.

She relied on the case of Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395 where real estate agents remunerated solely by way of commission were held to be employees. She also referred me to the leading case of Stevens v Brodribb Saw Milling Co Pty Ltd (1986) 60 ALJR 194. In that case at 196 Mason J. as he then said:

"A prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter.  It has been held, however, that the importance of control lies not so much in its actual exercise, although clearly that is relevant, as in the right of the employer to exercise it.   Zuijs v Wirth Brothers Pty Ltd (195S) 93 CLR S61 at S71; Federal Commissioner of Taxation v Barrett (1973) 129 CLR 39S at 402; Humberstone v Northern Timber Mills (1949) 79 CLR 389. In the last mentioned case Dixon J. said at 404;

"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."

But the existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment.  The approach this court has been to regard it merely as one of a number of indicia which must be considered in the determination of the question ....  Other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee."

The approach of the courts is to look at a number of indicia to determine the relationship between the parties.

Commencing first with the issue of control I find that aspects of the exercise of control are just as consistent with an employment relationship as with a different type of relationship.  Ultimate control here was retained by the Executive of the Respondent.   It was exercised by the removal of the Applicant from office.   It was exercised, in part, by Mr.  Kovacs in his criticism of the Applicant about the first edition.   On the other hand, short of publishing defamatory material, the Applicant had complete editorial licence.   His responsibilities were set down in detail in a position description.   His ability to delegate was limited yet he had complete flexibility in his hours of work.

In the absence of an unequivocal indication of the nature of the relationship on the issue of control it is necessary to look at the next important indicia which is that of remuneration.   This requires a consideration of the effect on the overall relationship of the payment of an honorarium of $ 1,200.00 to the 1994 editor of Genesis payable at the rate of $200.00 per issue.

I accept that the dictionary definitions of the term point strongly to its non‑contractual nature.   It is a term common in the context of unincorporated associations formed for social or sporting purposes.   The Respondent here, although incorporated, is in an analogous position .  The term has the connotation of a voluntary payment to the incumbent of a position regardless of the amount of work involved in that position.   Here payment was made on a per issue basis rather than on a monthly basis.  Payment on a basis other than at a regular interval is an indication that it is paid on a non‑contractual basis or at least on a basis not consistent with a contract of employment.

Applying these considerations there are strong grounds to find and I do so find that there was no intention to create legal relations between the parties in relation to payment of the honorarium for each issue produced.  This follows from the nature of the term in its general usage, the fact that the Applicant did not dispute such a classification of it and the voluntary nature of activities of other under‑graduate students within tertiary institutions.  The Applicant admitted that he understood the term to include a payment which may not be classified as a salary or employment.  The Applicant conceded in cross examination that it did not represent a payment in proportion to the work that he performed and that he may even have applied for the position if there was no honorarium.

Payment of the honorarium was not the total of the relationship between the parties however because of the evidence of the Applicant of his entitlement to a payment of commission on advertising sold.   Although the evidence was that no such payment had been made it was not really disputed that there was an entitlement to be paid in the event that advertising was sold.  I find that that entitlement was, for the editor, 35% of the advertising revenue.  I do not however accept the Applicant's submission that a combination of the honorarium and the commission entitlement is sufficient to make him an employee of the Respondent.  The case of Federal Commissioner of Taxation ‑v‑ Barrett (supa) is distinguishable because in that case the commission was the sole payment of the real estate agents.  They were part of the establishment of the office, in permanent positions and receiving substantial remuneration.   They were required to meet rosters.  Here the position was at best for a  period of twelve months, the payment was made essentially on a piece work basis but it was of a very low amount and even on the Applicant's own evidence it was only expected that he would earn about another  $600.00 in advertising commission for the balance of the calendar year.   1 do not put any weight on the fact that he was described as an employee of the VUT in a payroll deduction form, or on the fact that it appears that a pay slip was produced which showed that income tax had been deducted.  The evidence was that this was only a payment mechanism.

The entitlement to commission on advertising sales does not assist the Applicant because the arrangement was so informal that it did not have any of the trappings of an employer/employee relationship, such as a budget, set hours or even regular payment.  While I am prepared to find that there was an intention to create legal relations between the parties in relation to payment of advertising commission, I find however that the relationship so created was not one of employment.

Conclusion On Relationship Between The Parties

In view of my finding that neither the honorarium nor the advertising commission arrangement gave rise to a contract of employment it is unnecessary for me to precisely characterise the total relationship between the parties. It is sufficient for me to find that there was no employment relationship between them and thus the Court has no jurisdiction under s.170EA of the Act. I therefore propose to dismiss the Application.

The Respondent argued that in the event that I found that the Applicant was an employee, the Applicant was exempt under Regulation 30B of the Industrial Relations Regulations on the basis that his employment was for a specified period of time (Reg 30B(1)(a)) or for a "specified task" (Reg 30B(1)(b)).

In view of my finding that there was no employment relationship between the parties it is unnecessary for me to deal with this matter.

Accrued and Associated Jurisdiction

I raised with the parties the question as to whether, should I find that the Applicant was not an employee, the Court had jurisdiction to make any other orders. The Respondent argued in a written submission that the Courts' jurisdiction under s.418 of the Act was limited to the constitutional power of the Commonwealth to make laws with respect to conciliation and arbitration. I was referred to Philip Morris Inc. v Adam P. Brown Male Fashions Pty Ltd (1981) 148 CLR 457 where at 489 Gibbs J. found that the equivalent provision in the Federal Court of Australia Act (s.32) conferred power on the Court as distinct from jurisdiction. He thus submitted that s.418 would only apply if there was a matter with which the Court had jurisdiction to hear and determine.

The Respondent did not refer to s.430(1) of the Act which confers jurisdiction on the Court in respect of matters "that are associated with matters in which the jurisdiction of the Court is invoked."

The claim by the Applicant for payment of commission and reimbursement of travel expenses could be argued to be associated with the Applicant's claim that he was an employee.  In view of the concession by the Respondent in the running that it does not dispute that these monies are owing I decline to consider whether I have jurisdiction to make any order.

In relation to the Applicant's claim for compensation for the loss of his position as editor and also damages for his lost opportunity to earn commission income, I decline to make any order.  In my opinion the claim is substantially different in nature from the claim that he was an employee.  It arises out of a similar set of facts but raises a number of complex issues, which were not fully pleaded or argued, that arise under non federal law and have little or no link with a law of the Commonwealth.  The exercise of the accrued jurisdiction of the Court is discretionary (Peter W Jupp v Computer Power Group Ltd And Anor, unreported, Industrial Relations Court of Australia, VI No 141 of 1994, Keely J, 5 October 1994) and in circumstances where a matter which raises important issues of law and fact has not been pleaded, let alone argued, it is inappropriate that I exercise any accrued or associated jurisdiction of the Court.

Order Of The Court

The Court orders that the Application pursuant to s.170EA is dismissed.

I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment of the Court.

Associate: 

Dated: 28 October 1994

APPEARANCES

Representative for the Applicants:   Ms N Atkin of the Entertainment Arts Alliance.

Counsel for the Respondent:       Mr M.  Flynn

Solicitor for the Respondent:  McDonald McCoy

Date of Hearing:  11 October 1994 

Date of Judgment:  28 October 1994

IN THE INDUSTRIAL RELATIONS COURT          )
OF AUSTRALIA  )
  )           No.  VI 1279 of 1994
VICTORIA DISTRICT REGISTRY  )

BETWEEN:TONI ANDREEVSKI   and ANOTHER

AND:  WESTERN INSTITUTE   STUDENT UNION INC.

Court:  M.  D.  Murphy JR
Place:  Melbourne 
Date:  28 October 1994

MINUTES OF ORDER

THE COURT ORDERS THAT:

The court orders that the Application pursuant to s.170EA is dismissed.

NOTE:    Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court     Rules.