Tuffley v Mark McKay Pty Ltd
[2016] FCCA 1570
•7 July 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TUFFLEY v MARK MCKAY PTY LTD | [2016] FCCA 1570 |
| Catchwords: INDUSTRIAL LAW – Small claim – claim for monies allegedly owed under Road Transport and Distribution Award 2010 – whether employment relationship existed – whether intention to enter into a contract of employment – consideration of indicia of employment relationship. |
| Legislation: Competition and Consumer Act 2010 (Cth) Fair Work Act 2009 (Cth), Part 2-2, ss.13, 14, 548, 570, 793 Fair Work Regulations 2009 (Cth), Pt.3-6, Div.3 |
| Cases cited: Sappideen et al, Macken’s Law of Employment (7th Edn) (Pyrmont: Law Book Co, 2011) |
| Applicant: | BEVAN TUFFLEY |
| Respondent: | MARK MCKAY PTY LTD |
| File Number: | PEG 117 of 2014 |
| Judgment of: | Judge Antoni Lucev |
| Hearing date: | 4 and 6 February 2015 |
| Date of Last Submission: | 4 and 6 February 2015 |
| Delivered at: | Perth |
| Delivered on: | 7 July 2016 |
REPRESENTATION
| For the Applicant: | In person |
| For the Respondent: | Mr M McKay (a director) |
ORDERS
That the application be dismissed.
Any application for costs to be made within 28 days.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 117 of 2014
| BEVAN TUFFLEY |
Applicant
And
| MARK MCKAY PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant, Bevan Tuffley (“Mr Tuffley”), claims against the respondent, Mark McKay Pty Ltd (“McKay P/L”), in this Court’s small claims jurisdiction under s.548 of the Fair Work Act 2009 (Cth) (“FW Act”). The claim relates to monies allegedly owed for time worked, pursuant to the Road Transport and Distribution Award 2010 (“Award”).
Mr Tuffley’s claim
Mr Tuffley:
a)asserts that he was employed by McKay P/L from 22 January 2014 to 5 February 2014 as a truck driver loading and delivering goods from cold stores to IGA supermarkets in the Perth metropolitan area;
b)asserts that the work was covered by the Award, and that he was engaged as a casual employee who did not do regular hours; and
c)alleges that there was a contravention of clauses 15.2 and 27 of the Award resulting in an underpayment of wages in the sum of $1,796.30 and an underpayment of overtime in the amount of $725.05, being a total of $2,521.35, pursuant to an entitlement to be paid $20.71 per hour and $28.99 per overtime hour worked.
The circumstances in which the claim arises are set out in the “Form 5 – Small claim under the Fair Work Act 2009” (“Form 5”) filed with the application. In summary, those circumstances are as follows:
a)McKay P/L was advertising a truck and business for sale with ongoing work from Busselton Freight Services (“BFS”);
b)there were negotiations between McKay P/L, represented by Mark McKay (“Mr McKay”), a director of McKay P/L, and Mr Tuffley and his wife, Mrs Tuffley, concerning the purchasing of a truck or trucks and the ongoing work, which negotiations ultimately failed; and
c)whilst those negotiations were ongoing Mr Tuffley began driving a truck, and alleges that:
i)he worked with Mr McKay in the truck on 8, 9, 10, 11, 14, 15, 16, 17 and 20 January 2014; and
ii)he worked in the truck on his own on 22, 23, 24, 27, 28, 29, 30 and 31 January 2014 and 1, 2 and 5 February 2014. (The date alleged of Monday 1 January 2014 in attachment BT2 to the Form 5 is clearly a typographical error and is intended to be a reference to 1 February 2014).
Response
McKay P/L’s Response opposes the orders sought by Mr Tuffley and seeks further orders in relation to:
LOSE OF EARNINGS AND INTEREST TAX REFUNDS DUE TO EARLY PAY OUT OF BUSINESS LOANS.
(Transcribed from the Response without amendment).
FW Act – s.548
The matter is a small claim under s.548 of the FW Act, which relevantly provides as follows:
(1) Proceedings are to be dealt with as small claims proceedings under this section if:
(a) a person applies for an order (other than a pecuniary penalty order) under Division 2 from a magistrates court or the Federal Circuit Court; and
(b) the order relates to an amount referred to in subsection (1A); and
(c) the person indicates, in a manner prescribed by the regulations or by the rules of the court, that he or she wants the small claims procedure to apply to the proceedings.
(1A) The amounts are as follows:
(a) an amount that an employer was required to pay to, or on behalf of, an employee:
(i) under this Act or a fair work instrument; or
(ii) because of a safety net contractual entitlement; or
(iii) because of an entitlement of the employee arising under subsection 542(1);
(b) ...
Limits on award
(2) In small claims proceedings, the court may not award more than:
(a) $20,000; or
(b) if a higher amount is prescribed by the regulations--that higher amount.
Procedure
(3) In small claims proceedings, the court is not bound by any rules of evidence and procedure and may act:
(a) in an informal manner; and
(b) without regard to legal forms and technicalities.
Evidence
Having regard to the provisions of s.548(3) of the FW Act the Court has taken the evidence in this matter to include:
a)attachments BT1 and BT2 (including the attachments to attachment BT2) to the Form 5;
b)the written “Response” and attachments 1, 2, 3, 4, 5 and 6 thereto, attached to the Response filed on 18 December 2014 by McKay P/L (“First Written Response” and “First Response” respectively);
c)Mr Tuffley’s affidavit sworn 15 January 2015 (“Mr Tuffley’s Affidavit”);
d)the written “Response to Affidavit from Deponent Bevan Tuffley” and attachments 1, 2, 3, 4, 5, 6 and 7 thereto, as attached to the Response filed 5 February 2015 (“Second Written Response” and “Second Response” respectively); and
e)evidence given at hearing on 6 February 2015 by both Mr Tuffley and Mr McKay, in which, amongst other things, Mr McKay adopted the Second Written Response as true and correct to the best of his knowledge and belief: Transcript, 6 February 2015, page 11.
The Court has also had regard to the terms of the Award as consolidated and amended and including all variations up to 7 January 2014, as published by the Fair Work Commission, and to the transcript of the hearing of the matter on 4 and 6 February 2015.
Relevant award provisions
Mr Tuffley claims to have been a casual employee, and relies upon cll.15.2 and 27 of the Award for payment at an hourly rate of $20.71 per hour and $28.99 per overtime hour.
Clause 15.2 of the Award provides for minimum wage rates.
Clause 27 of the Award deals with payment for overtime, and provides for payment at the rate of time and a half for the first two hours and double time thereafter for overtime worked.
Clause 20 of the Award provides for payment of wages in the employer’s time on a day to be fixed by the employer and within four business days of the expiration of the week in which they accrue, with an employee who leaves or is dismissed to be paid all moneys due to the employee forthwith, with an employer being entitled to, at its discretion, pay an employee by electronic funds transfer to a bank account nominated by the employee.
Provision is made for casual employment under cl.12.1 of the Award, and cl.12.5 of the Award provides that a casual employee is an employee engaged as such and paid by the hour, and for the payment of a casual loading to a casual employee.
Clause 3 of the Award defines an “employee” to mean a “national system employee within the meaning of the [FW] Act”, and cl.4 of the Award provides that it “covers employers throughout Australia in the road transport and distribution industry and their employees in the classifications listed in clause 15 [of the Award]”.
National system employee under the FW Act
Section 13 of the FW Act provides a meaning of “national system employee” as follows:
A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.
The definition in s.14 of the FW Act relevantly includes in s.14(1)(a) of the FW Act the following:
a constitutional corporation, so far as it employs, or usually employs, an individual.
Factual matters
Employer and employee
There does not appear to be any dispute that McKay P/L is a constitutional corporation and a national system employer so far as it employs or usually employs any individual. There is however a fundamental dispute as to whether Mr Tuffley was at all, or at any, relevant time a national system employee, that is, an “individual … employed, or usually employed” by McKay P/L or an “employee” of McKay P/L. That issue falls to be determined on the law applied to the relevant facts. Relevant factual material is set out below.
November 2013 and early December 2013
In November 2013 Mr McKay was contacted by Mr Tuffley regarding trucks and a business that McKay P/L had for sale. Mr McKay informed Mr Tuffley that:
a)two trucks had been purchased in January 2013;
b)there was a sub-contracting arrangement between McKay P/L and BFS; and
c)for personal reasons, when McKay P/L purchased the two trucks it paid goodwill as part of the overall purchase price. Mr McKay says that when he informed BFS that he was looking to sell the trucks they informed him that they would not supply work to new buyers if any goodwill was included in the sale, but that the value of the earnings from each run could be taken into account as part of the overall sale price. Mr McKay says this is what he discussed with Mr Tuffley, and that the intention always was that there would be a component of goodwill on any truck sold to compensate for two runs that were external to work done for BFS. The reasons for BFS taking the stance it did concerning goodwill, and the amount of any goodwill, are not directly material to the wages issue in dispute between Mr Tuffley and McKay P/L.
Mr McKay says he believed that Mr Tuffley’s was a genuine offer to purchase and so arranged for an inspection of the trucks. Mr McKay advised Mrs Tuffley on 23 November 2013 that McKay P/L had not accepted any other offers, and Mr and Mrs Tuffley could come to inspect the trucks. There is a dispute as to the precise date the trucks were inspected, but that is immaterial to the disputed wages issue.
At some point Mr Tuffley met with BFS to discuss ongoing work, and was made aware that:
a)he would have to upgrade the truck he was going to purchase in 12 months; and
b)he should not pay any goodwill with the purchase of the truck.
The issues with BFS concerning whether or not goodwill could be paid were ongoing, and negotiations were ongoing between Mr and Mrs Tuffley and Mr McKay to reach an agreed price for a truck or the trucks that would then also be acceptable to BFS management, and in line with BFS’s advice in relation to market value. Mr McKay maintained that the goodwill component was in relation to the runs external to BFS.
9 December 2013
On the 9th of December 2013 Mr McKay received a text from Mrs Tuffley as follows:
I called him at 3pm and the papers are being drawn up tomorrow so you may hear from him then. Loan is 100% approved.
It appears that the “him” referred to was an officer at the Tuffleys’ bank.
10 December 2013
On 10 December 2013 Mr McKay was emailed a tax invoice prepared by the Tuffleys’ bank, which he signed that day and returned to the bank (“Tax Invoice”). The Tax Invoice is said to be from “Mark KcKay”, and addressed to “BJ & NJ Tuffley Transport Pty Ltd ABN 38238545962” (“Tuffley Transport”). The goods are described as a white 2007 Hino Ranger Pro with a price including GST of $150,000. The Tax Invoice seeks direct deposit to an account in the name of “Mark McKay PTY LTD” and is on a letterhead for “Macka’s Diesel Maintenance” with the Tax Invoice footer address setting out corporate, trust and trading details as follows:
Mark McKay PTY LTD. T/F The Mark McKay Family Trust T/A Macka’s Diesel Maintenance
Mr McKay says he had originally asked for $150,000 as the sale price of one truck and runs, but after negotiations with Mr Tuffley it was agreed, and they shook hands on, a final sale price of $110,000 for the BFS component, along with a goodwill figure of $40,000 for the external, or non-BFS, runs.
Mid to late December 2013 and early January 2014
Throughout December 2013 and early January 2014 there were emails between Mr McKay, Allan Price, a Director of BFS (“Mr Price”), Kathleen Janissen, Workforce Development and Compliance Manager at BFS (“Ms Janissen”) and Mrs Tuffley about the price for and the sale of the truck.
On 16 December 2013 Ms Janissen enquired of Mrs Tuffley by email as to whether anything had been decided. Mrs Tuffley responded to Ms Janissen as follows:
We have decided to purchase the 2007 model from Macka.
I am changing everything at the bank today.
I will keep in touch with you.
On 19 December 2013 Ms Janissen emailed Mr Tuffley and said there would be no work for the truck at BFS if McKay P/L was not prepared to lower the price and take out the goodwill. At this stage it appears that Tuffley Transport still intended to purchase the truck from McKay P/L. On 19 December 2013 Ms Janissen sent an email to Mrs Tuffley in the following terms:
I have spoken to the Boss about the deal and price.
I have just been informed that it will be a breach of our contract with Metcash to allow a deal to go through that includes an element of obvious goodwill even if the words are not used.
You are welcome to buy the truck at market/realistic price and work here, but we cannot let you work here if you pay an over inflated price which is obviously including goodwill.
Sorry I didn’t know this was a clause in our new contract with Metcash. You know what the 2005 truck in better condition just sold for.
If Macka will sell you the truck at market price then you are still welcome here.
I will cancel Monday for now. Hope you can come to some arrangement with Macka and can progress.
If Macka has an issue with this he can speak to Allan Price (Director).
Mrs Tuffley responded to Ms Janissen on 20 December 2013 as follows:
We are talking to Macka about the price of the truck at the moment and Macka is going to talk to Allan.
What day can Bevan come in for his training?
Can you please let me know.
Ms Janissen responded that Mr Tuffley could come in the following Monday, “If you get truck for max $80k with no hiding of goodwill”.
It would appear that there were then ongoing discussions between Mr McKay, Mr Price and Mr and Mrs Tuffley concerning the price and purchase of the truck.
8 January 2014 – 3 February 2014
Mr Tuffley commenced ‘buddy’ training with Mr McKay on 8 January 2014, which involved Mr Tuffley driving the truck with Mr McKay to learn how the vehicle worked and the regular routes that were travelled. Mr Tuffley continued training with Mr McKay up to close of business on 20 January 2014.
Mr McKay says that in the period between 8 and 20 January 2014 he was assured on more than one occasion by the Tuffleys that the deal was still going ahead, even though there had been no deposit paid. Mr McKay admits that:
a)Mr Tuffley had mentioned payment for training, but says that he informed Mr Tuffley that he was not being paid for training as it was part of buying the truck, and because BFS required any new Driver/Owner to have 3-5 days training before being assessed and ticketed to drive for BFS as sub-contractors; and
b)he told Mr Tuffley that once he was “ok to drive” he could drive until the payment for the truck was made and that the hours driven would be treated as the deposit and taken off the total purchase price, and that Mr Tuffley agreed with this.
Mr McKay says he believed that the sale was going ahead and would be finalised by 24 January 2014, and that consequently McKay P/L paid out two loans, one for the truck, and the other for a pallet jack, totalling $113,317.48 on 21 January 2014. The payout of those loans is confirmed by Westpac electronic payment receipts evidencing the payments from McKay P/L. Having made the payments for the payout of the truck and the pallet jack Mr McKay forwarded the receipts to Mrs Tuffley, and advised that certain arrangements would be made with the Commonwealth Bank over the next few days, and that he would deal with those matters “so you can still be in the truck working for yourselves on Monday [27 January 2014].”
On Friday 24th January Mr McKay says he was informed by an employee of BFS that the truck was being transferred from McKay P/L to Tuffley Transport at the close of business, so that Mr Tuffley could start on 27 January 2014. There had been no moneys deposited for the purchase of the truck so Mr McKay sent an email via phone to BFS stopping the transfer. Mr McKay spoke to Mrs Tuffley and was informed that the purchase was not going ahead. Mr McKay spoke to Mr Tuffley and told him that as he was not buying the truck he was not to drive the truck anymore.
Over the Australia Day long weekend Mr McKay recalled other commitments for the following week. As a result of the sale not going ahead he needed to get a driver, and so contacted Mr Tuffley “to offer him paid work for the rest of that week”, that is from 29 to 31 January 2014: Second Written Response at [15]. This “offer of employment”: Second Written Response at [15], was due to the fact that Mr McKay had no driver for the run, as he had changed his employees as a result of the anticipated sale, and as Mr Tuffley had trained on the run in question he knew the route. Mr McKay’s offer of employment was sent in a text message to Mr Tuffley at 7.14pm on 27 January 2014 which read as follows:
Wondering if you wanted to work on wednesday I have a meeting with the council. If so I will give you the rest of the week for some wages if you want it
Let me know
Mr Tuffley rang and told Mr McKay he had worked on that day (27 January 2014), which Mr McKay says was contrary to the direct instruction to Mr Tuffley on 24 January 2014. Mr McKay says that Mr Tuffley then said that the sale was still going ahead and they were now looking to purchase both trucks. Mr McKay says that as Mr Tuffley had just informed him the sale was still going ahead, they reverted back to the same agreement as before, that is, payment for services while driving the truck would be taken off the final price paid as deposit.
Mr Tuffley says that he worked from 22 January 2014 until the close of business on 5 February 2014.
Mr Tuffley says that:
a)he had numerous telephone calls with Mr McKay during this time regarding access to the fuel card so that he could purchase fuel for the truck;
b)he agreed to meet Mr McKay at the fuel station to pay for the fuel on one occasion;
c)another time when Mr Tuffley called Mr McKay he did not answer his phone so Mr Tuffley called the driver of McKay P/L’s other truck to get the fuel card from him; and
d)he contacted Mr McKay during this time in relation to a tyre that had blown out, and Mr McKay met Mr Tuffley at the end of the day at BFS’s carpark to repair the tyre.
Mr McKay says that:
a)at no time during this negotiation process was Mr Tuffley added to the list of employees for McKay P/L, and that what was agreed was that services would be provided in lieu of the sale deposit, and the only time an “offer of employment” was made was after the notification on 24 January 2014 that Mr Tuffley would not be going ahead with the purchase; and
b)paid work offered at that time (27 January 2014) was as a sub-contractor to his business, and never as an employee, but once Mr Tuffley advised that he was intending to continue with the purchase, it was again agreed that any hours worked would be in lieu of the deposit and the adjustment made at the time of settlement.
Mr McKay says that during the period of the above negotiations he had two conversations with Rob Balmer (“Mr Balmer”), who was then the Cold Store Coordinator at BFS. Mr McKay said that Mr Balmer said to him that Mr Balmer thought Mr McKay was getting set up by both BFS and Mr Tuffley. Mr McKay says that Mr Balmer said to him “don’t trust him, there is something going on with BFS and I think he is setting you up.”
4 and 5 February 2014
On the morning of the 5 February 2014 Mr McKay read an email received 4 February 2014 from Mrs Tuffley stating that the sale was no longer going ahead. Because of the previous conversation that Mr McKay had had with Mr Balmer he decided to meet with Mr Tuffley to confront him about the rumours.
On 5 February 2014 Mrs Tuffley emailed Ms Janissen to say the sale was not proceeding as the Tuffleys were not able to afford to purchase the truck and subsequently upgrade it in 12 months’ time given that there was no guarantee of ongoing work from BFS. Ms Janissen then said that the Tuffleys could purchase another truck and come and work with BFS, as she understood how frustrated they were in that the negotiations had gone on for so long.
Mr Tuffley worked in the McKay P/L truck on 5 February 2014 to the end of the day. At the end of the day Mr Tuffley met Mr McKay in the carpark where the truck was to be parked, and says he asked Mr McKay for his wages while working in the truck, but was told “no deal, no money.”
Thereafter, the matter became acrimonious with various claims of threats and misleading conduct being made by both parties in relation to each other, and by Mr McKay in relation to BFS. It is not necessary to traverse those allegations in order to resolve the dispute concerning the alleged non-payment of wages from 22 January to 5 February 2014.
Run sheets
The “run sheets” attached to Mr Tuffley’s Affidavit are in fact “BFS Daily Fatigue/Log” documents which record the times spent driving by a driver. The run sheets are not McKay P/L documents, but BFS documents. Further, the run sheets do not cover all of the days for which Mr Tuffley alleges he is owed wages by McKay P/L. That, however appears to be immaterial, given that there appears to be no dispute about the time that Mr Tuffley actually spent driving the truck.
Evidence and submissions at hearing
At hearing, Mr McKay was not cross-examined on his Second Written Response which he had adopted as being true and correct to the best of his knowledge and belief. That failure to cross-examine was notwithstanding Mr Tuffley being advised that if there was anything he sought to dispute or if there was any matter that he sought to establish to assist his case or to damage McKay P/L’s case the hearing was the opportunity to do so: Transcript, 4 February 2015, pages 2 (lines 35-43) and 4 (lines 29-32), 6 February 2015, pages 11 (lines 44-47) and 12 (line 1). The failure to dispute Mr McKay’s evidence by way of cross-examination makes it easier for the Court to believe that evidence. In any event, for reasons which will appear further below, on the critical issues it would appear that there is in fact little or no real dispute between the evidence of Mr McKay and Mr Tuffley.
Mr Tuffley’s evidence under cross-examination was that:
a)there was an agreement between he and Mr McKay that “wages” for the time that Mr Tuffley was driving the truck would be taken out of any deposit required to purchase the truck: Transcript, 6 February 2015, pages 3 (lines 10-13 and 19-21); 7 (lines 16-19); 10 (lines 13-15);
b)Mr Tuffley was aware prior to indicating to Mr McKay that he would purchase the truck that there could be no goodwill involved in the purchase price, but agreed to a purchase price which included a goodwill component: Transcript, 6 February 2015, page 5 (lines 25-26 and 45), but did not buy the truck because he was subsequently advised by BFS that if he paid goodwill he could not work for BFS: Transcript, 6 February 2015, pages 5 (lines 19-23); 6 (lines 10-12 and 46-47); 7 (lines 23-26); 9 (lines 16-18); and
c)any compensation ordered to be paid in this matter was to be paid to Tuffley Transport because that was who was buying the truck and that is who Mr Tuffley was providing services on behalf of: Transcript, 6 February 2015, page 10 (lines 33-35), and see also Form 5, Part H, Item 27.
In final submissions in relation to the issue of the payment of compensation to Tuffley Transport and the existence of a contract of employment the following exchange occurred between the Court and Mr Tuffley:
HIS HONOUR: All right. And, secondly, does not the fact that you now seek compensation to be paid to a company – and you agree that it was the company which was buying the truck, providing the services – indicate that there couldn’t have ever been a contract of employment between you and Mr McKay’s company, because your company was interposed between the two of you?
MR TUFFLEY: Yes, well, our company was only me and my wife and – yes, that’s our company. That’s ‑ ‑ ‑
HIS HONOUR: That doesn’t matter in the sense that there’s a corporate entity there and it’s that corporate entity which now seeks to be paid what you claim to be your wages. And isn’t there a difficulty with that?
MR TUFFLEY: Well, I could just go – I have got an ABN number, of course. I could just go as a subcontractor for wages.
HIS HONOUR: Well, that’s perhaps the point, that it’s a subcontractor arrangement and not a contract of employment. And the jurisdiction of the court only goes to – in the small claims jurisdiction under which you have claimed – contracts of employment and not subcontractor arrangements or the payment of subcontractors. What do you say about that?
MR TUFFLEY: Well, I was just doing the work. Like, I was learning the – I never thought it would ever come to wages. I thought it would just – I didn’t think it would come to this room to wages. I thought it would just come as a payment. Instead of paying $150,000 for the truck, we’re paying 147,000, whatever is – you know, whatever he was going to pay me at an hourly rate, which we would have agreed upon.
Transcript, pages 13 (lines 33-47) and 14 (lines 1-12).
Consideration
Contract of employment - legal principles
In order to create a contract of employment various elements must be present, namely:
a)an intention between the parties to create an enforceable legal relationship;
b)an offer by one party and its acceptance by the other;
c)a contract supported by valuable consideration;
d)the legal capacity to make the contract;
e)genuine consent to the terms of the contract; and
f)that the contract must not be rendered ineffective by reason of conduct illegal or contrary to public policy.
See Sappideen et al, Macken’s Law of Employment (7th Edn) (Pyrmont: Law Book Co, 2011) page 96 at [4.40].
Whether a person is an employee or not is a question of law: ACT Visiting Medical Officers Association v Australian Industrial Relations Commission [2006] FCAFC 109; (2006) 153 IR 228; (2006) 232 ALR 69 (“Visiting Medical Officers Association”); Damevski v Giudice & Ors [2003] FCAFC 252; (2003) 133 FCR 438; (2003) 129 IR 53; (2003) 202 ALR 494; (2003) 54 AILR 100-124, and there are many factors which may point to a contract being a contract of employment, with their relative importance varying with the circumstances. Control of the employee exercisable by the employer is a prominent factor, but not the sole criterion, and is one of a number of possible indicia of employment, including but not limited to “the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and the provision of holidays, the deduction of income tax and the delegation of work by the putative employee”: Stevens v Brodribb Sawmilling Company Proprietary Limited (1986) 160 CLR 16; (1986) 60 ALJR 194; (1986) 63 ALR 513; CLR at 24 per Mason J (with whom, on this point, Brennan and Deane JJ agreed at 47 and 49 respectively); Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21; (2001) 75 ALJR 1356; (2001) 181 ALR 263; (2001) 106 IR 80; 47 ATR 559 at [43]-[45] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ; Visiting Medical Officers Association at [19] per Wilcox, Conti and Stone JJ.
In Re Election for Office inTransport Workers Union of Australia, Western Australian Branch (1992) 40 IR 245 (“Re Election in TWU”) the Federal Court had to determine whether a nominee for election in the Transport Workers’ Union of Australia, Western Australian Branch (“TWU”) was employed in the transport industry and whether there was a legally binding contract of employment. The nominee’s full-time employment was as an employed (but not elected) industrial officer with the TWU. On a rostered day off he went to the premises of a transport company, pursuant to a prior arrangement to do so, reported to the office, was shown around the premises for about an hour, and then cleaned the company car. The nominee then had a coffee in the tea room, and subsequently sat in the cab of a truck whilst it was driven by another and then assisted with the loading of a few small pieces of steel onto the truck, following which the truck returned to the general yard area with the nominee again in the cab. The load was then tied down, and the nominee went back to finishing the cleaning of the company car. The nominee then washed an area of the yard where the company car had been cleaned and washed out a couple of rubbish bins. In total this took about four hours for which the transport company paid the nominee a gross wage with tax deducted. The nominee’s name was entered into the relevant pay records and he was designated as a casual driver/loader, and was recorded as having worked 7.6 hours on the day concerned. The nominee was given a group certificate and a letter evidencing his employment. On the basis of his “employment” in the industry the nominee subsequently nominated for a position as an elected official with the TWU.
In Re Election in TWU the nominee’s nomination was challenged by the incumbent Branch Secretary, and the Federal Court found that the arrangement as a whole “lacks the indicia of a contract of employment … their lack of certainty, the lack of any evidence of mutual obligation … taken together with … the underlying purposes of the parties, militate against the conclusion that they intended to form legally binding relationships. There was no evidence that Handmer [the nominee] submitted himself in any legally binding way to the direction of Carter [the managing director of the transport company]. The payment he received was in substance a gratuity that bore no relationship to the time that he had worked. There was no mutuality of obligation”: Re Election in TWU at 254-255 per French J. As a consequence, the acceptance by the returning officer at the nomination for election to the office of Branch Secretary/Treasurer of the Western Australian Branch of the TWU lodged by the nominee was declared by the Federal Court to be void: Re Election in TWU at 255 per French J.
Central to the Court’s jurisdiction under s.548 of the FW Act is a requirement that there be an order sought that relates to “an amount that an employer was required to pay to, or on behalf of, an employee: FW Act, s.548(1A)(a). Likewise, the Award applies to a “national system employee”, which is an individual “employed, or usually employed” by a national system employer: FW Act, s.14(1)(a). It is therefore a necessary pre-condition to the making of any order under s.548 of the FW Act, and to the existence of coverage under the Award of any person alleged to be an employee, that there be an employer and employee relationship between a claimant employee, here Mr Tuffley, and a respondent employer, here McKay P/L.
The claim that there was a contract of employment between Mr Tuffley and McKay P/L in this case falls at the first hurdle – that of an intention to create a contract of employment. This case was about a business deal gone wrong, not an employment relationship. The evidence establishes that there was no intention on the part of McKay P/L, acting through Mr McKay: see FW Act, s.793(1)(a), to create an employment relationship when Mr Tuffley drove the truck. Rather, any services thus provided were to be compensated for by deduction of the value of those services from the amount of any deposit payable by Tuffley Transport to McKay P/L for the purchase of the truck. The evidence discloses that this was the intention of Mr Tuffley, acting on behalf of Tuffley Transport: see FW Act, s.793(1)(a) and McKay P/L throughout the period of negotiation for the purchase of the truck, which ended on 5 February 2014. That that was the intention of Mr Tuffley specifically is disclosed by:
a)his evidence that he sought any “compensation” awarded in these proceedings to be paid to Tuffley Transport, a corporate entity, and not to him as an “employee”, which is indicative of the fact that any services provided in driving the truck were provided by Tuffley Transport, who would have been the sub-contractor to BFS if the sale had proceeded; and
b)Mr Tuffley’s concession in final submissions that he “never thought it would ever come to wages”, but rather that there would be a reduction in the amount of the deposit payable by Tuffley Transport for the purchase of the truck. That concession is entirely consistent with the evidence in the proceedings.
Although both Mr Tuffley and Mr McKay referred to the payment of “wages”, and Mr McKay referred to an “offer of employment”, particularly in relation to Mr Tuffley continuing to drive the truck after the Australia Day long weekend in January 2014, those statements do not, in their context, evince an intention to establish an employer - employee relationship. That is because, firstly, Mr Tuffley agreed that any monies attributable to his driving the truck were to be deducted from the deposit payable by Tuffley Transport for the truck, and it is evident from the evidence that the “wages” and “employment” referred to was, in the minds of both Mr Tuffley and Mr McKay, intended to be a sub-contract arrangement, with the monies payable to Tuffley Transport, or to be offset against any amount payable by Tuffley Transport by way of deposit. Ultimately, to paraphrase Re Election in TWU at 254-255 per French J, the underlying purposes of McKay P/L and Mr McKay, and Tuffley Transport and Mr and Mrs Tuffley, militate against a conclusion that there was an intention to form a legal binding contract of employment between McKay P/L and Mr Tuffley.
In the Court’s view there are a number of factors, or indicia, which point to the relationship between McKay P/L and Mr Tuffley not being an employment relationship. They include the following:
a)that there was no payment of wages at the time, and that there was never a mutual intention to pay wages at the time that Mr Tuffley was driving the truck;
b)as a consequence of (a) above there was:
i)no payment of any monies within the time prescribed by cl.20 of the Award for the payment of wages;
ii)no evidence of the maintenance of time and wages records required to be kept under the provisions of the Fair Work Regulations 2009 (Cth), Part 3-6, Division 3;
iii)no evidence of the deduction of taxation from any monies which were to be paid, or of any intention to do so; and
iv)no provision for any kind of leave prescribed under the National Employment Standards under the FW Act: see, for example, the entitlement under Part 2-2 of the FW Act to parental, annual, personal, community service and long service leave, or of any other kind of leave or holiday provision; and
c)no obedience to commands by the alleged employer, McKay P/L, when Mr Tuffley was told not to drive the truck, but drove it anyway, at least on 27 January 2014.
Although there is no requirement for a written contract of employment, and many contracts of employment still are entered into orally, there is, therefore, no evidence of any terms of any contract of employment, and as a consequence no certainty as to those terms and conditions, including fundamental terms, such as what classification and what rate of pay Mr Tuffley might be entitled to. There was no evidence going to such matters. It is also the case that there was no obligation on Mr Tuffley to work in the truck, and he was only doing so to serve the end of reducing the deposit payable upon purchase of the truck (or trucks) by Tuffley Transport.
For the above reasons, the Court is satisfied that:
a)there was no intention by Mr Tuffley or McKay P/L to enter into a contract of employment for the period from 8 January 2014 to 5 February 2014 inclusive, and no certainty as to any terms of any purported contract of employment; and
b)there is insufficient evidence of the factors or indicia of an employment relationship, such as to indicate that there was an employment relationship between Mr Tuffley and McKay P/L,
and the Court has therefore concluded that there was not an employment relationship between Mr Tuffley and McKay P/L. It follows, therefore, that Mr Tuffley was not an employee for the purposes of the Award, nor was he an employee for the purposes of s.548(1A) of the FW Act, and that he is therefore unable to bring the claim that he makes in this Court’s small claims jurisdiction under s.548 of the FW Act.
McKay P/L’s Response
As the Court indicated to Mr McKay at hearing: Transcript, 6 February 2015, page 12 (lines 22-30), McKay P/L’s Response is not capable of being dealt with by the Court in the small claims jurisdiction under the FW Act as it is not an order that relates to an amount referred to in s.548(1A) of the FW Act: see s.548(1)(b) of the FW Act, and the Court does not have jurisdiction in its small claims jurisdiction under the FW Act to deal with what is essentially a commercial law claim for misleading and deceptive conduct. To the extent that orders are sought in McKay P/L’s Response the Court has not determined the issues in relation thereto. The Court further notes that in these proceedings there was no proper formulation of any claim of misleading and deceptive conduct, and the evidence led did not fully grapple with that issue. If McKay P/L consider that there is substance in the apparent claim for misleading and deceptive conduct, that is a matter which can be pursued, subject to any time limitations, under the relevant provisions of the Competition and Consumer Act 2010 (Cth).
Conclusion and orders
The Court has concluded that no employment relationship existed between Mr Tuffley and McKay P/L, and that Mr Tuffley was not an employee of McKay P/L for the purposes of s.548(1A) of the FW Act or for the purposes of the Award. It follows that Mr Tuffley is therefore not able to make a claim in the Court’s small claims jurisdiction under the FW Act. It follows that Mr Tuffley’s application must be dismissed. There will be an order accordingly.
In relation to costs, the Court notes that:
a)these were small claims proceedings;
b)section 570(2) of the FW Act provides that a party may only be ordered to pay costs if the Court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause, or that a party’s unreasonable act or omission caused the other party to incur costs; and
c)neither party was legally represented, and there are therefore no professional legal costs which have been incurred in the proceedings,
but if any party seeks payment of costs it must make an application for those costs within 28 days: Federal Circuit Court Rules 2001 (Cth), r.21.02(1)(b).
I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Date: 7 July 2016
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