Widdicombe v Brian W Paton (trading as Tullamarine Chauffeur Drive)
[1997] IRCA 80
•06 March 1997
DECISION NO:80/97
CATCHWORDS
INDUSTRIAL LAW - UNLAWFUL TERMINATION - EMPLOYMENT RELATIONSHIP - EMPLOYMENT CONTRACT - employee or contractor - whether wage subsidy agreement incorporated into contract of employment - whether award incorporated - VALID REASON - OPERATIONAL REQUIREMENTS - REDUNDANCY.
Workplace Relations Act 1996 (Cth) ss170DB, 170DE, 170EA
Fair Trading Act 1985 (Vic)
Industrial Relations Act 1979 (Vic)
Vabu v Federal Commissioner of Taxation (1996) 33 ATR 537;
Ajax Cooke Pty Ltd v Nugent (unreported, Supreme Court of Victoria, Phillips J, 29 November 1993; Court of Appeal, 18 September 1996).
Phillipson v E.A.S.E. Furniture (unreported, IRCA, Murphy JR, 11 February 1997)
WIDDICOMBE v BRIAN W PATON (trading as TULLAMARINE CHAUFFEUR DRIVE)
VI96/2342
Before: MURPHY JR
Place: MELBOURNE
Dates of Hearing: 6 MARCH 1997
Date of Judgment: 6 MARCH 1997
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI96/2342
BETWEEN:
TRACI WIDDICOMBE
Applicant
AND
BRIAN W PATON
(trading as TULLAMARINE CHAUFFER DRIVE)
Respondent
BEFORE: MURPHY JR
PLACE: MELBOURNE
DATE: 6 MARCH 1997
MINUTES OF ORDERS
THE COURT ORDERS AND DECLARES THAT:
For the purposes of the Workplace Relations Act 1996 (Cth) the applicant is an employee;
The applicant’s claim under s170EA of the Act is dismissed.
The applicant’s claim for relief under the Statement of Claim filed 8 October 1996 is dismissed.
Note: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI96/2342
BETWEEN:
TRACI WIDDICOMBE
Applicant
AND
TULLAMARINE CHAUFFER DRIVERS
Respondent
BEFORE: MURPHY JR
PLACE: MELBOURNE
DATE: 6 MARCH 1997
REASONS FOR DECISION
Delivered ex tempore - revised from the transcript
The first issue to be determined in this proceeding is whether the applicant is an employee or a contractor. The applicant gave evidence that in October 1995 she heard from a friend that the respondent had a position as a driver available. She went to see the respondent. The respondent operates a hire car business, at the time consisting of seven cars. They had a brief conversation in which she said she was informed as to the basis on which she would work, namely that she would be paid fifty per cent of any fares and share half the petrol costs. She was also told that the respondent would ring her the night before and allocate the jobs, and after the first allocated jobs she would revert to him. Under the rules governing hire car businesses drivers are not entitled to tout for business. The result is that the applicant was required to rely on the respondent for all work that she had. She was also told she had to wear a black or blue suit, and that there was a three warning system. In the applicant's account of her retainer, there was no reference to her being a contractor. It was not put to her by counsel for the respondent that that was said to her at the time.
The respondent gave evidence that he told the applicant that she was to be a contractor, and that she was to work on the basis that the applicant had earlier given evidence of. The respondent produced two documents (Exhibit R2) in evidence which he said that the applicant had signed. The first was a driver agreement which detailed how the arrangement between the respondent and the applicant would operate. The second was a document headed "Conditions for Employment". The applicant denied signing or seeing either of those two documents.
The applicant gave evidence that a week after she started the respondent contacted her and asked whether she was eligible for a JobStart Wage Subsidy Agreement. She said she was not sure and would make appropriate arrangements. A week later she ascertained that she was, and told the respondent that. The respondent gave evidence that he considered the question of a Wage Subsidy Agreement as a result of seeing an advertisement for it on the back of a taxi, and he made the initiating telephone calls. The sequence in which the JobStart Agreement occurred, as recounted by the respondent, was not precisely put to the applicant.
At all events the respondent attended at the CES and completed a JobStart Wage Subsidy Agreement for the applicant. In that document (Exhibit R2) the job is described as "driving people to various destinations", the relevant award is Taxi Drivers Award, and the job title is a “chauffeur driver”. The applicant’s gross wages are described as “50% of the takings”, and the hours of work as thirty-eight hours per week. The respondent signed that document and was paid a subsidy for a period of six months.
When the applicant originally discussed a retainer with the respondent, he asked her how many days a week she would wish to work. She said to him six, and that was the basis on which she worked. She used a vehicle supplied by the respondent. When she was not using it for the respondent's jobs she could use it for her private use. That arrangement continued between the parties until July 1996. On a daily basis the applicant would complete sheets of the jobs that she undertook, and on a weekly basis those sheets would be handed to the respondent, together with the takings or credit vouchers. This occurred usually on a Saturday or Sunday, and on the following Monday or Tuesday the applicant was paid fifty per cent of the gross sum less any petrol that was due for her fifty per cent share of the petrol costs. The applicant drove a particular vehicle, registered number VHA 407, for the bulk of the period that she was engaged by the respondent.
Employee or contractor?
In relation to the first issue as to whether the applicant was an employee or a contractor, the applicant was paid her remuneration in a gross form, no tax was deducted. The applicant gave evidence that the respondent told her to see his accountant at tax time. It was put to the applicant that she was aware that within the hire car industry persons driving cars are retained on a contractor basis.
The particular label that parties in any relationship allocate to the relationship is not necessarily a decisive consideration, and it is a question for the Court to characterise the totality of the relationship between the parties. It has also been said that at times it is a matter of impression. I was referred to Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 33 ATR 537. The authorities discussed in Vabu indicate that the control test has now been superseded by a more flexible test. It is also stated in Vabu at 538 by Meagher JA that "a person may supervise others without becoming their employer". In Vabu couriers were held not to be employers.
There are significant differences between the position of the couriers in Vabu and the position of the applicant. The two most important differences are that in Vabu the couriers were risking more of their capital because they supplied their own vehicle. Here the applicant did not supply her own vehicle, and used the respondent's vehicle. The only capital that she risked in this venture was the mobile phone that the respondent required her to possess. The respondent provided her with street directories and the vehicle.
The second issue that is different from the position in Vabu is that in Vabu a decisive consideration in the decision of Meagher JA was that the respondent in that case had taxed the couriers as subcontractors. Further, in the documents evidencing in the agreement, there was power for the couriers to delegate, to use business names or corporate names. It was also said that whether or not to categorise the couriers as employees was not without difficulty.
Here I am satisfied that the applicant was indeed an employee of the respondent. She did not conduct a business on her own account. She provided her labour as a driver to the respondent. She also provided the mobile telephone. The remuneration was shared fifty per cent, but I do not see that as a decisive consideration. Further, that remuneration was aggregated on a weekly basis. The applicant was the subject of extensive control by the respondent in that he told the applicant that he had a three warning system. Further, he provided all the work, and she dedicated herself exclusively to him. Under the rules relating to chauffeur drivers she could not do otherwise. She arranged with the respondent to take leave, and in the six-day week that she worked was required to work at the hours that the respondent set, namely when jobs were available.
Further considerations supporting this conclusion are the content of both the driver agreement which the respondent says he had the applicant sign, but which I am satisfied he did not have the applicant sign, and also the conditions of employment document. These provide detailed indications of the right to exercise control over the applicant by the respondent. The final clause of the latter document states: "Any breech (sic) of these conditions will meet with instant dismissal". While it is clear that the respondent does draft some of his own documents, the use of that term is an indication that the applicant was seen as an employee rather than a contractor.
Is the Taxi Drivers Award incorporated?
The next issue is what are the consequences of finding that the applicant is an employee. The solicitor for the applicant relied on the description of the “Taxi Drivers Award” in the Wage Subsidy Agreement to incorporate that Award into the employment agreement between the applicant and the respondent.
He referred to Ajax Cooke Pty Ltd v Nugent (unreported, Supreme Court of Victoria, Phillips J, 29 November 1993; Court of Appeal, 18 September 1996). I see significant differences between that decision and the present case.
Here it was common ground that there was no reference to an award at the time of the discussion in October 1995 between the respondent and the applicant. Further, the reference in the Wage Subsidy Agreement to the Award is not to the Motor Drivers' Award, an award made under the Industrial Relations Act 1979 (Vic), but to the Taxi Drivers Award. It is common ground that there is no Taxi Drivers Award.
Further, as I have discussed in Phillipson v E.A.S.E. Furniture (unreported, IRCA, Murphy JR, 11 February 1997), the Wage Subsidy Agreement does not necessarily alter the existing contractual agreement between an employer and an employee. It is merely a description of certain aspects of the agreement between an employer and an employee designed to provide the basis for the payment of a wage subsidy. I am satisfied that the reference to the Taxi Drivers Award does not provide any juridical basis to incorporate into the agreement between the applicant and the respondent the provisions of the expired Motor Drivers' Award made under the Industrial Relations Act 1979 (Vic). It follows from this that the various claims made in the statement of claim that the respondent was in breach of provisions of the Motor Drivers Award are not made out.
Also in the statement of claim are claims of false or misleading conduct contrary to the Fair Trading Act 1985 (Vic). I am satisfied that the applicant has not made out a basis for those claims. The applicant, on her own evidence, took no notice of the content of the Wage Subsidy Agreement, and there was no suggestion that she relied on any representation contained in that agreement, and made to her by the respondent. I am not satisfied that the contents of that agreement constituted any representation by the respondent to the applicant that was in breach of ss11 or 14 of the Fair Trading Act. I am further satisfied that the applicant has suffered no loss as a result of any false or misleading conduct, because there was no false or misleading conduct as alleged. I am further satisfied that the applicant has not made out any claim in negligence or breach of duty as alleged in paragraph eleven of the statement of claim.
The circumstances associated with the termination of the employment of the applicant:
Around Christmas 1995 the respondent had a discussion with the applicant in relation to the possible sale of one or more of his hire car licenses. The applicant expressed some interest and made some inquiries about obtaining the finance from her father to purchase a vehicle and a license. That came to nothing. In June 1996 the respondent indicated at a meeting of drivers, including the applicant, that he had both his business and also two of the licenses, on the market. The respondent gave evidence that under the licensing regime associated with hire cars only certain types of licenses can be sold. He held two of those licenses, and he had indicated that those two licenses were on the market.
One of those licenses was the subject of a lease agreement that he executed on 15 May 1996 (Exhibit R3) with a Mr Pengelly in relation to the vehicle registered number VHA 051. That agreement provides for the vehicle to be leased and provides also that the agreement may be cancelled by one week's notice. In July the respondent was negotiating to sell another of the licenses. At the same time one of his drivers was going on two weeks' holiday. The respondent arranged with the applicant to drive a vehicle made available because the driver was going on holidays. At that time I am satisfied that the applicant was told that due to the pending sale of a vehicle, the applicant's future with the respondent was uncertain.
The agreement to sell the second license was entered into on 8 July 1996 with Mr Mete Kucuk. That agreement (Exhibit R4) provided for its completion by 17 July 1996. The result of that agreement, and the earlier agreement for the lease to Mr Pengelly, was that the respondent’s fleet of vehicles was reduced from seven to five. The sale to Mr Kucuk occurred during the period that the applicant was driving the vehicle, while the driver of that vehicle was on two weeks' holiday.
The respondent gave evidence that he told the applicant on the 19 July that, as a result of the sale agreement to Mr Kucuk going through, at the end of the two-week period that she was working relieving the driver who was on leave, that there would be no vehicle available for her. The position was uncertain until conclusion of whether or not Mr Pengelly proceeded to complete the lease agreement for the earlier vehicle. I am satisfied that the respondent in effect at that stage gave the applicant one week's notice. He did indicate to her, however, that weekend work could be available. I am satisfied that that conversation was repeated at the end of that week, which was when the other driver returned from his holidays. As events unfolded, no weekend work was available, and the last time the applicant did any work for the respondent was on 26 July. The respondent gave evidence that the agreement for the sale of the vehicle to Mr Pengelly was completed in August.
The solicitor for the applicant in cross-examination put to the respondent that this was in effect a redundancy of the applicant, and that no proper criteria had been applied, nor had there been any consultation. The respondent gave evidence that the extent that the applicant was redundant, it was as a result of the sale of the vehicle that she had driven. I accept his evidence on this point. I am satisfied that while it can be said that the applicant was redundant, when the matter is looked at in the light of the ability of the respondent to only sell two hire care licenses with their accompanying vehicle, and the way the respondent operated his business, namely that each driver remained with a single car, when the vehicle that the applicant drove was sold, as I am satisfied that it was, then at that point the respondent had no further need for the applicant's services.
The applicant had been on notice that this was possible since Christmas 1995, when the respondent had raised the matter with her and she then undertook various endeavours to buy a vehicle. The matter was confirmed again at the meeting in June 1996. Indeed, on the applicant's own evidence, she was aware that the respondent had both the business, and two of the licenses on the market. It follows from this that I am satisfied that the respondent had a valid reason for the termination of the applicant's employment. The reason was based on the respondent's operational requirements, namely that it no longer had a vehicle with an accompanying license for the applicant to drive. There has been no breach of s170DE(1) of the Act.
The solicitor for the applicant also claimed that the respondent was in breach of s170DB of the Act due to a failure to provide any notice to the applicant, and a claim for reasonable notice is also made in the statement of claim filed. I am satisfied the respondent gave the applicant one week's notice on 19 July, and the applicant worked the balance of that week when she drove the other vehicle. I am satisfied that in the circumstances it was reasonable notice and that there has therefore been no breach of any implied term of the contract that she be provided with reasonable notice.
In cross-examination, reference was made to a reference in the Wage Subsidy Agreement that the respondent use his best endeavours to provide ongoing employment for a period of a minimum of three months beyond the subsidy period. I do not see that clause as incorporated into the contract of employment with the applicant, and I am satisfied on the evidence of the respondent that he indicated to the applicant that he would attempt to provide her with weekend work, but that work was unavailable.
In the statement of claim the applicant seeks an amount pursuant to the Superannuation Guarantee Administration Act 1992 (Cwth). The relevant statutory provisions were not tendered before the Court, and I am not satisfied that the applicant has made out a basis on which she can claim the actual amounts to be paid by way of damages to her. I will however make a declaration that the applicant is, for the purposes of the Workplace Relations Act 1996 (Cth), an employee.
The orders that I will make are as follows:
I declare that for the purposes of the Workplace Relations Act 1996 (Cth) the applicant is an employee;
The applicant's claim under s170EA of the Act is dismissed.
The applicant's claim for relief under the statement of claim filed 8 October 1996 is dismissed.
I certify that this and the preceding nine (9) pages
are a true copy of the reasons for decision of
Judicial Registrar Murphy as recorded in the transcript
and revised by the Judicial Registrar.
Associate: KAREN HALSE
Dated: 6 March 1997
APPEARANCES
Solicitor appearing for the applicant: MR P HOLDING Solicitors for the applicant: GILL KANE & BROPHY Counsel appearing for the respondent: MR R M DOWNING Solicitors for the respondent: HAINES & POLITES Date of Hearing: 6 MARCH 1997 Date of Judgment: 6 MARCH 1997
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