WorkCover v Q-Comp and Lindsay Brothers Management P/L
[2010] QMC 7
•5 March 2010
MAGISTRATES COURTS OF QUEENSLAND
CITATION:
WorkCover v Q-COMP & Lindsay Brothers Management P/L & Anor [2010] QMC 7
PARTIES:
WORKCOVER QUEENSLAND
(appellant)
v
Q-COMP
(first respondent)
LINDSAY BROTHERS MANAGEMENT PTY LTD
(second respondent)
LINDSAY AUSTRALIA LIMITED
(third respondent)
FILE NO/S:
MAG69224/08(3)
DIVISION:
Industrial Magistrates Court
PROCEEDING:
Appeal against decision of Q-COMP
ORIGINATING COURT:
Industrial Magistrates Court at Brisbane
DELIVERED ON:
5 March 2010
DELIVERED AT:
Brisbane
HEARING DATE:
7 December 2009, 8 December 2009
MAGISTRATE:
Lee G
ORDER:
Appeal allowed. The decision of Q-COMP dated 12 March 2008 is set aside and a decision is substituted that the appropriate WorkCover Industry Classification (WIC) for the 2nd and 3rd respondents is number 611012 “Road Freight Transport”.
CATCHWORDS:
INDUSTRIAL LAW – WORKERS COMPENSATION - employer’s premium – method of calculation – appropriate WIC to be applied – what WIC most closely describes whole of employer’s business activity – whether “Road Freight Transport” or “Road Freight Forwarding” - factors to consider
Workers Compensation and Rehabilitation Act 2003 (Qld), s 54, s 550
WorkCover Queensland Notice (No 1) of 2006 (2006) 182 QGIG 217 (No 9)
WorkCover Queensland Notice (No 1) of 2007 (2007) 185 QGEIG (No 9)
C.A. Pisani & Co Ltd v Brown, Jenkinson and Co Ltd et al (1939) 64 LLR 340, cited
Otis Elevator Company v WorkCover Queensland [2001] QIC 15, cited
P & O Ports Limited v Q-COMP (2004) 177 QGIG 388, cited
Richardson et al v Radford et al [1996] QCA 554, cited
WorkCover v Shagadelic Pty Ltd [2001] QIC 13, cited
COUNSEL:
J Bell QC, T Pincus for the appellant
C Murdock for the first respondent
A Horneman-Wren SC G Dann for the second and third respondents
SOLICITORS:
Brian Bartley & Associates for the appellant
First respondent appeared on their own behalf
Sciaccas Lawyers for the second and third respondents
This is an appeal by WorkCover Queensland pursuant to section 550[1] of the Workers Compensation Act 2003 (“the Act”) against a decision of Q-COMP dated 12 March 2008 which set aside a decision of WorkCover dated 28 November 2007. Q-COMP is the first respondent in this appeal. Linsday Brothers Management Pty Ltd and Lindsay Australia Ltd, are respectively the second and third respondents and for convenience shall be referred to as “the employer” in these reasons. In short, this case is concerned with determining which WorkCover Industry Classification (“WIC”) applies to the employer for the purposes of establishing the workers compensation premium payable to WorkCover by the employer in the 2006/07 and 2007/08 financial years.
[1] In Part 3 (Appeals) of Chapter 13 (Reviews and Appeals) of the Workers Compensation and Rehabilitation Act 2003;
In its decision dated 28 November 2007, WorkCover determined that the relevant WIC for ascertaining the workers compensation insurance premium payable by the employer to be number 611012 “Road Freight Transport”. The employer successfully sought a review of that decision to Q-COMP[2] resulting in WorkCover’s decision being set aside and substituted with the decision that the appropriate WIC was number 664210 “Road Freight Forwarding” which, if accepted, would result in significantly lower premiums payable by the employer in the 2006/07 and 2007/08 financial years. By this appeal WorkCover seeks restoration of WorkCover’s original determination that the appropriate WIC for the employer is number 611012 “Road Freight Transport”.
[2] By subsection 54(9), the employer review was in accordance with Chapter 13 of the Act;
The legislative scheme for the calculation of workers compensation insurance premiums payable by employers starts with section 54 of the Act which then refers to detailed calculation provisions in government industrial gazettes published from time to time.
Section 54 of the Act[3] relevantly provides:
[3] In Division 1 (Premium setting generally) of Part 3 (Insurance under WorkCover Policies Generally) of Chapter 2 (Employer’s obligations) of the Act;
54 Setting of premium
(1) WorkCover must set the premium payable under a policy.
(2) The premium payable for the policy for a period of insurance[4]
must be assessed according to the method (the method) and at
the rate (the rate) specified by WorkCover by gazette notice.(3) If no rate is specified in the notice for an employer’s industry
or business, WorkCover must decide the rate to be the rate
applying to the industry or business classification specified in
the notice that most closely describes the employer’s industryor business…….[4] “Period of insurance” defined in Schedule 6 of the Act “means the period of insurance cover specified in a policy, policy renewal certificate or premium notice”;
Relevant to this appeal, there are two gazette notices for the purposes of subsection 54(2) of the Act. First there is WorkCover Queensland Notice (No.1) of 2006[5] which applied to assessments of premiums on and after 1 July 2006. Secondly, there is WorkCover Queensland Notice (No.1) of 2007[6] which applied to assessments of premiums on and after 1 July 2007. No issue has been taken as to their validity.
[5] Published Friday 23 June 2006 “The Queensland Government Industrial Gazette” Vol. 182 No. 9;
[6]Those gazette notices provide a detailed method by which a premium is calculated for a policy for a period of insurance for a particular employer and then sets out in Schedule 1 thereof the rate of premium to be paid based in part on the relevant WIC determined in accordance with the prescribed method in Part 2 of the gazette notices entitled “Allocation of WICs to policies”. The relevant provisions in Part 2[7] are:
4. One WIC to be allocated to employer’s policy
4.1Except as provided by sections 7, 8, 9, and 10, WorkCover shall allocate
1 WIC to an employer’s policy.5. WIC Determined by Business Activity
[7] Part 2 encompasses sections 4 to 11; sections 6 (Where an employer’s activity changes) & 11 (Allocation of Wages to WICs) were not the subject of submissions & are not relevant in this appeal;
5.1Except as provided by sections 7, 8, 9 and 10, WorkCover shall allocate to the employer’s policy the WIC that WorkCover considers corresponds to or most closely describes the whole of the employer’s business activity.
5.2Without limiting the generality of section 5.1, in determining the WIC that corresponds to or most closely describes the whole of the employer’s business activity, WorkCover may have regard to the following matters:
5.2.1 the employer’s primary or predominant activity; and
5.2.2 the use or estimated use by the employer in its business activities of persons, whether workers or otherwise, and whether engaged directly or through an arrangement with another entity whereby the persons’ labour or services are provided to the employer, including persons engaged by a labour hire employer, and
5.2.3 the business activity or activities the employer holds itself out as performing or being ready, willing and able to perform, and
5.2.4 any other matter connected with the employer’s business activities that WorkCover considers relevant.
5.3For the purposes of paragraph 5.2.1, an employer’s primary or predominant activity is the business activity under which the employer has the higher or highest expenditure on wages and payments to persons mentioned in section 5.2.2. Where this expenditure is inconclusive in identifying the primary or predominant activity WorkCover may, at its discretion, consider each business activity’s:
· contribution to revenue or profit,
· dollar value of production or sales, or
· both of those.
Sections 7, 8, 9 and 10 are not relevant to this appeal. The WIC determined under section 5 of the gazette notices partly forms the basis for determination of the precise premium payable by an employer under subsequent provisions of the gazette notices which are not material to this appeal.
As referred to previously, Schedule 1 of the gazette notices contain a schedule of premium rates. This is achieved by reference to WIC codes and WorkCover Industry Descriptions based on the ANZSIC Code which is defined as the Australian and New Zealand Standard Industrial Classification 1993[8]. Under the Divisional heading “I” entitled “Transport and Storage” in Schedule 1, for WIC Code 611012 and WorkCover Industry Classification Description “Road Freight Transport” the relevant premium rate was 3.318. For WIC Code 664210 and WorkCover Industry Classification Description “Road Freight Forwarding” the relevant premium rate was 2.246[9].
[8] Section 3.1 “Definitions” and WIC Table Notes in Schedule 1 of the gazette notices;
[9] These numbers are described in the table to Schedule 1 as “WorkCover Industry Premium Rates (per $100 wages excluding GST and Stamp Duty)”;
There is no dispute that this court can refer to the ANZSIC Code as extrinsic material in aide of comprehending the WICs in Schedule 1 of the gazette notices: see WorkCover v. Shagadelic Pty Ltd [2001] QIC 13; Otis Elevator Company v. WorkCover Queensland [2001] QIC 15[10]. In doing so, the ANZSIC Code should be read as a whole: Otis (supra) per Hall P. The structure of the ANZSIC Code is comprised of categories at four levels from the general to the specific, namely, Divisions, Subdivisions, Groups and Classes. The objective of the ANZSIC classification system stated in ANZSIC and also cited by Hall P. in P& O Ports Limited v. Q-COMP[11] is:
[10] Paragraph 15 appellant’s submissions; paragraph 16 first respondent’s submissions; paragraph 4.2(a) employer’s submissions;
[11] No C39 of 2004; judgment dated 5 October 2004 and published in QGIG 15 October 2004 at page 388;
Industrial Classification
The objective when developing an industrial classification is to identify groupings of businesses which carry out similar economic activities. Subject to certain criteria being met, each such grouping defines an industry and the similar economic activities which characterise the businesses concerned are referred to as activities primary to that industry. When the classification is completed, any individual business can then be assigned an appropriate industry category on the basis of its predominate activities. .
Hall P. in Otis[12] held that the correct approach in analysing which industry classification applies in a particular case “is to enquire which Division encompasses the appellant’s business activity, which of the Subdivisions within that Division most comfortably will absorb it, which Group within the Subdivision fits it most comfortably and finally, which classification within the group corresponds with or most closely describes the appellant’s business activity”. This is the approach contended for by the appellant in this case[13].
[12] [2001] QIC 15;
[13] Paragraphs 16 et seq of appellant’s submissions;
Adopting that approach in this case, as the appellant contends, the only Division potentially relevant is Division “I” entitled “Transport and Storage”[14] which is then divided into the following Subdivisions:
61Road Transport
62Rail Transport
63Water Transport
64Air and Space Transport
65Other Transport
66Services to Transport
67Storage
[14] There are 17 Divisions in ANZSIC from “A” to “Q”;
Subdivision “61 Road Transport” contains two Groups – “611 Road Freight Transport” and “612 Road Passenger Transport”. Subdivision “66 Services to Transport” contains the following Groups”:
661Services to Road Transport
662Services to Water Transport
663Services to Air Transport
664Other Services to Transport
The Group “611 Road Freight Transport” has only one Class i.e. a WIC, namely, “6110 Road Freight Transport”. The Group “664 Other Services to Transport” has the following WICs:
6641Travel Agency Services
6642Road Freight Forwarding
6643Freight Forwarding (Except Road)
6644Customs Agency Services
6649 Services to Transport n.e.c. [not elsewhere classified]
At issue in this case is which WIC applies to the employer i.e. “6110 Road Freight Transport” or “6642 Road Freight Forwarding”.
WIC “6110 Road Freight Transport” is defined in the ANZSIC Code as follows:
This class consists of units mainly engaged in the transportation of freight by road. It also includes units mainly engaged in renting trucks with drivers for road freight transport.
Exclusions/References
Units mainly engaged in
(a)providing road freight terminal facilities or services on a contract or fee basis to road transport units are included in Class 6619 Services to Road Transport n.e.c.
(b)road freight forwarding are included in Class 6642 Road Freight Forwarding;
(c)freight forwarding by rail and/or air and /or sea are included in Class 6643 Freight forwarding (Except Road);
(d)crating or packing for road freight transport on a contract or fee basis are included in Class 6649 Services to Transport n.e.c.; and
(e)leasing or hiring trucks from own stocks, without drivers are included in Class 7741 Motor Vehicle Hiring.
Primary Activities
Delivery service, road (except courier), furniture removal service (road), log haulage service (road), road freight transport service, taxi truck service (with driver), truck hire service (with driver)
WIC “6642 Road Freight Forwarding” is defined in the ANZSIC Code as follows:
This class consists of units mainly engaged in contracting to transport goods and using one or more different enterprises to perform the contracted services by way of road freight transport. In these cases the ‘forwarding’ unit takes on prime responsibility for the entire transport operation, specified in each contract, for a charge or fee which covers the total transport operation and, in turn, pays the actual carriers for the transport services rendered to it.
Exclusions/References
Units mainly engaged in freight forwarding by rail and/or air and /or sea, are included in Class 6643 Freight Forwarding (Except Road).
Primary Activities
Freight forwarding service (road)
The appellant submits, in accordance with the above definition, that “Road Freight Transport” includes a business mainly engaged in the transportation of freight by road such as the employer’s business. On the other hand “Road Freight Forwarding” encompasses a business that mainly engages in “contracting to transport goods” which is to be contrasted with “mainly engaged in the transportation of freight”. Here, even though the employers may undertake certain other logistic activities, they are primarily engaged in performing the actual transportation themselves and the nature of their business operation is, by and large, not in the nature of contracting to transport the goods. The contracting to transport goods connotes organising and then paying other arms length business entities or enterprises i.e. carriers, to perform the actual transportation. That is, with “Road Freight Forwarding”, there must be use of one or more different enterprises to actually perform the work. This envisages one enterprise taking on the prime responsibility and charging for the total contracted operation and then paying at least one other different enterprise who does the actual transportation (the actual carriers). Here, the employer performed the majority of the actual transportation by using its own large fleet of trucks.
The appellant submits that additional extrinsic material supports the view that the appropriate WIC for the employers is “Road Freight Transport”[15]. After referring to the development of the ANZSIC by replacing the Australian Standard Industrial Classification (ASIC) and the New Zealand Standard Industrial Classification (NZSIC), reference was made to “Concordances” in Chapter 1 of ANZSIC:
Concordances between classifications show the relationship between the various categories in them, and therefore the degree of comparability in data classified to them.
This publication includes broad concordances between the ASIC and the ANZSIC, the NZSIC and the ANZSIC, and the ISIC[16] and the ANZSIC. Detailed differences in the treatment of activities in the various industrial classifications will be included in a separate publication.
[15] Paragraphs 27 to 29 of appellant’s submissions;
[16] International Standard Industrial Classification of All Economic Activities;
The submission continues that the concordances reveal that the ANZSIC WIC “Road Freight Transport” is said to concord with the NZSIC classifications of logging haulage, stock haulage, refrigerated haulage, furniture removal and general freight carriage which supports the appellant’s contention that the business activity of “Road Freight Transport” means precisely what it says, namely, the actual performance of transportation by the enterprise under consideration. And ANZSIC WIC “Road Freight Forwarding” is said to concord with NZSIC classification “freight agents” and ISIC classification “activities of other transport agencies”. In my view the appellant’s submissions are of considerable force.
It must be remembered that reference to the ANZSIC Code is to assist in the interpretation of the provisions in the gazette notices in determining premium. It is not contentious that the “method” in sections 4 & 5 of the gazette notices must be applied[17] in establishing which WIC corresponds or most closely describes the whole of the employer’s business activity having regard to, but not limited to, the range of factors outlined in section 5 therein. Only one WIC can be applied to the employer’s policy. An “exact fit” is not required and is often not possible. It is also not contentious that the structure of Schedule 1 in the gazette notices follows the structure in the ANZSIC Code i.e. Divisions, Subdivisions, Groups and then WICs. Column 1 in Schedule 1 is headed “WIC Code” and column 2 is headed “WorkCover Industry Classification” (WIC). Therefore, the ANZSIC Code’s definition of “Road Freight Transport” and “Road Freight Forwarding” cited earlier provide significant assistance in the task of establishing the most appropriate WIC for the employers.
[17] Paragraph 30 appellant’s submissions; paragraph 2.2 employer’s submissions; paragraph 11 et seq of first respondent’s submissions;
In general terms Mr Bunker, the commercial manager for the employer, describes the employer as the largest carrier of fresh produce in Australia including dry freight and refrigerated freight[18]. The employer has nine freight terminals in Queensland[19] all with the ability to pre-cool, consolidate and store produce[20]. Mr Bunker provided a list of the employer’s 10 top customers[21] in an effort to show that the employer was engaged in “freight forwarding” because of the range of “end to end” logistic services provided.
[18] Paragraphs 9 & 13 Mr Bunker’s affidavit sworn 26 September 2008;
[19] Brisbane, Bundaberg, Childers, Emerald, Gatton, Mundubbera, Nambour and Stanthorpe;
[20] Paragraph 17 Mr Bunker’s affidavit sworn 26 September 2008;
[21] Paragraph 19 and Exhibit AWB-6 to Mr Bunker’s affidavit sworn 26 September 2008;
The crux of the first respondent’s submissions is that, in accepting Mr Bunker’s characterisation of “freight forwarding” and his analysis of the contribution of wages to employees, revenue and contractor payments in his affidavits, then the description that “most closely describes” the employers business activity should be “Road Freight Forwarding” and not “Road Freight Transport”[22]. The submission is basically that, in accepting Mr Bunker’s affidavit evidence without having any regard to concessions he made in cross examination, the employer’s predominant activity is contracting to collect, transport, store and forward goods i.e. an “end to end delivery package”. For reasons I will shortly outline, I reject those submissions and accept the appellant’s submissions.
[22] Paragraphs 31to 38 first respondent’s submissions;
The employer’s submissions are, in part, along similar lines to the first respondent’s submissions[23]. While the general approach is to follow the structure in the ANZSIC Code, it is submitted that the ANZSIC Code recognises that certain economic activities may fall within more than one WIC even though those WICs fall within different Subdivisions or Groups in the ANZSIC Code structure. Therefore, the submission continues, it is permissible to give consideration to activities in each of the WICs under consideration to be informed as to the current denotation of those activities[24].
[23] Paragraphs 5.2 & 5.3 of the employer’s submissions;
[24] Paragraph 4.1(c) & (d) of the employer’s submissions; Transcript Day 2 page 5 lines 28 to 45;
Further, the context of the employer’s submissions focuses on the changing nature of “freight forwarding” and that because “one transports the goods oneself does not prevent one from being characterised as a freight forwarder” particularly in modern Australian conditions[25]. That is, a freight forwarder can act as principal or as an agent and perform a range of activities including cartage because modern practice has departed from traditional notions of the role of a freight forwarder. I hasten to add though that, while this might be acceptable as a bald proposition, in my view the question as to which WIC applies here boils down to what extent the employer undertakes its own cartage. In my view, it is a matter of degree. That is, what is its predominant activity or activity it is mainly engaged in? If on the evidence a substantial part of the employer’s business is in the nature of actually performing road freight or cartage through its servants or agents, then I would have thought the nature of its business operation takes on a characteristic which departs from the notion of “freight forwarder”, which connotes a main business activity of acting as agent to get others to do the actual work even though cartage may well be performed by that enterprise although not as a main activity.
[25] Paragraph 5.1 of the employer’s submissions;
Two authorities were cited in the employer’s submissions illustrating I think the traditional concept of “freight forwarding”: Richardson and Ors v. Radford & Ors [1996] QCA 554[26]; C.A. Pisani & Co. Ltd. v. Brown, Jenkinson and Co Ltd and Anor (1939) 64 LLR 340 at 342[27]. At page 19 in Richardson McPherson J.A. referred to Pisani for the general proposition that freight forwarders get somebody to do the actual work and do not undertake to carry out the work themselves or by their servants or agents. Reference is also made in the employer’s submissions to a text book entitled Freight Forwarders, 1972, Stevens & Sons, London at paragraph 35. I do not consider it necessary to analyse this material further in light of my ultimate view of the matter. I accept the appellant’s submissions that the true meaning of “Road Freight Transport” and “Road Freight Forwarding” for the purposes of determining the WIC is by reference to the particular statutory framework under consideration and not to general statements on the topic or other statutory schemes[28]. In allocating only one WIC to a policy the question then is what WIC corresponds to or most likely describes the whole of the employer’s business activity having regard to, inter alia, the employer’s primary or predominant activity ((sections 5.1 & 5.2 of the gazette notices) and as previously mentioned, the ANZSIC Code definitions are most instructive for this purpose.
[26] The Court of Appeal constituted by Pincus, Davies & McPherson JJ.A; McPherson J.A. wrote the leading judgment; the case involved examining the relationship between two groups of individuals who collectively provided pilot services in the Torres Straight until 1 July 1993 under a specific statutory scheme which has since ceased due to deregulation of the maritime industry;
[27] In that case the plaintiff, an importer of Italian Marble Slabs, unsuccessfully sued their London shippers agents and a firm of stevedores; Goddard L.J. at 342 (2nd col.) expressed the view as to how a firm of brokers in London could be held liable to the plaintiff for the broken slabs when all they undertook to do was to get somebody to do the actual work – not to perform the carrying; provided they take reasonable care in choosing the person to do the work, they have discharged their contract;
[28] Transcript Day 2 page 33 lines 14 to 35;
As an alternative submission the first respondent and employer emphasised the effect of section 5.1 of the gazette notices i.e. “corresponds to or most closely describes the whole of the employer’s business activity” (my emphasis). During oral submissions it was submitted that section 5.1 is the dominant provision and that section 5.2 simply provides some tools for determining the WIC that “most closely describes the whole of the employer’s business activity”. The submission continues to the effect that the employer in this case undertakes a wide range of “end to end” activities. The employer plans and arranges for collection, transport, warehousing, cold storage and distribution of the goods. It remains responsible for completion of its contract. The employer submits that a fair view of all the activities of the employer referred to in Mr Bunker’s affidavit involves much more than the cartage of the clients goods. The employer has a broad discretion as to the management of the goods whilst under its control[29].
[29] Paragraph 5.2 of the employer’s submissions;
Therefore, the submission continues, the WIC that most closely describes the whole of the employer’s business activity is “Road Freight Forwarding”. I do not accept that submission particularly having regard to concessions made by Mr Bunker during cross examination as outlined in the appellant’s submissions. While it may be true that the employer undertakes other functions in its business activity, in my view it is a matter of degree. Again, if on the available evidence it is concluded that the main activity is cartage or transporting, then the WIC that most closely describes the employer’s activity would be more akin to “Road Freight Transport”. I accept the appellant’s submissions in this respect.
The appellant’s submissions note that Mr Bunker sought in his affidavits to apportion 80% of the employer’s overall wages and 80% overall revenue to “the provision of integrated transport, logistics and warehousing service to customers”. However, during cross examination Mr Bunker conceded that he attributed the employer as performing freight forwarding if “some” amount of consolidation and storage is undertaken. For example, if a customer pays for goods to be taken from the employer’s Munduberra depot to Melbourne and the employer itself does the transporting, Mr Bunker attributed 100% of the revenue for that service to “freight forwarding” on the basis that there had been some consolidation of loads at the Mundubbera depot[30]. Further, Mr Bunker’s exercise in apportioning wages and revenue to “freight forwarding” did not have regard to the legal definition of “Road Freight Forwarding” in the ANZSIC Code. Because the employer offers to its customers both freight transport and services incidental to freight transport, Mr Bunker has simply attributed 100% of the employer’s work to “freight forwarding”[31]. I agree with that submission. The evidence of the employer through Mr Bunker has applied the incorrect approach in attributing wages and revenue to any job in which there was “some” activity other than actual transportation and the consequent attribution by him of “freight forwarding”. I note from item 15 in exhibit 2 (Table of admitted facts) that in the period 1 July 2006 to 30 June 2008 the employer did not keep internal records differentiating time worked by various categories of staff in, for example, long haul transport pick up and delivery, and the breakdown of amounts paid to contractors for their role in transport and logistics. There is also no apportionment of revenue between Mr Bunker’s definition of “freight forwarding” activities and general transport activities. One has to resort to the evidence of Mr Bunker which I find to be unsatisfactory on this issue in that his data collection, methodology and conclusions are flawed as identified by the appellant.
[30] Transcript Day 2 page 39 lines 42 to 60; page 40 lines 1 to 16;
[31] Paragraph 46 of the Appellant’s submissions;
Mr Bunker has also admitted during cross examination that it is inaccurate to say, as he did in paragraph 12 of his first affidavit that the employer provides its services by “entering into a contract to arrange for the collection, transport, warehousing, if needs be cold storage and distribution of the goods”. The appellant submits, as Mr Bunker appears to have conceded, that the employer does not contract with it customers to “arrange” anything[32]. This is important when one has regard to the ANZSIC Code definitions of “Road Freight Transport” where the words used are “mainly engaged in transportation of freight etc” and “Road Freight Forwarding” where the words used are “mainly engaged in the contracting to transport goods etc.”. The appellant also observed that Mr Bunker admitted that the employer’s principal activity involves the operation of its own extensive fleet of trucks i.e. 838 vehicles including 220 prime movers, 261 refrigerated trailers and 71 rigid trucks[33]: see also item 16 of exhibit 2 (Table of admitted facts). Again, I agree with that submission.
[32] Paragraph 47(a) of the Appellant’s submissions;
[33] Paragraphs 42 and 47(b) of the appellant’s submissions;
The appellant noted other aspects of the evidence that supports the view that the activity that most closely describes the whole of the employer’s business activity is “Road Freight Transport”. Mr Bunker himself has deposed that the employer “specializes in the transport of food and food related products, It is the largest carrier of fresh produce in Australia”. This sums up the position that the employer is a carrier because its predominant activity is the carrying of the freight itself[34]. Further Mr Bunker deposed that the employer uses the services of contractors “on occasion” which supports the view that the employer does the carrying most of the time. Only 14% of total revenue was derived from the use of subcontractors in 2007 and 11% in 2008[35]. This further supports the view the appropriate WIC for the employer is “Road Freight Transport” after having regard to section 5.3 of the gazette notices.
[34] Paragraphs 48 & 49 of the appellant’s submissions referring to paragraph 9 of Mr Bunker’s first affidavit;
[35] Paragraphs 49(a) & (b) of the appellant’s submissions; paragraph 171 Mr Bunker’s third affidavit;
In further support of the appellant’s ultimate contention that the appropriate WIC for the employer is “Road Freight Transport” is the way in which the employer holds itself out to the public at large. The employer’s website (as at 26 September 2008) describes the employer as one of Australia’s leading refrigerated transport companies and that it transports around 1 million tonnes of freight over 45 million kilometres per annum and operates from 16 freight terminals[36]. Also, the employer has described itself in its 2007 and 2008 annual reports[37] respectively as an operator predominantly in “Transport – Cartage of general and refrigerated products and ancillary sales” and “transportation of refrigerated and general freight”. For 2007 & 2008 respectively, total revenue from “transport” was 92 % and 94% from “freight”[38]. I note also that the 2007 annual report at page 6 under the heading “Transport” provides as a reason for its increased revenue the “increased utilisation of company vehicles” and “reduction in the use of subcontractors”. Interestingly, the 2007 report further informed the public that it acquired the business assets of “Bob Fountain Transport” including 13 prime movers, 39 trailers and 11 rigid vehicles. Bob Fountain Transport had “operated Adelaide to Brisbane and return” and its assets were integrated into the employer’s “transport fleet and operations in each of Brisbane and Adelaide combined” and that as a result of that acquisition the employer “now has a major presence in Adelaide as well as Brisbane, Sydney and Melbourne”. This supports the view contended for by the appellant that the employer’s main business activity is that of actual transportation of freight.
[36] Paragraph 41 of the appellant’s submissions;
[37] Paragraph 43(a) of the appellant’s submissions;
[38] Paragraph 43(b) & (c) of the appellant’s submissions;
The employer submits that reference to the annual reports and the website are unhelpful because, the employer, for commercial purposes may choose to describe itself in that way and that it is legitimate to consider what activities lie behind those public representations[39]. I agree that it is legitimate to consider what activities lie behind the employer’s business activity, but that does not preclude the holding out being considered in the whole circumstances of the case. It is one factor to be considered with other factors. Here, as I have found, the evidence of the employer through Mr Bunker to be flawed. The holding out in my view does afford some evidence in support of the conclusion for which the appellant contends.
[39] Paragraphs 5.2 (g) & (i) of the employer’s submissions;
The first respondent submitted the employer’s website represents the employer as providing “end to end services packages etc” in support of its contention that the WIC that most closely describes the employer’s business activity is “Road Freight Forwarding”[40]. As I have already said, the essential point about all of this is that the holding out by the employer is one factor that can be taken into account along with all other factors in arriving at a view as to which WIC is appropriate: see section 5.2.3 of the gazette notices. In the whole scheme of things, I do not accept that the description “end to end etc” affects at all the appellant’s submissions about what it identified the employer saying in its website referred to at paragraph 31 above.
[40] Paragraph 36 of the first respondent’s submissions;
Mr Bunker also confirmed in cross examination that the employer’s 2007 costing report represented the employer’s records kept to indicate the primary activity in which each employee was engaged. The appellant submitted that it shows that 75% of staff was “drivers”[41].
[41] Paragraph 44 of the appellant’s submissions; see also Transcript Day 2 page 2 lines 27 to 40;
I find that the employer’s primary or predominant activity is that of actually performing the transportation of freight itself. The employer may well undertake other activities which have already been identified above but I find they are not the prime activities of the employer as compared to its activities in actual transportation. Its business activity can more comfortably be described as transporter of goods. It only uses contractors sometimes and it has its own large fleet of trucks for the purpose of transporting food products around the country. I agree with WorkCover’s decision when it considered as a critical factor the extent to which the employer performs the transport services itself as opposed to engaging different enterprises to do this activity[42].
[42] Paragraph 35 of the appellant’s submissions;
I note the employer’s submission that, by reference to the Oxford Dictionary, the use of the word “enterprise” in the ANZSIC Code definition of “Road Freight Forwarding” in the sentence “..using one or more different enterprises to perform the contracted services ..” can mean the activity itself being undertaken as opposed to meaning a separate entity or body[43]. It was suggested that in the context of freight forwarding, the “unit” concerned will work out how the work is to be performed and “put together the enterprise by which that will achieve”[44]. I respectfully do not agree with that submission. The Concise Macquarie dictionary “enterprise” generally includes those meanings in the Oxford Dictionary but also includes “a company organised for commercial purposes”. The use of the word “unit” in the ANZSIC Code refers to the business entity whose economic activity is under consideration[45]. The word “enterprise” in the context it is used in my view means another body or entity whose economic activity is not under consideration. In my view “enterprise” must mean another body or entity and not the activity undertaken particularly given the context in which that word is used. Later, the definition refers to the “forwarding unit” taking on the prime responsibility for the entire operation then paying the actual carriers for the transport services rendered to it.
[43] Transcript Day 2 page 17 lines 1 to 31;
[44] Transcript Day 2 page 17 lines 25 to 30;
[45] See ANZSIC Code “Description of the Classification” under heading “Industrial Classification” at page 2;
Further, in view of my findings, Q-COMP was led into error as the appellant submits because it simply accepted assertions made and figures supplied to it on 21 February 2008 by MSG Consulting who were appointed as agents to advocate on behalf of the employer. For example, this is patently clear where Q-COMP accepts the inaccurate assertion by MSG Consulting in the final page of its submissions under the heading “Conclusion” that, inter alia, “the highest proportion of [the employer’s] wages and payments to contractors relate to contracting to collect, transport, store and forward goods; i.e. road freight forwarding”. As the appellant submits, this is based on a premise bearing “little resemblance to that contained in the ANZSIC” [46].
[46] Paragraph 40 of the appellant’s submissions; Transcript Day 2 page 34 lines 1 to 20; page 35 lines 30 to 40; page 36 lines 1 to 15;
In my view, having regard to the range of factors identified in submissions and my findings, I consider the WIC that most closely describes the whole of the employer’s business activity as “611012 Road Freight Transport”: section 5.1 of the gazette notices.
Accordingly, pursuant to section 558(1)(c) of the Act, I set aside the decision of
Q-COMP dated 12 March 2008 and substitute the decision that the appropriate WIC to be applied to the employer’s policy of insurance in the financial years 2006/07 and 2007/08 to be “611012 Road Freight Transport”.
I am invited by the appellant that nothing takes this case out of the ordinary rule that costs follow the event. Costs are in the discretion of the court: section 558(3) of the Act. I order that all respondents pay the appellant’s costs to be assessed unless otherwise agreed. I grant liberty to apply to the parties on the giving of 3 business days notice for any outstanding matters.
Published Friday 29 June 2007 “The Queensland Government Extraordinary Industrial Gazette”
Vol. 185 No. 9;
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