Yang v China Australia Travel Group Pty Ltd
[2023] FedCFamC2G 1023
•10 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Yang v China Australia Travel Group Pty Ltd [2023] FedCFamC2G 1023
File number(s): SYG 1071 of 2021 Judgment of: JUDGE OBRADOVIC Date of judgment: 10 November 2023 Catchwords: FAIR WORK - Whether employee or independent contractor – accessorial liability – unchallenged evidence of applicant –entitlements pursuant to modern award Legislation: Fair Work Act 2009 (Cth) ss 45, 536, 545, 550, 557C Cases cited: Australian Securities and Investment Commission v Hellicar [2012] HCA 17
Bain v Bain (2017) 319 FLR 119
Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1
Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365
Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No.3) [2023] FCA 201
Fair Work Ombudsman v Hu [2019] FCAFC 133
Fair Work Ombudsman v Step Ahead Security Services Pty Ltd [2016] FCCA 1482
Gallagher v AAG Labour Services Pty Ltd [2020] FCA 1753Ghimire v Karriview Management Pty Ltd (No.2) [2019] FCA 1627
Hollis v Vabu Pty Ltd (2001) 207 CLR 21
JMC Pty Ltd v Commissioner of Taxation [2022] FCA 750
Jones & Dunkel (1959) 101 CLR 298
Ray v Radano [1967] AR (NSW) 471
Secretary, Attorney General’s Department v O’Dwyer [2022] FCA 1183
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 13
Whitby v ZG Operations Australia Pty Ltd (No.2) [2019] FCA 201
Workpac Pty Ltd v Rossato [2020] FCAFC 84
Division: Division 2 General Federal Law Number of paragraphs: 111 Date of last submission/s: 20 June 2023 Date of hearing: 3-6 April 2023 Counsel for the Applicant: Mr Mueller Solicitor for the Applicant: Zhang Shijing Lawyers Counsel for the Respondents: Mr O’Connor Solicitor for the Respondents: Chamberlains Law Firm
Table of Corrections 20 November 2024 At [32] “Generally, Mr Yang would receive an itinerary from CAT…” replaced with “Generally, Mr Yang would receive an email from CAT…” ORDERS
SYG 1071 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: XIJIE YANG
Applicant
AND: CHINA AUSTRALIA TRAVEL GROUP PTY LTD
First Respondent
XIAOLEI ZHAO
Second Respondent
JINZI HUANG
Third Respondent
ORDER MADE BY:
JUDGE OBRADOVIC
DATE OF ORDER:
10 NOVEMBER 2023
THE COURT DECLARES THAT:
1.The First Respondent contravened the following civil penalty provisions:
(a)Section 45 of the Fair Work Act 2009 (Cth) (“Act”) by failing to pay the Applicant the minimum hourly rate for ordinary hours for casual employees as required by clause 10.5 of the Passenger Vehicle Transport Award 2010 (“Award”);
(b)Section 45 of the Act by failing to pay the Applicant overtime payments as required by clause 23.1 of the Award;
(c)Section 45 of the Act by failing to pay the Applicant penalty rates on Saturday and Sunday as required by clause 23.2 of the Award;
(d)Section 45 of the Act by failing to pay the Applicant penalty rates on public holidays as required by clause 23.4 of the Award;
(e)Section 45 of the Act by failing to make superannuation contributions on behalf of the Applicant as required by clause 20.2 of the Award; and
(f)Section 536 of the Act by failing to provide pay slips to the Applicant within one working day of paying amounts to him in relation to the performance of work.
2.The Second Respondent was, for the purposes of s.550 of the Act, involved in the First Respondent’s contraventions of the Act set out in declaration 1 above.
3.The Third Respondent was, for the purposes of s.550 of the Act, involved in the First Respondent’s contraventions of the Act set out in declaration 1 above.
THE COURT ORDERS THAT:
4.Pursuant to ss.545 and 550 of the Act, within 28 days the First, Second and Third Respondents jointly and severally pay:
(a)To the Applicant the amount of $84,460.71;
(b)On behalf of the Applicant to such superannuation fund as nominated by him within 7 days, such superannuation contributions the First Respondent was required to make pursuant to clause 20.2 of the Award.
5.The matter is listed for directions with respect to penalty at 10:15am on Friday 2 February 2024.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE OBRADOVIC:
INTRODUCTION
The applicant, Mr Xijie Yang (“Mr Yang”), is a bus driver. Between June 2015 and October 2017, Mr Yang drove bus loads of Chinese tour groups to various sites in and around Sydney and New South Wales for the first respondent, China Australia Travel Group Pty Ltd (“CAT”). He says he did so as an employee of CAT.
CAT operates a souvenir shop in Dawes Point, NSW. The second respondent, Mr XiaoLei Zhao (“Mr Zhao”) is the husband of the third respondent, Ms JinZi Huang (“Ms Huang”) who is and has been at all material times, the sole director, secretary and shareholder of CAT. Ms Connie Cong (“Ms Cong”) worked for CAT and was for the most part, the main point of contact for Mr Yang in receiving his bus driving assignments from CAT.
Mr Yang contends that he was significantly underpaid by CAT. He alleges that his employee entitlements were covered by the Passenger Vehicle Transportation Award 2010 (“the Award”) and that he was underpaid by CAT in the amount of $125,560.23.[1] The alleged underpayments relate to the hourly rate of casual work, overtime rates of pay, penalty rates for weekend work, penalty rates for public holidays, reimbursement for expenses and superannuation. In not paying entitlements due to Mr Yang under the Award, Mr Yang further contends that CAT breached s.45 of the Fair Work Act 2009 (Cth), and that Mr Zhao and Ms Huang are accessories pursuant to s.550 of the Act.
[1] Statement of Claim filed 15 June 2021 at [20]-[28].
CAT did not pay Mr Yang any entitlements under the Award. CAT has never paid any superannuation contributions on Mr Yang’s behalf and it never issued any payslips to Mr Yang. CAT did not do any of these things as it says that Mr Yang was never its employee, but rather an independent contractor. Consequently, CAT contends that the application is to be dismissed.
Material Relied Upon and Procedural History
The proceedings were commenced on 15 June 2021 by the filing of an Application and Statement of Claim. The matter was listed for final hearing on 3-6 April 2023. The hearing could not commence on the first day due to the unavailability of interpreters.
On the final day of the hearing, the Court ordered the parties to file and serve written submissions and the Court listed the matter for oral submissions on a date in June 2023.
On 2 June 2023, the Court vacated the June 2023 listing intended for oral submissions and granted leave to the parties to file and serve any further written closing submissions and that, unless the parties objected, the Court would hear the submissions on the papers and judgment would be reserved to be delivered on a date to be advised. Further submissions were filed and no objection was raised to the matter proceeding by way of written submissions.
At final hearing, Mr Yang relied upon the following:
(a)Application – Fair Work Division filed 15 June 2021;
(b)Statement of Claim filed 15 June 2021;
(c)Affidavit of Mr Yang filed 21 December 2021;
(d)Affidavit of Mr Yang filed 30 March 2022;
(e)Affidavit of Mr Yang filed 23 September 2022;
(f)Affidavit of Mr Ning Zhang filed 30 March 2022;
(g)Exhibits 9 and 10;
(h)Written Submissions filed 5 May 2023;
(i)Written Submissions in Reply filed 2 June 2023; and
(j)Further Written Submissions in Reply filed 20 June 2023.
The submissions filed on behalf of the applicant are well argued and supported by evidence. They are meticulous in their analysis of the evidence and are carefully reasoned.
Mr Yang was cross-examined at length.
The respondents made the decision, after Mr Yang’s case was closed, not to call any witnesses in their case. All the respondents were represented by the same solicitor and counsel.
At final hearing, the respondents relied upon the following:
(a)Response filed 20 July 2021;
(b)Defence filed 20 July 2021;
(c)Exhibits 1 to 8;
(d)Written Submissions filed 30 May 2023; and
(e)Further Written Submissions filed 13 June 2023.
While all of the evidence has been considered, not all of the evidence is discussed in these Reasons for Judgment. Likewise in respect of the parties’ submissions.
DETERMINATION
Credit
The respondents, who chose to remain almost entirely silent, except through the tender of a limited number of documents, were very critical of Mr Yang’s case. They submitted that:[2]
… the applicant’s evidence of what the relationship was is so riddled with inconsistencies and outright lies that the Court could not place much if any weight on anything he says...
[2] Respondent’s Written Submissions filed 30 May 2023 at [4].
Such submission is not accepted.
While Mr Yang has the onus of proof, his evidence was in fact mostly unchallenged, including through the tender of the documents in the respondents’ case.
It is well accepted that where evidence is uncontradicted and is not otherwise inherently improbable or inherently incredible, and where the other party has not elicited in cross-examination or led in evidence some material to overcome it, either by proving the contrary or throwing the matter into doubt, it should be accepted.[3]
[3] Bain v Bain (2017) 319 FLR 119 at [112].
As noted earlier, Mr Yang was cross-examined at length. His command of the English language is limited. He gave evidence through an interpreter. The Court notes that much of the evidence was prepared while Mr Yang was in China and that at times, instructions might have been misunderstood.
Some of Mr Yang’s evidence was at times a little confusing. His oral evidence did likewise, at times contradict some of his evidence in chief. But overall, his evidence remained consistent and plausible, particularly if one is not on a quest to disbelieve. The challenges which were mounted to Mr Yang’s evidence in cross-examination, without more, were not sufficient to warrant the Court rejecting his evidence in respect of the matters which he was cross-examined about nor in respect of the matters where his evidence was entirely unchallenged.
The best that the Court can do to ascertain the respondents’ position about matters which are in contention is to consider the Defence which has been filed. The matters which are pleaded by the respondents are however, mere assertions, and by and large not supported by any evidence. The respondents’ submissions, unfortunately, do not help elucidate such matters either.
While it is correct, as a matter of basic legal principle, that the applicant bears the burden of proving his case, in circumstances where there is no oral evidence called to the contrary, the Court is left only with the evidence in Mr Yang’s case (sans the exhibits tendered by the respondents).
The ‘rule’ in Jones & Dunkel[4] can be explained as follows,[5] as far as relevant to these proceedings:
a)The unexplained failure by a party to give evidence or call witnesses, tender documents or other evidence, may, in appropriate circumstances lead to an inference that the uncalled evidence would not have assisted that party’s case. The inference entitles the trier of fact to more readily draw any inference fairly to be drawn from the other evidence by reason of the opponent being able to prove the contrary had the party chosen to give or call evidence;
b)The rule does not permit an inference that the untendered evidence would in fact have been damaging to the party not tendering it. The rule cannot be employed to fill gaps in the evidence or to convert conjecture and suspicion into inference;
c)The rule only applies when a party is required to explain or contradict something. No inference can be drawn unless evidence is given of facts requiring an answer. If there is no issue between the parties, there is nothing to answer;
d)The rule cannot be applied unless it would be natural for the party to call the witness or the party might reasonably be expected to call a witness, i.e., a failure to call evidence which that party was plainly in a position to have given or called; and
e)The evidence of the missing witness must be such as would have elucidated a matter.
[4] (1959) 101 CLR 298.
[5] See generally J D Heydon, Cross on Evidence, LexisNexis Looseleaf Service at [1215] – citations omitted.
The Court must weigh the evidence according to the proof which was in the power of one party to produce and in the power of the other to contradict.[6] Both Mr Zhao and Ms Huang were present in Court during the entirety of the final hearing. Although affidavits had been filed and served by the respondents, such evidence was not relied upon and the witnesses were not called.
[6] Australian Securities and Investment Commission v Hellicar [2012] HCA 17 at [164]-[170].
In the circumstances of this case, the Court draws a Jones v Dunkel inference in respect of the almost complete lack of evidence in the respondents’ case, that is, that such evidence would not have assisted the respondents’ case.[7]
[7] See also Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No.3) [2023] FCA 201 at [16]-[20].
Findings of Fact
Mr Yang was born in China in 1973 and migrated to Sydney in 2005. His understanding of the English language is limited.
Mr Yang had previously undertaken roles as a driver prior to meeting the respondents. In early 2015, he met Ms Huang and Mr Zhao, at their shop, which Mr Yang originally said was in Brighton-Le-Sands, but in a later affidavit corrected to Dawes Point.
Mr Yang had a discussion with Ms Huang and Mr Zhao wherein:
(a)Mr Yang asked if they were looking for a bus driver and tour guide and they said they were;
(b)Ms Huang and Mr Zhao said they would pay Mr Yang $150 per day no matter the distance travelled plus 5% commission on customer purchases from their shops;
(c)Ms Huang and Mr Zhao told Mr Yang that he would be their first tour guide and bus driver and he would get all of their work and have a stable income; and
(d)The work would involve taking tourists for tours around Sydney and NSW, and would involve taking the tourists to Ms Huang’s and Mr Zhao’s shops.
Mr Yang came back to the shop in June 2015 and met with Ms Huang and Mr Zhao. Mr Yang’s recollection of this meeting was that:
(a)He met Ms Connie Cong (“Ms Cong”), who he was told would send him the itineraries for each shift;
(b)Ms Huang told him she was responsible for managing the shops and Mr Zhao told him that he managed the buses and drivers;
(c)He was told that his “wages” would be paid to him by bank transfer and that he needed to provide bank account details and an ABN; and
(d)He was told his 5% commission would be paid in cash.
Mr Yang commenced working for CAT on a full-time basis after this meeting. He thereafter regularly worked weekdays, weekends and public holidays.
Mr Yang drove a bus provided to him by CAT which was either a 14 or 21-seater coach. The vehicles he used were mainly Mr Zhao’s but on rare occasions, and if instructed to do so by CAT, he would use a vehicle supplied by a third party including Golden Dragon Travel Pty Ltd and Travel AU. The buses were usually parked at Mr Yang’s home overnight.
Mr Yang was allocated work as follows:
(a)He was told of his shifts in advance of when he was to work;
(b)He would receive an email with an itinerary and would often receive a phone call as well;
(c)He would ask the staff at the shop to print the itinerary which he would then pick up; and
(d)Any changes to shifts were communicated by a telephone call from Ms Huang or Mr Zhao, or other staff of CAT, Ms Cong and Ms Joyce Yang. He was only contacted by third-party companies and travel agents in exceptionally rare circumstances.
Generally, Mr Yang would receive an email from CAT attaching an itinerary which, on the face of the document, did not mention CAT. These itineraries appear to be sent to CAT by the travel agencies who had organised the tours.
In the exhibits to Mr Yang’s affidavit, he includes over one thousand pages of emails attaching itineraries and standalone itineraries he received from CAT between September 2015 and October 2017. These emails and itineraries are partly in English and partly in Mandarin.
Mr Yang also tendered a copy of a notebook where he recorded some of the shifts he did. An English certified translation of this notebook is also provided. This notebook appears to track Mr Yang’s daily schedule and work. Whilst the details in each entry would differ, Mr Yang appeared to record dates, fees, itineraries, group/tour reference numbers, the number of people on each tour, the organising tour guide/company, tips, other charges and expenses including fuel and meals, overtime, commission and any other relevant notes.
Work which Mr Yang performed for CAT was generally as follows:
(a)Mr Yang would drive the bus to the hotel where the customers were staying in accordance with the itinerary, drive the customers to each of the locations on the itinerary as well as providing tour guide services on the way, then return the customers to the hotel listed on the itinerary. Each trip would also include a visit to CAT’s shop where the customers were encouraged to buy items by Mr Yang in accordance with instructions he received from CAT;
(b)A city tour or a trip to the Blue Mountains would take 10-12 hours, a trip to Port Stephens, Jervis Bay, Canberra or Newcastle would take at least 12 – 14 hours;
(c)Mr Yang would take a half hour lunch break each tour;
(d)Most shifts commenced at about 7:30am and Mr Yang would finish the shift between 8:30pm-10:30pm; and
(e)Occasionally, Mr Yang would take a shift involving dropping customers to the airport from their hotel. Such a shift would usually take 3-4 hours and he was paid $40-$50 for each airport shift.
Mr Yang received 5% commission on the products the customers bought at CAT’s shop on his tours, but was otherwise not paid any remuneration.[8] He did not receive any payslips, he was not paid superannuation and he never took any paid leave.
[8] Save as explained elsewhere.
Mr Yang paid for the petrol for the “company’s bus” and other fees including meals and water for customers and tickets for customers from his own pocket, for which he was never reimbursed by CAT.
Mr Yang generally did all work allocated to him by CAT during the period of his purported employment. Whilst CAT received the itineraries from third party travel companies and travel agents, Mr Yang’s relationship was with CAT and not with these third parties. Whilst he did occasionally do work for other travel companies, he would only do so under CAT’s direction and/or when he was otherwise not performing any work for CAT.
Mr Yang and Mr Zhao regularly exchanged WeChat messages about itineraries that Mr Yang was going to run.
On or about 22 November 2016, a complaint was made to Mr Zhao about Mr Yang’s conduct on a tour by a third party operator. Mr Zhao asked Mr Yang for an explanation and an apology and Mr Yang obliged in providing same.
Mr Yang did not control when he was to work, although he did at times ask for a day off for different reasons or tell CAT when he was unavailable for work. He did not set his rate of pay, or dictate how much he would be paid by CAT for the work he was performing for them.
Mr Yang, at all material times, had an ABN which he supplied to CAT.
There is no evidence that Mr Yang ever issued any invoices to CAT or to any third party in respect of the work he performed at CAT’s direction and upon receiving itineraries from them in respect of tour groups he was to drive around.
Mr Yang received very little payment from CAT between September 2015 and October 2017, a period of over two years. Whilst he asked for payment soon after he started and was told he would be paid later as a lump sum, he asked for payment many times in 2015 and 2016.
Mr Yang received one payment of $7,900.39 in or about July 2016 and another payment of $5,000 on 17 July 2017 from CAT.
Mr Yang then called Ms Huang in October 2017, telling her he quit because his wages had not been paid. He has done no further work for CAT since this date.
In November 2020, Mr Yang contacted Mr Zhao on WeChat and asked to be paid. Mr Zhao replied stating that the company’s email accounts were not working and that he could not check the company’s records for such a long period to establish what wages he was owed.
Mr Yang tendered his 2015/2016, 2016/2017 and 2017/2018 income tax returns. In each year, Mr Yang declared less than $20,000 of taxable income. In 2015/2016 and 2016/2017, this income consisted of welfare benefits and interest payments with no employment or business income. In 2017/2018, Mr Yang declared business income of $7,381.
Payments to Mr Yang
Mr Yang was taken to a message where he provided his wife’s bank details to CAT for payment for his work. He says he gave his wife’s details “because my wife is the boss for our household so I need to give money to her” and because “…by doing this, she will be more at ease, and she would not be worrying about money being used in other ways…”.
Mr Yang was then asked to confirm what his evidence was in relation to the payments he says he received. Consistent with his evidence-in-chief, he stated that he received one payment of $7,900.39 in July 2016 and another $5,000 which was “a prepayment requested by me.” The respondents then tendered the applicant’s bank details, which were subpoenaed in the course of the proceedings. Mr Yang was taken to various credits on his bank account statements.
The respondents tendered an aide-memoire of all the different entries on these accounts which they say are unexplained by Mr Yang and that may be reimbursement for his work for various other travel agencies.
At the conclusion of this line of questioning, Mr Yang maintained that he had only ever received a payment of $7,900.39 and $5,000 from the respondents. He explained this apparent contradiction by saying that these payments were for his work for other companies but that “these companies were introduced to me by my boss, and I don’t quite know the names of these companies. The purpose was to attract the tourists to the shop to consume, to spend money.” Mr Yang ultimately conceded in cross-examination that he received significant amounts of money from tour operators to run bus tour groups as evidenced in his bank account statement.
Mr Yang maintained that he worked for CAT and was not allowed to work for other companies due to a “conflict of interest reason”. Mr Yang conceded that other payments of $2,800 and $1,500 for these tours are over and above the $7,900.39 received from CAT. Mr Yang also conceded that, for these and other related jobs, he did not drive a vehicle owned or controlled by the respondents.
Mr Yang conceded that most of the money he was paid went into his wife’s account. However, he was not able to discern which of the entries into his wife’s bank account related to the work he did.
Mr Yang’s wife’s bank account showed many entries for thousands of dollars. Mr Yang was not able to explain these entries, as the account was not his but rather his wife’s. It came to light during Mr Yang’s oral evidence that his wife was also a tour guide in the travel industry.
Mr Yang maintained that he had only ever been paid $7,900.39 and $5,000 by CAT and that the reason he kept working without pay was that he was of the belief he would eventually be paid.
Mr Yang denied that he has intentionally tried to make it appear as if he had earnt minimal income to try and hide the fact that he was a freelance tour and bus operator for many different companies.
Vehicle Supply and Maintenance
Mr Yang annexes to his affidavit an online conversation he had with Ms Cong wherein he complained about the condition of a bus that a third party had supplied to him as instructed by CAT.
Mr Yang tendered copies of his WeChat messages with Mr Zhao from 16 June 2016 to 23 November 2020. Relevantly, the messages show that:
(a)Mr Yang and Mr Zhao frequently exchanged messages and photos about the vehicles Mr Yang was to drive on tours. This would include issues that Mr Yang was experiencing with the vehicles;
(b)Mr Zhao gave Mr Yang instructions about what to do in regard to issues with the vehicles;
(c)Mr Yang asked Mr Zhao questions about issues whilst on tours and Mr Zhao gave Mr Yang instructions; and
(d)When Mr Yang had issues with the police or was issued infringement notices, he asked Mr Zhao to sort them out, which he appeared to do.
The Respondents’ Evidence
In support of its case that Mr Yang was an independent contractor and not an employee, the respondents largely relied upon text messages and bank statements. Examples of such material relied upon is to be found below. The use of the heading at the commencement of this paragraph should not be taken to be a matter that distinguishes the matters below as separate from the Court’s findings of fact. The matters below are findings of fact and are to be understood as part of the overall mosaic of factual findings.
Tendered is a WeChat message chain between Ms Cong and Mr Yang. Ms Cong asks Mr Yang for his ABN, Mr Yang asked whether “they need that for reimbursement?”, Ms Cong replied in the affirmative and Mr Yang sent a screenshot of what appears to be his ABN, although the details are indecipherable.
Multiple text messages between a Mr Ye Zhao and Mr Yang are also tendered from various dates in late 2015 to early 2017. Mr Ye Zhao did not work for CAT but other travel companies, including Premium Travel Solutions and Travel AU. The messages include:
(a)Mr Ye Zhao asking Mr Yang “when did you finish today” and Mr Yang providing a date and time;
(b)Mr Yang sending various tables of dates and amounts he is owed for various tours;
(c)Mr Ye Zhao sending Mr Yang pick up details;
(d)Mr Ye Zhao advising what to do if “using the car overtime;
(e)Mr Ye Zhao sending Mr Zhang instructions about what to do for work, for example, telling him about flight times and when to pick up customers from their hotel;
(f)Mr Yang providing bank details to Mr Ye Zhao;
(g)Mr Yang advising Mr Ye Zhao of issues with a vehicle, he says that “the connector of the face protection chain is missing. The taillights don’t come on either. I won’t use it. Too dangerous. Thanks a lot!”;
(h)Mr Yang asking Mr Ye Zhao for payment, for example, for him to “settle the payment for this group now?” and Mr Ye Zhao replying “of course. I will transfer you this week”;
(i)Mr Ye Zhao advising Mr Yang the details and locations of vehicles he will be driving;
(j)Mr Yang providing his email address to Mr Ye Zhao; and
(k)Mr Yang sending to Mr Ye Zhao itineraries and enquiring about details in relation to them.
Mr Yang deposes that Mr Huang and Mr Zhao had a close personal and business relationship with Mr Ye Zhao, and with Travel AU and Premium Travel Solutions. He says a part of this relationship was the sharing of vehicles and providing drivers to each other. He does not deny that he did work for Mr Ye Zhao and was paid for it, but says this was under the direction of the respondents.
Other WeChat messages between Ms Cong and Mr Yang are also tendered in the proceedings. These messages are dated from July 2015 and January 2017 and include:
(a)Mr Yang providing bank details to Ms Cong;
(b)Mr Yang asking “can we get payments today?” in September 2015 and Ms Cong saying “No. Perhaps next week”;
(c)Ms Cong asking Mr Yang to check his itinerary;
(d)Mr Yang telling Ms Cong, on 14 December 2016, that “tomorrow im going to Wollongong” when asked if he was busy tomorrow;
(e)Mr Yang asking for the contact number for the “Gold coast tour guide”; and
(f)Mr Yang advising Ms Cong, on 9 January 2017, that the time of an itinerary conflict with his wife’s arrangements.
An exchange dated 2 December 2016 is as follows:
Mr Yang: Just reporting, I will be out from Monday and returning Wednesday.
Ms Cong: Ughh
Ms Cong: There is a good tour group on the 6th.
Ms Cong: I wanted to ask you.
Ms Cong: What are you going to do?
Ms Cong: If you have other group assignments you can get others to replace you.
Ms Cong: for this tour group I have a special arrangement.
Mr Yang: Thanks [smile emoji]
Ms Cong: What do you mean by thanks
Ms Cong: Can you take this assignment?
Mr Yang:thank you for thinking about me when there are good assignments [smile emoji]
Mr Yang: what special arrangements [sunglasses smile emoji]
Ms Cong: Could you be real with me
Ms Cong: Are you available or not?
Ms Cong: The shop is packed
Ms Cong: I will find someone and arrange for you
Ms Cong: Driver + guide?
Mr Yang: rental car
Mr Yang: I will drive myself. This is my tour group.
Ms Cong: the shop is very busy now.
Ms Cong: can’t we arrange for a car for you?
An exchange dated 27 November 2016, which Mr Yang was cross-examined at length about, is included:
Mr Yang:In the future for this type of temporary helping assignment, my fees would be $300, fees to the airport $100 and early flight fee would be another $100
Mr Yang: Thanks [smile emoji]
Ms Cong: Can you be realistic
Ms Cong: now you are the one being untruthful.
Mr Yang:that’s a misunderstanding, you have been absorbed by them. This is the market rate. You can see for yourself if you don’t believe me.
Mr Yang:I am here to rob money from people. You need to let me rob. [smile emoji]
In cross-examination, Mr Yang explained that he was communicating with Ms Cong and that what he said was in jest, and that in any event, Ms Cong had no authority to set rates of pay.
The respondents tendered WeChat messages from Ms Joyce Yang. These messages show Ms Joyce Yang offering tour assignments to Mr Yang and Mr Yang asking for an itinerary.
The respondents also tendered extracts of Mr Yang’s and Mr Yang’s wife’s bank account statements that were produced under subpoena. Mr Yang’s statement, ending in 9551, was for the dates 5 January 2015 to 13 December 2021. Mr Yang’s wife’s statement, ending in 8338, was for the dates 30 December 2014 to 18 November 2020.
Relevant Legal Principles
It is necessary to look at the totality of the parties’ relationship and conduct to determine the nature and terms of the contract the parties entered into, but only in so far as it concerns the rights and duties established by the parties’ contract, and not simply an aspect of how the parties’ relationship had come to play out in practice.[9]
[9] See for example: Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 (“Personnel Contracting”); JMC Pty Ltd v Commissioner of Taxation [2022] FCA 750 at [17]-[27]; Secretary, Attorney General’s Department v O’Dwyer [2022] FCA 1183 at [30]-[33].
It is not in contention that in order to answer the question of whether Mr Yang was an employee or an independent contractor, the Court must analyse the totality of the relationship by reference to the indicia provided for in the authorities.[10]
[10] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 13, Hollis v Vabu Pty Ltd (2001) 207 CLR 21 and Personnel Contracting at [61] and [56] – [57].
These indicia include, but are not limited to: the degree of control which the putative employer can exercise over the putative employee, and in this regard, the importance of control lies not so much in its actual exercise, as in the right of the employer to exercise it; the mode of remuneration; the provision and maintenance of equipment; the obligation to work; the hours of work and the provision for holidays; the deduction of income tax; and the delegation work by the putative employee.
It is well recognised that:[11]
The characterisation of a relationship as being either one of employer and employee, or one involving the engagement of an independent contractor, is ultimately an evaluative judgment that takes into account the totality of the parties’ contractual rights and obligations. The exercise may not necessarily be straightforward because, in some cases at least, the parties’ contractual rights and obligations may point in different directions. The evaluative exercise also should not be approached on the basis that there is some checklist against which ticks and crosses may be placed so as to produce the right answer…
[11] JMC at [27].
Was Mr Yang employed by CAT?
CAT maintained a large degree of control over Mr Yang during the period he worked for them. CAT provided vehicles for Mr Yang to drive and he never drove his own vehicle. Mr Zhao arranged for the repairs to the buses and directed Mr Yang to which repair shop to go to and Mr Zhao was the one who managed the upkeep and condition of the buses. Mr Yang did not have the vehicle or shopfront to operate his own travel company.
Mr Yang generally did not work for anyone else between June 2015 and October 2017 except at the direction of Ms Huang and Mr Zhao who occasionally instructed him to do work for other companies with whom CAT had business relationships. Occasionally, these companies contacted Mr Yang directly. Indeed, when Mr Yang worked for other travel companies, complaints about his services would go to the respondents. Non-exclusive work is consistent with the nature of casual employment.[12]
[12] Personnel Contracting at [84].
CAT set the rates of renumeration. Furthermore, CAT decided what shifts Mr Yang was to work and sent him an itinerary for each shift. While he did at times indicate that he was not available to work, when he did work, he did what CAT told him to do. Mr Yang asked for time off rather than being responsible for performing the services and finding a replacement for himself. CAT provided directions to Mr Yang with no suggestion that he had any choice as to whether to obey them or not. Mr Yang was contacted by an officer of CAT regarding any changes in shifts or issues with itineraries and his evidence is that he rarely had communication with the travel companies.
The messages relied upon in the respondents’ case, such as for example the one between Mr Yang and Ms Cong where Mr Yang is said to have demanded a higher rate for a “temporary assignment” do not of themselves negate an employment relationship. In respect of the message with Ms Cong, there is no evidence from the respondents that the rate which Mr Yang is said to have “demanded” was in fact paid by them, or indeed that Ms Cong did not understand the message as anything but a joke between her and Mr Yang. Likewise, the balance of the message exchanges can be just as easily understood in the context of casual employment.
The issue of payments to Mr Yang loomed large in the proceedings.
While Mr Yang’s evidence is that he “received” 5% commission in accordance with the parties’ agreement, the actual quantum is not part of the evidence. The respondents are also entirely silent about this. Mr Yang was not cross-examined about how much commission the respondents paid him. The parties’ submissions are silent as to how the Court ought to treat such payments vis-à-vis any Award and/or contractual entitlements it might find that Mr Yang is owed. However, in general, an employer is only entitled to set off a payment which is properly attributable to the award entitlement,[13] and the payment of commission was clearly not such an entitlement.
[13] Workpac Pty Ltd v Rossato [2020] FCAFC 84 at [829] (White J) (overturned on appeal but not on this point) referencing Ray v Radano [1967] AR (NSW) 471.
The mere fact that Mr Yang asked to be paid into his wife’s bank account is not an indication that he was an independent contractor, nor is it when taken together with the fact that he had an ABN. Mr Yang did not issue invoices, nor did he collect GST. He did not subcontract or delegate the work to anyone else.
While the evidence regarding payments into Mr Yang’s bank account and into his wife’s bank account was confusing, such evidence is not inconsistent with the concessions made during the hearing that Mr Yang did occasionally do work for other travel companies, either at CAT’s direction or when he was not otherwise working for CAT.
The respondents plead in their defence that they paid "the flat rate paid by multiple travel agents/tour operators to the Applicant" and that they paid Mr Yang 10% commission. They also plead that Mr Yang was entitled to be paid for his services as an independent contractor "subject to invoices being submitted". Pleadings are not evidence.
Even with the respondents’ case that Mr Yang was an independent contractor, the terms of the said contract are not in evidence before the Court. The Court is left in a quandary as to what the respondents say they were contracted to pay Mr Yang and whether they say that they did actually pay him all of the amounts they say they were obliged to pay him pursuant to this alleged agreement, and if so, how much this was. All these matters were within the respondents’ knowledge and the evidence could easily have been put before the Court. The respondents chose not to do so.
The cross-examination of Mr Yang in respect of his and his wife’s bank statements and the payments that were made into those accounts, was of no particular assistance to the Court and in reality obfuscated the issues.
The respondents submit that there is a total of $487,627.78 of unexplained credits in Mr Yang’s wife’s account and $9,379.42 in Mr Yang’s account. The Court understands that the purpose of these submissions is to convince the Court that Mr Yang was in fact an independent contractor who worked for a whole host of travel companies and earnt significant amounts of money. This is an available inference which may be drawn, but not the only inference. Indeed, the evidence is that Mr Yang’s wife carried on her own business.
The respondents submit that “The applicant’s case should be dismissed for the sole reason that [he] has not discharged the evidentiary onus to establish that he was an employee of the respondents”.[14] The Court finds that the evidentiary onus has been established, for reasons which have already been explained. The submission is rejected.
[14] Respondents’ Written Submissions at [34].
On balance the Court finds that Mr Yang was employed by CAT from June 2015 to October 2017.
Award Coverage and Entitlements
Having determined that he was an employee, the Court finds that Mr Yang was covered by the Award.
The Court accepts the submissions that Mr Yang is properly classified as a Grade 3 employee under the Award, and that having regard to the way in which work was allocated to Mr Yang by CAT on an “as needed” basis by sending him an email a few days prior to the day on which CAT required him to work, the Court finds that Mr Yang was a casual employee.
Accordingly, Mr Yang is entitled to:
(a)The hourly rate for casual employees, for ordinary hours worked, being 1/38 of the minimum weekly wage varied from time to time, plus a 25% casual loading, pursuant to cl 10.5 and cl 14 of the Award;
(b)Overtime payments at the rate of time and a half for the first three hours and double time thereafter for all hours worked in excess of ordinary hours per work pursuant to cl 23.1 of the Award;
(c)Penalty rates for hours worked on Saturday (time and a half), Sunday (double time) and Public Holidays (double time and a half) pursuant to cl 23.2 and cl 23.4 of the Award;
(d)Superannuation contributions pursuant to cl 20.2 of the Award; and
(e)A meal allowance when he worked more than two hours’ overtime beyond his ordinary finishing time pursuant to cl 15.2(f) of the Award.
While Mr Yang claims that he is entitled to expenses and reimbursements pursuant to cl 15 of the Award, on the evidence this has not been established as the claim for reimbursement does not fall within the parameters of the Award.
There is no dispute between the parties that Mr Yang was not remunerated in accordance with the Award. As such, and given the Courts findings, it is an incontrovertible conclusion that CAT contravened the Award, and therefore s.45 of the Act.
There is likewise no dispute between the parties that CAT did not make any superannuation contributions to a superannuation fund for the benefit of Mr Yang in accordance with the Award and as required by the superannuation guarantee legislation, and that CAT did not issue Mr Yang with payslips as required by s.536(1) of the Act.
Mr Yang seeks an order pursuant to s.545 of the Act awarding compensation. The total amount claimed, as set out in his Statement of Claim, is $116,869.82 (not including superannuation), relating to underpayments for ordinary time and overtime, penalty rates, meal allowances and reimbursement for expenses (which the Court has determined he is not entitled to as explained above at [91]).[15] Mr Yang relies upon his notebook and the itineraries annexed to his affidavit in support of such claim. While it became apparent during cross-examination that there may be some difficulties in accepting that Mr Yang worked each and every time there was a corresponding itinerary and/or notebook entry, on balance the Court accepts that he did his best to keep what records he could.
[15] See in particular Annexures “A”, “B”, “C” and “E” to the Statement of Claim filed 16 June 2021.
Further, Mr Yang seeks an order pursuant to s.545(1) of the Act, that CAT make such superannuation contributions on his behalf to a superannuation fund nominated by him as it was required to make for the applicant’s benefit under the provisions of the Passenger Vehicle Transportation Award 2010 (“the Award”) in the period September 2015 to October 2017, and calculates that amount to be $8,690.41
Section 45 of the Act is one of the civil remedy provisions specified in s.557C(3).
Section 557C of the Act shifts the burden of proof onto the employer in a proceeding relating to a contravention by the employer, in circumstances in which the employer was required to make and keep records or give pay slips. Noting the Court’s finding that CAT was Mr Yang’s employer, it was required by the Act to keep employee records.[16] Section 557C is a reflection of a legislative policy that an employer should not be able to take advantage of its failure to make and keep records to defeat a claim for underpayments of its employee.[17] “Section 557C provides for more than an evidentiary burden on the defaulting employer when it comes to an absence of records. It is not a mere reversal of the evidentiary onus…[it] states expressly that the defaulting employer bears the burden of disproving the allegation. It is a provision concerned with the overall burden of proof.”[18]
[16] S.535 of the Act.
[17] Gallagher v AAG Labour Services Pty Ltd [2020] FCA 1753 at [18]; Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No.3) [2023] FCA 201 at [91]-[94].
[18] Ghimire v Karriview Management Pty Ltd (No.2) [2019] FCA 1627 at [14].
Even if the evidence adduced by the employer did not rise to the level necessary, on the balance of probabilities, to affirmatively prove that Mr Yang did not work the hours he claimed, the effect of s.557C is such that those claims are upheld. In that context, it is not enough that there may be reasons to question the credibility of the account given by Mr Yang. Even if his evidence had not been accepted, CAT would not have thereby disproved the allegation made by Mr Yang as to the hours he says he worked.[19]
[19] Ibid at [16].
Therefore, an order is to be made that CAT pay compensation to Mr Yang in the total sum of $84,460.71. This is made up of pay for ordinary hours, overtime, penalty rates and meal allowances less a set off of $12,900.39 being the amounts CAT has already paid Mr Yang. An order will also be made that CAT pay, on behalf of Mr Yang, the minimum superannuation contributions required by the Award.
Accessorial Liability
Section 550 of the Act is in the following terms:
1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
2) A person is involved in a contravention of a civil remedy provision if, and only if, the person:
a)has aided, abetted, counselled or procured the contravention; or
b)has induced the contravention, whether by threats or promises or otherwise; or
c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
d)has conspired with others to effect the contravention.
While strictly speaking the pleadings arguably might have addressed the accessorial liability claim with a great deal more care and precision,[20] the respondents did not raise any objection in that regard. Furthermore, the respondents did not address the accessorial liability issue at all in their submissions.
[20] See e.g. Whitby v ZG Operations Australia Pty Ltd (No.2) [2019] FCA 201 at [29].
Although as recognised in Fair Work Ombudsman v Hu[21] the terms of s.550 have given rise to some potential divergence in the authorities, there are a number of relevant principles which are well established and not in dispute. They have been summarised by White J in Fair Work Ombudsman v Devine Marine Group Pty Ltd[22] as follows:
[176] Although the general principles relating to accessorial liability are settled, their application in a case such as the present is not without difficulty. In order to aid, abet, counsel or procure the relevant contravention, the person must intentionally participate in the contravention with the requisite intention: Yorke v Lucas (1984) 158 CLR 661 at 667. In order to have the requisite intention, the person must have knowledge of “the essential matters” which go to make up the events, whether or not the person knows that those matters amount to a crime: Yorke v Lucas at 667. Although it is necessary for the person to be an intentional participant and to have knowledge of the matters or things constituting the contravention, it is not necessary for the person to know those matters or things do constitute a contravention: Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213; (2002) 118 FCR 236 at [159]-[160]. That is to say, it is not necessary that the accessory should appreciate that the conduct in question is unlawful. …
[177] Actual, rather than imputed, knowledge is required. So much was made clear in Giorgianni v The Queen (1985) 156 CLR 473 at 506-7 by Wilson, Deane and Dawson JJ …
[178] The notion of being “knowingly concerned” in a contravention has a different emphasis from that of aiding, abetting, counselling or procuring” a contravention. To be knowingly concerned in a contravention, the person must have engaged in some act or conduct which “implicates or involves him or her” in the contravention so that there be a “practical connection between” the person and the contravention: Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299 at [26]; Qantas Airways Ltd v Transport Workers’ Union of Australia [2011] FCA 470; (2011) 280 ALR 503 at [324]-[325].
[179] As indicated, these principles are not in doubt...
[21] [2019] FCAFC 133.
[22] [2014] FCA 1365; cited with approval by the Full Court of the Federal Court in Fair Work Ombudsman v Hu [2019] FCAFC 133.
The reality of the situation is that notwithstanding that the first respondent is a corporate entity, it is a sole director, sole shareholder corporate identity. The husband of its sole director was intimately involved in the running of the business. This is a small family business, which is (behind the corporate veil) owned and operated by a husband and wife team. Its employee, Mr Yang, did what he was told to do by the second and third respondents.
On the evidence and in respect of Ms Huang, the Court is satisfied that:
(a)Ms Huang was the sole director and sole shareholder of the company;
(b)Ms Huang engaged Mr Yang on behalf of CAT and was well aware that he was not remunerated as an employee. Such conclusion is based on the evidence of the initial meetings between Mr Yang and the second and third respondents;
(c)Ms Huang had knowledge of the directions given to Mr Yang of the hours and the days he was to work and did work. Such conclusion is based on evidence of communications between CAT and Mr Yang providing the itineraries; and
(d)Ms Huang was well aware that CAT was not paying Mr Yang as an employee with regard to any of his Award entitlements in contravention of s.45 of the Act. Such conclusion is based on evidence of communications between Ms Huang and Mr Yang where he sought payment for the work he had performed and the payments which were made by Ms Huang to Mr Yang.
On the evidence and in respect of Mr Zhao, the Court is satisfied that:
(a)Mr Zhao was present and party to Ms Huang engaging Mr Yang on behalf of CAT, and was well aware that he was not remunerated as an employee. Such conclusion is based on the evidence of the initial meetings between Mr Yang and the second and third respondents;
(b)Mr Zhao had intimate knowledge of the directions given to Mr Yang of the hours and the days he was to work and did work. Such conclusion is based on evidence of communications between CAT and Mr Yang providing the itineraries, and between Mr Zhao and Mr Yang in respect of the provision of the bus which Mr Yang drove; and
(c)Mr Zhao was well aware that CAT was not paying Mr Yang as an employee with regard to any of his Award entitlements in contravention of s.45 of the Act. Such conclusion is based on evidence of communications between Mr Zhao and Mr Yang where he sought payment for the work he had performed.
The Court is satisfied, having regard to its findings of fact and in particular as a result of the initial conversations between Mr Yang and Ms Huang and Mr Zhao, that the second and third respondents were aware that Mr Yang was to be paid a set daily rate for his work, regardless of the number of hours he worked on a particular day, the time of day that he worked, and whether or not work occurred on a Saturday, Sunday or public holiday. The second and third respondents were also aware that CAT would not be making any superannuation contributions on behalf of Mr Yang and indeed that it had not done so.
On the facts of this case, where the second and third respondents were intimately involved in the running of the first respondent’s business, where they were intimately involved in all of the work which Mr Yang was asked to do for the first respondent, where they controlled how he performed the work, when he performed the work and provided him with the tools to perform the work, the Court is satisfied that both Ms Huang and Mr Zhao were knowingly concerned in CAT’s contraventions of the Award and the Act.
The Court is also satisfied that Ms Huang and Mr Zhao were knowingly concerned in CAT’s contraventions pursuant to s.550(2)(c) of the Act. Consequently, both the second and third respondent are involved in the contravention and are thus deemed to have contravened the relevant civil remedy provision themselves.
The Court is satisfied that an order that all of the respondents be jointly and severally liable for the any underpayment determined by the Court is in all of the circumstances appropriate.[23]
[23] Fair Work Ombudsman v Step Ahead Security Services Pty Ltd [2016] FCCA 1482 at [56].
Pecuniary Penalties
Having concluded the contraventions outlined above, the Court is satisfied that in addition to the payment of compensation consideration should be given to the payment pecuniary penalties by the respondents pursuant to s 546 of the Act.
A separate hearing will be required to determine the appropriate penalties.
I certify that the preceding one hundred and eleven (111) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Obradovic. Associate:
Dated: 10 November 2023
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