Young v Tasmanian Contracting Services Pty Ltd
[2012] TASFC 1
•3 July 2012
[2012] TASFC 1
COURT: SUPREME COURT OF TASMANIA (FULL COURT)
CITATION: Young v Tasmanian Contracting Service Pty Ltd [2012] TASFC 1
PARTIES: YOUNG, Anthony Henry
v
TASMANIAN CONTRACTING SERVICES PTY LTD
FILE NO: 801/2011
JUDGMENT
APPEALED FROM: Tasmanian Contracting Services Pty Ltd v Young [2011] TASSC 49
DELIVERED ON: 3 July 2012
DELIVERED AT: Hobart
HEARING DATE: 28 February 2012
JUDGMENT OF: Blow, Tennent and Wood JJ
CATCHWORDS:
Workers Compensation – Proceedings to obtain compensation – Determination of claim – Appeals, judicial review and stated cases – Question of law – Generally – What amounts to error in point of law.
Protective Security Services Pty Ltd v Bedelph (2004) 13 Tas R 354; Hall (Inspector of Taxes) v Lorimer[1992] 1 WLR 939; Bill Williams Pty Ltd v Williams (1972) 126 CLR 146, referred to.
Workers Rehabilitation and Compensation Act 1988 (Tas), s63(1).
Aust Dig Workers Compensation [340]
REPRESENTATION:
Counsel:
Appellant: S P Estcourt QC and S Taglieri
Respondent: P Jackson
Solicitors:
Appellant: Hilliard & Associates
Respondent: Abetz Curtis
Judgment Number: [2012] TASFC 1
Number of paragraphs: 45
Serial No 1/2012
File No 801/2011
ANTHONY HENRY YOUNG v
TASMANIAN CONTRACTING SERVICES PTY LTD
REASONS FOR JUDGMENT FULL COURT
BLOW J
TENNENT J
WOOD J
3 July 2012
Order of the Court
Appeal dismissed.
Serial No 1/2012
File No 801/2011
ANTHONY HENRY YOUNG v
TASMANIAN CONTRACTING SERVICES PTY LTD
REASONS FOR JUDGMENT FULL COURT
BLOW J
3 July 2012
I have read the judgment of Tennent J in draft form. I agree that this appeal should be dismissed, and agree with all that her Honour has written. There is a little that I would like to add.
For the reasons stated by Tennent J, the only question before the learned primary judge was whether, as a matter of law, on the facts as found by the Workers Rehabilitation and Compensation Tribunal, that Tribunal was obliged to conclude that the appellant, Mr Young, was not a "worker" for the purposes of the Workers Rehabilitation and Compensation Act 1988. In practical terms, the question was whether the Tribunal was obliged to find that the appellant was an independent contractor with no right to workers compensation, as distinct from an employee with a right to workers compensation. The learned primary judge concluded that the Tribunal was obliged, as a matter of law, to conclude that the appellant was not a "worker", but an independent contractor, and therefore not entitled to workers compensation. In my view that conclusion was correct.
On the facts as found by the Tribunal, the matters that weighed in favour of a finding that the appellant was an independent contractor were as follows:
· He and the respondent, Tasmanian Contracting Services Pty Ltd ("TCS"), entered into a written contract in which he acknowledged that there was no employer/employee relationship.
· It was an express term of that contract that TCS had no responsibility to him, except that he was "guaranteed to be paid for actual on-site hours worked or agreed job price for work done".
· The contract contained express terms that he would do his work "in a proper manner"; that TCS was "guaranteed against faulty work"; and that all work "must be made good".
· It was an express term that he would have no claim against TCS for "Public Liability, Accident Insurance, Long Service and Holiday Pay".
· It was an express term of the contract that he would supply his own equipment, including safety equipment.
· At some stage TCS provided him with a document entitled "Information Guide for ODCO Contractors". That document set out a summary of the appellant's rights, or lack thereof, consistent with him being an independent contractor, not an employee.
· His perception of his situation was that he was a contractor, not a permanent employee; that he had no workers compensation coverage; that he had to supply his own work equipment; that TCS was not obliged to provide him with work because he was self-employed; and that he had the right to refuse any work that was offered to him by TCS.
· He understood that TCS obtained personal accident insurance for him. TCS required him to have such cover prior to any commencement of work. He was offered a choice between arranging his own cover, or electing to be covered under a master policy taken out by TCS.
· He was free to obtain and do other work.
· Initially the appellant's remuneration involved a quota arrangement. If he performed a certain quota of work on a particular day, he would be paid a day's pay, equal to 7.6 hours' pay, and would be free to finish work even if he had not been working for 7.6 hours. Subject to that arrangement, he was to be paid by the hour. (After a time, that arrangement came to an end, and he was entitled to be paid by the hour.)
· TCS was under no obligation to find or supply work for the appellant.
· TCS had no control over how or when the appellant was to perform his work.
· Although TCS made 9% payments to a superannuation fund for the benefit of the appellant, it deducted the amount paid from the appellant's remuneration.
· TCS deducted income tax from the appellant's remuneration in accordance with the Australian Taxation Office's Pay As You Go procedures, which normally apply to independent contractors, rather than its Pay As You Earn procedures, which are normally applicable to employees. The appellant was offered a choice of having tax deducted at a flat rate, or having tax deducted in accordance with the PAYG tax tables. (The Tribunal regarded the income tax arrangements as a neutral factor. I disagree. I think they point towards the appellant being an independent contractor.)
The factors which the Tribunal thought to indicate that the appellant was a "worker" in an employer/employee relationship, and my comments as to those factors, are as follows:
· The appellant had no autonomy as to how he performed his work, but had to work in accordance with instructions given by, and supervision provided by, others. This counts for little because the instructions and supervision came not from TCS, but from its client.
· TCS had some control over the appellant on issues such as occupational health and safety, behaviour, anti-discrimination, and responsibilities owed to TCS and its client. In my view, this degree of control was consistent with the appellant being an independent contractor, and this was therefore a neutral factor.
· The appellant was given little flexibility as to working hours. In the main he was required to commence work in order to fit in with the production schedule of TCS's client. In the main he was required to work until the day's quota was completed or until he had worked for 7.6 hours. When he was doing production line work, he was required to conform to more consistent starting and finishing times. In my view, these matters count for little because the timing requirements were imposed not by TCS, but by its client, and the appellant retained the right not to do the work.
· The appellant did not negotiate his remuneration and did not consider that he had any right to do so. However, I regard this as a neutral factor. Often an independent contractor will be given no choice about his or her remuneration, and will have little or no bargaining power.
· The appellant was doing unskilled work, and was not in the position of selling skill or expertise on the open market.
· Very little equipment was provided by the appellant. In my view, the Tribunal was wrong to take this into account as a factor indicating an employer/employee relationship. The fact that the appellant had to provide his own equipment, and the fact that he did provide some, both weigh in favour of him being an independent contractor.
· The appellant did not have "the trappings of conducting his own business" in that he did not have an Australian Business Number; did not seek work from other areas; and was not developing any capital benefit or goodwill. Save that any human being can be a "business entity", I agree that these matters tend to indicate an employer/employee relationship.
· There was no evidence that the appellant "conducted his financial affairs so as to deduct business expenses from his remuneration". I presume the Tribunal was referring to tax deductions.
· The appellant worked for TCS at only one site, did not offer his services elsewhere, and did not obtain work elsewhere. In my view, these are neutral factors. The important point is that he had the right to work elsewhere while continuing to work for TCS at the particular site.
· The appellant wanted to work for the business known as K & D Bricks & Pavers, just wanted a job, and was given no choice as to how to get the work he wanted.
· He could not delegate his work to someone else.
Some of the matters taken into account by the Tribunal as indicating an employer/employee relationship should not have been treated as tending to give any such indication. Some of the matters that the Tribunal took into account as indicating such a relationship should have been given very little weight. Looking at the whole relationship between the appellant and TCS, it is my view that there was only one conclusion reasonably open to the Tribunal and to the learned primary judge, namely that the appellant was an independent contractor, and not a "worker" within the meaning of the Act.
File No 801/2011
ANTHONY HENRY YOUNG v
TASMANIAN CONTRACTING SERVICES PTY LTD
REASONS FOR JUDGMENT FULL COURT
TENNENT J
3 July 2012
As at 23 September 2010, the appellant was working at a site at Lenah Valley operated by Kemp & Denning Pty Ltd, where it traded as K & D Bricks and Pavers ("K & D"). He was working there as a result of an arrangement he entered into through Tasmanian Contracting Services Pty Ltd ("TCS"). On 23 September, he suffered a significant injury while working at the site. He sought from the Workers Rehabilitation and Compensation Tribunal ("the Tribunal") a determination that, at the time he was injured, he was a worker as that term is defined in the Workers Rehabilitation and Compensation Act 1988 ("the Act") and employed by TCS.
The terms "worker" and "employer" are defined in the Act. A worker is relevantly defined to be:
"(a) any person who has entered into, or works under, a contract of service or training agreement with an employer, whether by way of manual labour, clerical work or otherwise, and whether the contract is express or implied, or is oral or in writing; and…..".
An employer is relevantly defined to be:
"the person with whom a worker has entered into a contract of service or training agreement and may include – …".
Both definitions contain the phrase "contract of service". The principal issue in this case was whether it could be said, having regard to all the circumstances, that the appellant had entered into a contract of service with TCS.
The Chief Commissioner of the Tribunal determined that the appellant was a worker in the employ of TCS. TCS appealed that decision to the Court. TCS's position was that the appellant was a contractor. The sole ground of appeal was that the finding of the Chief Commissioner that the appellant was a worker was not reasonably open on the evidence and the findings of fact made.
The appeal to a single judge
The Act, s63(1), provides that any person aggrieved by a determination of the Tribunal "in point of law" may appeal a decision of the Tribunal to the Court. The appeal against the Chief Commissioner's decision was heard by Evans J, and, on 9 September 2011, his Honour allowed the appeal, set aside the order of the Tribunal and ordered that, at the relevant time, the appellant had not entered into or was not working under a contract of service with TCS. The appellant now appeals that decision.
Grounds and scope of appeal
The grounds of appeal are as follows:
"1 That the learned primary judge erred in finding that the appellant had not entered into a contract of service with the respondent so as to be a worker within the meaning of s3(1) of the Workers Rehabilitation & Compensation Act 1998.
2 That the learned primary judge erred in failing to find that the acknowledgment of self employment in the Agreement to Contract between the parties and the description of the appellant therein as a 'contractor' were mere 'labels' that the parties applied that did not withstand proper analysis of the facts surrounding the relationship between them.
3 That the learned primary judge erred in holding that the 'necessary result' of his assessment was that the appellant had not entered into a contract of service and that therefore the Chief Commissioner had committed an appealable error of law of a kind described in Protective Security Services Pty Ltd v Bedelph (2004) 13 Tas R 354 when the conclusion reached by the Chief Commissioner was one of fact that was reasonably open to him."
In the course of his decision, Evans J conducted a detailed examination of the Chief Commissioner's reasons, and examined the circumstances surrounding the appellant's working arrangements, which included certain documents he signed, and concluded at par[44]:
"In my view the necessary result of this assessment is a finding that the respondent had not entered into, or was not working under, a contract of service with TCS within the meaning of the Workers Rehabilitation and Compensation Act. Accordingly the Chief Commissioner's decision to the contrary is an error of law: Protective Security Pty Ltd v Bedelph (supra) at pars[28] and [75] – [78]; Hope v Bathurst City Council (1980) 144 CLR 1 at 7 and Marshall v Whittaker's Building Supply Co (supra) at 213."
Protective Security Pty Ltd v Bedelph (2004) 13 Tas R 354 involved an appeal to the Full Court following an appeal to a single judge from a decision of the Tribunal. The issue in that case was also whether a person was a worker or an independent contractor, although the referral to the Tribunal was by the person's dependant daughter, the person having died as a consequence of the relevant work-related accident. The Tribunal had evidence of the working arrangements and documents relating to them. It determined that it was not persuaded the person was a worker within the meaning of the Act. That decision was appealed to a single judge who overturned the decision of the Tribunal, and found the person to be a worker. That decision was then appealed to the Full Court by the putative employer. That employer of course had to establish an error of law.
Crawford J (as he then was) discussed at pars[22] – [27] the relevant test for an appeal in point of law. He said at par[25]:
"25 An obvious corollary to what was so stated is the following proposition from Mason JA in Williams v Bill Williams Pty Ltd [1971] 1 NSWLR 547 at 557:
'[I]t may happen that the tribunal at first instance is confronted with the task of applying the statutory expression to primary facts in such circumstances that it is reasonably possible to arrive at different conclusions, the question being largely one of degree upon which different minds may take different views. Here, again, it is not possible to conclude that the decision appealed from is erroneous in point of law.'
The principle has been enunciated that, if different conclusions are reasonably possible, the determination of which is the correct conclusion is a question of fact."
Crawford J then concluded at par[28] that the question to be determined by the judge appealed from and by the Full Court was whether "on the facts, the question whether the deceased was a worker within the meaning of the Act, necessarily had to be answered in the affirmative.". He went on to say that, if it were, then the respondent (that is the dependant daughter) must succeed, whereas, if it were not, the putative employer must succeed. On the facts of that case, the Full Court dismissed the appeal by the putative employer.
There is no dispute that the test to which Evans J had regard was correct. A significant issue on this appeal is whether different conclusions were reasonably possible as to whether or not the appellant was working under a contract of service, given that, in considering the totality of the relationship between the appellant and the respondent, different minds might attach different significance to the documents which underpinned the appellant's arrangements with TCS. Counsel for the appellant said in his written submissions:
"If it was reasonably possible to arrive at different conclusions because of a question upon which different minds may take different views then no appeal in point of law arose from the decision of the learned Chief Commissioner (Williams v Bill Williams Pty Ltd [1971] 1 NSWLR 547 at 557E cited with approval in Protective Security Pty Ltd v Bedelph [2004] TASSC 128 at [25] and [76] & Workers Rehabilitation and Compensation Act 1988, s63(1))."
That is, it was the appellant's position that, in this case, different conclusions were open on the evidence before the Tribunal and the learned judge, and therefore no appeal in point of law arose.
The other issue identified as underpinning the appeal was whether Evans J erred by reaching a different conclusion from that of the Chief Commissioner which was that the description of the appellant in the documents as a contractor was merely a "label", on the basis of his Honour's observation that there was no suggestion that the contractual documents were a "sham".
The decision of the learned primary judge
His Honour said, at par[7], that it was well established that the test for establishing whether a contract of service exists involved many factors. In that regard, he then adopted a passage from the decision of Crawford J in the Protective Security case (supra), and set out that passage. I do not repeat it. No issue is taken on this appeal with the approach identified. His Honour then went on to say at par[8]:
"The fact that the sort of relationship which amounts to a 'contract of service' remains largely unidentified as a legal concept except in terms of various criteria of no fixed relevance, makes it difficult to determine whether a particular relationship or a particular occupation gives rise to a contract of service."
His Honour recognized that a number of quite onerous obligations had over the years been placed on employers and that, as a consequence, for many years some involved in engaging or providing the services of others had done what they could to avoid creating an employment relationship.
His Honour then went on at pars[10] – [17] inclusive to set out the terms of relevant documents and to refer to other relevant facts taken from the evidence of the appellant and Michael Flynn, the principal of TCS. At par[18], his Honour identified a number of factors which he said pointed to the relationship between TCS and the appellant being other than that of employer and employee. He noted that one, which related to the lack of control which TCS had over the appellant, was a finding of the Chief Commissioner disputed by TCS. His Honour said he agreed with that finding. At par[20], his Honour set out a number of factors which the Chief Commissioner had identified as being "facts which are suggestive of a worker/employer relationship". His Honour then identified at par[21] "other findings of the Chief Commissioner that bear on his decision".
At pars[22] and [23], his Honour commented upon one of the factors he referred to in par[21]. That was a finding that:
"The worker in practice did not operate as a contractor. He did not offer his services elsewhere, he did not obtain work elsewhere. He merely went to work, did what work he was required to do and left when he was authorised to do so".
His Honour said:
"22 Sound as the penultimate finding of the Chief Commissioner noted above is, I am dubious that this is a factor that should be given much weight. Connelly v Wells (1994) 55 IR 73 dealt with an issue as to whether the injured party had entered into or was working under a contract of service with the other party as his employer, pursuant to the Workers Compensation Act 1987 (NSW). Gleeson CJ at 74 said:
'Where the relationship between two persons is founded in contract, the character of the relationship depends upon the meaning and effect of the contract. In the absence of a suggestion that a contract was varied after it was originally made, its meaning and effect must be determined as at the time it was entered into. If the contract is in writing, then the court which is considering the nature of the relationship between the parties is directed to an examination of the terms of the written agreement in the light of the circumstances surrounding its making. (Narich Pty Ltd v Commissioner of Pay-Roll Tax(1983) 2 NSWLR 597 at 601).'
23 Consistent with the above passage, the fact that the respondent in this case did not offer his services elsewhere and did not obtain work elsewhere has no bearing on his contractual relationship with TCS. By their contractual relationship he was entitled to do so. Nonetheless, for the purposes of establishing whether the respondent was working under a contract of service with TCS, the totality of their relationship is to be found not merely from the terms of their contract. The system which operated thereunder and the work practices imposed by TCS go to establishing the totality of the relationship between the parties; it is this which is to be considered; Stevens v Brodribb Sawmilling Co Pty Ltd, (supra) at 29 and Hollis v Vabu Pty Ltd, (supra) par[24]. What must be focused on is the totality of the relationship between the parties. I find it difficult to see how the unilateral action or inaction of a party to the relationship outside of the relationship has any significant bearing on it. If it did the answer to the question 'is the person working under a contract of service?' would be ambulatory. If the question was addressed at a time before the person chose to obtain work elsewhere, there would be an increased likelihood of a finding of employment, but if addressed after the person had obtained work elsewhere, there would be an increased likelihood of a finding that the person was not employed. To my mind the contractual entitlement of the respondent to work elsewhere is of greater significance than his exercise of that right."
At par[24], his Honour commented upon what he perceived as a blurring by the Chief Commissioner of the distinction between TCS and K & D in his factors which were suggestive of a worker/employer relationship. He then reiterated that the issue before the Chief Commissioner related to the relationship between the appellant and TCS (and by inference not that between the appellant and K & D). Counsel for the appellant submitted in relation to the comment about blurring the distinction that what his Honour was doing was re-finding facts, and not evaluating findings of fact already found by the Chief Commissioner. With respect I disagree. His Honour did not make any finding there inconsistent with the Chief Commissioner's views. He simply noted there appeared to be a blurring of the distinction between the roles of TCS and K & D in respect of the appellant, and highlighted what the role of the Chief Commissioner was.
Starting at par[25] of his decision, his Honour then dealt with decisions of other courts where the Odco system of documentation (that is the system of documentation used in the present case) had been considered. The first case to which he referred was a decision of the High Court in Accident Compensation Commission v Odco Pty Ltd (1990) 95 ALR 641. His Honour said about this at pars[26] – [33]:
"26 The first authorities to which I will refer that involve Odco documents are a series of decisions culminating in the High Court's decision in Accident Compensation Commission v Odco Pty Ltd[1990] HCA 43; (1990) 95 ALR 641. These decisions relate to the provisions of the Accident Compensation Act 1985 (Vic). Odco Pty Ltd, trading as Troubleshooters Available ('Troubleshooters'), was providing the services of tradesmen to builders. The issue was whether Troubleshooters was deemed to be an employer of the tradesmen under that Act and was, in consequence, liable to pay a levy pursuant to it. The Act's definition of 'employer' was orthodox insofar as it included a person 'for whom a worker works; or with whom a worker agrees to perform work', but also extended to 'a person who is deemed to be an employer under this Act'. Similarly, the definition of 'worker' was orthodox insofar as it included a person 'who performs work for an employer; or agrees with an employer to perform work', but was extended to a person 'who is deemed to be a worker under this Act'.
27 In the judgment of the Court of Appeal in Odco Pty Ltd v Accident Compensation Commission [1990] VicRp 16; [1990] VR 178 at 181, it is noted that at first instance before Gray J the Commission did not contend that the tradesmen were workers under a contract of service. The Commission's case was advanced on the basis that Troubleshooters and the tradesmen were covered by deeming provisions in the Act. Nonetheless, as noted by the Court of Appeal, Gray J had held that whatever the nature of the relationship between Troubleshooters and the tradesmen was, it did not amount to a contract of service, as it lacked the element of control that must be present in some form or degree in every contract of service. The Court of Appeal said that the conclusion of Gray J in that regard was clearly correct and observed that as this aspect of the decision was not challenged before the Full Court, it would not be the subject of any further consideration.
28 Similarly, before the High Court it was not suggested that there was a contract of service between Troubleshooters and the tradesmen. The issue put in contention by the Commission at first instance, before the Court of Appeal and before the High Court, was whether provisions in the Act that extended the meaning of the terms 'employer' and 'worker' applied to deem Troubleshooters to be the employer of the tradesmen. One of the individuals who was the subject of these decisions was a labourer. At 647 of the High Court's unanimous decision, it held that the labourer was deemed to be an employee of Troubleshooters under a provision of the Act which bears some similarity to the Workers Rehabilitation and Compensation Act (Tas), s4B(1), which deems contractors covered by its terms to be employees. That subsection was not mentioned in the Tribunal's decision or in argument before this Court. I assume that this is because, by reason of s4B(2), it did not apply. That subsection provides that if a contractor to whom subs(1) applies takes out his own personal accident insurance, the contractor is taken not to be a worker for the period during which the insurance remains valid. (For a deeming provision that would appear to be squarely aimed at Odco type arrangements see the Workers Compensation Act 1951 (ACT), s12.) So, save insofar as the High Court's decision proceeded on the implicit assumption that a labourer engaged pursuant to the Odco documents in the circumstances there under consideration was not engaged under a contract of service, it does not touch on that issue.
29 Nonetheless, the High Court's decision at 646 – 647 does assist in distilling the nature of the agreement between the parties to an Odco arrangement. The Agreement to Contract set out in that case at 643 is in substantially the same terms as the Agreement to Contract set out in par[10] of these reasons, save that:
•it includes an express provision that Troubleshooters is not liable for workers compensation. Provisions to that effect are elsewhere in the documents in the current case;
•it forbids Troubleshooters from making deductions in respect of income taxation, whilst the respondent's agreement with TCS instructs it to make deductions under the PAYG system of taxation; and
•it includes a provision obliging the contractor to belong to a trade union. In the Information Guide the respondent was informed that he was free to be a member of a union.
30 Paraphrasing what the High Court said and relating it to the case under consideration, it can be said that once a labourer accepts an offer of work and attends at a client's site, he remains at the site working for as long as that client requires, or for as long as the labourer wishes. TCS does not exercise, and is not able to exercise, any control whatsoever over what the labourer does at the site or how he does it. The only contact TCS has with the labourer is in obtaining information of what work he has done. The client contacts TCS every week to advise the details of hours and sites worked for the client during the previous seven days, and this information is verified by the labourer. From this information, invoices are raised by TCS to the relevant client.
31 The conclusion to be drawn from the material is that the labourer enters into a contract with TCS by accepting the offer of work. The fact that the labourer is evidently free to withdraw from the site at any time because he objects to work, or to work further on the grounds of safety or for some other reason, is by no means inconsistent with the entry of a contract with TCS on acceptance of the offer of work. There had been no suggestion that the labourer's right to withdraw his services rendered the contract between him and TCS illusory.
32 When the labourer accepts the offer of work, a contract comes into existence in the terms set out in the document headed 'Agreement to Contract' which the labourer has previously signed. That document contains the terms which govern the contractual relationship which then arises. It is significant that cl 6 of the document contains a promise by the labourer to 'carry out all work that I agree to do through the agency of TCS in a proper manner'. This clause also contains a 'guarantee' against faulty work. In this context the words 'work that I agree to do' contemplate the reaching of an agreement between the labourer and TCS with respect to the work to be carried out.
33 So far as the client is concerned, it enters into a contract with TCS whereby it agrees to pay TCS an amount which will enable TCS to pay remuneration to the labourer. On the acceptance by the labourer of the offer by TCS of work, an agreement arises between TCS and the labourer constituted by the offer and acceptance and the terms set out in the document entitled "Agreement to Contract". The agreement is one whereby the labourer agrees with TCS to perform work for the benefit of TCS in the sense that the work is done for the purposes of TCS's business, and enables TCS to derive remuneration from the relevant client which will enable TCS to pay the labourer for his services. This distillation of what the High Court said about the nature of the agreement between the parties to an Odco arrangement is pertinent to the determination of the case in question."
His Honour, at pars[34] – [37], referred to further cases and said at pars[38] – [40]:
"38 A contrary decision was reached in relation to a relationship based on Odco documents in Country Metropolitan Agency Contracting Services Pty Ltd v Slater [2003] SAWCT 57. In that case an issue was whether the labourer, a tomato picker, was an employer of the grower or the appellant, the entity that supplied her services to the grower. The Agreement to Contract between the appellant and the labourer worker is at par[5] of the decision. It is consistent with the Agreement to Contract in this case between the respondent and TCS. The three members of the Workers Compensation Tribunal (SA) held that the labourer was an employee of the appellant.
39 In the reasons for decision that are the subject of this appeal, the Chief Commissioner adopted the following passage from this decision:
'36 Finally the learned Deputy President referred to the decision of Woodward J in Odco Pty Ltd v Building Workers Industrial Union of Australia (unreported Federal Court of Australia No 483, 24 August 1989) at par 265 - 9. He distinguished that case, one which concerned the construction industry, and concluded in the following terms (par 52 of his reasons for decision):-
"52 Apart from the description of independent contractor there is nothing about the applicant's enterprise that points in that direction. She was not a free-lance tomato picker plying the skills of her trade on her terms. When it is all said and done she was an unskilled labourer looking for work, who took what work was on offer, on such terms as were offered, and when she did so, she was treated as you would expect an unskilled labourer to be treated, told when she could start, when she could finish, what work she was to perform and how she was to perform it".'
40 With regard to the other decisions in relation to Odco documents that I have dealt with in the course of these reasons, insofar as the Chief Commissioner expressly referred to them, he said the following:
'Cases decided in other jurisdictions that involved the ODCO contracting system were relied upon as authority in upholding the express terms of this documentation in application to factual situations said to be similar to the present case. (Personal Contracting Pty Ltd v CFMEU (supra) Accident Compensation Commissioner v ODCO Pty Ltd(1990) HCA 43, Building Workers Industrial Union of Australia v ODCO Pty Ltd(1991) 199 ALR 735). However it is the factual circumstances that are important and in those cases my impression was that the persons engaged were persons having particular experience or trade skills, especially within the building industry and they performed their duties at a number of work sites. In this case the worker was engaged and provided work at one site and had been there since February 2008. He had no particular skills. Although he agreed that he had signed relevant documents and those documents asserted that there was a contractor relationship and he understood from what he was told and what was in those documents that he was a contractor, I consider that in all the circumstances this was merely a label.'"
His Honour then said at pars[41] – [44]:
"41 Later in his decision the Chief Commissioner returned to the mere label question and said: 'Having stood back and having the common sense to look at the worker's relationship with TCS I concluded that the term 'contractor' was but a label'.
42 With respect, I am not prepared to dismiss the documents in question so readily. There is no suggestion that the agreement between the respondent and TCS or any of the related documents were a sham. Neither before the Tribunal nor on this appeal was a contention to this effect advanced on behalf of the respondent. To a very substantial degree that which was done by the parties reflected the terms of their agreement and the related documents. That the respondent's strong preference was to be employed by K & D does not mean that the documentation in relation to his agreement with TCS does not genuinely reflect his agreement with TCS or provide a basis for construing his relationship with TCS as one of employment.
43 The answer to the ultimate question of whether the respondent was working under a contract of service is to be assessed by looking at the totality of the relationship, taking into account all relevant factors.
'This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another." Hall (Inspector of Taxes) v Lorimer[1992] 1 WLR 939 Mummery J at 944, Green v Victorian Workcover Authority[1997] 1 VR 364, Tadgell JA at 375, Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (unreported, Court of Appeal, Victoria, 24 October 1997) at 9 and Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue[2005] VSC 136 Harper J par[10].'
44 In my view the necessary result of this assessment is a finding that the respondent had not entered into, or was not working under, a contract of service with TCS within the meaning of the Workers Rehabilitation and Compensation Act. Accordingly the Chief Commissioner's decision to the contrary is an error of law: Protective SecurityPty Ltd v Bedelph (supra) at pars[28] and [75] – [78]; Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1 at 7 and Marshall v Whittaker's Building Supply Co (supra) at 213."
There is what appears to be a clerical error in par[43] in that the passage which appears as a quote has not been properly identified. The passage is taken from Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 at 944 in the judgment of Mummery J. The remaining cases referred to are those in which the same matter has been dealt with.
The factual background
The appellant was aged 26 at the time of the hearing before the Tribunal in February 2011. He left school having only completed year 11. His initial intention was to go to university but he said he had some trouble in his life. After leaving school, he worked, over the years between then and when he began working at the K & D site in February 2008, at a number of basically unskilled labouring type jobs. While he had never had a full-time job, except briefly as an apprentice painter, he had in practical terms been fully employed most of the time, with short periods of unemployment from time-to-time.
In 2008, the appellant was looking for work. He telephoned K & D and enquired about work. He was told that they did not deal with employment and was referred to TCS. He rang TCS and was told there was then no work. About six weeks to two months later someone from TCS contacted him and said there was some work available. He began work at the K & D site two days later.
Between when the appellant was contacted by a representative of TCS and when he began work, a Ryan Flynn from TCS came to his home to talk to him about the arrangements pursuant to which the appellant would work. During the course of this discussion forms were filled out, it seems largely, if not wholly, by Mr Flynn. The appellant agreed it was his signature on most of them. The documents were:
·an "Agreement to Contract" (signed by the appellant),
·a tax file declaration (signed by the appellant),
·a form containing questions and answers about the appellant's health (there was uncertainty about whether the appellant signed this although he agreed he thought he answered the questions in it),
·form permitting deduction of tax (signed by the appellant),
·form concerning occupational health and safety and discrimination issues (signed by the appellant but not completed by him).
Mr Flynn spent about half an hour with the appellant. In addition to dealing with the documents, Mr Flynn talked about the work generally and told the appellant to be at the K & D site at 8am the following Friday and to see Phil Oakley. The appellant believed that he met Michael Flynn from TCS at the site before he went to see Mr Oakley, and had a brief discussion with him.
The appellant also said that Mr Ryan Flynn had told him that he could not claim workers compensation because he was a contractor. He also told him he could not claim sick leave or annual leave because he was not a full time worker, only working on a casual basis. The appellant spoke of receiving a letter from TCS a couple of weeks after he started work. Attached to that letter were a number of documents. One was an Odco Information Guide. He also received a document headed "Information for Contractors". The appellant was paid weekly for the work he did. He was given pay slips which told him how much. The money was however paid directly to a bank account. At all times payments to him came from TCS. Initially there was no allowance for superannuation but at some later date TCS began paying an amount to TasPlan for him.
The appellant worked at the K & D site from February 2008 until 23 September 2010. He was then injured. He was subsequently paid amounts under a personal accident insurance policy arranged through TCS.
The appellant was questioned before the Tribunal about what he understood from the Agreement to Contract document. The appellant accepted that:
·he understood there was no relationship of employer/employee between he and TCS,
·that TCS would not guarantee him work,
·that TCS would find work for him if they could but were under no obligation to give him work,
·that he was self-employed, and
·that he did not have to take whatever work TCS offered him.
The Agreement to Contract was a very short document. It had TCS's name at the top and a space for the contractor's name and address. In this case, the appellant's details appear. The document then provided:
"AGREEMENT TO CONTRACT
CONDITIONS OF CONTRACT
1I acknowledge and agree that there is no relationship of employer / employee with Tasmanian Contracting Services Pty Ltd (TCS) and that TCS does not guarantee me any work. I am self-employed and, as such, I am not bound to accept any work through TCS.
2I hereby agree to work for an agreed amount per hour for actual on-site hours, or job price to be agreed.
3I instruct TCS to make deductions under the PAYG system of taxation.
4I hereby agree that I have no claims on TCS in respect of Holiday Pay, Long Service Leave, Sick Pay, or any similar payment.
5I hereby agree that TCS has no responsibility or liability to me, except that I am guaranteed to be paid for actual on-site hours worked or agreed job price for work done.
6It is agreed that I must carry out all work that I agree to do through the agency of TCS in a proper manner and TCS is hereby guaranteed against faulty work. All work must be made good. Further, I agree to cover the work (where necessary) for Public Liability, Accident Insurance, Long Service, and Holiday Pay, and have no claims on TCS in respect of the above.
7I hereby agree to supply my own equipment, including safety equipment, where necessary to perform the work, and that I have no claim on TCS in respect of the above.
SIGNED:(CONTRACTOR) DATE: 20/2/08
SIGNED:DATE: 20/2/08
For and on behalf of: TASMANIAN CONTRACTING SERVICES PTY LTD"
Submissions and discussion
The starting point of the submissions of counsel for the appellant was that a conclusion that the appellant was a worker was reasonably open on the facts as found as was the conclusion he was not a worker. In those circumstances, relying on the words of Crawford J in the Protective Security case set out at par[13] of these reasons, any conclusion one way or the other was a question of fact and there could be no error in point of law to be dealt with. Counsel also submitted that the learned primary judge formed a view about the significance to be attached to the contract documents. That view was different from that expressed by the Chief Commissioner, which was that the description of the appellant in those documents was merely a label. Both views, he submitted, were reasonably open on the evidence. In those circumstances, there was no error in point of law for his Honour to even consider.
Counsel also submitted that his Honour made an error in that, rather than simply evaluating facts as found by the Chief Commissioner, he re-found some of those facts. While it was acceptable to evaluate the legal consequences of facts as found, it was not the role of an appellate court to re-find facts. In particular, counsel referred to what his Honour said at par[20] of his decision and compared it to what the Chief Commissioner said in his decision about the same matter. Counsel submitted that what the learned primary judge was doing was re-finding facts.
As to this particular complaint, as I said at par[20] of these reasons, I disagree. The Chief Commissioner's role was to determine the relationship between the appellant and TCS. It was not to determine the nature of any relationship between the appellant and K & D. Against that background, the Chief Commissioner at par[13] of his decision listed a number of facts he said were suggestive of a worker/employer relationship. It had to follow that the relationship being dealt with was that between the appellant and TCS. The facts the Chief Commissioner set out should therefore have related to that relationship. His Honour did not disagree with any of the facts set out by the Chief Commissioner in that paragraph, and he did not make findings inconsistent with them. All his Honour did was note that, in the findings he made, the Chief Commissioner appeared to have blurred the distinction between TCS and K & D.
When he commented about a blurring of the distinction between the two entities, his Honour did not in my view stray over the boundary as that concept was discussed by Walsh J in Bill Williams Pty Ltd v Williams (1972) 126 CLR 146 where his Honour said at 156:
"In some cases it is a difficult task to determine whether different conclusions or but one conclusion are or is reasonably open. It is easy, in endeavouring to make a decision on that question, to slip across the boundary which must be maintained between the evaluation of the legal consequences of facts already found and the making of findings of fact. In this case our attention must be confined to the facts which the learned judge stated as having been found by him. On a consideration of those facts, I have reached the conclusion that it was not a case in which his decision should have been held to have been erroneous in law."
Counsel ultimately submitted that, when comparing the facts of this case with those in the Protective Security case, the facts in that case were much stronger in the sense that the facts were much clearer. As Crawford J there said, it was close to fanciful to suggest that the person in that case was carrying on business as an independent contractor. That sort of conclusion clearly was not apposite here. As a consequence, counsel submitted it could not be said it was a necessary legal consequence of the facts as found that the appellant was not a worker.
Counsel for the appellant also dealt with what he described as the label/sham dichotomy. He submitted that it was clear that his Honour apprehended incorrectly that, for the term contractor in the documentation to be a label, he had to find the documents were a sham. In his written submissions, counsel said:
"The learned primary judge said at [42] that he was not prepared to dismiss the contractual documents as readily as his Honour found the Chief Commissioner had done and noted that there was no suggestion that the agreement or any of the related documents were a sham. It was not necessary however, for the Chief Commissioner's approach, for him to find that the contractual documents were a sham [41]-[42]. In Ferguson v John Dawson & Partners (Contractors) Ltd [1976] 1 WLR 1213 at 122 – 123 Megaw LJ made it clear that the nature of the relationship is to be determined by law and not by the label which the parties choose to put on it, and that it was not necessary to go so far as to find the contractual document containing the label to be a sham. Megaw LJ was cited with approval Protective Security Services v Bedelph (supra) at [33] per Crawford J (as his Honour then was) with whom Blow J agreed at [69]."
It followed, counsel submitted, that the learned primary judge's assessment that the appellant was a contractor was tainted by error because of his Honour's approach to the contractual documents. I do not take issue with the law as stated by counsel for the appellant in the preceding paragraph. With respect, however, I do take issue with the manner in which counsel has categorised his Honour's approach. Paragraph [42] of his Honour's reasons is set out at par[23] of these reasons. His Honour did not conclude that, for the Chief Commissioner to have found the term contractor to be a label, he had to have found the transaction embodied in the documents was a sham. He simply noted there was no suggestion the documents were a sham. He then went on to comment further about the documents. A consideration of the contractual documents was clearly from his Honour's reasons, only one factor he considered.
In the course of his reasons, his Honour evaluated aspects of the findings made by the Chief Commissioner. The application of the test to determine whether or not there was an error of law did not preclude a value judgment based on reasonableness in order to decide whether a particular result necessarily followed from established facts. Blow J in Protective Security said at par[75]:
"75 There is ample Australian authority to support the proposition that an assessment of the reasonableness of a conclusion as to facts falling within a statutory expression may be required in order to determine whether a tribunal or court has erred in law in reaching that conclusion. In Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1 at 7, Mason J (with whom Gibbs, Stephen, Murphy and Aickin JJ agreed) referred to Brutus v Cozens[1972] UKHL 6; [1973] AC 854 and commented in relation to it:
'The only question raised was whether the appellant's behaviour was "insulting". As it was not unreasonable to hold that his behaviour was insulting, the question was one of fact.'"
His Honour, in the course of the evaluation process he undertook, considered the reasonableness of the conclusions reached by the Chief Commissioner. He clearly determined that, in the context of whether some of those conclusions were reasonable or not, some were not. In the light of that conclusion he then determined that the Chief Commissioner's conclusion that the appellant was a worker was not reasonably open on the facts.
The issue for this Court is whether his Honour made an error when he concluded that it was a necessary result of his assessment of the facts found that the appellant was not a worker. If the Court is satisfied that there was more than one conclusion reasonably open on the facts as found, then there was no error in point of law for his Honour to even consider, and the appeal should succeed.
In summary, his Honour canvassed the facts as found. He evaluated those facts by reference to the conclusions drawn by the Chief Commissioner from them. He was entitled to make a value judgment as to whether those conclusions were reasonably open on the facts found. He also canvassed the relevant authorities. He acknowledged that the question of whether or not there was a contract of service involved a consideration of many factors. He also acknowledged that the question of whether or not a person was a worker needed to be determined by reference to the totality of their relationship, and not merely from the terms of their contract. He had regard to the terms of the relevant contract, and determined at par[42] that, to a substantial degree, what the parties did reflected the terms of their agreement and the related documents.
His Honour concluded, after going through the process I have identified, that the conclusion he reached that the appellant was not a worker working under a contract of service was a necessary result of his process of evaluation. Having regard to the matters I have canvassed, I am unable to see in the circumstances that the appellant has demonstrated the learned primary judge made the errors asserted. I would dismiss the appeal.
File No 801/2011
ANTHONY HENRY YOUNG v
TASMANIAN CONTRACTING SERVICES PTY LTD
REASONS FOR JUDGMENT FULL COURT
WOOD J
3 July 2012
I have had the benefit of reading the reasons for judgment of Tennent J. I agree with those reasons. I have also had the opportunity to read the reasons of Blow J, and the additional comments his Honour makes. I wish to record my agreement with those comments and the view reached by his Honour that the only conclusion reasonably open to the Tribunal and to the learned primary judge was that the appellant was an independent contractor, and not a "worker" within the meaning of the Act under consideration. The appeal should be dismissed.
58
3
1