Zarkovic v APA Monet Pty Ltd

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Zarkovic v APA Monet Pty Ltd [2025] NSWPIC 147
APPLICANT:	Mirko Zarkovic
RESPONDENT:	APA Monet Pty Limited
MEMBER:	Adam Halstead
DATE OF DECISION:	11 April 2025
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987 (1987 Act); Workplace Injury Management and Workers Compensation Act 1998 (1998 Act); claim for payment of weekly compensation pursuant to section 37 of the 1987 Act and for medical expenses pursuant to section 60 of the 1987 Act; whether the applicant was a worker pursuant to section 4 of the 1998 Act or a deemed worker pursuant to section 5 of the 1998 Act and clause 2 of Schedule 1 to the 1998 Act; correct calculation for pre-injury average weekly earnings (PIAWE); Held – applicant a worker or deemed worker at the time of injury; PIAWE is $1,575.87 and subject to indexation; general order for medical expenses.
DETERMINATIONS MADE:	The Commission determines: 1. At all material times, the applicant was a worker or deemed worker employed by the respondent. 2. The applicant had pre-injury average weekly earnings of $1,575.87, which is subject to indexation. 3. General order pursuant to s 60 of the Workers Compensation Act 1987 for medical and related treatment expenses. A brief statement is attached setting out the Commission’s reasons for the determination.

STATEMENT OF REASONS

BACKGROUND

These proceedings are primarily about the nature of the contractual relationship between the parties. The applicant, Mr Mirko Zarkovic, commenced undertaking carpentry work for the respondent, APA Monet Pty Ltd, from 19 September 2023. He was injured while working at a job site on 27 February 2024 when a door fell on him.
The applicant claims to have been a worker employed by the respondent at the time or, in the alternative, a deemed worker. The applicant seeks payment of weekly compensation and expenses for medical and related treatment. The respondent disputes the claim made by the applicant and denies he was a worker or deemed worker.
The applicant filed an Application to Resolve a Dispute (ARD) in the Personal Injury Commission (Commission) on 29 October 2024 in relation to the disputed claim.

ISSUES FOR DETERMINATION

The following issues remain in dispute and require determination by the Commission:
(a) whether the applicant was a “worker” according to s 4 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act);
(b) whether the applicant was a “deemed worker” according to s 5 and cl 2 of Sch 1 to the 1998 Act, and if so,
(c) the amount of the applicant’s pre-injury average weekly earnings (PIAWE).
The respondent accepts it would be liable for the payment of weekly compensation and to pay reasonably necessary medical and related treatment expenses if the applicant is found to be entitled, that is, as a worker or deemed worker.

PROCEDURE BEFORE THE COMMISSION

The matter was before the Commission for arbitration hearing on 5 February 2025.
Mr Adhikary of counsel, instructed by Taylor & Scott Lawyers, appeared for the applicant. The respondent was represented by Mr Gaitanis of counsel, instructed by Bartier Perry Lawyers. Both parties provided written submissions following the arbitration hearing.
I am satisfied the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I endeavoured to bring the parties to the dispute to an acceptable settlement. The parties had sufficient opportunity to explore settlement. They were unable to reach an agreed resolution of the dispute.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission, without objection, and considered in making this determination:
(a)    ARD and attached documents;
(b)    Reply with attachments from the respondent (Reply);
(c)    Application to Lodge Additional Documents (ALAD) filed by the respondent on 17 December 2024;
(d)    ALAD filed by the applicant on 10 January 2025, and
(e)    ALAD filed by the respondent on 28 February 2025.
There was no application to call oral evidence or cross-examine any witness at the hearing.

CONSIDERATION, FINDINGS AND REASONS

Was the applicant a ‘worker’?

Section 4 of the 1998 Act defines a “worker” as:
“worker means a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing).”
There is no contention about the existence of any training contract between the parties and so that aspect of the definition at s 4 is not relevant in these proceedings. I must therefore consider whether the applicant entered into or worked under a contract of service with the respondent. The fundamental question, as identified by the High Court in Hollis v Vabu,[1] being: was the applicant serving his employer in the employer’s business (contract of service) or carrying on a trade or business of his own (contract for services)?
[1] [2001] HCA 44.
The applicant bears the onus, on the balance of probabilities, to establish that he was a worker (or deemed worker), according to s 4 (or s 5) of the 1998 Act.
Establishing that a contract of service exists involves the application of contract law principles such as offer and acceptance, consideration and mutual obligation. A contract of service requires a mutuality of obligation in the formation of the contract with the intention to create legal relations: Dietrich v Dare.[2] If there is unambiguous evidence a person offered services for reward, and the proposed employer accepted the offer on the basis that payment for those services would be made, there will be an intention to enter into legal relations, and a contract of employment will exist.
[2] (1980) 30 ALR 407.
The “multi-factor test”, established by the High Court in Stevens v Brodribb Sawmilling Company Pty Limited[3] (Stevens), requires consideration of various indicia to determine whether an employment (contract of service) or principal and independent contractor (contract for services) relationship exists. Relevant indicia that indicate employment include the nature and extent of employer control, direction and supervision over a worker, mode of remuneration, provision and maintenance of equipment, obligation to work, hours of work and provision for holidays, deduction of income tax, ability to delegate work, the right of the employer to have a particular person do the work, right to suspend or dismiss the worker, right to the worker’s exclusive services, and the right to stipulate the place of work.
[3] [1986] HCA 1.
According to the High Court in ZG Operations Australia Pty Ltd v Jamsek,[4] to establish whether a person is an employee or independent contractor, it is necessary to give primacy to the legal rights and obligations contained in the contract entered between the parties rather than their subsequent conduct. In the related decision[5] of Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd,[6] referring to Stevens, the High Court found the characterisation of a relationship as one of employment or one of principal and independent contractor is to be determined by reference to “the totality of the relationship between the parties”, generally with reference to the contract when entered.
[4] [2022] HCA 2.
[5] As far as similar legal concepts were considered, and the judgments were handed down together.
[6] [2022] HCA 1.
There was no written contract between the parties in this matter and although some of the key terms of their oral agreement are evident, such as the rate and method of pay, others were not recorded in detail at the commencement of their relationship. The terms of the contract can however be inferred from the arrangements between the parties and so the indicia identified in Stevens therefore require consideration to ascertain the totality of the relationship between the applicant and respondent.
The applicant’s unchallenged evidence about the nature of the relationship between the parties is that he “commenced employment” with the respondent on 19 September 2023 as a carpenter[7] and was paid an hourly rate of $55 plus GST for regular hours of work[8] on a weekly basis. According to the applicant, the relationship ended on 1 March 2024.[9] He held an Australian Business Number (ABN) but did not have a business name. The applicant issued weekly invoices for his time to the respondent and described his working arrangement as:[10]
“17. My work was directed by [the respondent] and performed at the request of the company. I was assigned work on site by [the respondent], and their foreman Osvald determined when and where I should work and what work was required to be done. I did not have a high level of discretion and flexibility about how I performed work. I worked set hours determined by [the respondent] on site, at the premises of their choosing. I had no right to delegate tasks to another, but was directly hired by the company for my work.
18. While employed by [the respondent] I did not advertise my services or work with any other company. I also did not have any employees. I was solely employed by [the respondent] during normal business hours during my employment with the company. I had no financial or commercial risk in my work as a carpenter; I was simply paid an hourly rate for my work.”
[7] ARD p 7.
[8] ARD p 5.
[9] ARD p 7 at [4].
[10] ARD pp 8-9.
The applicant also stated that “[d]uring the period I was employed by [the respondent] I was exclusively working for the company and did not seek any additional work” and the respondent supplied all required building materials and any “expensive tools”. Only “simple tools” were provided by the applicant.[11]
[11] ARD p 5 at [25].
Other than holding an ABN and invoicing the respondent, including for goods and services tax (GST), the working arrangements described by the applicant are consistent with an employment relationship, wherein he was employed by the respondent.
The respondent highlighted that holding an ABN, invoicing (with GST), attending to his own taxation obligations and not receiving any provision for superannuation or leave all indicate the applicant was not employed. These and other relevant issues were summarised in the respondent’s submissions as:[12]
“26. The applicant had his own ABN and charged the respondent GST. He was responsible for his own tax obligations. The applicant did not receive any employment benefits such as superannuation or leave entitlements. The applicant’s tax return show he was conducting a business as a sole trader with business income and deductions. The extent of deductions (which include substantial amounts for materials and tools) claimed by the applicant establish a commercial enterprise for his own benefit. The applicant is aware of the difference between working for wages and for himself as a sole trader, and has declared that is the case in the claim form. The applicant did not wear a uniform to indicate he was working in the respondent’s business. The evidence does not establish the respondent had any significant control over the applicant as to how he performed his duties including the use of his tools. There is no evidence the applicant refused work or could not work between 6 December 2023 and 28 January 2024 as he was ‘employed’ by the respondent.”
[12] Respondent’s submissions p 8.
It is accepted the matters highlighted by the respondent suggest there was no employment relationship. The applicant did acknowledge that he had worked both in contracting and employed roles previously[13] and so it must be accepted that he was aware of the difference as contended by the respondent, which is in any case evident from the applicant’s holding of an ABN and issuing regular invoices for work. The applicant referred to a 29 May 2024 letter produced by the respondent’s accountant, Vedran Maric of BVM Accountants and Business Consultants, that states while the applicant “worked for [the respondent] under his personal ABN” it was nonetheless an arrangement where he was “directly employed by [the respondent”. Although the accountant’s view is not considered to be conclusive about the nature of the arrangement, it is instructive about how the applicant’s role was regarded.
[13] ARD p 5 at [25].
The respondent also emphasised the applicant had referred to himself as a “sole trader”. However, a “label” the parties may choose to describe their relationship is not determinative of the nature of the relationship.[14] As was identified by Bromberg J in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (no 3)[15] labels “are of little assistance if those labels are inconsistent with the real substances or reality of the relationship involved”. The court also observed that “[o]btaining an ABN is a simple process in which the existence of a business is not required to be demonstrated”.[16] I therefore do not consider the fact the applicant may have referred to himself as a “sole trader” in a claim form and was the holder of an ABN who issued invoices, including with a GST component, to be determinative as to the nature of the relationship; it does though weigh against employment.
[14] JMC Pty Limited v Commissioner of Taxation [2022] FCA 750 at [26] per Wigney J, referring to various paragraphs in Personnel Contracting.
[15] [2011] FCA 366 at [246].
[16] At [244].
The respondent identifies the nature of the applicant’s tax returns as having business income and business-like deductions as of significance. The nature of the work-related deductions could though apply equally to an employed tradesman or one who work on their own account. The “business income” reporting is a tax accounting label that describes the type of income, which in the applicant’s case is necessary, unsurprisingly, due to him invoicing for his work. When viewed in the context of the overall nature of the arrangement between the parties, I do not consider these issues to have the substantial weight sought to be attributed by the respondent.
The applicant’s day-to-day working activities were in serving the business interests of the respondent, performing tasks under supervision and being subject to direction. Job sites were chosen by the respondent, as was the allocation of work. The work undertaken by the applicant was for the benefit of the respondent and at its risk, where he did not employ staff or subcontract that work. The applicant performed work at the location and direction of the respondent or its authorised delegate, Mr Osvald, and he was paid for the work on an hourly basis, rather than per job or quotation as would be expected of a contractor. It is also noted that on the date the applicant was injured, he commenced work at the office of the respondent, travelled to the job site with others, performed the required work (during which injury occurred), then travelled back to the respondent’s office before finishing for the day and going home.
All of these are significant indicators of employment, none suggest a contract for services. Control of work functions and environment was overwhelmingly exercised by the respondent; a key indicator of employment. Other than the financial and taxation administrative arrangements, there is little else to demonstrate the applicant was anything other than employed. The evidence does not support a finding that the applicant was working on his own account, that is, as “an entrepreneur working in their own business” as was accepted by Snell DP as another important indicator in UPVC Window Solutions Pty Ltd v Workers Compensation Nominal Insurer (icare).[17]
[17] [2023] NSWPICPD 11 at [130].
The weight of the evidence is that the totality of the relationship between the applicant and respondent was that of employment. Accordingly, I find that the applicant was a worker for the purposes of s 4 of the 1998 Act. Notwithstanding that finding, I have also considered whether the applicant was a ‘deemed worker’ according to s 5 of the 1998 Act.

Was the applicant a ‘deemed worker’?

Section 5 of the 1998 Act provides that Sch 1 to the 1998 Act has effect to determine whether a person is deemed to be a worker. The applicant has the onus to establish he was a deemed work on the balance of probabilities. Clause 2 of Sch 1 provides:
“Other contractors
(1) Where a contract—
(a)to perform any work exceeding $10 in value (not being work incidental to a trade or business regularly carried on by the contractor in the contractor’s own name, or under a business or firm name), or
(b)(Repealed)
is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, taken to be a worker employed by the person who made the contract with the contractor
…”
According to the Court of Appeal in Scerri the applicant needs to establish all the following:[18]
“1.     that they were a party to a contract with the respondent to perform work;
2.     that work exceeds $10 in value;
3.     that work is not work incidental to a trade or business regularly carried on by the applicant in their own name or under a business or firm name; and
4.     that the applicant has neither sublet the contract nor employed workers in the performance of it.”
[18] At [399].
It is undisputed there was an oral contract between the parties for the applicant to perform work for the respondent. At $55 per hour, the value of the work was more than $10.
The first unresolved issue to consider is whether the work was not incidental to a trade or business regularly carried out by the applicant in his own name or under a business or firm name. In Pasqua v Morelli Constructions Pty Ltd[19] (Pasqua), Roche DP observed at:
“As observed by Dixon J in Humberstone, a distinction must be drawn between an independent contractor whose relationship with the principal is ‘special or particular’, on the one hand, and, on the other hand, an independent contractor who ‘performs work successively or perhaps concurrently for his customers or others in the course of a definite trade or business carried on systematically or who holds himself out as ready to do so.’[20]
…
[I]t is necessary to consider whether the contractor is in business for himself or herself and whether a trade or business is carried on systematically and regularly.”[21]
[19] [2009] NSWWCCPD 153.
[20] At [50].
[21] At [58].
The underlying principle of whether “holding out” is necessary was considered in Malivanek v Ring Group Pty Ltd:[22]
“The question of whether there must be a ‘holding out’ before an applicant is prevented from relying on Sch 1 was considered by the High Court in Higgins v Jackson [1976] HCA 37; 135 CLR 174 (Higgins) at 176 where Barwick CJ (Stephen, Mason and Murphy JJ concurring) said:
‘The subsection requires the business to be carried on with regularity. Thus a contractor who regularly contracts can scarcely be said not to hold himself out as carrying on the business in the course of which he makes the contracts. But in my opinion, there is no separate element required by the subsection of holding out. It is sufficient, as I have said, that the contractor regularly carries on business in his own or a firm name.’”
[22] [2014] NSWWCCPD 4.
The evidence does not establish the applicant’s work for the respondent was incidental to a trade or business regularly carried out in his own name or under a business or firm name. Although it may be argued the applicant’s ABN was an indicator of the carrying out of a business, there is no evidence of him doing so other than for the respondent. In the circumstances, it is not accepted the work carried out by the applicant was incidental to a business he otherwise carried on.
There is also no evidence of the applicant subcontracting his work or employing staff.

Accordingly, the requirements of s 5 of the 1998 Act are satisfied and the applicant is found to have been a deemed worker employed by the respondent.

What was the applicant’s PIAWE?

The applicant contends that his PIAWE were $2,346.29 given the total amount invoiced from 19 September 2023 to 27 February 2024 was $39,887 and as he worked for only 17 weeks in the 23-week period, average income should be calculated only across the 17 working weeks: 39,887 ÷ 17 = 2,346.29
The respondent asserts PIAWE for the applicant of $1,562.28 on the basis that GST should not have been included in the applicant’s total income amount and that the full period of 23 weeks and one day should be applied as the divisor, as there is no reason to exclude the six-week period when no income was received.
There is no dispute that the relevant period from 19 September 2023 to 27 February 2024 is correct, notwithstanding an apparent typographical error in the respondent’s submission citing an end date of “27 September 2024”. That period is a total of 23 weeks and one day as identified by the respondent. It is evident the applicant invoiced on a weekly basis and so the relevant period is appropriately aligned to a weekly basis in accordance with cl 8D of the Workers Compensation Regulation 2016 (the Regulation) to 23 weeks.
The respondent’s submission about the exclusion of GST is correct, as any GST the applicant may have received was not earnings, which is defined at cl 6(1) of Sch 3 to the Workers Compensation Act 1987 (the 1987 Act) as income of the worker received by the worker for work performed in any employment. The GST component was collected by the applicant for remittance to the Commonwealth not for his own benefit as income. With GST excluded, the applicant’s total earnings during the 23-week period were $36,245.
Although the applicant contends a divisor for 17 weeks should be applied, there is no basis for adjustment of the divisor in accordance with the Regulation. Clause 8D has no application to discount the six-week period when the applicant received no income because there is no evidence before the Commission that he was on a period of unpaid leave. An inference could perhaps be drawn given the time of year the applicant did not work (being around the generally observed December-January holiday break), but in the absence of specific evidence about the reason for not working, the provision cannot be applied.
Accordingly, the applicant’s PIAWE is calculated as: $36,245 ÷ 23 = $1,575.87
Indexation is to be applied to that amount from 1 April 2024 and 1 October 2024, with the applicable published indexation factors being 1.0179 and 1.0198 respectively. Applying those to PIAWE as determined results in the following amounts (rounded to the nearest $10 in accordance with s 82D of the 1987 Act):
From 1 April 2024 to 30 September 2024: 1,575.87 x 1.0179 = 1,600
From 1 October 2024 to 31 March 2025: 1,600 x 1.0198 = 1,630
Indexation is also to be applied to PIAWE from 1 April 2025 once the indexation factor is available and then thereafter in accordance with s 82A of the 1987 Act as may be required.

Medical and related treatment expenses

The respondent accepts that if the applicant were found to be entitled to an award for compensation, then a general order for medical expenses pursuant to s 60 of the 1987 Act would be appropriate. Given a relevant finding as to him being a worker or deemed worker has been made, such an order will be made accordingly.

Capacity

In its written submissions, the respondent raised, for the first time, the issue of the applicant’s work capacity after having reviewed bank statements provided by the applicant for the purposes of resolving the dispute about PIAWE.
The respondent has requested this new issue be agitated in the current proceedings and requests the matter be relisted to do so. The applicant opposes the respondent’s request and highlights there had been sufficient opportunity for those records to be obtained at a preliminary stage of the claim, which was not done. The applicant submits that capacity has not been put in issue previously, which is accepted as correct.
Section 289A of the 1998 Act provides that a dispute cannot be referred for determination by the Commission unless it concerns only matters previously notified as disputed, that is, prior to the commencement of the proceedings; that was not done. However, the matter now raised by the respondent is arguably a “matter subsequently arising” from the dispute that is before the Commission and may be dealt with if I consider it to be in the interests of justice to do so.
This new issue raised by the respondent relates to a completely different matter to those before the Commission in the current proceedings. The nature of that newly identified dispute, should it now be pursued, would call for evidence of a completely different type and have the effect of commencing new proceedings within the current matter. It is not accepted as appropriate; the applicant would be at a disadvantage and I do not accept it is in the interest of justice to do so. The new issue can be dealt with by the respondent in a different way should it intend for it to be pursued. The respondent’s request is refused accordingly.

SUMMARY

The applicant was a worker or deemed worker employed by the respondent and is the amount of his PIAWE was $1,575.87, which is subject to indexation. As the applicant is entitled to compensation as a worker or deemed worker, the respondent is liable for reasonable medical and related treatment expenses. The respondent’s request for the matter to be relisted is refused.

[2025] NSWPIC 147

11 April 2025