Young, Anthony Henry v Tasmanian Contracting Services Pty Ltd

Court:Full Supreme Court
Docket Number:861/2011
Judge:Blow J, Tennent J, Wood J
Judgment Date:03 Jul 2012
Jurisdiction:Tasmania

[2012] TASFC 1

[2011] TASSC 49

SUPREME COURT OF TASMANIA (FULL COURT)

Blow, Tennent and Wood JJ

861/2011

Young, Anthony Henry
and
Tasmanian Contracting Services Pty Ltd

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]

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.

REASONS FOR JUDGMENT
FULL COURT
Blow J
1

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.

2

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 theWorkers 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.

3

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 thatarrangement, 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.)

4

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.

5

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.

Tennent J
6

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 theWorkers Rehabilitation and Compensation Act 1988 (‘the Act’) and employed by TCS.

7

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...

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