Giljevic v Yaraka Holdings Pty Ltd [2005] ACTSC 19 (1 April 2005)

Last Updated: 11 May 2005

ANTE GILJEVIC v YARAKA HOLDINGS PTY LIMITED

[2005] ACTSC 19 (1 April 2005)

WORKER'S COMPENSATION - worker - casual builder's labourer - whether contract of service or contract for services - deemed worker.

Workers Compensation Act 1951, s 11, s 197

Magistrates Court (Civil Jurisdiction) Act 1982, ss 387(2), 391 and 393 (now repealed and replaced by identical provisions in Part 4.5 of the Magistrates Court Act 1930)

Workplace Relations Act 1996 (Cth), reg 30B

Uranerz (Aust) Pty Ltd v Hale (1980) 30 ALR 193

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588

Hollis v Vabu Pty Ltd (2001) 207 CLR 21; [2001] HCA 44

Abdalla v Viewdaze Pty Ltd (2003) 121 IR 215

Jennings Industries Ltd v Negri (1982) 44 ACTR 9

Husher v Husher (1999) 197 CLR 138; [1999] HCA 47

Humberstone v Northern Timber Mills (1949) 79 CLR 389

Smajlagic v Karhunan [1999] NSWIRComm 117

Ransom v Arthur Anderson 413/99 M Print R4178

Reed v Blue Line Cruises Limited (1996) 73 IR 420

Glass, McHugh and Douglas, The Liability of Employers in Damages for Personal Injury

2^nd ed (1979)

ON APPEAL FROM THE MAGISTRATES COURT

No SCA 49 of 2004

Judge: Connolly J

Supreme Court of the ACT

Date: 1 April 2005

IN THE SUPREME COURT OF THE )

) No SCA 49 of 2004

AUSTRALIAN CAPITAL TERRITORY )

ON APPEAL FROM THE MAGISTRATES COURT

BETWEEN: ANTE GILJEVIC

Appellant

AND: YARAKA HOLDINGS PTY LIMITED

Respondent

ORDER

Judge: Connolly J

Date: 1 April 2005

Place: Canberra

THE COURT ORDERS THAT:

1. The appeal be upheld with costs.

2. The award for the respondent be set aside.

3. The matter be remitted to the Magistrates Court for determination and entry of an appropriate award in favour of the appellant.

1. This is an appeal from a decision of a Magistrate that the appellant was not a worker employed by the respondent pursuant to the provisions of Chapter 3 of the Workers Compensation Act 1951 (the Act). The appeal again raises the distinction between an employee, who in the event of an industrial accident is covered by the employer's workers compensation insurance, and an independent contractor, who is required to bear his/her own insurance against unforeseen accidents. It was argued before the learned Magistrate that the appellant was both an employee under the common law test and, in the alternative, that the appellant fell within the provisions of the Act which deem certain contractors to be employees for the purposes of the Act. The learned Magistrate found against the appellant on both grounds, and the appeal is brought on both points.

2. An appeal from a Magistrate's decision on a worker's compensation application lies to a single judge of this Court pursuant to s 197 of the Act, and ss 387(2), 391 and 393 of the Magistrates Court (Civil Jurisdiction) Act 1982 (now repealed and replaced by identical provisions in Part 4.5 of the Magistrates Court Act 1930). The provisions governing appeals of this nature, which are to proceed as a rehearing, are well established and regularly applied in appeals to this Court from workers compensation appeals (Uranerz (Aust) Pty Ltd v Hale (1980) 30 ALR 193). Although there has been considerable attention focussed on the question of the extent to which an appellate court can or should depart from a finding of fact that is based on the credibility of a witness before the first instance judicial officer (Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588), it was common ground that this appeal will turn on the question of whether the learned Magistrate applied the appropriate legal test to the facts that she found, rather than the facts themselves. Counsel for the appellant acknowledged that, where the learned Magistrate had made findings of fact adverse to the appellant and had preferred evidence given by Mr Bailey, a director of the respondent, the appeal should proceed on the basis of those findings.

3. The appellant brought a claim for workers compensation following an industrial accident that occurred on 9 August 2002. He was performing the duties of a builder's labourer, demolishing a steel shed on a building site in Fyshwick in the Australian Capital Territory. It was common ground that he was working for the respondent on that day. The learned Magistrate's findings in relation to the accident were set out at AB 7-8 as follows -

By 9 August 2002 the applicant had been working for several days at the premises of Pirie Printing in Fyshwick. It was a one-man job. Mr Bailey had asked him to brick up a window and then to demolish a steel shed. Mr Bailey gave him a screw gun, a pinch bar and a ladder. The applicant told Mr Bailey that he would bring his tall ladder along to use as well. He agreed that he did not need to be told how to do basic brickwork as he understood what had to be done but said that he had been told by Mr Bailey how to take the roof down and what materials to put aside and save. Some time after he started the work he phoned Mr Bailey and told him that the drill attachment to the screw gun he was using did not fit all the sizes of the screws he needed to remove. He asked him to get the correct size for him. Mr Bailey subsequently arrived and gave him the correct socket bit. Later, as the applicant was attempting to prise apart some sheets of metal on the roof of the shed, he fell onto the concrete floor below. He was taken to the Canberra Hospital and spent seven or eight weeks there.

As a result of the accident, the applicant's pelvis was fractured as was his left knee. He also sustained injuries to his head, back and to his stomach.

4. The appellant is a man in his early 60's who was born in Croatia. The learned Magistrate observed (AB 5) that "he has a hearing problem which is compounded by the fact that his use, and understanding, of English is on occasions problematic". The learned Magistrate found that he worked on his father's farm after leaving school at about the age of 12 and then took up apprenticeships as a blacksmith and mechanic before undertaking military service. Upon his arrival in Australia in 1967 he worked as a welder for a period and then commenced working on building sites as a general labourer doing concreting, masonry and carpentry work but that he had no formal trade qualifications.

5. The learned Magistrate found that in 1995 or 1996 the appellant met Mr Bailey and often thereafter performed work for the respondent. She found (AB 6) -

It was not every day but most of the time. According to the applicant his work for the respondent, in general terms, involved him performing activities of hard labouring and concreting on construction building sites. Mr Bailey would phone him when he had work for him. It was up to the applicant whether he accepted or rejected the work offered. Mr Bailey told him where they would be working, what time they would start and what time the work finished.

6. The learned Magistrate did not fully accept the appellant's evidence that his times were directed by Mr Bailey, saying that (AB 15) -

According to Mr Bailey, he did not have control or direction over when the applicant would finish each day, but he did indicate that at some sites they were asked to start later than was traditional because, for example, of noise constraints. In that case he would tell the applicant and everyone else involved in the job of those restrictions. If the applicant had finished a job, then he would leave early and if there was only an hour or so work to go he might on occasion stay back to finish it. I accept that the applicant's working hours were dictated more by custom in the building industry and the task at hand, than, as the applicant had stated "John always made the decision of when the work will start and when the work will end".

7. It was common ground that the respondent would pay the applicant at an hourly rate, and that this would be by cheque, originally paid to a partnership between the appellant and his then wife, and in more recent times directly to the appellant. The learned Magistrate found (AB 7) -

He was paid by the respondent for the number of hours he worked. On some days this would be seven or eight hours and on other days as little as two or three or four hours. He worked different hours on different days with no particular pattern or reason (he did not always start or finish at similar times). The applicant earned $25 an hour. This had increased to $27.50 an hour at the time of the accident. The applicant was also paid at an hourly rate by some of the others for whom he worked. On occasions, Mr Bailey would ask the applicant if he was short of money and if so, might give him a cheque for $1,000 or $2,000 to tide him over until he was next paid. Both men kept a record of the work undertaken by the applicant and they would use these records to reconcile the payments made by Mr Bailey with the number of hours worked by the applicant to see if the applicant had been overpaid or whether further money was due to him. These reconciliations would take place at no particular time just when it suited both men. Mr Bailey gave the applicant a cash bonus at Christmas time.

8. It was common ground that the appellant did not work solely for the respondent, but undertook similar building labouring work for others in the construction industry. The learned Magistrate accepted Mr Bailey's evidence that (AB 14) -

He said that he would ring the applicant and ask him if he could come to do the work and that on most occasions he said yes. He said that there were occasions when the applicant could not come straight away because he was working for someone else but could not comment as to how often that happened. He could not detail a specific instance where the applicant refused to work for him or stopped working because of being offered other work and said "If Tony was working for me at the time, it was a discussion and by mutual arrangement so that he didn't miss out on other jobs where he may be earning - he may be able to fit in (sic)".

9. The extent to which the appellant derived his income from the respondent and other sources has varied over time. The appellant's taxation returns were in evidence, and an analysis of these prepared by the solicitors for the respondent was also put in evidence. It was common ground that in the year ending 30 June 2001 83 per cent of the appellant's gross income of $34,914 came from the respondent, and in the year ending 30 June 2002 45 per cent of the appellant's gross income of $43,655 came from the respondent.

10. It was common ground that the appellant would use his own tools, but "if he did not have the appropriate equipment with him or did not own a particular tool he would use Mr Bailey's" (AB 14). Additional equipment would be purchased by the appellant on the respondent's account at a Canberra hardware store. The appellant's taxation returns show that he did claim depreciation on tools, being a jack-hammer, concrete mixer and grinder, but these were disclosed as having an original total cost of less than $300 in total.

11. It is common ground that there was never a written contract between the parties.

Was the appellant an employee at common law?

12. Mr Crowe, for the appellant, argues that the learned Magistrate fell into error in failing to properly apply the common law test of whether the activities of a worker amount to a contract of service or a contract for services set out by the High Court in Hollis v Vabu Pty Ltd (2001) 207 CLR 21; [2001] HCA 44. This case was referred to by her Worship, but she concluded that (AB 24) -

... the legal relationship between the two parties is more appropriately characterised as principal and independent contractor rather than employer and employee. That is, to use the language of the legislation, that there was not a contract of service but rather numerous contracts for services entered into between the parties over the years.

13. The question in Hollis v Vabu was whether a person injured by a bicycle courier could hold the bicycle courier company vicariously liable for the actions of the courier. The approach adopted by the High Court to determine whether the courier was an employee (and so the employer would be vicariously liable) or an independent contractor is, it was common ground, equally applicable to the question of whether the worker is an employee or contractor for workers compensation purposes. In the joint judgment of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ, their Honours said at 38 [39] -

In Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia (1931) 46 CLR 41, Dixon J explained the dichotomy between the relationships of employer and employee, and principal and independent contractor, in a passage which has frequently been referred to in this Court Kondis v State Transport Authority (1984) 154 CLR 672 at 691-692; Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 574; Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 at 329-330, 366. His Honour explained that, in the case of an independent contractor, Colonial Mutual (1931) 46 CLR 41 at 48 -

[t]he work, although done at [the principal's] request and for his benefit, is considered as the independent function of the person who undertakes it, and not as something which the person obtaining the benefit does by his representative standing in his place and, therefore, identified with him for the purpose of liability arising in the course of its performance. The independent contractor carries out his work, not as a representative but as a principal.

14. Their Honours observed that the old test of whether the contract placed the supposed employee as subject to the command of the employer was of limited relevance in modern conditions, citing a passage from Glass, McHugh and Douglas, The Liability of Employers in Damages for Personal Injury (2^nd ed (1979)) where the learned authors say -

The control test was the product of a predominantly agricultural society. It was first devised in an age untroubled by the complexities of a modern industrial society placing its accent on the division of functions and extreme specialisation. At the time when the courts first formulated the distinction between employees and independent contractors by reference to the test of control, an employer could be expected to know as much about the job as his employee. Moreover, the employer would usually work with the employee and the test of control and supervision was a real one to distinguish between the employee and the independent contractor.

15. It is clearly the case that in many modern workplaces young workers, who are clearly employees, may be employed to undertake tasks related to information technology in circumstances where the employee's skills in relation to using modern computers far exceed that of the employer, so that the employer would have a limited ability to "control" the manner of the exercise of the task assigned to the worker.

16. After noting that the control test was one factor that could provide assistance in determining whether a given worker was an employee or an independent contractor, the majority in Hollis v Vabu concluded (at 41 [47]) that -

... the Court of Appeal fell into error in making too much of the circumstances that the bicycle couriers owned their own bicycles, bore the expenses of running them and supplied many of their own accessories. Viewed as a practical matter, the bicycle couriers were not running their own business or enterprise, nor did they have independence in the conduct of their operations. A different conclusion might, for example, be appropriate where the investment in capital equipment was more significant and greater skill and training were required to operate it.

17. The appellant's case is that the Magistrate fell into error in making too much of the taxation arrangements, whereby the appellant originally operated as a partnership, made deductions for the use of tools and vehicles, and also did work for other builders, and concluded that (AB 21) -

Whilst the applicant said that he did not regard himself as an independent contractor, I am satisfied that the way he fashioned his financial and business arrangements indicates to the contrary.

18. Mr Crowe drew my attention to a decision of the Australian Industrial Relations Commission in Abdalla v Viewdaze Pty Ltd (2003) 121 IR 215 where, in determining an appeal on the question of whether a worker is an employee for the purpose of termination of employment provisions, the Full Bench provides a summary of High Court authority to date on the relevant approach to the question. While a decision of even a Full Bench of the Australian Industrial Relations Commission is not binding on this Court, the reasoning of Lawler VP, Hamilton DP and Bacon C is, with respect, useful and instructive. They begin their analysis by saying at 228 -

Following Hollis v Vabu, the state of the law governing the determination of whether an individual is an employee or an independent contractor may be summarised as follows:

(1) Whether a worker is an employee or an independent contractor turns on whether the relationship to which the contract between the worker and the putative employer gives rise is a relationship where the contract between the parties is to be characterised as a contract of service or a contract for the provision of services. The ultimate question will always be whether the worker is the servant of another in that other's business, or whether the worker carries on a trade or business on his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own. This question is answered by considering the totality of the relationship.

(2) The nature of the work performed and the manner in which it is performed must always be considered. This will always be relevant to the identification of relevant "indicia" and the relative weight to be assigned to various "indicia" and may often be relevant to the construction of ambiguous terms in the contract.

(3) The terms and terminology of the contract are always important and must be considered. However, in so doing, it should be borne in mind that parties cannot alter the true nature of their relationship by putting a different label on it. In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole: that is, the parties cannot deem the relationship between themselves to be something it is not. Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract. If, after considering all other matters, the relationship is ambiguous and is capable of being one or the other, then the parties can remove that ambiguity by the very agreement itself which they make with one another.

(4) Consideration should then be given to the various "indicia" identified in Brodribb and the other authorities bearing in mind that no list of indicia is to be regarded as comprehensive and the weight to be given to particular indicia will vary according to the circumstances. Where a consideration of the "indicia" points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. For ease of reference we have collected the following list of "indicia".

* Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place of work, hours of work or the like

Control of this sort is indicative of a relationship of employment. The absence of such control or the right to exercise control is indicative of independent contract. While control of this sort is a significant factor, it is not by itself determinative. In particular, the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where their work involves a high degree of skill and expertise. On the other hand, where there is a high level of control over the way in which work is performed and the worker is presented to the world at large as a representative of the business then this weights significantly in favour of the worker being an employee.

...

* Whether the worker performs work for others (or has a genuine and practical entitlement to do so)

The right to the exclusive services of the person engaged is characteristic of the employment relationship. On the other hand, if the individual also works for others (or the genuine and practical entitlement to do so) then this suggests independent contract.

* Whether the worker has a separate place of work and/or advertises his or her services to the world at large

* Whether the worker provides and maintains significant tools or equipment

Where the worker's investment in capital equipment is substantial and a substantial degree of skill or training is required to use or operate that equipment the worker will be an independent contractor in the absence of overwhelming indications to the contrary.

* Whether the work can be delegated or subcontracted

If the worker is contractually entitled to delegate the work to others (without reference to the putative employer) then this is a strong indicator that the worker is an independent contractor. This is because a contract of service (as distinct from a contract for services) is personal in nature: it is a contract for the supply of the services of the worker personally.

* Whether the putative employer has the right to suspend or dismiss the person engaged

* Whether the putative employer presents the worker to the world at large as an emanation of the business

Typically, this will arise because the worker is required to wear the livery of the putative employer.

* Whether income tax is deducted from remuneration paid to the worker

* Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks

Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks. Obviously, in the modern economy this distinction has reduced relevance.

* Whether the worker is provided with paid holidays or sick leave

* Whether the work involves a profession, trade or distinct calling on the part of the person engaged

Such persons tend to be engaged as independent contractors rather than as employees.

* Whether the worker creates goodwill or saleable assets in the course of his or her work

* Whether the worker spends a significant portion of his remuneration on business expenses

This list is not exhaustive. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.

(5) If the indicia point both ways and do not yield a clear result the determination should be guided primarily by whether it can be said that, viewed as a practical matter, the individual in question was or was not running his or her own business or enterprise with independence in the conduct of his or her operations as distinct from operating as a representative of another business with little or no independence in the conduct of his or her operations.

19. It seems to me that an application of these indicia to the present case leads to the conclusion that the appellant was an employee for the purposes of the Act. It is appropriate to work through the indicia as applied to the facts as found by the learned Magistrate.

Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place of work, hours of work and the like

20. The Magistrate concluded (AB 20) that the appellant "was not subject to constant control and direction by Mr Bailey". This is true, but in the modern workplace few employees have an employer constantly looking over their shoulder, and to some extent this was acknowledged by the Magistrate when she said that "one would not expect to find any detailed control of the work of a skilled labourer" (AB 20-21).

21. The learned Magistrate made a finding that the appellant was a skilled labourer, but at the end of the day that is what he was - a building labourer who dug holes and did certain demolition and building work for a construction project manager, the respondent. He was not a tradesperson. He would be engaged to do a specific labouring task, and he would do it. The Magistrate found that Mr Bailey would do his best to visit each of his work sites every day, and as a general rule he would be at the site where the appellant was working every day. It seems to me that Mr Bailey clearly exercised control and had the right to exercise control over the manner of the labouring work. The fact that the appellant could have said no to any offered work does not, it seems to me, alter this relationship, although the Magistrate felt that this assumed significance (AB 21).

Whether the worker performs work for others (or has a genuine and practical entitlement to do so)

22. In this matter it was clearly the case that the appellant did labouring work for others, but in the modern labour market of increasing part-time employment, it does not follow that multiple casual employment does not remain employment.

Whether the worker has a separate place of work and/or advertises his or her services to the world at large

23. There was no evidence here that the appellant held himself out as a contractor to the public at large by way of advertising or even, for that matter, a listing in the yellow pages. Rather, he sold his labour by the hour to the respondent construction project management company, and to others in the building industry.

Whether the worker provides and maintains significant tools or equipment

24. The appellant here did provide some of his own tools, but these, it seems to me, can hardly be described as significant, and are comparable to those in Hollis v Vabu. Significantly, he did not provide consumables, and when he needed materials he would purchase them on the respondent's trade account at a hardware store.

Whether the work could be delegated or subcontracted

25. The situation here was that the respondent would engage the appellant personally on an hourly rate to perform labouring duties. There was no element of subcontracting. The appellant did not quote on jobs and assume the risk of a loss if he underquoted or a profit if he overquoted. There is no evidence that he ever engaged any assistance. Rather, he sold his labour by the hour.

Whether the putative employer has the right to suspend or dismiss the person engaged

26. It seems to me that Mr Bailey could have ceased to engage the appellant at any time, but equally he could have ceased to re-engage any subcontractor, and this indicia is essentially neutral.

Whether the putative employer presents the worker to the world at large as an emanation of the business

27. This has been a significant indicia in industries where it is common practice for employees to be uniformed, and was considered significant in Hollis v Vabu, where the couriers were required to wear a uniform with the insignia of the company. This is of lesser relevance in the building industry, where there was no evidence of any uniform being required. It is, however, common practice for contractors to be identified on building site signs. There is no evidence that, on sites where the respondent was engaged in construction projects the appellant would be listed as "labourer" alongside electrical contractors or plumbing contractors.

Whether income tax is deducted from remuneration paid to the worker

28. The evidence here is that tax was not deducted but that, in accordance with taxation requirements in the building industry, the Prescribed Payments Scheme was complied with. The appellant operated for taxation purposes as a partnership with his wife but, it seems to me, this is not decisive, and this is consistent with the view of Kelly J in Jennings Industries Ltd v Negri (1982) 44 ACTR 9, and the approach the High Court has adopted in looking at taxation arrangements in calculating economic loss in tort claims (Husher v Husher (1999) 197 CLR 138; [1999] HCA 47). The reality is that the appellant was selling his labour by the hour to the respondent.

Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks

29. The appellant worked at an agreed hourly rate. This did not vary depending on whether it was a job to simply dig a ditch, or a task that may have required more skill. There was no element or risk in quoting fixed prices for jobs. Moreover, there was a system of Christmas bonuses (AB 137). The hourly rate was increased as the years went by.

Whether the worker is provided with paid holidays or sick leave

30. These were not provided, but these are generally not provided in casual employment where a higher hourly rate of pay exists.

Whether the work involves a profession, trade or distinct calling on the part of the person engaged

31. Although the Magistrate found that the appellant was a skilled labourer, he was a labourer, and his duties were essentially those of heavy manual labour.

Whether the worker creates goodwill or saleable assets in the course of his or her work

32. Mr Crowe submitted, rightly it seems to me, that to the extent that the tasks were performed well, the goodwill would flow to the respondent, the project management company engaged by members of the public to build or renovate.

Whether the worker spends a significant portion of his or her remuneration on business expenses

33. The evidence shows that consumables such as blades, drill bits and the like were provided by the respondent by use of its hardware account. The appellant has made modest claims for depreciation for some tools, and has claimed, and had allowed, depreciation for motor vehicle expenses to get to and from his various worksites.

34. It seems to me that on all of these criteria the appellant's relationship with the respondent is more properly described as being that of an employee. It seems to me that this is consistent not only with the modern approach of the High Court, but with the older and often cited tests laid down by Dixon J in Humberstone v Northern Timber Mills (1949) 79 CLR 389 where his Honour said (at 404) in relation to the control test as then understood -

The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter's order and direction. In the present case the contract by the deceased was to provide not merely his own labour but the use of heavy mechanical transport, driven by power, which he maintained and fuelled for the purpose. The most important part of the work to be performed by his own labour consisted in the operation of his own motor truck and the essential part of the service for which the respondents contracted was the transportation of their goods by the mechanical means he thus supplied. The essence of a contract of service is the supply of the work and skill of a man. But the emphasis in the case of the present contract is upon mechanical traction.

35. In this case the essence of the relationship was hourly labour hire of a building worker to perform non-trades manual labour on building sites. Applying Dixon J's tests, this meets the criteria of a contract of service. I would uphold the appeal on this point.

Was the appellant a deemed employee?

36. It seems to me that, even if I were wrong on this point, the relationship nevertheless falls within the expanded definition of employment contained in s 11 of the Act. This section relevantly provides, on the assumption that the appellant is, in accordance with the findings of the Magistrate and contrary to my conclusion, engaged under a contract for service -

11 Regular contractors and casuals (CW WRR reg 30BA(3))

(1) This section applies to the engagement of an individual by a person (the principal) if -

(a) The individual has been engaged by the principal -

(i) under a contract for services to work for the principal (whether or not on a casual basis); or

...

(2) For this Act, the individual is taken to be a worker employed by the principal if -

(a) the engagement, under the contract or similar contracts, has been on a regular and systematic basis; or

(b) the individual has (or apart from any injury, would have had) a reasonable expectation of the engagement continuing on a regular and systematic basis (under the contract or similar contracts), even if the engagement has not been on a regular or systematic basis.

(3) To work out whether an engagement has been on a regular and systematic basis, or whether there is (or would have been) a reasonable expectation of an engagement continuing on that basis, relevant matters include (but are not limited to) the following:

(a) the terms of all relevant contracts;

(b) the working relationship between the principal and the individual and all associated circumstances;

(c) the period of the engagement, or the periods of the engagement if it has not been continuous;

(d) the frequency of work under the contract or similar contracts;

(e) the number of hours worked under the contract or similar contracts;

(f) the type of work;

(g) normal arrangements for someone engaged to perform that type of work.

37. The learned Magistrate concluded that the arrangements did not amount to engagements on a "regular or systematic basis", holding that (AB 28) -

There is no evidence of any assumption by the applicant that he was required to present on a daily, weekly or monthly basis to the respondent unless told otherwise nor that he actually did so.

38. It seems to me that this is not the appropriate test to apply, and that the learned Magistrate has fallen into error in not applying the criteria set out in s 11(3)(a)-(g) appropriately. To require that there be daily reporting and regular hours would, it seems to me, significantly limit the work that s 11 has to do, as then a worker would only fall within the expanded definition in circumstances where, in all likelihood, they would meet the common law test for employment.

39. It seems to me that in the present case the appellant has for many years been regularly engaged by the respondent, albeit on a casual basis. The essence of casual employment is just that - that it may involve irregular hours. To import a requirement of regularity of hours to a statutory regime expressly covering casual employment, and the section expressly covers persons operating under a contract for services whether or not on a casual basis (s 11(1)(a)(i)) seems to me to be in error.

40. The working relationship, as found by the Magistrate, was that Mr Bailey would phone the appellant and engage him to perform specific tasks at specific building sites. It was arranged that this would be at a set hourly rate, and apart from the evidence that this increased over the years from $25 per hour to $27.50, there was no evidence that there was ever specific negotiations as to price for different jobs. There was, it seems to me, a regular and systematic series of engagements of his hourly labour at a set rate. This extended over many years and, at least in the early years, the appellant earned the overwhelming proportion of his income from the respondent. The Magistrate seemed to attach significance to the fact that the hours had reduced over the last twelve months, saying (AB 28) that -

... I am satisfied that this proportion had reduced considerably and indicated a permanent, rather than a temporary, change in the working relationship. I am satisfied that the engagement was not on a regular basis.

41. This, it seems to me, indicates an error. It could not be said that a casual employee who worked 20 hours a week in one year, but only four hours a week in the next year, was no longer a casual employee just because their hours had reduced. There was before the Magistrate the appellant's work diary for the year before the accident, and this indicated that, although the hours had reduced, he continued, it seems to me, to work regularly for the respondent. An extract of the appellant's days worked with the respondent from August 1999 to August 2002, the month of the accident, was prepared by the solicitors for the respondent, and tendered in the proceedings below. It showed the appellant working for between 16 and 26 days a month every month in 1999, and between 14 and 25 days every month in 2000 except September when only eight days were worked. In 2001 there was a greater variance, with June taken off for travel, and only a few days in July and August, but otherwise between 11 and 23 days a month. In 2002 he worked 15 days in January, 13 in February, five in March, 16 in April, six in May, he again had June off to travel, and he worked 15 days in July, and three days in August up to the accident on 9 August. It seems to me that this is indicative, taking account of the factors listed in s 11(3)(c), (d) and (e), to indicate that this was regular as well as systematic.

42. It was common ground that the concept of "regular and systematic employment" was drawn from provisions found in regulations under the Workplace Relations Act 1996 (Cth), particularly reg 30B. The terms there are used to qualify those employees who are protected from dismissal, and the scheme is that employees engaged on a casual basis for a short period are excluded from protection. Regulation 30B provides that a casual employee is taken to be employed for a short period, and so excluded, unless -

the employee is engaged by a particular employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months.

43. The meaning of this provision has been considered by industrial tribunals in a number of cases, and I was taken to Smajlagic v Karhunan [1999] NSWIRComm 117, and Ransom v Arthur Anderson 413/99 M Print R4178, a decision of the Industrial Relations Commission of Australia of 23 April 1999. It seems to me that only limited assistance can be obtained from these decisions, which were in the context of a test of whether employment was or was not casual. The statutory test under consideration here is whether a series of contracts for the provision of services, whether on a casual basis or not, was regular and systematic. Regularity of hours was seen as important to the test for casual employment under the Commonwealth regime. Although Commissioner Whelan in the Ransom case found that some variation of hours was permissible, the regularity of hours remained of importance, and so it was in the learned Magistrate's decision adverse to the appellant.

44. The Commonwealth legislation, however, does not contain s 11(3), which requires a Judge or Magistrate to apply the relevant matters at 11(3)(a)-(g) to determine whether a casual engagement or series of engagement has been regular and systematic. The tests developed by industrial tribunals to determine whether or not casual employment is regular and systematic are, it seems to me, of limited assistance.

45. Casual employment is, by its very nature, irregular. As Moore J observed in Reed v Blue Line Cruises Limited (1996) 73 IR 420 at 425 -

A characteristic of engagement on a casual basis is, in my opinion, that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.

46. In giving effect to a provision designed to cover persons engaged, whether or not on a casual basis, it is inappropriate to apply a test that will in effect rule out any person whose engagement would properly be described as casual. The legislature has determined that persons engaged on a casual basis, if that engagement is on a regular and systematic basis, can be deemed to be a worker for the purposes of the Act if their engagement, albeit casual, is regular and systematic applying the criteria in s 11(3)(a)-(g). It seems to me that the engagement of this builder's labourer, at an agreed hourly rate over many years from 1995 to 2002 to perform building labouring work as required by the respondent at sites determined by the respondent, fits this criteria, and that the Magistrate erred in applying a test more appropriate for determining whether given employment was casual.

47. The appeal should be upheld, and the award for the respondent should be set aside. Although the learned Magistrate made the observation that the serious nature of the injuries has probably precluded the appellant from returning to work as a builder's labourer, there is not sufficient evidence before me to make an award, and the matter should be remitted to the Magistrates Court for the determination and entry of an appropriate award in favour of the appellant.

I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Connolly.

Associate:

Date: 1 April 2005

Counsel for the appellant: Mr RL Crowe SC with Mr FMG Parker

Solicitor for the appellant: Maliganis Edwards Johnson

Counsel for the respondent: Mr R Williams QC

Solicitor for the respondent: Hunt & Hunt

Date of hearing: 3 February 2005

Date of judgment: 1 April 2005