Helmers v Department of Corrective Services [1997] NSWCC 3; (1997) 14 NSWCCR 248 (4 February 1997)

[1997] NSWCC 3; (1997) 14 NSWCCR 248

HELMERS v. DEPARTMENT OF CORRECTIVE SERVICES

Compensation Court of New South Wales: Campbell CJ

26 NOVEMBER 1996 (H)

4 FEBRUARY 1997 (J)

PERSONS ENTITLED TO COMPENSATION - WHO IS A "WORKER" - CONTRACT OF SERVICE - A PRISONER WHO IS INJURED WHILE WORKING AS A STOCKMAN ON A RURAL PROPERTY IS NOT A WORKER - WORKERS COMPENSATION ACT 1987, SECTION 3

B. O'SULLIVAN, for the applicant

D.S. WILKINS, for the respondent

CUR ADV VULT

CAMPBELL CJ: This matter came before the Court as an application to strike out the proceedings on the basis that they did not disclose a cause of action. After the affidavits were read there was some discussion which it is unnecessary to recount. In the event I was asked by the parties to determine, as a separate issue, whether on 11 April 1994 the applicant was a worker within the meaning of the Workers Compensation Act 1987 (the Act). It was further agreed that that question was to be determined on the basis of the facts set out in the applicant's affidavit of 8 November 1996. When that affidavit was read initially one sentence was not pressed; however, I take the agreement to refer to all the matters contained in the affidavit.

Mr B. O'Sullivan of counsel appeared for the applicant and Mr D.S. Wilkins of counsel for the respondent. Counsel's submissions have been recorded and, in the main, transcribed and it is unnecessary for me to refer to every submission merely to ensure that it is noted. I should mention that, whilst judgment was reserved, Mr Wilkins forwarded to me, with the consent of Mr O'Sullivan, a judgment of her Honour Judge Truss in PALMER v. THE SALVATION ARMy, Compensation Court, No. 6224/95, unreported, delivered on 22 February 1996.

The applicant's affidavit, omitting formal parts, reads as follows:

"1. I am the applicant herein.

2. On or about 11 June 1993, I was sentenced to prison for a period of 12 months. Initially I was at Cooma Gaol for about 2 weeks where I was not offered employment or required to work and I did not work.

3. About early July 1993, I was transferred to Goulburn Gaol where I remained as a prisoner for the next 21/2 months. While I was there, I was not required to work, nor did I work nor was I offered any employment.

4. During my time at Goulburn Gaol I applied to the Prison authorities to be transferred to a minimum security prison upon becoming eligible. I knew that inmates of minimum security prisons are required to perform work for which they receive pay.

5. Around September 1993 I was offered a transfer to Mannus Correctional Centre at Tumbarumba NSW (the Centre) which I accepted.

6. On arrival at the Centre I discovered that there were two working pastoral properties attached to the Centre. One of those properties, known as `The Meadows' grazed cattle which were sold on the local market. I was invited to choose from a selection of available employment at the Centre.

7. Each employment that was offered to me attracted a different rate of pay. I chose work as a stockman because I had experience as such and also because it offered one of the higher available rates of pay.

8. I was subsequently given employment as a stockman at `The Meadows'. My duties included mustering stock, tractor driving, fence mending and feeding stock. Occasionally I was sent to work on the other property some kilometres away which ran sheep. My duties at that property included mustering, shearing shed maintenance and dipping/crutching sheep. Prior to commencing such work, I was required to complete some forms which I understand were related to my pay account and tax liabilities.

9. My normal hours of work at the Centre were from 0800 to 1500 hours, Monday to Friday. There was no work on Public Holidays.

10. From time to time, I was invited to work outside the normal working hours. Such work was at my discretion and I received extra pay when I performed it.

11. I was supervised in my work by a Prison Officer who worked with me as a stockman. I was subject to his direction and control as to what I was to do on any particular day or part of a day. Subject to that general direction, however, I was free to perform my duties generally as I saw fit. I often worked alone on the property or with other inmates.

12. The Centre provided all my working equipment. That included my clothing, horse, saddle, tools and safety helmet.

13. There is no shop or canteen at the Centre. Nor are there any banking facilities. Inmates are, further, not permitted to carry any cash. Some goods and services were nevertheless available for purchase at the Centre. The available goods were things such as personal hygiene items, confectionery and tobacco. Services included use of the telephone.

14. My earnings were paid into a `Prison Cash Account' in my name. I could draw on credits in that account to purchase certain goods and services at the Centre. The residue was paid to me in cash upon my release from custody.

15. During periods of incapacity for work due to illness, my pay ceased. My Prisoner Cash Account was, however, credited with a much reduced `muster' allowance during such periods.

16. When the Prison officer who worked alongside me and performed duties as my supervisor took his holidays, I did not work on either property, but remained at the Centre without specific duties. My normal pay continued for those such periods however.

17. On 11 April 1994 I was performing my normal duties as stockman at `The Meadows'. Stock had been mustered in the morning. Some were then loaded on a truck for transfer to the local Abattoir. My supervisor departed soon afterwards in the truck with the cattle. The other stockman and I thereupon prepared to return to the Shearing Shed for lunch. The other stockman went on ahead of me as I had some small jobs to do before I went to lunch. When I mounted my horse, the other stockman was some way ahead and the horse was keen to catch up and go home. I have not even managed to get my feet into the stirrups when the animal started off.

18. Near where I was working a tractor had been left standing on the road. It had attached to it some forks used for handling rolls or (sic) hay. The horse passed close to the tractor, my left leg struck the forks and I was unhorsed. I fell on to a steel fence post and suffered the injuries alleged in the application for determination.

19. Although I was not free to leave the Centre after work and I had no access to cash, my duties and conditions of employment were in all other respects similar to those I have encountered while employed as a stockman on other rural properties in Australia.

20. I say that it was open to me to not seek transfer to the Centre in which case I would have remained at Goulburn Gaol, where employment was not offered to me, for the residue of my sentence."

Before turning to counsel's agreement it is convenient to set out certain relevant statutory and regulatory provisions.

Section 3 of the Act relevantly defines "worker" as follows:

" `worker' means any person who has entered into or works under a contract of service ... with an employer ... whether the contract is expressed or implied, or is oral or in writing ..."

The section contains certain specific exclusions but does not expressly exclude persons serving terms of imprisonment.

Section 20 of the Prisons Act 1952, as amended, provides, INTER ALIA, as follows:

" (1) Subject to the direction of the Commissioner, the governor of a prison may order any convicted prisoner in any such prison to be set to some work considered suitable to his physical capacity.

(2) Such convicted prisoners or such classes or groups of convicted prisoners as the Commissioner may from time to time determine may be set to work beyond the precinct of the prison in which they are imprisoned and while so beyond such precinct shall be deemed to be within the prison.

(3) The Commissioner may, out of moneys provided by Parliament for the purpose and subject to the regulations, make payments to prisoners for any reasons (including for work done)."

Section 50 of that Act provides, INTER ALIA:

" (1) The Governor ... may make regulations ... for and with respect to:

...

(o) the conduct and functions of prison officers and other persons employed in or about a prison or prison complex."

The relevant Regulation is the Prisons (General) Regulation of 1989. Clause 39 prescribes as follows:

" (1) The Director-General is to determine the hours of work and general routine for each prison.

(2) When making a determination under this clause with respect to a prison, the Director-General may determine different hours of work or general routines for different parts of the prison.

(3) The governor of a prison is to ensure that a notice setting out the hours of work and general routine of the prison or of each part of the prison, as the case may be, determined under this clause is exhibited at the prison in a conspicuous position where it may be read by prisoners in the prison or part of the prison to which it relates.

(4) The Director-General may require the hours of work and general routine for a prison to be published in such manner as the Director-General thinks fit, but a requirement made under this clause does not affect the requirement made by subclause (3)."

Clause 40(1) prescribes as follows:

" (1) Subject to subclause (2), each prisoner must comply with the hours of work and general routine determined under clause 39 for the prison or part of the prison in which the prisoner is detained."

Part 7 of the Regulation prescribes, INTER ALIA:

"PART 7 - EMPLOYMENT IN PRISONS

Work to be performed

60. As far as is practicable, prisoners ordered to be employed pursuant to section 20 of the Act are to be employed at work best fitted to their actual and potential ability.

Certain work prohibited

61. A prisoner is not to be employed:

(a) in a disciplinary capacity; or

(b) on any work not authorised by the Director-General; or

(c) on any work for the benefit of anyone employed in the Department of Corrective Services.

Payment for work

62. A prisoner who complies with conditions set by the Director-General may receive credits of money for work performed in accordance with scales determined from time to time by the Director-General.

Disposition of credits earned

63. (1) A prisoner may expend such portion of his or her credits as may be determined by the Director-General for such purposes as are authorised by the Director-General.

(2) Any unexpended credits are to be paid to the prisoner upon his or her discharge from prison."

Clause 147 prescribed that contravention of, INTER ALIA, clause 40(1) is a prison offence.

As argued by counsel the resolution of the issue to be determined depended upon whether the applicant carried out the work he undoubtedly did under a contract of service or not.

Mr O'Sullivan submitted that, had the legislature intended that work performed by a prisoner was not be to be work performed under a contract of service, there would have been an express exclusion in section 3 of the Act. He referred to the observation of Isaacs J, as he then was, in BULL v. ATTORNEY-GENERAL (NSW) [1913] HCA 60; (1913) 17 CLR 370 at 384 as to the beneficial construction to be adopted for remedial Acts, as the Workers Compensation Act 1987 clearly is.

It is convenient to say that I consider these considerations of little weight in the present circumstances. If work carried out by a prisoner is not work done under a contract of service then it is unnecessary for there to be a specific exclusion. There is no ambiguity in the requirement of the section that, relevantly, a worker must be one who does the work under a contract of service.

Mr O'Sullivan referred to the use of the term "employment" in the Prisons Act and Regulation; however, in my view that word as used in the Act and Regulation is neutral on the issue here being considered.

Mr O'Sullivan referred in general terms to the case of STEVENS v. BRODRIBB SAWMILLING CO PTY LTD [1986] HCA 1; (1986) 160 CLR 16 as providing an account of the INDICIA of employment, using that word in the sense of contract of employment. That case is more generally referred to in the context of an issue as to whether an applicant was an independent contractor or working under a contract of service; however, it does provide assistance on some of the matters which go to point to a contract of service (see, for example, Wilson and Dawson JJ at 36) although not upon the important factor in this case of the intention to create a legal relationship.

Mr O'Sullivan distinguished the present situation from one where a prisoner was ordered without choice to undertake work. He pointed to the fact that the applicant could have remained at Goulburn without working, but he chose to apply for the transfer to the minimum security prison. Once there he selected, from a range of options, the type of work he would do; a factor in his choice being, according to the agreed facts, that that work earned more money. The applicant was paid for that work and, upon occasion, he agreed, the choice being his, to do extra work for which he was paid extra money.

The correct conclusion, it was submitted, was that there had been an agreement between the applicant and the respondent and a contractual intention that he be paid a certain amount of money for work to be undertaken by him under a contract of service.

Mr Wilkins submitted, in effect, that there was no scope for a contract of service where, as here, the person doing the work was a prisoner subject to the Prisons Act and Regulation and liable to be directed to work with payment being according to a regulated scale and made in a regulated manner.

He submitted that for there to be a contract of service there must be an agreement, a contractual intention and consideration: MONCRIEFF v. SOUTH AUSTRALIA (1982) 49 SAIR (Pt 2) 30 at 33. None of these elements was present, he put, in the present case.

Mr Wilkins relied upon a number of decided cases from various jurisdictions which, whilst dealing with differing circumstances, collectively suggest that the course of authority is against the conclusion that a prisoner, subject to direction to work whilst serving a term of imprisonment, is carrying out work under a contract of service even if some form of payment occurs.

In PULLIN v. PRISON COMMISSIONERS [1957] 1 WLR 1186, Lord Goddard CJ sitting in the Queen's Bench Division held that work carried out by a prisoner was not work for wages and was not carried out under a contract of service. The judgment is a short one and it does not appear whether payment of any sort was made to prisoners at that time and place.

In MORGAN v. ATTORNEY-GENERAL [1965] NZLR 134, the plaintiff was a prisoner who requested outside work and whilst working outside the prison on a Sunday was injured. Prisoners were not compelled to work on a Sunday but were permitted to do so and, if they did, were paid prison wages. Section 20 of the New Zealand Penal Institutions Act 1954 provides:

"(i) ... every inmate, ... shall be employed in such work as is directed by the Superintendent of the institution and may be so employed beyond the precincts of the institution in which he is detained."

Tompkins J at 137 said:

"It is clear that a prisoner is not an employee of the Prisons Department, notwithstanding the provisions of section 20 ... Accordingly the Prisons Department is not subject to the duties of an employer to provide safe equipment or a safe system of work. ..."

The Judge referred to PULLIN and also to the judgment of Hudson J, sitting as a member of the Full Court of Victoria, in HALL v. WHATMORE [1961] VR 225 at 233 where Hudson J appears to have accepted that the plaintiff, a prisoner injured whilst working in a gaol, was not an employee of the Crown.

In MONCRIEFF, Judge Russell QC held that a prisoner who was injured in the course of work which he performed as a kitchenhand at the prison in which he was incarcerated was not working under a contract of service.

In ZAPPIA v. DEPARTMENT OF CORRECTIONAL SERVICES (SA) (1993) WCATR 30, the Workers Compensation Appeal Tribunal followed the decision of Judge Russell in MONCRIEFF and, amongst other things, said:

"In our respectful view, however, the fact that the prisoner is consulted as to the type of work he is to do, is requested to do work rather than directed to do so and that prison authorities may not choose to use the range of disciplinary powers available in the event of a refusal to work does not alter the position that as a matter of law a prisoner is required to work and is subject to punishment if he refuses to do so. By operation of law a refusal to carry out an assigned task or its wilful or careless mismanagement by a prisoner may result in the punishments we have outlined earlier. The reasoned and more sensitive approach taken by prison management in order to get the prisoner working cannot alter the underlying legal requirements and convert the arrangements made between prison management and prisoners into a contract of service."

In PALMER, Judge Truss, after referring to DIETRICH v. DARE (1980) 54 ALJR 388 and TEEN RANCH PTY LTD v. BROWN (1995) 11 NSWCCR 197, held that a rehabilitee who was paid a small cash allowance whilst working on a farm was not working under a contract of service as he had not established that the arrangement between the parties contemplated legal relations.

Whilst all these cases can be distinguished to varying degrees there emerges, in my view, a clear principle that work carried out by a prisoner, who is subject to direction to work, does not lead to an inference of the existence of a contract of service, even where the prisoner elects to perform particular work and is credited with moneys dependent upon the nature and amount of the work carried out.

As was pointed out by Handley JA in TEEN RANCH PTY LTD at 201 an intention that the parties to the suggested contract of service intended to enter into legal relations is essential to the existence of such a contract. The evidence in this matter does not establish any such intention. In particular, there is no basis for a conclusion that the respondent intended to enter into such a relationship.

Having regard to the circumstance of the applicant's imprisonment, I do not find it established that the applicant agreed to enter into a contract of service in the sense referred to in MONCRIEFF.

Further, I do not find it established that the credits made, subject as they were to a discretion and fixed by scale, amounted to consideration in any real sense for the work that was done.

In my view the applicant has not established that when he was injured he was working under a contract of service with the respondent. It follows that he was not a worker within the meaning of the Workers Compensation Act 1987.

This conclusion leads inevitably to an award for the respondent and I make such an award.

AWARD MADE ACCORDINGLY

Solicitors for the applicant: BOLZAN & DIMITRI

Solicitors for the respondent: HUNT & HUNT