The Development and Environmental Professionals' Association v Fairfield City Council and another [2008] NSWIRComm 24 (15 February 2008)

Last Updated: 30 May 2008

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION :
The Development and Environmental Professionals' Association v Fairfield City Council and another [2008] NSWIRComm 24



FILE NUMBER(S):
IRC 3022

HEARING DATE(S):
13 November 2007

DATE OF JUDGMENT:
15 February 2008

PARTIES:
APPLICANT
The Development and Environmental Professionals' Association

FIRST RESPONDENT
Fairfield City Council

SECOND RESPONDENT
Local Government Association of New South Wales

CORAM:
Staff J


CATCHWORDS: Industrial dispute - Whether an apprentice was an employee of Fairfield Council during his apprenticeship or employed by another organisation - When contract entered into with Council - With whom was the contract of service during the apprenticeship - Principles for determining whether employment exists and with whom considered - Evidence - Whether an intention on behalf of the Council to enter into a contract of employment with apprentice - Held - No evidence of intention to enter into legal relations between apprentice and Council - Apprentice employed by another organisation - Nothing unfair or unjust in the treatment of apprentice - Orders refused

LEGAL REPRESENTATIVES
APPLICANT
Mr I Latham of counsel
Mr I Robertson
The Development and Environmental Professionals' Association
RESPONDENTS
Mr M Easton of counsel
Solicitor: Mr L Smith
Local Government Association of New South Wales

CASES CITED:
Australian Broadcasting Corporation v XIVth Commonwealth Games Limited (1988) 18 NSWLR 540
Dalgety Farmers Ltd t/a Grazcos v Bruce and Anor (1995) 12 NSWCCR 36
Drake Personnel Ltd T/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432
Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Labour Co-operative Ltd v WorkCover Authority of New South Wales (Inspector Robins) (2003) 121 IR 78
Swift Placements Pty Limited v WorkCover Authority of New South Wales (Inspector May) (2000) 96 IR 69
WorkCover Authority of New South Wales (Inspector Legge) v Coffey Engineering Pty Limited (No 2) (2001) 110 IR 447

LEGISLATION CITED:
Apprenticeship and Traineeship Act 2001 (NSW)
Industrial and Commercial Training Act 1989 (NSW)
Industrial Relations Act 1996 (NSW)


TEXTS CITED:




JUDGMENT:

- 1 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: STAFF J

15 February 2008

Matter No IRC 3022 of 2006

Notification under section 130 of the Industrial Relations Act 1996 by The Development and Environmental Professionals' Association of a dispute with Fairfield City Council and the Local Government Association of New South Wales re continuity of employment

DECISION

[2008] NSWIRComm 24

1 The Development and Environmental Professionals' Association ("DEPA"), an industrial organisation of employees, recognised under the Industrial Relations Act 1996 (NSW) ("the Act") notified the existence of a dispute with Fairfield City Council ("the Council") and the Local Government Association of New South Wales ("LGA"). The matter in dispute was expressed this way:

... the issue of continuity of employment for long service leave purposes for Mr Grant Milienou. Mr Milienou has been an employee of the Council since May 1996. From January 1993 until May 1996, he was indentured as an apprentice to an organisation known as Western Sydney Regional Organisation of Council Group Apprentices ("WSROC"). For all intents and purposes, Mr Milienou was employed solely under the terms and conditions of employment at the Council and the indenture to WSROC was merely an administrative arrangement.

2 It was contended by Mr M Easton of counsel, who appeared for the respondents, that there was no evidence of a contract between Mr Milienou and the Council between 1993 and May 1996, but rather a contract between Mr Milienou and WSROC. For the reasons that follow, I agree with this contention. I find that Mr Milienou was employed by WSROC between 1993 and 1996.

Evidence of DEPA

3 It was common ground that WSROC was a party to the Indenture of Apprenticeship as the employer; that WSROC paid Mr Milienou all of his wage entitlements and WSROC paid Mr Milienou all of his leave entitlements and accruals up to May 1996.

4 Mr Milienou, who is currently employed as the Co-ordinator of Building Control at the Council, stated that in 1992 or 1993, he saw an advertisement in the local newspaper, under the heading "Fairfield Council", seeking applications for a range of apprenticeships. Mr Milienou submitted an application and was subsequently asked by the Council to attend their premises to undertake a test. At the time he undertook the test, he recalled being told that WSROC would be handling the selection process and after the results of the test were known, he would be asked to attend an interview. Subsequently, Mr Milienou was interviewed at the Council's premises by a Council foreman named Cedric, Mr Neil Smith, the Manager of the Building Trades Section of the Council and a more senior manager of the Council, Mr Les Symons. There was no representative from WSROC present at the interview.

5 During the interview, Mr Milienou's evidence was that he was told that he would be paid under the Fairfield Council Enterprise Agreement ("the Council Agreement") because he was over the age of 21 and he would receive more money than if he were paid under the State Apprenticeship Award. His recollection was that he was initially paid under the Apprenticeship Award, but that after about nine months he was paid under the Council Agreement. He also received back pay.

6 After the interview, Mr Milienou said that he received a call from WSROC saying that he had been successful. He was directed to attend the Council on 27 January 1993 and report to either Cedric or Neil. Thereafter, he said that he had nothing to do with WSROC. The Council supplied him with clothing, safety equipment and training and his work was carried out at the direction of Council employees. If he took leave, he was required to fill out a form provided to him by the Council. Mr Milienou's salary was paid into his bank account each month by WSROC. He also received a statement. Each week he was required to fill out a timesheet and hand it to the Foreman of the Council. He was not sure what was then done with the timesheet. A couple of times he was informally disciplined and on those occasions it was by Neil Smith, an employee of the Council. There was no contact with WSROC at any stage in relation to any aspect of his employment.

7 In cross-examination, Mr Milienou was asked about the recruitment process and how he came to work at the Council. He gave the following evidence:

Q. ... You say you answered a job ad that was under the heading FCC"?

A. Yes.

Q. When you say under the heading of "FCC", are you indicating there that you don't recall whether it was an ad placed by the council or--

A I believe it was an ad placed by the council with the council logo on it. The reason I remember that is because the first time I had heard of WSROC was when we actually went for the test at Fairfield Council.

Q. You answered the ad. Who did you answer it to?

A. I can't remember. I imagine it would have been Fairfield Council - to wherever it said. It would have been Fairfield Council because as I said when I turned up for the test, that's the first time I had heard of them.

Q. When you say "would have", you mean you're not sure?

A. I mean I am not sure.

Q. You met people from the council before you were employed?

A. Yes, we had already had an interview process.

Q. As far as you understood it, was WSROC handling the process?

A. That's what I was told at the testing.

8 Mr Milienou agreed that he was told by WSROC to turn up at the Council to commence his apprenticeship. He could not recall whether his group certificate contained the words "WSROC". He said that he had been unable to find his group certificates for the years 1993 to 1996, or pay dockets for that period, as he had moved house. However, he recalled that when he signed the indenture of apprenticeship that WSROC was noted as his employer. He agreed that when arranging days off for annual leave, he liaised with the Foreman of the Council and provided him with leave forms but said that he had no idea what happened to the forms after that. Mr Milienou saw other apprentices that he said were treated differently to him. These apprentices seemed to have a little more contact than he did with WSROC and that he recalled that he saw more of WSROC's representatives when they started compared to when he started.

9 During cross-examination Mr Milienou recalled that there was a person at the testing interview from WSROC who rang him after the interview, but that he could not recall the person's name or the position that the person held with WSROC. After Mr Milienou was employed as a carpenter with the Council, he recalled asking a representative from WSROC, who was at the Council's premises to meet new apprentices, about his termination payments. This was after he had received his first pay docket from the Council which showed that he had no sick leave and no concessional leave or leave accruals. This led him to think that he must have restarted with the Council.

10 Mr I Latham of counsel, who appeared for DEPA, tendered a pre-employment evaluation report dated 25 October 1995, which certified Mr Milienou's fitness for employment with the Council. Counsel also tendered a letter dated 13 October 1995 to Mr Milienou directing him to undertake a medical examination at Council's expense together with a letter to the doctor who was to carry out a medical examination for Council. This material was provided to Mr Milienou at the time that he was applying for a position of carpenter with the Council.

11 Mr Latham made the following submissions:

1. There is significant evidence that the contract of employment was in truth between Mr Milienou and the Council. Counsel pointed to the following evidence:

(i) Mr Milienou responded to an advertisement in the name of the Council seeking for applications for apprenticeships.

(ii) Mr Milienou wrote to the Council applying for one of the apprenticeships.

(iii) Mr Milienou was called to the Council for an interview with Council employees.

(iv) Mr Milienou was told that he would be paid under the Fairfield Agreement.

(v) In January 1993, Mr Milienou took part in a pre placement health assessment for the Council.

(vi) Mr Milienou was in fact paid under the Fairfield agreement although the early payments were backdated.

(vii) The Fairfield Agreement applied on its terms to all persons employed by the Council (with some nominated exceptions).

(viii) Mr Milienou performed his work at the direction of employees of the Council.

(ix) Mr Milienou filled out the Council's time sheet.

(x) The Council supplied Mr Milienou with clothing, safety equipment and training.

(xi) Discipline was undertaken by employees of the Council.

(xii) A memorandum dated 2 June 1993 to the Council's Paymaster from the Manager - Mechanical and Building Services in which it is said:

"Council has employed nine WSROC group apprentices..."

(xiii) Mr Milienou was appointed as a carpenter on or about 10 May 1996.

2. The only contract with WSROC seemed to be its request to Mr Milienou to "turn up" at the Council, noting that there was some other documentary evidence from WSROC to the effect that:

(a) Mr Milienou would be placed with the Council.

(b) That the medical examination would be to Council's standard. [This is the pre placement health assessment referred to above].

(c) Mr Milienou signed an indenture of Apprenticeship on or about 27 May 1993. This was some months after Mr Milienou had commenced work at the Council.

3. It is not easy to simply define what is meant by employment; classical definitions of employment involve a determination of matters such as the control exercised upon the putative employee. Reference was made to Stevens v Brodribb Sawmilling Company [1986] HCA 1; (1986) 160 CLR 16; Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 and Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 at [81] - [82]; Swift v WorkCover Authority (2000) 96 IR 69 at 86 - 87. After analysing these authorities, counsel submitted that all practical control resided with the Council. Mr Latham also examined whether the worker had been integrated into the business of the putative employer, referring to Brodribb at 26 - 28 and Australian Timber Workers' Union v Monaro Timber Mills [1980] FCA 43; (1980) 42 FLR 369 at 378 and Hollis at [50] - [52] submitting that the level of integration was high.

4. That whilst an indicator of employment, payment is not conclusive: Australia Insurance Employees Union v WP Insurance Service Pty Ltd (1982) 1 IR 212 at 216.

12 Mr Latham made a further submission that I was entitled to make a finding in relation to the evidence that persons who could have been brought as witnesses by the respondents to give evidence were not called. It was submitted that would enable me to draw an adverse inference that such witnesses would not have helped the respondents' case, relying upon Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298.

13 In respect to the last submission, this matter relates to events that occurred over 20 years ago, which, no doubt, form part of the reason that there was a lack of documentation available from both Mr Milienou's perspective and that of the respondents. There is no evidence before me that there were witnesses available who the respondent could have called, but did not. I do not intend to draw any adverse inference in this respect.

14 The respondents relied on affidavit evidence given by the following persons who were required for cross-examination.

Mr Ian Duncan Tucker, Managing Director and Company Secretary of WSROC

Mr Bruce Rochaix, Building Trades Co-ordinator, Fairfield City Council

Ms Ana Alcantara, Building Trades Clerk, Fairfield City Council

Mr Cosimo Bartone, Accounts Payable Supervisor, Fairfield City Council

15 Mr Tucker stated that WSROC commenced operations in 1981 with the support of both the State Government and the Federal Government, Trade Unions and Industries. He reports to a Board comprising 12 directors, of which seven are derived from the Regional Organisation of Councils of Western Sydney.

16 WSROC is a not-for-profit organisation and operates a number of employment and training-related functions including:

a. a group training scheme with trades under the registered business name of "WSROC Group Apprentices";

b. a licensed job placement organisation contracted by the Commonwealth's Department of Employment and Workplace Relations as part of the Job Network Program.

17 WSROC AusNAC, a related body, operates as part of a consortium of Group Training Companies under contract to the Commonwealth's Department of Education, Science and Training for the provision of Australian apprenticeship support services.

18 WSROC is a registered group training organisation for the purposes of s 30 of the Apprenticeship and Traineeship Act 2001 (NSW). Mr Tucker stated that WSROC registers the trainee or apprentice, as required by the Apprenticeship and Traineeship Act, and is the employer for the purposes of that Act. Trainees and apprentices are generally then placed with a host training company ("the Host"). Placements occur pursuant to a host training contract between WSROC and the Host with the placement period being negotiated between WSROC and each Host.

19 On occasions, a trainee or apprentice stays with one Host for the full training period. On other occasions, the trainee or apprentice may be rotated to a different Host.

20 The placement of WSROC apprentices with businesses, including the respondent Council, is monitored constantly and often an apprentice will be returned to WSROC and rotated to another Host for reasons such as:

· a downturn in the Host's trade;

· lack of further skill development opportunities;

· incompatible work culture;

· a failure by the Host to pay invoices; and

· a serious breach of the agreement by the Host.

21 Mr Tucker stated that the Council had exercised the option of returning apprentices to WSROC. Once placed with the Host, the trainee or apprentice is required to respond directly to the supervision and instruction of the Host.

22 Mr Tucker said that WSROC:

a. meets all of the employer related responsibilities such as wages, leave entitlements, workers compensation and the repatriation of injured workers;

b. manages the quality of training for trainees and apprentices, including the registration of the indenture, vocation classification and enrolment in the training program with the registered training organisation;

c. monitors the performance for the duration of the training contract, including remedial action;

d. provides mentoring and support whilst the employees are placed to perform work at the Host's workplace; and

e. provides to the Host a total administration and personnel service thereby relieving them of any responsibility as the employer and also satisfies the contractual responsibilities under the National Training Contract.

23 WSROC recruits trainees and apprentices from school leavers, pre-vocational students and job seekers and advertises jointly for candidates with some host employers.

24 Mr Tucker had no direct knowledge of how Mr Milienou responded to the position which WSROC had available with the Council as a host employer at the time when he commenced with the Council. WSROC had not retained records for the period when Mr Milienou commenced with the Council. He stated that it has never been the case that a host company has advertised for applicants itself, interviewed the applicants and then referred them to WSROC for further selection. If the process of testing and selecting applicants is facilitated by WSROC at the premises of the host company, it is not WSROC's usual practice to have a staff member present at the interview for a placement conducted by the respective host company.

25 Mr Tucker had no direct knowledge of how Mr Milienou was paid whilst employed by WSROC and no records are now available. The current practice of WSROC is to pay trainees and apprentices under the relevant State Award. Particular hosts may elect to pay apprentices placed at their worksite at a higher rate with any higher rate being identified as a sundry allowance. In cases where a host has an industry specific award to which WSROC is not a respondent or an enterprise-based agreement and the host wishes the apprentice to be paid commensurate with those conditions, WSROC's practice is to engage such apprentices under the relevant State Award with other conditions being identified as sundry to their entitlements under the Award and specified as such in their placement agreement.

26 Mr Tucker stated that he was concerned that if the orders sought by DEPA were granted then, such orders would have a broader impact on the business of WSROC, its clients and apprenticeship opportunities within Western Sydney. He explained that impact extends to:

· the liability of service based entitlements transferring to the host employer post the term of the apprenticeship;

· confusion as to the obligations of the host employer versus that of WSROC;

· the diminution of marketable benefits of the group training scheme;

· less apprentices engaged by WSROC; and

· loss of income derived from the training and placement of apprentices by WSROC.

27 There are a total of 46 group training organisations registered in New South Wales with approximately 10,000 apprentices and trainees employed under the Joint Group Training Program ("GTO"). It was claimed that if DEPA was successful, any decision may also affect other GTOs, the effectiveness of the national training system, persons seeking apprenticeships and any other organisation involved in the on-hire of labour.

28 Mr Tucker was referred to a document which he identified as belonging to WSROC. The title of the document was "Employer Card". Alongside the words "company name and address" was handwritten "Fairfield City Council" and its address. The document contained other handwritten notes including contact names and telephone numbers and names of trades. Mr Latham described the document as being part of a job card system which recorded the host's details and contact details of the apprentice(s) which were placed with the Host for the duration of the placement. On page 2 of the document, it contained the names of various apprentices, including Grant Milienou, together with his start date and last working date with the Host. Against each apprentice's name was the trade that they were undertaking, together with the word or words "completed", "early release", "rotated" or "cancelled". Alongside Mr Milienou's name were the words "early release".

29 Mr Tucker's evidence was that "early release" meant that an application had been made to the Department of Education to complete the apprenticeship early and "cancel" meant that the contract, the training and the employment of the apprentice was cancelled. "Rotated" meant that the apprentice was taken from the host employer and placed with another host employer.

30 During cross-examination, Mr Tucker acknowledged that he had no direct knowledge concerning the employment of Mr Milienou. In respect of meeting the employer's responsibilities, he stated that these included the payment of superannuation and PAYG tax.

31 Mr Rochaix, who has been employed by the Council for the past 10 years, is currently the Council's Building Trades Co-ordinator. His position includes supervising all wages staff, including apprentices. He stated that the Council sources its apprentices from several registered agencies, including WSROC. In return for the provision of apprentices, WSROC receives payment for their placement. When apprentices are employed by WSROC and placed with the Council, they do not occupy a position within Council's organisational structure. The apprentices sit over and above staff numbers and do not fill permanent positions because the Council may not always have work or training to meet the statutory apprentice requirements. On at least three occasions, Mr Rochaix has returned apprentices to WSROC for various reasons, including absenteeism, tardiness and the failure of the Council to meet "on-the-job" training requirements. He stated that he was unable to control the volume of work at the Council and if there was a shortage of work or oversupply of labour, the Council had the option to return apprentices to WSROC. In such circumstances, WSROC is obliged to either transfer that apprentice to another work location or terminate his/her employment. The Council does not have this authority.

32 Mr Rochaix acknowledged that the Council has an obligation under its occupational health and safety policy to ensure that all workers have suitable personal protective clothing. Council's occupational health and safety obligations extend beyond WSROC's staff and Mr Rochaix therefore ensures that apprentices, contractors and/or labour hire staff working for Council have complied with WSROC's occupational health and safety policy.

33 According to Mr Rochaix, the Council stopped directly employing apprentices around 1980. Council's staff provide direction on a day-to-day basis whilst WSROC, as the principal employer deals with timekeeping; payment of wages, rosters and annual leave; payment of TAFE fees; administration of sick leave and undertaking discipline when necessary. He accepted that whilst physical control at a Council job site is administered by Council, all other forms of control ultimately rest with WSROC. The day-to-day control of apprentices by Council is a practical feature of WSROC's relationship. He stated that as the work required to be performed by Council resides within its boundaries, it would be impracticable for a WSROC officer to direct apprentices remotely from their offices in Blacktown.

34 During Mr Rochaix's 10 years with the Council, WSROC has always been responsible for initiating its recruitment process. WSROC advertises for applicants, as well as sourcing potential applicants from other job market activities. Candidates are put through a preliminary screening test, usually referred to as aptitude testing, before any formal interview takes place. Mr Milienou, like other apprentices at the time, would have been called by WSROC to attend a Council location for convenience. The Council likes to see the nominated candidates and contributes to the final selection process. It can do this with informal interviews after WSROC has completed its preliminary screening.

35 In respect of the requirement for timesheets, Mr Rochaix stated that it is Council's practice that apprentices are required to complete Council's timesheets for the following important purposes:

· to ensure the hours worked by WSROC apprentices are recorded in a proper manner, under the supervision of Council;

· to assist the administration and payment of apprentices by WSROC;

· to cross reference time sheets with WSROC invoices for the placement and provision of apprentices by WSROC to Council;

· to attribute costs to works and projects conducted by Council that the apprentice works on;

In addition, in order to assign true costs to Council, a number is assigned to the apprentice and when they record it, it enables costs to be assigned to the various assets the apprentice works on.

36 Timesheets completed by WSROC apprentices are then forwarded to WSROC for processing wage payments for the employees working with Council. Furthermore, WSROC advises Council of new billing rates and other matters affecting the Host employer, including, for example, that a public holiday had been declared on Friday 7 September 2007 because of the Asia-Pacific Economic Co-operation ("APEC") Summit.

37 After successfully completing his apprenticeship, Mr Milienou received a formal letter of offer to join the Council as an employee. A copy of this letter dated 10 May 1996 was annexed to Mr Rochaix's affidavit. This letter referred to Mr Milienou's application and recent interview for the position of a carpenter with the Council and offered him appointment as a carpenter. Mr Milienou was advised that his appointment was in accordance with the Local Government (State) Award and would be for a six month probationary period. Subject to satisfactory service, permanent status would then be gained. Mr Milienou was advised that on the first day of his employment with Council, or within the first two weeks, he would be required to attend an Induction Session to familiarise himself with Council's policies and procedures. He was further advised that he was to report to Mr Roy Newman, the Building Trades Co-ordinator, to commence duties at 6.45 am on Tuesday 14 May 1996.

38 Mr Milienou was also advised in a letter dated 13 October 1995 that "as part of Council's employment procedures", selected applicants (for the position of carpenter) were requested to undertake a medical examination at Council's expense. He was provided with a letter from the Council to its doctor, which advised that Mr Milienou was being considered for appointment to the Council's staff as a carpenter.

39 Mr Milienou was also required to complete a Staff Records Questionnaire. A copy of this document signed by Mr Milienou, bearing the date of 30 May 1996, was attached to Mr Rochaix's affidavit. Under the heading "Previous Employers Names", Mr Rochaix had written "WSROC" and under the heading "Period" and the words "Commenced and Terminated" he had written the numbers "1993" and "1996" respectively. Under the word "Position", he had written "apprentice carpenter FCC".

40 Mr Rochaix was not aware of any formal discipline, or any other disciplinary action concerning Mr Milienou during his placement at the Council. He said an apprentice may receive a "referee's warning". During re-examination, he explained that this meant a warning given "on-the-run", as often occurs with a referee in sport. If the referee's warning does not work, the apprentice's supervisor would bring the matter to the attention of Mr Rochaix and explain what has happened. If formal discipline is required, that is done by Mr Rochaix. He stated that at the conclusion of the apprenticeship, there was no guarantee that an apprentice will obtain employment with the Council. During the past 10 years, many apprentices placed with the Council have not been successful in obtaining employment with the Council upon completion of their apprenticeship. He believed that the Council had engaged approximately 12 apprentices across the craft ranges, with only two being successful in obtaining employment at the Council. Each apprentice is advised by WSROC that their apprenticeship contract will expire and there will be no extension of their time with Council.

41 During cross-examination, Mr Rochaix conceded that he had no direct knowledge of Mr Milienou working at the Council. Mr Rochaix also conceded that Council employees could give warnings to an apprentice if he/she were not doing the right thing and that Council could return an apprentice back to WSROC if the case required it. Mr Rochaix explained that at the present time, there is a three month probationary period with WSROC. At the conclusion of this period, WSROC seeks advice from the Host as to how the apprentice is performing. WSROC then makes a decision as to whether it will support the apprentice by signing the indentures. The indenture of apprenticeship for Mr Milienou dated 27 May 1993, stated that the indenture was with WSROC. It was signed by Mr Milienou and Ms Alcantara, on behalf of WSROC. Mr Rochaix confirmed that apprentices wore Council uniforms and the payroll number assigned to an apprentice by WSROC also enabled the apprentice to gain access to tools owned by the Council.

42 Ms Ana Alcantara is the Building Trades Clerk at the Council. She has been employed with the Council for the last 17 years and her duties include keeping records and undertaking other administrative functions including the preparation of documents to enable WSROC to pay their apprentices.

43 Ms Alcantara stated that WSROC has an annual call for apprentices to be employed and once they have been through the normal screening and testing process, they will advise Councils who have vacancies for a particular trade to informally meet an applicant. This process is removed from Council's recruitment and selection process, where a decision to fill a vacant position first requires management approval to fill such a position. The position must be advertised in local and state newspapers in accordance with s 348 of the Local Government Act 1993. Ms Alcantara has always been the contact person when interested persons enquire about positions advertised by the Council. She stated that she has never fielded phone calls for persons interested in apprenticeships with WSROC. She stated that all Council positions are advertised in the daily newspaper. She annexed to her affidavit an advertisement which was placed in the Fairfield Advance Newspaper dated 22 August 1995 for a carpenter and joiner position with the Council, which Mr Milienou applied for and was successful.

44 She stated that on occasions where leave is sought by a WSROC employee, the application will be considered by the Council's Foreman, who assesses the operational requirements of Council and whether they may be compromised by the leave. If leave is granted, Council liaises with WSROC to replace the apprentice for that period. Ms Alcantara stated that the leave forms that the apprentices completed were not used by Council for any other purpose except to be forwarded to WSROC for processing, which included approval or refusal of the applications by WSROC as their employer.

45 Council charges out apprentices at a uniform rate to all its internal clients. The hourly rate for all WSROC apprentices is based on the average cost to Council per apprentice. Annexed to Ms Alcantara's affidavit was a memo dated 10 August 1995 which sought that the hourly rate for all WSROC apprentices be adjusted. Ms Alcantara was required to ensure that all timesheets reached WSROC by the strict deadline of Monday lunch time so that apprentices could be paid. If the timesheet was not received by the deadline, WSROC could not process the payment and the apprentice would not be paid on time for that week. This has occurred from time to time and the apprentice has been required to follow the matter up with WSROC and is then paid the following week. She believed most apprentices were aware of the deadline. WSROC is also responsible for workers' compensation insurance and administering that process. From time to time, Ms Alcantara has followed up pay discrepancies or other enquiries on behalf of apprentices with WSROC, particularly where they were out on a job as it would have been too difficult for them and for Council projects to be off the job.

46 Her evidence was that apprentices did not have an employee identification numbers, but were allocated a number to access stores and charge their time to the Council's customers. Without the number, an apprentice could not be allocated a uniform, stock, tools and materials in the same way that permanent staff were able to obtain them.

47 During cross-examination, Ms Alcantara conceded that she was not involved in the process when Mr Milienou began working as an apprentice for the Council. Ms Alcantara acknowledged that her signature appeared on the indenture form for Mr Milienou.

48 Her evidence during re-examination was that on occasions, she was asked by her supervisor to sign the form as a witness, but she did not have a specific recollection of signing Mr Milienou's indenture document.

49 Mr Cosimo Bartone is employed as the Accounts Payable Supervisor with the Council. Having commenced employment with the Council in 1990, Mr Bartone confirmed that the Council had been paying WSROC on the basis of invoices received for apprentices who work in accordance with their apprenticeship agreement. He stated that he had been able to locate, through miscrofiche records, payments made to WSROC by the Council on the basis of invoices received for apprentices who were working for the Council in accordance with their apprenticeship agreement for the period 1993 to 1995. This included Mr Milienou. His understanding of the arrangements with WSROC and their apprentices was that WSROC dealt with any enquiries in relation to wages paid and provided any changes to the Council by way of subsequent invoices either with credits or other charges. He stated that at no point in time had Council paid apprentices employed through WSROC any wages.

50 Mr Easton's submissions may be summarised as follows:

(i) Mr Milienou, WSROC and the Council did not act on the basis that Mr Milienou was an employee of the Council during 1993 to 1996;

(ii) there is evidence of a contract between Mr Milienou and WSROC and no evidence of a contract between Mr Milienou and the Council;

(iii) there is nothing unusual or enigmatic about apprentices and trainees employed by group schemes working in host workplaces and such apprentices and trainees working under the day to day direction of managers employed by a host employer;

(iv) if parliament had intended for the period of employment as an apprentice employed by a group scheme to be part of the worker's continuous service, then it would have made specific provision for it.

(v) the granting of any orders in Mr Milienou's favour will cause significant hardship across many industries that have used and are using group scheme arrangements to facilitate and support apprenticeships, traineeships and training generally.

Consideration

51 The question for determination in these proceedings is: with whom was the contract of service of Mr Milienou between 1993 and 1996 made? In my view, and I find for the reasons that follow, that Mr Milienou was employed by WSROC during the relevant period.

52 The legal principles applicable to the determination of the issue in this case are not in doubt. A convenient summary of them was set out by Kirby ACJ, with whom Clark and Cole AJA agreed, in Dalgety Farmers Ltd t/a Grazcos v Bruce and Anor (1995) 12 NSWCCR 36 where his Honour succinctly observed at 47 - 49:

(2) Determining whether employment exists, and if so with which person or organisation, is often a difficult task. It involves the characterisation of the essence of a relationship by reference to given criteria. It frequently results (as cases both in Australia and elsewhere illustrate) in borderline decisions upon which different legal minds, properly instructed, can reach different conclusions. See Connelly v Wells (1994) 55 IR 86 (NSWCA); Articulare Restorations Development v Crawford (1994) 57 IR 371 (NSWCA), 378. Lee Ting Sang v Chung Chi-Keung and Anor [1990] UKPC 1; [1990] 2 AC 374 (PC) 385; O'Kelly and Ors v Trust House Forte plc [1984] 1 QB 90 (CA). In borderline cases, it is proper that this Court should have a proper sense of modesty when it comes to the task of classification. See Connelly, 86 ...

...

[4] In disputes concerning the existence of employment-type arrangements, and the characterisation of those arrangements, the proof of paper documentation, although relevant, will not necessarily be determinative. This was the point of the opinions of Pristeley JA and Handley JA in Pitcher, see ibid, 154, 163 (a reference to Pitcher and Anor v Langford and Anor (1991) 23 NSWLR 142). Their Honours made it plain that, in determining the identity of a disputed employer, the Court is entitled to consider the reality of the purported contractual arrangements. It may do so even though it was not argued that the arrangements were a sham...

(5) In determining whether a contract of service has been entered, and if so with whom, it is necessary to look to the circumstances of the engagement and to ascertain who it was that offered employment, and whether the worker accepted that offer. To determine whether what then ensued was indeed employment (in the sense of a contract of service) it is necessary to look to the whole of the relationship. Whilst the existence of the right of control remains highly significant, as the High Court pointed out in Stevens, (see at 24, 28, 36), (a reference to Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16), it is no longer regarded as the sole criterion... Thus the search which is on is for the essence of the relationship, not the simple touchstone of actual control, or the right of control. The duty to look to the "totality of the relationship" is emphasised both by the High Court (see Zuijs, 571; Stevens, 29) and by this Court (see Connelly, 74, 82; Articulate Restorations, 379).

However convenient it would be to return to the simple test of control it does not represent the present law, for since it was formulated the nature and incidents of the employment relationship have moved beyond control simpliciter to a more complex notion.

53 More recently, in Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 at [45], the High Court explained that "control", the traditional indicium of the employment relationship, is only one relevant factor in determining the existence of an employment contract. Instead of having regard exclusively to "considerations of control", which may be less relevant to the variety of modern employment relationships, the High Court took the view that it is necessary to consider the totality of the relationship between the parties.

54 The Full Bench of the Commission in Court Session, as it was then known, in Swift Placements Pty Limited v WorkCover Authority of New South Wales (Inspector May) (2000) 96 IR 69 observed that whether a person is the employee of another, who is the employer at any particular time or for a particular purpose, is a question of fact to be determined according to given criteria (at [28]). The Full Bench went on to consider various authorities dealing with that question, stating at [37]:

It will be apparent that Mr Macken's submission did not attend to the primary question arising, namely, whether there was an intention to create a legal relationship between Mr Terkes and Warman but rather assumed such a relationship and characterised it according to various criteria, principally control, as an employment contract. Having in mind the proper process referred to above in Hewitt v. Bonvin, Perpetual Trustee Company and Grazcos to look first to the circumstances of the engagement to ascertain whether a legal relationship was created before determining the nature of that relationship, we consider the submission to be flawed and not supportive of the appellant's case. Indeed, on the facts as found, we are satisfied that Marks J. was correct in finding no evidence of any contractual relationship between Mr Terkes and Warman.

55 It is these principles that I intend to apply to determine the issue before the Commission.

56 I am of the view that there is no evidence that there was an intention on behalf of the Council to enter into a contract of employment with Mr Milienou in 1993. The applicant's case has proceeded upon an assumption that because an advertisement appeared in a newspaper, which may have had a reference to the Council, that resulted in Mr Milienou being interviewed by employees of the Council, therefore a contract of employment was entered into between those parties. Mr Milienou's evidence was that he could not remember who he contacted in respect of the advertisement. Although he attended an interview at the Council's premises at which employees of the Council were present, his evidence was that WSROC was handling, what he described as, "the process". I infer that this is a reference to the interview of Mr Milienou that determined whether he was suitable to be indentured as an apprentice carpenter. Mr Milienou does not go so far in his evidence to say that he understood he was being offered a position with the Council in 1993. He merely asserts that in respect of some matters (uniform, directions received from employees of the Council, the filling out of Council timesheets and minor disciplinary action) he was treated similarly to employees at the Council.

57 It may well be that there was an advertisement that made reference to the Council seeking an apprentice carpenter. This is unsurprising in light of the evidence given by Mr Tucker that WSROC is a group training scheme established to recruit trainees and apprentices from school leavers and job seekers. Seven of its 12 member board of directors come from the Regional Organisation of Councils of Western Sydney. Mr Tucker's evidence was that WSROC advertises jointly for candidates with some host employers.

58 However, the evidence of Mr Rochaix is that the Council had not employed apprentices directly since 1980. It is therefore not surprising that there is no evidence of an offer of employment and therefore an intention to create a legal relationship between Mr Milienou and the Council. I find on the evidence no such offer of employment was made by the Council during the relevant period.

59 In reaching this conclusion, I have been mindful that there are a long line of Full Bench decisions in the occupational health and safety area that have determined that labour hire firms or their equivalent, are employers: Swift; Labour Co-operative Ltd v WorkCover Authority of New South Wales (Inspector Robins) (2003) 121 IR 78; Drake Personnel Ltd T/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432; WorkCover Authority of New South Wales (Inspector Legge) v Coffey Engineering Pty Limited (No 2) (2001) 110 IR 447.

60 I turn to consider the nature of the relationship. Mindful that it is necessary to look at the "totality of the relationship", the following evidence points in favour of a contract of employment between Mr Milienou and WSROC:

(i) Mr Milienou executed an indenture of apprenticeship with WSROC as the employer. There was no evidence that the Council sought to enter into an indenture of apprenticeship with Mr Milienou;

(ii) it was common ground that WSROC paid Mr Milienou's salary directly into his bank account and provided him with a pay slip on a monthly basis.

61 Although group certificates and tax returns for the relevant period (1993 to 1996) were not in evidence, it can be inferred that such documentation would show WSROC as the employer. Mr Bartone's evidence was that records showed payments made by the Council to WSROC in respect of Mr Milienou between 1993 and 1996. His evidence was that at no time had Council paid apprentices employed through WSROC. The Industrial and Commercial Training Act 1989 (NSW), which was repealed in 2002, provided pursuant to s 25 that an employer who employs a person in a declared trade may only apply to the Commissioner for the establishment of an apprenticeship for that person. WSROC applied for the establishment of an apprenticeship for Mr Milienou. This may be inferred because the indenture was executed between Mr Milienou and WSROC. Once the indenture was established, s 36 of the Industrial and Commercial Training Act imposed various obligations on the employer including in respect of taking all reasonable steps to ensure the apprentice was properly trained and obtained proper instruction to enable the apprentice to learn the skills of the trade and discharge his or her obligations as an employer of the apprentice. The obligations in s 36 were not undertaken by the Council.

62 WSROC retained ultimate control over Mr Milienou's work. Mr Tucker's evidence was that WSROC placed apprentices with host employers or host workplaces and such apprentices could be rotated from one host to another. Mr Rochaix's evidence was that the formal disciplining of apprentices was done by WSROC which, of course, is again unsurprising given that WSROC bears the legal responsibility as an employer pursuant to the indenture of apprenticeship. Although Mr Milienou was not the subject of disciplinary proceedings, he described being "chipped" by his Council supervisor for standing around and talking. Mr Rochaix acknowledged that the Council supervisors gave, what he described as a "referee's warning" to apprentices but that formal discipline resided with WSROC. Furthermore, WSROC directed Mr Milienou to attend the Council's premises and was responsible for workers' compensation and insurance issues.

63 DEPA points to, and relies upon, Mr Milienou being paid under the Council Agreement which applied to all persons employed by the Council as evidence of employment with the Council. Mr Milienou recalled that there was some discussion after he commenced his apprenticeship as to whether he should be paid pursuant to a State award or the Fairfield Agreement which provided for higher rates of pay. Ultimately, it appears because of Mr Milienou's age, it was decided after some period of time had elapsed (nine months), to pay him in accordance with the Council Agreement. This is not indicative of a contract of employment with the Council, but rather as illustrative of a distinction between Council employees and WSROC employees. The very fact that such an issue arose seems to me to point to Mr Milienou not being engaged by the Council, otherwise he would have been paid in accordance with the Council Agreement from the date of his commencement and there would have been no issue as to whether he was covered by the Council Agreement or not. As it transpired, the Council was prepared to pay the industrial agreement rates, although the evidence is somewhat unclear on this issue.

64 The filling out of Council timesheets is another factor relied upon by DEPA to illustrate employment with the Council. This was necessary so that timesheets could be forwarded to WSROC for the apprentices to be paid. Although Mr Milienou's evidence was that he did not know what happened to the timesheets, which seems somewhat implausible, it is clear from the evidence of Mr Bartone and Ms Alcantara that the timesheets were forwarded to WSROC for payment. Annual leave and sick leave forms were processed in the same way. Similarly, the evidence in respect of ID numbers is not indicative of a direct employment relationship. They were simply logistical measures by which the apprentices could be integrated into a system of stock control and tool control. The wearing of a Council uniform again needs to be considered in terms of the totality of the relationship. Similarly, although Mr Milienou stated that WSROC was his employer on his application form for employment, this is a matter to which I do not attach a great deal of weight, although it was Mr Milienou's opinion at the time. Sometimes when a dispute has arisen as to the legal nature of a relationship, the parties to the relationship will assert, in or out of Court, their individual intention or understanding of the question. For reasons that are explained by Gleeson CJ in Australian Broadcasting Corporation v XIVth Commonwealth Games Limited (1988) 18 NSWLR 540 at 550 and which I shall not repeat, such assertions are usually unhelpful and legally irrelevant.

65 Reference was also made to a number of cases dealing with whether the arrangement was a sham. It is unnecessary to deal with this aspect of the matter, as I have come to the firm view that this was not the case.

66 As in many of these cases, it is not unusual for the indicators of an employment relationship to point both ways. However, particularly bearing in mind that there was no evidence of an intention to enter into legal relations between Mr Milienou and the Council, I am of the view that Mr Milienou did not enter into a contract of employment with the Council between 1993 and 1996.

67 I find that there was nothing unfair or unjust in the treatment of Mr Milienou as an employee of WSROC that would lead to the Commission intervening in this matter.

68 Finally, I would observe there is nothing to preclude an award containing a provision that the service of an apprentice with WSROC is to be taken into account for the purposes of calculating long service leave. The Local Government (State) Award 2004 currently provides that for the purpose of calculating long service leave entitlements, all prior continuous service with any other council within New South Wales shall be deemed to be service with the Council by which the employee is currently employed (cl 19(D)(iii)). Such an application could be made to the Commission and would be determined on its merits.



LAST UPDATED:
15 February 2008