Report file for Building Workers' Industrial Union of Australia v. Odco Pty Ltd (1991) 29 FCR 104
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\begin{document}
\subsection*{Employee area}
\subsubsection*{Instant case}
The law distinguishes between a contract of service (between
employer and employee) and a contract for services (between
principal and independent contractor). This distinction
affects the terms that will be implied in the absence of an
express agreement, the liability of the employer to third
parties, the applicability of industrial awards, the
applicability of statutes which may affect workers'
compensation, occupational health and safety, long-service
leave, fringe benefits tax, etc.\par The terms ``employer''
and ``worker'' are used here to mean ``employer'' and
``employee'' (in the case of a contract of service) or
``principal'' and ``independent contractor'' (in the case of a
contract for services).
\medskip\noindent In the instant case,
the employer did not direct the manner in which the work was
to be done;
the worker was allowed to use her/his own discretion in
doing an aspect of the work that was not specified
beforehand;
the worker was not an integral part of the employer's
business, but was accessory to it;
the worker owned the tools or provided the transport with
which she/he performed the work;
the employer would not make a profit/loss if the work
performed by the worker cost less/more than expected;
the work was not performed on the employer's premises;
the employer neither supervised nor inspected the work;
it is not known whether the worker was in business on
her/his own account;
the worker was not allowed to employ others to assist with
her/his work;
the worker was not obliged to work only for the employer;
the worker was required to work at specified times;
it is not known whether the employer paid the worker by
time;
the money that the employer paid to the worker was not
stated to be a ``fee'';
the money that the employer paid to the worker was not
stated to be ``wages'' or ``salary'';
the employer did not deduct PAYE tax instalments from the
worker's pay;
the employer paid the worker neither sick pay nor holiday
pay;
the employer and the worker did not express any intention
that the relationship would be one of employer and
employee; and
the employer and the worker expressed an intention that the
relationship would be one of principal and independent
contractor.
\medskip\noindent In my opinion---following \frenchspacing
{\it Humberstone v. Northern Timber Mills\/}\nonfrenchspacing---%
the worker is an independent contractor.
\medskip\noindent In \frenchspacing
{\it Humberstone v. Northern Timber Mills}\nonfrenchspacing,%
\footnote{(1949) 79 CLR 389.}
a 1949 decision of
three justices of the High Court of Australia,
Humberstone carried goods for NTM. He had originally held
himself out as a carrier, prepared to carry for anyone,
but for over twenty years he had carried goods solely for
NTM (although he would, infrequently, carry back-loads for
NTM's customers). Humberstone owned the truck, and paid
for petrol and repairs. He was paid weekly on a
weight-mileage basis. He was a licenced carrier, and had
his name printed on the side of his truck with the
description ``carrier.''\par On the way back from a job,
he had a puncture. He went home to change the wheel, but
exerted himself so strenuously in trying to remove the
tyre from the wheel that he became ill and later lapsed
into a coma, from which he did not recover. Section 3 of
the {\it Worker's Compensation Act\/} 1928 (Vic) had been
amended about a year before Humberstone's death so as to
include independent contractors in its definition of a
``worker'' covered by the Act. However, the High Court
held that the amendment applied only to contracts entered
into after it came into operation. Further, the Court
decided that Humberstone was not an employee of NTM.
Hence, he was not a ``worker'' under the Act, and his
widow was not entitled to compensation under the Act.
There are several significant similarities
between the instant case and \frenchspacing
{\it Humberstone v. NTM\/}\null\nonfrenchspacing:
the employer did not direct the manner in which the work was
to be done;
the worker was allowed to use her/his own discretion in
doing an aspect of the work that was not specified
beforehand;
the worker was not an integral part of the employer's
business, but was accessory to it;
the worker owned the tools or provided the transport with
which she/he performed the work;
the employer would not make a profit/loss if the work
performed by the worker cost less/more than expected;
the work was not performed on the employer's premises;
the employer neither supervised nor inspected the work;
the worker was not obliged to work only for the employer;
the money that the employer paid to the worker was not
stated to be a ``fee'';
the money that the employer paid to the worker was not
stated to be ``wages'' or ``salary'';
the employer did not deduct PAYE tax instalments from the
worker's pay;
the employer paid the worker neither sick pay nor holiday
pay; and
the employer and the worker did not express any intention
that the relationship would be one of employer and
employee.
However, the instant case is not on all fours with \frenchspacing
{\it Humberstone v. NTM}\null\nonfrenchspacing.
In that case
the worker was not in business on her/his own account;
the worker was allowed to employ others to assist with
her/his work;
the worker was not required to work at specified times;
the employer did not pay the worker by time; and
the employer and the worker did not express any intention
that the relationship would be one of principal and
independent contractor.
Nevertheless, I believe that \frenchspacing
{\it Humberstone v. NTM\/} \nonfrenchspacing
should be followed.
\medskip\noindent If \frenchspacing
{\it Ferguson v. John Dawson and Partners (Contractors) Ltd\/} \nonfrenchspacing
is followed then the worker is an employee.
\medskip\noindent In \frenchspacing
{\it Ferguson v. John Dawson and Partners (Contractors) Ltd}\nonfrenchspacing,%
\footnote{[1976] 1 WLR 1213.}
a 1976 decision of
the English Court of Appeal,
Ferguson fell off a roof while removing some scaffolding
boards. He claimed damages against Dawson (the building
contractors) for breach of statutory duty relying on the
Construction (Working Places) Regulations 1966 (UK). This
duty would only be owed if Ferguson was an employee of
Dawson.\par Megaw and Browne LJJ held that, despite the
fact that both parties labelled Ferguson a ``self-employed
labour only subcontractor'', the reality of the
relationship between them was that of employer and
employee.\footnote{ibid. at 1219 per Megaw LJ, at 1228--9
per Browne LJ.}
There are several similarities
between the instant case and \frenchspacing
{\it Ferguson v. Dawson\/}\null\nonfrenchspacing:
the work was not performed on the employer's premises;
the worker was not allowed to employ others to assist with
her/his work;
the worker was not obliged to work only for the employer;
the worker was required to work at specified times;
the money that the employer paid to the worker was not
stated to be a ``fee'';
the money that the employer paid to the worker was not
stated to be ``wages'' or ``salary'';
the employer did not deduct PAYE tax instalments from the
worker's pay;
the employer paid the worker neither sick pay nor holiday
pay;
the employer and the worker did not express any intention
that the relationship would be one of employer and
employee; and
the employer and the worker expressed an intention that the
relationship would be one of principal and independent
contractor.
However, there are several significant differences
between the instant case and \frenchspacing
{\it Ferguson v. Dawson}\null\nonfrenchspacing.
In that case
the employer directed the manner in which the work was to be
done;
the worker was not allowed to use her/his own discretion in
doing an aspect of the work that was not specified
beforehand;
the worker was an integral part of the employer's business;
the worker neither owned the tools nor provided the
transport with which she/he performed the work;
the employer would make a profit/loss if the work performed
by the worker cost less/more than expected;
the employer supervised or inspected the work;
the worker was not in business on her/his own account; and
the employer paid the worker by time.
Note also that \frenchspacing
{\it Ferguson v. Dawson\/} \nonfrenchspacing
is only a decision of
the English Court of Appeal
and not as good authority as a case decided by
three justices of the High Court of Australia%
---like \frenchspacing
{\it Humberstone v. NTM}\null\nonfrenchspacing.
Consequently, there is nothing in \frenchspacing
{\it Ferguson v. Dawson\/} \nonfrenchspacing
to warrant any change in my conclusion.
\subsubsection*{Hypothetical 1}
Consider the instant case changed so that the following is true:
the worker was allowed to employ others to assist with
her/his work; and
the employer and the worker did not express any intention
that the relationship would be one of principal and
independent contractor.
\medskip\noindent If that were so then I would be more strongly of the
opinion that---following \frenchspacing
{\it Humberstone v. Northern Timber Mills\/}\nonfrenchspacing---%
the worker is an independent contractor.
\medskip\noindent Details of \frenchspacing
{\it Humberstone v. NTM\/} \nonfrenchspacing
are summarized above.
There are several significant similarities
between the hypothetical case and \frenchspacing
{\it Humberstone v. NTM\/}\null\nonfrenchspacing:
the employer did not direct the manner in which the work was
to be done;
the worker was allowed to use her/his own discretion in
doing an aspect of the work that was not specified
beforehand;
the worker was not an integral part of the employer's
business, but was accessory to it;
the worker owned the tools or provided the transport with
which she/he performed the work;
the employer would not make a profit/loss if the work
performed by the worker cost less/more than expected;
the work was not performed on the employer's premises;
the employer neither supervised nor inspected the work;
the worker was allowed to employ others to assist with
her/his work;
the worker was not obliged to work only for the employer;
the money that the employer paid to the worker was not
stated to be a ``fee'';
the money that the employer paid to the worker was not
stated to be ``wages'' or ``salary'';
the employer did not deduct PAYE tax instalments from the
worker's pay;
the employer paid the worker neither sick pay nor holiday
pay;
the employer and the worker did not express any intention
that the relationship would be one of employer and
employee; and
the employer and the worker did not express any intention
that the relationship would be one of principal and
independent contractor.
However, the hypothetical case is not on all fours with \frenchspacing
{\it Humberstone v. NTM}\null\nonfrenchspacing.
In that case
the worker was not in business on her/his own account;
the worker was not required to work at specified times; and
the employer did not pay the worker by time.
Nevertheless, I believe that \frenchspacing
{\it Humberstone v. NTM\/} \nonfrenchspacing
should be followed.
\medskip\noindent If \frenchspacing
{\it Cam and Sons Pty Ltd v. Sargent\/} \nonfrenchspacing
is followed then the worker is an employee.
\medskip\noindent In \frenchspacing
{\it Cam and Sons Pty Ltd v. Sargent}\nonfrenchspacing,%
\footnote{(1940) 14 ALJ 162.}
a 1940 decision of
four justices of the High Court of Australia,
Sargent was the master of a ship. He entered into an
agreement with Cam and Sons that claimed that the ship was
hired by Cam and Sons to Sargent and his fellow
contractors (called ``the partnership''). However, it was
doubtful whether that agreement actually deprived Cam and
Sons of any control over the ship. The partnership was to
use the ship only to carry coal from Swansea to Sydney.
Cam and Sons were sole agents of the partnership for
securing cargoes for the ship, and for collecting money
due to the partnership. The partnership paid nothing for
the ``hire'' of the ship, but received a specified sum for
each return trip of a certain tonnage plus (in certain
circumstances) 5\% of the earnings, the balance of which
was retained by Cam and Sons. Cam and Sons had to approve
people employed by the partnership.\par Sargent claimed
that he (and others in the partnership) were employed by
Cam and Sons, and therefore came within the terms of an
industrial award. Cam and Sons claimed that members of the
partnership were independent contractors.\par The High
Court unanimously agreed with Sargent. Rich J came to the
conclusion that the agreement was an attempt to evade the
terms of the industrial award.\footnote{ibid. at 163.}
There are several similarities
between the hypothetical case and \frenchspacing
{\it Cam v. Sargent\/}\null\nonfrenchspacing:
the worker was allowed to use her/his own discretion in
doing an aspect of the work that was not specified
beforehand;
the work was not performed on the employer's premises;
the employer neither supervised nor inspected the work;
the worker was allowed to employ others to assist with
her/his work;
the worker was not obliged to work only for the employer;
the money that the employer paid to the worker was not
stated to be a ``fee'';
the money that the employer paid to the worker was not
stated to be ``wages'' or ``salary'';
the employer did not deduct PAYE tax instalments from the
worker's pay;
the employer paid the worker neither sick pay nor holiday
pay;
the employer and the worker did not express any intention
that the relationship would be one of employer and
employee; and
the employer and the worker did not express any intention
that the relationship would be one of principal and
independent contractor.
However, there are several significant differences
between the hypothetical case and \frenchspacing
{\it Cam v. Sargent}\null\nonfrenchspacing.
In that case
the employer directed the manner in which the work was to be
done;
the worker was an integral part of the employer's business;
the worker neither owned the tools nor provided the
transport with which she/he performed the work;
the employer would make a profit/loss if the work performed
by the worker cost less/more than expected;
the worker was not in business on her/his own account;
the worker was not required to work at specified times; and
the employer did not pay the worker by time.
Despite the fact that \frenchspacing
{\it Cam v. Sargent\/} \nonfrenchspacing
is a decision of
four justices of the High Court of Australia
(and better authority than a case decided by
three justices of the High Court of Australia%
---like \frenchspacing
{\it Humberstone v. NTM\/}\nonfrenchspacing),
there is nothing in \frenchspacing
{\it Cam v. Sargent\/} \nonfrenchspacing
to warrant any change in my conclusion.
\subsubsection*{Hypothetical 2}
Consider the instant case changed so that the following is true:
the worker was not allowed to use her/his own discretion in
doing an aspect of the work that was not specified
beforehand; and
the worker was an integral part of the employer's business.
\medskip\noindent If that were so then my opinion would be
that---following \frenchspacing
{\it Ferguson v. John Dawson and Partners (Contractors) Ltd\/}\nonfrenchspacing---%
the worker is an employee.
\medskip\noindent Details of \frenchspacing
{\it Ferguson v. Dawson\/} \nonfrenchspacing
are summarized above.
There are several significant similarities
between the hypothetical case and \frenchspacing
{\it Ferguson v. Dawson\/}\null\nonfrenchspacing:
the worker was not allowed to use her/his own discretion in
doing an aspect of the work that was not specified
beforehand;
the worker was an integral part of the employer's business;
the work was not performed on the employer's premises;
the worker was not allowed to employ others to assist with
her/his work;
the worker was not obliged to work only for the employer;
the worker was required to work at specified times;
the money that the employer paid to the worker was not
stated to be a ``fee'';
the money that the employer paid to the worker was not
stated to be ``wages'' or ``salary'';
the employer did not deduct PAYE tax instalments from the
worker's pay;
the employer paid the worker neither sick pay nor holiday
pay;
the employer and the worker did not express any intention
that the relationship would be one of employer and
employee; and
the employer and the worker expressed an intention that the
relationship would be one of principal and independent
contractor.
However, the hypothetical case is not on all fours with \frenchspacing
{\it Ferguson v. Dawson}\null\nonfrenchspacing.
In that case
the employer directed the manner in which the work was to be
done;
the worker neither owned the tools nor provided the
transport with which she/he performed the work;
the employer would make a profit/loss if the work performed
by the worker cost less/more than expected;
the employer supervised or inspected the work;
the worker was not in business on her/his own account; and
the employer paid the worker by time.
Nevertheless, I believe that \frenchspacing
{\it Ferguson v. Dawson\/} \nonfrenchspacing
should be followed.
\medskip\noindent If \frenchspacing
{\it Australian Mutual Provident Society v. Chaplin\/} or
{\it Ready Mixed Concrete (South East) Ltd v. Minister of Pensions and National Insurance\/} \nonfrenchspacing
are followed then the worker is an independent contractor.
\medskip\noindent In \frenchspacing
{\it Australian Mutual Provident Society v. Chaplin}\nonfrenchspacing,%
\footnote{(1978) 18 ALR 385.}
a 1978 decision of
the Judicial Committee of the Privy Council,
Chaplin was a representative of AMP. A clause of the
agreement between them stated that the relationship was
one of ``principal and agent'' and not one of ``master and
servant.'' Chaplin claimed that he was employed under a
contract of service, and was therefore a ``worker'' under
the {\it Long Service Leave Act, 1967\/} (SA) and entitled
to certain benefits.\par The Privy Council found that
there was no reason to think that the clause was not a
genuine statement of the parties' intentions. Examining
the agreement, their Lordships concluded that it provided
for a contract of agency. The fact that Chaplin was given
the power of unlimited delegation of the whole performance
of his work was ``almost conclusive against the contract
being a contract of service.''\footnote{ibid. at 391.}
There are several similarities
between the hypothetical case and \frenchspacing
{\it AMP v. Chaplin\/}\null\nonfrenchspacing:
the employer did not direct the manner in which the work was
to be done;
the worker was an integral part of the employer's business;
the worker owned the tools or provided the transport with
which she/he performed the work;
the employer would not make a profit/loss if the work
performed by the worker cost less/more than expected;
the work was not performed on the employer's premises;
the employer neither supervised nor inspected the work;
the money that the employer paid to the worker was not
stated to be a ``fee'';
the money that the employer paid to the worker was not
stated to be ``wages'' or ``salary'';
the employer did not deduct PAYE tax instalments from the
worker's pay;
the employer paid the worker neither sick pay nor holiday
pay;
the employer and the worker did not express any intention
that the relationship would be one of employer and
employee; and
the employer and the worker expressed an intention that the
relationship would be one of principal and independent
contractor.
However, there are several significant differences
between the hypothetical case and \frenchspacing
{\it AMP v. Chaplin}\null\nonfrenchspacing.
In that case
the worker was allowed to use her/his own discretion in
doing an aspect of the work that was not specified
beforehand;
the worker was in business on her/his own account;
the worker was allowed to employ others to assist with
her/his work;
the worker was obliged to work only for the employer;
the worker was not required to work at specified times; and
the employer did not pay the worker by time.
Despite the fact that \frenchspacing
{\it AMP v. Chaplin\/} \nonfrenchspacing
is a decision of
the Judicial Committee of the Privy Council
(and better authority than a case decided by
the English Court of Appeal%
---like \frenchspacing
{\it Ferguson v. Dawson\/}\nonfrenchspacing),
there is nothing in \frenchspacing
{\it AMP v. Chaplin\/} \nonfrenchspacing
to warrant any change in my conclusion.
\medskip\noindent In 1967,
\frenchspacing
{\it Ready Mixed Concrete (South East) Ltd v. Minister of Pensions and National Insurance\/}\nonfrenchspacing%
\footnote{[1968] 2 QB 497.}
was decided by
the Queen's Bench Division of the English High Court.
(A case decided by
the Queen's Bench Division of the English High Court
is not as good authority as a case decided by
the Judicial Committee of the Privy Council%
---like \frenchspacing
{\it AMP v. Chaplin\/}\nonfrenchspacing;
furthermore \frenchspacing
{\it Ready Mixed v. Minister\/} \nonfrenchspacing
is 11 years older than \frenchspacing
{\it AMP v. Chaplin}\null\nonfrenchspacing.)
In \frenchspacing
{\it Ready Mixed v. Minister}\nonfrenchspacing,
Latimer worked for Ready Mixed as an ``owner-driver.'' He
was paid at mileage rates, and was obliged to buy the
truck through a financial organization associated with
Ready Mixed. The truck was painted in the company's
colours, and he had to wear a Ready Mixed uniform. Latimer
was obliged to meet the costs of maintenance, repair and
insurance of the truck (and the attached mixing unit,
which belonged to Ready Mixed). The Minister determined
that Latimer was employed under a contract of service, and
was therefore an ``employed person'' under s. 1(2) of the
National Insurance Act 1965 (UK), making Ready Mixed
liable to make weekly contributions.\par MacKenna J
examined the contract and held that the rights it
conferred, and the duties it imposed, between Latimer and
Ready Mixed were not such as to make it a contract of
service.
There are several similarities
between the hypothetical case and \frenchspacing
{\it Ready Mixed v. Minister\/}\null\nonfrenchspacing:
the employer did not direct the manner in which the work was
to be done;
the worker was an integral part of the employer's business;
the worker owned the tools or provided the transport with
which she/he performed the work;
the employer would not make a profit/loss if the work
performed by the worker cost less/more than expected;
the work was not performed on the employer's premises;
the employer neither supervised nor inspected the work;
the money that the employer paid to the worker was not
stated to be a ``fee'';
the money that the employer paid to the worker was not
stated to be ``wages'' or ``salary'';
the employer did not deduct PAYE tax instalments from the
worker's pay;
the employer paid the worker neither sick pay nor holiday
pay;
the employer and the worker did not express any intention
that the relationship would be one of employer and
employee; and
the employer and the worker expressed an intention that the
relationship would be one of principal and independent
contractor.
However, there are several significant differences
between the hypothetical case and \frenchspacing
{\it Ready Mixed v. Minister}\null\nonfrenchspacing.
In that case
the worker was allowed to use her/his own discretion in
doing an aspect of the work that was not specified
beforehand;
the worker was not in business on her/his own account;
the worker was allowed to employ others to assist with
her/his work;
the worker was obliged to work only for the employer;
the worker was not required to work at specified times; and
the employer did not pay the worker by time.
Note also that \frenchspacing
{\it Ready Mixed v. Minister\/} \nonfrenchspacing
is only a decision of
the Queen's Bench Division of the English High Court
and not as good authority as a case decided by
the English Court of Appeal%
---like \frenchspacing
{\it Ferguson v. Dawson}\null\nonfrenchspacing.
Consequently, there is nothing in \frenchspacing
{\it Ready Mixed v. Minister\/} \nonfrenchspacing
to warrant any change in my conclusion.
\end{document}