The Respondent to this appeal made an application to Service NSW for an Individual Contractor Licence (the licence) under the Home Building Act 1989 (NSW) (the HB Act). The Appellant refused the application on the basis that the Respondent had not gained the relevant experience. The Respondent sought internal review, the result of which was that the refusal to grant the licence was maintained.
The Respondent then sought review in the Tribunal. The Tribunal published its decision on 11 May 2023 (the Decision). The Decision records that the Tribunal set aside the Appellant's decision to refuse the Respondent's application for an Individual Contractor Licence and in substitution granted the Respondent such licence. The Appellant appeals those orders.
[2]
The Decision
It is of assistance in understanding the appeal and our decision to understand the issues before the Tribunal at first instance and the reasoning contained in the Decision. A summary of the Decision is contained in the following paragraphs.
The Decision records that the Appellant confirmed that there was no dispute that the Respondent held the appropriate qualifications for the licence. The Appellant conceded that the experience gained by the Respondent otherwise satisfied the requirements necessary for the grant of a licence with the exception that the Appellant contended that the Respondent was required to gain the relevant experience as an employee, but the relevant experience had been gained as a subcontractor. The Respondent contended that he was an employee, and that the experience he had gained qualified him for the licence. Therefore, as the Tribunal recorded at [4], the issue in dispute was whether the Respondent had been an employee at the time he had obtained the relevant experience.
The Decision sets out the statutory background. It is not in dispute that the Appellant had the authority to specify qualifications and experience relevant to the grant of a contractor licence or that the relevant document setting out the necessary requirements is contained in an instrument published in the NSW Government Gazette on 14 January 2022 with the title "Qualification Requirements for an Endorsed Contractor Licence or Supervisor Certificate for General Work" dated 23 December 2021 (referred to by the parties as the Instrument).
As the submissions of the Appellant state, the issue between the parties turned on the construction of the Instrument and particularly the meaning of employee within the Instrument for the purpose of satisfying the requirements for relevant experience.
The Instrument contains the following definition of "Experience":
"Experience" means experience gained by the applicant as:
(a) an employee of; or
(b) a holder of a supervisor certificate and as a nominated supervisor for the contractor licence held by; or
(c) a holder of an endorsed contractor licence contracted to; or
(d) a holder of a supervisor certificate in the capacity of a nominated supervisor for a contractor licence held by an individual, partnership or corporation contracted to;
the holder of a contractor licence authorising the holder to do the class of residential building work in which experience was gained ("the Work"), where the applicant, during the relevant period, was:
- supervised and directed in the doing of the Work by the holder of an endorsed contractor licence or supervisor certificate authorising its holder to supervise the Work, and this is verified in the Relevant Application Form; and
- received Remuneration in accordance with law for the Work which the applicant carried out;
At [23] of the Decision, the Tribunal recorded that it was undisputed that the Respondent had not at any time held a licence under the HB Act, and therefore, in order to comply with the criteria contained in the Instrument, it was necessary for the Respondent to have gained his experience as an "employee".
The contention of the Respondent was that he was an employee of Mr Deerness who supervised the Respondent. The contention of the Appellant was, and is, that the Respondent was not an employee of Mr Deerness and that their relationship was that of a "subcontracting arrangement".
At [26] the Tribunal recorded the submission of the Respondent that regard should be had to the context of the word "employee" within the legislation and that the Tribunal should "rely on a broader, more ordinary interpretation of "employee", consistent with the statutory purpose of the [HB Act] of licensing individuals with relevant qualifications and experience. This purposive approach to interpretation would result in a broader interpretation than that applied in taxation or employment law. Focusing on a narrow interpretation of whether someone was an employee, as contended for by the [Appellant], was submitted by the [Respondent] to be inappropriate in those circumstances".
At [27] and [28] the Tribunal referred to, and indicated it proposed to follow, the approach taken in Zada v Director-General, Department of Finance & Services, NSW Fair Trading [2014] NSWCATOD 16 where the Tribunal stated the following at [36] and [37]:
36 In the absence of a statutory definition of "employee" in the HB Act, the word must take its ordinary meaning - "a person working for another person or a business firm for pay" (Macquarie Online Dictionary). A simplistic distinction between an employee and an independent contractor (or subcontractor) is that the former works for another while the latter works for himself. In earlier times the main indicator of an employment (master/servant) relationship was the control exercised by one person over another, but nowadays it is "the totality of the relationship between the parties which must be considered": Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 29, cited with approval in Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 41 [[2001] HCA 44]. Supervision and direction are often very relevant to the enquiry. Those concepts are also relevant to the "experience" question, as is evident from their use in paragraph (c) of the definition in the Instrument.
37 That is why it may be more instructive to start the enquiry by considering the level of supervision and direction provided by the licence holder rather than to focus on either the label used or the tax arrangements in place. The greater the level of supervision and direction, the more likely it is that an employment relationship exists. And if the worker is not closely supervised and directed, then he or she is not likely to reach the requisite level of "experience" in any event, no matter what label has been applied to the relationship. The proper task is to examine "the totality of the relationship between the parties".
At [30], the Tribunal stated that the requirement for an individual seeking a licence to be an "employee" in order for their experience to count towards the experience requirements in the Instrument is to ensure that the work they do is adequately supervised and directed by the licence holder.
From [31], the Tribunal turned to the definition of Remuneration contained in the Instrument. The definition of Remuneration is:
"Remuneration" means wages, salary and director's fees paid to an applicant on a regular basis but does not include bonuses, commissions, allowances or any other ad-hoc payments, including payments from a profit-sharing arrangement between the applicant and any another party, where such payments are the only payments made to the applicant for the Work which the applicant carried out.
The Tribunal noted that the definition is not limited to wages, but also extends to director's fees and that there appears to be a "clear delineation between payments made on a regular basis for work completed by an individual working for a company - salary, wages and regular director's fees; and payments which are occasional and often discretionary, connected to the income and profit of a company - bonuses, commissions, allowances or ad hoc payments". The Tribunal concluded at [33] that the definition of Remuneration demonstrates that an "employee" under the Instrument must be considered by its "broader ordinary meaning", being "a person working for another person or a business firm for pay, rather than its narrower legal meaning". The Tribunal stated that there was no dispute that the Respondent was working for Mr Deerness and for his company, Technique Build Pty Ltd (Technique) for pay.
From [34] the Tribunal went on to consider the evidence and found that the Respondent was an employee and not a subcontractor.
At [35] the Tribunal stated that there was no "contract or written agreement" between the Respondent, Mr Deerness and Technique and that the Tribunal must adopt the approach contained in Stevens and Hollis, being the cases cited in the Zada decision. That approach was described by the Tribunal as the traditional common law "multifactorial" approach involving a consideration of a number of "non-exhaustive" factors. The Tribunal held that the "totality of the relationship must be considered" in determining whether the relationship is that of employee/employer.
The Tribunal summarised the evidence concerning the degree of control and power that existed in the relationship between the Respondent and Mr Deerness and held at [44] that the evidence demonstrates that Mr Deerness did not monitor, control or supervise, the Respondent's work on building sites any more than he would any other subcontractor to Technique. However, Tribunal also recorded that it was unclear on the evidence whether Mr Deerness would have treated employees any differently on-site in that respect.
The Appellant submitted that there had been gaps in the Respondent's employment history and that those gaps evidenced that he was an independent contractor. The Respondent's letter of application (referred to at [39] of the Decision) contains particulars of the periods of employment. These were 10 days in September 2015 (working a 40 hour week), part-time employment between 1 March 2016 and 31 August 2016 (16 hours per week), full-time employment between 5 May 2020 and 16 March 2022 (40 hours per week) and full-time employment between 16 May 2022 and the date of the letter (16 June 2022).
At [46] the Tribunal stated that consideration of the gaps in the Respondent's work experience as "irrelevant" to the determination of whether the Respondent was a subcontractor or an employee. The Tribunal stated that it was common in the construction industry for there to be gaps between jobs. It is relevant to record that the Respondent was a qualified architect who also worked for an architectural firm called Hall Bowra during the gaps.
At [50] the Tribunal found that the evidence given by the Respondent and Mr Deerness indicated that the Respondent was on-site for Technique at the relevant times to do the work himself, for the purpose of gaining experience. He did not delegate work assigned to him or pay other employees of Technique or subcontractors to do work for him. The evidence did not suggest that the Respondent could delegate his duties while working for Technique and nor had he ever done so.
At [53], the Tribunal addressed the fact that the Respondent had a "unique skill set" but that when he was working onsite for Technique, he was not engaging that skill set to complete work. He was not working as an architect onsite. He was provided providing physical labour and dealing with building construction trades under the supervision of Mr Deerness.
In Hollis, one of the factors considered was whether a worker is seen as a representative or extension of the employer and the fact that a worker may be required to wear a uniform bearing the employer's logo was seen as an indication that the worker is an employee. At [55] the Tribunal accepted the evidence that the Respondent wore the "Technique uniform" bearing the Technique logo when he was working on Technique work sites.
From [56] the Tribunal dealt with the manner in which the Respondent was remunerated. At [61] the Tribunal accepted the Respondent's evidence that the Respondent issued invoices in the name of Hall Bowra Architects. At [62] the Tribunal appears to have accepted the evidence that Mr Deerness or Technique did not pay superannuation for the Respondent, but rather the Respondent put money into his superannuation fund himself. The Tribunal also referred to the fact that the Respondent maintained various insurances in his own name and the name of Hall Bowra Architects including personal accident and sickness insurance, professional indemnity insurance, public and products liability and trades and services insurances. At [65] the Tribunal stated that the ability for an employee to set their own remuneration and manner of payment is not unusual in the context of an employment relationship between a company and a more sophisticated worker and that it is not unusual for a highly paid employee to take out their own personal insurances, irrespective of their employer's insurances. At [66] the Tribunal stated that it did not agree with the Appellant's submissions that the Respondent's remuneration is indicative of him being a subcontractor rather than an employee. The Tribunal found, consistently with the definition of Remuneration, that the Respondent was "remunerated in accordance with law" and that "He was paid by Technique, for the work he did for Technique, on a regular basis ".
From [67] the Tribunal considered whether the provision of tools and equipment by the Respondent was indicative of him being a subcontractor rather than an employee. There was evidence that the Respondent had a considerable amount of tools and equipment. The Tribunal held at [70] that it was irrelevant what tools and equipment the Respondent had in his possession unless he was required to use them in the work he did for Technique and there was no evidence of that requirement.
At [71] the Tribunal stated that considering the "totality of the relationship between Technique and the [Respondent] the Tribunal agreed with the Respondent's submissions that he was an employee of Technique, and not a subcontractor to Technique. As the Appellant had conceded that the Respondent had met the "qualifications requirements" of the Instrument and that, should the Tribunal find that he was an "employee" under the Instrument, he had sufficient appropriate experience.
As a consequence of the conclusion reached by the Tribunal, the Tribunal ordered that the Appellant's decision to refuse the Respondent's application for an Individual Contractor Licence be set aside and that, in substitution, the Respondent's application is to be granted.
[3]
Notice of Appeal
On 24 May 2023, the Appellant lodged a Notice of Appeal containing the following grounds of appeal, which it contended were questions of law not requiring leave to appeal:
1. Ground 1: the Tribunal erred at law in applying a broad interpretation of the term "employee" for the purpose of determining whether the Applicant (now the Respondent) met the experience requirements as set out in the Instrument.
2. Gound 2: the Tribunal erred at law in concluding that the Respondent was an employee of Technique for the purpose of determining whether the Respondent met the experience requirements as set out in the Instrument.
By the Notice of Appeal, the Appellant sought an order from the Appeal Panel that the Appellant's decision to refuse the Respondent's application for an Individual Contractor Licence be upheld on the basis that he was not an employee when he gained his experience.
The Respondent lodged a Reply to Appeal opposing the appeal and submitting that the existing orders made at first instance should be maintained.
[4]
Appellant's Submissions
In the following paragraphs the Appellant's submissions are summarised.
The Appellant submits that the Tribunal made errors of law by failing to properly interpret the word "employee" and misapplying the Hollis test to the facts, and thereby concluded in error that the Respondent was an employee of Technique. By Ground 1, the Appellant submits that the Tribunal erred in law by accepting the broader interpretation of the term "employee", contrary to what the legal meaning and the established common law test for employment requires.
By Ground 2, the Appellant submits that the Tribunal erred in law by incorrectly applying the Hollis test to conclude that the Respondent was an employee of Technique while ignoring relevant evidence that suggests otherwise, such as the Respondent being an employee of Hall Bowra, a corporate entity and it was Hall Bowra and not the Respondent, that was engaged as a contractor by Technique.
The Appellant submits that a failure by the Tribunal to properly interpret the words of legislation and misapplying the law to the facts are recognised errors of law. Statutory construction generally involves a question of law: Commissioner for Fair Trading v Younan [2016] NSWCATAP 270 at [28]. Questions, such as whether the wrong question was asked, the statute construed too narrowly, or too widely, have always been questions of law: Lombard Farms Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADTAP 42 at [22].
Further by Ground 1, the Appellant submits that the Tribunal erred in accepting an overly broad interpretation of the term "employee" which is not defined in the HB Act or in the Instrument. The HB Act and the Instrument should be interpreted together, particularly in circumstances where the Instrument has certain mandatory consequences under the HB Act. The term "employee" is used at multiple points throughout the HB Act, for example, at ss 12, 132, 136 and 98.
The HB Act should be interpreted in a way that gives a consistent and coherent meaning to its statutory provisions. The proper construction of these provisions, consistent with the purpose and objects of the HB Act is best served by using the common law test for employment as the definition of what is an employee.
The Appellant submits that, if the Appeal Panel does not accept the above submission, the Appellant's alternative argument is that, in any event, the ordinary and natural meaning of "employee" is the same as the definition of employee adopted at common law or the ordinary natural meaning of a word should give way to a particular legal meaning because the statute requires as much for the reasons accepted by the Full Court of the Federal Court in Seafarers Safety, Rehabilitation & Compensation Authority v Associated Steamships Pty Ltd [2019] FCAFC 232.
It was an error by the Tribunal to find that the contrary conclusion is warranted or required by the defined term "Remuneration": see [31] and [32] of the Decision. The Tribunal observed that "remuneration" means wages, salary and director's fees paid to an applicant. Nothing turns on the inclusion of director's fees. Such fees can be paid to an employee.
The second ground of appeal contends that the Tribunal incorrectly applied the test from Hollis to conclude that the Respondent was an employee of Technique. One of the factors to be taken into account is the degree of control and power to delegate. The Tribunal found that Mr Deerness did not monitor, control or supervise the Respondent's work on building sites any more than he would any other subcontractor to Technique (at [44]) and that if the Respondent was told to redo a task on a building site, he would "wear" that cost: at [43]. The Tribunal found that it was unclear on the evidence whether Mr Deerness would have treated employees any differently on-site in that respect: at [44]. The submissions go on to record the various findings of fact made by the Tribunal but contended that the "correct analysis" of the evidence was that the Respondent was an employee of Hall Bowra and that Hall Bowra was engaged as an independent contractor by Technique. The Appellant submits that it was wrong of the Tribunal to ignore the contractual structure that the parties had agreed to. That structure involved an agreement between two companies by which one company subcontracted to another company. The Appellant's submissions rely on a portion of the transcript in which Mr Deerness stated that he considered that the Respondent was working as a subcontractor.
The Appellant submits that the evidence discloses that the Respondent was not in a "work-wages bargain with Technique". The Respondent had no contractual relationship with Technique. His contractual relationship was with his employer, Hall Bowra and Hall Bowra subcontracted with Technique.
The Appellant's submissions also point to evidence which the Appellant submits is inconsistent with the finding of an employee/employer relationship. This evidence includes the fact that Respondent purchased a car and tools and that he took out his own insurance policies during his time with Technique. In addition, Hall Bowra was paid by Technique, sometimes on an hourly rate basis and on other occasions by payment of a defined sum. The Appellant's submissions rely upon the evidence that Mr Deerness did not monitor, control or supervise the Respondents work on building sites any more than he would any other subcontractor to Technique and that if the Respondent was told to redo a task he would "wear" that cost. Further, the Respondent performed other work for Hall Bowra when there was time to do so.
The Appellant's submissions relied upon statements made by the Full Court of the Federal Court in WorkPac Pty Ltd v Skene [2018] FCAFC 131. There, the Full Court stated, from [104], the principles of statutory construction of relevance to the interpretive task which was before that Court. The issue in that case was that the Court was required to consider the phrase "casual employee" in a statute, which was not a defined term. The Full Court stated that ordinarily the meaning of an undefined expression is discerned by reference to the language of the relevant Act viewed as a whole [105]. The Appellant also made submissions based upon the principle set out in Hollis (supra). There, the Court was required to consider whether a company bore vicarious liability for the injuries incurred by a person by the negligent act of an individual bicycle courier during the course of making a delivery. The majority held that the company was vicariously liable for the negligent act of the bicycle courier on the ground that the courier was an employee of the company. In that case the High Court held that a feature of the employer/employee contract was that the employee was subject to the command of the employer or, to put it another way, the employee was subject to a degree of control by the employer. The High Court held that a number of factors determine whether the relationship is one of employee/employer and one of those is the issue of "control".
It is of relevance to set out, in summary, how the High Court identified relevant features of the relationship of the bicycle couriers with the company for the purposes of determining whether the company was vicariously liable for the negligent actions of the couriers. We will set out those features subsequently in these reasons. The Appellant referred to the following paragraphs of the High Court judgment from [47]:
1. The majority stated that, as a practical matter, the bicycle couriers were not running their own business or enterprise and nor did they have independence in the conduct of their operation. They were not providing skilled labour or labour which required special qualifications.
2. The couriers had little control over the manner of performing their work.
3. The couriers were presented to the public and to those using the courier service as emanations of the company. They wore the company's uniform bearing the company's logo.
4. The majority referred to the "matter of deterrence". The Court quoted, with approval, a judgment of the Supreme Court of Canada which had stated that holding an employer vicariously liable for the wrongs of its employee may encourage the employer to take steps to reduce the risk of harm.
5. The company superintended the courier's finances. The couriers had no scope to bargain for the rate of their remuneration.
6. With respect to tools and equipment, in Hollis the couriers provided their own bicycles and were responsible for the cost of repairs. The Court stated that there is nothing contrary to a relationship of employment in the fact that employees were required to provide the equipment, particularly as the capital outlay was relatively small and because bicycles are not tools that are inherently capable of use only for courier work but also provide a means of personal transport. The provision of the bicycles by the couriers did not indicate the existence of a relationship of independent contractor and principal.
7. The company retained control of the allocation and direction of the various deliveries undertaken by the couriers who had little latitude.
The Appellant further relied upon aspects of the evidence to support the submission that Hall Bowra contracted with Technique for the provision of services performed by the Respondent. The evidence was:
1. Hall Bowra invoiced Technique for the work done by the Respondent and the Respondent was paid by Hall Bowra;
2. the Respondent did not accrue leave or leave entitlements with Technique;
3. Mr Deerness' evidence was that he considered the Respondent to be a subcontractor and that there was an agreement between Technique and Hall Bowra;
4. Technique did not contribute to the Respondent's superannuation;
5. the Respondent was not paid a salary. Hall Bowra invoiced Technique for work completed.
The Appellant submits that the Tribunal erred in not considering that the relevant agreement was that between Technique and Hall Bowra.
[5]
Respondent's Submissions
The Respondent's submissions may be summarised as follows.
The Respondent submits that the Tribunal did not err in its application of the term "employee". The Respondent submits that "it is more instructive" in considering whether the Respondent was an employee to consider the level of supervision and direction provided by the licence holder rather than to focus on either the label used or the tax arrangements in place. This approach was adopted in Zada v Director-General (cited earlier) where, at [37], the Tribunal stated that "[t]he greater the level of supervision and direction, the more likely it is that an employment relationship exists, and if the worker is not closely supervised and directed, then he or she is not likely to reach the requisite level of 'experience' in any event, no matter what label has been applied to the relationship. The proper task is to examine the totality of the relationship between the parties".
The Respondent referred to ss 132 and 136 of the HB Act. They impose upon an employer liability for the acts of an employee. If, as the Appellant contends, the term "employee" is to be construed narrowly and if the term is to have a coherent meaning throughout the whole of the HB Act, the result would be to narrow the application of the HB Act to a smaller number of people, contrary to providing consumer protection as required by the HB Act.
The Respondent submits that the Tribunal was correct in taking a purposive approach to the interpretation of the Instrument as it did at [30], There, the Tribunal held that the purpose of the Instrument is to ensure that work undertaken is adequately supervised and directed by the licence holder. This approach is consistent with that stated by the High Court in SZTAL v Minister for Immigration & Border Protection [2017] 262 CLR 362; [2017] HCA 34 at [14] where the court stated that the starting point for the ascertaining of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard had to its context and purpose. Additionally, the Court said "[c]considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of the word may be suggested, and so too if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected".
The Respondent submits that the purpose of the HB Act and the Instrument is consumer protection and to ensure that an individual has had sufficient experience to deal with the work for which they are being licensed. The Appellant accepts that the Respondent has sufficient experience to qualify for the builder's licence but for the fact that they say he gained the experience under a badge other than as "employee".
The Respondent submits that the Tribunal correctly applied the word "employee" using the traditional common law "multifactorial" approach in favour of finding that the Respondent was an employee of Technique. The non-exhaustive list of factors relevant to this enquiry are those set out in the Hollis decision. The evidence demonstrates that Mr Deerness did in fact monitor, control and supervise the Respondent's work on the building sites. Mr Deerness swore in an affidavit dated 30 January 2023 that he supervised the Respondent at all times in the same way as other direct employees of Technique. The Respondent's submissions also rely on evidence given by Mr Deerness to the effect that he directed the Respondent as to which sites to attend, what work the Respondent was to complete and that he closely watched, checked and monitored all work undertaken by the Respondent.
The Respondent submits that the Tribunal could not construe the meaning of the Instrument in a fashion which goes beyond what is required to achieve its purpose. The Appellant's submissions go too far in establishing criteria for a finding that the relationship was one by which the Respondent was an employee.
With respect to the Notice of Appeal the Respondent submits that the Notice of Appeal does not identify any question of law with precision and generally restates arguments made at the hearing at first instance.
[6]
Appellant's Submissions in Reply
The Appellant submits (in response to submissions made by the Respondent) that the two grounds of appeal raise questions of law. Ground 2 may raise a mixed question of both facts and law.
[7]
Consideration
Section 80 of the Civil & Administrative Tribunal Act 2013 (NSW) (the NCAT Act) provides for an appeal to be made available from an internally appealable decision. Relevant to the Decision, the Appellant is able to bring this appeal as of right on any question of law or with the leave of the Appeal Panel on any other grounds (s 80(2)(b)).
In our view, the purpose of the HB Act is to provide protection to consumers with respect to arrangements they enter into for the construction of residential and other regulated buildings.
We agree with the statement made in the decision of the Administrative Decisions Tribunal in Thukral v Commissioner for Fair Trading [2006] NSWADT 356 where, at [6], the Tribunal described the HB Act as essentially a "consumer protection Act". The Act stipulates that a person must not contract to do any residential building work or other work regulated by the HB Act without a licence: at s 4. Further, s 12 provides that an individual must not do any residential building work, or specialist work, except as a member of a partnership or officer of a corporation that is the holder of a contractor licence or as the holder of an owner-builder permit authorising its holder to do the relevant work or "as an employee of the holder of such a contractor licence or permit". Section 16 provides:
16 Obligations of holders of contractor licences
The holder of a contractor licence must ensure that, when residential building work, or specialist work, for which the contractor licence authorises the holder to contract is being done by or on behalf of the holder, the work is done--
(a) by the holder of an endorsed contractor licence, or of a supervisor or tradesperson certificate, authorising its holder to do the work, or
(b) under the supervision, and subject to the direction, of the holder of such an endorsed contractor licence or supervisor certificate, but only if the work is done so as not to contravene a requirement made by or under this or any other Act.
Maximum penalty--1,000 penalty units in the case of a corporation and 200 penalty units in any other case.
Essentially, s16 requires residential building work to be done by the holder of the relevant licence, or under the supervision and subject to the direction of the holder of the licence.
We turn to the first ground of appeal, which is concerned with the Tribunal's approach to the interpretation of the word "employee" in the Instrument. The Appellant accepts that the test in Hollis' case is relevant to determination of the issues in this case. Both parties relied upon Hollis' case, as did the Tribunal at first instance.
The Hollis case was concerned with the nature of the relationship between a company and bicycle couriers. The question was whether the couriers were independent contractors or whether they were employees and whether, in either case, the company was vicariously liable for the negligent actions of the couriers. The majority concluded that the relationship struck between the company and the bicycle couriers was that of employer and employee and that the company was liable for the consequences of the courier's negligent performance of his work.
At [36] the majority stated that terms such as "employee" and "independent contractor" and the dichotomy which is seen as existing between them "do not necessarily display their legal content purely by virtue of their semantic meaning". In determining the character or content of the relationship between the parties the Court considered the following factors:
1. The couriers were not providing skilled labour and could not be said to be running their own enterprise.
2. The couriers had little control over the manner of performing their work. They were required to be at work by 9 am and were assigned in a work roster according to the order in which they signed on.
3. The couriers were presented to the public and to those using the courier service as emanations of the company. They wore uniforms with the company's logo.
4. The court considered the matter of deterrence. Fixing an employer with responsibility for the employee's wrongful acts, even where the employer is not legally negligent, may have a deterrent effect.
5. With respect to pay, the couriers had no scope to bargain for the rate of their remuneration.
6. Although the couriers provided their own bicycles and were responsible for repairs, that does not necessarily result in the conclusion that the couriers were independent contractors. This conclusion was particularly the case where the capital outlay was relatively small and it was also relevant that bicycles are not tools that are inherently capable for use only for the courier work but also provide a means of personal transport.
7. With respect to control, the company not only had the right to exercise control but retained control of the allocation and direction of the various deliveries with the couriers having little latitude.
It is not disputed that the Tribunal correctly identified that the question before it was whether the Respondent had acquired the relevant experience as an employee of the holder of a contractor licence, that being a requirement of the Instrument. Both Mr Deerness and Technique held licenses. In considering that question the Tribunal correctly, in our view, considered whether the Respondent was an employee of Mr Deerness and/or Technique by reference to the factors identified in the Hollis judgment. The Tribunal found at [33] that the Respondent was working for Technique and Mr Deerness for pay and the Tribunal also considered the factors identified in Hollis.
Earlier in this decision we identified seven factors considered in Hollis for the purposes of determining the character or content of the relationship between the relevant parties. In our view the Tribunal correctly considered the same factors. Thus:
1. At [51] the Tribunal found that, although the Respondent was skilled as an architect, the relationship between the Respondent and Mr Deerness was one by which the Respondent was "providing physical labour". At [53] the Tribunal found that the Respondent was providing physical labour and dealing with building construction trades under the supervision of Mr Deerness. By reference to the Hollis judgment these facts could not be said to mean that the Respondent was running his own enterprise.
2. With respect to the question of control, the Tribunal accepted the evidence that Mr Deerness retained control of the allocation and direction of the Respondent's daily building tasks. At [42] found that Mr Deerness retained control of the allocation and direction of the Respondent's daily building tasks and supervised the Respondent on all building sites telling him "where to go and what to do".
3. Whether the Respondent presented as an emanation of the employer: the Tribunal dealt with this issue at [55] and accepted evidence concerning the use of uniforms by the Respondent, enabling the Tribunal to conclude that the Respondent presented to the public and to those using Technique as an employee of Technique.
4. Deterrence: at [43] the Tribunal accepted evidence that Mr Deerness monitored, controlled and supervised all people on the jobsite, both employees and subcontractors. The Tribunal accepted his evidence that he supervised the Respondent because the Respondent was "on a site Mr Deerness was responsible for". Although the evidence of Mr Deerness is to the effect that he did not supervise the Respondent because he was an employee, he, nevertheless, supervised the Respondent because he was responsible for the work conducted onsite. The transcript at page 73 reveals that Mr Deerness gave evidence that he was responsible for monitoring, controlling and supervising all subcontractors and tradespeople on the job, whether they be employees or subcontractors. The evidence was that he did so, so as to ensure "quality control" and that his reputation would be at stake if something went wrong. He agreed with the proposition that he supervised the Respondent because he was responsible for the Respondent's work onsite.
5. Pay: in Hollis the Court recorded that the fact that the couriers had no scope to bargain was indicative of the fact that they were employees. In the proceedings under this appeal, there was no evidence as to whether or not either party had scope to bargain. Rather, the rate of remuneration was said to have been mutually agreed. In our view this aspect of the financial relationship between the parties is neutral, neither pointing for or against the identification of an employee/employer relationship.
6. Provision of tools: the Tribunal considered this issue from [67] and found that the Respondent was not required to bring his own tools and equipment to the Technique project sites and use them in his employment: at [70]. The Tribunal's finding that the fact that the Respondent had a large amount of specialist tools and a utility not to be indicative of a subcontracting arrangement was in the circumstances open on the evidence and does not display error.
7. Control: this has already been dealt with above.
In our view, the approach of the Tribunal was in conformity with the approach recorded in the Hollis judgment and the findings of fact made by the Tribunal were open on the evidence. The Decision does not reveal any error giving rise to a question of law.
The crux of the Appellant's case, as identified in ground 1 of the appeal, concerns the issue of payment. It appears not to be in dispute that the Respondent worked for Mr Deerness and his company, Technique for pay: see [33]. It also appears to be accepted by the parties that the Respondent caused his company Hall Bowra to invoice Technique for work done by the Respondent, that Technique paid Hall Bowra's invoices, and that the Respondent was ultimately paid by Hall Bowra. It is also common ground that Technique did not pay superannuation to the Respondent and that the Respondent did not accrue leave entitlements with Technique.
The Instrument requires the Respondent to have received, as an employee, "Remuneration". Remuneration is defined as wages, salary and directors' fees "paid to an Applicant on a regular basis". It does not expressly require the payment to the applicant (i.e. the Respondent) to have been made directly by the employer to the employee. Here, the Respondent was paid indirectly by the employer in the sense that Technique paid Hall Bowra following receipt of an invoice and Hall Bowra then paid the Respondent.
In our view, the interpretation given by the Tribunal to the requirements of the Instrument, in particular as to the meaning of employee in the circumstances, was an interpretation consistent with the consumer protection purposes of the HB Act . Further it could lead to an inconsistency if a narrower interpretation of "employee" were adopted in the interpretation of the Instrument. Such an interpretation could carry forward to narrowing the interpretation of the application of ss 132 and 136 of the HB Act reducing the scope for protection of consumers. This was a matter raised in the Respondent's submissions and we agree with it.
A further point of potential significance put by the Appellant was that there was evidence that if the Respondent did not perform a task satisfactorily the Respondent would "wear" the cost of that task. That arrangement was said to be indicative of a contractor relationship. The transcript reveals at page 79 that in re-examination Mr Deeness elaborated upon that evidence in two respects. He said that the Respondent was to "wear" the cost "in terms of time" and, secondly that it "never happened". We do not think that an arrangement by which an employee is required to perform a task again (having previously performed the task unsatisfactorily) in the employee's own time is necessarily indicative of the relationship being other than employer/employee relationship. This is particularly the case where the arrangement was never invoked during the lengthy period the Respondent worked for Mr Deerness.
In our view, ground 1 of the appeal should be rejected. The interpretation adopted by the Tribunal of the term "employee" was in the circumstances correct.
Ground 2 is also rejected. The Tribunal did not err in concluding that the Respondent was an employee of Technique for the purposes of determining whether the Respondent met the experience requirements as set out in the Instrument and, in our view, the Tribunal correctly interpreted the requirements of the Instrument as having been complied with by the Respondent on the basis of the found facts.
Accordingly, the order we make is as follows:
1. Appeal dismissed.
[8]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 01 December 2023