Control
134 Construct's case is that Hanssen, not it, controlled all aspects of Mr McCourt's work at site, and that it was Ms O'Grady and others working for Hanssen who directed Mr McCourt what work he was to do, and when and how he was to do it. Construct says that it had no control over the way that Mr McCourt carried out his work, and that Mr McCourt was free to work when he pleased. Construct says this consideration is of particular importance as an indicator that Mr McCourt is not its employee.
135 The applicants' principal case to the contrary is that Construct had either control, or a right of control, over Mr McCourt, because he was contractually bound to Construct to obey Hanssen's directions. The case was put this way by senior counsel for the applicants, Mr M A Irving QC, in his written opening submission (at [74] ff):
74. It is agreed that the ASA forms the core of the express terms. It contains the following clauses regulating control. The contractor shall:
d) 'Co-operate in all respects with Construct and the Builder in the supply of labour to the builder';
e) 'Attend at any building site as agreed with the Builder at the time required by the Builder, and shall supply labour to the Builder (subject to notification under clause 5(c)) for the duration required by the Builder in a safe, competent, and diligent manner';
f) 'Indemnify Construct against any breach by the Contractor of sub-paragraph 4(c) hereof';
g) 'Supply such tools of trade and equipment, for safety or other reasons, as may be required by the Builder, in respect of which the Contractor is solely responsible' …
75. By these clauses, Construct exercises control about where the work is to be done: it requires it to be done at the site agreed with the builder. It regulates when the work is to be done - "at the time required by the builder". It regulates how the work is to be done - "supply labour to the builder … for the duration required by the builder in a safe, confident and diligent manner". It regulates what work will be done: "supply labour… in a safe, confident and diligent manner". It imposes continuing obligations about that work: "cooperate in all respects … with the builder in the supply of labour". It reinforces each of these obligations by requiring McCourt to indemnify Construct against any breach of his obligations.
76. It is contended by the Applicants that the Construct induction document further contains express terms exercising control. It is nine pages of directions. It concludes with McCourt agreeing to "ensure" that he will follow all safety rules and procedures given by the host client. The notion that in the light of these express terms, there was no control, is incorrect.
77. Pausing at this point: the contract expressly regulated what, when, how and where work was to be done. That was control. It required the worker obey the builder. That is control. There is a good deal of evidence from the Respondents that no-one from Construct attended the site and told what work was to be done. John Van der Plas for example says: Construct has no control over the work of the workers; the workers perform work under client's supervision and direction; they follow clients' directions; Construct no day to day control; Construct are not in a position to direct the work. However, having contractually bound McCourt to obey Hanssen, any direction by Hanssen was the obedience of that contractual grundnorm. And Hanssen, it appears all agree, gave hundreds of directions.
136 I do not accept the applicants' submission that the "core terms" of the ASA vest in Construct a right to say what work is to be done and where, when, how it is to be done, because that is not what the ASA says.
137 In my view, generally expressed obligations to co-operate, to turn up for work at a nominated hour, and to work safely, competently and diligently, do not vest in Construct a right to control or direct the way in which particular work is carried out on site from time to time or to obey any other lawful orders.
138 As for the other submission that "having contractually bound McCourt to obey Hanssen, any direction by Hanssen was the obedience of that contractual 'grundnorm'" (a German word, meaning "fundamental norm"), if it means that in obeying any lawful direction given by Hanssen on site, that Mr McCourt was complying with his obligations to Construct to co-operate, to turn up for work at a nominated hour, and to work safely, competently and diligently, then it may readily be accepted. It if means that by doing so, Construct relevantly "controls" Mr McCourt, then I reject the submission. On any view, the entity with the ultimate authority over Mr McCourt in the performance of his work, the entity to whose orders and directions he was subject, was Hanssen, not Construct.
139 The applicants also submitted that the following matters go to the question of Construct's "control" over Mr McCourt (at [80] ff):
Control when the work was done
80. The power to dictate when work is to be performed is indicative of control. The stipulation of starting and finishing times, the right to grant or deny time off for a worker, and the power to require the worker to attend the employer's premises are all indicative of control.
81. Clause 4 (c) of the ASA imposed an obligation on McCourt to attend at the building site at the time required by the builder, and for the duration required by the builder ...
82. The hours of work were set in Hanssen's site rules and induction form. It set the core hours. It set when the smoko was taken and the starting and finishing hours. It imposed the requirement to text when the worker was ill, and McCourt complied with the direction. It imposed the requirement to book holidays in advance. McCourt was told when to perform the work. It set when the toolbox meeting was held. He worked the hours set. McCourt was obeying and performing his contract with Construct by working the hours he did.
Control over where and how the work is done
83. The power to dictate where work is to be performed is indicative of control. The fact that the employer is not in a position to directly supervise the work does not mean that the control test cannot be satisfied. After all, sailors were employees before there was GPS. Clause 4 (c) of the ASA imposed an obligation on McCourt to attend at the building site required by the builder. McCourt was obliged by his contract with Construct to comply. He did so. The Respondents admit that Hanssen had the power to determine where McCourt performed the work, and Hanssen exercised that power.
84. The right to dictate how the work is performed is indicative of control. This includes telling the worker how to perform the task, requiring the worker to rectify errors and directing the worker how to conduct herself when dealing with clients. It is admitted by both Respondents that when the work was being performed in a manner that was different to the way McCourt's leading hand (or another supervisor from Hanssen) wanted the work performed, the leading hand (or supervisor) would instruct McCourt as to the manner in which it should be done, and McCourt would comply with those instructions. It is admitted that when the work was done in a manner or to a standard that was different to the manner or standard McCourt's leading hand (or another supervisor from Hanssen) wanted, the leading hand (or supervisor) would instruct McCourt to redo the work and McCourt would comply with those instructions.
85. The control over how work was done was regulated by the express terms imposing an obligation to cooperate with the Builder and the obligation to provide labour in a competent and diligent manner.
Control over what work was done
86. An employer has the power to dictate what work is to be done by the employee, subject to any contrary express term. It is admitted that throughout his working day McCourt's leading hand would text or call McCourt and instruct him that different or additional work needed to be performed, and McCourt would perform it. It is also admitted that throughout the day McCourt would text or call his leading hand when he had completed assigned work, seek different or additional work and McCourt would perform the work as instructed[.]
140 In my view, each of those submissions serves to emphasise the control that Hanssen, not Construct, exercised over Mr McCourt.
141 It is, of course, well established that the importance of control lies as much in the right to exercise it, as in its actual exercise. Here, there is no doubt that Mr McCourt owed obligations to Construct under the ASA which, in appropriate circumstances, Construct could enforce. To that extent, it may be accepted that Construct may control Mr McCourt by withdrawing him from an assignment to Hanssen and perhaps terminating the ASA. Such a right would probably be implied into the ASA, but as Woodward J said in Odco (see [123] above), the notion of suspension or termination does not sit well, since Construct is not obliged to find work for any particular person registered with it, and that person is not obliged to hold himself available for it. But in circumstances where it is Hanssen that has the authority to direct every aspect of his work (the when, what, where and how of it), and where it is Hanssen that has the express right to terminate the worker's retainer, whatever Construct's potential rights against Mr McCourt (which do not in any event involve the giving of directions) seem to me to pale into insignificance, when one weighs them in the balance.
142 The question of control also concerns the level of independence or control over their own work enjoyed by the worker.
143 Here, Mr McCourt was free to accept work from Hanssen, or reject it, as he wished. In Building Workers Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104 at 124, the Full Court said that the fact the "the workers are free to work when they please" was an indicator of a lack of control, noting that "[t]he elements of stability and continuity, which are such a central part of every contract of service extending over a period of time, are not present."
144 On the other hand, an inability of a worker to delegate their tasks or work to another is an indicator of a lack of control on the part of the worker. In Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 26, Mason J said that the power to delegate by employing another worker is an important factor in deciding whether a worker is an employee or not. His Honour cited the decision of the Privy Council in Australian Mutual Provident Society v Chaplin (1978) 52 ALJR 407 at 410. The passage cited includes the following:
In the present case there appears to be nothing in the written agreement to prevent the respondent from delegating the whole performance of his work to one or more sub-agents. In the opinion of their Lordships this power of unlimited delegation is almost conclusive against the contract being a contract of service … The unlimited extent of the power of delegation is one consequence of the striking absence of any express obligation upon the respondent to perform any particular duties, or to work any particular hours, or indeed to do any work at all on behalf of the Society.
145 In this case, Mr McCourt was required to perform the work personally. He had no right of delegation, he had to give four hours' notice if he wished to stop working, and he was told by Hanssen that he had to give a week's notice for any holiday that he wished to take, which are indicia that point away from him being an independent contractor.
146 On the other hand, Mr McCourt had the right under the ASA to work for others. The applicants submitted that this was "impractical" in the particular facts here, because of the long hours he worked for Construct, but the entitlement to do so is an indicator pointing to him not being an employee.
147 All that being so, although there are more "control indicia" pointing to Mr McCourt not being an employee, the question of control is not dispositive. As McDougall J said in Forstaff Pty Ltd v Chief Commissioner of State Revenue (2004) 144 IR 1; [2004] NSWSC 573 at [114]:
I do not think that the control test is dispositive in the present case. It may be acknowledged readily, as the cases that I have referred to indicate, that the control test is in many cases dispositive and in most, if not all, cases significant. However, historically, the control test has been considered in the context of a bilateral, rather than trilateral (or multilateral) relationship. Significantly, in the cases that do involve a trilateral relationship … the control test has not been regarded as dispositive. That, I think, reflects the reality that in a changing workforce, with evolving relationships, including those of the kind presently under consideration and those considered in the cases just referred to, the concept of control is not readily susceptible of analysis according to the traditional master/servant matrix. The true meaning and nature of the relationships that are embodied within the word "control" will vary, of necessity, according to the factual and contractual context within which control is located and exercised.