Whether the worker has a separate place of work and/or advertises his or her services to the world at large
92 In his annual taxation returns Mr Stewart claimed deductions for the use of his home and garage for business purposes. But it is difficult to describe his home as a separate place of work. Essentially what he did was store confectionery stands (and some product) in his garage and cleaned the stands from time to time on weekends. Moreover, the applicant did not advertise his services to the world at large. During normal business hours the applicant worked essentially selling the first respondent's products and did not seek to attract customers or clients other than on behalf of the first respondent and perhaps to a limited extent, the supplier of Honey Corn.
Whether the worker provides and maintains significant tools or equipment
93 The applicant provided all of the tools and equipment necessary to carry out the work including a van and mobile phone. The applicant also bore all of the expenses of running and maintaining the motor vehicle and the phone.
94 On the question of the provision of a motor vehicle McHugh J in Hollis stated at [71]:
Given the course of authority in this Court concerning workers who provide their own equipment, it seems impossible to say that those couriers who provided their own motor vehicles were employees ( Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 359; Humberstone v Northern Timber Mills (1949) 79 CLR 389; Wright v Attorney-General for the State of Tasmania (1954) 94 CLR 409). The right to supervise or direct the performance of a task cannot transform into a contract of service what is in substance an independent contract ( Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 539 at 552). and, when a person has to provide equipment such as a motor vehicle, the conventional view is that the person is not an employee. In principle, there can be no distinction between those couriers working for Vabu who provide their own bicycles and those couriers who provide their own motor vehicles.
95 In Humberstone, Dixon J stated at 404-405:
The essence of a contract of service is the supply of the work and the skill of a man. But the emphasis in the case of the present contract is upon mechanical traction. This was to be done by his own property in his own possession and control. There is no ground for imputing to the parties a common intention that in all the management and control of his own vehicle, in all the ways in which he used it for the purposes of carrying their goods, he should be subject to the commands of the respondents.
96 In Hollis the majority considered that the provision by the couriers of their own bicycles did not favour a conclusion that the relationship was one of independent contractor and principal, rather the reverse. The majority, however, observed that the case concerned liability for bicycle couriers, not motor vehicle or motorbike couriers: [22], [47]. They also accepted (at [47]) that a significant investment in capital equipment might lead to a different conclusion.
97 In Australian Air Express v Langford (2005) 147 IR 240 the New South Wales Court of Appeal considered whether a delivery driver who delivered goods on the appellant's behalf pursuant to an Owner/Driver Agreement and who provided his own truck and bore the expense of its maintenance and operation, was an employee or independent contractor in the context of a claim by the respondent for damages for personal injury. McColl JA with whom Ipp and Tobias JJA agreed, held that the respondent was an independent contractor. It was further held, inter alia, that ownership of an expensive item of equipment such as a truck was a significant factor favouring the conclusion that a person was an independent contractor as it tended to indicate that the chance of profit and loss in the business of carriage were the owner/driver's.
98 At [44]-[47] her Honour found as follows:
44 There is a consistent line of High Court authority supporting the "conventional view" that owners of expensive equipment such as the truck owned by the respondent are independent contractors. As MacKenna J said in Ready Mixed (at 526), such ownership indicates a contract of carriage rather than one of service because "the ownership of the assets, the chance of profit and the risk of loss in the business of carriage are [the owner/driver's] and not the company's". That proposition was referred to with approval by Meagher JA in the Taxation Decision (at 538).
45 Although the Taxation Decision was disapproved by the majority in Hollis insofar as it related to bicycle couriers, it retains its force insofar as it concerns the significance of the ownership of expensive capital equipment such as motor vehicles. It is therefore, an earlier decision of this Court which, to that extent, remains binding.
46 It remains to note several facts concerning the respondent's truck to which the primary judge did not expressly refer. It was purchased for $67,323.00. In the 1998 and 1999 financial years he incurred approximately $26,000 and $32,000 in running expenses to keep it operational. It is clear it represented a considerable investment.
47 In my view the primary judge was justified in holding that the respondent's ownership of his truck was a significant factor favouring the conclusion that he was an independent contractor.
99 It is interesting to note the matters taken into account by the judge at first instance in arriving at his view the respondent was an independent contractor. These matters were reproduced in the judgment of McColl JA as follows:
14 In favour of his being an employee was as follows:
(a) the defendant required the plaintiff to report to its premises each day at 6.00 am to receive orders for delivery;
(b) though the plaintiff supplied his own truck, the defendant's name was painted on it, at the defendant's request and cost;
(c) the plaintiff was supplied by the defendant with livery, consisting of shirts, trousers, shorts and jumpers;
(d) the defendant supplied a radio, at its cost, for installation in the plaintiff's truck, for communication during the work day, and paid for its maintenance; though when the plaintiff bought the truck he had when injured, he chose not to have the radio installed, instead using his own mobile phone; this arrangement he conceded was for his own convenience;
(e) though he had his own "run" this was chosen for him by the defendant; changes, which the defendant could direct, could result in income loss;
(f) loading of goods for delivery and unloading, on the truck's return, was performed using forklift machines supplied by the defendant and operated by its employees;
(g) the plaintiff used the defendant's telephone at its depot, its software for records, its computer printer, fax machine, amenities room, and toilets;
(h) the plaintiff attended computer and safety lectures, work barbecues and Christmas functions, organised by the defendant;
(i) the defendant supplied him with a photographic identification card and he carried it at the defendant's request, producing it as needed, on occasions, in the course of his work;
(j) he carried no personal accident insurance;
(k) no reference was made in the contractual documents to workers compensation or the need for self-insurance for sickness and accident;
(l) he had to produce medical evidence if he claimed to have been sick;
(m) he applied for and received Comcare workers compensation benefits when he suffered the subject injuries, (as he had done for other injuries) only commencing these proceedings when Comcare declined further liability, asserting, contrary to its earlier view, that he was not an employee of the defendant when injured, but an independent contractor;
(n) it is clear from the contractual documents that the defendant maintained a high degree of control, including powers to discipline; this control was contrary to the position in Humberstone v Northern Timber Mills (1949) 79 CLR 389; however though there was at least a degree of control over how the work was to be done, insofar as skill and experience was concerned, which did not require or permit control, in the case of an experienced and skilled worked in a specialised field, control is of less importance: Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561.
15 In favour of his being an independent contractor was as follows:
(a) he supplied his own truck, and met all running expenses for it;
(b) he was paid on piece rates - the more deliveries or pickups he did, the more he was paid - though there were some limits; it is said however that payment by piece rates casts little light on the relationship: Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395 at 405 (per Stephen J);
(c) the only tax deducted from his earnings was PPS tax. This was 25%, 20% being compulsory, the additional 5% at his own request;
(d) communication with him when on the run was by his mobile phone, the cost of which he met; though it could have been by a radio supplied by the defendant; this was the same however for Mr Bell;
(e) he was not required to work all day: once his morning deliveries were finished, and before his pick ups started (usually no earlier than 2.30 pm) his time was his own and he could, if he chose, go to the beach, though he took the phone with him; however this also was available to Mr Bell;
(f) he could, if he chose, not do the work, but employ another, provided his choice was agreed to by the defendant. On one occasion he went overseas for 3 months, leaving in his place a substitute, for whom he took out a workers compensation policy, and to whom he paid a salary not fixed by reference to pieces of work performed;
(g) the defendant supplied him, each week, with a summary of his earnings, in which he was described as a "subcontractor"; though labels are not, and cannot be, determinative: Hollis at [58];
(h) there was no 'clocking on' or off, though there was for Mr Bell, who worked the same hours;
(i) though he had no sickness and accident insurance he said (and I accept) this was because his health, consistently with the early deaths of his parents, and an earlier unsuccessful attempt, would not permit it; Mr Russell, whose company had the agreement with the defendant paid for his own sickness and accident cover, though he said that was to fill gaps not covered by Comcare;
(j) he paid his own union fees annually, by personal cheque;
(k) he was paid no sick leave, no holiday pay, and no superannuation, apart from as provided by the 1995 agreement: see cl 30. This appears to have been less than what Commonwealth legislation requires for an employee and would appear not to have been paid to satisfy such legislation. Mr Bell, however was paid for holiday and sick leave;
(l) though the defendant's employees received silver and gold awards for 5 and 10 years service respectively, he did not: he did say he had once received $200.00 from the defendant but could not recall what it was for and there was no other evidence about it; it was obviously different from what the defendant's employee, Mr Bell, received. As to the gold and silver awards, Mr Bell said he thought they were just for "company drivers";
(m) theoretically he could have worked for others as the 1995 agreement did not forbid him from doing so: though the hours he was required to be available to the defendant, and having the defendant's name on his truck, might have hindered any such ambitions.
16 Though there are powerful agreements (sic - arguments) in favour of the plaintiff's having been an employee, I am not so persuaded. First, he supplied and paid for his own truck. Secondly he was not treated as a PAYE employee. Thirdly he had the ability to substitute others to do his work, subject to satisfying the defendant the substitute was appropriate. None of the indicia of employment in [14] above are inconsistent with his being an independent contractor. The factor I find quite inconsistent with his being an employee, is his ability to substitute other drivers. Having looked at the totality of the relationship, I am persuaded the plaintiff was not an employee, but an independent contractor.
100 It seems to me, with respect, that the observation by the judge at first instance that there were "powerful agreements (sic - arguments) in favour of the plaintiff's having been an employee" was an understatement but, nevertheless, upheld on appeal, with the provision of a truck by the delivery driver figuring prominently in the Appeal Court's reasoning.
101 Given the conventional view that a person who has to provide equipment such as a motor vehicle is not an employee and the line of authority referred to in Australian Air Express v Langford and the decision in that case, it must be accepted that the provision by the applicant in this case of a motor vehicle and the fact that he bore the whole of the expense for operating and servicing that vehicle, points strongly in the direction of him being an independent contractor. As it was held in Australian Air Express v Langford the finding in that case was not inconsistent with Hollis because in Hollis the majority were concerned with bicycles in respect of which the capital outlay was relatively small and because bicycles were not tools that were inherently capable of use only for courier work but also provided means of personal transport or recreation. Further, as I noted earlier, the majority in Hollis also accepted that a significant investment in capital equipment might lead to a different conclusion.
102 I have had regard to the fact that the cases referred to in Australian Air Express v Langford involved a drover providing horses, men and equipment (Queensland Stations), a timber carter (Humberstone), an owner/driver carting concrete (Ready Mixed Concrete (South East) Ltd v Minister of Pensions & National Insurance [1968] 2 QB 497), a courier driver (TNT Worldwide Express (NZ) Ltd v Cunningham [1993] 3 NZLR 681) and bicycle couriers (Hollis). None of the cases relied upon involved persons who might be described as commercial travellers. However, the principle relied upon in Australian Air Express v Langford was that ownership of the motor vehicle indicated a contract of carriage rather than one of service because "the ownership of the assets, the chance of profit and the risk of loss in the business of carriage are [the owner/driver's] and not the company's": [44]. Whilst the contract between the first respondent and the applicant was not a contract of carriage, the chance of profit and the risk of loss was the applicant's and not the respondent's.