Return to Work Act 2014

JUDGMENT OF: His Honour Deputy President Judge Gilchrist

Application for review - Applicant who was engaged through a trust to provide chauffeur duties for a chauffeur company was allegedly assaulted after chauffeuring customers to an address in the city and claimed compensation on account of the injuries he allegedly received - Through the trust the applicant purchased a large van that cost nearly $100,000 and he was paid by the job with no provision for income tax but with provision for GST - When undertaking chauffeur duties the applicant was required to wear a uniform and the van had to have affixed to it a logo identifying the company - Whether the applicant was employed pursuant to a contract of service and if not, was he a deemed worker pursuant to the regulations - Held that the hallmark of a contract of employment is personal service and the agreement was between the trust and the company - Held that in any event while there were several facts that pointed to this being an employer/employee relationship such as some degree of control over how the work was performed by insisting that certain standards had to be maintained; by requiring the use of a uniform and signage on the van thus depicting the applicant as part of the company; by providing of an office, lunch room and wash bay being the sorts of facilities that an employer would be expected to make available to an employee; and that the fee was not set by the applicant; there are many facts that point decisively in the other direction, these being: the applicant's right to delegate driving duties to others; the applicant, albeit through a trust brought to the relationship a substantial and expensive piece of equipment, i.e. the van; and the taxation and invoicing arrangements, involving the use of a family trust to both pay expenses and the ability to distribute income to family members, with GST being charged and collected, and no income tax being withheld from payments - Held that the applicant was not an employee - As to the claim based on the regulation the applicant was the driver of a motor vehicle used for the purpose of transporting members of the public but the regulation cannot apply if he held or leased a licence issued in relation to the vehicle he drove - Held that a letter issued by the Department of Planning, Transport and Infrastructure that is addressed to the applicant and which nominates the van that he drove speaks for itself and enables the finding that the applicant was a driver who held a licence issued in relation to the vehicle he drove such that he cannot avail himself to the regulation - Held that the application for review is dismissed - Return to Work Act 2014, Return to Work Regulations (SA) 2015, Passenger Transport Act 1994, and the Public Transport Regulations 2024.

JMC Pty Ltd v Commissioner of Taxation [2022] FCAFC 750

Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 275 CLR 165

ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; (2022) 275 CLR 254

EFEX Group Pty Ltd v Bennett [2024] FCAFC 35

Pirot Pty Ltd v Return to Work SA (Schultz) [2017] SAET 92

Australian Air Express Pty Ltd v Langford [2005] NSWCA 96

Tattsbet Ltd v Morrow [2015] FCAFC 62; 233 FCR 46

The Palace Gallery v WorkCover Premium Review Panel and Others [2014] SASCFC 60

Stocco v WorkCover Corporation (JK and KM Ramage Pty Ltd) [1996] SAWCAT 69

Gray v Return to Work SA [2020] SAET 144

1. On the afternoon of Tuesday, 22 November 2022, Steve Mandalios, when acting as a chauffeur, transported a Virgin Airline flight crew that he had collected from the Adelaide Airport to a hotel in Hindley Street, Adelaide. The chauffeur company that he worked for was Hughes Chauffeur Service (Hughes). Various corporate entities such as Equity Transport Group (Qld) Pty Ltd and Equity Transport Group Pty Ltd are associated with the ownership of Hughes and for convenience I shall generally refer to them and to Hughes, as Equity.
2. Having parked his vehicle to enable his passengers to leave the vehicle, Mr Mandalios became involved in an altercation with another driver and was allegedly assaulted. Sometime later he claimed compensation for the injuries he allegedly received under the Return to Work Act 2014 (the Act).
3. The claim was rejected by the Return to Work Corporation (the Corporation) on various grounds, one of which was that at the time of the incident Mr Mandalios was not a "worker" for the purposes of the Act. Mr Mandalios has filed an application for review challenging that decision. For now, the only issue that I have been asked to determine is whether the contention that he is not a worker is correct.
4. A person can be a worker for the purposes of the Act by being a party to a contract of employment in the conventional sense. Alternatively, the person can be a worker by satisfying the criteria contained in the Return to Work Regulations 2015 (SA) (the RTW Regulations).
5. In this case both are potentially in play.
6. Section 4(1) of the Act relevantly defines a "worker" as meaning "a person by whom work is done under a contract of service (whether or not as an employee)".
7. The section relevantly defines "a contract of service" as being:

(a) a contract under which 1 person (the worker) is employed by another (the employer); or

(b) a contract, arrangement or understanding under which 1 person (the worker) works for another in prescribed work or work of a prescribed class; or

1. The expressions "prescribed work" and "work of a prescribed class", are defined in the RTW Regulations.
2. Regulation 5 of the RTW Regulations relevantly provides:

(1) For the purposes of the definition of "contract of service" in section 4(1) of the Act (but subject to this regulation and regulation (6), the following classes of work under a contract, arrangement or understanding are prescribed classes of work:

(d) driving a taxi-cab or similar motor vehicle used for the purpose of transporting members of the public where the driver does not hold or lease a licence issued in relation to the vehicle and, where -

(i) the work is performed by 1 person to the contract, arrangement or understanding (the "worker") in the course of or for the purposes of a trade or business carried on by another person to the contract, arrangement or understanding (the "employer"); and

(ii) the work is performed personally by the worker (whether or not the worker supplies any tools, plant or equipment); and

(iii) the worker does not employ any other person to carry out any part of the work; and

(iv) the value of any materials supplied, or reasonably expected to be supplied, by the worker does not exceed $120 (indexed); -

(Emphasis added mine)

1. It seems to be accepted that for the purposes of reg 5(iv) the relevant indexed amount is $135.

1. At trial I heard from Mr Mandalios, Michael Tsaousoglou, and Kent Joseph.
2. Mr Mandalios is a man in his mid-fifties and over the course of his working life he had worked as a taxi driver. He said that in 2019, he had a discussion with Mr Tsaousoglou, the husband of one of his cousins. He said that at that time Mr Tsaousoglou was Equity's fleet manager. Mr Mandalios claims that Mr Tsaousoglou asked him whether he was interested in undertaking some chauffeur work for Equity.
3. Mr Mandalios said that he was, and that this led to him filling in for another driver who was engaged by Equity for about a month. He said that after this, he asked Mr Tsaousoglou how he could undertake this work on a more permanent basis for Equity, and was told that to do so, he needed to purchase his own vehicle. He said that he then discussed with him what was the best type of vehicle to purchase. He said that he was told that a van would allow more flexibility than a sedan, as it would enable the chauffeur to take bigger jobs by accommodating more passengers. He said that it was also suggested that he buy a European van that was black in colour.
4. Mr Mandalios said that following this discussion, he purchased a black, V-Class 250 Diesel Mercedes 7-seater van (the van). He said that based upon advice from his accountant, he had set up the Mandallion Family Trust (the Trust). In his oral evidence he explained that the Trust has been operating since 2003.
5. He said that the arrangement that he entered into with Equity was that it would pay to the Trust the money that he had earned whilst driving, and that the money would then be distributed for taxation purposes amongst nominated beneficiaries.
6. Mr Mandalios said that when he started working for Equity, Mr Tsaousoglou explained to him what was required. He said that he was told that Equity would allocate the work and that he would keep 70% of the fee for his driving, less an administration fee. He said that he was told that he had to wear a uniform that comprised of a white shirt and a blue suit with an option that the suit could be monogrammed with the Hughes emblem. He said that he was provided with a Hughes brooch to pin to his suit as well as a Hughes tie. He said that he was required to wear the uniform when doing passenger pick-ups and drop-offs. He said that his van had a sticker identifying it as a Hughes vehicle. He said that when he was wearing the Hughes uniform and when the sticker was on his vehicle, identifying it as a Hughes vehicle, he was absolutely forbidden from taking any other work.
7. Mr Mandalios said that he never engaged anyone else to drive the van for Equity.
8. Mr Mandalios said that he could indicate what days and times he would be available to drive and that the allocation of work was via an app provided by Equity. He said that he could decline a job that had been allocated but added that Equity was unhappy when this occurred in the absence of a good reason, such as car issues, illness or a personal emergency. He said that on one occasion, when he was contacted by Equity to take a job at the Railway Station and declined, the next day he was not allocated any jobs. He said that this was very unusual and he took it to mean that he was being disciplined. In his oral evidence he said: "All I remember is that they took work off me, I rang up the office and they said, "Because you did not do a certain job or something and gave us too much late notice or put us under the pressure and that's the reason."[1]
9. Mr Mandalios said that when he started working for Equity its premises were a site in Chief Street, Brompton. He said that the site contained an office, a wash bay, a dispatch centre, a lunchroom and indoor parking facilities. He said that he and other drivers regarded the site as a work base and would use it regularly between jobs.
10. On 6 November 2019, Mr Mandalios signed a document titled "Recipient Created Tax Invoice Agreement" (the Agreement).[2] The Agreement purports to be an agreement between Equity and the Trust. It describes the Trust as the "Operator".
11. The agreement relevantly provides as follows:

WHEREAS

1. The Operator is likely to perform chauffer drive services for Equity, using their own vehicle.

2. The Operator would like to have the work associated with invoicing in respect of such services performed on its behalf, by Equity.

NOW THIS AGREEMENT WITNESSES as follows:-

1. The parties acknowledge and confirm the above recitals.

2. The Operator hereby retains Equity as its agent and Equity accepts the retained,

3. to prepare in the Operator's name, on the Operator's behalf, and based on information available to Equity, tax invoices in an approved form as required by relevant legislation, with respect to any services provided by the Operator to Equity as envisaged in Recital A, and

4. to deliver the same to Equity in its capacity as the party liable for the amount thereof.

1. Examples of the tax invoices produced pursuant to the Agreement were attached to an affidavit provided by Mr Joseph. He is Equity's current Chief Executive. One such example, for the period from 1 December 2022 to 15 December 2022,[3] relevantly is as follows:

CODE: MADALLION

MADALLION FAMILY TRUST

...

INVOICE TO:

EQUITY TRANSPORT PTY LTD

...

SUPPLY OF CHAUFFEURED VEHICLE SERVICES

GST INCLUSIVE OUTPUTS $2,989.66

GST INCLUSIVE INPUTS (see attached Tax invoice) -$57.50

TOTAL GST INCLUSIVE $2,932.16

...

ADJUSTMENTS (INCL GST)

ADDITIONS $0.00

DEDUCTIONS $0.00

TOTAL AMOUNT OF THIS INVOICE $2,932.16

SUNDRY ITEMS $70.00

LESS CASH ALREADY RECEIVED BY SUPPLIER $0.00

NETT PAYABLE ON THIS INVOICE $3,002.16

1. In the 2022/2023 financial year, Mr Mandalios received $14,503.00 from the Trust. A profit and loss statement prepared by accountants acting on behalf of the Trust records that in that financial year, the Trust received gross receipts of $52,004.00. It also stated that the Trust incurred $38,501.46 in expenses comprising of things like depreciation, interest payments, licences and permits, and motor vehicle expenses. It records that the Trust made a net profit of $14,502.54 and that all of the profit was distributed to Mr Mandalios. The records of the Trust indicate that as of 30 June 2023, the Trust owned the van that cost $99,915.72 and which had a depreciated value of $61,681.08.
2. Mr Mandalios said that following the incident on 22 November 2022, he immediately drove to the Henley Beach Police Station and reported the incident. He said that he contacted Equity and told them that that he could not work for the rest of the day. He said that later that night he again contacted Equity and said that he could not work the next day because a madman had assaulted him. He said that a few days after that he was contacted by Equity and was told that Virgin Airlines had reported the incident and he was told that he needed to undertake some anger management otherwise he would be let go. He said that this made him angry and upset as he thought that he had done nothing wrong, and he said this to Equity, upon which he was told that he had to resign or be let go. He said that he walked away from Equity and has not worked for them since.
3. In cross-examination, Mr Mandalios was taken to the purchase form for the van and accepted that it showed that he had purchased the van on behalf of the Trust. Included in the materials placed before the Court was a copy of the van's registration certificate.[4] The nominated expiry date is 5 November 2020. It can be inferred from this that the van was first registered on or about 5 November 2019. The nominated owners are Efstathios Mandalios and Angela Mandalios. It is common ground that Efstathios Mandalios is Steve Mandalios and Angela Mandalios is his wife.
4. In cross-examination, Mr Mandalios was also taken to a letter issued by the Department of Planning, Transport and Infrastructure (the letter) [5] and a Driver Accreditation card issued under the Passenger Transport Act 1994.[6] Both are issued in the name "Efstathios Mandalios". Amongst other things, the letter contained the notation of vehicles being operated under the person's accreditation. Mr Mandalios acknowledged that included within the vehicles he had nominated was the van.[7] The appearance of the card is much like a driver's licence and it contains a stipulation that the card must be carried when driving a passenger vehicle.
5. Mr Tsaousoglou provided a slightly different account of how the relationship between Mr Mandalios and Equity began. He said that he had been involved with Equity since 2015, having commenced there as a contractor providing chauffeur services, before becoming an employee in 2017.
6. Mr Tsaousoglou confirmed that Mr Mandalios is his wife's first cousin and that he has known him since approximately 1980. His recollection was that in or about January 2018, Mr Mandalios approached him about performing luxury chauffeured services for Equity. He said that they had a very general conversation about the services contractors provide to Equity and he explained that the business preferred to engage contractors who drove black European vehicles. He said that he did not tell Mr Mandalios that he was required to own and operate a luxury vehicle and advised him against buying a vehicle in the first instance. He said that he suggested that he initially drive for one of the contractors already providing services to Equity so that he could gain an understanding of the industry. He said that he did not know whether Mr Mandalios did in fact drive for another contractor. When asked whether he had a recollection of Mr Mandalios working as a driver before he entered into a contract with Equity he said:

Look, I wasn't sure whether he did or not. I knew that if he did, it was only for a short period of time. Because my advice to Steve was to find a driver, but obviously it's a few years ago now, and I don't recall whether he actually worked for him or whether just went straight into his own vehicle.[8]

1. Mr Tsaousoglou said that in late 2019, the Hughes licence in South Australia was purchased by Equity and in early 2020, the office moved from Bowden to Wayville. He said that the Wayville office was a large office that included Administrative Assistants, Receptionists, Customer Service Consultants, HR, Accounts, a General Manager, an Operations Manager and Fleet Controllers.
2. Mr Tsaousoglou said that in November 2019, Mr Mandalios presented unexpectedly at Equity's Bowden office with a brand new luxury Mercedes people mover van. He said that he introduced Mr Mandalios to Mr Anthony Olsen, who was Equity's then General Manager, and that Mr Olsen suggested that it was worth having Mr Mandalios join the fleet. He said that Mr Olsen was very impressed by the vehicle and Mr Olsen and Mr Mandalios verbally agreed there and then, that Mr Mandalios would join the company.
3. Mr Tsaousoglou said that contractors are self-directed in how they perform their services, but before Mr Mandalios started, he took him to a number of regular pick up points and explained to him the service standards expected. He said that these included general guidance on how a contractor should behave and present from pickup point to drop off point.
4. Mr Tsaousoglou said that to receive jobs, contractors indicate to the Operators/Fleet Controller their availability to work and that the Fleet Controllers then allocate the jobs accordingly. He said that if a contractor was unavailable to perform a job after it had been allocated the job, upon contacting the Fleet Controller the job would be re-allocated to another contractor. He said that in his general experience, this was not an issue and contractors would not be disciplined for changing their availability. He said that Mr Mandalios' practice was to send an email providing his hours of availability for the coming week and requesting to be allocated jobs on those days. He said that jobs were then allocated to him based on his availability. He said that Mr Mandalios was free to choose his availability and the hours he wished to perform jobs and that, like every other contractor, he was free to allow other drivers to drive his vehicle on his behalf, albeit that he never chose to do so. He said that when contractors are allocated a job, whilst they are required to transfer passengers from point A to point B in a safe and comfortable manner, they decide the routes they take, and whatever route selected would not change the price of the job as it is pre-determined.
5. When asked about the alleged Railway Station incident and Mr Mandalios' view that following it was he was being disciplined, he said that he had no recollection.
6. Mr Tsaousoglou said that contractors often do their own private jobs outside of their work for Equity and that if they do so, they negotiate a price and collect payment directly with their client. He said that Mr Mandalios, like other contractors engaged by Equity, was able to do his own private work if he wished to do so.
7. Mr Joseph said that Equity operates a service-based business model where it engages independent contractors, who must supply their own luxury vehicles, to provide a luxury chauffeured vehicle service. He said that prior to performing these services for Equity, the contractors experience level is assessed. He said that if a contractor has experience in the passenger transportation industry, they will receive little to no training. He said that in other cases, contractors are offered training on basic service standards, such as how to open a door, how to load luggage into the boot, and how to meet the expectations regarding cleanliness of their vehicles.
8. He said that once Equity is satisfied that a contractor is compliant with the standards required by the South Australian Department for Infrastructure and Transport, the contractors are able to make themselves available to be offered chauffeured vehicle jobs. He said that jobs are offered to contractors through a mobile phone application called the ETG App, which is integrated directly with Equity's computer software system. He said that when Equity receives a job from a client, it determines whether a contractor is appropriate for the job based on the contractor's availability to perform work on that particular day, and whether they meet the criteria for the job based on the type of vehicle required and the number of seats their vehicle has. He said that if the contractor is deemed appropriate for the job, the contractor is offered the job through the ETG App. He said that contractors are typically offered jobs the night before for the following morning, however given the dynamic nature of the industry, the timing of the job offers varies, based on demand. He said that jobs may be allocated or offered to contractors at any time, ranging from days to minutes before a customer requests the service.
9. He said that when a contractor is offered a job, they agree to the job and then accept the job within the ETG App and are then expected to drive to the pick-up location and change their status on the ETG App to 'on-site'. He said that when the contractor has completed the job, they change the status of the job to 'complete' at which time they have completed the service for Equity and are not required to accept or perform any jobs beyond that. He said that contractors are not subjected to any disciplinary action if they do not agree to perform any jobs.
10. He said that whilst contractors can perform chauffeured vehicle services whenever they choose to, the hours are dictated by demand. He said that typically, there is greater demand in the mornings from 5.00am to 9.00am, when clients commute to and from work and the airport. He said that demand also picks up later in the afternoon.
11. He said that contractors are paid for the services they perform either at a set rate for the job or on a percentage of the job depending on the contract with Equity's client. He said that a "A Recipient Created Tax Invoice" is generated twice a month and issued to the contractor either via email or through the contractor portal. He said that the invoice sets out how many services the contractor has performed and the payment due for each of the provided services and that payment is then made to the contractor's nominated bank account, which in this case was to the Trust.
12. He said that Equity does not withhold any amount for taxes or superannuation from the contractor's payment and that they are responsible for paying their own taxes on the income earned while performing luxury chauffeured vehicle services for Equity and they are fully responsible for all aspects of their vehicle's upkeep, including all servicing, insurance, registration, fuel, cleaning, lease payments (if applicable), and other related costs.
13. He said that contractors are free to perform luxury chauffeured vehicle services for other competing businesses such as Uber, and many of them do.
14. Annexed to Mr Joseph's affidavit were records of the bookings and payments made to the Trust. Contrary to Mr Mandalios' evidence the records indicate that the Trust continued to regularly provide chauffeur services to Equity until 14 January 2023.
15. In cross-examination, Mr Joseph accepted that he was not personally involved in the engagement of Mr Mandalios.

1. The characterisation of a relationship as being either one of employer and employee, or one involving the engagement of an independent contractor, involves an evaluative judgment that takes into account the totality of the parties' contractual rights and obligations.[9]
2. In submitting that that evaluative judgment ought to result in a finding that Mr Mandalios was an employee of Equity, Mr Colgrave, counsel for Mr Mandalios, submitted that in determining how the contract between Mr Mandalios and Equity should be characterised I should give little, if any, weight to the invoices that Equity issued, as these were no more than documents created by Equity that render to it invoices on Mr Mandalios' behalf resulting in him being paid based on those invoices.[10]
3. As for the purported contract between the Trust and Equity, he submitted that as a matter of law, there cannot be a contract between a trust and another entity. He added that what was also significant about the Agreement is what it did not say: it does not indicate the rate of pay; it does not indicate what Equity's responsibilities, rights and warranties are; it does not indicate what the contractor's obligations and rights and warranties are; and there is no statement of intention by the parties that they wished to create an independent contractor relationship.
4. Mr Colgrave submitted that it followed that there was no written contract entered into between Mr Mandalios and Equity, much less one that defined the nature of their relationship.
5. He then referred me to the judgment of the High Court in C_onstruction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (Personnel Contracting)_,[11] where Kiefel CJ, Keane and Edelman JJ, stated that whilst the dichotomy between a person's own business and the putative employer's business may not be perfect, so as to be of universal application because not all independent contractors are entrepreneurs, that approach is still useful. They noted that it focuses attention on whether the putative employee's work as contracted to be performed, was so subordinate to the putative employer's business, as not to be part of an independent enterprise.[12] He submitted that in approaching this issue of subordination, factors such as the extent to which the putative employee can be seen to be working in their own business, as distinct from the putative employer's business, and the extent to which the putative employer has the right to control how, when and where the putative employee performs the work, are relevant considerations.
6. Mr Colgrave said that with this in mind, what was important was what Mr Mandalios was doing, namely that he was performing chauffeur driving work for Equity and that in doing so, he would be seen as a part of Equity, and not as part of independent enterprise. In saying this, he noted that when driving for Equity, Mr Mandalios was required to wear a uniform and drive a vehicle identified with Hughes, and that when he did so, he was absolutely forbidden from taking any other work.
7. He noted evidence that indicated Equity's preference for drivers to work Monday to Sunday and to be available for early morning pickups. He submitted that in reality, Equity had the right to control how, when and where Mr Mandalios performed the driving work. He asked me to find that Mr Mandalios was disciplined in failing to make himself available to perform chauffeuring duties at the Railway Station.
8. Mr Colgrave submitted that it was also notable that Mr Mandalios did not supply the vehicle that he used, it was the Trust. Similarly, he said that Mr Mandalios was not personally responsible for the running costs of the vehicle. That too was the responsibility of the Trust. Next, he said that the initial provision of a workshop, wash bay and lunch room and that charging of administration fees, all had a colour of employment.
9. Mr Colgrave submitted that taking all of these matters into account, I should find that when Mr Mandalios was driving customers he was doing so as part of Equity's business, not his own, and that collectively all of these matters point to him being an employee.
10. As for the alternative case based upon reg 5 of the RTW Regulations, he accepted that there are several constructions that could possibly be placed on the expression "where the driver does not hold or lease a licence issued in relation to the vehicle." He submitted that it cannot mean what it literally says, because every driver must hold a driver's licence. He submitted that the licence must pertain to the vehicle and that given that the provision is plainly directed towards people driving a taxi cab it must mean holding a taxi cab licence for the particular taxi cab that is being driven and as such the word "licence" should be construed as taxi cab plate. He submitted that if the regulation means what it literally says, no limousine driver accredited to perform that work could ever be performing prescribed work, no matter what the arrangements were between the parties.
11. Next, he said that if Mr Mandalios qualifies under the primary provision, he is not excluded by the disqualifying provisions, because as a matter of fact he did not employ any other person to carry out any part of the work; and any materials supplied, or reasonably expected to be supplied, did not exceed the prescribed amounts because Mr Mandalios did not supply the vehicle and he did not supply the running costs. In both instances, it was the Trust that did so.
12. In submitting that the evaluative judgment ought to result in a finding that Mr Mandalios was not an employee of Equity, Ms Stewart, counsel for Equity, submitted that in conformity with the decision of the High Court in Personnel Contracting, the terms of the Agreement must be afforded considerable weight. She accepted that the primary focus of the Agreement was directed towards the issuing of invoices, but she submitted that it clearly contemplated that the Trust would be supplying the plant needed to give effect to the contract, which was the van that cost of the order of $100,000. She said that as such, there were similarities between this case and the case of ZG Operations Australia Pty Ltd v Jamsek (Jamsek).[13]
13. The facts in Jamsek were as follows.
14. Mr Jamsek was formerly an employee of ZG Operations or its predecessor. In 1985, when he and others sought a pay rise, they were told that none was forthcoming, but ZG Operations invited them to consider becoming contractors, which would involve them owning their own trucks. They accepted the offer. Successive written contracts were executed that described Mr Jamsek and the others as contractors. Over the course of the arrangement, Mr Jamsek purchased trucks with money borrowed to finance them. The trucks were purchased on behalf of a partnership with him and his wife. The partnership paid all of the expenses associated with the trucks, including registration, maintenance, and interest on the funds borrowed to finance their purchase. These were claimed as deductions for tax purposes, and the income from the work performed by Mr Jamsek was declared as income of the partnership and split, generally evenly, between himself and his wife. In practice, ZG Operations exercised a fair degree of control in the way Mr Jamsek went about his business of driving, and it required him to adorn his truck and himself with the company logo.
15. In 2017 the agreement between ZG Operations and the partnership was terminated, following which Mr Jamsek commenced proceedings in the Federal Court of Australia seeking declarations in respect of statutory entitlements alleged to be owed to him as an employee of ZG Operations. ZG Operations opposed this on the basis that he was an independent contractor. The issue before the Court was the proper characterisation of the contract.
16. At first instance it was held that Mr Jamsek was not an employee and his action failed.
17. On appeal, the Full Court of the Federal Court held otherwise. It stated that in characterising the nature of the contract, it was appropriate to consider the reality of the situation. It thought that it was significant that Mr Jamsek was in a weaker negotiating position than ZG Operations when he initially executed the contract. It formed the view that the degree of control exercised by ZG Operations was significant. It stated that the requirement regarding adornment of its logo, would lead stakeholders to identify Mr Jamsek as part of its staff, and that this may have limited his opportunity to obtain work from others. It noted that his work from ZG Operations was his only source of income, and that he did not drive for any other entity. It considered that the lengthy and devoted nature of the working relationship were important considerations and that the surrounding facts displaced what the written contract said.
18. On appeal, the High Court unanimously, and emphatically rejected this, and confirmed the judgment at first instance.
19. Kiefel CJ and Keane and Edelman JJ noted that the relevant contracts were between ZG Operations and partnerships consisting of the truck driver and his spouse; that it was the partnerships that owned and provided the trucks as well as the skills of the driver; that the drivers were, through their partnerships, engaged in the conduct of their own businesses; and that because the drivers were only associated with the company as members of the partnerships with which the company contracted, there was no basis for concluding that the drivers were employed by the company. They said:

The services provided by the partnerships involved, compendiously, the truck‑driving skills of the respondents and the use of the trucks owned by the partnerships. The provision of such services has consistently been held, both in Australia and in England, to have been characteristic of independent contractors, not employees. In the present case, there is no reason to reach a different conclusion.[14]

1. They rejected the relevance of an "expectation" that the drivers wear company-branded clothing and display the company logo on their trucks, finding that such "expectations" did not alter the contractual rights and obligations which characterised the relationship between the partnerships and the company.
2. Gaegler and Gleeson JJ allowed the appeal because they concluded that a hallmark of a contract of service was a relationship of personal service. They considered it significant that a partnership maintained the truck provided to perform the delivery obligations under the contract and that ZG Operations contracted with a partnership, not an individual. Having said that: "Personal service is not inherently inconsistent with the individual who provides service being responsible for the physical means by which his or her service is provided", they added: "Where work contracted for, actually performed by an individual, and paid for, involves use of a substantial item of mechanical equipment for which the provider of the work is wholly responsible, the personal is overshadowed by the mechanical."[15] (Emphasis mine)
3. Whilst Gordon and Steward JJ accepted that some matters in the contract suggested a relationship of employer and employee, they observed that it was the partnerships, and not the individuals who were the contracting parties. They said:

The partnerships each contracted to provide, to operate and to maintain a truck to carry ZG's goods to its customers. The partnerships were entitled to invoice ZG for carrying the goods that they carried. It is true that the 1993 Contract between the partnerships and ZG addressed the obligations of the partnerships providing drivers. But that is to be expected. A truck could not in 1986 or 1993 carry and deliver goods without a driver.[16]

1. Ms Stewart submitted that like Jamsek, in this case: the contracting party was not Mr Mandalios, it was the Trust; the chauffeuring work performed by Mr Mandalios involved use of a substantial item of mechanical equipment for which the provider of the work was wholly responsible, namely the van, the value of which was about $100,000; and that Mr Mandalios' taxation returns reveal that all expenses associated with the van were claimed as deductions for tax purposes. She added that it was also significant that Mr and Mrs Mandalios determined how the income generated by the work for Equity was to be shared.
2. Ms Stewart submitted that taking these factors into account leads to the conclusion that the relationship at common law was that of an independent contractor.
3. Ms Stewart then addressed whether there was any significance about the fact that the contracting party was a trust as opposed to a partnership, by reference to the judgment of the Full Court of the Federal Court in EFEX Group Pty Ltd v Bennett (EFEX).[17]
4. The facts in EFEX were as follows.
5. Mr Bennet worked for EFEX as a business development manager for about 22 months. Despite agreeing to take up the position as a contractor and invoicing the company for his services as the trustee of a family trust, when he was told his services were no longer required, he claimed that he was an employee and sought relief for an alleged unfair dismissal.
6. In resisting that claim, EFEX made a jurisdictional challenge upon the basis that he was not an employee, such that the Fair Work Commission had no jurisdiction to hear the application because protection from unfair dismissal is only afforded to employees. The Commission found otherwise, and the Full Bench of the Commission refused permission to appeal. That in turn resulted in EFEX prosecuting an action in the Federal Court seeking an order prohibiting the Commission from continuing to hear and determine the unfair dismissal claim.
7. The issue before the primary judge was one of characterisation, that is to say, whether the facts demonstrated that Mr Bennett was an independent contractor rather than an employee.
8. The primary judge dismissed the application. On appeal, the Full Court of the Federal Court held otherwise. In the context of this case, the analysis of why it did so is not important. What Ms Stewart sought to draw from the judgment was the following:

At the very outset, before Mr Bennett commenced work for EFEX, he set up a trust for the very purpose of the impending commencement of work under the contract with EFEX, so that payment could be made in that way for the services he performed.

The inescapable conclusion is that Mr Bennett held the fruits of the contract with EFEX in his capacity as trustee of the Bennett Enterprises Trust, benefited from the tax arrangements attendant on that fact, and this was known and agreed to by EFEX. Indeed, the contract was offered on that express basis. Mr Bennett used the trust structure to hold income from EFEX, pay his business costs and take advantage of certain tax benefits in ways broadly analogous to the use of partnerships by independent contractors in Jamsek, where they were held to indicate that the impugned workers were conducting their own business: see Jamsek at [63].

Mr Bennett's submission that regard to the trust structure and tax arrangements must follow characterisation of the relationship is misplaced in a context where these were foundational terms of the contract. For the reasons already discussed, the establishment of the trust was not just an expression of the parties' opinion about Mr Bennett's relationship with EFEX. It was not really an opinion at all. It was a manifestation of the very nature of the contract that was agreed upon and entered into. The post-contractual conduct of issuing invoices in the name of the trust, of receiving payment into the trust bank account, and of paying expenses out of that bank account was conduct that was consistent with the nature of the contract itself as one of principal and independent contractor.

The taxation and remuneration arrangements alone were a significant basis for displacing the indicia of an employment contract. The limited right of contractual control exercised, as opposed to being shown to be contractually bestowed, did not provide any significant support for a contrary conclusion. The correct characterisation is that the relationship between the parties was that of principal and an independent contractor, not employer and employee. Only the clearest of written contracts to the contrary could readily have displaced that.[18]

1. Ms Stewart added that the Court should not be concerned about whether technically a trust might not have a legal personality. She referred to another part of the judgment of the Full Court in EFEX that said:

It is important to note that the language of contracting "in one's capacity as a trustee" rather than "in one's personal capacity" can confuse more than it clarifies. The obligations of a trustee under a contract are always personal, even though parties are free to agree that the trustee's liability is limited to trust assets and the trustee is free to declare that she or he holds the fruits of the contract on trust. With that in mind, EFEX must therefore to be taken, perhaps somewhat beneficially, to be contending it and Mr Bennett had agreed that the fruits of the agreement would be held by him on trust for the beneficiaries of the Bennett Enterprises Trust. This understanding of EFEX's submission is reinforced by its reliance upon expenses being paid out of the trust and trust distributions being made, albeit only to Mr Bennett. EFEX submits that the significance of the taxation arrangements was that they were a consequence of the terms of the contract, not merely a label or manifestation of an expectation.[19]

1. As to the alternate claim based upon Mr Mandalios being a deemed worker pursuant to reg 5 of the RTW Regulations, Ms Stewart submitted that for the regulation to have any application in this case, Mr Mandalios, as the driver, must not hold or lease a licence issued in relation to the vehicle. She submitted that "licence" simply means a lawful authority to drive something which comprises of a taxi-cab or similar motor vehicle used for the purpose of transporting members of the public. Next, she said that the document issued by the Department of Planning, Transport and Infrastructure which was issued to Mr Mandalios and which nominated the van as being a vehicle operated under the accreditation, was a licence held by Mr Mandalios issued in relation to the vehicle that he was driving for the purpose of transporting members of the public. Hence, she said that regulation had no application.
2. Next, she submitted that in any event, the value of any materials supplied, or reasonably expected to be supplied, by Mr Mandalios exceeded the prescribed limit, which was after indexation $135. She submitted that the means of determining this was to calculate the average weekly spend on fuel for the 12 month period immediately prior to the date of the injury, which she contended yielded an amount of $153.14.
3. In developing this submission, Ms Stewart referred me to Pirot Pty Ltd v Return to Work SA (Schultz).[20] In that case it was held that in determining how the value of materials supplied is to be determined, a finding needs to be made as to the period of the engagement. The finding was that the periods of engagement were weekly and that the value of materials supplied was to be assessed based on an average week spend. She submitted that in this case it would be reasonable to find that Mr Mandalios was engaged on a weekly basis, such that the average weekly spend applied.
4. Mr Harms, counsel for the Corporation, submitted that to talk in terms of looking at indicia of employment, there must first be a relationship between the putative parties which was lacking in this case. He said that if there is no relationship that is a contractual relationship of any description between Mr Mandalios and Equity, then there cannot be a contract of service. He submitted that the only contract here was a contract between Equity and the Trust. He noted that the Trust agreed to provide chauffeur services to Equity, not Mr Mandalios. He said that when this is tested against the other evidence, it points the same way. He accepted that Equity created the invoices, but it was the Trust that invoiced Equity and it was the Trust that received the money. He noted that there was not a single payment made by Equity to Mr Mandalios himself.
5. Mr Harms otherwise generally adopted the submissions advanced by Ms Stewart.

1. It is correct to say that a trust is not a legal entity that is capable of being a party to a contract. Where there is a purported contract between a trust and another party, the true contracting parties are the trustees acting on behalf of the beneficiaries of the trust, and the other contracting party. Thus in this case, the agreement that Mr Mandalios signed 6 November 2019, was not a contract between the Trust and Equity. It was a contract entered into by him as agent for the trustees of the Trust, and Equity. It was an agreement that the trustees of the Trust would provide for the performance of chauffeur driving services for Equity, which included the provision of a vehicle to do so. Mr Mandalios was not personally a party to the contract with Equity. He was merely acting as agent for the trustees of the Trust.[21]
2. In conformity with the observations by Gaegler and Gleeson JJ in Jamsek that a hallmark of a contract of service is a relationship of personal service, I think that the characteristics of the Agreement between the Trust and Equity are decisive. Mr Mandalios was not an employee of Equity, because it was the Trust which carried on the business of providing chauffeur services to Equity, not him personally.
3. In my opinion, this of itself compels a finding that when Mr Mandalios was performing chauffeuring duties for Equity he was not doing so as an employee of Equity.
4. Even if the position were otherwise, I would come to the same conclusion.
5. The following proceeds from the premise that despite my primary conclusion that there was no personal contract between Mr Mandalios and Equity, there was in fact such a contract.
6. Following the decisions in Personnel Contracting and Jamsek, in determining how a contract of the type under consideration here is to be characterised, primacy must be given to objective findings as to what the agreed terms were at the time of the contract's formation. The fact that the parties might be in an uneven bargaining position when the contract was formed is not especially relevant. And the fact that in practice, the parties might have conducted themselves in a way that is inconsistent with the terms of the contract or points to the character of the contract being different to that which have been thought to be the case when the contract was formed, will generally not provide a basis to conclude that the contract is other than what appears on its face.
7. But as Justice Lee observed in EFEX, in construing and characterising contracts that are made orally or only partially in written form, it would be an oversimplification to draw from these cases that nothing that occurred after the contract was formed is relevant. He said:

...in the absence of a written contract, the established principles of inferring a contract from the acts and conduct of parties (as well as in the absence of their words), come into play, and such conduct may be considered not only for the purpose of inferring whether a binding agreement had been reached at some point in time, but also for the purpose of identifying its necessary terms.[22]

1. With this in mind, and based upon the evidence presented, I make the following findings of fact.
2. Fact 1: At the time when the agreement was entered into, Equity had a worksite that included an office, a wash bay and a lunch room and that Mr Mandalios was aware of this.
3. Fact 2: Equity required Mr Mandalios when he was performing chauffeur duties for Equity to wear a uniform identifying Hughes and that his vehicle had to be badged as a Hughes vehicle and when he did so he could not drive for anyone else.
4. Fact 3: Work was allocated to Mr Mandalios through an app supplied by Equity.
5. Fact 4: The amount that the Trust was paid was determined by a fee that Equity set. It did not comprise of an hourly rate and although it might have been determined by reference to the anticipated drive time, the amount was fixed in the sense that it was not increased or reduced if the job took longer or less time than anticipated.
6. Fact 5: Equity exercised some control over how the job was undertaken in the sense that it expected certain standards of cleanliness, punctuality, and politeness to be met, and that in the case of inexperienced drivers, it would provide them with training to ensure that these standards were met.
7. Fact 6: Mr Tsaousoglou said that he told Mr Mandalios to gain some experience driving for another of Equity's contractors before committing to Equity. That evidence rings true. Mr Mandalios was adamant that he drove for someone engaged by Equity before entering into the Agreement and that although Mr Tsaousoglou has no memory of this, he did not deny that it might have occurred. I therefore find that Mr Mandalios did in fact drive a vehicle for Equity before he entered into the Agreement. This leads me to find that Equity allowed those it engaged to delegate driving duties to others and that Mr Mandalios was aware of this before he entered into the Agreement.
8. Fact 7: Mr Mandalios and his wife purchased the van at a cost of almost $100,000 in or about October 2019. The van was registered in their name as joint owners. They owned it on behalf of the Trust. Mr Mandalios held out to Equity that this would be the van that he would use to discharge the Trust's intended contractual obligation to perform chauffeur duties for Equity.
9. Fact 8: The Trust assumed responsibility to pay all of the expenses associated with the running of the van.
10. Fact 9: The Trust notionally invoiced Equity for the chauffeuring duties that Mr Mandalios undertook for Equity.
11. Fact 10: Once a job had been offered by Equity and accepted by Mr Mandalios, he determined the route by which the job would be undertaken.
12. Fact 11: No PAYE tax was deducted from the amount paid by Equity to the Trust.
13. Fact 12: GST was allocated for the amount paid by Equity for the chauffeuring duties that Mr Mandalios undertook for Equity.
14. Fact 13: Mr Mandalios and Equity made no provision for Mr Mandalios to take or be paid for holidays.
15. Fact 14: The use of the Trust enabled the payments made by Equity to be distributed to the beneficiaries of the Trust and it was able to offset the expenses associated with the van in connection with the liability to pay income tax.
16. In connection with my task of fact finding I make some further observations. I assume that the purpose of leading evidence from Mr Mandalios about Equity telling him after the incident that he had to undertake some anger management and that when he said to Equity that he had done nothing wrong, he was told that he had to resign or be let go, was to establish a level of control by Equity. That might be true, but I cannot overlook the records annexed to Mr Jospeh's affidavit that suggest that Mr Mandalios worked for Equity well after the incident. There is no reason to doubt the accuracy of those records.
17. I do not know where the truth lies, but I am not prepared to make a finding that Mr Mandalios was disciplined by Equity in connection with the incident or that he was told that he had to resign or be let go.
18. As for the alleged imposition of disciplinary action following Mr Mandalios failing to make himself available to perform chauffeuring duties at the Railway Station, in his affidavit, Mr Mandalios did not say for certain that he was disciplined. He merely made the observation that he was not allocated work the next day. He did not identify when this was. In his oral evidence he was more certain about the fact that he was disciplined, but again his description was light on detail and I did not find his evidence convincing. There could have been other reasons why he was not allocated work. When I add Mr Tsaousoglou's evidence of having no recollection of this, I am left in the position where I do not feel an actual persuasion that Mr Mandalios was disciplined for not accepting a job.
19. It must be accepted that there are several facts that point to this being an employer/employee relationship. Equity exercised some degree of control over how the work was performed by insisting that certain standards had to be maintained. By requiring the use of a uniform and signage on the van it held Mr Mandalios to be part of its organisation. The provision of an office, lunch room and wash bay are the sorts of facilities that an employer would be expected to make available to an employee. It was Equity that supplied the app, through which Mr Mandalios was allocated work. Equity set the fee for the job, not Mr Mandalios.
20. But there are many facts that point decisively in the other direction.
21. First, was Mr Mandalios' right to delegate driving duties to others. The contractual right to delegate the work governed by the contract to others is a powerful indicator that the putative worker is in fact an independent contractor. As was observed by the Full Court of the Federal Court in JMC Pty Ltd v Commissioner of Taxation [23]

...if a person engaged to perform work has a contractual right to have someone else perform that work, that is a matter which at the very least tends against a conclusion that the person is an employee. The existence of the right is inherently inconsistent with an employee relationship. In the absence of significant countervailing considerations, how can you be an employee if, within the scope of the contract, you can lawfully get someone else to perform the entirety of your contractual obligations, whether for a short period, or for a longer period?[24]

1. The fact that Mr Mandalios did not engage others to drive the van for Equity is not especially to the point. What is important is the right to do so.
2. Second, is the substantial asset the Trust brought to the relationship with Equity. As was observed by the New South Wales Court of Appeal in Australian Air Express Pty Ltd v Langford:

There is a consistent line of High Court authority supporting the "conventional view" that owners of expensive equipment such as a truck owned by the respondent are independent contractors. As MacKenna J said in Ready Mixed Concrete (South East) Ltd v Minister of Pensions, "the ownership of the assets, the chance of profit and the risk of loss in the business of carriage are [the owner-drivers] and not the company's".[25] (Footnotes omitted)

1. I do not regard the fact that it was the Trust and not Mr Mandalios personally that supplied the van to be significant, given that Mr Mandalios was a trustee and beneficiary of the Trust. In a very real sense, he was supplying the van, in the same way that in Jamsek, Mr Jamsek was seen as supplying a truck, notwithstanding that it was owned in partnership with his wife.
2. Third, are the taxation and invoicing arrangements, involving the use of a family trust to both pay expenses and which enabled the distribution of income to family members, with GST being charged and collected, and no income tax being withheld from the payments that Equity made. As Jessop J (with whom Allsop CJ and White J agreed) observed in Tattsbet Ltd v Morrow:

It is no longer just the absence of PAYG deductions that may make it more difficult to characterise the relationship as one of employment, it is the presence of GST collections by the putative contractor, and his or her compliance with the regulatory requirements which apply to the provision of services by persons who are not employees, that point quite strongly against the relationship being characterised in this way.[26]

1. Having conducted the evaluative exercise that is required to characterise the nature of the contract, in my opinion the factors pointing against a contract of employment outweigh those which point the other way.

Was Mr Mandalios a deemed worker under the RTW Regulations?

1. As a matter of fact, Mr Mandalios was the driver of a motor vehicle used for the purpose of transporting members of the public. He therefore potentially qualifies under reg 5 of the RTW Regulations provided he was not a driver who held or leased a licence issued in relation to the vehicle he drove and he did not supply materials, the value of which exceeded the prescribed amount.
2. It is instructive that the regulation does not speak in terms of "a taxi-cab licence". If it had been intended that only the holders or lessees of taxi cab licences were excluded, it might have been expected that the regulation would have said so. The word "licence" is not defined in the RTW Regulations. It is an ordinary word that connotes some type of official certification granting authority to do something.
3. Section 27 of the Planning Transport Act 2014 provides that a person must not operate a passenger transport service within (or partly within) the State unless the person holds an appropriate accreditation. In addition to requiring the person to be of good repute and in all other respects fit and proper to be responsible for the operation of a passenger transport service and meeting prescribed standards relating to things like providing a safe passenger transport service, it makes provision for the identification of the vehicles that the accredited person intends to operate. It makes it a condition of the accreditation that that the accredited person must, within seven days, inform the Minister of the introduction of a vehicle to the service, or of the withdrawal of a vehicle from the service. It also makes it a condition of the accreditation that "that a vehicle used for the purposes of the service has a current certificate of inspection (unless a certificate is not required because of an exemption under section 54 of the Act) or, if a certificate of inspection is required under Part 4A of the Road Traffic Act 1961, a current certificate of inspection under that Act".[27] Section 31(7) of the Planning Transport Act 2014 makes it an offence not to comply with a condition prescribed by that Act.
4. In my opinion the letter issued by the Department of Planning, Transport and Infrastructure that is addressed to Mr Mandalios and which nominates the van that he drove for Equity, speaks for itself. It is an official certification that enables the finding that Mr Mandalios was a driver who held a licence issued in relation to the vehicle he drove for Equity. Accordingly, Mr Mandalios cannot avail himself to the regulation.
5. Such a conclusion does not mean that in respect of limousine drivers reg 5 of the RTW Regulations has no work to do. If, for example, Mr Mandalios had been injured when he was driving for another contractor, before he purchased the van, he could have potentially been covered by the regulation and hence, the Act.
6. In case I am wrong about my finding that Mr Mandalios was a driver who held a licence issued in relation to the vehicle he drove for Equity, I will go on and consider whether he is excluded by the amount of the materials he supplied.
7. I do not accept Ms Stewart's submission that Mr Mandalios was engaged on a weekly basis. The rate of pay that he was to receive was based on each engagement. If the value of material supplied exclusion applies, in my opinion it must be calculated by the amount supplied for each individual engagement, not week by week.
8. The meaning of the word "materials" was considered by Kourakis CJ in The Palace Gallery v WorkCover Premium Review Panel and Others.[28] After observing that the word when read literally is wide enough to include tools, plant and equipment, he added that if it did have that wide meaning, the regulation would have very little work to do. Specifically, in respect of the classes of driving work, he observed that these:

...contemplate that a driver who enters into an arrangement to drive a vehicle for the prescribed purpose may own his or her car, but still supply materials valued at less than $50. It follows therefore that for the purposes of the driving work prescribed by those subparagraphs, the driver's car, which plainly enough is plant or equipment supplied by the worker, is not "materials" for the purposes of subplacitum (iv) of each of those subparagraphs.[29]

However, the word "materials" generally refers to items on which a worker works and which, for that reason, are in whole or in part consumed or transformed by the work performed. Plant, tools and equipment are generally items with which a worker performs his or her labour in order to effect that transformation, but which, wear and tear aside, are not consumed by that work.[30]

1. Thus I must only concern myself with actual materials, and in this case that must be limited to the cost of fuel.
2. Because the focus of the regulation is directed to the circumstances at the time of injury,[31] the issue is whether the amount of fuel that Mr Mandalios supplied to drive on 22 November 2022, from the Adelaide Airport to Hindley Street, Adelaide, exceeded $135.
3. Even without evidence of point, I am permitted to know that even a large diesel engine would not consume that much fuel in undertaking that trip.
4. Thus assuming, without deciding, that fuel supplied by the Trust can be material supplied by Mr Mandalios for the purposes of reg 5 of the RTW Regulations, if it had come to it, I would not have held that Mr Mandalios was excluded from invoking that regulation by the amount of the materials he supplied.

1 The application for review is dismissed.

2 I grant the parties liberty to apply as to costs.

[9] JMC Pty Ltd v Commissioner of Taxation [2022] FCAFC 750 at [8].

[11] [2022] HCA 1; (2022) 275 CLR 165.

[13] [2022] HCA 2, (2022) 275 CLR 254.

[17] [2024] FCAFC 35.

[20] [2017] SAET 92.

[22] [2024] FCAFC 35 at [59].

[25] [2005] NSWCA 96 at [44].

[26] [2015] FCAFC 62; (2015) 233 FCR 46 at [70].

[27] See reg 13 (1)C(i) of the Passenger Transport Regulations 2024.

[28] [2014] SASCFC 60.

[31] Stocco v WorkCover Corporation (JK and KM Ramage Pty Ltd) [1996] SAWCAT 69; See, also: Gray v Return to Work SA [2020] SAET 144 at [55].