The pleadings and the matters at issue
15 To identify in broad terms the claims for relief made and the major issues likely to arise for determination at trial, it is necessary to give an outline of the issues raised by the Further Amended Statement of Claim ("FASC") and also by ISGM's Defence ("Defence"). I have also had regard to the material filed in support of the declassing application and the submissions of the parties which elaborate upon the nature of the case each party is likely to rely upon. The claims for relief made by the FASC are detailed below. There is only one claim for relief relating to contraventions of s 357(1) of the FW Act which is claimed in relation to all group members. The other claims for relief are currently framed by reference to Mr Mutch alone. I suspect that that is so because, at this time, Mr Mutch has only been able to particularise his own claims. It may, however, be expected that the nature of the claims for relief intended to be made for group members will largely mirror the nature of the claims specified in the Amended Originating Application ("AOA") for Mr Mutch. The need to specify those claims, if only in general terms, was raised by the Court at the hearing. Counsel for Mr Mutch indicated an intent to address that matter.
16 Mr Mutch posed the following common questions in the AOA:
1. Whether the Respondent controlled and directed, or had the capacity to control and direct, the manner in which the Group Members performed work.
2. Whether the Respondent superintended the Group Members' finances.
3. Whether the economic activity carried out by the Group Members was portrayed as that of the Respondent.
4. Whether the Group Members were integrated into the business of the Respondent.
5. Whether any goodwill inured in activities carried out by the Group Members.
6. Whether the Respondent negotiated rates of pay with the Group Members.
7. Whether the Group Members were economically dependent upon, and provided services exclusively, or to an extent that was almost exclusive, to the Respondent.
8. Whether, the relationship as between the Group Members and the Respondent was one of employment.
9. Whether ISG Management was a 'national system employer' within the meaning of s 14 of the Fair Work Act.
10. Whether the Group Members were 'national system employees' within the meaning of s 13 of the Fair Work Act.
11. Whether the Group Members were 'casual employees' within the meaning of s 86 of the Fair Work Act.
12. Whether the Respondent contravened s 44 of the Fair Work Act.
13. Whether the Respondent contravened s 45 of the Fair Work Act.
14. Whether the Respondent contravened s 357 of the Fair Work Act.
15. Whether the Respondent is liable to pay a pecuniary penalty under s 546 of the Fair Work Act.
16. Whether any of the 2013 Tickets of Work Agreement, the 2015 Tickets of Work Agreement, and the 2016 Agreement was 'unfair' or 'harsh' within the meaning of s 12 of the Independent Contractors Act.
17. Whether an order should be made under s 16 of the Independent Contractors Act and, if so, what form of order is appropriate.
17 For the reasons I will now detail, it is tolerably clear from the pleadings that what is primarily in contest in the proceeding are questions that concern the correct legal characterisation of the relationship, if any, between each of the group members and ISGM. At the core of Mr Mutch's case is that each group member (including himself) was a telecommunications technician employed by ISGM and that, accordingly, various employee entitlements are owed by ISGM. At the core of ISGM's Defence is that it had no legal relationship with any group member as its employee. It contends that it made agreements with various corporate entities from whom it received services under an independent contractor relationship. Its position in denying the case put by Mr Mutch is that the group members were either employees or independent contractors of those corporate entities.
18 Mr Mutch pleads that from 2011 Telstra and ISGM were parties to an agreement under which ISGM agreed to manage a workforce to provide Telstra with installation and maintenance services. The "workforce" contemplated by that pleading is essentially the group members which are defined as the "workers" by the FASC. Putting aside conditions in that definition not relevant for current purposes and reading that definition in the context otherwise given by the FASC, the group members are the natural persons who, in the period 2011 to the date of the filing of the FASC, are asserted to have received "Tickets of Work" from ISGM and provided their services to ISGM as telecommunications technicians.
19 Perhaps a more neutral descriptor for a group member than the term "worker" used by the FASC, is the term "technician". I will adopt that descriptor in referring to group members. As I understand it (an understanding drawn largely from the Defence), the term "Ticket of Work" refers to an electronic document provided to a technician via a mobile computer known as a "Toughbook". The document specifies the work that Telstra desires be undertaken in relation to telecommunications facilities or equipment provided by Telstra to a particular customer or customers.
20 Central to Mr Mutch's pleading is that he and each other technician made an agreement or agreements with ISGM (referred to as "Tickets of Work Agreement") pursuant to which those technicians received Tickets of Work and provided services to ISGM as employees of ISGM.
21 That each Tickets of Work Agreement was entered into as between ISGM and each technician is pleaded to be a legal conclusion that follows from an examination of the whole of the relationship between ISGM and each technician including because:
each technician "individually" received "Tickets of Work" from ISGM;
each technician "individually" provided telecommunications services to ISGM;
"Toughbooks" were issued to technicians and Tickets of Work were issued to technicians through the use of the Toughbook; and
by reason of each of the matters detailed at [30]-[32] below.
22 As to the nature of the agreements asserted to have been made between ISGM and each technician, and again relying on the matters detailed at [30]-[32] below, Mr Mutch pleads that "on the totality of the relationship" as between each technician and ISGM, the relationship created was one of employment.
23 On the basis that he was an employee of ISGM, Mr Mutch claims that ISGM failed to meet both the statutory and industrial award obligations imposed upon it by law. There is no claim made either in the AOA or the FASC that ISGM failed to pay either statutory or industrial award entitlements to any group member other than Mr Mutch. As earlier indicated, such claims for compensation are not yet specified for any group member beyond Mr Mutch because Mr Mutch is not in a position to know or specify the particulars thereof. Nevertheless, it is apparent from the indications given by Senior Counsel for Mr Mutch that the claims for relief by way of unpaid statutory and award entitlements intended to be made for group members will, in terms of the nature of those claims, largely mirror those made by Mr Mutch in the pleading as currently formulated.
24 In respect of statutory entitlements, Mr Mutch claims that in contravention of s 44 of the FW Act, he was not provided annual leave, paid in lieu of annual leave or provided personal carer's leave as required by ss 87, 90(2) and 96 of the FW Act. In support of those claims, Mr Mutch asserts that he and each technician were "national system employees" within the meaning of s 13 of the FW Act and that they were not "casual employees" within the meaning of s 86 of that Act. In respect of alleged award obligations, Mr Mutch claims that he and each technician were, from 1 January 2010, covered by the Telecommunications Services Award 2010 ("Award"). He claims that contrary to the obligations imposed upon ISGM by the Award, he was underpaid minimum wage entitlements; not paid a vehicle allowance; not paid a telephone allowance; not paid a meal allowance; not paid expenses and travelling time; not paid a tool allowance; and that ISGM did not make superannuation contributions; failed to pay penalty rates in respect of weekend work and overtime; and failed to pay amounts in respect of annual leave in accordance with the requirements of the Award.
25 The Award contraventions alleged are also claimed as contraventions of s 45 of the FW Act. As well as compensation, civil penalties are sought in respect of all alleged contraventions of the FW Act.
26 An alternative claim of award breach is made on the basis that, if Mr Mutch was not a full-time employee, he was a casual employee and entitled to a casual loading.
27 Section 357(1) of the FW Act relevantly provides that a person that employs an individual must not represent to the individual that the contract of employment under which the individual is employed by that person is a contract for services under which the individual performs work as an independent contractor.
28 Mr Mutch also claims that, in contravention of s 357 of the FW Act, ISGM represented to each technician (ie. each group member) that the contract of employment under which the technician was employed by ISGM was a contract for services under which the technician would perform work as an independent contractor. To make good those claims, apart from the making of the representations, it will be necessary for Mr Mutch to establish that each technician was an employee employed by ISGM. By reference to the various matters I here outline, Mr Mutch pleads that each technician was an employee of ISGM. Both a declaration and civil penalties are sought in relation to those alleged contraventions.
29 An alternative claim is also made under the Independent Contractors Act 2006 (Cth). Mr Mutch pleads that if the technicians were independent contractors of ISGM, each of the Tickets of Work Agreements was "unfair" and/or "harsh" within the meaning of s 12 of the Independent Contractors Act. Mr Mutch claims that in order to put him in the position he would have been in had he been an employee, the Tickets of Work Agreements that he made with ISGM are amenable to being varied by inserting a term that ISGM pay appropriate compensation. That claim, as currently pleaded, is made only in relation to Mr Mutch.
30 To support the allegation of an agreement (or agreements) made between ISGM and each technician as well as the allegation that on the totality of the relationship as between each technician and ISGM an employment relationship existed, the FASC relies upon a wide range of asserted facts and circumstances. Those facts and circumstances are categorised at paras 220-227 of the FASC by reference to indicia not uncommonly considered by the authorities as relevant to whether a legal relationship is to be characterised as that of employment. Those categories and the matters relied on in support of each are as follows:
(1) That ISGM controlled and directed, or had the capacity to control or direct, the manner in which the technicians performed work, including in respect of the following matters:
(a) the manner in which work was to be performed, and what standards and requirements were to be complied with in performing the work;
(b) the issuance of Tickets of Work;
(c) the circumstances in which technicians could accept or reject a Ticket of Work;
(d) the hours in which technicians were to be available to perform work;
(e) the provision of training, and requirements that technicians be trained;
(f) attendance at meetings;
(g) the circumstances in which technicians could sub-contract or delegate work;
(h) the issuance by ISGM of directions to the technicians;
(i) the provision of information by the technicians to ISGM, and ISGM's rights to be provided with information and audit the technicians;
(j) ISGM having the right in certain circumstances and in certain respects, to amend contractual documents and/or alter the legal rights as between ISGM and the technicians;
(k) ISGM having the right to terminate the contracts with technicians without cause;
(l) in the event that Telstra exercised its right to defer or suspend the provision of services under the "Head Agreement", ISGM's entitlement to defer or suspend any services or work;
(m) the circumstances in which technicians could perform services for other persons;
(n) ISGM's power to impose, and its imposition of, adverse consequences on technicians in respect of perceived or actual poor performance, or when the technicians failed to meet statistical measures desired by ISGM;
(o) ISGM's specification of the tools that the technicians were required to use;
(p) that technicians were required not to make public or media comment about the services performed for ISGM, without first obtaining permission;
(q) the superintendence by ISGM of the technicians' finances; and
(r) the appearance of the technicians.
(2) That ISGM superintended the technicians' finances by reason of the following matters:
(a) the amount payable for work done was set in accordance with rates determined by ISGM;
(b) ISGM prepared "Recipient Created Tax Invoices" ("RCTIs") and provided the RCTIs to the technicians;
(c) ISGM prescribed the process for when technicians sought to dispute the amounts in RCTIs; and
(d) ISGM could, and did, in certain circumstances, adjust the rates in respect of the amounts to be paid for work.
(3) That the economic activity that was carried on by the technicians was portrayed as that of ISGM by reason of the following matters:
(a) the technicians were required to wear a uniform containing ISGM branding;
(b) the technicians were required to use ISGM branding on their vehicles; and
(c) the technicians were required to have identification with ISGM and Telstra branding.
(4) That by reason of the following matters each technician was integrated in the business of ISGM and did not conduct a business of his or her own:
(a) ISGM controlled the allocation of work;
(b) Technicians had little latitude in respect of acceptance of work;
(c) ISGM's business was the marshalling and direction of the labour of the technicians; and
(d) the technicians did not supplement or perform part of the work undertaken by ISGM, rather the technicians effectively performed all of ISGM's operations.
(5) That no goodwill inured to the technicians by reason of services performed for ISGM.
(6) That the technicians carried out little, or no, advertising to the public promoting a business being carried on by the technicians.
(7) That ISGM did not negotiate with the technicians in respect of the amounts paid (or payable) to them.
(8) That the technicians were economically dependent upon, and provided services exclusively, or to an extent that was almost exclusive, to ISGM.
31 Each of the matters relied upon in each of the sub-paras to categories (1), (2), (3) and each of sub-paras (a) and (b) of category (4) are supported in the FASC by particulars. Whilst as a rule of pleading material facts should not be hidden in particulars, the particulars given set out the material facts relied upon in support of each allegation. In each case what is relied upon is:
(i) one or more clauses of a Tickets of Work Agreement asserted to have been made between ISGM and the technicians. There are 3 versions referred to: the "2013 Tickets of Work Agreement"; the "2015 Tickets of Work Agreement"; and the "2016 Agreement"; and/or
(ii) one or more clauses of a "Field Operations Manual" alleged to have been issued to technicians by ISGM and which it is alleged technicians were required to comply with. There are 3 versions referred to: the "2013 Field Operations Manual"; the "2015 Field Operations Manual"; and the "2016 Field Operations Manual"; and/or
(iii) one or more of the sub-paras to para 219 of the FASC.
32 Paragraph 219 of the FASC is headed "Work practice" and is in the following terms:
At all material times, the relationship between ISG Management (on the one hand) and the Applicant (and the group members) (on the other hand) was conducted on the following basis:
a. [Technicians] were required to login on a Toughbook by 7am to 8am.
b. On logging in, Tickets of Work were allocated to [technicians].
c. [Technicians] were not able to pick and choose the Tickets of Work allocated to them.
d. The number of Tickets of Work allocated to [technicians] varied from day to day.
e. [Technicians] had no ability to predict or to control the minimum number of Tickets of Work allocated to them.
f. [Technicians] had no ability to predict or control the location of Tickets of Work.
g. If [technicians] wanted to decline a Ticket of Work, the [technician] would have to go to the [technician's] team leader and ask for a sequence code (being a code inputted by a [technician's] team leader that, once provided, could be submitted to ISG Management in order to decline a Ticket of Work). Team leaders would usually refuse to issue a code.
h. Each Ticket of Work had a timer attached to it, which had a time set by ISG Management allocating the time within which the Ticket of Work was required to be completed.
i. [Technicians] were required to complete a Ticket of Work within the time indicated by the timer.
j. ISG Management measured and recorded [technicians'] compliance with timers.
k. If [technicians] did not complete Tickets of Work within the time allocated by the timers, they would be reprimanded by ISG Management; and/or [technicians] were (from time to time) directed to suspend work on the first job, which resulted in two Tickets of Work being active.
l. [Technicians] had little or no control over how long a job would take, and no allowance was made for difficulties encountered by the [technician] in performing the work due to matters beyond the [technician's] control.
m. In practice, there was no ability of the [technicians] to delegate Tickets of Work to other [technicians].
n. ISG Management provided, on a weekly basis, statistics to [technicians] in respect of their performance for matters including:
i. The time taken to complete Tickets of Work.
ii. Whether the time taken to complete a Ticket of Work was in accordance with the time allocated to the Ticket of Work.
iii. The number of Tickets of Work the subject of a sequence code.
iv. Customer satisfaction.
v. Returns to jobs to fix defects.
vi. Re-rolls (being when a [technician] had to send someone else out to complete a job that the [technician] had been assigned when the first [technician] was unable to complete the job).
o. [Technicians] were able to avoid the recording by ISG Management of a 're-roll' by completing the job in question without pay.
p. ISG Management penalised [technicians] in respect of perceived or actual poor performance (or when the [technician] did not meet the statistical measures desired by ISG Management) by assigning fewer (or no) Tickets of Work.
q. In practice, [technicians] were required to work for a minimum of 6 days a week, and sometimes worked 7 days a week, including public holidays.
r. In practice, if [technicians] wanted to take time off, they were required to give 3 months' notice of unavailability to work on particular days.
s. In practice, [technicians] were not able to provide services for entities other than ISG Management because they were expected to be available 6 days a week and, if the [technicians] indicated a lesser availability, the [technicians] (in practice) were allocated fewer (or no) Tickets of Work.
t. [Technicians] were required to wear uniforms with Telstra and ISG Management logos.
u. [Technicians] were directed by ISG Management to comply with policies, manuals and methods of work issued by ISG Management.
v. In the event that ISG Management concluded that a [technician] had not complied with policies, manuals and methods of work, ISG Management penalised the [technician], including by issuing a breach notice or suspending the [technician] from receiving new Tickets of Work.
w. ISG Management, from time to time, suspended [technicians] from receiving new Tickets of Work for substantive periods.
x. ISG Management required [technicians] to attend meetings or do training including the following:
i. mandatory toolbox meetings (being meetings of teams of [technicians], who worked in a particular radius under a particular team leader, usually held monthly).
ii. mandatory OH&S training.
iii. courses offered by Telstra and ISG Management.
y. [Technicians] did not negotiate the terms or amounts of payment.
z. ISG Management required [technicians] to wear identification with ISG Management and Telstra branding.
aa. [Technicians] had no ability to engage additional workers to carry out a Ticket of Work.
bb. [Technicians] were required to obtain tools specified by ISG Management.
Particulars
ISG Management listed mandatory tools in a document entitled 'ISGM Contractor - Mandatory Tool List'.
cc. [Technicians] were not paid a minimum wage.
dd. [Technicians] were not paid any amounts in respect of Annual Leave.
ee. [Technicians] were not paid any amounts in respect of Overtime.
ff. [Technicians] were not paid any amounts in respect of Long Service Leave.
gg. [Technicians] were not paid any amounts in respect of Employee Allowances.
hh. [Technicians] were not paid any amounts in respect of Superannuation.
Particulars of practices to which the Applicant was subject
(i) The Applicant was subject to the practices referred to in (a) to (m), (o), (q), (r), (t) to (v), and (x) to (hh) above.
(ii) In respect of paragraph (n) above, the Applicant was subject to the practices referred to in (n), (i), (iv), (v) and (vi).
(iii) The Applicant is aware of the practice of (w) above occurring to other workers.
33 Although not elegantly pleaded, many if not most of the matters referred to in the sub-paras to para 219 of the FASC assert the existence of a particular work practice, policy or system of ISGM upon which the relationship between ISGM and each technician is said to have been conducted. A few of the matters referred to cannot be so characterised. They appear to address a circumstance or consequence alleged to have been experienced by technicians. For example at sub-para (m) - "in practice, there was no ability for [technicians] to delegate Tickets of Work to other [technicians]".
34 It seems apparent then, that for his own claim to have been an employee of ISGM employed under a contract or contracts made with ISGM and for the claims made that each other technician was such an employee, Mr Mutch largely relies upon requirements, arrangements or circumstances which are asserted to have been generally applicable to all technicians either by reason of a Tickets of Work Agreement, a Field Operations Manual or by reason of a practice, policy or system of ISGM. In support of the characterisation of the relationship contended for and by reference to the particulars given at paras 220-227, the FASC relies upon over 120 such requirements, arrangements or circumstances.
35 The Defence largely denies the allegations made by the FASC. In particular, ISGM denies that Mr Mutch or any of the technicians made any agreement with it and that the technicians were its employees. ISGM asserts that it entered into agreements (referred to in the Defence as "Standard Agreements" but said to have been historically titled "Tickets of Work Standing Offer Agreement" and subsequently "I&M Subcontractor Agreement") with various proprietary companies (referred to as "Subcontracting Companies") pursuant to which services (described as installation and maintenance services or "I&M Services") "were provided by Subcontracting Companies as independent contractors in the course of carrying on their own businesses". Principally, I&M services are stated to involve:
A. the installation of telephone, asymmetric digital subscriber line (ADSL) and broadband cable services to Telstra customers;
B. identification and rectification of faults on the [Customer Access Network] and on customer premises;
C. disconnection services; and
D. work required to connect copper twisted wires that connect Telstra customers' telephone service to equipment in the Telstra exchange in order to create a dial tone or ADSL.
36 The Defence denies the allegation that pursuant to an agreement between Telstra and ISGM, ISGM agreed to manage a workforce to provide Telstra with I&M Services. By its Defence, ISGM refers to and relies upon particular provisions of its agreement with Telstra. Contrary to the characterisation made in the FASC to the effect that under the Telstra/ISGM agreement ISGM was the provider of a workforce, ISGM asserts that it was the provider to Telstra of I&M Services.
37 The Defence alleges that there were terms of the Telstra/ISGM Agreement to the following effect:
(a) ISGM could enter into subcontracts in relation to provision of the I&M Services;
(b) any subcontractor engaged by ISGM to perform I&M Services was required to be incorporated as a proprietary company;
(c) any subcontractor engaged by ISGM to perform I&M Services was required to have and maintain an Australian Business Number (ABN);
(d) any subcontractor engaged by ISGM to perform I&M Services was required to be permitted to further subcontract such work to its own contractors or employees;
(e) any subcontractor engaged by ISGM to perform I&M Services was required to participate in reporting and safety meetings with Telstra, as required by Telstra;
(f) each subcontractor was required to be engaged by ISGM through a written subcontract signed by authorised representatives of the subcontractor, which was consistent with all requirements necessary to provide for a principal/contractor relationship; and
(g) the rates payable to ISGM's subcontractors for the performance of I&M Services were to be fixed by Telstra in consultation with ISGM.
38 The Defence further relies upon terms of the Telstra/ISGM Agreement requiring that all persons performing I&M Services on Telstra's network have suitable training, skills and accreditation and, in that respect, asserts that the requirement reflects the requirements arising under the Telecommunications Act 1997 (Cth) and the Telecommunications Cabling Provider Rules 2014 (Cth). Further, it is asserted that all persons performing I&M Services must undergo specific training as directed by Telstra relating to the use of Telstra's assets and products, health and safety issues specific to Telstra's network and the use of Telstra's electronic and work management system and further that those persons must comply with Telstra's operational procedures when carrying out work on Telstra's "Customer Access Network" and on the premises of Telstra's customers.
39 Additionally, the Defence asserts that the manner in which I&M Services are performed was informed by the Telecommunications (Customer Service Guarantee) Standard 2011 (Cth), said to be a legislative instrument made pursuant to the Telecommunications (Consumer Protection and Service Standards) Act 1999 (Cth) which contains certain minimum performance requirements.
40 Under the heading "Provision of I&M Services", the Defence sets out the process or work management system which it is asserted was utilised in the provision of I&M Services. The Defence states that in accordance with the terms of the Telstra/ISGM Agreement, from about 2011, ISGM entered into agreements with proprietary companies - the Subcontracting Companies - pursuant to which those companies were engaged by ISGM to perform the I&M Services. Again, to adopt more neutral language I will refer to the "Subcontracting Companies" as the "Corporate Entities".
41 Passing over matters to which I will return, the Defence states that each of the Corporate Entities was incorporated pursuant to the Corporations Act 2001 (Cth); had and maintained an ABN; was registered for the purposes of GST; had and maintained at its own cost public liability insurance, workers' compensation insurance and vehicle insurance; was required to ensure that its officers, employees and/or contractors had the necessary skills, training and accreditations to perform the I&M Services on its behalf; was responsible for the employment costs of employees engaged by it and for the remuneration of any contractors engaged by it and had at least one director.
42 It is asserted that on entering into a Standard Agreement, a Corporate Entity was required by ISGM to satisfy ISGM that its technicians (referred to as the Corporate Entity's "Representatives") had engaged in the requisite training and held the requisite accreditations to perform I&M Services. Further, that ISGM ensured that each Corporate Entity and/or its technicians had access to ISGM's electronic "Contractor Management System"; and that ISGM requested that the Corporate Entity record its technicians' nominated availability to perform I&M Services up to three months in advance in the Contractor Management System. It is further asserted that ISGM discussed and agreed with each technician a "start location", being the areas or districts in which work was to be offered to the technician.
43 ISGM pleads that it advised Telstra of the engagement of a Corporate Entity and provided Telstra with details about the identity, skills accreditations and availability of the Corporate Entity's technicians.
44 In further describing the processes or work management system utilised, ISGM asserts that the information described above was provided by it to Telstra and was then recorded in an electronic work allocation system operated by Telstra and known as "Connect". That information included the nominated availability of the technicians. It is asserted that Telstra provided each of the technicians with a Toughbook and required each technician to complete Telstra's mandatory training.
45 The Defence then asserts that "thereafter", the Corporate Entity and/or their technicians, used ISGM's Contractor Management System to identify:
the days that technicians were available to perform I&M Services each week;
the time periods during which each technician was available to perform I&M Services each day; and
the number of Tickets of Work they wished each technician to complete on each day that they were available to perform I&M Services.
46 Further, when Telstra received requests for I&M Services from its customers, Telstra scheduled appointment windows for time periods of 2 or 4 hours (referred to as "customer appointment windows"); recorded details of the customer appointment windows and the nature of the I&M Services required in Connect and that, on the day scheduled for the specific customer appointments, Telstra allocated the customer appointments to individual technicians in the form of Tickets of Work which were received via the technicians' Toughbooks.
47 The Defence then states that on any given day, the Corporate Entities' technicians logged onto their Toughbooks shortly before the time they had indicated their availability would commence, received Tickets of Work allocated by Telstra via their Toughbook and were able to accept or reject Tickets of Work that had been allocated to them.
48 Upon completion of a Ticket of Work, it is asserted that technicians entered details of the work they had completed in their Toughbook and that those details were automatically communicated to Telstra via Connect. Telstra provided details of the work completed pursuant to each Ticket of Work to ISGM and, based on those details, RCTIs were automatically generated by ISGM's Contractor Management System on a weekly basis.
49 It is asserted that RCTIs in respect of I&M Services were issued in the names of Corporate Entities, identified the Corporate Entities' ABNs, were tax invoices for the purposes of GST, and included a charge by the Corporate Entities in respect of GST.
50 The Defence then states that the amounts payable by ISGM to the Corporate Entities in respect of each RCTI were provided by ISGM within 7 days of the date of the RCTI and that the amounts payable were reimbursed to ISGM by Telstra.
51 Lastly, in dealing with the arrangements through which I&M Services were provided, the Defence asserts that Corporate Entities determined the amounts paid to their technician or technicians pursuant to the employment, contracting or other arrangements they had with their technicians and were responsible for those costs, together with any superannuation payments and other statutory and/or award entitlements.
52 The Defence also pleads to some variation in circumstances as between Corporate Entities.
53 The Defence asserts that Corporate Entities engaged persons to perform I&M Services on their behalf and that those arrangements varied, including as follows:
i. sole director [Corporate Entities] where the sole director individually performed the I&M Services for and on behalf of the [Corporate Entity];
ii. [Corporate Entities] with more than one director and/or officers where the directors and/or officers performed the I&M Services for and on behalf of the [Corporate Entity];
iii. [Corporate Entities] with one or more directors that engaged between one and 129 employees to perform the I&M Services for and on behalf of the [Corporate Entity]; and
iv. [Corporate Entities] with one or more directors that engaged varying numbers of contractors to perform the I&M Services for and on behalf of the [Corporate Entity].
54 The material filed by ISGM in support of its declassing application suggests that (taking a point in time assessment as at 3 May 2019) some 94% of the Corporate Entities were, like MBC, within the first category described above where the sole director was a technician who, like Mr Mutch, individually performed the I&M Services provided to ISGM. The material also asserts that about 113 Corporate Entities currently engage more than one technician, which equates to about 22.7% of the technician workforce. ISGM contended that it is likely that these Corporate Entities would have a variety of contractual arrangements in place with technicians asserted to be engaged by those Corporate Entities.
55 There are other asserted variations in arrangements as between Corporate Entities referred to in the Defence. It is asserted that the Corporate Entities engaged by ISGM from time to time were not necessarily engaged pursuant to the same version of the Standard Agreement at the same time or times. The Defence identifies 12 versions of such agreements between ISGM and Corporate Entities that were used between 2011 and 2019.
56 Material filed by ISGM (some 12 affidavits) was received for the limited purpose of allowing the Court to gain an understanding of the kind of evidence that may be available to demonstrate the potential for variability as between group members relating to particular indicia that may be relevant to the issue of whether the technicians were employees of ISGM. That material elaborated upon the nature of the variations referred to in the Defence.
57 Other asserted differences raised in the material relied upon by ISGM were that:
Some Corporate Entities provided ISGM and its related companies services other than I&M Services including services outside of "the Tickets of Work System". The ISGM material asserted that of the 3,348 Corporate Entities that contracted with ISGM during the period of Mr Mutch's claim, some 284 have provided services other than I&M services to the Tandem Group of companies to which ISGM belongs;
Some Corporate Entities provide services to other individuals or entities outside of the Tandem Group. The ISGM material noted that while ISGM does not have detailed knowledge of which Corporate Entities were providing such services, approximately 96 Corporate Entities provide services to other individuals or entities;
The days of work differed as between different Corporate Entities and the hours of work and starting times differed as between different technicians; and
The revenue earned by Corporate Entities varied greatly.
58 ISGM relies on variations in the manner in which the Corporate Entities came to provide services to it. It is asserted that only some Corporate Entities, like Mr Mutch's company MBC, were set up by individuals who, like Mr Mutch, took part in specific training programs which, as ISGM asserted, were aimed at increasing I&M suppliers where the opportunity of providing services to ISGM was specifically envisaged by the program. ISGM further asserts that some 1,074 Corporate Entities (engaging 1,116 technicians) had been suppliers to ISGM's predecessors in relation to the I&M services provided to Telstra. Yet another 722 Corporate Entities (engaging 787 technicians) are asserted to have been new to Telstra related work and were established companies providing work to entities other than Telstra.
59 In terms of variation to the agreements ISGM asserts it made with Corporate Entities, ISGM relies on 4,726 separate agreements being executed with the 3,348 Corporate Entities which it asserts contracted with ISGM in the years 2011-2019. In a chart provided by ISGM, a summary of changes made to 10 clauses is given. Of the clauses addressed, 6 are relied upon by the FASC.
60 ISGM also relied upon negotiated variations to Tickets of Work Agreements asserted to have been made by it with Corporate Entities. ISGM contended that 8 Corporate Entities directly discussed or negotiated the terms of the 2015 Tickets of Work Standing Offer Agreement with ISGM which resulted in ISGM agreeing to amend the terms of the standard agreement in relation to 4 Corporate Entities. However, it is not clear that those amendments to the standard agreements materially affected the provisions relied upon by Mr Mutch in the FASC. Further, it is asserted that 196 Corporate Entities appointed the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia to represent them in negotiations with ISGM. No detail was provided as to what variations were made, if any, as a result of those negotiations.
61 Fundamental to the denials made by ISGM's Defence of Mr Mutch's claims for unpaid statutory and award entitlements is ISGM's denial that Mr Mutch was ever employed by it. Further, ISGM pleads that if the technicians (including Mr Mutch) were employees they were casual employees of ISGM within the meaning of s 86 of the FW Act. ISGM denies that the technicians (including Mr Mutch), if employees, were covered by the Award. ISGM denies the claims made that, in relation to each technician, it contravened s 357(1) of the FW Act. In that respect it again denies that the technicians were employees of ISGM.
62 It is apparent from the Defence and the material upon which ISGM relies, that ISGM intends at trial to make out a positive case in denying the characterisations contended for by Mr Mutch. The Defence extensively relies upon a wide range of material facts in relation to what, by its own material, ISGM refers to as "the Tickets of Work System".
63 It seems clear that the parties through their pleadings are calling upon the Court to engage in an exercise of characterisation through which the Court will determine who were the parties to what the Defence calls the Standard Agreements and what the FASC calls the Tickets of Work Agreements as well as the nature of those agreements. On the one hand, Mr Mutch is contending that the parties to the relevant agreements were ISGM and the technicians and that the relationship between those parties was a relationship of employment. On the other hand, ISGM contends that the parties to the relevant agreements were ISGM and the Corporate Entities and that the technicians did not provide services to ISGM but provided their services to the Corporate Entity that employed or engaged them.
64 What is of significance for purposes to which I will later refer, is that in large part each of the FASC and the Defence deals globally - that is by reference to all technicians and all Corporate Entities - in setting out the material facts asserted in support of the competing characterisations contended for. Further, many if not most of those material facts arise from agreements (including requirements made by relevant manuals) with the same or similar content and out of ISGM policies and practices and a system of work management applicable to all technicians and all Corporate Entities. Reliance is also placed, particularly by ISGM, on its agreement with Telstra and various legislative requirements, the consequences of which for the characterisation exercises here required, appear to be largely standard across all technicians. Of course, each of the parties seeks to emphasise different aspects of those arrangements in contending for its own characterisation of the nature of the relationships created pursuant to them.
65 It is also tolerably clear that in trying to establish the existence of an employment contract between ISGM and each of the technicians, Mr Mutch will conduct his case on the basis that an assessment of the substance or reality of what has or has not been agreed ought not be confined to the terms of contractual arrangements entered into, but will only be revealed by an examination of a wide range of other considerations and, substantially, considerations that arise from ISGM systems, practices and other arrangements generally applicable to all technicians. It is sufficient for current purposes to observe, by reference to the authorities that follow, that the approach to the issue of whether the technicians were each employees of ISGM that Mr Mutch intends to take, is sufficiently supported by authority to make that exercise, broadly speaking, forensically justifiable.
66 Determining whether a first person is providing work to another as an employee of that second person, is an exercise which requires consideration of whether a contract exists between the first and second person and, if so, whether that contract bears the legal character of a contract of employment. When determining whether a contractual relationship exists and the legal nature of that relationship, courts have been alert to ensure that form and presentation, whilst relevant, do not distract from the substance of what has been agreed and the true nature of the relationship in question: Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (2015) 228 FCR 346 at [142] (North and Bromberg JJ) and the authorities there cited.
67 It will not necessarily be the case that the interposition of a corporation between a worker providing personal services and an entity receiving those services will deny the existence of a contract of employment between the worker and the recipient of the work: Ace Insurance Ltd v Trifunovski (2013) 209 FCR 146 at [150]-[153] (Buchanan J with Lander and Robertson JJ in agreement); Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2010) 184 FCR 448 at [43] (Keane CJ, Sundberg and Kenny JJ). A relevant consideration is the function served by the corporation in the relationship created by the contract which, as the authorities just referred to show, requires an examination of a range of relevant circumstances beyond the terms of the contract in question.
68 The parties' characterisation of their relationship may not be given effect according to its terms where that characterisation contradicts the nature of the relationship the parties have actually created: Curtis v Perth and Freemantle Bottle Exchange Co Ltd (1914) 18 CLR 17 at 25 (Isaacs J); Garnac Grain Co Inc v H M F Faure and Fairclough Ltd [1968] AC 1130 at 1137 (Lord Pearson); Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 389 (the Court), citing Lord Denning MR in Massey v Crown Life Insurance Co [1978] 2 All ER 576 at 579; Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at [58] (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ); Quest at [148] (North and Bromberg JJ). The character of the relationship created by the contract will be revealed by all the terms of the contract examined in the light of circumstances surrounding the making of it: Narich Pty Ltd v Commissioner of Pay-roll Tax [1983] 2 NSWLR 597 at 601 and 606 (Lord Keith of Kinkel, Lord Elwyn-Jones, Lord Roskill, Lord Brandon of Oakbrook and Lord Templeman); ACT Visiting Medical Officers Association v Australian Industrial Relations Commission [2006] FCAFC 109 at [24] (Wilcox, Conti and Stone JJ); and Quest at [148] (North and Bromberg JJ).
69 Determining whether a person is providing services as an employee requires a multi-factorial assessment of the "totality of the relationship": Hollis at [24]; Quest at [176] (North and Bromberg JJ). The majority in Hollis (at [40]) approved the observation made by Windeyer J in Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210 at 217 that the distinction between an employee and an independent contractor is "rooted fundamentally in the difference between a person who serves his employer in his, the employer's business, and a person who carries on a trade or business of his own": see further Hollis at [47] and [57] and see Quest at [177].
70 In the multi-factorial assessment conducted in Hollis, the indicia that the majority considered included: the level of skill exercised by the worker; whether the worker was able to create an independent career and generate goodwill; whether the notion that the worker was running a business was intuitively unsound; whether the worker could refuse work offered; whether the worker could delegate work; whether the worker could engage in work for others, ie. was given scope for the pursuit of any real business enterprise on the worker's own account; whether the worker was presented to the public as an emanation of the recipient of the work; whether the recipient superintended the worker's finances; whether there was scope for the worker to bargain for the rate of remuneration; whether the recipient undertook provision of insurances; the method of payment; the capacity for the worker to take leave; the provision of and maintenance of tools and equipment; and whether the workers effectively performed all of the business' operations in the outside world (at [48]-[57]).
71 At [24] the majority emphasised the relevance of the recipient's work systems and work practices stating that the relationship between the worker and the recipient was not to be found merely from the contractual terms agreed and observed that:
The system which was operated thereunder and the work practices imposed by [the recipient] go to establishing 'the totality of the relationship' between the parties; it is this which is to be considered.
72 Most of the indicia referred to in Hollis and set out above are relied upon by Mr Mutch. The list there given is not exhaustive. Nor are any of the indicia necessarily determinative in any particular case. The weight which may be accorded to any particular indicator may vary from case to case: Lopez v Deputy Commissioner of Taxation (2005) 143 FCR 574 at [82] (Ryan, Lander and Crennan JJ). As Wigney J observed in Bywater at [61], the characterisation task is "essentially evaluative", citing Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 at 944 where Mummery J emphasised that the task was a "matter of evaluation of the overall effect of the detail".