Notification under section 130 of the Industrial Relations Act 1996 by the Australasian Meat Industry Employees' Union, New South Wales Branch, of a dispute with Peter Stoitse Transport Pty Ltd and another re industrial action and the Australasian Meat Industry Employees' Union, New South Wales Branch (on behalf of Kevin Freund and others) and Peter Stoitse Transport Pty Ltd and another [2002] NSWIRComm 185

APPLICANT: Mr Steve Gurney LEGAL REPRESENTATIVES: Australasian Meat Industry Employees Union, New South Wales Branch NO APPEARANCE OF SECOND RESPONDENT

JUDGMENT: - 28 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP

Matter No IRC00/6347 Notification under section 130 of the Industrial Relations Act, 1996 by the Australasian Meat Industry Employees' Union, New South Wales Branch, of a dispute with Peter Stoitse Transport Pty. Ltd. and anor, re: Industrial action

Matter No IRC01/145 The Australasian Meat Industry Employees' Union, New South Wales Branch (on behalf of Kevin Freund) and Peter Stoitse Transport Pty Ltd and another

Matter No IRC01/146 The Australasian Meat Industry Employees' Union, New South Wales Branch (on behalf of Noel James Black) and Peter Stoitse Transport Pty Ltd and another

Matter No IRC01/147 The Australasian Meat Industry Employees' Union, New South Wales Branch (on behalf of Rodney Wait) and Peter Stoitse Transport Pty Ltd and another Applications re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2002] NSWIRComm 185

1 This decision concerns applications, pursuant to section 84 of the Industrial Relations Act 1996 ("the Act"), filed by the Australasian Meat Industry Employees' Union ("the Union") on behalf of three of its members, Kevin Freund, Noel James Black and Rodney Wait ("the applicants"). The Union alleges that its three members were unfairly dismissed on 31 December 2000.

2 The applications and a related dispute notification (IRC00/6347) were originally allocated to Tabbaa C. After unsuccessful conciliation proceedings in Albury, the Commissioner listed the matters for arbitration. In a decision, published 8 December 2001, the Commissioner dismissed the applications by finding that the respondents had no case to answer.

3 The Union successfully appealed the Commissioner's decision and the matters were remitted to me by his Honour the President, Wright J as a consequence of the Full Bench's judgment (Freund and Ors and Peter Stoitse Transport Pty Ltd and Anor [2002] NSWIRComm 54).

4 The questions to be determined by this decision are relevantly: 1. Who was the real and effective employer of the three dismissed employees? 2. Were the dismissals of the three employees "harsh, unreasonable or unjust" within the meaning of Pt 6 ch 2 of the Act? 3. If the answer to question two is in the affirmative, what, if any remedy should be ordered by the Commission, pursuant to s89 of the Act?

5 It is to be observed that these questions were not considered by the Full Bench on appeal, nor in the first instance decision of Tabbaa, C.

6 On 25 June 2002, the Commission decided that these matters should be determined, ex parte, pursuant to Rule 83 of the Industrial Relations Commission Rules. The Commission's decision was made in light of the following background to the proceedings.

7 The matters were listed for directions on 17 April 2002. Mr S Gurney represented the Union and the applicants. Mr P Hayward (Solicitor) appeared for the first respondent, Peter Stoitse Transport Pty Ltd. There was no appearance for the second respondent, Workforce On Tap. Mr Gurney informed the Commission that there had been no appearance by the second respondent in the appeal proceedings before the Full Bench. However, a solicitor represented the second respondent in the proceedings before Tabbaa, C.

8 Mr Gurney gave a commitment to advise the second respondent, within seven days by registered post, of the Commission's directions.

9 Mr Hayward submitted that the first respondent maintained, as it had at all times, that it was not the employer of the dismissed applicants. It wished to be heard on this contention if the matter proceeded to arbitration.

10 The matters were listed in Albury for three consecutive days commencing on 25 June 2002. Directions were issued for the filing of evidence.

11 It later became evident that there was some doubt the scheduled hearing in Albury would occur. Three issues had arisen which gave cause for this concern. Firstly, the union had reached a settlement with the first respondent, but not the second respondent; secondly, no evidence had been filed by either of the respondents; and thirdly, a notice to produce served by the Union on the second respondent and returnable by 3 June 2002 had not been answered. Accordingly the Commission, of its own motion, listed the matters for further directions.

12 At this hearing on 19 June 2002 Mr Saunders, the second respondent's external accountant, represented Workforce On Tap. Mr Saunders stressed that he had no relevant instructions from the second respondent. He did, however acknowledge that the second respondent remained in existence. Mr Saunders advised that as late as the previous week, the second respondent believed the first respondent was jointly representing them. However, the first respondent's deed of release with the Union had excluded the second respondent from the settlement of the claims.

13 Mr Gurney requested that the hearing proceed as directed by the Commission. He advised his dismissed members were now seeking compensatory relief and not reinstatement.

14 As a result of these developments the Commission made the following comments and directions: I require you, that is the company, Workforce On Tap, who you are representing, to advise me by 4 pm tomorrow of whether or not you intend to firstly defend this action, and if you do, what form of defence you intend to put, that is, calling of witnesses and the like, and if you don't seek to defend the action, or don't advise me by 4pm tomorrow, I will proceed to determine this case on the basis of the evidence that has already been filed by the union, and about which you are familiar, because it has been served on the respondent. The choice is entirely in your client's hands, and once you have advised me or not advised me by 4 pm tomorrow, I will then decide what further steps are necessary, in consultation with both the union and yourself and the company, if it proposes to defend the action, as to what we do about the proceedings next week. But I cannot allow this Commission to be placed in the position that you have put it in, of having a three-day hearing and the cost involved with it, not least the waste of the Commission's time if it does not proceed, without taking a very dim view of what has happened. As I said, if the company chooses not to defend the claim, I will simply decide it on the basis of the evidence that has been filed. The risk, of course, to the company, is that it may well be faced with an order of compensation for alleged unfair dismissal. That will be decided at the appropriate time.

15 The following day, 20 June 2002, the Commission received a faxed affidavit from Mr Saunders in the following terms: 1. I am the external accountant of the businesses that operates under the name of Workforce On Tap and I am authorised to swear this affidavit on its behalf. 2. I swear this affidavit from my own knowledge and from examination of the records of the Workforce On Tap business. 3. At all material times the three applicants in this matter were employed by a company that traded under the business name of Workforce On Tap. That business was operated by a company now known as A.C.N 092 177 761 PTY LTD. Annexed and marked "A" is a copy of the certificate of Registration of the employer company that I have obtained from the Australian Securities and Investments Commission database. 4. Annexed and marked "B" are copies of the PAYG Payment Summaries for the three applicants for the year ended 30 June 2001 that were issued by A.C.N 092 177 761 PTY LTD.

16 As a result of this communication, the Commission issued the following statement on 21 June and faxed it to all parties: STATEMENT The Commission is minded to issue the following statement in view of recent unfortunate developments in these matters.

These matters were reallocated to me for determination on their merits, pursuant to s84 of the Industrial Relations Act 1996 ("the Act"). This followed a successful appeal by the applicants' Union against a decision of Tabbaa C, in which the Commissioner had dismissed all three applications.

The question of who was the relevant employer at the time of the dismissals has always been a live issue - although not decided by, or agitated before the Full Bench on appeal. It is an issue that may well fall for determination in the disposition of the matters before me.

There are two named respondents, Peter Stoitse Transport ("the first respondent") and Workforce On Tap ("the second respondent"). I note that the second respondent was not represented in the appeal proceedings.

On 17 April 2002 the arbitration of the claims was listed for hearing in Albury on 25 to 27 June, with directions issued for the filing and service of affidavit material.

However, the Commission has been recently advised that the applicants have settled their claims of alleged unfair dismissal against the first respondent, but not the second respondent.

In preparation for the hearing, the applicants' Union has duly complied with the Commission's directions. However, no affidavits have been filed for, or on behalf of, the respondents. In view of the settlement with the first respondent, it is understandable that it has not filed any evidence. However, there has been no explanation provided as to why the second respondent has failed to comply with directions.

As a consequence, the Commission re-listed the matters for further directions by telephone on 19 June. Mr Gurney appeared for the Union and Mr Saunders , the second respondent's accountant, was notified and appeared for Workforce On Tap.

At the conclusion of the directions hearing, the Commission directed the second respondent to advise the Commission by 4.00pm on 20 June as to whether it intended to defend the applicants' claims of unfair dismissal and, if so, what course any future proceedings should take.

Shortly before 4.00pm on 20 June, the Commission received a faxed affidavit from Mr Saunders in which he deposed that the company known as "Workforce On Tap Australia Pty Limited, Australian Company Number 092 177 761", had changed its name on 5 February 2002 to "A.C.N 092 177 761 Pty Ltd" and that the three applicants " at all material times " were employed by a company that had traded as Workforce On Tap. Nothing was put in direct response to the questions I had earlier required to be answered.

It is not readily apparent from this limited information, as to what is intended by the contents of the affidavit. I was not informed and can only speculate as to what is intended by this affidavit. Perhaps it purports to establish that the employer of the applicants no longer exists and consequently has no case to answer. If so, and if the respondent seeks to rely for whatever purpose, on this affidavit, it will be required to attend the hearing, seek to admit the document into evidence, and have the deponent of the affidavit available for cross examination.

A failure to attend will result in the Commission refusing to accept the document as evidence in the proceedings. The arbitration will continue ex parte and be decided on the basis of the evidence properly admitted and the further submissions of the parties.

In view of these developments, it would be impractical to list these matters for Albury. They will instead be listed for 10.00am in Sydney on Tuesday, 25 June 2002.

17 The hearing was transferred to Sydney. There was no further communication from Mr Saunders, or any other person, or representative, on behalf of the second respondent.

18 In my opinion Rule 83(a) of the Industrial Relations Commission Rules is applicable to the circumstances I have detailed above: A tribunal, in addition to its own powers generally under the Act, may in relation to any proceedings before it: (a) Hear and determine the proceedings in the absence of a party who has been summoned or given notice to appear.

19 I am satisfied that all reasonable steps have been taken to inform the second respondent of its obligations to attend the hearing and the consequences which might flow if it fails to do so. For whatever reason it has chosen not to defend the claims against it. In my judgment it would not be serving the interests of justice to delay these matters any further in the face of these circumstances. These matters will be determined on the evidence properly admitted without objection.

20 The Commission is satisfied that these matters should be determined in the absence of the second respondent pursuant to Rule 83(a) of the Commission Rules.

21 Messrs Freund, Black and Wait were previously employed by Haberfields then Parmalat/Pauls Ltd as milk truck drivers operating from the Albury depot: Mr Freund for twenty-three years, Mr Black for ten years and Mr Wait for six months.

22 In July 2000 Pauls' drivers were made redundant when Peter Stoitse Transport Pty Ltd took over the contract. All entitlements were paid out, including redundancy pay. All three employees were offered similar work under similar terms and conditions.

23 However, from this time, the drivers were employed through a labour hire company, Workforce On Tap; although their day to day directions were through Mr Brian Haberfield, a transport supervisor employed by Peter Stoitse Transport. The applicants were required to sign a temporary employment agreement with the second respondent.

24 The applicants gave evidence that the arrangements with the second respondent were to continue for a three months trial period, after which Peter Stoitse Transport would permanently employ them. During this time wages and conditions were to remain the same, except laundry allowance would not be paid as Peter Stoitse provided uniforms.

25 On 15 December 2000 the seven drivers at that time employed (including the three applicants) were invited by letter to a meeting on 18 December to discuss their ongoing employment with Peter Stoitse and his Cost Accountant, Graeme Shaw.

26 The letter indicated that the arrangements with the second respondent would cease on 31 December and the company would thereafter require four permanent and two seasonal drivers. An application for employment form was attached to the letter. Service with the second respondent would count. The letter also advised that the company was, at that time, negotiating an Australian Workplace Agreement (AWA), which was designed to bring all Albury employees into line with the company's other employees.

27 The applicants rejected the Company's proposal having not seen a draft agreement and believing the offer was substantially less than the earnings they were then receiving. The Union became involved and the offer was increased to $16.00 an hour. This offer was also rejected.

28 The three applicants became aware on or about 2 January 2001 that their names were not on the roster for ongoing work with Peter Stoitse Transport Pty Ltd. Their employment was effectively ended on 31 December 2000, when the contract between the first and second respondent came to an end.

29 Mr Freund gave evidence that after the three-month trial he raised concerns about his employment conditions with Mr Haberfield and was told that the company was developing a workplace agreement for all its drivers. He felt reassured by Mr Haberfield and Mr Shaw (through a phone call Mr Black had with Mr Shaw) that he would be offered permanent employment, as he was one of the two "main drivers".

30 Mr Freund said that the proposals put by Mr Stoitse at the meeting on 18 December were totally unacceptable as he would lose approximately $10,000 per annum. He said that when he approached Mr Haberfield on 27 December he was given an ultimatum to accept the offer or "you're up the track and that's that."

31 After seeking advice from the Union, he again approached Mr Haberfield and told him he wasn't prepared to sign something he had not seen and was available to continue to work on the same conditions as the previous six months.

32 On the 2 January 2001, the roster was posted and he, Mr Black and Mr Wait were not on it.

33 Mr Freund deposed that in twenty-three years as a driver, he had never received any complaints about his work or conduct. He would frequently agree to roster changes at short notice. Mr Freund holds a Milk Graders Certificate and New South Wales Heavy Combination Licence. He believed he was more qualified and experienced than other drivers who were offered ongoing employment with Peter Stoitse Transport.

34 Mr Freund believed he was dismissed because he had expressed dissatisfaction with the conditions under the Australian Workplace Agreement.

35 Mr Freund gave evidence that he had obtained a casual driver position of gas tankers. He was never offered a position or contacted by the second respondent when Coons Dairy in Wodonga was looking for drivers in January 2001.

36 Mr Wait holds a Milk Graders Certificate and had worked in the industry since 1978. He is a qualified auto-electrician and holds various other trade licences. Mr Wait answered an advertisement for drivers and was employed by Pauls Pty Ltd on 18 June 2000. He said that Mr Haberfield provided day to day direction, prepared the roster, allocated runs and dealt with any problems. He continued to report to Mr Haberfield after Stoitse took over the contract.

37 Mr Wait said he picked up milk from about 10 farms a day and drove between 300-400 kilometres per day.

38 Mr Wait corroborated the evidence of Mr Black in respect to the events after the 18 December 2000.

39 He deposed that on 7 January 2001 he contacted the second respondent and was told that he would be "put on a list". The second respondent did not contact him until after the conciliation conference in Albury on 9 February 2001. He had been offered clerical and sales positions by the second respondent but these jobs were not suited to his qualifications. Mr Wait had arranged five weeks work for himself.

40 Mr Black's evidence is consistent with that of Mr Wait and Mr Freund. I need not repeat it.

41 However, he gave additional evidence that in August 2000 when he raised the issue of unpaid overtime, Mr Haberfield referred him to the second respondent. Mr Black spoke to a Kathy Themersay from Workforce On Tap and was told that it was Mr Haberfield who had told her how the pay was to be done.

42 On 22 September 2000, after talking to Mr Shaw, Mr Black felt reassured that he would be made permanent.

43 In respect to the 18 December meeting, Mr Black deposed that he had asked about the AWA and Mr Shaw had said it would be lodged in January and if it didn't meet the (company) requirements "we will pull out of Albury".

44 Mr Black said that after he and the other applicants contacted the Union and the Union had contacted the Company, the proposed offer of employment was increased from $15.00 per hour to $16.00. Mr Black said this was still unacceptable.

45 Mr Black said he was given an ultimatum by Mr Haberfield to accept the offer or "that's that." He considered this was unfair as no document had been produced.

46 Mr Black holds a Milk Graders Certificate (NSW & Vic), a heavy articulated licence, pasteurisers and butter makers certificates and a forklift ticket. He felt he was more qualified and experienced than the other drivers. He believed his employment came to an end because he was not prepared to accept an Australian Workplace Agreement. He had never seen or been given a copy of the proposed Australian Workplace Agreement.

47 In early January 2001, Mr Black said that he heard that Coons Dairy were looking for drivers. He approached the company and was told to approach the second respondent. He did so. When he heard nothing after a week, he made further enquiries and he was subsequently employed by Coons. He said that he, and not the second respondent, initiated the discussions concerning Coons. He deposed that the second respondent had regularly offered him unsuitable positions such as door to door salesman, head chef and fruit pruner.

48 All three applicants signed temporary employment agreements with the second respondent. The standard agreement signed by Mr Freund on 27 June 2000 was annexed to Mr Freund's witness statement (Ex "2") and is reproduced as an annexure to this decision.

49 The agreement provides, inter alia, for the following terms: 1. My employment with Workforce On Tap is as a temporary on an assignment by assignment basis, with each assignment constituting a discrete period of employment. I may accept or reject any offer of an assignment from Workforce On Tap. On completion of an assignment, whether satisfactory or otherwise, Workforce On Tap is under no obligation to offer me further assignments; … 3. I accept that if a customer of Workforce On Tap varies the length of an assignment period or terminates my attendance at an assignment, as provided for in point 2 above, Workforce On Tap has the right to discontinue my employment and to not offer me further assignments with other customers in the future. Where notice of termination is necessary, such notice shall be in accordance with the terms of the relevant Award, Site or enterprise Agreement; 4. I accept that I am under the care, control and supervision of Workforce On Tap's customer during the period of any assignment in regard to defined working arrangements and the manner and proficiency in which my work is to be performed. I acknowledge the right of Workforce On Tap's customer to direct my work activities; … 6. Payment for my work will be made by Workforce On Tap on a weekly basis only on receipt of a Workforce On Tap time sheet, correctly completed and with appropriate authorisation by an approved customer supervisor, or by some other method defined by Workforce On Tap. … 15. I understand that it is my responsibility to provide an authorised Workforce On Tap time sheet to the Workforce On Tap office and acknowledge that I will not be paid if the time sheet is not provided. … 17. I agree to notify Workforce On Tap as soon as is practicable, but no later than normal start time on any day, that I am unable to attend during any period of an assignment; … 19. For a period of six months from the cessation of my last assignment, I agree that I will not seek or accept a direct offer of employment whether temporary, contract or permanent from any customer, former customer, employee or former employee of Workforce On Tap to whom I am introduced without first notifying Workforce On Tap; 20. I agree to complete an Employment Declaration (Australian Taxation Office form) with Workforce On Tap this financial year if I have not already done so; … 22. Workforce On Tap is responsible for statutory Workers' Compensation Insurance and, in the event of any injury occurring during an assignment, I will contact Workforce On Tap with details immediately;

50 Mr Gurney tendered copies of the applicants' Group Certificates for the year ended 30 June 2001 (Ex "5"). Each disclosed that the employer is named as the ACN number of Workforce On Tap. The certificates were issued under the signature of a Ms Brenda Seymour, an employee of the second respondent.

51 Mr Gurney tendered details of the income earned by the applicants in the six months after dismissal (Ex"6"). This disclosed that Mr Wait earned $9,740 employed by Artrans Pty Ltd; Mr Freund earned $15,506 employed through labour hire company, Drake Australia Pty Ltd, and Mr Black earned $15,908 employed by the second respondent for an assignment which commenced on 21 January 2001 with Coons Ltd.

52 The Union's submissions may be summarised as follows.

53 Mr Gurney said that the Union had settled the applicants' claims of alleged unfair dismissal against the first respondent. The Commission was informed of the terms of settlement. It is appropriate that such terms are to remain confidential to the parties and the Commission. The terms of settlement were based on purely commercial grounds and negotiated well after the applicants' dismissals.

54 Mr Gurney submitted that the only income relevant to considerations under s89(6) of the Act, was that earned in the six months immediately after the dismissals i.e. between 31 December 2000 and 30 June 2001. Income earned in this period was detailed in Ex "6" and could be appropriately deducted from the twenty-six weeks maximum compensation available under s89(5) of the Act.

55 Mr Gurney traced the employment history of the three applicants - particularly their last employment period with the second respondent. It was clear, Mr Gurney submitted, that at the time of the dismissals the employment relationship was with the second respondent. The second respondent paid the wages, superannuation and tax and required the applicants to fill out Australian Tax Office employment declaration forms. The second respondent issued the applicants with their group certificates.

56 While the first respondent exercised day-to-day control over the work performed by the applicants, it was the second respondent, which had ultimate control. See Drake Personnel Ltd & Ors v Commissioner of State Revenue [2000] VSCA 122 and Zuijs v Worth Brothers (1955) 93 CLR 561 and Australian Mutual Provident Society v Allen and Another 52 ALJR 407.

57 The applicants were dismissed when their names didn't appear on the roster after 24 December 2000. Mr Gurney said that all three applicants were required to sign temporary employment agreements, which permitted the second respondent to "discontinue" their employment - seemingly without any notice. Mr Gurney submitted that the second respondent failed to notify any of the applicants that their employment was "discontinued." Moreover, Mr Black had learnt of casual work available at Coons Dairy and took the initiative to secure further employment. The second respondent had Mr Black "on its books" but did nothing to offer him further work.

58 Mr Gurney said that the second respondent had shown contempt for the Commission similar to the treatment it afforded its own employees. There was suspicion as to the true nature of the second respondent's operations. It had work available and knew the applicants were well qualified. The applicants were, at all times, ready, willing and able to work. The second respondent failed to do anything to offer them such work. This amounted to a termination of employment at the initiative of the employer i.e. a constructive dismissal.

59 Given that the applicants were given no notice of their dismissals, Mr Gurney said that this was sufficient for a finding that the dismissals were "harsh, unjust and unreasonable."

60 Mr Gurney said that the applicants no longer sought reinstatement and in any event, it was unclear whether the employer continued to exist in its previous form. Compensation of twenty-six weeks was sought, discounted by the amounts earned in the six months immediately after the dismissals.

61 Finally, Mr Gurney foreshadowed an application for costs against the second respondent.

62 I turn then to the first question to be determined- Who was the real and effective employer of the dismissed employees?

63 Mr Gurney referred to the traditional test of establishing whether an employment relationship exists between an employer and employee. The test has often been described, in shorthand, as the "control test".

64 The control test, of course, may also be of assistance in determining who is the real and effective employer where a dispute arises in circumstances not unlike those revealed in this case.

65 The passage cited by Mr Gurney from Drake v Commissioner of State Revenue is particularly apposite to this matter: In this respect it was Drake who engaged them on every occasion and it was Drake who was responsible for paying what in other circumstances would be called wages. It would, perhaps, be harder to envisage the normal employer/employee relationship when all that Drake provided to a client was a person to do half a day or a day's work, but that is only one end of the scale, for in many cases the temporaries were provided for a week, a month or for several months. The work they then performed was the ordinary work performed by employees engaged directly to do that work. The problem in the present case is that the clients did not engage them directly, nor did they pay them or have true right of control over them inasmuch as they were not the clients' employees. On the other hand Drake did engage them, did pay their wages and did have ultimate control over them. The only difference from a normal employment arrangement was that they did not work at Drake's offices or premises but were sent to clients' premises to carry out their duties. I cannot see that that prevents Drake from being their employer according to generally accepted concepts.

66 In Australian Mutual Provident Society v Allen and Another the Privy Council referred with approval to the following principle enunciated by Lord Denning MR in Massey v Crown Life Insurance: The law, as I see it, is this: if the true relationship of the parties is that of master and servant under a contract of service, the parties cannot alter the truth of that relationship by putting a different label upon it…On the other hand, if their relationship is ambiguous and is capable of being one or the other [that is, either service or agency], then the parties can remove that ambiguity by the very agreement itself which they make with one another. The agreement itself then becomes the best material from which to gather the true legal relationship between them.

67 In modern Australian employment law, it is now clear that the traditional 'control test' is not the only basis upon which the true nature of the employment relationship can be tested. As Meagher J said in Vabu Pty Limited v Commissioner of Taxation 81 IR 150 at p151: Whilst it is almost never an easy task to decide whether a given person is an employee or an independent contractor, there is no doubt what the legal tests are. The old test of "control" is now superseded by something more flexible. This is made clear by the judgment of Mason CJ in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, and in the earlier judgment of Dixon J in Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 539.

68 In the same judgment, Sheller J summarized the current state of the law on the subject. It is appropriate to quote extensively from his Honour's judgment: Consideration, in any particular case, of whether a relationship of employer and employee exists, starts with the High Court's decision in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16. At 24 Mason J, with whose judgment Brennan J was in general agreement, said that a prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter. The importance of control lies not so much in its actual exercise, though that is relevant, as in the right of the employer to exercise it. But his Honour said: "… the existence of control, while significant, is not the sole criterion by which to engage whether a relationship is one of employment. The approach of this Court has been to regard it merely as one of a number of indicia which must be considered in the determination of that question: …other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee." …At 26 Mason J said that the power to delegate is an important factor in deciding whether a worker is a servant or an independent contractor and referred to Australian Mutual Provident Society v Chaplin (1978) 52 ALJR 407 at 410. At 27 his Honour referred to what has been called the "organisation" test, that is to say, that the person engaged was part and parcel of the other's organisation and said he was unable to accept that the original test could result in an affirmative finding that the contract was one of service when the control test either on its own or with other indicia yielded the conclusion that it was a contract for services: "Of the two concepts, legal authority to control is the more relevant and the more cogent in determining the nature of the relationship." However at 29 his Honour reiterated that Control is not now regarded as the only relevant factor: "Rather it is the totality of the relationship between the parties which must be considered." At 36-37 Wilson and Dawson JJ said that in most cases it is still appropriate to apply the control test in the first instance because it remains the surest guide to whether a person is contracting independently or serving as an employee. Other indicia suggesting a contact of service rather that a contract for services include the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like. Those which indicate a contract for services include work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of goodwill or saleable assets in the course of his work, the payment by him from his remuneration of business expenses of any significant proportion and the payment to him of remuneration without deduction for income tax: "None of these leads to any necessary inference, however, and the actual terms and terminology of the contract will always be of considerable importance. However an attempt to list relevant matters may mislead because they are no more than guides. The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance." Deane J agreed with the reasons set out in the judgment of Mason J for the conclusion that the persons engaged were independent contractors and not employees.

69 To this authority may be added the more recent views of the majority of the High Court in Hollis v Vabu Pty Ltd [2001] HCA 44 concerning the "control test". At Para 43 - 45 of the judgment, Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ said: Control These notions also influence the meaning to be given today to "control" as a discrimen between employees and independent contractors. In Stevens v Brodribb Sawmilling Co Pty Ltd, the Court was adjusting the notion of "control" to circumstances of contemporary life and, in doing so, continued the developments in Zuijs v Wirth Brothers Pty Ltd [60] and Humberstone v Northern Timer Mills . In Humberstone , Dixon J observed that the regulation of industrial conditions and other statutes had made more difficult of application the classic test, whether the contract placed the supposed employee subject to the command of the employer. Moreover as has been pointed out: The control test was the product of a predominantly agricultural society. It was first devised in an age untroubled by the complexities of a modern industrial society placing its accent on the division of functions and extreme specialisation. At the time when the courts first formulated the distinction between employees and independent contractors by reference to the test of control, an employer could be expected to know as much about the job as his employee. Moreover, the employer would usually work with the employee and the test of control and supervision was then a real one to distinguish between the employee and the independent contractor. With the inventions and growth of the limited liability company and the great advances in science and technology, the conditions which give rise to the control test largely disappeared. Moreover, with the advent into industry of professional men and other occupations performing services which by their nature could not be subject to supervision, the distinction between employees and independent contractors often seemed a vague one. It was against that background that in Brodribb , Mason J said that, whilst these criticisms might readily be acknowledged: the common law has been sufficiently flexible to adapt to changing social conditions by shifting the emphasis in the control test from the actual exercise of control to the right to exercise it, 'so far as there is scope for it', even if it be 'only in incidental or collateral matters': Zuijs v Wirth Brothers Pty Ltd . Furthermore, control is not now regarded as the only relevant factor. Rather it is the totality of the relationship between the parties which must be considered. So it is that, in the present case, guidance for the outcome is provided by various matters, which are expressive of the fundamental concerns underlying the doctrine of vicarious liability. These include, but are not confined to, what now is considered "control".

70 In Dalgety Farmers Ltd v Bruce (1995) 12 NSW CC R 36 Kirby, C.J. said at pp 47-48: In determining whether a contract of service has been entered [into], and if so with whom, it is necessary to look to the circumstances of the engagement and to ascertain who it was that offered employment, and whether the worker accepted that offer. To determine whether what then ensued was indeed employment (in the sense of a contract of service) it is necessary to look to the whole of the relationship.

71 A recent Full Bench decision of the Australian Industrial Relations Commission in Morgan v Kittochside Nominees' Pty Ltd, referred to the High Court decision in Hollis v Vabu: From the circumstances of this case it is manifest that through Mr Reid, Kittochside and the Northam Pharmacy exercised in effect a co-determinative control over the work and the conditions of employment of Ms Morgan. The decisions in WPS Wire and Bellechic illustrate that the common law is sufficiently flexible to accommodate a Court finding that the employing entity may be identified with the person who affectively exercises control over the work. The decision of the High Court in Hollis v Vabu is another step toward an analysis consistent with an indicium for a contract of service, control and direction of work, being accorded dominance and applied to prevent regulatory protections of employees being avoided. Article 2.3 of the Convention Concerning Termination at the Initiative of the Employer might also be read as an encouragement to the Court or the Commission to construe provisions of the Act in a way consistent with minimising the avoidance of such protections.

72 I am well assisted to answering the first question by reference to the learned authority I have just cited.

73 The Commission is satisfied that the real and effective employer, at the time of the applicants' terminations of employment, was the second respondent. This conclusion is comfortably drawn from the following evidence: 1) The applicants were required to sign temporary employment agreements with the second respondent. 2) The second respondent paid the applicants' wages. 3) The applicants' group certificates were issued and authorised by the second respondent. 4) The second respondent was responsible for the applicants' superannuation contributions and workers compensation obligations. 5) The applicants' employment declaration forms, required by the Australian Taxation Office, were provided by, and issued under the name of the second respondent. 6) The applicants' time sheets were to be submitted to the second respondent. 7) The second respondent had the right to "discontinue" the applicants' employment.

74 It appears the second respondent changed its name on 5 February 2002 from Workforce On Tap to ACN092177761 Pty Ltd. There is no evidence of the reasons for this change. However, I have my suspicions. If it was deliberately intended to frustrate these proceedings and escape any orders the Commission might make, I doubt that a mere name change will be sufficient to achieve this outcome. However, the enforcement of any orders of the Commission cannot be addressed by this decision. In the result, I need take this matter no further.

75 The Commission considers that this case warrants orders in the applicants' favour of the maximum compensation of six months wages, pursuant to s89(5) of the Act. The facts and circumstances here revealed, demonstrate that the applicants were dismissed without any notice or warnings. These are matters appropriately to be considered under s88 of the Act and I intend to do so.

76 Further, I accept the applicants' evidence that they were not offered continued employment because they disputed the terms under which their employment was to continue after 31 December 2000 under an Australian Workplace Agreement they had not seen.

77 To my mind, there could be little doubt that such a termination of employment was "harsh, unreasonable and unjust " within the meaning of Pt 6 ch 2 of the Act.

78 Mr Black and Mr Freund had long periods of service, without complaint or criticism of their competence, skills or experience. Mr Wait, whose service was shorter, similarly had received no complaint about his work performance or attitude.

79 Pursuant to s88(f) of the Act, I have also had regard to the difficulties the applicants would have in finding comparable alternative employment in country New South Wales. Nevertheless, all the applicants actively sought and secured alternative employment. However, it was at a much lower rate of pay than earned when employed by the second respondent. I also have had regard for this matter pursuant to s89(6) of the Act.

80 The Commission is of the view that this is a case where reinstatement or re-employment is not only impractical, but likely to have no practical effect. The respondent employer has made a conscious decision to take no part in these proceedings. It remains unclear as to whether the respondent continues to exist, or operate as a supplier of labour hire services in the Albury region.

81 In these circumstances, I would be most reluctant to order reinstatement or re-employment if the effect would be a nullity.

82 Therefore, the Commission considers that compensation is the only appropriate remedy. I will so order subject to the following matter.

83 Mr Gurney argued that for the purposes of s89(6) of the Act, the only relevant income to be taken into account is that which was earned in the six months immediately after the dismissal.

84 It seems to me that this is an entirely sensible and logical interpretation of s89(6). The section is expressed as follows: When assessing any compensation payable, the Commission is to take into account whether the applicant made a reasonable attempt to find alternative employment and the remuneration received in alternative employment, or that would have been payable if the applicant had succeeded in obtaining alternative employment.

85 It is readily apparent that s89(6) does not expressly set a period of time in which the amount of remuneration earned subsequent to dismissal should be taken into account. A Full Bench of the Commission recently considered the practical application of s89(6). In D & R Commercial Pty Ltd and Flood [2002] NSWIRComm 88, the Full Bench said that the matters identified in s89(6) "are not necessarily to be reflected in any particular arithmetic or definite way in the money order for compensation made." In any event, the Full Bench continued, the issue still remained a matter of discretion to be considered by the Commission in light of all the relevant facts and circumstances of a particular case.

86 In this case, the applicants were dismissed on 31 December 2000. Their claims are being determined eighteen months later after a successful appeal. Does this mean, for the purposes of s89(6), that the Commission must have regard for the remuneration earned in that entire eighteen month period? I think not.

87 The absurdity and unfairness of such an approach is, in my opinion, manifestly obvious. Let me take a further hypothetical example to demonstrate the point.

88 An employee earning $30,000 per annum is dismissed and the claim for whatever reason, is not determined by the Commission for a further eighteen months. Compensation at the maximum level of twenty-six weeks ($15,000) is found to be appropriate. The employee was unemployed for eight months after dismissal, but in the subsequent ten months earned $17,000. The Commission is asked to have regard to the amount of $17,000 for the purposes of s89(6) and discount it against the $15,000. The result is obvious. The applicant would receive nothing for being unfairly dismissed eighteen months earlier. This example, I think, demonstrates a bizarre result if too literal or rigid interpretation of the section is applied.

89 I cannot imagine that this was the intention of the legislature when it enacted the Industrial Relations Act 1996. Nor can I imagine that such a result can be evinced from the remedial intention of Pt 6 ch 2 of the Act.

90 Moreover, on one view, the fact that s89(5) limits compensatory orders to six months of the pre dismissal earnings strongly implies to me that s89(6) should be viewed within a similar time frame.

91 Accordingly, I am persuaded by Mr Gurney's submission that any order for compensatory relief should only be discounted by the remuneration earned in the six months immediately after the dismissals.

92 Consequently, the fact that the Union settled its claims against the first respondent by way of a monetary sum, in June 2002 (some eighteen months after the dismissals) can not, in my view, be relevant for the purposes of s89(6) of the Act.

93 Pursuant to s89(5) and s89(6) of the Industrial Relations Act 1996 the Commission orders that: 1. The second respondent, Workforce On Tap, shall pay to Mr Kevin Freund compensation for unfair dismissal of $12,836.00. 2. The second respondent, Workforce On Tap, shall pay to Mr Noel Black compensation for unfair dismissal of $13,070.00. 3. The second respondent, Workforce On Tap, shall pay to Mr Rodney Wait compensation for unfair dismissal of $19,155.00. 4. The amounts in Orders one, two and three above shall be paid within twenty-eight days of today. 5. Any application for costs shall be made by way of notice of motion within fourteen days of today. 6. Save for any application for costs, these proceedings are formally concluded, including dispute notification IRC 6347/00.

PETER SAMS DEPUTY PRESIDENT WORKFORCE ON TAP TEMPORARY EMPLOYEE AGREEMENT TERMS AND CONDITIONS OF EMPLOYMENT

This Temporary Employee Agreement is to be signed by all temporary staff upon registering for employment with Workforce On Tap.

As a temporary employee, some conditions of your employment may be set by a relevant award, site or enterprise agreement, but the conditions as stated in that award, site or enterprise agreement shall not form part of your common law contract of employment.

Please read the following carefully and sign this form to confirm your understanding of the terms and conditions of your employment.

I have read, understood and agree to the conditions set out below:-

My employment with Workforce On Tap is as a temporary on an assignment by assignment basis, with each assignment constituting a discrete period of employment. I may accept or reject any offer of an assignment from Workforce On Tap. On completion of an assignment, whether satisfactory or otherwise, Workforce On Tap is under no obligation to offer me further assignments;

I understand that Workforce On Tap does not control the length of any assignment and I accept that whilst Workforce On Tap may indicate the potential length of an assignment with a customer in good faith, the customer may vary the length of an assignment period or terminate my attendance at an assignment at their absolute discretion;

I accept that if a customer of Workforce on Tap varies the length of an assignment period or terminates my attendance at an assignment, as provided for in Point 2 above, Workforce On Tap has the right to discontinue my employment and to not offer me further assignments with other customers in the future. Where notice of termination is necessary, such notice shall be in accordance with the terms of the relevant award, Site or Enterprise Agreement;

I accept that I am under the care, control and supervision of Workforce On Tap's customer during the period of any assignment in regard to defined working arrangements and the manner and proficiency in which my work is to be performed. I acknowledge the right of Workforce On Tap's customer to direct my work activities;

I agree to adhere to all Occupational Health and Safety policies of Workforce on Tap customers, and to obey all lawful and reasonable orders of Workforce on Tap's customer with regard to the use of safety equipment, the wearing of protective clothing and noise protection devices, and with regard to methods of performing work tasks;

Payment for my work will be made by Workforce On Tap on a weekly basis only on receipt of a Workforce On Tap time sheet, correctly completed and with appropriate authorisation by an approved customer supervisor, or by some other method defined by Workforce On Tap;

Payment to me by Workforce on Tap may be made at Workforce On Tap's discretion by Electronic Funds Transfer to the bank account nominated by me;

My remuneration by Workforce On Tap is on an hourly basis according to my classification and is subject to all relevant provisions of any appropriate Award, Site or Enterprise Agreement;

My hourly rate is subject to change from the effective implementation date of any decision by an authorised tribunal to amend wage rates;

Where overtime, shift penalties or other allowances are provided for in a relevant Award, Site or Enterprise Agreement, such payments will be calculated according to the terms of that Award, Site or Enterprise Agreement;

Payment for public or trade holidays is governed by the appropriate Award, Site or Enterprise Agreement:

Payment of Occupational Superannuation is governed by the appropriate legislation, Award, Site or enterprise Agreement:

On an assignment I will be paid by Workforce on Tap for a minimum of four hours, or such other minimum period stipulated by a relevant Award, Site or Enterprise Agreement;

Any sick leave entitlements shall be determined by the Appropriate Award, Site or Enterprise Agreement;

I understand that it is my responsibility to provided an authorised Workforce On Tap time sheet to the Workforce On Tap office and acknowledge that I will not be paid if the time sheet is not provided;

I understand that future payments may be adjusted if actual working hours or others details differ from information provided on authorised time sheets received by Workforce On Tap and I further agree to allow Workforce On Tap to deduct any overpayments from future payments;

I agree to notify Workforce on Tap as soon as is practicable, but no later than normal start time on any day, that I am unable to attend during any period of an assignment;

I agree to keep confidential any information obtained during my assignment with Workforce On Tap's customers, which may be considered sensitive or confidential to Workforce On Tap or its customer including customer details, trade secrets and other confidential information;

For a period of six months from the cessation of my last assignment, I agree that I will not seek or accept a direct offer of employment whether temporary, contract or permanent from any customer, former customer, employee or former employee of Workforce On Tap to whom I am introduced without first notifying Workforce On Tap;

I agree to complete an employment declaration (Australian Taxation Office form) with Workforce On Tap this financial year if I have not already done so;

I accept that on some types of assignments I may be required to undertake a medical examination or hearing test;

Workforce On Tap is responsible for statutory Workers' Compensation Insurance and, in the event of any injury occurring during an assignment, I will contact Workforce On Tap with details immediately;

I declare that the employment related information which I have provided to Workforce On Tap is true and correct. I have read and I understand the Terms and Conditions of my employment as detailed above and accept Workforce On Tap and/or its customers' rules covering union membership, medical requirements, safety regulations, time of attendance at work, and any other conditions on the work site to which I am assigned from time to time.

I accept the terms and conditions of the offer of employment as detailed above.

Employee name;…………………………………………. Witnessed by;…………………………………………….

Signature:………………………………………………… Signature:………………………………………………..

Date:……………………………………………………… Date:……………………………………………………..

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.