Employee vs independent contractor
258 The chronology of key events is reflective of the largely undisputed parts of this case. Much of the additional evidence was reflective of greater detail than the chronology of key events. The greater detail in the additional evidence also more readily exposed the points of difference and disagreement between the competing cases, as well as facilitating reaching conclusions based on the personal attributes of the various witnesses, especially the Putlands and Mr Andrews. Not every point of difference required detailed consideration and not every disagreement required resolution. The focus, in considering the totality of the evidence needed to be on key aspects of those differences and disagreements insofar as they had a bearing on the resolution of the competing cases. The key purpose of this analysis is to reach a concluded view on the single most important issue - that of whether the Putlands, at least in the relevant period from September 2012 to May 2015, worked for Royans Wagga as independent contractors or as employees.
259 This ended up being a case in which the resolution of the question of whether Royans Wagga retained the authority to control the Putlands, or either of them, was decisive. Before turning to the issue of control, it is convenient first to list the competing indicia for the relationship between Royans Wagga and the Putlands being one of employer/employee or independent contractor, noting the warnings in the authorities about the hazards and risks attendant upon a mechanical listing of indicia. Such a list is useful for summarising and framing more detailed considered of the key or otherwise decisive factors as they have emerged in the evidence and submissions.
260 The indicators in favour of an independent contractor relationship were as follows, many of which occurred prior to the relevant period:
(1) the obtaining of ABNs by the Putlands;
(2) the issuing of tax invoices in lump-sum amounts;
(3) the non-deduction of income tax;
(4) the availing of income-splitting;
(5) the working from home, mostly by Ms Putland, but also at different times by Mr Putland, including by helping Ms Putland out prior to the relevant period, and filling in for Ms Yerbury when she was ill during the relevant period, plus during the last six months or so from mid- to late October 2014 to the start of May 2015;
(6) the lack of any Royans Wagga uniform being worn by the Putlands; and
(7) paying others to do work.
261 The terms of the written proposal from September 2007 might also have been influential, but as it has been found that this was never the subject of any concluded contract, it is of limited, if any, weight or relevance. The suggested business structures were never adopted, no work was done for anyone other than Royans Wagga and there was no retaining of employees of the kind contemplated.
262 The independent contractor features listed above were largely reflective of the Putlands' subjective understanding of the position they were in, according to the wishes of Royans Wagga, rather than supporting an objective assessment of the true nature of the relationship. The Putlands had ABNs, but no real understanding of their legal significance. The ABNs reflected an aspect of the formal and legal requirements to have a business, largely for taxation purposes. But they did not reflect in any meaningful sense the setting up of an independent business, let alone a business that was separate from Royans Wagga.
263 The issuing of tax invoices with ABNs was a step along the way to establishing a separate business, based on the advice of their accountant. There was no evidence to suggest that the Putlands appreciated any legal, as opposed to financial, significance in doing this. Viewed in this way, these steps were reflective of form rather than substance. Similarly, the non-deduction of income tax, and the resultant income-splitting, was the product of the use of tax invoices, rather than being any independent indicator. The fact of a lump-sum amount tends towards a contract for services; however, the unilateral nature of that arrangement was evidence of the existence of control by Royans Wagga. If the time from Friday evening until Monday morning is calculated as being, in round terms, 60 hours, a weekend rate of $750 equates to $12.50 per hour. In the cross-examination of Mr Andrews, a weekend was measured as 58.5 hours, producing an hourly rate of $13.68, based on $800 for a weekend. Both hourly rates are quite a departure from the $18 per hour offered for the weekday afternoon shifts Ms Putland also worked.
264 Working from home was, on all of the evidence, not of itself a strong indicator either way. Put another way, it was not, in this case, of itself inherently inconsistent with an employment relationship. Not wearing a uniform was of trivial significance and cannot be given any substantial weight, especially when the majority of the Putlands' interactions with Royans staff and members of the public were by telephone.
265 The most significant of the independent contractor indicia ended up being the payments made to others to do radio base work. However the significance of this fades once it is appreciated that this was done in a very limited way, for a very limited time, and only outside the relevant period. It was not something that could, of itself, change the nature of the relationship between the Putlands and Royans Wagga.
266 The "employment contract document" is, on its face and therefore objectively, consistent with an outsourcing arrangement with an independent contractor, or at least consistent with such an arrangement being in contemplation by Ms Putland, so might have been of some importance. However, a curious feature of this document is that Mr Andrews was not aware of it until it emerged in the course of this litigation. Ms Putland appears to have knowledge of the document, or apparently of it having been prepared by her father. The document was never signed and it is difficult to characterise this as having been a contract at all, given the lack of any meeting of the minds as to its contents or even existence. Despite the initial impression, the document does not advance Royans Wagga's case as it could not be shown to have ever been more than a bare and unconsummated proposal.
267 The indicators of there being an employment contract relationship between the Putlands and Royans Wagga were as follows:
(1) The Putlands only performing radio base or call centre work for Royans Wagga;
(2) payment by Royans Wagga for the installation and transfer of ownership of telephone lines at the Putlands' home;
(3) payment by Royans Wagga of the monthly telephone and internet accounts at the Putlands' home;
(4) emails and other documents reflecting involvement by Ms Putland, in particular in the overall running of Royans Wagga, albeit with a focus on the base, including deference to Mr Andrews;
(5) the supply of scanners and other equipment, including the commander telephone system and a computer, by Royans Wagga to the Putlands;
(6) the lack of any profit and the dominance of hourly rates, although lump-sum rates were present for weekend work;
(7) the absence of any form of advertising of a business run by the Putlands;
(8) the lack of tangible assets supplied, purchased or maintained by the Putlands for the ostensible use in a business run by the Putlands;
(9) the accrual of goodwill to Royans Wagga from the work being performed by the Putlands; and
(10) the lack of true autonomy besides the carrying out of mechanical tasks, including home visits by Mr Andrews.
268 Each of the above 10 indicators are significant indicators of an employer-employee relationship. However they might not on their own be decisive. What is much more important in this case than any of those 10 indicators is authority to control.
269 The question of authority to control in significant measure turns on an assessment of the conflicting evidence of the Putlands and, in particular, Mr Andrews. The conflict was somewhat nuanced. The overall burden of Mr Andrews' evidence, especially if only read and not heard and seen, might tend towards the idea that the Putlands were indeed operating a separate business which he sought to influence, but did not seek to control and did not have authority to control. However, his manner and demeanour, the way he spoke, and the sense of authority he conveyed stood in sharp contrast to the same assessment of each of the Putlands. I was left in no doubt that each of them was subordinate to Mr Andrews' wishes, even if he did not always get his own way. He had authority to control and, when needed, he exercised it. This was a feature of the relationship between Mr Andrews and each of the Putlands throughout the period that each of them performed work for Royans Wagga. A few examples from the additional evidence illustrate the basis for this conclusion:
(1) Ms Putland's evidence of the circumstances leading to her first working for Royans Wagga in 2005, including her remuneration, were reflective of Mr Andrews' control over her as an employee from the outset.
(2) The process by which Ms Putland came to take on responsibility for the radio base full-time from home in late 2007 was controlled by Mr Andrews, despite the proposal that was advanced by her and her father, which was never substantially put into effect.
(3) The assistance that Ms Putland was able to get from Mr Putland in 2008 was only obtained after Mr Andrews had given his approval. To the extent that Mr Andrews suggested otherwise, I found the evidence of the Putlands more reliable and more persuasive on this point.
(4) Increases in remuneration, such as that which took place in early 2010, were sought from and approved by Mr Andrews in the manner of a pay rise, rather than in the manner of a variation of an independent contractor's terms and conditions of contract.
(5) Mr Andrews gave written directions by email of requirements he was imposing on the Putlands that were akin to directives to an employee, rather than the enforcement or negotiation of a term of a contract with an independent contractor. This took place by way of forwarding minutes of a group sales meeting held on 27 August 2009, and by way of, for example, an email sent to branch managers and forwarded to the Putlands on 3 February 2012.
(6) Ms Putland prepared documents for the purposes of Royans' Wagga business, for approval by Mr Andrews, including in particular the towing and salvage contract clarification document, extracted at [120] above, sometime after November 2012.
270 Each of the above events preceded the relevant period of September 2012 to May 2015, but demonstrated the nature of the relationship and its history leading up to that time. It was the context in which Mr Andrews sought, and effectively required, the weekday work to return to Royans Wagga's premises in the Hut. That process alone would most likely have been more than enough, in all the circumstances, to establish the requisite authority to control, and indeed its exercise, for the relevant period. However, when that history and context is added to the equation, that conclusion is inescapable. The residual indicia of an independent contractor arrangement then pale in significance.
271 That conclusion is reinforced by two further considerations. The first is that Mr Putland's evidence of what took place in the Hut until October 2014 leaves almost no room for him to be regarded as anything other than an employee in that period. In particular, he worked side-by-side with employees in the Hut, doing the same work as them and even working in Ms Yerbury's shifts when she was ill. In substance, he was at all times an employee in the Hut.
272 A potentially important collateral question requiring resolution is whether the accident reporting service provided by the Putlands between September 2012 and October 2014 should be regarded as a single service considered in combination, or as separate services bifurcated as between what was done in the Hut on Royans Wagga's premises and what was done at the Putlands' home. This divides approximately, but not always precisely due to variations, into the working week (including after-hours) in the Hut, and on weekends from the Putlands' home.
273 The suggestion of two separate services as between the Hut and the Putlands' home is not supported by any part of the arrangements disclosed by the evidence. Apart from time of day and location of work, the substance of what was done did not change. The same work was being done in both locations and at all times. The bulk of that work was done during the working week, with the weekend work being in the nature of maintaining coverage at all times. It was a single service. This has a significant effect in reinforcing how the overall arrangement should be viewed and characterised. The work done in the Hut strongly and decisively leans towards an employment relationship. Viewed in combination, while the taxation and ABN aspects indicate, however weakly, an independent contractor relationship, almost everything else, most particularly Royans Wagga's undoubted authority to control, points to an employment relationship having no more than the appearance, in some limited respects, of an independent contractor relationship.
274 While the authorities make clear that the determination of the nature of the relationship is multifactorial, in appropriate cases control can and will be a dominant consideration. This was such a case. Each of the independent contractor considerations were reduced to matters of form or a reflection of the subjective view of Royans Wagga, via Mr Andrews, or the Putlands. The problem is that this then relied upon the soundness of those subjective views, rather than the underlying reality of what was taking place.
275 Mr Andrews' evidence in chief, spelt out in some detail above, makes it clear that he, on behalf of Royans Wagga, retained a high degree of discretionary control and authority at all times, which he freely exercised when it suited him, albeit not always achieving his desired results. The situation worsened further for Royans Wagga once regard is had to the cross-examination of Mr Andrews.
276 Overall, it has to be said that Mr Andrews did not fare well in cross-examination. The stance he attempted to maintain was considerably weakened by cross-examination. Not all of that cross-examination has been the subject of detailed consideration. However, an overall impression obtained about Mr Andrews, both in his evidence in chief and in cross-examination, was that he is a firm and disciplined man. He has a forceful personality and would have had little difficulty in imposing his will on the Putlands, who were not just in a weaker position, but had neither his force of personality, nor his economic power to impose his will. Supported by the documentary evidence, I was left in no doubt whatsoever that Mr Andrews' authority to control and, in fact, his actual control over the work done by the Putlands was extensive and as far-reaching as he wanted it to be. It was his decision entirely as to how much latitude the Putlands were given over how they carried out their work.
277 That is not to say that Mr Andrews' control and its exercise was wholly successful. The decision to return the weekday work to the Hut in late July 2012 was a reflection of Mr Andrews' inability to have the work by the Putlands, and by Mr Putland in particular, performed to a standard and in a way that he considered acceptable. Equally, his acceptance of the radio base work being taken back to the Putlands' home in October 2014 until early May 2015 was an arrangement that he undoubtedly could and would have changed if that suited him and Royans Wagga. I note that by October 2014, discussions about moving the radio base work to an independent call centre had commenced and advanced, including a site visit to Well Done in Nowra in early September 2014. I therefore infer that it suited Mr Andrews and Royans Wagga not to return the work to the Hut pending that change.
278 Finally, the contractual arrangements ultimately arrived at with Fonebox were even more starkly different to the arrangements with the Putlands, and clearly reflected an independent contractor relationship between Fonebox and the Royans companies. For example, in the course of Mr Andrews' evidence in chief, it was apparent that it took months of negotiation of documentation about the new arrangement with Fonebox as the ultimate independent contractor before the services were provided, and the contract ultimately signed in April 2015 bore Fonebox branding, including the Fonebox logo and website. The arrangement was for a payment of $2,500 per month, charged at the rate of 1,000 minutes per month.
279 The weight of the indicia established by the evidence, dominated by the finding of Royans Wagga's authority to control, favours finding an employment relationship rather than an independent contractor relationship, notwithstanding certain lesser features that are in common or more telling of the latter. The reality is that the impact of technology, and in particular communications technology, has greatly facilitated working from home where the substance of work is no different from that which was done in the workplace in the past. However, quite apart from the arrangements in the Hut which strongly tell of an employment relationship, the key features, even for the weekend and after hours work from home, are the undoubted control that Royans Wagga, through Mr Andrews, had the authority to exercise and did exercise from time to time, and the fact that the work was only done for Royans Wagga. Any sense in which the applicants were entrepreneurs and running their own business was illusory and, in any event, a matter of form rather than substance. They were not truly performing work as entrepreneurs owning and operating a separate business. They were not truly working in and for their own business and as representatives of that business but, rather, were performing work as representatives of Royans Wagga.
280 The conclusion I have reached, in the end by a comfortable margin, is that the nature of the legal relationship between Royans Wagga and each of the Putlands in performing the accident reporting service work in the relevant period must objectively be viewed as one of employer and employee, rather than principal and independent contractor.
281 Had I been in any serious doubt as to the nature of the legal relationship between the Putlands and Royans Wagga, there would have been a need to consider in some detail the Independent Contractors Act alternative claim. It suffices for present purposes to say that this would have been a difficult claim for the Putlands to establish. In all the circumstances, there is nothing useful to be achieved in determining whether that claim would have succeeded.