WorkCover Authority of NSW (Insp Mauger) v SWR Constructors Pty Ltd - [2000] NSWIRComm 115 - NSWIRComm 1998 case summary — Zoe

NSWNSWIRComm

WorkCover Authority of NSW (Insp Mauger) v SWR Constructors Pty Ltd

[2000] NSWIRComm 115

Industrial Relations Commission (NSW)|1998-04-13|Before: Kavanagh J, Marks J, Mr P

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At a glance

Source facts

Court

Industrial Relations Commission (NSW)

Decision date

1998-04-13

Before

Kavanagh J, Marks J, Mr P

Catchwords

02/15/2000
02/16/2000
02/17/2000
02/18/2000

Source

Original judgment source is linked above.

Catchwords

02/15/200002/16/200002/17/200002/18/200002/28/200002/29/2000 DATE OF JUDGMENT: 07/25/2000

Judgment (49 paragraphs)

[1]

Industrial Relations Commission of New South Wales in Court Session

[2]

CITATION : WorkCover Authority of NSW (Insp Mauger) v SWR Constructors Pty Ltd [2000] NSWIRComm 115 PROSECUTOR: PARTIES : WorkCover Authority of NSW DEFENDANT: SWR Constructors Pty Ltd FILE NUMBER: IRC1313 of 1999 CORAM: Kavanagh J CATCHWORDS : Section 16 of the Occupational Health and Safety Act 1983 - requirement for prosecutor to prove the defendant is an employer for purposes of a valid prosecution - whether prima facie case on prosecutor's evidence - whether on the evidence as it stands, at the close of the prosecutor's case, the defendant could lawfully be convicted - witnesses called by prosecutor give evidence different from that contained in their statements to WorkCover Authority as to employment - inference to be cast from the statements, oral evidence and other documentation - no prima facie case established - preliminary question whether the summons valid and the affidavit in support of the summons, filed in accordance with IR Rule 219, validates the nature of the breach as pleaded in the summons - summons found valid. Occupational Health and Safety Act 1983 Industrial Relations Act 1996 s168 R 219 LEGISLATION CITED : Supreme Court (Summary Jurisdiction) Act 1967 s6 Income Tax Assessment Act 1936 Justices Act 1902 Tooheys Limited v Commissioner of Stamp Duties (NSW) (1961) 105 CLR 602 Weissensteiner v The Queen (1993) 178 CLR 217 Swift Placements Pty Ltd v WorkCover Authority of NSW (Insp May) [2000] NSWIRComm 9 WorkCover Authority of NSW v P Ward Civil Engineering Pty Ltd (unreported, Marks J, 13 April 1998) May v Sullivan (1955) 92 CLR 654 CASES CITED : Zanetti v Hill (1962) 108 CLR 433 R v R (1989) 18 NSWLR 74 Teen Ranch Pty Ltd v Brown (1995) 11 NSW CCR 197 Dalgety Farmers Limited t/as Grazcos v Bruce (1995) 12 NSW CCR 36 Denham v Midland Employers Mutual Assurance Limited [1955] 2 QB 437 Baldi & Fletcher Pty Ltd v Rabmar Pty Ltd (1988) 25 IR 101 McLean v Case & Deignan Pty Ltd (1961) 78 WN 476 HEARING DATES: 02/14/2000; 02/15/2000; 02/16/2000; 02/17/2000; 02/18/2000; 02/28/2000; 02/29/2000 DATE OF JUDGMENT: 07/25/2000

[18]

Mr Panebianco was an employee of a sub-contractor to a sub-contractor of the defendant company. His employer was a company called Hitex Pty Ltd. State Wide Road Ltd ("SWR"), a public company, contracted with the Department of Main Roads to extend the M4 Motorway. The construction, at the time of the accident, involved the widening of the M4 roadway from two lanes to three lanes. The location of the incident was within the northern shoulder of the eastbound carriageway on the M4 Motorway approximately one kilometre east of the Church Street, Parramatta interchange. 6 State Wide Roads is a conglomerate with a number of associated companies, one of which is the named defendant, SWR Constructors Pty Ltd; other relevant companies named throughout the proceedings have been SWR Services Pty Ltd and SWR Engineering Limited. They are all associated companies. 7 Hitex was a concreting company. Its job was the placing and finishing of concrete. Mr Panebianco was employed by this concreting company. However, on the day of the accident he was under the instruction, through a day labour arrangement, of another company subcontracted to the defendant, namely, Ridge Consolidated, to undertake tasks allocated by that sub-contractor. 8 To summarise the overall contractual arrangement: Hitex Concrete were subcontractors to the firm Ridge Consolidated who were in turn the subcontractors to the primary contractor - one of the companies within the State Wide Roads organisation. The company within SWR to whom Ridge Consolidated was contracted to is unclear from the evidence, as is the company who contracted with the State Government to build the road. 9 Relevantly, at the time of the accident Mr Panebianco was in the process of patching the concrete at the northern end of a precast concrete section located a distance from the northern edge line of the eastbound carriageway. There is dispute about that distance and evidence is not completed. The defendant has not gone into evidence and the question as to the distance from the roadway to where the deceased was standing at the time of impact remains open. The work being undertaken by Mr Panebianco involved him moving in a westerly direction along the northern edge of the precast concrete section applying patching material to any irregularities which were evident in the previously cast concrete section. This work involved Mr Panebianco entering an area adjacent to a previously used opening in the New Jersey protective barriers located along this section of the roadway. 10 From the evidence, at the time the incident occurred, Mr Panebianco was located adjacent to the eastern end of the New Jersey barrier. The gap in the erected barrier, which the evidence reveals was an appropriate gap, was to allow trucks to enter and exit the worksite. It was guarded by bollards, approximately six in number which were from the evidence the appropriate number. 11 Mr Garrick Roy Maybury employed by Ridge Consolidated Pty Ltd as the site supervisor on the M4 Motorway was asked: Q. Do you know what Mr Panebianco was doing at the time of the accident? A. Yes, I had issued him instructions as to what to do earlier that morning which was to patch concrete on the edge of the road. Q. Which was behind the site barriers, and when you say along the edge, can you describe that? A. Well, there was existing motorway there that had been the edge of that, had been cut down and where we joined the new concrete on the edge was rough, and it had to be patched prior to new concrete being - Q. Before the new pour? A. Yeah. Q. When the concrete was going to be poured was alignment going to be used? A. Yes. Q. Were you aware that there was an opening in the barriers when Mr Panebianco was working on 24 March 1997? A. I was, but that was past the limit of where he was supposed to be working. . . . Q. Were there any barriers in the area when, where Mr Panebianco was working? A. Was where I had instructed him to work where the accident occurred. I was just east of the opening, probably behind the terminal end, I should say, but he had certainly gone further than where the pour was, had intended to be stopped. Q. Did you tell him to stop at a certain point? A. I can't recall my specific directions that day, but it could have been where, where the steel had been laid out which was, I can't remember, it was east or west of that opening. Q. You know because you were at the scene and police and everyone came, you know pretty well where he was struck? A. Well, I'm not - I'm not sure of his exact position. He, I believe, where I have seen the marks of the barrier he was probably behind the terminal end which is a sloping piece. Q. And you say that is a point where you hadn't intended him? A. From memory we stop 20 metres, prior to the 20 metres short of the openings, but - 12 While crouching down and working in a position at a distance (still in dispute) from the edge of the through carriageway, Mr Panebianco was struck by a vehicle inside the worksite. This vehicle was driven by Mr Stephen Wells. It careered "crazily" down the carriageway along the outside grassed area, then drove across one lane of traffic, the outside lane, and into the second inside traffic lane where it was struck by a semi-trailer. It then careered into the entrance/exit gap in the New Jersey barrier, knocking over the bollard, striking a truck owned by Hitex inside the worksite then directly striking Mr Panebianco at work. He was then pushed, or thrown, a significant distance as a result of the primary impact from the errant vehicle. He suffered fatal injuries. 13 Mr Stephen Wells, the driver of the errant vehicle has been gaoled for offences related to the incident. Evidence reveals he was under the influence of drugs at the time of the accident. 14 In cross examination, Mr Maybury revealed that he had been working with Mr Panebianco on the site for a week or two. He identified the job Mr Panebianco was carrying out should have been performed by another contractor and was not. The rough edge needed to be patched before the new concrete was put up against it. He agreed the whole edge of the site had to be patched but said the patching would have been done in stages. 15 Mr Drazen Varga also worked for Hitex Concrete and was working with Mr Panebianco at the time doing the same patching work. At the time the car struck Mr Panebianco he was mixing and patching in the middle of the opening behind a bollard not protected by the New Jersey barriers at all. He was asked:

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Mr Varga confirmed the bollards were in position across the gap and "They been placed just next to that white line on the road." He thought three to four bollards were in the gap. 17 When asked what Mr Maybury (identified as Garry, the supervisor on the site) told him, he said: He tell me strip supposed to be patched. He did not say exactly where I have to stop, he just continue from that place which he show me in the morning further up. Q. Through the gap? A. Through the gap too. 18 It is agreed between the parties the M4 Motorway carried a significant volume of traffic at relatively high speeds although, around this site by agreement with the Roads & Traffic Authority and the local police, the speed limit had been reduced from 80 kilometres an hour to 60 kilometres an hour. 19 There are Australian Standards and Guidelines which are relevant to these works. They have been developed primarily with the fundamental objective of protecting the roadworkers from the likely consequences of passing and/or errant vehicles. A secondary consideration in the establishment of guidelines is the protection of the vehicle drivers passing through or adjacent to the worksite. A further consideration is the protection and integrity of the actual worksite and the work itself. Such expert evidence was given by Mr Grant Johnston, a consulting engineer. 20 From the evidence it is clear that Mr Panebianco was employed by Hitex Concrete Pty Ltd but directed, on the day of the accident, by Mr Maybury an employee of Ridge Consolidated, a subcontractor to the defendant company. The work being undertaken by Mr Panebianco involved him moving in a westerly direction along the edge of the concrete section. At the time of being struck Mr Panebianco was located adjacent to the eastern end of the subject opening of the New Jersey protective barrier. 21 The defendant company named in the summons is SWR Constructors Pty Ltd. The WorkCover Authority proceeded against this company relying on statements given to it by a significant number of workers on the M4 motorway construction who identified the defendant as their employer. These statements were taken during WorkCover's investigation of the accident. They were often taken in the presence of a senior lawyer and practitioner experienced in matters before the Industrial Relations Commission of NSW who was representing the company's interest. 22 On 24 April 1998, Senior Safety Inspector Graeme Mauger of the WorkCover Authority wrote to a Mr Larry Hegarty. The letter was not addressed to him as an officer of any company. The letter requested an interview with Mr Hegarty about this accident and requested: . A Letter of Authority, authorising you to speak on behalf of the organisation. This letter should be signed by the Managing Director or Company Secretary. . A copy of your organisation's letterhead which includes the Australian Company Number and Registered Office Address . Training or induction records which demonstrate training provided to Pietro Panebianco prior to 24/3/97. 23 On 1 May 1998 the WorkCover Authority of New South Wales received a letter in the following form: SWR STATEWIDE ROADS Our ref: . . . STATEWIDE ROADS LIMITED ACN 003 573 573 1 May 1998 WorkCover NSW 128 Marsden Street PARRAMATTA NSW 2150 Attention: Senior Safety Inspector Dear Sir

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He was then asked in relation to an inspection and inspection records kept on the site: Q. Who carried out the inspection? A. Ross Howton was the Inspector. Q. Was he an employee of SWR Constructors P/L? A. Yes. Q. Would you please confirm that SWR Constructors P/L was responsible for the placement and positioning of the concrete barriers (New Jersey Barriers) and/or the traffic bollards on the said site? A. Yes we are responsible. Q. On the 24 March 1997 there were a number of gaps in the concrete barriers. What was the reason for the existence of those gaps? A. The gaps were there for access to the site. It was a requirement in our contract with the RTA that access be obtained to the site from the M4 Motorway. 28 He gave a further interview on 22 March 1999. The solicitor was not at this interview. He was asked: Q. Can you produce a written authority? A. No, but the last one still stands. He identified some traffic management plans. 29 In all of these interviews Mr Hegarty was asked did he give the answers of his own free will, was the interview true and correct and to each question he replied "Yes" and then he signed and initialled the interviews as a correct copy of what occurred. 30 In evidence, however, Mr Hegarty challenged the first record of interview. Mr Skinner in chief asked him: Q. I do not want to trick you. The second-last question is a critical one, 'Is it a correct record of our conversation?' Did you actually say 'Yes' to that? A. Yes. Q. But you have some problems now about that being a correct record of your conversation? A. Yes I do. Q. Where are your problems? A. In that this does not give all the questions that were asked. Q. Where do you think some questions were asked that are not transcribed? A. I was asked a question 'Who were you employed by?' Q. Where do you think that would have come? On the first page you can see the introduction, you give your name, date of birth and your address? A. I believe it came after I was asked my name and address. Q. What do you think you were asked? A. I believe I was asked - Q. Can you give it in direct speech? A. 'Who were you employed by?' I said, 'SWR Services Limited.' He then stopped and asked, 'Is it not SWR Constructors Pty Ltd?' I then said, 'State Wide Roads is a group of companies that has a number of companies within the group and that I am employed by SWR Services. I worked for SWR Engineers, another company, and I am seconded across to SWR Constructors Pty Ltd for the purpose of the M4 upgrade.' . . . Q. Mr Hegarty, you say all these things were said by you to Mr Mauger in that interview on 5 May 1998? A. That's correct. Q. None of them appear anywhere in exhibit 8 do they? A. No, they don't. Q. How could it be that you agreed and signed signifying your agreement to that printout being a correct record of the conversation? A. Well, I reviewed the record of interview. I said to the solicitor, . . .-- (Objection taken) . . . Q. As a result of that conversation you signed this document? A. Yes.

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Mr Hegarty said he was not really aware of the relevance or not of what was left out. Well, I wasn't aware of whether it was relevant or not. It was things that were said weren't included in the statement. . . . Q. Your solicitor also was aware of it, you discussed it with him? A. Yes. 31 Mr Hegarty said he always understood there was a distinguishing feature between the "position" he served in and his "employment". He acknowledges he did not apply the same test to his answer when asked who employed Mr Howton and his answer was Mr Howton was employed by SWR Constructors. After cross examination the court asked Mr Hegarty: Q. You have given evidence in relation to your interview of 5 May 1998 that some question and answer you gave is not included in that statement? A. That's correct, your Honour. Q. When did you realise that? A. When did I first realise that it was not completed? Q. Yes. A. I realised it when I read the record of interview. Q. Following your realisation, is that when the discussion with (the solicitor) occurred? A. That's correct. Q. When was it you were told by SWR that you would work for SWR Engineers Pty Ltd? A. I think even prior to my starting work with SWR. Q. When were you told you would be seconded to SWR Constructions? A. I think that was possibly before I started also. Q. With whom did you report for work? A. I reported to Doug Cowan, the manager of SWR Engineers. Q. And was it on the time you reported for work you were told you were going to be seconded or prior to that? A. Oh no, I was - knew I was going to work on the M4 project. I was hired specifically for that project. Q. When did you know that work would be conducted under the name SWR Constructions Pty Ltd? A. I am not sure. I would think it is probably when I started. Q. As in the interview when you were hired or when you reported--? A. No, when I reported for work. Q. Did you get a letter of appointment when you were hired to do this work? A. Yes. Q. Where is that letter of appointment? A. I would think that would be at home in my records. Q. You say you were not employed by SWR Constructors, is that correct? A. Yes, yes. Q. You say you have perused the company records and kept a file in relation to this matter. Is that correct? A. I have kept a record of - yes. Q. Do you know any person who is employed by SWR Constructors? A. No, I do not. Q. Do you know any person who is employed by SWR Engineers Pty Ltd? A. No I do not. 32 Mr Hegarty also said in his statement of 12 March 1999 when he produced inspection records arising out of a traffic management plan submitted to the RTA by SWR Constructors Pty Ltd: Q. Having considered those records was an inspection carried out on 24 March 1997? A. Yes. Q. Who carried out the inspection? A. Ross Howton was the inspector. Q. Was he an employee of SWR Constructors Pty Ltd? A. Yes. 33 Mr Howton was interviewed on 22 March 1999 by the WorkCover Authority. However, the summons to the charge being considered had already been issued before he was interviewed. He was asked: Q. By whom are you currently employed? A. SWR Engineers Pty Ltd. Q. What is your position with SWR Engineers Pty Ltd and for how long has this company employed you? A. I am employed as a civil inspector, since 1991. Q. Who employed you on 24 March 1997? A. SWR Constructors Pty Ltd. Q. What was your position with SWR Constructors Pty Ltd on 24 March 1997? A. Civil inspector. 34 On 12 March 1999, Insp Mauger took a statement from Martin Mario Gormley who identified himself as the site engineer on the M4 upgrade. This statement was taken in the presence of the solicitor. Evidence revealed he gave an earlier statement on 14 July 1997 but that statement was not held to be admissible due to the circumstances in which it was taken. However, cross-examination revealed the contents of that statement. In the statement of 12 March 1999 he was asked: Q. By whom were you employed on 24/3/97? A. SWR Constructors. Q. What was your position with SWR Constructors? A. Site engineer on the M4 upgrade. 35 At the close of the prosecutor's case two applications were brought by the defendant: (i) that the summons be dismissed as invalid; and (ii) that the summons be dismissed because the prosecution has not established a case to answer ie, a prima facie case.

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AS TO THE VALIDITY OF SUMMONS 36 The first application was brought by way of a notice of motion filed by the defendant alleging the summons was invalid. The defendant after filing the notice of motion before the hearing sought leave to delay submissions on the notice of motion until the handing down of a judgment of this court in an associated matter namely WorkCover Authority v Ridge Consolidated (unreported, IRC1311 of 1999, 23 February 2000). In the challenge to the validity of the summons in Ridge Consolidated, the submissions related to a requirement under IR Rule 219 of the Industrial Relations Act 1996 that the prosecutor must verify the allegations as contained in the summons. 37 Mr Hodgkinson attacks the summons before the court submitting the affidavit of the prosecutor sworn on 22 March 1999 and filed on 23 March 1999, fails to identify the factual elements contained in the summons in accordance with the provision of IR Rule 219. In Ridge Consolidated, the court held that once the matter was filed in court, the court was seized of jurisdiction and should assess the validity of the summons in accordance with the Supreme Court (Summary Jurisdiction) Act, 1967 as required under s168 of the Industrial Relations Act, 1996 and the relevant precedents at common law. (see John L Pty Ltd v Attorney General for New South Wales (1987) 163 CLR 508, Stanton v Abernathy (1990) 19 NSWLR 656; De Romanis v Sibraa [1977] 2 NSWLR 264; Smith v Moody [1903] 1 KB 56; Johnson v Miller (1937) 59 CLR 467 and Ex parte Graham; Re Dowling (1968) 88 WN (NSW) 270. 38 The court found the language of IR Rule 219 is the language of mandate and not discretion. Further when the court is seized of jurisdiction the court has powers under s6 of the Supreme Court (Summary Jurisdiction) Act 1967 to amend a summons in the use of the court's discretion. The court was guided by the view of Hill J in Boral Gas New South Wales Pty Ltd v McGill 58 IR 363 at 394, which authority was adopted by Wright J, President, in WorkCover Authority of New South Wales (Insp Rodney Dubois) v Concrete Constructions Group Limited (unreported, Wright J, President, 20 May 1999, IRC97/5242 on appeal). In consideration of legal precedents and the obligations imposed on the court under the relevant legislative provisions the court in the matter of Concrete Constructions found there was simply a lack of particularity to the summons which could be rectified by the provision of further and better particulars. 39 In an examination of this summons accompanied, as required, by an affidavit of the prosecutor, the court finds the essential elements of the offence have been pleaded and validated in the affidavit. Section 16 of the Act requires the defendant be an employer carrying out an undertaking at his place of work. This summons pleads the defendant failed to ensure persons not in its employ were exposed to risks to their health and safety. The relevant particulars to be relied upon must be supplied. Mr Hodgkinson submits that para 14 of the affidavit outlining particulars of the breach, in support of the application, limits the scope of the summons. He submits the summons is a much broader summons than that identified by the particulars supplied in para 14 of the Affidavit in Support. However, para 14 must be read in the totality of the prosecutor's affidavit. The affidavit is required to identify particulars relied upon by the prosecutor and identify the nature of the breach. I find the affidavit in support makes clear the basis on which the charge is brought. While it is mandatory that the affidavit must identify the nature of the breach I find IR Rule 219 has been complied with. 40 Further, the defendant alleges the summons, and its particulars, is invalid because it fails to identify the nature of the breach or the ambit of the particulars relied upon by the prosecution. Having read the affidavit of Insp Mauger in its entirety, I find there is a significant amount of material in the affidavit which verifies the nature of the breach alleged in the summons which summons also contains detailed particulars on which the prosecution relies. I find the summons clearly states the breach and the appropriate particulars have been provided. I dismiss the notice of motion.

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AS TO EMPLOYER/NO PRIMA FACIE CASE 41 The defendant makes a further application. It submits the prosecutor has not established a prima facie case, that is, a case to answer in the charge brought under s16 of the Act. The defendant bases this application "on the single issue being as to whether or not the defendant is an employer." 42 Section 16(1) states: Every employer shall ensure that persons not in the employer's employment are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at his place of work. 43 It is fundamental to the charge that a defendant be an employer. It is trite to say, but it must be said, the defendant may be an employer of any individual and still fall within the compass of s16 of the Act. 44 The prosecution called a number of witnesses relevant to the issue of employment and relies on documentation and inferences which can be cast from the evidence. After cross examination the prosecution witnesses' evidence is summed up as follows: while they "worked for" SWR Constructors they were "employed by" SWR Services. The evidence was while the witnesses statements to the WorkCover Authority said they were employed by the defendant they did not realise, at the time they gave their statements, their employer was not the organisation for whom they worked. 45 Each gave similar oral evidence to the effect of 'I was employed by SWR Services Pty Ltd but I worked for SWR Constructors Pty Ltd'. 46 Each of the witnesses, Mr Howton, Mr Gormley and Mr Hegarty were called and cross examined. Mr Howton produced his group certificate, his taxation return for the year ended 1997, his tax return and pay slip for the relevant period in 1997, all identifying his employer as SWR Services Pty Ltd. Also before the court is Mr Howton's employment declaration form (identified as being filled in mostly by his employer) which identifies his employer as SWR Services Pty Ltd. Before the court were Mr Gormley's group certificates for the years ending June 1996, 1997 and 1998; also Mr Gormley's pay slip for the period 24 March 1997. All documents identify his employer as SWR Services Pty Ltd. Mr Hegarty's 1997 group certificate, 1997 tax return and 1997 pay slip were also put before the court and identified in cross examination. All documents identify his employer as SWR Services Pty Ltd. 47 The prosecutor relies on the original statements made in the various interviews with the various WorkCover inspectors, which statements clearly represented to the WorkCover Authority that the employer organisation was SWR Constructors Pty Ltd, the named defendant.

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THE SUBMISSIONS AS TO EMPLOYMENT 48 The prosecutor submits that the thrust of ss15 and 16 of the Act is to regulate place of work. The distinction between these two sections of the Act it submits is based on the classification in terms of the law as to employment of those persons who have been exposed to risks. As the breach is brought under s16 of the Act, the prosecution submits that a corporation must conduct its "undertaking" at its "place of work" through employees. It submits the definition of "work" read into "place of work", is "work means work as an employee or as a self-employed person." It further submits it accords with company law and realities of the real world for the court to accept that any corporation conducting an "undertaking" and having a "place of work" must do so through at least some employees and that the legislature enacted s16 of the Act as part of a coherent scheme upon this basis. Thus an inference as to employment can be cast. 49 The prosecution submits a company cannot interact with the external world other than to a limited extent through its officers and otherwise through its employees or agents. The internal management of a company by its board of directors and other statutory officers such as the company secretary, and its dealings with the external world through individuals with an official capacity (as in filing statutory returns), is a completely different concept to that of managing a company's "undertaking". If the bulk of the company's undertaking is conducted through agents, that is, independent contractors, the said contracts being contracts for services (rather than contracts of service) some direction must be given to such agents. The contracts must be managed. The prosecution submits any person who manages the day to day business of the company, even if that only involves managing the contract for services between that company and its agents, must be an employee. To support this submission the prosecutor relies on the words of Kitto J in Tooheys Limited v Commissioner of Stamp Duties (New South Wales) (1961) 105 CLR 602 (at 620): . . . a director of a company may be a servant as well as being a director: . . . and when he is employed as a managing or other executive director on the company's permanent staff, . . . there is no ground for denying that he is a servant of the company within the purview of such an Act as we are considering. . . . 50 The evidence relied upon by the Prosecutor to establish a prima facie case that the defendant is the employer is: Mr Gormley and Mr Howton expressly said they were employees of the defendant in their statements to the WorkCover investigators. Mr Hegarty implicitly said he was an employee by reference to his "position" with the company and his omission to say anything else. (The prosecutor accepts for this submission the evidence of Inspector Mauger that nothing else was said other than that recorded in the statement). 51 The prosecutor submits that no consideration can be given to the evidence of witnesses in the hearing that they were not employees at this stage of the court's consideration as each of those persons thought they were employees of SWR Constructors Pty Ltd when they made their statements. This must act as a powerful indicator to the Court that there is a prima facie case. 52 The fact that salaries were paid by a different entity is not conclusive the Prosecutor submits (Building Workers Industrial Union of Australia v Odco; Aardvark Security Services Pty Ltd v Hartnett (unreported, Federal Court of Australia, Wilcox J, 14 August 1998). As to the financial records placed before the court by the witnesses, the prosecutor submits representations made to the Income Tax Commissioner by either the individuals or any company in the SWR group are not conclusive. The definition of "employer" in the Income Tax Assessment Act 1936 dealing with the PAYE tax collection is as follows: Employer means a person who pays or is liable to pay any salary or wages and includes: (a) in the case of an unincorporated body of persons other than a partnership - the manager or other principal officer of that body; and (b) in the case of a partnership - each partner; and (c) a government body.

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This definition of employer does not apply under the IR legislation the prosecutor submits and should be distinguished. 53 Further, the prosecutor submits a person can be engaged in a contract of employment with more than one entity (Electro Board Administration v O'Brien (unreported, New South Wales Court of Appeal, 10 December 1999). It also relies on Aardvark Security Services Pty Ltd v Hartnet (unreported, Federal Court of Australia, 14 August 1998). In that case, the court examined where a worker had incorporated himself and had been paid a salary out of his own company with funds paid to it by Aardvark from invoices rendered, Wilcox J found: It seems to me the case in favour of the proposition that Mr Hartnett was at all material times an employee of Aardvark Security Services is overwhelming. If one applies the test laid down in the authorities and looks at the nature of the services rendered and the matter of control, one finds he did nothing more than any other employee would do - namely, he provided his own services and nothing else and he worked under the detailed control of a superior officer. 54 The prosecutor submits SWR Constructors Pty Ltd had a General Manager, Mr D C Brewer, and Mr Hegarty gave evidence the general manager "looks after the company . . . directs the operations of SWR Constructors." The prosecutor invites the court to infer Mr Brewer was General Manager at the date of the accident, that is, at the relevant time. The company had also a managing director at the date of the accident, which Managing Director, Mr Alan Livingston authorised Mr Hegarty to speak for SWR Constructors. Evidence revealed the company also had a Quality Manager, Mr Jamie Robinson. Further, the company, SWR Constructors Pty Ltd, provided the necessary authorities by acting and preparing and publishing letters through employees to the WorkCover Authority. Such work, the prosecution submitted, is the role of employees of a company not Board members or an Individual Director or a Company Secretary. 55 The prosecutor submits the issue before the Court is not whether any particular person is an employee but whether the defendant is an employer. The court is invited by the prosecutor to look at all of the indicia of the relationship. The control of these workers must have rested with the defendant company he submitted because each worker said in evidence he "worked for" the defendant company. The prosecutor submits the court should apply the principles as enunciated in Weissensteiner v The Queen (1993) 178 CLR 217 and when considering the lack of an explanation from the defendant the court should draw the inference from the evidence adduced in the prosecutor's case that this element is proved beyond reasonable doubt. Mason CJ, Deane and Dawson JJ said at 228-229: However, the appellant argued that, just as it is impermissible for the trial judge to suggest that inferences adverse to the accused may be drawn from a previous exercise of the right to silence, so it is impermissible for the trial judge to suggest that inferences adverse to the accused which are available to be drawn from the facts proved by the Crown may be drawn more safely when the accused does not give evidence of relevant facts which must be within his or her knowledge. We do not agree. There is a distinction, no doubt a fine one, between drawing an inference of guilt merely from silence and drawing an inference otherwise available more safely simply because the accused has not supported any hypothesis which is consistent with innocence from facts which the jury perceives to be within his or her knowledge. In determining whether the prosecution has satisfied the standard of proof to the requisite degree, it is relevant to assess the prosecution case on the footing that the accused has not offered evidence of any hypothesis or explanation which is consistent with innocence. 56 The defendant submits the fact the evidence establishes a relationship between particular parties is insufficient to be determinative of the question as to whether or not there was a contract of employment. The prosecutor in its submissions relies substantially on the authority of Fox v Kangan Bateman TAFE, (unreported, Full Bench, AIRC, 25 October 1999). The court in that matter determined a working relationship itself is not necessarily a contract. It is submitted by the defendant, the court should apply from Kangan the tests which identified the elements of a contract by adopting the definition in Macken, McCarry and Sappideen's The Law of Employment, 4th Ed (1997) (at 74). These tests should assist the court to determine the issue of employment. The law holds that before any simple contract is enforceable it must be formed so as to contain various elements. These are: ( i) there must be an intention between the parties to create a legal relationship, the terms of which are enforceable; (ii) there must be an offer by one party and its acceptance by the other; (iii) the contract must be supported by valuable consideration; (iv) the parties must be legally capable of making the contract; (v) the parties must generally consent to the terms of the contract; (vi) the contract must not be entered into for any purpose which i s illegal .

[33]

In relation to the first of these elements the learned authors say: The first element essential to the existence of any contract is the requirement the parties have a mutual intention to create a legally enforceable bargain. 57 The defendant concedes that elements (iv) and (vi) and the requirement of element (v) are not of great significance in these circumstances. The defendant submits the prosecutor has not made out any of the first three of the required elements to prove a contract of employment has been entered into between any person and this defendant at the relevant date, the date of the accident, 24 March 1997. 58 The first of the essential elements is whether the parties evinced an intention to enter into legal relations with the defendant. The defendant submits that Mr Howton, Mr Gormley and Mr Hegarty provided no evidence on which the prosecution could rely to say they sought to enter into any legal relationship with the defendant. Further, there was no evidence the defendant promised at any time, nor was there any evidence of, payment as consideration for their services by the defendant. The defendant also relies on the evidence called by the Prosecutor. Mr Hegarty said he was hired to work on the M4 and on occasions he "worked for" SWR Engineering and SWR Constructors. Mr Hegarty said he was at times seconded to SWR Engineering and SWR Constructors. The defendant submits there is no evidence to suggest the defendant paid any moneys or provided any benefits to any of the relevant individuals who gave evidence. But further, there is no evidence the defendant has paid any person, either the witnesses or any other person as an employee. 59 Mr Hodgkinson for the defendant relies on the words in Swift Placements Pty Ltd v WorkCover Authority of NSW (Insp May) [2000] NSWIRComm 9 (published 3 March 2000) where the Full Bench stated (at para 68) referring to the same point made by Kitto J in Attorney-General for NSW v Perpetual Trustee Co Ltd (1951-1952) 85 CLR 237 (at 300), by following the illustration in Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd (1947) AC 1 (at 17) that: the statement that the doing of the work must be for the benefit of the master does not mean, of course, that the direct benefit from the work itself must necessarily accrue to the master; he may, without altering the relationship, direct his servant to do work which will benefit another. 60 The defendant in the alternative , if the court were to find prima facie, submits the court should dismiss the case by direction having regard to the clear evidence before it as to the status of the defendant. It invites the court to dismiss the charge as the Prosecutor has failed to establish the defendant is an employer to the criminal standard.

[47]

The first issue that must be identified is whether there exists a legal relationship (see Swift Placements Pty Ltd at para 41 which relies on comments in Stevens v Brodribb Sawmilling ) . The employment relationship is routed in contract (see Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 436). 71 The Full Bench in Swift Placements relied upon the principle in Poulson v John Jarvis & Co Ltd [1919] 122 LTRep 471 where Lush J questioned (at 478): To what extent must the particular employer have taken over the control before he can be said to have become the master, responsible for the acts of the workman as being the acts of his servant? The hirer always gives some directions to the workman. He tells him where the work is to be done and what it consists of. That is not a taking over the control. The hirers in Jones v Corporation of Liverpool (14 Q.B. Div.890) told the servant what streets to water, but they were held not to have controlled the servant. There must be a taking over by the particular employer of the complete control - a complete transfer of the service - before he can be held to be the responsible employer of the workman. "The great test," said Bowen, L.J., in Moore v Palmer (2 Times L. Rep. 781, at p.782), "was this - whether the servant was transferred or only the use and benefit of his work?" a test which Lord Dunedin adopted in McCartan v Belfast Harbour Commissioners (1911, 2 Ir. Rep. 143). 72 The court asked Mr Hegarty how he was hired and his answers provide the prosecutor with no assistance. The prosecution led no evidence as to the hiring of any worker or as to the consideration paid to those individuals or any other individuals for work as could provide indicia of a contract for service between an employer and employee. The prosecutor led no evidence of the control exerted over alleged employees except to rely on inferences from documents where some persons were nominated to speak on behalf of the defendant. The only evidence on these indicia comes from the defendant. 73 The prosecution relies on the statements of the witnesses taken in the investigating process. It tendered those statements and called the witnesses. However, the statements did not contain the evidence which it led from those witnesses. Rather, the evidence of the prosecution from its own witnesses was simply 'we workers gave statements saying we were employed by SWR Constructors and now we say we are not. Further, we offer documentation from which it can be inferred that SWR Constructors is not our employer but rather our employer is a company called SWR Services'. 74 Those documents for the purpose of the prima facie case were identified and tendered and are in the main financial records which indicate all the witnesses called by the prosecutor were paid salary by that other corporate identity, SWR Services Pty Ltd. Further there was no evidence led by the Prosecutor the named defendant hired these workers. 75 There was no evidence led as to the relationship between all the SWR corporate entities. There is some evidence only as to management structures of one entity, the defendant company, its registration and the statutory or other titles held by some persons. 76 The prosecutor relies on the acknowledged and recognised titles given to its witnesses to prove employment by the defendant. The prosecution witnesses say "yes" we hold that title but we are seconded to that company for whom we carry title. The prosecutor asks the court to infer from some of the titles, such as, Project Manager and Managing Director that this is sufficient evidence which, if accepted, would prove these are persons who conduct the day to day business of the company. They rely further on some of the documentation such as the letters to the WorkCover Authority authorising individuals to speak on behalf of the defendant, as evidence they must be employees as they are the authorised persons to speak on behalf of the defendant company. Such must be held by inference because the prosecution offers no proof as to the fact of who hired or appointed these persons in authority or who hired and controlled those instructed to speak on behalf of the company. The prosecution says those who were authorised to give statements and those who hold a company title act as agents for the company, therefore by inference, there must be employment. 77 The prosecutor opines all direction and control was with the defendant - the men all originally proffered the opinion they "worked for" the defendant; the defendant, as evidenced by its documents with the RTA, accepted legal control of the site. In summary the prosecution submits the inference to be cast from the evidence must support the prosecution case that the defendant is an employer. As to the witnesses evidence relied upon to cast such an inference the prosecutor submits these workers originally thought they were employed by the company; they still concede they "work for" the company; the company controlled the site on which they toiled; the company represented to the world they were its employees and they, as workers, represented to the world they were employees of the defendant company. Such, it submits, is sufficient to establish prima facie the defendant is an employer. 78 The prosecutor therefore relies on the words of Kirby ACJ in Dalgety Farmers Limited t/as Grazcos v Bruce (1995) 12 NSW CCR 36 (at 47-48) for the court to be aware: . . . it is necessary to look to the whole of the relationship.

[48]

and those in Swift Placements Pty Ltd (at para 62): admissions as to the true nature of a relationship [are] admissible and entitled to considerable weight. 79 However, in Swift Placements Pty Ltd (at para 37) it was also held the primary question was whether there was an intention to create a legal relationship. The court must "look first to the circumstances of the engagement to ascertain whether a legal relationship was created before determining the nature of that relationship". 80 The question to be considered by the court at the close of the prosecution's case is whether, on the evidence as it stands, the defendant could lawfully be found to be an employer. The question is whether employment, on the evidence, could be established or could be inferred. A prosecutor must establish a prima facie case. The prosecutor in this matter may well have been led into a false sense of security as to "employer" from the statements it obtained, which on the totality of the evidence so far, were misleading and from other documents from which the WorkCover Authority inferred persons who were speaking on behalf of a company were employees of that company. However, the onus is on the Prosecution. I find the WorkCover Authority did not perform its primary duty which is to investigate and confirm from primary sources this company was an employer. 81 From the oral evidence called by the prosecutor and taking into account the witness statements to the WorkCover Authority, the court is not satisfied there is before it evidence from the prosecutor that could lawfully establish or infer there has been "a complete transfer of the service" of these employees from SWR Services to SWR Constructors or if there has only been the transfer of "the use and benefit" of their work in accordance with the reasoning of Lush J in Poulson. 82 The court has considered the evidence and the inferences to be cast from the witness statements as well as their oral evidence, the documents tendered and has examined the whole of the relationship as has been revealed but it is not satisfied such evidence could be capable of establishing prima facie that this defendant is an employer so that the defendant could lawfully be convicted. 83 The court finds the prosecution has not presented sufficient evidence that could establish a prima facie case as to employment. It therefore cannot argue the defendant company is the employer under the provisions of s16 of the Act. Further, it has not presented evidence sufficient to cast such an inference. 84 WorkCover laid these charges relying on statements, and documents authorising the statements. I do not accept under the circumstances revealed in the evidence that the named defendant discovered it was incorrectly named as the defendant 11/2 weeks before hearing of the prosecution. Such a claim is unacceptable taking into account the contemporaneous discussion Mr Hegarty revealed in evidence he had with his solicitor arising out of matters left out of the 5 May 1998 record of interview with the WorkCover Authority. Mr Hegarty clearly inquired why such matters had been left out of the statements and was advised not to raise the issue but to proceed to sign a statement which was incomplete. The defendant suggests such behaviour could be held to be "an error of judgment". It is this court's view it is close to an intentional misleading of the WorkCover Authority in its investigative procedures. However, such is not a matter for this court to determine. Further, by inference, the defendant suggests the questions and answers identifying SWR Services Pty Ltd as the employer were purposely left out of the statements by the WorkCover investigator when he took the statement. The question as to the inferences to be cast from the fact that the relevant companies are associated and the time limit for the laying of any other charges against any other defendant under the Act has expired is also raised. This court has no intention of ruling as to any of these allegations. Some of the individuals concerned have not been given an opportunity to answer such allegations and any inferences that may be cast. These are not issues before this court. 85 The court however does comment it would not have before it this application had Mr Hegarty not been legally advised to sign a record of interview which he knew, as did his solicitor, at best contained statements which were, if not misleading, not complete. As was said in McLean v Case & Deignan Pty Ltd (1961) 78 WN 476 (at 478): . . . allowing it was not a deceptive act, it was nevertheless an act of the company which could be misleading and it certainly misled the informant. 86 The defendant company has obligations under the Act. Its behaviour in the investigative procedure I find much more serious that "an error of judgment" as was submitted. It raises a question of grave concern as to the defendant company's commitment to the spirit and principles of Occupational, Health and Safety in its operations in NSW. 87 Accordingly there shall be no order as to costs. 88 The summons is dismissed in matter No. IRC1313 of 1999.

WorkCover Authority of NSW (Insp Mauger) v SWR Constructors Pty Ltd

At a glance

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Judgment (49 paragraphs)

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Cases Cited (17)

Cited By (3)