Zada v Director-General, Department of Finance & Services, NSW Fair Trading

Judgment (7 paragraphs)

[1]

reasons for decision 1Mr Zada has applied for review of a decision to refuse his application for a contractor licence in the category of "general building work". The respondent refused that application because it was not satisfied that Mr Zada had a minimum of two years relevant industry experience in a wide range of building construction work. 2I heard Mr Zada's review application in the General Division of the ADT on 12 November 2013 but adjourned the proceedings to allow Mr Zada some time to gather further information in support of his application. 3Following the merger of the ADT into the Civil and Administrative Tribunal of New South Wales (NCAT) on 1 January 2014, I resumed the hearing in the Occupational Division of NCAT on 30 January 2014. At the end of the second hearing day I asked for some further information from the respondent, which was provided on 4 February 2014. Mr Zada responded to that information on the same day or the next day. I have had regard to both parties' communications in coming to my decision. 4I am authorised and required to determine the matter as a member of NCAT: clause 7(2) in Schedule 1 to the Civil and Administrative Tribunal Act 2013 (NCAT Act). Matters, such as this one, concerning the administrative review of decisions made under the HB Act, which were formerly dealt with in the General Division of the ADT are dealt with in the Occupational Division of NCAT: s 83B of the HB Act and clause 4(2) in Schedule 5 to the NCAT Act. 5Like the respondent, I am not satisfied that Mr Zada has the required level of practical experience for the issue of a contractor licence. I must therefore affirm the decision under review. My reasons follow.

[2]

Mr Zada's "experience" 13When Mr Zada lodged his application with the respondent in May 2013, he relied on only one referee - Chandrahasan Alagaratnam (Mr Hasan). Mr Hasan attested to Mr Zada's having worked with him from "10/01/11 to current" - a period of 2 years and 4 months. Mr Zada did not nominate any other referees at that stage because he thought his period of experience with Mr Hasan would satisfy the two-year requirement. 14One of the respondent's officers spoke to Mr Hasan in June 2013 as part of the process of considering Mr Zada's application. Mr Hasan was asked whether Mr Zada was employed as a full time employee and he answered no, he was not an employee and he did not work on a full time basis. Mr Hasan confirmed that Mr Zada had undertaken a range of activities -organising subcontractors, monitoring the job site, organising payments, site management - but told the officer that Mr Zada had only worked with him for four months. The work apparently related predominantly to the fitout of a medical centre. 15The respondent wrote to Mr Zada, inviting him to provide further detail of his experience. 16Mr Zada provided two further references. One of them was from a person who is a building certifier and the other was from Mr Charbel Taouk, who is a licensed builder. Mr Zada accepts that the reference from the building certifier cannot assist him. 17Both Mr Hasan and Mr Taouk gave oral evidence in the Tribunal proceedings, Mr Hasan by phone and Mr Taouk in person. 18Mr Hasan told the Tribunal that Mr Zada had worked with him from early 2011 until the middle of 2013. He nominated four job sites where Mr Zada had worked. Mr Hasan said that most work that Mr Zada had performed had been under Mr Hasan's control and supervision. He described Mr Zada's role very broadly as "helping me". He said he was very confident that Mr Zada can be a builder. 19Mr Hasan was asked how he contracted with Mr Zada. He said that he paid him for his time. He did not deduct pay-as-you-go (PAYG) withholding amounts. He confirmed that he regarded Mr Zada as an independent contractor. 20Mr Maynard, who appeared for the respondent, asked Mr Hasan what role he wanted Mr Zada to perform for him and Mr Hasan said he wanted Mr Zada to act between him, Mr Hasan, and the subcontractors. He said that on one of the job sites, at North Epping, Mr Zada had worked for him for 7 to 8 months. On a full-time equivalent basis, he estimated it as three months. 21At the second job site, on Carlingford Road, Mr Hasan was the project manager. The owner of the property had an owner builder permit. Mr Hasan's responsibility was very similar to that of a builder. Mr Zada's work was to co-ordinate and organise subcontractors. Although Mr Hasan said Mr Zada was not involved in any hands-on work, he also said that Mr Zada did some fitout of toilets and ceilings. The project took eight months in total, with Mr Zada involved for three months. Mr Hasan said that equated to two months full-time. 22The third job site was in Punchbowl where Mr Zada had an owner builder permit. Mr Hasan had designed the work to be done and was supervising Mr Zada's work. Mr Hasan said that he visited the site about once a week over a period of 3-4 months. 23The fourth job site was a medical centre involving the 2-month fitout of an existing building. Mr Hasan said that on this job, he had been engaged by Mr Zada rather than the other way around. Mr Hasan said it was really Mr Zada's job and Mr Zada worked there full time. 24Mr Taouk's written reference, dated 24 June 2013, nominated Mr Zada's work period as "01/02/13 to current". However, Mr Taouk in oral evidence said Mr Zada had continued to work with him beyond the reference date and was still working with him in January 2014. 25At the property known as 43 Catherine Street, where the owner had an owner builder permit, Mr Zada had worked for four months continuously from February 2013. This job involved a second storey addition to an existing residence. Mr Taouk described Mr Zada's work as "completely structural". He had supervised the pouring of a concrete patio slab, had marked the property out for excavators, and had performed hands-on work on the upstairs addition. 26At a second property in Catherine Street, number 51, Mr Zada had been on site "pretty much all the time". This owner, like the one at number 43, had an owner builder permit. Mr Zada had done "a bit of labouring". Mr Taouk noted that the residence had already been built and was at the lock-up stage. But there was a 400 m² backyard on a sloping site, and Mr Zada had engaged and supervised the landscapers. Mr Zada had been involved on this site for two months. 27By the time Mr Taouk was engaged as the builder on a project in Doonside, he had become very comfortable with Mr Zada's work. He could "put the whole project together for you". Mr Zada had helped with the quoting, which involved looking at the plans, determining what was necessary by reference to building standards, and obtaining quotes from suppliers. He had surveyed and pegged out the site. Mr Zada had been involved on this project for three months. 28There was also a project in Ermington which involved a dual occupancy development. Mr Zada had started working with Mr Taouk after this property had reached the lock-up stage and he had been involved in it while also carrying out work on other sites. 29In addition to these projects, Mr Zada had also worked on a commercial property in Berala, which involved the conversion of a former video store into a doctors surgery. Mr Zada had been involved in this project for six weeks. 30In summary, Mr Taouk said that Mr Zada had had "12 months solid experience with me". 31Apart from Mr Hasan and Mr Taouk, Mr Zada also wanted to rely on a reference from a Mr Antoun Boumelhem. Mr Zada's work with Mr Boumelhem was undertaken between eight and nine years ago. The respondent's officers had found it difficult to contact Mr Boumelhem to have him confirm Mr Zada's claims about the range and period of work he had done for Mr Boumelhem. Eventually Mr Boumelhem was contacted and an officer of the respondent made a file note of the discussion he had with Mr Boumelhem on 3 February 2014. The file note records uncertainty in relation to Mr Boumelhem's claimed supervision of Mr Zada, Mr Boumelhem's own status as a potential supervisor at the time, and the possibility that the entity capable of certifying Mr Zada's work was not licensed for part of the claimed work period. Given these shortcomings and the lapse of time since the performance of any such work on Mr Zada's part, I do not accept it as "relevant industry experience" that can assist Mr Zada. 32On the evidence available Mr Zada can only establish, at most, one year and five months of relevant experience. Apart from not accepting his time with Mr Boumelhem, I also do not accept Mr Zada's owner builder project at Punchbowl or the medical centre fit-out (paragraphs [21] and [22] above). They cannot on any view amount to "experience" of the kind required by the Instrument dated 3 July 2013. At Punchbowl Mr Zada was not "financially remunerated" for the work and in any event the project, like the medical centre fit-out, was Mr Zada's, not Mr Hasan's, as the Instrument seems to contemplate.

The expressions "employee", "otherwise lawfully engaged" and "supervised and directed" 33Mr Zada's inability to establish two years of relevant experience makes it unnecessary to consider the remaining provisions of the Instrument. Nevertheless, it is appropriate to comment briefly about the expressions "employee" and "otherwise lawfully engaged" as used in the Instrument, since the respondent submitted that the arrangements between Mr Zada and his referees rendered the entirety of his experience ineligible. Those expressions, and their interaction with the words "supervised and directed", can be critically important to applicants. 34The respondent's position seems to have been based on the fact that none of Mr Zada's referees had treated Mr Zada as an "employee" for taxation purposes. Apparently Mr Zada had provided his referees with his Australian Business Number (ABN). That had encouraged them to believe that he was not subject to PAYG withholding or superannuation guarantee payments. Mr Hasan and Mr Taouk both labelled him a "subcontractor". That created further difficulties, in the respondent's view, since it invited the inference that he was in breach of s 12 of the HB Act, being neither the holder of a contractor licence nor an "employee" of a licence holder. On that basis, on the respondent's approach, it could not be said that he had been "otherwise lawfully engaged". 35A relevant question for the respondent is whether Mr Zada was, in fact, an employee of his referee. That question is not answered by looking no further than the way the parties have arranged their tax affairs. Even if the parties came to the view that Mr Zada was not an employee, that is not the end of the enquiry. Mr Zada and the licence holder may have been wrong. Indeed, Mr Taouk seemed to think that Mr Zada could not be an employee because he did not work full time for him. In this day and age when so many people in the workforce are employed part-time, that is plainly not right. In short, it is not safe to assume that the parties (that is, the worker and the supervising licence holder) will always have put the right label on the arrangement. It is necessary to examine the facts. 36In the absence of a statutory definition of "employee" in the HB Act, the word must take its ordinary meaning - "a person working for another person or a business firm for pay" (Macquarie Online Dictionary). A simplistic distinction between an employee and an independent contractor (or subcontractor) is that the former works for another while the latter works for himself. In earlier times the main indicator of an employment (master/servant) relationship was the control exercised by one person over another, but nowadays it is "the totality of the relationship between the parties which must be considered": Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 29, cited with approval in Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 41. Supervision and direction are often very relevant to the enquiry. Those concepts are also relevant to the "experience" question, as is evident from their use in paragraph (c) of the definition in the Instrument. 37That is why it may be more instructive to start the enquiry by considering the level of supervision and direction provided by the licence holder rather than to focus on either the label used or the tax arrangements in place. The greater the level of supervision and direction, the more likely it is that an employment relationship exists. And if the worker is not closely supervised and directed, then he or she is not likely to reach the requisite level of "experience" in any event, no matter what label has been applied to the relationship. The proper task is to examine "the totality of the relationship between the parties". 38Having said that, there is still room for debate about the reach of the expression "otherwise lawfully engaged", given provisions in the HB Act such as s 12 which prohibit certain categories of work except as an "employee". The respondent suggested, by way of example, that the expression may allow a licensed carpenter (not being an employee) to carry out, under supervision, some incremental activities as a way of progressing towards a builder's licence. That suggestion seemed to be driven more by pragmatism than by a close analysis of the words of the Instrument and the broader regulatory regime. And of course there is an inconsistency between that suggestion and the respondent's primary position, which is that a person who is not an employee will necessarily be in breach of s 12, and is therefore not "otherwise lawfully engaged". 39This is not the case in which a full analysis of the expression "otherwise lawfully engaged" is required or even desirable. That analysis should be left for a case where the application of the expression is critical to the outcome.

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Judgment (7 paragraphs)

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