- iB con tes | CY JUDGMENT INO. cccesssossssscsenl eosocsoneee CATCHWORDS ADMINISTRATIVE LAW - Contract of Service - features of - agency distinguished - Written Agreement - Interpretation - Effect of subsequent conduct - Australian Broadcasting Corporation Act 1983 - Administrative Decisions (Judicial Review) Act 1977. Administrative Decisions (Judicial Review) Act 1977 Australian Broadcasting Corporation Act 1983, ss. 5, 46, 47, 48. Australian Mutual Provident Society v. Chaplin & Anor. (1978) 18 A.L.R. 385. LAWRENCE JAMES PRATT v. AUSTRALIAN BROADCASTING CORPORATION QLD. G122 of 1985 CORAM - Spender Jd. Brisbane 20 December, 1985 IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G122 of 1985 GENERAL DIVISTON ) BETWEEN : LAWRENCE, JAMES PRATT Applicant AUSTRALIAN BROADCASTING CORPORATION Respondent MINUTE OF ORDER JUDGE MAKING ORDER: Spender J. DATE OF ORDER: WHERE MADE: 20 December, 1985 Brisbane THE COURT ORDERS THAT: (1) (2) The decision to terminate the employment of Mr. Pratt by the Australian Broadcasting Corporation communicated to him by letter over the hand of Mr. Whitehead dated 12 September 1985 be set aside; the Respondent pay the Applicant's costs to be taxed. Note: Settlement and entry of orders are dealt with in Order 36 of the Federal Court Rules tard mp vine IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G122 of 1985 GENERAL DIVISION ) BETWEEN : LAWRENCE JAMES PRATT Applicant AUSTRALIAN BROADCASTING CORPORATION Respondent SPENDER J. 20 December, 1985 REASONS FOR JUDGMENT This 18 an application by Mr. Lawrence James Pratt for an order of review under the Administrative Decisions (Judicial Review) Act 1977 in respect of a decision to terminate his working for the Australian Broadcasting Corporation ("ABC"). That decision was indicated to him by letter over the hand of Mr. Geoffrey Whitehead, the Managing Director of the Corporation, dated 12 September 1985. The reasons for the decision and the nature of it appear from that letter. It reads in part:- "The continuation of a racing service in Queensland was a matter for the Radio Division and the Radio Management in Queensland to decide. In his letter to you of 27 August the Radio Manager in Queensland, Bob Hailstone, has set out quite clearly the reasons for the termination of the existing service and why, consequently, your services under your existing contract cannot be retained. As Mr, Hailstone explained, a conference was held with the Federal Head of Sport (Radio), Mr. Mason and the Queensland Sporting Supervisor, Mr. Denovan, to discuss ways of coping with reduced funding. It was put to Mr. Denovan and his staff that a choice had to be made between filling a vacant staff position or retaining your contract services at the present level. The Sporting Department decided to fill the vacant position with a full time staff member. This decision is in no way a reflection on your performance aS a race-caller, which I am pleased to note has been of a consistent professional standard during the many years of your contract with the ABC. I draw your attention to the invitation in Mr. Hailstone's letter for you to approach the 4QR Station Manager, Neal Waddell, to discuss arrangements for any future work on radio, and to approach the Television Manager, Rory Sutton, to negotiate new arrangements for continuing your present work on Television. Under the terms of your contract of employment dated 13 September 1979 (which provides for four weeks notice by either party) this letter is formal notification to you from the Managing Director of the termination of that contract, four weeks from the date of this letter." It is to be noted that Mr. Whitehead referred to "your contract of employment". The letter later continued:- "I would like to place on record our appreciation of your professional services over the period of 23 years that you have been on contract with the AEC. I assure you that it concerns me greatly that the ABC is faced with the necessity to reduce ats services in this way and is losing the skills and experience of a long-standing broadcaster such as yourself. I can understand your disappointment at not being able to continue in your present role, but I would hope that you will continue to have an amicable nd mutually beneficial relationship with ABC Radio and Television in Queensland." It is regrettable, as counsel for the ABC properly acknowledges, that Mr. Fratt first learned of this decision not as a result of the letter, but on 22 August as the result of tea-room gossip. He wrote on that same day an immediate letter of protest to Mr. Whitehead, and in the letter he said, in part:-~ "I was disturbed today to learn via corridor gossip that my position with ABC Radio was defunct." And later:- "I have been an employee of the ABC for 23 years and feel I am entitled to more consideration than this." Mr. Hailstone, the Manager, Radio, for Queensland, wrote and apologized on 27 August 1985 in-respect of that matter. The first paragraph of his letter says:- "T am concerned that media speculation and corridor gossip caused you distress leading to your on air comments and subsequent statement in the press about your treatment by me and the A.B.C." As the letter of 12 September 1985 showed, Mr. Pratt has worked for the ABC (to use a neutral term) for more than 23 years. He has been primarily, but not exclusively, concerned as a race caller, tipster, and commentator. The fact that his work has not been associated exclusively with racing has a relevance in these proceedings, of which I will say more later. Mr. Pratt claims that he was and is an employee of the Australian Broadcasting Corporation, never properly having been dismissed. The Corporation denies that he was an employee and maintains that he was an independent contractor, which the Corporation calls a "contract artist". The Corporation says his services were properly terminated on the giving of four weeks' notice in the letter on 12 September, 1985. The relationship between Mr. Pratt and the Corporation was undoubtedly regulated by a contract. The central question in this application is whether the contract was one of service, or one of agency. There were two submissions of a subsidiary or fall-back kind by the parties. The Corporation asks that, even if Mr. Pratt is properly to be regarded as an employee to whom the redeployment provisions of the Australian Broadcasting Corporation Act 1983 applies, this Court should nonetheless decline to grant his application in the exercise of a proper judicial discretion, because, it is said, it would be inevitably futile, Mr. Pratt having only such specialist skills that he cannot be redeployed. Counsel for Mr. Pratt submits that, if Mr. Pratt is not an employee of the ABC and his engagement was governed by the contract, he was, in addition to being entitled to four weeks' leave notice, by virtue of the requirements of natural justice, also entitled to be heard prior to being given notice. fa at The respondent Corporation was established by the Australian Broadcasting Corporation Act 1983. Section 5(1) of that Act provides:- "The body corporate that was, immediately before the commencing day, in existence by virtue of section 30 of the Broadcasting and Television Act 1942 under the name Australian Broadcasting Commission continues in existence by force of this sub-section as a body corporate, under and subject to the provisions of this Act, under the name Australian Broadcasting Corporation." Part V of that Act deals with the Australian Broadcasting Corporation Service and in s.32, the interpretation section, "officer" and "temporary employee" are not very usefully referred to: "officer" means "officer of the Corporation"; "temporary employee" means "temporary employee of the Corporation". I might say that that terminology is the same as adopted ain the Broadcasting and Tetevision Act 1942-1973: see s.43(2) of that Act. Section 46, which appears in Division 3 of Part V,a division headed "Redeployment and Retirement", has an interpretation section, s.46(1), in which this appears:- "In this Division, unless the contrary intention appears - 'employee' means a person to whom, and in relation to whom, this Division applies by virtue of section 47;" ; Section 47 is the central provision with which this application is concerned. It is headed ~ "Persons in relation to whom Division applies" and provides - ""47.(1) Subject to this section, this Division applies to and in relation to - (a) a person who is an officer; and (b) a person who is a temporary employee, being a person who has, for the immediately preceding period of one year (whether or not the period commenced before the commencing day), been a temporary employee, or an officer and then a temporary employee." (2) This Division does not apply to or in relation to - (a) a person who is remunerated by fees, allowances-or commission only; (b) a person who is employed in an honorary capacity only; _ (c) an officer who was appointed on probation and whose apoointment has not been confirmed; or (d) a temporary employee who is employed under a contract of employment for aterm of less than one year or for a term of years. (3) For the purposes of this section, any period in which a person was an officer or temporary employee of the Australian Broadcasting Commission shall be treated as if it had beena period in which the person was an officer or temporary employee of the Corporation." The significance of whether Mr. Pratt was an employee rather than an agent under the contract of engagement is seen from the provisions of s.48 and following of the Act. That section. appears in Subdivision B, headed "Redeployment of Employees", and s.48 relevantly provides:- "The objects of this Subdivision are - (a) first, to ensure, to the greatest extent that is practicable, that the Corporation operates in such a manner as to make efficient and economical use of the services of its employees; and (b) secondly, to ensure, to the greatest extent that is practicable, that each employee whose services cannot, consistently with the achievement of the first object of this Subdivision, reasonably be used by the Corporation on appropriate duties - (i) for the reason that he is included in a class of employees employed by the Corporation that comprises a greater number of employees than is necessary for the efficient and economical working of the Corporation; (ii) for the reason that he is, in consequence of physical or mental incapacity, incapable of performing his duties; (iii) for the reason that he is inefficient in relation to the performance of his duties; or (iv) for the reason that he is not qualified to perform his duties, is redeployed in the employment of the Corporation on duties that he can reasOnably be required to perform." Then a system is set out to further the aim of providing redeployment where possible, enhancing the security of tenure of persons to whom the Division applies. On the central question in these proceedings, in Australian Mutual Provident Society v. Chaplin and Another (1978) 18 A.L.R. 385, the Judicial Committee of the Privy Council was concerned with characterizing the "relationship constituted by — contract between an insurance company and one of its representatives. Lord Fraser of Tullybelton, in delivering the judgment of the Board, said at p.387:- tee "The appeal does not raise any general question of law. A number of decided cases was referred to in the course of the argument but, except on certain particular points to be mentioned later, their Lordships consider that these cases are only useful as examples of facts which have been treated by the courts as indications for -or against a contract of service. Their Lordships are content to adopt the following passages from the judgment of the learned Chief Justice in the Supreme Court, in which Hogarth J concurred, as a correct summary of the law for the present purpose: 'How, then, is one to distinguish between a contract of service and a contract for services? The older test was simple. It all turned on the right to control the manner of doing the work. If the alleged employer possessed such a power the contract was a contract of service, not a contract for services: if not, then not. That power was both a necessary and sufficient condition of a contract of service.' After referring to a number of decided cases the learned Chief Justice went on: 'It seems to me, then, that at the present time there is no magic touchstone. The court has to look at a number of indicia and then make up its mind into which category the instant case should be put. It isa question of balancing the indicia pro and con... But the power of control over the manner of doing the work is very important, perhaps the most important of such indicia.'"" Clause 3 of the contract in that case provided: "The relationship between the Society and yourself is that of Principal and Agent and not that of Master and Servant." The judgment continued at p.389:- "Clearly cl 3, which, if it stood alone, would be conclusive in favour of the Society, cannot receive effect according to its terms if they contradict the effect of the agreement as a whole. Nevertheless, their Lordships attach importance to cl 3, and they consider that the following statement by Lord Denning MR in Massey v. Crown Life Insurance Co. (4 November 1977, unreported) correctly states the way in which it can properly be used: '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 Eile 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.'" Mr. Charles McGilvray Grahame, the General Manager for Queensland for the corporation, gave evidence that there has always been a distinction in the Corporation between permanent officers, temporary employees, and those contracted for a fee to the Corporation, being "contract artists". I should note that Mr. Grahame appeared to give his evidence dispassionately. I make that observation because the material shows that the decision in question, and its wider accompanying decisions, have engendered a degree of partisan feeling. I have also referred to, and simply note, Ready Mixed Concrete (South Fast) Ltd. v. Minister of Pensions and National Insurance £1968] 2 9.B. 497; [19681 1 All E.R. 433; Ferguson v. John Dawson & Partners (Contractors) Ltd. 01976] 1 W.L.R. 1213; £19763 3 All E.R. 817; Performing Right Society, Limited v. Mitchell and Booker (Palais De Danse), Limited [19243 1 K.B. 762, Lu. particularly at 767; Zuijis v. Wirth Brothers Proprietary Limited (1955) 93 C.L.R. 561; Humberstone v. Northern Timber Mills (1949) 79 C.L.R. 389 at 404 and 405. I therefore adopt the approach set out in the judgment of the Privy Council to which I have referred. Ionow turn to the contract. Mr. Pratt's contract of engagement, (again to use a neutral term), is contained ina letter dated 13 September 1979 from the Principal Legal Officer of the then Commission. It informed Mr. Pratt that its purpose was to confirm the revised terms of his exclusive engagement by the Australian Broadcasting Commission. His exclusive engagement was:- ".,.for a period of 52 weeks commencing 6 August, 1979 continuing thereafter subject to termination by either party on giving four (4) weeks' previous notice in writing." Mr. Pratt's remuneration was dealt with in clause 3 of the agreement and was described as a "fee" of a set amount per week, that amount being subject to - "(a) such future adjustments as shall be applicable in consequence of the decisions in the Conciliation and Arbitration Commission in National Wage Cases; and . (b) a flow-on from any movement in the related staff salary level as for (a nominated position) arising from future work value or comparative wage justice assessments." a ii. Clause 5 set out the duties of Mr. Pratt both on radio and television in some detail. These duties were said to be "Under the direction of the Supervisor Sporting Programs (Queensland)". It is worth noting that his duties in part included: "Prepare contributions for 'Sporting Highlights' 6.30 PM Monday/Tuesday. Present program if required in emergency; Prepare contributions to 'Sportsman's Highlights' 6.30 PM Friday. Present program as required." And on television his duties included: "'On camera' presentation racing segment 'Sports Review' Saturday 7.15 pm, including role of compere if necessary;" Clause 4 was in these terms: "You will not normally work in excess of 36% hours per week but the ABC will have the right to require you to doso on such days and at such hours as may be necessary for the proper performance of your duties without additional payments for overtime or penalty rates." Clause 5 required him to travel to centres other than Brisbane at the request of the ABC and provided that the ABC would pay fares, and that Mr. Pratt would also receive:- ...travelling allowance on the same basis as applies to members of the ABC's Staff on the same rate of salary in accordance with Staff Rule 120 of the ABC's Staff Rules." we, The contract provided for four weeks' recreation leave to together with an additional day for each public holiday worked. "He was entitled to two weeks' sick leave on full pay and two weeks half pay; the entitlement to sick leave being cumulative. 12. Under clause 7 of the agreement he assigned copyright in the material he prepared to the ABC, but under clause 8 wags permitted to earn additional remuneration for his commentary used on the public address system at racecourses,. Clause 9 provided, significantly in my view:- "You shall seek approval of the Assistant General Manager (Radio) of the ABC for work other than that undertaken for the ABC, either for local or overseas organisations, any fee involved being the subject of negotiation between yourself and the organisation concerned. Approval shall be granted only if such work does not conflict with your duties under this contract." It is also significant that, when Mr. Pratt was paid, he received a payslip headed "Australian Broadcasting Corporation salary details". He was allocatéd a payroll number and, importantly, there was deducted from his fortnightly payment what is popularly termed a pay-as-you-earn taxation deduction, Attention is directed to Division 2 of Part VI of the Income Tax Assessment Act 1936, particularly s.221C. Subsection 1A of that section provides:- * "Where an employer pays to an employee salary or wages, the employeer shall, at the time of paying the salary or wages, make a deduction from the 4 salary or wages at such rate (if any) prescribed a in accordance with sub-section (1) or (1AA) as is wt applicable. . Penalty: $1,000." S10}, KS A WOE oy meee tee WY ete Ae i An ' ' 13. To be contrasted with the many and strong indicia of a contract of employment that Mr. Pratt's contract contains are the circumstances that, unlike ordinary employees, Mr. Pratt was not obliged to fill in time sheets. He had no fixed number of hours to work. He had permanent employment with another employer, the "Brisbane Telegraph" newspaper. He did not have a salary position number in the organization. In relation to the number of hours worked, there was a dispute on the evidence which is unnecessary for me to resolve, but Ihave already referred to the contract which speaks of working for a period up to 36% hours, with which is to he contrasted the erroneous statement of Mr. Grahame in his affidavit, where he said:- "Notwithstanding contract provisions that required Mr. Pratt to work 36 and 1/2 hours' per week Mr. Pratt to my knowledge did not work more than 20 hours per week and frequently worked less than that." Accepting that there is no "magic touchstone", I am clearly of the view that, having balanced the indicia pro and con, Mr. Pratt, pursuant to the contract contained in the letter of 13 September 1979, was properly to be regarded as an employee of the Australian Broadcasting Corporation. It follows, in my judgment, that the system for the protection of employees afforded by Subdivision B of Part V of the Act should have been followed in Mr. Pratt's case. weg cee ye ne eh i 14. As to the subsidiary submission of counsel for the Corporation, viz., that I should not grant the application because to do so would be futile, I am not satisfied that that is necessarily so. I recognize that it may be that Mr. Pratt will be found to be non-redeployable if, in fact, the position of ABC radio's involvement in racing remains unchanged. In Mr. Pratt's evidence, while indicating, naturally enough, he wanted to continue as a specialist race caller and tipster, he admitted that, if offered a position as a general broadcaster, he would have to consider his position. In my view it is not impossible for a specialist broadcaster like Mr. Pratt to turn his abilities to those of general sports broadcasting. Thankfully, the reverse is not the case. There are, moreover, some narrower concerns. In the light of my decision that Mr. Pratt has never properly been dismissed by the Australian Broadcasting Commission, he is entitled to be paid. Mr. Pratt, after the letter purporting to dismiss him, attended ready to perform his duties. As to the subsidiary submission by counsel for Mr. Pratt, it is umnecessary to rule. I indicate, however, that, if the basis of Mr. Pratt's engagement had been exclusively set out in the contract, (which I have found is not the case), then, in my opinion there is no requirement of natural justice that Mr. Pratt be heard before being given the four weeks' notice contemplated by the contract. In the result I allow the application. The orders that I propose are these. I set aside the decision to terminate the employment of Mr. Pratt by the Australian Broadcasting Corporation communicated to him by letter a . over the hand of Mr. Whitehead dated 12 September 1985, and I order that the respondent pay the applicant's costs to be taxed. Iwill hear the parties as to the precise form of the orders. ee ease ng party tt ie ena) ru no ceee fet red sogcordta ct ons tet o7g5 0.2 a TL C25 > eves fi J mean A te aye Bee ea atere Uforoord Pere Ci PHS IS TOUT 'A MJ ae Crnasens try, ducice optics Associate