Fair Work Ombudsman v Personnel Contracting Pty Ltd [2019] FCA 1807

FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Personnel Contracting Pty Ltd [2019] FCA 1807 File number: WAD 284 of 2018

Judge: O'CALLAGHAN J

Date of judgment: 6 November 2019

Catchwords: INDUSTRIAL LAW – application by ombudsman alleging contraventions of the Fair Work Act 2009 (Cth) for breaches of the Building and Construction General On-Site Award 2010 – heard with VID 1191 of 2018 – hire of labour – nature of contract between labour hire company and worker – whether worker an employee of labour hire company – held that relationship was not one of employment, but one of principal and self-employed contractor – application dismissed

Legislation: Fair Work Act 2009 (Cth)

Date of hearing: 13 June 2019, 14 June 2019, 19 June 2019

Registry: Western Australia

Division: Fair Work Division

National Practice Area: Employment & Industrial Relations

Category: Catchwords

Number of paragraphs: 103

Counsel for the Applicant: R J S French

Solicitor for the Applicant: Corrs Chambers Westgarth

Counsel for the Respondent: J Blackburn SC

Solicitor for the Respondent: Hotchkin Hanly Lawyers

ORDERS WAD 284 of 2018

BETWEEN: FAIR WORK OMBUDSMAN Applicant

AND: PERSONNEL CONTRACTING PTY LTD Respondent

JUDGE: O'CALLAGHAN J DATE OF ORDER: 6 November 2019

THE COURT ORDERS THAT:

1. The proceeding be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

O'CALLAGHAN J:

introduction 1 This proceeding was heard in conjunction with proceeding no VID 1191 of 2018 (VID 1191). The two proceedings concern the respondent and raise the same legal issues. By agreement, opening submissions and evidence were heard in this proceeding after opening submissions and evidence in VID 1191. Closing submissions were then made in turn in VID 1191 and then in this proceeding. Mr J Blackburn SC appeared in both proceedings for the respondent (Construct). Mr RJS French of counsel appeared for the applicant (FWO) in this proceeding. Mr French was present in court at the commencement of VID 1191, and during the course of closing submissions in it. 2 This procedure was agreed in order to minimise repetition, which it did. 3 These reasons therefore assume familiarity with, and should be read together with, my reasons in VID 1191 of 2018 (Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2019] FCA 1806). 4 In this proceeding, the FWO alleges, among other things, that Construct contravened s 45 of the Fair Work Act 2009 (the Act) by not paying three workers certain allowances and entitlements that he says were due to them as employees performing building work during the period 14 July 2016 to 14 October 2016 who were covered by the Building and Construction General On-Site Award (the Award). 5 Like proceeding VID 1191, the critical question here is whether the relevant workers were employees. 6 The workers the subject of this proceeding are Ms Jessika Lee (née Robinson-Dernie), Ms Ieasha Kemp, and Mr Lyall James. Ms Lee and Ms Kemp were 16 and 17 years old respectively when they signed on with Construct. 7 Like the CFMMEU in VID 1191, the FWO does not dispute that Construct intended to engage the workers as independent contractors. And he also does not contend that the contract between Construct and the workers, the "Administrative Services Agreement" (the ASA), was a sham, or a pretence. 8 The FWO's case is along the same lines as the case brought by the CFMMEU in VID 1191, namely that the named workers, Ms Kemp, Ms Lee and Mr James (collectively, the workers), were employees of Construct during the relevant pleaded period because: (1) Construct had the ultimate right of control over each of the workers pursuant to the terms of the ASA. (2) Construct exercised that ultimate right of control by directing each of the workers to attend Hanssen sites and to do what they were told by the supervisors on site. (3) Each of the workers was not at any point operating their own business. (4) Each of the Workers was integrated into Construct's business "in the sense that they were providing labour on site in accordance with an overriding direction made by Construct". (5) Construct was liable to pay the workers for each hour of work performed by them for Hanssen.