John Robinson v Telstra Corporation Ltd [1994] IRCA 179

CATCHWORDS INDUSTRIAL LAW - termination of employment - definition of "employee" - application dismissed. Industrial Relations Act 1988 Sections 170EA, 347 Stevens v Brodribb Sawmilling Company Pty Limited 160 CLR 16 Barro Group Pty Limited v Fraser & anor (1985) VR 577 JOHN ROBINSON V TELSTRA CORPORATION LTD. No. WI 238 of 1994 Before: Linkenbagh J.R. Place : Perth Date of hearing: 8 and 10 November 1994. IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA Matter No. WI 238 of 1994 BETWEEN John Robinson Applicant AND Telstra Corporation Limited Respondent COURT: LINKENBAGH J.R. PLACE: PERTH DATE: 8 and 10 November, 1994 REASONS FOR JUDGMENT This is an application pursuant to Section 170EA of the Industrial Relations Act, 1988. The remedy which can be applied for is asked for by an "employee" in respect of "termination of his or her employment." By Section 4 of the Act an employee is defined as "includes any person whose usual occupation is that of employee". Thus the status of the applicant is left to be determined by the application of tests used by the courts at Common Law to identify the existence of an employer/employee relationship. The respondent raised this issue in a Notice of Motion filed on 18 October, 1994 asserting that the Court had no jurisdiction to entertain the application as the applicant was an independent contractor and not an employee. The issue was heard along with the substantive application, to avoid delay and duplicating of the evidence. Both parties adduced evidence of the factual basis of the relationship between them. It is common ground that the applicant was not employed on the same basis as other Telecom employees, and the Court must determine on which side of the line the unique facts this case place the applicant. There are many indicia of employment, as the High Court noted in Stevens v Brodribb Sawmilling Company Pty Limited 160 CLR 16, and as Mason J. observed at page 29, "it is the totality of the relationship between the parties which must be considered". Wilson & Dawson JJ say at page 35 that the relevance of the various criteria may vary according to the circumstances. The Court finds that: 1. The applicant performed cleaning duties at the Mount Yokine Radio Terminal from February 1983 to July 1994. He was engaged through an agency, not in the usual manner in which Telecom employees are recruited. 2. The rate of remuneration was nominated by the applicant initially at $7.00 per hour. The applicant rendered weekly accounts to Telecom headed"Blue Star Cleaning Service." There was no written agreement. The applicant was paid under Telecom's purchase system, which is the system used to pay contractors. 3. Telecom repaired a broken window caused by the applicant in 1984. The applicant did not have Insurance cover. 4. From 1990 the applicant did gardening work, at an agreed rate of $15.00 per hour. 5. Blue Star Cleaning Service is a business which has been owned by the applicant and his wife and daughter. The firm did other work in addition to the Telecom work. 6. From time to time there were discussions between the applicant and Telecom personnel about the basis of the arrangement between them and Telecom expressed concern that there was no "contract." The applicant did not engage in the negotiations regarding the contract. 7. The applicant took out no insurance cover in relation to the work for Telecom. 8. The applicants daughter assisted him to complete his duties on several occasions. 9. The applicant joined in staff activities such as morning tea and Christmas parties. 10. The applicant did not receive annual leave or sick leave nor did he work or be paid for public holidays. 11. No income tax was deducted from the applicants earnings. 12. Telecom directed the applicant as to his hours of work and the duties he was to perform, but not as to the manner in which he performed those duties. 13. When the Mt Yokine Terminal was closed down all other employees were allocated to other Telecom sites, and the applicants services were terminated. He was treated differently to the other workers in the discussions relating to the closure. 14. The arrangement for the supply of equipment and materials varied from time to time. The applicant supplied his own cleaning materials from 1991 to 1994 and if he used his own equipment, he charged Telecom a hiring fee. 15. The applicant was not part of the routine procedures applicable to Telecom employees, such as the sign on book, staff meetings, daily working reports, nor was he given a staff badge or an Australian Government Service Number. 16. The income from Telecom was paid into the partnership account, along with income from other cleaning work done by the applicant. 17. Taxation returns for Blue Star Cleaning Services over several years show the split of net income of the firm amongst the partners, and the applicants returns for corresponding years show his income as his share of the partnership net income. Deductions are claimed in the partnership returns for depreciation on cleaning equipment, and the usual business expenses. The applicants counsel submitted that because the unusual arrangement went on for some years, it became employment. That submission presupposes that the initial relationship was based on contract, and is erroneous, as the Court must look at the facts from time to time to determine the nature of the relationship. The further submission that Telecoms attempts to have the applicant sign a formal contract indicate that he was not a contractor is also erroneous, as the evidence indicates that those attempts were designed to bring the relationship between Telecom and the applicant into line with arrangements with other contractors. The Court finds that on the balance, the relationship was not one of employer/employee. The primary reason is found in the actions of the applicant himself in electing to provide the services to Telecom through his family partnership business with the Taxation other benefits which flow from that. The Court does not accept the applicant's evidence that he made that election on the advice of his Accountant, without fully understanding all the consequences which flowed from it. The election is fundamentally inconsistent with the belief that at any time he was an employee of Telecom. The Court notes the submissions of counsel for the respondent in that regard, based on the decision in Barro Group Pty Limited v Fraser & Anor (1985) VR 577. The other facts as found by this Court confirm the conclusion that an employment relationship did not exist. The finding that the applicant was not an employee brings these proceedings to an end. The Court has considered exercising the discretion to order costs against the applicant on the ground that the proceedings were instituted without reasonable cause, as provided in Section 347 of the Act. However, given the relative inequality of the parties and the failure by both parties to address the question of definition of their relationship over the eleven years it subsisted, the Court declines to make an order for costs.