Jayson Deslandes Lawrence v Colin Nicholas Constantine and Maxine Constantine t/as Carls Milk Supply [1995] IRCA 416

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WI 1441 of 1995 B E T W E E N: Jayson Deslandes LAWRENCE Applicant A N D Colin Nicholas CONSTANTINE & Maxine CONSTANTINE t/as CARLS MILK SUPPLY Respondent REASONS FOR DECISION 29 August 1995 PARKINSON JR This is an application made pursuant to S170EA of the Industrial Relations Act 1988. The applicant alleges that his employment was terminated by the respondent in contravention of the Act. The applicant appeared on his own behalf in the proceedings, and the respondents, who trade in partnership under the name of Carls Milk Supply, appeared by Mr Colin Constantine. The notice of appearance filed in the proceedings by the respondents identified the employer as being properly named as Colin Nicholas Constantine and Maxine Constantine, trading as Carls Milk Supply. This is consistent with the application filed by the applicant in accordance with the rules. The applicant submitted that his employment was terminated without notice, and further that the reason for the termination of his employment was his absence from work due to illness. The respondent submitted that the termination was as a result of the applicant failing to attend for work. The applicant was employed as a driver on 13 February 1995 by the respondent in its milk distribution business. His employment was terminated on 12 April 1995. During the course of his short period of employment the applicant was not absent from work on any occasion other than on 12 April 1995. The evidence established in my view that the applicant performed his duties efficiently and was willing to work long and additional hours as the need arose. There is a preliminary matter in these proceedings which I now turn to consider. At the outset of the proceedings the respondent submitted that the applicant was not an employee but a sub-contractor, and thus was not able to bring this application. The basis of this submission was as a result of there being a deduction of taxation by the respondent pursuant to the Prescribed Payments System from the payments made to the applicant. The respondent further deducted from the applicant's pay each month a sum of $100.00, described by the respondent as being deductions for lease of the motor vehicle the applicant drove to deliver the milk on behalf of the respondent. Even in this context, however, the weekly payments made to the applicant were described by the respondent in various documentation as "normal weekly pay" and "3 days pay" (Exhibits A4 and A5). No invoices or statements were required to be provided by the applicant to the respondent on account of the work he performed on behalf of the respondent. In my view this arrangement does not constitute an independent contractor or sub-contractor arrangement in any real sense. There was nothing "independent" in the manner in which the applicant performed his work. He was subject to the rostering and distribution arrangements made from time to time by the employer and, despite Mr Constantine's evidence, was in my view required to attend work at particular and regular times. Further, there was no document before me establishing any terms of engagement as a sub-contract, nor any contractual entitlements in that regard. Finally and relevantly, the applicant's understanding and belief was that he was employed by the respondent and was subject to his direction and control. The vehicle "lease" arrangement could not truly be described as a lease in any sense of that word, either legally or even as it might be understood in common usage. The applicant had no control over the vehicle. It was garaged at the respondent's premises. There was no insignia on the vehicle identifying the applicant as being a cartage contractor on behalf of the respondent. The vehicles on the respondent's evidence were all fully owned by the respondent and registered in the name of the respondent. The applicant had no access to the vehicle other than in the circumstances of performing the duties prescribed by the respondent. There was no evidence of any requirement for the applicant to take out insurance on the vehicle or to in any other manner take responsibility for the vehicle, other than due care in its usage as an employee. The arrangement was a sham and the applicant was in all senses of the word an employee of the respondent, despite the arrangements put in place by the respondent's to avoid such a characterisation of the relationship. The respondent tendered in proceedings a letter from a Department of State which informed him of that Department being satisfied that the applicant, together with two other employees, was in a sub-contract arrangement (Exhibit R2). I am not informed as to what information or material was relied upon by that Department, but suffice to say on the evidence before me in these proceedings I am satisfied that, however the respondent may characterise the relationship, it was nevertheless an employment relationship. I reach this decision having regard to the reality of the relationship between the parties, and in this regard have been guided by the matters identified in the decision of his Honour Gray J in Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179 and the indicia discussed by the Full Court of the Federal Court in Building Workers' Industrial Union of Australia and Others v Odco Pty Ltd (1991) 29 FCR 104 as being relevant to such a characterisation. In Re Porter his Honour Gray J said (at page 184): A court determining whether a particular relationship is that of employment or of some other kind can therefore only resort to the process of balancing all of the factors, or as they are called in Stevens and other cases, the 'indicia'. In truth, the result may be a matter of impression. It is unfortunate that this is so. It should not be necessary for people to obtain a decision of a court, in order to know the true nature of their relationship. Unfortunate or not, that is the case. Although the parties are free, as a matter of law, to choose the nature of the contract which they will make between themselves, their own characterisation of that contract will not be conclusive. A court will always look at all of the terms of the contract, to determine its true essence, and will not be bound by the express choice of the parties as to the label to be attached to it. As Mr Black put it in the present case, the parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognise it as a duck. As is indicated by the passages in Stevens to which I have referred, there is no prescribed list of factors which will be examined in determining whether a contract is one of employment. Any circumstance which may shed light on the nature of the contract will be taken into account. Some difficulty may arise where practical constraints on a party conflict with the express stipulations in the contract. For instance, a party may be described as an independent contractor, and the contract may even provide expressly that he or she is at liberty to provide services to other persons, outside of the contract. The reality may be that economic considerations dictate that work will only be accepted from the other party to the contract....In such circumstances, there is no particular reason why a court should ignore the practical circumstances, and cling to theoretical niceties. The level of economic dependence of one party upon another, and the manner in which that economic dependence may be exploited, will always be relevant factors in the determination of whether a particular contract is one of employment. In many respects, the balancing of various factors once they are assembled is difficult. This is because many of the factors commonly relied upon prove to be of insubstantial weight upon proper analysis. For instance, a factor relied on commonly is whether or not income tax is deducted from the remuneration of a person before being paid to him or her. In the resent case, reliance was placed on the fact that tax was deducted at the rate of 15 per cent of the gross earnings of some owner-drivers, pursuant to the prescribed payments scheme. No instalments were deducted from the remuneration of those persons under that pay as you earn taxation system. To place heavy reliance of this factor, however, is to assume that the payer has acted in accordance with the requirements of income tax legislation in choosing one type of deduction, rather than another. I am satisfied that the applicant was an employee of the respondent and is entitled to bring these proceedings. I turn now to consider the application pursuant to S170EA. S170DE & S170DF(1)(a)