CATCHWORDS INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - WHETHER APPLICANT AN EMPLOYEE - INDEPENDENT CONTRACTOR. INDUSTRIAL RELATIONS ACT, 1988 S.170EA NARICH PTY LIMITED -v- COMMISSIONER OF PAYROLL TAX 50 ALR417 STEVENS -V- BRODRIBB SAWMILLING PTY LIMITED 160CLR16 CHRISTINA MARY CROSBY -v-BAYSIDE PERSONNEL PTY LIMITED ACN 003158816 No. NI 2779 of 1995 COURT: LINKENBAGH JR PLACE: SYDNEY DATE: 16 OCTOBER 1995 INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES REGISTRY No. NI 2779 of 1995 BETWEEN: CHRISTINA MARY CROSBY Applicant AND: BAYSIDE PERSONNEL PTY LIMITED ACN 003158816 Respondent CORAM: LINKENBAGH JR PLACE: SYDNEY DATE: 16 October 1995 REASONS FOR JUDGMENT (Delivered ex tempore - revised from transcript) I propose to deliver judgment now on the question of whether or not this applicant is entitled to bring an application before this Court under section 170EA of the Industrial Relations Act as she has done. The respondent argues that she is not entitled to bring the application because she is not an employee within the meaning of the Act and she must, of course, be an employee before the right to apply arises. I find that the applicant was not an employee. I have considered adjourning the matter to reduce my reasons for that view to writing. However, I have decided to deliver the reasons orally and if either of the parties wishes to have the reasons edited and produced in writing then I shall make the reasons available on request. The parties entered into a contract on or about 23 January 1995. That contract is quite detailed and is supplemented by the terms of a letter of offer dated 17 January 1995, which was handed to the applicant at the same time as she received the contract and which she signed, acknowledging its terms. The parties came to know one another because the respondent is in business as an employment agent and the applicant approached the respondent initially in 1991 about being placed on its books for the purpose of her finding work through the respondent's auspices in her field as an interior designer or interior consultant. She did not find work with the respondent until January 1995 when she was telephoned by the respondent's representative and offered a position in which she would start immediately. Her evidence was that she had had an interview in December 1994 with Mr Cottee. Mr Cottee cannot recall that interview and was very definite that the interview did not occur. The recollections of the applicant and Mr Cottee in relation to that interview do not, I think, reflect adversely on the credit of either of them and the fact of whether or not that interview actually occurred is not a fundamental factor in the reasons for my decision. I find that the applicant knew when she accepted the position on 12 January that it was to be subject to the terms of a contract. She did not know the terms of the contract at that time as it had not been provided to her. Nevertheless, she gave notice at the place of employment in which she was engaged at that time and reported for work with a company called Interco on 16 January 1995. I find that the arrangement between the various players in this matter is that Interco provides services to its clients who wish to relocate their businesses. Interco has an arrangement with the respondent, which I shall refer to as Bayside, for Bayside to provide to Interco various persons with particular expertise in particular fields pursuant to a contractual arrangement between Interco and Bayside. Interco uses those persons in the services it provides to its clients. Interco employs other persons directly as employees and supplements its workforce with the services of people provided to it by Bayside. Bayside, in turn, finds the people with the expertise in the workforce and contracts with them so that Bayside can fulfil the obligations that it has to Interco. The Privy Council said in Narich Pty Limited v the Commissioner of Payroll Tax, 50 ALR at 417, in discussing the significance to be attached by the Court to an agreement between the parties: 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 the relationship is ambiguous and is capable of being one or the other, that is 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. That is a quote from Lord Denning in the case of Massey v Crown Life Insurance Company which was relied upon by Privy Counci in Narich's case and the quote goes on to say: In the present case where there is no reason to think that the clause is a sham, or that it is not a genuine statement of the parties intentions it must be given its proper weight in relation to other clauses in the agreement. There is no evidence before me that this contract was a sham or had any intention to defeat a finding of the existence of an employer/employee relationship. This agreement was voluntarily entered into between the applicant and the respondent and it is very clear in its terms, as is the letter which is attached to it. There is no evidence that the applicant asked a single question about the meaning of any of the provisions of the agreement and she went along with its terms. There is no evidence that she misunderstood. She says she thought she was entering into an employment contract, but certainly on the face of it, it is very clear from this document that it is not and does not purport to be an employment contract. It purports to be a contract for the provision of services by an independent contractor and it uses the expression independent contractor over and over again. The agreement is part of the business arrangement between the players. Mr Wallace for the applicant argued that the agreement contains restrictions on the applicant and that, therefore, because there are restrictions the respondent exercises a degree of control over the applicant in the relationship. I cannot see it in that way. The restrictions are no more than the creation of obligations. Any agreement between parties involves the creation of obligations on both parties, and the performance of the terms of the contract inevitably restricts the activities of the parties in some respects. In Stevens v Brodribb Sawmilling Company Pty Limited, 160 CLR 16 the High Court said that in assessing the relationship between the parties one looks at the total relationship between the parties, in order to determine what the nature of the relationship really was. In this case, in addition to the agreement there is the fact that the applicant's taxation deductions were paid by way of the Prescribed Payments Scheme rather than the PAYE scheme. In previous employment she had paid under the PAYE scheme and she knew that the PPS arrangement was a different arrangement and she went along with payment under that Scheme. The question of day to day control in the management of the applicant's time and the duties that she performed was, I find, entirely in the hands of Interco. Bayside did not tell her what to do from day to day or where to do it. She dealt with Interco, she filled in time sheets which were directed initially to Interco and which were initially approved by Interco and passed on to Bayside for payment. Bayside paid her and then charged Interco for her services and charged an additional amount for the services rendered by Bayside to Interco. The agreement provides certainly for the applicant's Workers Compensation and Superannuation benefits to be paid by Bayside in addition to her hourly rate. I do not find that that is significant given the wide definitions of "employee" in the relevant legislation. The fact that the respondent under the agreement paid Public Liability Insurance premiums for the applicant is, I find, consistent with the arrangement that the parties had structured and Bayside's obligations to Interco to ensure that the persons that it provided to were properly covered for Public Liability Insurance. The contract between the applicant and the respondent was, I find, a necessary part of the overall arrangement in which all the parties engaged. I find that the applicant knew, or must have known, and certainly made no inquiry or no complaint about, the true nature of the relationships between the various players. She was a willing participant. It was put that she had engaged the services of an employment agency in the past, that she thought that this was the same, that she was entitled to expect that this would be the same sort of arrangement. There is, however, no evidence that she paid anything to Bayside for their services in providing her with the employment at Interco and one would have thought that if she had any concerns about the nature of the employment agency arrangement, she would have perhaps inquired as to who was paying the bill. The applicant is a woman who works in the Interior Design field. She gave evidence before me, and is obviously well educated and very conversant with the English language. I have no hesitation in believing that she understood the arrangement at the time, that she accepted this arrangement when she entered into it and commenced work, and that she must have known that she was an independent contractor. I find that she was an independent contractor and that, as far as her relationship with Bayside Personnel Pty Limited is concerned there was no relationship of employer and employee and therefore the application must fail and is dismissed. I certify that this and the preceeding six pages are a true copy of reasons for judgment of Judicial Registrar Linkenbagh. Associate: Date: 22 November 1995 Applicant: appeared in person Respondent: appeared in person Date of Hearing: 16 October 1995 Judgment Date: 16 October 1995 INDUSTRIAL RELATIONS COURT OF AUSTRIALIA NEW SOUTH WALES REGISTRY No. NI 2779 of 1995 BETWEEN: CHRISTINA MARY CROSBY Applicant AND: BAYSIDE PERSONNEL PTY LIMITED ACN 003158816 Respondent COURT: LINKENBAGH JR PLACE: SYDNEY DATE: 16 October 1995 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The application is dismissed. Settlement and entry of Orders is dealt with by Order 36 of the Industrial Court Rules.