Deo Nadan v Cumberland Cabs Company Pty Limited [1995] IRCA 703

C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - TEST OF EMPLOYER/EMPLOYEE RELATIONSHIP - CONTRACT OF BAILMENT - JURISDICTION OF THE COURT UNDER PART VIA DIVISION 3. Industrial Relations Act 1988 (Cth)

Industrial Relations Act 1991 (NSW)

The London Hackney Carriages Act 1843

Taxi Industry (Contract Drivers)

Contract Determination 1984 for Metropolitan Transport District.

The Evidence Act 1995 (Cth)

Yellow Cabs of Australia v Colgan [1930] IR 137.

Platt v Treweneck

Green Cab Service Proprietary Limited v Platt [1953] IR 642

Stevens v Brodribb Sawmilling Company Pty Ltd [1986] CLR 16

Performing Rights Society Limited v Mitchell and Booker (Palais de Danse)

Limited [1924] I.K.B. 762

Venables v Smith [1877] 20, B.D 279

Dillion v Gange [1941] 64 CLR 253

Mersey Docks and Harbour Board v Coggins and Griffiths (Liverpool) [1947] ACI

Harrison v McDonald and Evans [1952] ITLR 101

Giles v The Taff Vale Railway Company (2E and B 822)

Goff v The Great Northern Railway Company (3E & E P.672)

DEO NADAN -V- CUMBERLAND CABS COMPANY Pty LIMITED No. NI 95/3601 BEFORE: LOCKE JR PLACE: SYDNEY DATE: 15 DECEMBER 1995 INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES REGISTRY No. NI 3601 of 1995 BETWEEN: DEO NADAN Applicant AND: CUMBERLAND CABS COMPANY Pty LIMITED Respondent CORAM: LOCKE JR PLACE: SYDNEY DATE: 15 DECEMBER 1995 REASONS FOR JUDGMENT THE PROCEEDINGS On 11 September, 1995, the applicant initiated proceedings under s.170EA of the Industrial Relations Act 1988, (the Act) for the remedies of both reinstatement and compensation in respect of the alleged termination of his employment as a taxi driver with the respondent company. Appearing in person, the applicant averred he had been unlawfully terminated and that on any view his relationship with the respondent was that of employer and employee. Mr Wolfe of Counsel for the respondent sought was granted leave to amend the name of the respondent in the application to that of Cumberland Cabs Company Pty Ltd instead of one Steve Wilkinson. The record was rectified accordingly. THE ISSUES No evidence was led that any agreement was entered into between the parties as to the terms and conditions of their co-adventure. However, there was uncontroverted testimony that the relationship was governed by Taxi Industry (Contract Drivers) Contract Determination 1983 for Metropolitan Transport District. A copy of this document became exhibit 3 in the proceeding and is described as a contract of bailment. For this reason, argued Mr Wolfe, this Court had no jurisdiction to hear and determine the matter under Part VIA, Division 3 of the Act which bestows jurisdiction only in those matters pertaining to a relationship of employer/employee. Apart from relying on exhibit 3, Mr Wolfe also urged upon the Court to take cognisance of S.662(1) of the Industrial Relations Act 1991 (N.S.W.) in support of his contention that in truth and essence, the relationship under review was that of bailor/bailee. Section 662(1) of the New South Wales Act reads as follows:- "In this chapter a "contract of bailment", means a contract under which: (a) a public vehicle that is a taxi-cab is bailed to a person to enable the person to ply for hire in a transport district established under the Transport Administration Act 1988; or (b) a public vehicle that is a private hire vehicle is bailed to a person to transport passengers in such transport district. Mr Steven Tomvald, the respondent's Fleet Manager for eight years identified the determination (exhibit 3) as being the current one applying as between the respondent company and its drivers. Giving evidence of his knowledge of the award, in the first instance, the applicant deposed he was not aware of it. Subsequently, he resiled from that position, in that he said he had read the award and was appraised of that part of the award which related to holiday pay and sick leave. From the evidence that fell in the hearing, I was left in no doubt that the applicant was aware of the relationship he entered into with the Cumberland Cabs Company when he commenced driving its vehicles sometime in February 1995. This is despite his protestations that: "We wouldn't be a bailee if we are employed as a permanent ...(the determinations deals separately with casual and permanent bailees), we are employed by the company, so how can we be a bailee on an independent basis". COURSE OF EVIDENCE Both the applicant and Mr Tomvald gave evidence at the hearing - these were only witnesses. Having commenced driving a taxi cab owned by the respondent the relationship was terminated on 23 August 1995 for reasons which will be referred to anon. The evidence given on this point is in conflict. It would appear the applicant earned for himself approximately $500.00 per week which he described as commission earned by him from renting a taxi-cab from the respondent. Provisions 19 and 20 of exhibit 3 (the determination) provided for paid annual holidays and five days sick leave respectively. Each morning the applicant would attend a nominated place where he would be given a taxi at the beginning of a shift. Having driven the shift he would return the vehicle to a nominated location. In the interim, he was free to drive anywhere in the metropolitan transport district of Sydney, picking up fares on his selection. In the course of the week the applicant would pay a predetermined amount of money to the respondent, such sum being predicated by the particular day of the week. for example, a higher pay in figure would be required for a Saturday shift than a Monday shift. Payments for cleaning the vehicle and fuel was met by Mr Nadan. The driver retained any monies he collected in fares over and above these outgoings. According to the evidence which fell from Mr Tomvald the Taxi Council recommends a particular pay in figure (exhibit 2). This is often described as a flat rate for taking the taxi out. On Saturdays the council proscribes the number of kilometres which a particular driver may travel in the course of his shift. Should this particular ambit be exceeded then the driver has to pay a surcharge. However, these rates recommended by the Taxi Council are but a guide. This figure is not calculated on the basis that an account has to be made for all the money collected during a shift and a percentage paid come what may. Even if a single fare is not collected that sum of money ordained by exhibit 1 has to be paid come what may. The applicant responded affirmatively when it was suggested by Mr Wolfe in cross examination that the pay in figure was rent for the use of the motor vehicle and taxi plate, not wages. The respondent company's pay in figure was about 25% less than that recommended by the Taxi Council -(exhibit 1). Consideration for this concession by the respondent was that in the case of an accident where a driver was at fault any excess was to be shared by the company and the driver equally. It was exactly this point which led to the rupture in the relationship of the two protagonists. Apart from those matters negotiated in the determination between the Taxi Council and the Transport Workers Union and those requirements imposed by law, it would appear the respondent gave the applicant no directives as to what he should do or how he was to perform his duties or where he should ply for fares. There is no evidence to suggest the applicant was at the beck and call of the respondent and it would seem that during his driving shift, the applicant had unrestricted use of the taxi cab, not even being required to work from a rank allocated by the company. No ad hoc supervisory system was used by the company as was the case in Yellow Cabs of Australia Limited -v- Colgan (1930) IR 137. In that case the majority of the Court were of the view a taxi driver was not an employee of Yellow Cabs , although the President dissented. Whilst no specific evidence fell as to the actual parties to the determination, reference was made to as to their identity in submission and this fact was within the knowledge of the Court. There exists authority (almost ancient) which supports the proposition that a Court is at liberty to use its own knowledge in such matters even when there is no specific evidence. In Giles v The Taff Vale Railway Company(2E and B.822) principles were laid down by the Court of Exchequer Chamber, which principles the Court of Queens Bench, alluded to as binding in the later case of Goff v The Great Northern Railway Company(3E and E P.672). The principles had references to a jury's use of its own knowledge as to the duties of an officer of a company. In Giles casethere was evidence that the general superintendent of the railway company had converted the plaintiff's property to the company's use. The Court of Exchequer Chamber, had to consider without any specific evidence what was the actual extent of the general superintendent's authority to act for the company. A particularly strong Court (Jervis CJ; Pollock CB; Parke B; Alderson B; Maule J; Platt B; Williams J; Talfourd J and Martin B), all agreed that the jury might infer from the term the "general superintendent" what his duties were. Baron Platt's view in Giles was quoted with approval in Goff: "It is objected that we do not know what a general superintendent is but might not the jury know. Might they rightly infer that he was a person having authority generally to superintend the affairs of the company on the spot, and, in the act of such superintending to deliver or refuse to deliver goods left with them as carriers". These common law decisions have received legislative fiat in the various acts of the States of the Commonwealth as well as legislation passed by the Commonwealth Parliament, The Evidence Act 1995 (Cth), Section 144. It will be seen from the determination that some control was exercised by the respondent. However, that need not prove fatal to the creation of relationship of bailor/bailee. "... show that in all arrangements where parties occupy a relationship in the nature of joint adventurers, there is necessarily involved a certain degree of direction and control arising out of the nature of the relationship ...... but this does not necessarily create the relationship of employer and employee, that question, depends on all the surrounding circumstances having been taken into consideration, being mainly determined by the degree and extent of the detailed control rested in one party over the acts of the other party in the actual execution of the work contemplated in the joint venture". As per Street and Cantor JJ in Yellow Cabs of Australia (supra) This passage was cited with approval in Platt -v- Treweneck and Green CabService Proprietary Limited v Platt [1953] IR 642 at 654 and Stevens -v- BrodribbSawmilling Company Pty Ltd [1986] 160 CLR 16. Performing Right Society Limited -v- Mitchell and Booker (Palais de Danse) Limited [1924] I.K.B. 762 is authority for the proposition that any control must be continuous, dominant and detailed so as to constitute a contract for service. Reverting back to what occurred instantly and the facts relied on by each party. Briefly, it is common ground that the applicant had an accident in the taxi-cab for which he was culpable. It will be recalled in such circumstances he would be required to contribute to the excess under the respondent's pay-in-system under which he drove his cab (and which was exhibited in prominent spots at the company's depot). Of course, had the Council's recommendations been in place, no excess payment would have flowed to the applicant. Not wishing to assume this liability, the applicant sought advice from the Council which was in the negative, if no contracts had been signed which was the case. According to the applicant (and he was adamant about this) he at no time refused to pay the excess. The extent of his demurrer was: "Probably I don't have to pay the excess" Upon arriving at work the next day the applicant was called into Mr Tomvald's office. This is how he described what followed: "Do you refuse to pay the excess", asked Mr Tomvald "No, I didn't refuse to pay the excess", He described Mr Tomvald as continuing as follows: "No here's my stuff and I get to go on with and he said I'll make up your pay now and terminate", This is not how Mr Tomvald described how the events of the applicant's departure unfolded. When he asked the applicant was he paying the excess, on 23 August 1995, the applicant responded, "the Taxi Council said he didn't have to". The fleet manager then said to the applicant. "Since you are using the Taxi Council's advice for the excess, you can their pay their pay-ins and I gave him a copy of them".. (exhibit 2). Giving what he described as a quote of the applicant's reply Mr Tomvald went on, "I don't think I can afford those. I finish up" That being the applicant's decision, a cheque for the termination pay was drawn up that day whilst the applicant waited. Whilst the question of whether the applicant resigned or not is not central to the conclusion which will ultimately be decided in this case, I would prefer the evidence given by Mr Tomvald. There were just as many instances in the applicant's evidence which were contravented. He did not impress me as a witness of truth. It had occurred to me at one stage that he had simply misunderstood the legal effect of his relationship with the respondent. Viewing his evidence as a whole including the evidence he gave regarding the facts and circumstances of his next joint venture in the taxi industry with Northern Districts Radio Taxi Cab Co-Op Pty Limited and Mr Andy McKern, I am satisfied the applicant was well aware of his position qua the respondent, during the period he plied for leave using the respondents taxi-cab. From the foregoing, it is clear that if and only if an employer/employee relationship is established between the parties does the applicant have the right to plead his case under the Act. Because of the determination and the evidence led on behalf of the respondent the questions to be decided are whether the applicant drove the respondent's vehicle under a contract of bailment or as an employee. This necessitates and investigation into the essence and effect of the determination as well as the course of conduct between the parties. Was the bailment described in the evidence a mere fiction? Such devices (such as contracts of bailment or leases) have often been used in the past to escape the terms of an award and even legislative enactment, getting the same service for less pay. Generally, it could not be asserted that the owner of a taxi cab and the driver cannot possibly create between themselves the relationship of employer/employee. Each case has to be decided on its own particular facts - proof by evidence of the particular facts which may differ considerably, inter se, English Courts have managed to evade making decisions on purely factual grounds by holding that the London Hackney Carriages Act 1843 creates a statutory presumption that a driver of a hackney carriage or a taxi cab drives as the servant of the owner "Statute alters what would otherwise be the parties true relationship", said Cockburn C.J in Venables -v- Smith[1877] 2 Q.B.D 279 at 282-283. Australian Courts have refused to construe their own statute and awards in equivalent terms and have preferred to regard the relationship of master and servant as a matter of legislative fiction, preferring to take the course of a factual investigation previously mentioned. Dillion v Gange [1941] 64 CLR 253; Yellow Cabs of Australia Limited; and Green Cab Service Propriety Limited(as above). In answering the question now under review Australian Courts looked primarily to the control the owner had asserted over the driver and the degree of independence with which the later is entitled to act. A review of authorities on this point reveals that since, at least 1930 the majority of conclusions drawn by the Courts in this country is that the parties operate under a contract of bailment. It may be useful at this point to compare and contrast, by definition, the respective relationships of bailment and employer/employee. Bailment, according to he learned author of the text, "Bailment" (Law Book Company, 1979) is one of the commonest form of transaction in every day life - it stands at a point where property, contract and tort converge. In its standard form it represents a conveyance of personal property (a chattel) created by contract and enforceable in tort, yet it retains a separate legal personality with much to distinguish it from other concepts. The essence of bailment is possession. Its derivative is the French word "bailer" meaning to deliver. It denotes the separation of the actual possession of goods with some ultimate or possessory right. During each shift, the respondent delivered its motor vehicle and taxi plate to the applicant, who took it away separating it from its owner, with the proviso that at sometime the said property be returned to the respondent. Bailment is confined to personal chattels, such as a motor vehicle or a taxi plate; it has no application to real property nor intangible property, as yet. A chose in action comes to mind. Nor can it apply in modern times to human beings. However, in the past long since the bailment of slaves was a common phenomenon in the United States of America. There is said to be six theories as to the essential formative elements in a bailment. They are as follows:- 1. Delivery of possession, 2. A contract giving rise to possession, 3. Consensus or agreement giving rise to possession, 4. Possession must be voluntary, 5. Possession requires a knowing (though it need not necessarily be voluntary), 6. The fact of possession is required no more. Thus it is obvious that possession is central to each of these theories. On the evidence, in the instant proceeding, the onus the respondent bears in relation to each of these indicia has been discharged. "Employee" is not defined in the Act with any particularity just as including any person whose usual occupation is that of employee. Historically, in determining whether a person was an employee or not, the solution lay in applying the "control" test, that is could the employer control not just what the person was to do, but also the manner of his doing it - if so that person was an employee. Performing Arts Society Ltd -v- Mitchell and Booker (Palais de Danse) already cited; Mersey Docks and Harbour Board -v- Coggins and Griffiths (Liverpool) [1947] ACI. In the search for a substitute test various ideas have been canvassed, one being "integration test". Whether a person was fully integrated into the employer's concern or remained apart or independent of it. Stevenson Jordon and Harrision -v- Mc Donald and Evans [1952] ILTR 101, CA as per Denning LJ. This is another example of this innovative jurist's search "to find another way". In abandoning the search for a single test, the modern curial approach is to go down multiple or pragmatic paths, weighing up all the factors for and against the contract of employment and determining on which side the scales eventually settle. Describing, what he opines the leading contemporary authority on this point, the author of Australian Industrial Law, Peter Punch cites Stevens -v- Brodribb Sawmilling Company Pty Ltd [1986] 160 CLR 16. All members of the High Court who expressed views on the issue referred to the control test as the prominent means of assessing whether a particular worker is an employee or not. Mason J (with whose views on the issue Brennan and Deane JJ agreed) was of the view that the integration or organisation test was not a criterion in itself for the determination of the issue of whether a particular contract fell into one category or another. Rather, the integration of A into the business organisation of B is to be regarded as additional evidence of the authority of B to control the actions of A. In this case, however, other factors were more congent to the question of legal status. Other factors with indicated relationships with independent contractors rather than employees were: the mode of remuneration (not in the form of fixed salaries of wages), the provision and maintenance of equipment by S and G, the right of S and G to set their own hours of work, the treatment of income tax, and the fact that G was able to employ his son as a driver. Wilson and Dawson JJ also emphasised the control test but stated that the ultimate question will always be whether a person is acting as the servant of another or on his or her own behalf. The factors to consider in answering this question differ from case to case, and the relative significance of the factors also varies. Thus the common theme running through all decisions of the Courts is that control is generally an important consideration in determining whether an employment relationship exists. As it is clear from the views expressed by Mason JJ (as he then was) in Stevens v Brodribb, there falls for consideration a number of other indicia. In short, the totality of the relationship between the parties must be considered as a whole. Instantly, the applicant was not paid wages his obligation was not to work but to discharge his obligation as to the pay in figure. The respondent did not deduct, "pay as you earn" tax. Giving due consideration to the obligations of the applicant, it is found as a fact that the amount of control exercised by the respondent fell short of the type of supervision which is indicative of the relationship being one of master and servant, even though the respondent exercised some direction over how the applicant did his work and the applicant was paid for holiday and long service leave plus being allowed sick leave. For these reasons, as well as those to which I have already adverted, it has been established to my satisfaction that the true relationship between the applicant and the respondent was that of bailor/bailee - the parties operated under a veritable contract of bailment. That being so, this Court has no jurisdiction to hear and determine the substantive issues raised by the applicant. I certify that this and the preceding fourteen (14) pages are a true copy of the reasons for judgment of Judicial Registrar Locke.